Grand Committee Report of 18 March 2002

Official Report of the Grand Committee on the Employment Bill
Monday, 18th March 2002.
The Committee met at half-past three of the clock.
[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]
Clause 22 [Employment tribunals]:
Baroness Turner of Camdenmoved Amendment No. 75:
Page 32, line 35, at end insert—
"( ) No award shall be made under subsection (1) to a party which is a body corporate where the relevant time was spent by a director, executive, consultant or employee of the company in the ordinary course of duties for which he is engaged or remunerated, whether or not those duties were executed in overtime, or to a party which is a partnership where it was spent by a partner, consultant or employee in the ordinary course of his duties or of the partnership."
The noble Baroness said: We debated this clause at some length at our last Committee sitting and my noble friend Lord Wedderburn demonstrated conclusively why Clause 22(2) should not be in the Bill at all. My noble friends and I are not alone in that view. My own union Amicus, formerly MSF, has written to me to say that it thinks it should come out. My noble friend Lord Wedderburn has quoted the Law Society's brief, which of course I have seen, and there are others as well. The National Association of Citizens Advice Bureaux, which has unrivalled experience of representing people who otherwise would have no one else to support them, believes that the possibility of incurring costs is already a deterrent to potential claimants. In fact, it says that CABs are already reporting an increase in cases where applicants are intimidated by threats of costs. It concludes:
"We fear that the potential for a party's preparation time to be reflected in costs awards will simply strengthen the ability of employers' legal representatives to intimidate tribunal applicants with threats of an action for costs quoting the maximum that may be available."
It seems that the Government have not been willing to accept our earlier amendments on this issue.
So we come to our amendment, which at least seeks some measure of fairness in the matter of preparation compensation—an unprecedented provision, as my noble friend Lord Wedderburn has demonstrated. It seems unjust that an employer should be able to claim the cost of preparing for a case when the people involved in such preparation would have to do this kind of work anyway as part of normal duties. An employer, unless this clause is amended, would be able to claim the cost of the time of people working in his personnel department, or of people holding managerial positions (or their support staff) where staff matters are a part of their normal remit. Therefore, preparation compensation could be quite substantial, with legal costs presumably in addition.
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An employee, however, particularly if not represented, would not be able to claim so much by way of preparation compensation. He might do his preparation on his kitchen table in the evenings. It is difficult to see how employment tribunals could be expected to handle the arrangements set out in this clause equitably.
Of course, NACAB is right. One can very well see that unscrupulous employers, or their lawyers, would be prepared to use the mere existence of a provision of this kind to intimidate potential claimants. They could tell them, "You realise that you may lose and, if you do, you will not only face costs but you will also have to compensate the employer for the time his staff have to spend preparing for the ET case. That could run into a great deal of money, so think hard. The employer intends to fight this case hard. Is it worth the risk"?
I have already had examples of what happens now. There is the case of a Mr H who claimed unfair dismissal and was acting for himself. The employer's representative wrote to him, threatening him with costs as follows:
"It is clear from the facts that your claim is wholly without merit and is bound to fail. Therefore, we hereby place you upon notice of costs as we are of the view that this claim is frivolous and vexatious and is bound to fail. For the avoidance of doubt, if you withdraw your claim, we shall not pursue you for costs".
This case was handled by a local law centre. When it went to an ET, the tribunal decided that the individual had been unfairly dismissed and awarded him the maximum compensation of £50,000.
I have a case here, too, of alleged sexual harassment. The two women concerned were threatened that.
"[there] are likely now to be awarded substantial sums against people who bring claims on the spurious grounds of discrimination, such as we are sure you will alert your client can he up to £50,000".
The two women concerned were, of course, very worried when they received that letter. If preparation costs are also added, that is even more cause for attempting to intimidate people into not taking cases.
I hope that the Minister will see that we are trying to introduce an element of fairness into this clause. We are trying to ensure that heavy preparation costs do not include the costs of people whose job it is normally within a firm to handle staff matters with the result that a heavy preparation award could be expected to be made and could be threatened. It is the deterrent effect which bothers many of us. I hope that the Government will look favourably on the amendment. I beg to move.
3.45 p.m.
Lord Wedderburn of Charlton: I rise to support my noble friend in her arguments for the amendment. I want to raise one or two points which, in my submission, show how important it is and how important the Government's lack of understanding on this matter appears to be.
As has already been explained by the Government, Clause 22(2), which deals with preparation time, suggests a payment which, I believe, is quite new. It is

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a derogation from the ordinary principle of law that a company is a separate person from its shareholders, managers and employees. We are faced with a new kind of legal "payment" which, as has already been established, although drafted to look even-handed, will impact especially and disproportionately upon employees who are claimants in the tribunals. Applicants can be made to,
"make a payment to any other party"—
it could be a third party but normally an employer will be the respondent—
"in respect of the time spent by that other party in preparing his case".
It is not costs, although the Government may one day, by regulation, make it applicable where costs are payable. We believed that that should be in the Bill if that is what they intend. There will be a limit on the maximum to the costs maximum of £10,000. That is not exactly compensation because it is not payable for actual loss. Compensation is for loss. However, the amounts will not be measured by loss; they will be bureaucratically predetermined by a scale of which the logic will be known only to the Department of Trade and Industry and the Secretary of State. The amount to be paid will not even be in the discretion of the courts or the tribunals, as is the case in any parallel in relation to costs—if there is one—in the High Court.
This is a new animal in the judicial zoo of penalty payments and it should, therefore, be examined very closely. I still await the answer to my question of 9th January about any parallel precedents in the ordinary courts, tribunals or planning inquiries on the matter of preparation time.
The CBI welcomed this proposal, while the TUC and a significant number of other respondents to Routes to Resolution did not. One respondent pointed out—I am citing the Government's response to the consultation—that such a change might encourage employers to spend undue time and resources in preparing their case. However, the Government's proposals apparently did not intend to limit recovery to cases where costs are recoverable—at least, not on the face of the Bill, which is highly relevant to this amendment. Instead, in response to the consultation, they said at page 36:
"The Government believes it is right that those affected by weak and vexatious cases, applicants or respondents, to be compensated for the time spent preparing their case."
It says "weak and vexatious cases". Weak cases are not necessarily cases where costs are payable. The Government do not seem to understand the difference between weak cases, where you have to try the merits of the case to decide whether it is weak; or unreasonable and misconceived cases, where there is manifestly no cause of action at all; or vexatious cases; or cases conducted unreasonably, where a party goes on and on about a point that is obviously a failure. Those affected by weak cases—and we will come to the matter later in the Bill—are all to get their preparation time, according to the Government, which goes beyond the notion of costs.
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My noble friend has quoted the comment of the citizens advice bureaux, that the potential of this clause would be to strengthen the ability of employers' legal representatives to intimidate tribunal applicants with threats of an action—they say, for costs—quoting the maximum that may be available. The Minister, my right honourable friend Mr Alan Johnson, confirmed on 11th December, (col. 61), that new preparation time awards would apply even where the employer was legally represented. This is not limited, therefore, to cases of no legal representation.
The importance of the matter raised by our amendment is that there is a legal howler at the root of the new animal in the zoo. Most respondents to an employment tribunal hearing are employers who are registered companies. The first principle of the legal status of a registered company is that it is a legal person, totally distinct from the natural persons who own it, from the managers who manage its business and from the employees who work for it. As Lord Halsbury said in the great precedent of Salomon v. Salomon in 1897:
"The company is a different person altogether from the subscribers"—
that is, subscribers who are shareholders. As many other cases have established, it is separate from the managers and it is separate from the employees.
Therefore, when the clause states, therefore, that the party can recover an award for time spent, "in preparing his case"—what it should say in terms of corporate bodies is "its case"—of whom is it speaking? The case prepared by the company—but who is that? Every time you have a corporate body in a section of an Act of Parliament, you have to decide who counts as the company.
Throughout the proceedings in another place and, indeed, even in government documents, it has been assumed that "his" case—or "its" case, as it should be—here means that the company includes every secretary, manager, executive, consultant who works on the case. That does not necessarily follow. As my noble friend explained, the company is already paying these people; they are already employed.
It may be that there has been a mistake and it really means cases where the company has no legal representative. I am interested in what the Ministers will say about that. However, even a litigant in person is not permitted in the High Court to claim costs incurred on his behalf by secretaries, consultants and assistants. His claim is capped to two-thirds of the amount he would have been allowed if he had been represented by a legal representative. That is in the rules of the Supreme Court; it is Rule 48 PD-003, in Section 52.4. The section goes on to say,
"The amount which may be awarded to a litigant in person under rule 46(3)(5)b and rule 48.6(4)—
which are the relevant sections—
"is £9.25 an hour".
Is that going to be the limit also in the tribunals, or is the company going to be able to charge more?

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I would like the Minister to answer that because the Government know what is going to be in the regulations. They will tell us that it will be in the regulations; of course it could not possibly go into the Bill because then we would know. It is going to be in the regulations, so is it going to be £9.25 an hour as in the High Court, or is it going to more?
On 11th December, the Minister in another place said that they were considering—he did not say they had decided making the scale of recovery—this is the Department of Trade and Industry scale that we are going to have in regulations—
"perhaps against average costs per jurisdiction". [Official Report, Commons Standing Committee F, 11/12/01; co1.64.]
Therefore, it will not only be actual loss for time spent in preparing the case, it will be an average over cases in that jurisdiction. What possible justice is there in that?
The Minister also said,
"We must find a way to calculate what an hour of a person's time is worth." [Official Report, Commons Standing Committee F, 11/12/01: col. 62.]
How are they going to do that? What sort of mentality goes into that approach?
The Routes to Resolution, and the associated document, that notorious Survey of Employment Tribunals 1998 (SETA), told us that cases which go to an employment tribunal hearing are said to involve a median a 27 hours for time spent by persons who act for employers. Even at £200 per hour, let alone £9.25, it would come to some £5,400 to £5,500 a case. What sort of approach to the actual sums involved is to be adopted in relation to this?
The legal howler at the root of the new rule is, of course, that nobody has explained why the case of a corporate respondent should include all the work done by a manager, executive, secretary or anybody else. They are all people, as my noble friend said, who get paid for the work they do anyway. The only possible rationale and justification for such an approach is that tribunal cases are special. The personnel manager will deal with it anyway, but it is so outrageous that there should be a case in a tribunal against a corporate employer, that the employee, if his costs are awarded or anything like it, must subsidise the defendant for the work for which the corporate body is paying anyway.
When we look at the impact assessment in the Government's response to consultation, they say at page 47 that:
"costs awards will include".
I break off to say it is really rather confusing for the Government suddenly to say "costs awards". This is a different payment from costs awards, as my noble friend the Minister explained very well when we last met. They say that:
"Costs awards will include costs of time spent by parties where cases or defences are weak. Awards will be possible against paid representatives where it is their behaviour which has triggered the costs award".
The proposals, they say, should discourage a small number of weak tribunal applications. Of course, this is the objective all the time. Under the banner of introducing workplace procedure, they aim to get rid
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of 40,000 employment tribunal applications. How many will this deal with? The Government also state that the proposal should discourage a small number of weak tribunal applications, about 100 to 500 a year. Is that right? Perhaps the Minister will tell us if that is wrong. How many cases is this going to discourage?
The response also says that in addition, more costs awards will be made providing more compensation to those at the receiving end of unreasonable behaviour. This passage is a terrible jumble. Costs are mixed up with compensation and the new animal of payment for time spent by parties. But all that is in breach of normal legal principles to save 100 to 500 cases a year. Is that right? The confusion has been confirmed in a letter which the Minister, my honourable friend Mr Alan Johnson, has written more than once, mainly to Members in another place, saying:
"I am writing to you once more to set the record straight on the Employment Bill".
I refer to the Minister's letter of 15th February, which has been widely distributed and on which I have been consulted. It is very strange. It states,
"we have already said that the compensation"—
that is, compensation for time spent—
"will probably not relate to actual hours worked but to average amounts, this is because it would require parties to keep detailed records of their case preparation time and we do not wish to impose this requirement on either party".
That is a new explanation. Parties cannot be made to keep records of the time that they spend preparing cases and, therefore, a scale is going to be drawn up out of the air. I continue with the quotation:
"We intend the implementing regulations to provide for tribunals to make these awards on the basis of guidance. Of course, we are aware of concerns that preparation time may impact harshly on applicants because respondents are in a position to rack up high costs. Consequently, as there are a number of ways to implement this proposal we intend to have a full public consultation to ensure that the specific details are right. For example, options include a cap on compensation for preparation time, and fixed costs to keep excessive claims at bay.
I do not believe that this provision gives extra ammunition for intimidatory behaviour. We are told that it is the £10,000 ceiling on costs the tribunal may award which is being used to intimidate. This limit is not part of the Bill but we will examine further how to address these legitimate concerns. In the meantime an award made by a tribunal for preparation time would have to fit within it"—
that is, within the £10,000, which is quite a lot of money. I continue:
"We believe that it is important to provide information for parties on the costs regime because the threat of high awards is not based on the facts".
Of course, we do not know that because we have not seen the scale which the Department of Trade and Industry has in its corporate mind. No doubt it includes its managers, secretaries and everyone else, but we do not know what will be put forward.
Our amendment would offset the novelty of this new type of payment—at least to the extent that an employing company should not be able to pay for persons for whom it is paying anyway and who, in the ordinary course of their duties, including overtime, deal with tribunal cases. Time spent by the company in

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preparing its case—or, as the clause states, "his case"—is said by most people to include a great deal of time spent by people who are employed to do the job anyway. It is bad in justice and it is bad in law.
The noble Baroness frowns. I must explain the matter again. It is bad in law because, if I say that the company can charge its expenses, then one has to make an imaginative leap to ask for whom the legal person—the company—is claiming for its expenses. Is it the expenses of the door-keeper, the secretary, the managers, the executives, the noble Lord, Lord Simpson, if he deals with it, or whoever deals with the case? Is a limit to be placed on this? It is no good saying, "Yes, there will be a limit. It might be set out in regulation". This point must be made more clearly to the Committee than we have done. It is our fault that we have not made it sufficiently clear in the past.
Primary legislation is for matters of principle. If primary legislation is to be changed, Parliament must consider it and Parliament can amend it. A regulation cannot be amended and a regulation is frequently—we all know this—not adequately discussed. A regulation is an easy way for the department concerned to change the law without too much trouble.
If there is to be a limit on who is the company for corporate parties to tribunal litigation, that should be in the Bill. No doubt our amendment's wording could be improved and we would be very happy for the Minister to consider it and take it away. If the Minister will take this away we can come back on Report and discuss a much better amendment if he puts one forward. At least there will not be an open-ended offer that anybody employed by the company who touches this problem of litigation can be charged for even when it is their job to deal with the matter in any event.
I very strongly support this amendment and hope that it will be considered favourably by the Minister.
Lord Davies of Coity: I rise to support the amendment. The clause to which the amendment refers looks, on the face of it, to be extremely even-handed and it can apply to both applicants and the respondents in a case before a tribunal. However, in practical terms this clause undoubtedly is going to be of greater significance to an employer than it ever will be to an employee making an application. An employer will have a personnel department and an industrial relations department, and the costs that they incur can be considerable—I understand that. I do not think that that is so much the problem. The problem will perhaps involve intimidating the employee who has been unfairly dismissed, or claims that he is unfairly dismissed or wrongfully selected for redundancy. Indeed, he may be bullied to the extent that has to put in a resignation and then claim constructive dismissal. The employer will be saying, "All right, you take me to a tribunal, but you imagine what it is going to cost you if you lose". To that extent it will deter an applicant from putting forward an application, and that is the wrong way of dealing with it.
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In my experience of industrial tribunals, I have known many employers over the years—particularly if they did not know whether they were going to win or lose at an industrial tribunal—who took steps to reach a settlement on the grounds that those costs would be less than those that they would incur preparing to meet the application at an employment tribunal. Those are the facts and figures that arise from my practical experience in employment tribunals, and it seems to me that in practical terms this will be wholly loaded to the advantage of an employer. Agreeing to the amendment would at least go some way towards evening the practical balance that is required.
Baroness Miller of Hendon: As we have heard several times, Clause 22 seeks to give new power to tribunals to order one party to make payment to the other in respect of the time it has been taken preparing his or her case. The noble Lord, Lord Davies of Coity, said that the arrangement looks even-handed, but he went on to suggest that perhaps it was not so even-handed and that it was much more to the benefit of employers than employees. I do not agree. I think that it is even-handed. The Government are to be commended on that.
Amendment No. 75 seeks to modify the power in Clause 22 quite drastically by refusing such compensation for time expended to corporations where the time has been expended by a director or employee of the company who would be paid whatever work he was doing, or to a partner in a firm or a paid employee.
I believe that the amendment gives rise to four questions. Why do the proposers of the amendment discriminate against, for example, a small trader who perhaps operates his corner shop via a limited company rather than his personal name? The noble Lord, Lord Davies of Coity, said that employers will have personnel departments and so on. My experience from the employers' side is that most businesses are small businesses that employ people and there are many more small businesses than there are large businesses. I believe that the Government have been fair in taking note of that.
The second question that arises is: why is there the same discrimination against two people who are trading in partnership as distinct from a sole trader? One assumes that the tribunal will award such costs and expenses to the winner, so why should a small trader be penalised for the time and trouble that he has taken to prepare his successful case simply because he has not employed a lawyer?
Lord Davies of Coity: Perhaps I may suggest to the noble Baroness that a small trader probably will not incur the costs that would be incurred as a result of what is contained in the amendment. Consequently, the amendment would cater for that situation.
Baroness Miller of Hendon: I do not believe that the amendment would do so; the clause deals with that problem. The whole tenor of the amendment is to militate against employers who succeed in their case.

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My fourth question is: is this not an instance of anti-employer legislation, whereas the Government have commendably produced an even-handed proposal? That is where I started my comments.
4 p.m.
Lord McCarthy: Perhaps I may ask the Minister a question. I was worried about this provision when I first saw it. At page 32, the Bill refers to, "compensation for preparation time". One would think that that was going to be standard procedure; one would think that everybody could get back their preparation time. Employment tribunal procedure regulations may include provision for authorising an employment tribunal to order a party to proceedings before it to make a payment to any other party in respect of the time spent by that other party in preparing his case. In other words, if one knew nothing about anything else, one may think if one goes to an employment tribunal in future, one will have to pay the other party's preparation time. That is what it seems to say.
Where does it say something otherwise? If one reads the very short debate that took place in another place and what was said by the Minister, the situation is not clear; it becomes more confused. The Explanatory Notes state:
"It is also intended that the new awards could be made"—
I do not like "could", I would rather have "will"—
"only in the circumstances in which a costs award may be made at present".
That is nothing to do with losing or winning. The notes define what the circumstances are in which a costs award may be made; that is, where the party has behaved unreasonably in some way. In other words, if one reads this and nothing but this, it does not seem so bad because all that is being said is that this is another way of adding to costs. If one behaves unreasonably, one will not only get costs but will also be asked to pay for the other party's time spent in preparing his case.
My question is simple: is that government policy? Are the Government prepared to tell us that when we get the regulations, all that we will be asked to pay is a little bit extra—or rather, more extra—when costs are currently levied where the party has behaved unreasonably? As long as one does not behave unreasonably, one will never have to pay for preparing the other fellow's case.
Lord McIntosh of Haringey: Of course, I take seriously anything that comes from the sources that the noble Baroness, Lady Turner, quoted. I take seriously the views of the National Association of Citizens Advice Bureaux and of her union, which represents many low-paid and junior people and others. I understand the concern behind what the noble Baroness is saying. I understand the concern that applicants may suffer under a new system of case preparation compensation; that it may not operate evenly in practice as between employees and employers, although the noble Baroness, Lady Miller, thinks it will; and it may become a tool with which to intimidate genuine applications. I will say, baldly, that that is not what we intend.
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The introduction of case preparation is intended to reflect the fact that in employment tribunals, most parties are not legally represented. When a tribunal considers that a costs award is just, there may be no compensation for the injured party, because that injured party has not incurred costs or expenses, but may be justified in having compensation for preparation time.
We believe—for all the reasons we explained last week and which I shall not repeat—that the introduction of case preparation provides a fairer base for recompense which reflects the nature of employment tribunals. On the whole, costs and expenses—"expenses" being the Scottish word—are more likely to be incurred by the respondent, by the employer, than by the applicant. If there is any bias at all in subsection (2) of Clause 22, it is towards those who are not legally represented; on the whole, to the applicants.
I am not able to accept the amendment as it stands because it is not the best way of achieving a fairer costs regime. It seeks to limit awards made to employers to work which has been done on the case which is outside the ordinary duties of an employer of staff. In effect, it would mostly exclude employers from case preparation compensation, despite the fact that an employer may not be represented and may have spent time preparing the defence. The principle behind the amendment is to ensure that preparation time awards do not impact disproportionately on applicants. I have every sympathy with that aim, but I do not believe the amendment is the way to achieve it.
Perhaps I may go a little further. We have been developing our thinking on this and there may be merit in developing it further since, as I said, after all, this Bill is not set in stone. Let me say what are restrictions we intend, as things stand, on compensation for preparation time.
First, the noble Lord, Lord McCarthy, asked me whether compensation for preparation time would be standard procedure. The noble Lord answered his own question by quoting the Explanatory Notes.
"It is also intended that the new awards could be made only in the circumstances in which a costs award may be made at present, that is, where the party has behaved unreasonably in some way".
That is what the regulations will say.
Lord Wedderburn of Charlton: Is it "could be made" or "will be made"?
Lord McIntosh of Haringey: What is the difference?
Lord McCarthy: I could say, " I may have heard you, or I may not have heard you".
Lord McIntosh of Haringey: It is intended that they should be made only in these circumstances. How is that different from saying that it is intended that they will be made?
Lord McCarthy: Well—
Lord McIntosh of Haringey: It is intended that they could be made, so that there is no possibility that they

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should be made, except in these circumstances. That is what it means. I am talking about the English language now.
Lord McCarthy: The Minister is saying that it would make no difference—I cannot move an amendment on this, so he is quite safe—if it said that the new awards will be made. If I say that "could", in this case, means "will", I will be correct.
Lord McIntosh of Haringey: If it says that the new awards could be made only in certain circumstances, it means that they could not be made other than in those circumstances. That is the same as will, in effect. There is no difference in the English language and there is not much to be gained from this argument.
My answer to the noble Lord, Lord McCarthy, is that it is not standard procedure. It is the same procedure as with costs and expenses. Since we have been quoted again and again, that there have only been 247 costs cases a year out of 130,000 applications, it follows that this is a very rare procedure. It also follows that there is nothing in the argument which the noble Lord, Lord Wedderburn, used, that this is an attempt to discourage applications to the tribunal. It would be quite a pathetic attempt if it were but it certainly is not.
I go further: NACAB quite reasonably talked about the problems of the applicant making out his case on the kitchen table. That is exactly the kind of compensation for preparation time that we are talking about. The applicant has no lawyer; the applicant has nobody to advise him. If the respondent behaves unreasonably, the applicant has no costs which can be awarded against the respondent. The applicant has only his own efforts. Compensation for preparation time precisely helps that. There is a maximum amount that may be made. That applies to costs and expenses and also to compensation for preparation time.
Costs are not intended to act as a deterrent to genuine applications, neither is compensation for preparation time. They are intended both to deter and to protect the other party from vexatious behaviour and cases which have no reasonable prospect of success. We want the costs regime and the compensation regime to operate more fairly, not less fairly.
I can say to the Committee, therefore, that the Government are prepared to think again on this issue and intend to bring forward an amendment at the Report stage. The amendment will have the effect that a party may not receive both case preparation time and a costs award for the same time period. The logic of extending the costs regime to include preparation time is that there should be recompense for people who are not legally represented. Logically, I accept that the extension should not apply to those who engage legal representation. I give that answer specifically to the point that the noble Baroness, Lady Turner, was making on behalf of NACAB.
There are of course details to be worked out, which is what will happen between now and the Report stage. We will let Members of the Committee have sight of
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the proposed amendment as far in advance of the Report stage as we can. On that basis, I hope that the amendment will be withdrawn.
Lord Wedderburn of Charlton: Will the Minister say a word about the points that I raised about a body corporate? No doubt the Government gave great care to drafting this clause—indeed, this new section—of the Employment Tribunals Act; that it is to be time spent that is recompensed by the other party "in preparing his case". How does that apply to a body corporate? Do the Government intend that every person working for the body corporate on the case should be chargeable at so much per hour? The Minister referred in the other place to working out how much per hour. Perhaps the Government have some idea of how much they have in mind? If so, perhaps he could tell us now? How does that apply to a body corporate?
Lord McIntosh of Haringey: The answer is that we do not have an idea yet, no. It will be the tribunals which will calculate the preparation time; it will not be the DTI or the Government. It will be the tribunals themselves.
Lord Wedderburn of Charlton: With guidance.
Lord McIntosh of Haringey: Let me finish the sentence. One possibility is to link assessment to the time and remuneration of the staff of the respondent. Certainly, that is a possibility. As far as we are concerned, a party to the proceedings can be an individual, it can be a body corporate and it can be a partnership, as the amendment points out. It makes no difference as far as the Bill is concerned; there is no reference in the Bill to a body corporate. They are parties to the proceedings. They could be sole traders; they could be partnerships; they could be bodies corporate of various kinds and the rules will apply impartially to whatever corporate status they have. The fundamental answer is that these are difficult regulations to frame and we will have to consult on them before we finish framing them and before they are presented to Parliament.
Lord Wedderburn of Charlton: I am sorry to press my noble friend on this. I am aware that a party may be a sole trader, which is irrelevant to our amendment. I am aware that all sorts of bodies may be involved, but I am concerned, first of all, with the body corporate. Have the Government received legal advice on what is meant in the section they are going to add to the 1996 Act about the time spent preparing the case by a body corporate who is a party to the proceedings? Whose time is included? They must have some idea of this or else they would not have tabled the new section.
Lord McIntosh of Haringey: I have already said that one option is that we will be linking the assessment of compensation for preparation time to the time and remuneration of the staff of the respondent if the respondent is a body corporate. That is one option but there is a whole series of other options for different corporate status.
4.15 p.m.
Lord Wedderburn of Charlton: It could be that my noble friend has not decided this yet. It is a central issue to the clause but the Government have not yet decided whose time is going to be chargeable as a body corporate's time spent in preparing the case. Could it be all the staff who ever come across it?
Lord McIntosh of Haringey: It would have to be a reasonable assessment of actual tasks. It would have to be within the cost and expenses envelope which already exists; it could not be additional to that. It would have to be assessed by the tribunal. The principal thing is that the advantage of having a compensation for preparation time is that that is available to the applicant, even if the applicant is working for himself. As regards the detail in which the regulations will go about which staff of a body corporate are eligible to be claimed for compensation, that surely is a detail that can be covered in consultation.
Lord Wedderburn of Charlton: With great respect to my noble friend, I want to pursue this. I am sorry to press him on this. He says it is a question of what is reasonable. That is a question of fact. The questions that I am asking are questions of law. If the tribunal awards costs to a body corporate, that is not to do with applicants; I am not sure that the applicant is ever a body corporate in an employment tribunal. If the Minister knows of such cases he will tell me. I am talking about bodies corporate. They are therefore 99.9 per cent—if not 100 per cent—likely to be respondents.
Where there is a body corporate, is it as a matter of law wrong for the tribunal to award preparation time spent by the secretary in the company? It is a question of law. I want to know what the Government's law is. Would it be upset on appeal if it awarded preparation time for someone in a subsidiary company who had worked on it? Does it apply to that party, including all the employees of that party? Does it include the corporate group? We should consider a number of cases in the tribunal. The reality today involves not the company but the corporate group. Does it extend to a party who is a member of a corporate group where the matter has expanded into the issues that relate to corporate groups? The Government must have some view on these questions of law, or have they not bothered?
Lord McIntosh of Haringey: I am advised that there is no issue of law here. I am advised that on the question of the way in which the regulations are framed, the regulations must be framed so as to be even-handed. Of course they must be framed in such a way that the tribunals can interpret them and apply them in an even-handed way between applicants and respondents. Before the regulations have been framed it is certainly not appropriate for me to say that the regulations will include or exclude secretaries or directors or whoever it may be within bodies
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corporate. That is a matter to be determined in the regulations and to be consulted on when draft regulations are amended.
Baroness Turner of Camden: I welcome much of what the Minister has said in response to this amendment. However, in view of the most recent exchanges, I do not see why our amendment could not be accepted. If it is the Government's intention that this should not act as a deterrent, we have said enough to demonstrate that there is ample evidence that, even at the present time, claimants are often put off and the question of possible costs acts as a substantial deterrent. If preparation costs, which could include managerial costs, support staff costs, personnel departments and so on—
Lord McIntosh of Haringey: On the amendment that we will bring forward on Report, I said that the two are mutually exclusive. We cannot have a claim for costs and expenses and a claim for compensation for preparation time for the same time period both being put forward.
Baroness Turner of Camden: I certainly welcome the Minister's comment to the extent that one cannot claim for both compensation costs and costs for the same time period. However, we shall need to look at the wording of that amendment when it is tabled. I am pleased that the Government have accepted that it is not just a question of leaving this to regulation but there has to be a change in the wording currently in the Bill and that there will be a draft amendment, which we shall have the opportunity of looking at before Report. That is important in view of the statements that have been made this afternoon by the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 76 not moved.]
Clause 22 agreed to.
Clause 23 [Employment Appeal Tribunal]:
[Amendments Nos. 77 to 81 not moved.]
Clause 23 agreed to.
Clause 24 [Conciliation]:
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 82:
Page 33, line 29, leave out subsections (2) to (4).
The noble Lord said: Clause 24 is about conciliation. I take it to be common ground that nothing is more important than that we should have as many cases as possible settled by conciliation or other means before they go to the tribunal.
We do not quite understand parts of the clause. At first, it looks rather technical but, in fact, it amends, especially in subsections (2) and (3), which we are moving to delete. It does so rather in a probing sense

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because we do not quite understand the provision. The provision seems to us not, as the Explanatory Notes suggest, to encourage conciliation but to diminish the opportunities for conciliation.
Clause 24(2) relates to Section 18 of the Employment Tribunals Act 1996, which I immediately say is a most important section because, of course, it is the section whereby any case which is presented to a tribunal immediately goes, as a matter of course, to the ACAS conciliation officer. Although there is not a lot in our discussions about conciliation officers, nothing could be more important, in our view, than the function of the conciliation officers.
Section 18 is to be amended in cases where,
"the fixing of a time and place for a hearing",
has been postponed for,
"an opportunity for proceedings to be settled by way of conciliation and withdrawn".
That is a very important period. because postponements are often the period in which conciliation can take place.
During that period, under the amendment, where the conciliation officer at the moment has a duty to be continuously interested in the case and a duty to consider any step that he can take towards conciliation, that duty is to be abolished. Instead, he is to be given a power.
As I understand it, that would leave the conciliation officer in a much less favourable condition to promote a conciliated settlement. He has a power to go on with conciliation, but he has no duty to do so. Therefore, if he comes back to the parties in this period of postponement and says, "I think I can help you further", one of them—it may be the respondent/employer—can say, "Go away, you have a power, but you used to have a duty". How will that assist conciliation? Why get rid of the duty of the conciliation officer who can go on and continue to be interested in the case?
Similarly in subsection (3), Section 19 is amended. That is the section which, as the Bill makes clear, requires employment tribunal procedure regulations to provide for the originating application of an employee, and notice of appearance by the employer, to be sent to the conciliation officer. There is no more important step in employment tribunal procedure than that the case that is presented to the tribunal should go automatically to the conciliation officer. I think I am right in saying that has been so since 1971, but the noble Baroness, Lady Miller of Hendon, whose government was responsible for the Act in 1971, will tell me if I am wrong. I think that has always been the case, and it is absolutely fundamental to procedure to introduce conciliation and the opportunity for conciliated settlement from the very beginning.
The Government want to introduce the phrase,
"except in such as circumstances as the regulations may provide".
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What circumstances could justify the lack of notification to a conciliation officer that there is a dispute? Why should one keep that from the conciliation officer? Similarly, in the next paragraph, a paragraph which assists
"to give an opportunity for conciliation) shall cease to have effect",
in Section 19 of the same Act. We find it mystifying to understand—subsection (4) seems to us to lead in the same direction—the fact that this will give rise to fewer opportunities, to fewer duties and to fewer chances of conciliation than the Act as it stands at the moment.
What we do not understand is how that could possibly be in pursuit of the Government's objective of cutting out 40,000 cases a year. I have looked up the response to consultation and I see that they say there will be a year's timelag in achieving that objective. However, it could possibly be that having less consultation, fewer opportunities for consultation, fewer duties of consultation by conciliation officers, could possibly lead to any diminution of tribunal hearings. That is more likely to lead to an increase.
I await the Minister's explanation of this diminution of opportunities for conciliation with great interest and ask him whether the Government will reconsider this clause. I beg to move.
4.30 p.m.
Lord McIntosh of Haringey: Let me begin by saying as flatly as I have made some other comments that is not the intention of the Government to diminish conciliation; to bring about a diminution of opportunities for conciliation. What we are doing with this clause is much more limited and specific; that is, trying to diminish what is called settlement on the steps of the tribunal. I refer to last-minute settlement. The approach of having a fixed period for consultation, which can be extended and I will go into that in more detail, was debated at considerable length during the consultation period over the last year. As a result of that, ACAS has concluded that,
"a deadline could help timely settlement".
That is the purpose of this clause. There is to be no reduction in conciliation and no pressure on ACAS, or from ACAS, to reduce the amount of conciliation that is carried out. We intend simply to make the process more efficient in one specific way; that there will be no discouragement of any kind, but encouragement to have the conciliation carried out within a period known to both parties. The fixed period of conciliation is a clearly defined period, where the services of ACAS conciliators are guaranteed to be available to the parties. Outside the fixed period, ACAS has no obligation to provide those services, although it may choose to do so. The length of the fixed period will be determined in regulations which will be drawn up in consultation with ACAS, the tribunals judiciary and the Employment Tribunals Service.
The aim is to raise the profile of conciliation, to focus the minds of two sides on reaching settlement during the conciliation period. As I understand it—and I have far less knowledge of employment tribunals

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than many of the Members of the Committee, as has become rather obvious—the problem is that too many people start considering the case seriously only as the hearing date approaches. However, if we have a fixed starting and ending date, they are encouraged to turn their minds to the conciliation process earlier and think rather harder about the prospects of achieving an amicable settlement.
ACAS has been closely involved with the development of this policy since it started. We recognise the valuable and successful work that ACAS carries out in conciliating disputes and we have no desire—it would be mad for us to have any desire—to cut back on its involvement in the resolution of disputes. On the contrary, the aim of this clause is to focus attention on the conciliation process. The number of claims that are subject to conciliation will not he reduced at all by this clause.
Let me give some detail on the subsections. Subsection (2) provides that an ACAS officer's duty to conciliate cases reverts to a power after a fixed period. This means that once the fixed period is over, ACAS officers will no longer be duty-bound to conciliate further. They will have the power to do so if they believe that there is a strong chance of settlement being reached but they can otherwise turn their attention to other cases.
Subsection (3)(a) states that the regulations may provide for circumstances where the Employment Tribunals Service might not send the application and response forms on to ACAS. The intention of this clause is that ACAS will not be send details of uncontested cases where the respondent has not returned the IT3 response form or engaged in the process in any way. Again, this enables ACAS to concentrate attention on cases where conciliation can really bear fruit.
Subsection (3)(b) makes consequential amendments to subsection 19(c) of the 1996 Act.
Subsection (4) amends Section 19 of the Act to reflect the change in ACAS's duty to conciliate. This simply ensures that parties will be notified that after the end of the fixed conciliation period, the services of a conciliation officer might not be available to them.
This is a matter of process rather than change in the effectiveness and availability of conciliation services. At the moment, conciliation can take place in parallel with the tribunal processing. The hearing date is fixed with reference to how conciliation is progressing. Surely, if conciliation is possible, it is desirable to attempt to complete the conciliation process and then the question of setting a tribunal date would not be necessary. Too often, parties do not fully consider the case until the hearing date is set. If we make it clear that the time for conciliation is fixed, then they should consider the process earlier.
Nobody has any less right to conciliation. Nobody has any less right to a tribunal hearing as a result of this clause. All it seeks to do is to eliminate or reduce one of the defects of the procedure, as it has been observed in the course of the consultation process.
Lord McCarthy: I hope it keeps fine for the Government, but I do not think they have appreciated the things that cause people not to take decisions until they get inside tribunals. The noble Lord talks about settlements on the steps. That is a new one. I hear about settlements in the side room. What happens is that ACAS tries conciliation but the employer will not move. Or, if the employer will move a little, the applicant will not move and, therefore, conciliation runs out. Conciliation runs out very fast if the two sides will not move. It may just require a few telephone calls and, if the two sides will not move, there is no more point in conciliation. However, one cannot immediately have a tribunal because the resources are not there. There is a queue.
The tribunal service is extremely reluctant to tell us how long that takes; in fact, one cannot find out how long it takes between the moment when ACAS throws up its hands and says, "This is useless!" and when it actually gets in the room for a hearing. Nobody knows. It quotes figures such as, "70 per cent get it settled in six months", but that reveals nothing. Nobody says precisely and, if asked, people who know say, "It varies enormously". What happens, however, is not settlements on the steps but settlements inside—just before they come in. They ask for an adjournment or for an extra half hour. Why? Because the lawyers have not read the papers and they all sit in the room and waste time until they come in. So if the noble Lord wants something to prevent settlement in the side room, I do not know what it is.
Lord McIntosh of Haringey: I am sure the noble Lord is right. What he says has the ring of truth to me and I make no distinction between the side room and the steps of the tribunal. It will still happen, even if this clause is agreed to without amendment. We just hope that that will happen a little less if more attention is focused on the conciliation proceeding in advance. I am very modest about expectations of this clause.
Lord Wedderburn of Charlton: So my noble friend is saying that the Government hope that conciliated settlements—at the last minute, I suppose—will happen a little bit less and that there will be more hearings.
Lord McIntosh of Haringey: No.
Lord Wedderburn of Charlton: There will be hearings if there is no settlement, I can assure the Minister. If there is no settlement, there will be a hearing—unless, of course, the poor employee applicant is prohibited from presenting his case; we shall come to that in Clause 33.
I really think that the Government have been badly advised on this matter. I hesitated to say this but I have to tell the Minister that one very experienced tribunal chairman has said to me, "This clause must have been drafted by people who have never been in an employment tribunal". I have to say that now because such a stout defence of the provision has been advanced.

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I direct my noble friend to particular points that he did not answer. On subsection (3), he gave a reason why particular circumstances should avoid the notice of appearance being sent to the conciliation officer, because these were cases that were not contested. He did not give any reason whatever why every originating application should not be sent to a conciliation officer. I ask him again, under what circumstances should an originating application not be—as it always has been—automatically notified to a conciliation officer?
Lord McIntosh of Haringey: The answer—
Lord Wedderburn of Charlton: If I may, I shall complete the point. If we had Ministers popping up and down each time someone makes an arguable point, our procedure will dissolve into a rather funny afternoon.
Lord McIntosh of Haringey: All right.
Lord Wedderburn of Charlton: I proceed to the second matter that I want to raise with the Minister. He says that the deadline on conciliation will help timely settlements. I appreciate that sometimes it is very inconvenient for people where there is a settlement at the last minute, but everybody I know in tribunals knows perfectly well that a large number of settlements come late on. If you have ever been near a tribunal, you always hear about settlements coming late; and that is nothing special to tribunals. It happens in all courts. If the Government do not like the judicial process, they must say so; however, last-minute settlements are a feature of judicial processes.
This amendment is apparently the product of a tiny but inexperienced mind because we must have conciliation first and then we must have the rest of the procedure. Life is not like that! You cannot deal in tidy concepts with conciliation and settlement. The Minister has given us absolutely no reason whatever why the duty of the conciliation officer should become a power. Also, he has not given us any reasons involving a party who wants conciliation to continue when the other party does not—that happens; one party wants more conciliation and the other party does not. Will not the conciliation officer, having no duty to conciliate, be in a weaker position, in which he merely has the power to do so if the parties want him to? He will be in a much weaker position; of course he will. I do not believe that ACAS has given advice to the contrary on that point; it is such an obvious point.
First, what about Section 19 and originating applications? Secondly, why will last-minute settlements not give rise to more hearings? Does the Minister really think that last-minute settlements are not a natural feature of judicial process?
Lord McIntosh of Haringey: I thought that I had answered both of those questions. On the question
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about the circumstances in which papers will not be sent to ACAS, the answer is: only in rare circumstances, such as uncontested applications.
Lord Wedderburn of Charlton: We do not know whether it is uncontested.
Lord McIntosh of Haringey: If there is any question of it being contested, it will not go.
Lord Wedderburn of Charlton: I am sorry; the Minister says he answers questions but then he changes them. I return to my question. When you get an original application, you have no idea at all whether it is going to be contested; you automatically send it now to the conciliation officer. Why stop that?
Lord McIntosh of Haringey: I do not see any reason to stop that.
Lord Wedderburn of Charlton: All to the good.
Lord McIntosh of Haringey: That does not need an alteration to the clause; the clause does not say that. The other significant issue that is being raised returns us to the point made by the noble Lord, Lord McCarthy, about settlement in the side room and what happens after the fixed period. I am very modest in my expectations of the effect of this clause. By focusing attention on a period in which conciliation is the first priority, there is a possibility that there may be some reduction in last-minute settlements. I did not claim—I would not claim—that there would ever be an elimination of last-minute settlements.
My noble friends Lord Wedderburn and Lord McCarthy both say that last-minute settlements are a feature of the judicial process, just as they are a feature of the tribunal process. We are very modestly trying to turn attention to a way in which it is possible to reduce the number. We may be wrong, but if we are wrong, no harm is done by having a fixed period. There is no threat to the applicants, there is no threat to the tribunal procedure and there is no diminution of the availability of conciliation or of the tribunals itself.
All of those matters are in the remit of the Employment Tribunal System Taskforce, which is looking at the overall deficiency of the operation and will advise on how to improve it and on whether more investment is needed. If that is the key—if more investment is needed—more investment will be made available.
Lord Wedderburn of Charlton: In view of the Minister's opposition, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendonmoved Amendment No. 83:
Page 34, line 7, at end insert—
"( ) The Secretary of State shall within 120 days of this section coming into force, prepare and publish an assessment of the additional resources required by the Advisory, Conciliation and Arbitration Service to facilitate the conciliation process as provided for in this section."

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The noble Baroness said: The amendment follows the philosophy that lies behind a similar amendment that I proposed to Clause 21; that is, Amendment No. 58. I believe that at that time the noble Lord, Lord McCarthy, indicated that he supported the proposal with regard to ACAS, although he suggested that there were difficulties in trying to assess the costs. However, he agreed with the principle that I was posing.
Parliament and, indeed, the public are entitled to know what the cost of implementing the Bill is going to be. One of the major impacts of the Bill will be the increased demands that will be made on the Advisory, Conciliation and Arbitration Service—ACAS. Despite the conciliation procedures laid down in Schedule 2, which hopefully will head off an unknown number of cases from employment tribunals, there is bound to be heavily increased demands on the resources and facilities of ACAS. Both sides of industry have expressed concern about the adequacy of those already stretched resources.
As my honourable friend the Member for Runnymede and Weybridge pointed out when this amendment was debated in the other place, we are concerned that the Government are imposing a greater use of ACAS without at the same time giving it adequate resources to provide the necessary service.
If the issue of providing ACAS with adequate resources is not addressed, then conciliation will become a mere piece of window dressing, which could simply delay the process and would fail in its objective of reducing the number of cases reaching tribunals. This would occur because there would simply not be enough conciliation officers to operate the process.
The Minister in the other place told the Committee there, as I imagine the Minister here might very well tell us, that the changes the Government are proposing have been made in full consultation with ACAS. The Government agreed that there would be resource implications, but all the Minister could say about them in the other place was:
"They would be the subject of ongoing discussions between my Department and ACAS".—[Official Report, Commons Standing Committee F, 11/12/01; col. 99.]
That is Whitehall-speak for, "ACAS is asking for as much money as possible, and the Treasury wants to pay as little as it can get away with".
As I say, the Minister told the Committee in the other place at col. 100 of Hansard that:
"Resource implications … would be the subject of ongoing discussions between my Department and ACAS."
As regards ongoing discussions, perhaps the Minister can tell us what stage the haggling reached in the three months before he made that statement? The Minister claimed that the Government do not accept that extra resources will necessarily be needed. How can they say that if, as the Minister in the other place admitted, also at col. 100,
"The proposals … are predicted to have a considerable impact on ACAS's case load"?
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Was the Minister suggesting that ACAS has surplus capacity at the moment? I doubt if ACAS would agree. The Minister in the other place also told the Committee at col. 100—and I would again like to quote his exact words—
"Requiring the Secretary of State to prepare and publish an assessment of the additional resources required by ACAS … is not likely to be helpful."
To whom is that not likely to be helpful? I assume that ACAS would like to know what resources it is likely to be given. I am sure that Parliament would like to know how much money it is going to have to provide and whether that money will be adequate to fulfil the ambitious plans that the Government have for this new conciliation regime.
I am sure also that employers and the unions, and individual employees, would like to be given some idea how practical this whole concept is likely to be in the light of the resources that will be made available to it. I cannot imagine that the Government and ACAS have absolutely no idea of what is going to be involved.
The amendment, of which the Government have already had three months' notice since it was debated in the other place, and of which they will have several more months while this Bill completes its passage through Parliament, does not ask the Government to publish their assessment tomorrow, next week or even next month. It gives the Government 120 days; that is, four whole months, from the passing of the Act—and incidentally it is one month more than my honourable friends proposed—to work out the cost and to publish the figures, which just shows how very reasonable I am. The Government are prone to ask Parliament for blank cheques, and what we are asking for is for the Government to promise to fill in the details and tell us what they are. I beg to move.
4.45 p.m.
Lord McCarthy: I am absolutely certain that the Government have absolutely no idea about that, but how could they have? How could they have in 120 days? If the case works out as the Government hope it works out, and they cut 40,000 applications, of course there would be less work for ACAS. There would be less work for everybody.
If, on the other hand, what Judge Prophet thinks will happen does happen and this new procedure generates more and more disputes under more and more headings, then of course there will be more work for ACAS. If the encouragement of the principle of postponing a hearing produces more conciliation and fewer hearings, then there would be more work for ACAS. If my noble friend Lord Wedderburn is right as regards the fixed term and giving ACAS just a power and not a right and that discourages it so that it will be missing and so will the hearing, and the poor applicant is stuck in the middle with nobody doing anything, then there might be less of such work. I feel extremely sorry for ACAS. It is being loaded with a completely new system and nobody can tell it what the consequences will be. Certainly no one will know that in 120 days or so. After all, we will not know what is happening as regards the total number of cases for at

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least six or nine months. The Government may not invoke the whole Bill; they may not bring all the parts of the Bill into effect. So we have no idea about that matter.
I said earlier that I saw the reason behind the amendment, that I did not want the Government to accept it, but that I would like them to think about the problem that they have created. I said that because they have created a situation in which it is quite impossible for ACAS to say how far it will be required to deal with an additional caseload or a smaller caseload. Just remember, this is a service but it is not a service of life or death. These are not policemen, nurses or firemen. These are not the kind of people who can apply pressure to get money out of the Treasury. ACAS is in a delicate and difficult situation, and the Government should be aware of that.
Baroness Miller of Hendon: I was surprised to hear the noble Lord say that he hopes the Government resist my amendment. I quote his words of last Wednesday,
"I support a subsequent amendment tabled by the noble Baroness, Lady Miller, which relates to ACAS because at least it is relatively precise. I am not against attempts to try to work out the cost of Bills".—[Official Report, 13/3/02; col. CWH57.]
In fact, he went on to say that it was quite difficult to do that, and I accept that. However, in principle, he agreed with me. Therefore, I was surprised when he started by saying he hoped the Government would resist my amendment.
Lord McIntosh of Haringey: I do not want to intrude on that but, if I may concentrate on the amendment, it is important to recognise that, since the issue was first raised, we have set up the Employment Tribunal System Taskforce. Clearly, the Employment Tribunal System Taskforce under Janet Gaymer cannot look at the employment tribunal system without looking, to some extent, at ACAS which is complementary to it. The terms of reference of the taskforce are to make recommendations on how the service can be made more efficient and cost-effective for users, and advise on the need for new investment to meet any revised service objectives and performance measures. If that is not instructing the Government on independent advice to look at the resource elements, I do not know what is.
As a matter of historical fact, the funding of ACAS has increased considerably over recent years. If I pick the period between 1998–99 and now, in 1998–99 it was £26.2 million, in 2001–02 it is £36.6 million. That is a substantial increase and it shows that the Government, if presented with arguments for an increased used of conciliation, are prepared to provide the funding for that increased use of conciliation. On that basis, we do not believe that a requirement for a formal review of the effect of the conciliation clauses on the resources of ACAS is necessary. We believe that that kind of review goes on successfully all the time.
Lord Wedderburn of Charlton: Before my noble friend sits down, he mentioned that this is relevant to a subsequent amendment but it will save time if he would just say a word about it now in addition to what he has said. He mentioned the Employment Tribunal System Taskforce. As we are discussing questions of parts of the Bill coming into force, are we going to wait to see parts of the Bill not coming into force until we have the report of the Employment Tribunal System Taskforce? Is that the intention? So we shall have to wait not merely for the regulations but also, and I am thinking aloud, the Employment Tribunal System Taskforce report before we can know what the position is on a variety of matters. This taskforce has been a matter of mystery to some people. It is now fully established and its membership has finally been announced. It is to report, I believe, in the spring.
Lord McIntosh of Haringey: Yes.
Lord Wedderburn of Charlton: Will we wait for that before parts of the Bill come into force?
Lord McIntosh of Haringey: If it is in the spring, clearly it will be reporting before the Bill comes into force—that is inevitable. However, it is probably better if, on the basis of the most up-to-date information I can obtain, I write to the noble Lord, Lord Wedderburn, and Members of the Committee who have taken part in this debate on the timing of the taskforce report and the timing of this Bill.
Lord Wedderburn of Charlton: I am grateful.
Baroness Miller of Hendon: I thank the Minister for his reply to my amendment, and the comments made by the noble Lord, Lord Wedderburn, which are quite helpful. I would be very grateful to receive the letter in due course. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 agreed to.
5 p.m.
Clause 25 [Power to delegate prescription of forms etc.]:
Lord McCarthymoved Amendment No. 84:
Page 34, line 12, after "State" insert ", after consultation with the Advisory, Conciliation and Arbitration Service, and with the Presidents of the Employment Tribunals for England and Wales and for Scotland,"
The noble Lord said: It was agreed that we would take Amendments Nos. 84, 86 and 85 in a group. In fact, Amendment No. 85 is rather different, but I shall come to that later.
In relation to the last amendment—and I hope that it will not be the case in relation to the points I am making today—spring will be a little late this year I fear. Last Wednesday I hoped that I would be able to move these amendments and gain some clarity about the Government's attitude towards Clause 25. But it was not to be. I then thought I might do it last

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Thursday, but we did not get to it then. Since we are halfway through today, I began to wonder whether we would come to it today. Gracie Fields had a song:
"I took my heart to a party but nobody asked me to play, so I took the damn thing away!"
I wondered whether we would ever get to this list of amendments and I am glad that we have done so now.
They are quite simple. In my opinion, they take us into the heart of the Bill. The Bill has several hearts, but I refer to Clause 25, which deals with what the Government plan to do to what I call "dear old ET1"—or, if you like, "dear old ET3". No one seems to know what ET2 is.
Dear old ET1 is a simple little form which the applicant fills in. He does not need to fill it in, of course, because he can write a letter. At the moment, it sets off the whole process of getting some statement other than the last word of the employer. That is what we must always hang on to these days. It is the way that the worker gets something other than the employer's final word. All he or she has to do to start the process off is simply to fill in the form, or even just write a letter, and it all begins to move forward.
The Government propose to change that. We are very concerned that they propose to change that because we cannot find out from the statements that they have made, either in the Explanatory Notes or in the various statements that the Minister has made in another place, precisely what they intend to do. Precisely why do they need the regulations that they have mentioned in the Bill? We do not see why they need all these regulations.
My first two amendments, to which I shall speak very quickly, are designed merely to ensure that, before these very important regulations are published on how we shall have these new forms, there should be public consultation. Last time the Committee met, I said that public consultation was not enough because the Government have now developed a whole range of public consultations. One needs about five definitions of what public consultation means. In particular, we seek to put into the Bill the specific insistence that ACAS and the Presidents of the tribunals for England and Wales and for Scotland in particular shall be consulted when we receive the regulations—or when we receive the draft regulations before we get the final regulations—on the new forms which are to replace the existing ET1 and ET3.
There has been very wide criticism of the problem that the Government, I believe, have created for themselves by saying that they are changing this long-established system without saying in advance and on the face of the Bill or in the notes to the Bill precisely what they intend to do. Judge Prophet has said that he regards this as the prime instrument which is to reinforce the barriers to access and to dictate the contents of the forms of application. He even seems to be saying that this is a major constitutional change; that instead of the judges deciding the forms of application to justice, this time the Secretary of State is deciding the matter. Certainly, there is power there for the Secretary of State completely to re-make these regulations.
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I would read to you what the Bill provides:
"(a) authorise the Secretary of State to prescribe, or prescribe requirements in relation to, any form which is required by such regulations to be used for the purpose of instituting, or entering an appearance to, proceedings before employment tribunals.
(b) authorise the Secretary of State to prescribe requirements in relation to documents to be supplied with any such form, and
(c) make provision about the publication of anything prescribed under authority conferred by virtue of this subsection".
We consider that that provision could cover anything. I do not say at this stage that that is what the Government intend. I am saying that it would cover. I am saying that they are taking the powers to do so. It would cover, for example, discovering whether the applicant had a knowledge of Schedule 2 procedures. One might very well say that since the applicant has to say that he has carried out Schedule 2 procedures, he ought to know what Schedule 2 procedures are. Applicants also ought to know, since they are going into quite a new system in which all kinds of penalties exist, what the penalties are. Otherwise, is it fair that the applicant could enter the new system without realising what is involved? It is not enough now, but will it still be possible to ignore these new procedures and to write a letter? I do not know. That is one of the questions I would like the Minister to argue.
It could be otherwise for several reasons. On 11th December in Standing Committee, the Minister was very reassuring in so far as he went. He admitted that a great deal of concern had been felt about these proposals and he said:
"Some concern was expressed, particularly by Labour Members, about people who might have problems with the language and feel uncomfortable about the issues. We are determined to design the form with those fears in mind and envisage a tick-box procedure".—[Official Report, Commons Standing Committee F, 11/12/01; col. 102.]
I am not quite sure how that will work. Perhaps one will have to tick to indicate which schedule one is going under and whether one is going to have a full procedure or the modified procedure. I do not know. The Minister continued:
"We should be as user-friendly as possible, particularly for people who must get used to the changing arrangements. We will address that in the regulations. I should emphasise that we will make enormous efforts to ensure that the forms are as widely available as possible".
In the past, one did not require a form and the form was not prescribed by the Secretary of State. It was required by the tribunals themselves. It was not a standard form. The Minister went on to say:
"They will be available from the employment tribunal service, job centres—or whatever their fancy new name is from April—and advice and law centres. They must be ubiquitous so that people have an easy access to them".—[Official Report, Commons Standing Committee F, 11/12/01; col. 103.]
That is all very fine and very reasonable. It sounds all right but it does not say what he Ts going to put in them. That is where I come to one qualification that we would like to see put in our Amendment No. 85. I shall read it to the Committee. It states:
"Page 34, line 15, at end insert 'save that no requirement or prescription shall be made by regulations made under this paragraph which requires an applicant to guarantee his

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observance of a statutory dispute resolution procedure falling within section 29, but that prohibition shall not extend to requirements relating to statements of honest belief".
In other words—Members of the Committee may not like the way it is written and have a better way of phrasing it—what we are trying to do is to limit what can be demanded from the applicant. All that can be demanded from the applicants is that they give their honest belief about what they feel they know about the procedures and their observance of them and the fact that they have completed them. That of course means—I accept this—that the prime responsibility for seeing that the law is obeyed passes to the employer. The employer, after all, is the person who must be expected to know what is in the Bill and to see that the provisions therein are embodied in the contract and that the worker is given the contract, which tells him or her what has to be done. All the workers can be expected to say is that they have done their best to observe what is in their contract. Nothing more than that can reasonably be expected of the worker. He cannot be expected to go out and buy incomes data services or law textbooks. All the workers can he expected to say is, as we say in our amendment, that they have related themselves to, "statements of honest belief", on the form. That is the amendment, which seems eminently reasonable. I hope that the Government will accept it. I beg to move.
Baroness Turner of Camden: I rise to support this amendment. A number of us feel a bit suspicious of what may happen if a very simple form, which ET1 is at the moment, is somehow passed over to a government department for redrafting. Some of us have experience of some of the forms which have had to be completed by claimants in the field of social insurance. We often find them very complicated and they sometimes look like an obstacle to people obtaining benefits. There seems to be nothing at all wrong with ET1. It is a very simple form that can be filled in by people with very limited educational attainments and perhaps those with language difficulties. We want to know why it is necessary for it to be redrafted at all; it has operated quite well for a number of years and there seems no reason at all for the provisions in Clause 25.
Baroness Miller of Hendon: I, too, would like to agree with Amendments Nos. 84 and 86. They are based on a similar principle to my later Amendment No. 89, which relates to Clause 27. I am not sure if these two amendments in fact go far enough, in so far as the Law Society has represented to me the view that these matters should not be dealt with by the Secretary of State but exclusively by ACAS or the president of the tribunals. I agree most strongly with the sentiment in those two amendments.
The noble Lord, Lord McCarthy also spoke to Amendment No. 85, which I would not accept—or, to phrase it differently, the amendment would need considerable explanation before I could understand it. It seemed to me to be saying that an applicant, who
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would always be the employee, need not comply with the detailed dispute procedure laid down in Schedule 2. I may not have understood that correctly but that is what it seemed to be saying. I thought, perhaps incorrectly, that Schedule 2 was introduced by the Government to replace their original proposal that the employee should pay costs if he or she lost, which seems to be a compromise position that the Government have found themselves in, and which should be accepted as it is. However, perhaps I do not understand that amendment.
Lord McCarthy: Will the noble Baroness tell me which particular bit of Schedule 2 she is concerned about?
Baroness Miller of Hendon: My concern was not about a particular part. It seemed to me as I read it that the applicant need not comply with the details of the dispute. I said that I was not sure I understood it, and if the noble Lord, Lord McCarthy, wishes to explain it to me, then he may do so. He may not feel that that is necessary. I certainly support Amendments Nos. 84 and 86. I would need more convincing about Amendment No. 85, but it is not for me to agree to or otherwise; it is a matter for the Government.
Lord McCarthy: The noble Baroness, Lady Miller of Hendon, appears to want to help. We cannot say precisely what the applicant will he required to answer in the new ET1. This is our difficulty and that is why we have an amendment.
As I tried to say when I moved the amendment, what the Minister said may be true. At one stage, he said that he wanted this only because he had to get it on e-mail and you cannot get ET1—I do not know why, one can get everything on the e-mail or on the Web—on the Web. Another time he said that some ET1s were different from other ET1s. He wants to standardise it. Why? I do not know why he wants to standardise it. They are not very different. What does it matter?
We do not know. We know what people say. We know what Judge Prophet says. He says one could use this in order to block access to the tribunal. I am not saying that that is what they want to do. I will say, however, that the CBI still seems to think that it can get 40,000 cases out of this. It also wants the Government to introduce a review and to say in a couple of years' time that if the number of cases is not going down, they will in fact introduce further legislation.
I want to know what the Government think and whether they have given such an undertaking to the CBI. We do not know. We do not know precisely what will be on the form. That is why we have tabled the amendment. We are saying that the general limitation should be placed on what we are asking the employee to say. He wants to discharge his side of the enterprise. Once he discharges his side, if the employer does not discharge his side, the process moves forward. It is the employer's fault because the employer has not filled in the questionnaire. We want the applicant to be able to discharge his obligations—very easily and as easily as he can now do it with ET1. The simple formula we

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have come up with is that the most that he has to do is to make "statements of honest belief". They do not have to be right. He does not have to get the schedule right. He does not have to be correct about law; he has to be correct to his honest and best belief.
The main test of that will be what is on his contract of employment. If he can point to the procedure that the employer has given him and say, "I've done all that", he is through. That is the purpose of the amendment.
Lord Wedderburn of Charlton: My noble friend Lord McCarthy puts the point very clearly and is obviously right. When the Minister responds, will he make reference to the matters that flow from this? Two things occur to me. First, Clause 25 is, as it were, the hinge of the apparatus of the Bill. This involves the form —whatever it is to say—that the employee must put in to initiate proceedings. That relates to Clause 33, in which, of course, he can be prohibited from presenting a complaint if he has not done what Clause 33 wants; which is mainly, as my noble friend rightly says, the completion of the necessary steps in Schedule 2. If the form is going to ask him to guarantee that he has completed the step under Schedule 2, it should, in our submission, be on the basis of "honest belief".
Secondly, although other amendments could not be grouped with this amendment or with Amendment No. 85 in particular—I do not want to upset the Minister's very large file in any way—they relate to matters arising in subsequent amendments. I mention especially Amendment No. 192, in relation to which we shall say that the explanation of the effect of relevant statutory procedures should be put into the written particulars by the employer, which the employer is obliged to give under Section 1 of the Employment Rights Act 1996 and which he has been obliged to give since 1963. I hope that my noble friend will not consider this to be an isolated amendment. Amendment No. 85 is absolutely central to the practical machinery of what will be put through if the Bill is enacted as it is and if the particulars ask him to say something about his position in relation to Schedule 2.
5.15 p.m.
Lord Gladwin of Clee: I just happen to have a copy of the ET1 application to an employment tribunal. It is a straightforward and simple document and I shall be interested to know why there is an intention to change it.
I am concerned about two matters, which have already been referred to by Members of the Committee. First, the DTI is not an infrequent party at employment tribunals—that is true—and it is questionable whether the ET1 and ET3 forms will be the products of someone who is not infrequently a party. I believe that a big question mark hangs there.
Secondly, this matter is simple but it is not prescribed. I suppose that at some point—I am sorry that the noble Baroness, Lady Gardner, is not here—most applicants fill in one of these forms, but it is not unusual to see them filled in rather skimpily. I had one
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today—my late arrival was due to the fact that I was at an employment appeal tribunal—where the continuation page went on and on. Therefore, I am worried about what is intended by taking these powers under this part of the Bill. However, I return to my concern about the Secretary of State having responsibility for doing that.
Lord McIntosh of Haringey: Clause 25 appears to me to be extremely wide-ranging. It seems that, under the terms of the clause, one could make quite dramatic changes in the form. However, I am sure that that is not what is intended. Rather than pursue what might be done under certain circumstances but which the Government have no intention of doing, it might be better if I were to respond to the amendment before us.
Before doing so, I should say that Clause 25 has been subject to scrutiny and consultation. In particular, the Council on Tribunals, which has the overarching responsibility as the statutory body responsible for keeping under review the constitutional workings of tribunals, including employment tribunals, was content that the use of revised forms should be mandatory. It made no comments about consultation. ACAS also responded to various points in the consultation paper but did not suggest that it should be consulted on the prescribed forms and documents.
More recently, this matter has gone before the House of Lords Delegated Powers and Regulatory Reform Committee. The department told the committee that the Secretary of State would be eligible to make provision in regulations on the basis of existing powers. However, in order to have the flexibility to make changes quickly and to make minor changes to the wording and layout of the forms, which would not necessarily justify the making of a statutory instrument but which would make the forms more user-friendly, it is considered helpful for the Secretary of State to have the power to prescribe forms under the regulations. The regulations will make provision about publication of any requirements prescribed by the Secretary of State in this way in order to ensure that the forms are readily available to those who are likely to need them. The Delegated Powers and Regulatory Reform Committee made no comment, adverse or otherwise, on that submission.
I turn to the question of consultation. I can give an absolute assurance that the tribunal presidents will be consulted—that is asked for in Amendments Nos. 84 and 86. I can also give an assurance that ACAS will normally be consulted. Clearly there may be occasions when a swift or minor adjustment to the form is required, but that will not be the normal situation and ACAS will normally be consulted. Of course, there will also be consultation with the Council on Tribunals.
We do not normally spell out on the face of a Bill who should be consulted. That is largely because, if one includes one person on a list but excludes someone else, it is assumed, perhaps wrongly, that the people who are not on the list will not be consulted. However, there is no difference in relation to the substance.

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Amendment No. 85 is concerned with the new statutory dispute resolution procedures. The intention here is to ask applicants not about the law, or about what is going to happen in the future or anything of that kind, but what procedures they have used. That will simply involve placing a tick in a box. There is no question whatever of them being asked to guarantee. That would imply somehow that penalties would be applied if they said anything wrong. Clearly applicants do get things wrong when filling in the forms. Sometimes, in the worst case, the applicant will state on the form, "I was unfairly dismissed" and the response will state, "No, you weren't; you were fairly dismissed". That does not get one very far and one has to make further inquiries. Those further inquiries could be made by letter or telephone, as happens now. No change is proposed to that.
I am interested in the point made by my noble friend Lord Gladwin about the DTI being a party. Of course, he is right to say that the DTI can be a party to tribunals. But how could it seek to further its own interest as a party to proceedings by the way in which it framed the questions in the form? Surely the DTI's interest is in ensuring that a reasonable explanation is given about the complaint in order that the other party can understand it. Of course, we want the form to ask questions such as whether the applicant has discussed the problem with his employer. We shall deal with that point when we reach Part 3 of the Bill.
So far as I can see, the DTI has no interest in distorting the form. Only a tiny proportion of claims—fewer than 2 per cent—involve the DTI. If an assurance is required that it will not be led by those 2 per cent of claims then I am very happy to give that assurance.
Lord McCarthy: I do not want to spend any time on this because, as Members of the Committee know, we shall be opposing the Question whether the clause stand part. I shall be able to make any general comments then. I simply want to make three quick points because I do not believe that the Minister gave me an answer in relation to two of them. In addition, he said something in relation to the third which rather worries me.
First, he did not answer my question regarding whether or not the form will be compulsory. As my noble friend Lord Gladwin said, very often applicants do not use the darned thing; they simply write a letter. Some people say that they have written a postcard. It is true that they get the form back again, but it is not compulsory. One does not have to obtain form ET1 in order to start the process.
I shall ask my first question again. Will a person have to use the official form in order to start the process? Will he need to have it in his hands before he can begin to obtain an answer which is different from that provided by the employers?
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Secondly, I asked, but perhaps did not do so with enough formality, what the Government's reaction was to the most recent statement of the CBI in which it asked for a review of the Bill—not simply of this clause but of the whole Bill. I quote from the CBI:
"We would therefore welcome assurances that the Government will review the effectiveness of this procedure after three years and consider whether further measures are necessary to promote workplace dispute resolution".
My question is: have the Government given such assurances? Will they give such assurances? Do they take the CBI's view that we have to get the 40,000 out? Somehow, the CBI still believes in 62 per cent having something to do with people like that. What is the Government attitude towards these assurances? That is directly related to this clause because the requirements could easily be tightened up in it. One could so easily discourage people from coming. I do not say that that is what the Government are doing at this moment, but if they were to be committed and were to give assurances to the CBI that it must review the effectiveness of the procedure after three years if we do not get to 40,000 or so, we have to be concerned.
Finally, the Minister did say something new, if I understood him correctly—I will read Hansard tomorrow—about what will be on the new form. He said that the applicant will be asked to say what procedure he used. That worries me because there are four models. There is a grievance procedure and a disciplinary procedure. Many—I should be careful here—applicants will not know whether they are concerned with a grievance or a reaction to a discipline. All such cases involve reaction to a management act; that is why he has a grievance or why he has been disciplined. He would not be there if there had not been a management act—but you are going to ask the applicant to tell you whether he is going forward under the grievance procedure or under the disciplinary procedure, so he has to know that.
Secondly, you must be asking him whether he used the full procedure or the truncated procedure. We want to argue subsequently that whether you are in that procedure or the other procedure, full or modified, seems to us on the face of the Bill to depend entirely on the employer. He is going to decide which one you are in. That brings me back to my amendment. You cannot ask the worker to say anything more than what he has in his contract of employment. He may not know which procedure he is in. For God's sake, why should he know what procedure he is in? All he knows is that he wants to get to a tribunal.
I would therefore like the Minister to answer these three questions for me. Why do we need to ask him this last set of questions?
Lord McIntosh of Haringey: There are three separate questions. First, is the form compulsory? The answer is: no more than it is now. What happens now is that people put in forms that are illegible or incomplete or in the form of a letter. If I am told postcards have been used, I believe it; but that is not the point. The point is that the secretary of the tribunal will accept all illegible or complete applications or

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applications made on the form on the date of receipt for the purpose of the time limit. Then it is a matter of making further enquiries and for the chairman of the tribunal who can decide whether an application is not valid because it is out of time. As I understand it, there is no proposal for any change in that from the present position.
The second question is about the CBI demanding a review after three years. Neither my noble friend nor the CBI will misunderstand me if I say that we always review legislation and we certainly will not take more than three years to review it. That will not be because the CBI has asked us to do so; it will be because it is good practice to do so. If it happens to coincide with what the CBI wants, it does not do so for the reasons given by my noble friend Lord McCarthy about the CBI's motives; there is no such implication in this regard.
The third question comes back to Amendment No. 85 and the new form. I said that when the procedures have been used, we needed to establish whether they were dismissal procedures or any other particular procedures, and I agreed that the applicant could not be expected to know that. This arrangement is very much simpler than that. It merely involves asking questions such as, "Have you written a letter?" and "Have you had a meeting?"; in other words, it involves purely factual questions that can be answered by ticking a box and without any knowledge of the law or of tribunal procedures.
Lord Wedderburn of Charlton: The Minister has added to my knowledge enormously and I for one am most grateful to him. He said the new form will not be obligatory and he now says that there will be some questions of this sort. What happens if the employee applicant does not know the answer?
Lord McIntosh of Haringey: Then he says he does not know.
Lord Wedderburn of Charlton: What happens then?
5.30 p.m.
Lord McIntosh of Haringey: The same as happens now when forms are incomplete: steps are taken to fill in the gap. There has to be something to start a tribunal procedure. The great virtue of tribunals is that they act in a relatively informal way. The assurance that is needed is that those further inquiries to make sure that one has a starting case do not affect the validity of the application by putting it out of time.
Lord McCarthy: I do not want to waste the time of the Committee. I am not satisfied but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 85 and 86 not moved.]
On Question, Whether Clause 25 shall stand part of the Bill?
Lord McCarthy: It is ridiculous for us in Grand Committee, when we have not really obtained any
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concessions—any significant concessions, though we have got some information—to oppose the Motion that the clause stand part, because we do not intend to divide. We cannot divide.
I stress how strongly we feel that the Government should go away and think again about this clause. That is not just because of all the concern about the matter. I could have wasted the time of the Committee by quoting all kinds of authoritative people and groups who were closely involved with the tribunal process and who are worried. CABs do not get excited over nothing. They are worried about the replacement of the old familiar ET1 with something new.
I wish that the Government could find it in their heart to put something different in the clause so that the regulations did not look so horrendous, open or extreme. They appear as if they would justify—I am not saying the Government intend to do this—a whole list of extra conditions. I accept the Minister's statement that there is no intention to introduce such measures. I wish that there was something on the face of the Bill to reassure people about what they have done. We cannot disregard the fact that whatever the Government may say—to some extent they speak with two voices—they seem to have a desire to reduce the total number of tribunals. There are people—employers in general, not just the CBI—who believe that a central purpose of Parts 2 and 3 is to reduce the total number of applications and therefore the total number of hearings. Sometimes I have heard Ministers say—I cannot remember whether this was in public, in private or in semi-private—that that is not the Government's basic intention and that they do not really care if they get 40,000 or 20,000 out. However, they never put that on the record. They never say that they have somehow got into this because they were put under pressure and told that Parts 1 and 4 were in the interests of the trades unions and the workers, and therefore Parts 2 and 3 had to have what they now call balance.
Clause 43, which we have not reached yet, is a central place—as is Clause 25—in which the Government could say something to detach themselves from this notion that we are all on a chariot which is moving towards reductions in the total number of tribunals. After all, they know, if they are honest, that there will not be any reduction in the total number of tribunals. They know that they are stuck with introducing all kinds of legislation and directives from Europe and elsewhere.
The Government do not know yet what the effect will be of reducing the application period to 12 months; no one knows what that will do to tribunals. All kinds of accidents happen which produce additional tribunals and they know they will not get down to 40,000 or 30,000 or 20,000. The sooner they disengage from that concept, the better. This could be done under the heading of Clause 25. A new Clause 25 could be written which would be much more acceptable and which would symbolise the Government's appreciation that one of the main

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themes of Routes to Resolution has been modified by the facts. I therefore oppose the Question that the clause stand part of the Bill.
Lord Wedderburn of Charlton: My noble friend makes a powerful case. I would like to suggest to the Minister that there are two aspects that one would like a reply to. It must be the case that Members of the Committee wonder why we bother to say we oppose clause stand part because, of course, in a Grand Committee, that is a proposition almost writ in water. Nobody divides on anything in a Grand Committee.
But I must say to the Minister that this is a matter that we ought to come back to on Report. I am sure he understands that a large number of these amendments are moved both as a matter of practicality and as a matter of principle. We do not believe that workers should be inhibited in the way that the Bill could mean as regards their access, on reasonable cases, to the justice of tribunals.
Now, of the two points that I hope my noble friend can respond to, the first thing that arises from this Clause 25 is that a government should never take powers that they cannot possibly see the need of. As I understood my noble friend the Minister, he was saying, "Well, of course, we could do all sorts of terrible things under these powers to make regulations, but we could not possibly imagine ourselves doing it". Now, of course, if that is just at the margins, I quite understand; the Government want to be able to adjust things with fine tuning as time goes along. But this is an ability under Clause 25 in the new Subsection (3ZA) vastly greater than the Government say they need. It really is hubris of a government to take vast powers when they say they only need small ones, although what those small ones are going to be used for is more and more mysterious.
Indeed—and this is my second point in support of my noble friend's proposition that the Government should please go away and consider dropping or redrafting this clause in some way—I have had more communications from expert commentators upon Clause 25 and Clause 33 than upon anything else because Clause 25 is the hinge. We cannot discuss them both together because of our procedure but we will come to Clause 33 later.
Clause 33 is the clause under which, unless they fulfil certain conditions, workers are going to be prevented from getting to the tribunal at all and from presenting a case to the tribunal at all. Now, the Minister will understand, I am sure, that those conditions relate to Schedule 2. He says an applicant will be asked under the new procedures, "Have you completed certain procedures"? That is what Schedule 2 is about. So Clause 25 is the hinge that takes you to the operation of Clause 33. There is vast concern about what will be put in the new prescribed forms. I understand that there will be new prescribed forms but we cannot tell exactly what there will be that is different from the current ET1 in the new prescribed form and whether a worker will be asked to say what procedures he has followed. We have already made the case that he
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should not be asked to guarantee that, but of course, even a statement of honest belief could go to the operation of Clause 33 if it did not fulfil the requirements of Schedule 2 and steps he has to complete if he is to be allowed even to go within the range of hearing of the tribunal.
I hope we can get some assurance from the Minister that this clause, which is so central to the operation of the new machinery of it and Clause 33, and indeed Clauses 31 and 34, is going to he reconsidered by the Government.
Baroness Turner of Camden: I, too, would like to support my noble friends who have expressed their concerns about Clause 25. As I said earlier, it can be taken that the form could be redesigned to provide all sorts of obstacles to somebody who wanted to apply to an employment tribunal. We have heard from the Minister this afternoon that that is not the Government's intention. He said that the form would not be compulsory and gave the impression that so far as present procedures are concerned, they were quite satisfactory.
If that is so, I question whether the clause is needed at all. Quite frankly, if it remains unamended in the Bill, it will give the impression to many people that the whole thing is going to be reorganised, the form will be redesigned, everything will be made much more difficult, and further obstacles will be put in the way of people who want to go to an ET.
The Government have assured us that that is not the intention; of course, I accept that. However, since that is so, it seems to me that there is a case for looking very carefully at the clause. As it stands at the moment, as the Minister has himself said, powers given under the clause are very wide indeed. Can we please have this looked at again?
Lord McIntosh of Haringey: I said when I was responding to Amendments Nos. 84 to 86 that Clause 25 seems to be very widely drawn. I do not deny that in certain hands—no doubt taken as it stands—these powers could be distorted or even misused. That is the nature of regulations and legislation. That is always the case; there is nothing different here. It is always the case that we do not commit future governments, and nothing is set in stone, to use the analogy of the noble Lord, Lord Wedderburn of Charlton.
The powers are wide because there are a number of things which may be necessary, and have been suggested as being necessary in the consultation process, to improve the efficiency of the tribunal system. This has all been a matter of consultation already; it will continue to be a matter of consultation with the TUC, the CBI, the Law Society, the Council on Tribunals, the presidents of the tribunals themselves and everybody else—the "tribunal judiciary" as it is called, is it not? It is the intention that the forms will be properly designed and "plain English-ed". Indeed, I would not mind giving an undertaking that the forms will be sent to the Campaign for Plain English. Does not Chrissie Maher in Manchester do a very good job and receive awards

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every year? She looks at things whether they are sent to her or not. They can certainly be sent to her for her expert criticism.
If it can be shown that something could be put on the face of the Bill which would give more assurance to those who are worried about misuse of regulations, we will look at it of course between now and Report stage. We always do that.
Lord McCarthy: Why cannot the Minister look at our amendment? That is what our amendment does.
Lord McIntosh of Haringey: We are discussing clause stand part at the moment.
Lord McCarthy: Why did you not—?
Lord McIntosh of Haringey: The amendments are defective. I am sorry; I have to look at the amendments on the face of the Bill. I have no objection whatsoever to our debating in Grand Committee the Question that the clause stand part. The subject was introduced with a measure of apology. No apology is necessary; it is entirely proper that we should be debating clause stand part. However, at present we are debating clause stand part and not particular amendments. We have to choose.
Lord Wedderburn of Charlton: I appreciate what my noble friend says. Of course, it goes without saying that our amendments are almost certainly defective in their wording and can always be improved if the Minister is intending to take them away and reconsider them. However, I rose only to obtain clarification because there is much concern about what will be done with these powers. My noble friend says that the form can be put into plain English. I have the form here. Which part of it is not in plain English?
Lord McIntosh of Haringey: I do not believe that it is my job to criticise the existing form. I acknowledge that a number of people here are better informed than I am about tribunals. I spent my working life in questionnaire design, and I do know something about forms. Many things can be said about most government forms, and it is certainly true that many government forms are not expressed as clearly as they might be. I have given undertakings about the form being in plain English.
The matter comes back to the fundamental point that I want to make in relation to Part 2 of the Bill. We are trying to promote other ways of resolving cases. We are not proposing a mechanistic system to cut down on claims. However, we are looking for flexibility in choice and that must be to the advantage of applicants as well as employers.
I have listened to claims that there will be a reduction in the number of tribunal cases. I have no idea whether there will be a reduction in the number of cases; there may well be an increase. That is not the object of the exercise. The object of the exercise is to secure resolution in different ways and, so far as possible, to do so in advance of the tribunal to the satisfaction of all parties. It is not the intention to
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freeze out applications. That is not what the forms will be used for. I shall consider between now and Report stage whether it is possible to be more precise about those objectives in Clause 25.
5.45 p.m.
Baroness Miller of Hendon: Before the Minister sits down. I do not support his noble friends in their opposition to the Question whether Clause 25 stand part of the Bill. In responding to his noble friends, the Minister pointed out yet again, as he did earlier when he responded to the amendment, the wide nature of the powers that the Secretary of State has. His noble friends showed their concern about it, as indeed did I, and that is why I supported their Amendments Nos. 84 and 86.
I know that we are not discussing the amendments now but, in view of what the Minister said about the extraordinarily wide powers conferred by Clause 25 and what could happen, I believe that he should look again at the amendments. They may well he defective, but there is no reason why the Minister and the Government could not return with amendments that meet our concerns some of the way.
Lord McIntosh of Haringey: The answer is that the concerns are very different and conflicting. I want to say one more word about a complex form and a simple form. It is not necessarily true that a simple form is better from the point of view of the applicant. It may be better if, for the sake of a little more complexity, the applicant is encouraged to make a better case at the beginning and not to lose part of his claim. As a survey researcher and question designer, I place that into the thinking pot.
Lord Gladwin of Clee: If all the consultation that my noble friend mentioned has taken place, why do we not amend the form that we use at present? As my noble friend said, this problem is of the Government's own making. I was asked why I was concerned at the Secretary of State at the DTI being a party. Of course, I recognise that only a few cases are involved. I am no lawyer, but this is one of the first things that the lawyers who practise employment law throw at me. Of course, I am supposed to defend everything that the Government do, and in this area I do my best.
There is an air of suspicion. The Government should be working to get rid of it, and they can do so in Grand Committee. The opportunities will arise, in particular, when we deal with the amendments to which my name is attached. If there is a problem in relation to the application form and the notice of appearance, why do we not alter both forms ET1 and ET3? Why should we accept what are regarded as draconian powers? The answer is: in order to reduce the number of applications which go before tribunals.
However, the answer that I have given is not that one. I believe that the way to reduce the number of tribunal hearings is by introducing a system into the 600,000 workplaces that do not currently have a procedure. However, that goes down like a lead balloon because those workplaces believe what they

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have been told—that is, that the intention of the Government is to reduce the number of tribunal cases. This is seen as a way of doing so. I know that the Minister says that that is not the case but, if the nature of the application to tribunals needs to be altered, then we should alter the one that we already have.
Lord McIntosh of Haringey: I repeat what I said. The new forms will not be designed to deter applicants or respondents, even inadvertently. If that means that we build on or adapt the existing forms rather than create new ones, I do not simply believe that that is possible—it is highly likely. One does not start from scratch when one has a variety of alternatives. One certainly starts with what one currently has and sees in what ways it can be improved from the point of view of both applicants and respondents.
Perhaps I may talk about the lawyers and talk to my noble friend Lord Gladwin. I believe that I have given all the assurances that I can give about the Government's intentions. However, suspicions relate to perceptions and not only reality. It is our duty to seek to counter suspicions which are based on misconceived perceptions as well as those which are based on realities. My offer to reconsider whether the scope of this clause can be confined more closely to the objectives which I set out in defending the clause applies precisely because I am aware that we must be concerned about suspicions, whether or not they are well-founded.
Lord McCarthy: I want to raise only a few points. First, we shall undoubtedly table some new amendments which will enable the Government to modify this and many other clauses. We thank them for looking at those amendments.
Secondly, the position in which the Government find themselves and the perceptions about which they are concerned are their own fault. Routes to Resolution refers to the 40,000 cases. Alan Johnson's introduction to the document talks about how more disputes are ending up in litigation. As we have argued time and again, there is no evidence for that, and there is no proportional increase in litigation. In response to Routes to Resolution, the combined effect of putting forward a whole series of proposals—not only in relation to Clause 25—is an estimated reduction of between 30,000 and 40,000 applications compared with current levels. That becomes a government objective; it becomes a government aim. There it is—the combined effect of all the proposals is an estimated reduction of between 30,000 and 40,000 applications.
If one really wants to change the atmosphere, one should change that target—withdraw that target. While that target is there, you will be consistently, persistently misunderstood. That is the first point—or the second point actually, because I said that we will take these amendments.
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The third point is that you say, "Well, we have all these powers under the clause. You come along and say that they are possibly, or could be, the basis of abuse". One might say that everyone could say that—everything can be abuse. However, careful drafters and careful legislators know that. They look at their legislation and say, "Let me not demand anything more than I essentially, necessarily require. Then that suspicion cannot be so easily placed upon me".
Frankly, we cannot see why the Government cannot carry on with the same old tribunal form that we have now. They do not tell us why they need this tremendous set of powers set out in Clause 25. Until the Government come to terms with what they have on the face of the Bill, just as they must come to terms with the claim that they make, they will consistently be misunderstood.
When I first read the document, and put it together with other statements made by Ministers in the House, it seemed to me that the Government were making vast claims for what they intend to do. I know that they have taken it back, but that was the impact effect. I am sure that that is what many people thought and they really ought to have done it rather better.
Finally, successive governments have attempted to do something of this sort. The Conservative government tried to do something of this sort. My friends who sit and work on tribunals will not thank me for saying this, but it is an open secret. The reason tribunals work as well as they do is that when such things are shoved in legislation, sensible, intelligent members of tribunals know how to mitigate their consequences.
There are not many pre-hearing assessments. There could be many more but there are not because they are not considered to be helpful. One could put in powers to get costs out of applicants but, on the whole, the tribunals do not take costs from applicants because they do not think it will help. One could say that the applicants should be fined if they make vexatious presentations, but the tribunals say that they do not really think they have any vexatious presentations. Many provisions could be put on the face of the Bill but tribunals have an expertise and skill in making the system continue to work, much as it worked in the past.
However—this is where Clause 25 comes in—if Clause 25, by accident or design, discourages people—if they look at it and decide they are not going in for that—there is nothing the tribunals can do. The cases will not reach the tribunals. If Clause 25 works, in the sense that some people in the CBI would like it to work, there will be a fall off in the number of tribunal hearings because people will not get to the tribunals. Nobody can mitigate the consequences of this legislation if they do not have a simple, easy way of access to the tribunal. That is why, although we are not dividing in the Committee, we believe that the Government should take this clause away and rewrite it.
Clause 25 agreed to.
6 p.m.
Clause 26 [Determination without a hearing]:
Baroness Miller of Hendonmoved Amendment No. 87:
Page 34, line 25, at end insert "if it is agreed by the parties to the proceedings"
The noble Baroness said: I should like to speak to Amendments Nos. 87, 88 and 90, which are grouped together. The first two amendments deal with Clause 26, the marginal note to which describes its purpose as "Determination without a hearing". Amendment No. 90 relates to Clause 28, which deals with pre-hearing reviews.
The purpose of Amendment No. 87 is to make it clear that the regulations do not empower the tribunal to dismiss an employee's case it considers unsustainable simply on the basis of reading the application and any supporting documents. It also equally ensures that the tribunal does not give judgment against a respondent on the basis that it has decided against him without any need to consider his defence and any oral evidence. In other words, this amendment is tabled to ensure that there is no summary dismissal of a case without a hearing except, of course—and this is the point—if the parties consent.
The consent of the parties is to be an essential ingredient of any procedural regulation allowing the determination of the case without a full dress hearing. There is, in fact, ample precedent for such a limited power to dispense with an oral hearing. Some cases in the High Court are dealt with purely on the basis of affidavit evidence, including, for example, applications for summary judgment under Civil Practice Rule 24.
Quite incidental to that, years ago that rule was numbered 14 and there was a useful jingle, which all law students had to learn, which went,
"Order 14,
What does it mean?
Well it's the end,
Unless you get leave to defend".
There is also the important example of planning appeals, the vast majority of which are dealt with by written submissions to the inspector, including submissions from objectors among the general public who are not actual parties to the application.
So we can agree that there are circumstances where an oral hearing could be dispensed with and to that extent we agree with the Bill as it is drafted. However, that summary dismissal can take place only if both parties agree, otherwise, their rights under the convention to a fair and public hearing will be infringed.
The Minister may tell us that this could be covered by the regulations, but on the other hand it may not. We do not know what the regulations are going to say and, in turn, the regulations themselves can be altered by the Secretary of State. The purpose of this amendment is to ensure that consent of both parties must always be had or a hearing of some sort must take
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place—including such as I shall mention in relation to Amendment No. 90—before the tribunal takes upon itself to deprive a party who wants it of a hearing.
Amendment No. 88 is to provide for a deficiency in the clause. It sometimes happens that a party launches a claim or indicates that a claim is to be defended, then fails to turn up at the hearing. This amendment allows for summary judgment to be given without going through the formality of the attending party having to adduce all the evidence and perhaps keep witnesses hanging around while other witnesses give evidence or while the case is explained in great detail to the tribunal.
It is quite right that the tribunal should have a discretion to adjourn the case to a later date. However, to do so could add to the expense of the attending party and the inconvenience of the tribunal and witnesses alike. This amendment allows the tribunal—except where it is convinced that there is reasonable excuse for non-attendance—simply to exercise its discretion to treat such non-attendance as an admission of the other party's case or of the abandonment of its own. The Government will presumably be pleased to see a procedure where public and witnesses' time and expense can be saved.
Amendment No. 90 deals with pre-hearing reviews which tribunals will be authorised to conduct. In recent years, the civil courts have introduced a system of pre-trial review, when issues such as the number of witnesses to be called, how many expert witnesses per side, what admissions of fact either party is prepared to make, the potential length of the hearing and a myriad of other procedural points can be disposed of with a view to speeding up and shortening the actual hearing. We welcome the addition of this facility to the tribunal procedure, which is introduced by Clause 28.
However, the Government have missed an opportunity further to improve the tribunal procedure, which my constructive amendment is designed to do. I just explained that in civil cases—and again I remind the Committee that the same applies to tribunal proceedings—the court has the power under Civil Practice Rule 24 to give a summary judgment against a defendant in cases where it is satisfied that there is not a valid defence.
In the civil courts it is also a fact of life that the district judge or the High Court Master conducting the review can sometimes give an indication—which is lawyer-speak for "a nod and a wink"—as to the way the judge thinks the case is likely to go. In the civil courts, where the parties are usually represented by trained lawyers, that indication is usually enough at least to send them off to the negotiating table. Let there be no mistake—many cases are brought before the employment tribunal which everyone knows are hopeless from the start, or in which the amount that the claimant is likely to receive is out of all proportion to the time and expense that the case would involve. Equally, there are many cases in which the best advice that a respondent could be given is to pay up and to look cheerful while he is doing so because he does not have a case at all.

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Cases before tribunals, no less than civil cases before the ordinary courts, cost money to conduct, cause considerable stress to the parties on both sides, cost public money to accommodate and take up the time of public officials to manage and adjudicate on. That is to say nothing of the fact that the lists are cluttered with what will turn out to be no-hope cases, causing parties with what I may call genuine cases to have to wait much longer for justice.
This amendment gives the tribunal power comparable to the other civil courts—I emphasise the words "other civil courts"—to dismiss hopeless cases or hopeless defences. It does not require the tribunal to do so automatically. Of course, the words "reasonable prospect of success" give the tribunal a great deal of— I use a word that is dearly loved by the Government—flexibility. I hope the Minister will agree. I beg to move.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): The amendment of the noble Baroness, Lady Miller of Hendon, seeks to ensure that parties will have to give written consent to proceeding with a determination without a hearing, rather than attending a full oral hearing on their case. I am happy to be in a position to reassure that, as stated in the Explanatory Notes accompanying the Bill, the Government fully intend that such content must be received from both parties in writing before it is possible for the right to an oral hearing to be waived. It is important that neither party should be able to pressgang the other into pursuing a determination without a hearing rather than attending an oral hearing. We do not believe that it is helpful to include such detail on the face of the Bill, however. We believe that that is better set out in regulations.
The only exception to a requirement for consent will be where a respondent has failed to take advantage of his opportunity to defend the case. In such uncontested cases, the specific content of the respondent to a determination without a hearing would not be required, as he would have lost the opportunity to have a say in how the proceedings should be determined.
The Government have clearly laid down their intended implementation of the clause both in the Explanatory Notes, and on the record in the other place. In addition to the requirement for both parties to give their written consent, they will have to seek independent advice from a third party on the consequence of consenting. Such advisers will include ACAS officers and those who may advise on compromise agreements.
Furthermore, the final decision on whether or not a determination can be made without a hearing will lie with the tribunal. If the tribunal chairman believes that an oral hearing is in the public interest or is otherwise not appropriate, he may override the parties' consent if he wishes.
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The use of determinations without a hearing will be used as part of the fast track for the consideration of tribunal claims, which was consulted on in Routes to Resolution and which received broad support. The Employment Tribunal System Taskforce is studying the fast track as part of its consideration of improvements to the management of caseflow and case management. Any recommendation the taskforce makes on the use of determinations without a hearing will be taken into account before the regulations are drafted. There will be full consultation on the regulation and I hope that this will be of some comfort to the noble Baroness.
I turn to Amendment No. 88. It would provide that where a party failed to attend the hearing, the tribunal would, without hearing oral evidence or considering written submissions, find for the party who did attend. While it is clear that it is undesirable to have cases that progress to tribunal only to have one party fail to attend, I do not believe that the method that that amendment suggests is the best way to deal with such situations.
If a case were uncontested—that is, the respondent had failed to engage in the process at any stage—the tribunal, under the Employment Tribunal Rules of Procedure, may make a determination based on the applicant's evidence alone. Following the implementation of this clause, under such circumstances the applicant would also have the option of requesting the tribunal to make a determination without a hearing based on written submissions and without any contribution from the respondent. The respondent would have failed to take advantage of his opportunity to have a say in how the proceedings are determined by failing to submit his ET3 response form. Those are the ways in which applicants can receive a determination in a case that is not contested. They both contain some consideration of the merits of a case even though a respondent has failed to engage in the process in any way.
The amendment of the noble Baroness, however, deals not with such cases, as I understand it, but rather with circumstances in which the respondent has engaged in a process to a certain degree—perhaps even fully—but one of the parties cannot attend the tribunal on the date arranged. Where the party is ill or abroad on that date, they would be covered by the "reasonable excuse" caveat in the amendment. But what about the small employer who cannot attend for business reasons? If an employer had engaged fully in the process from receipt of the ET1 through conciliation for setting of the date for oral hearing but then had strong business reasons for failing to attend the tribunal on that day, it is unlikely that the tribunal would consider that a reasonable excuse and, under this amendment, would automatically find against the employer without consideration of any papers or the hearing of oral evidence.
There is no precedent for the determination of a case without the consideration of any evidence whatever and I believe it would be a dangerous path down which to venture. It would also allow applicants to succeed without having to make out their case before the

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tribunal. I hope that the explanations that I have given will allow the noble Baroness to withdraw her amendment.
Amendment No. 90 requires tribunals to dismiss or strike out proceedings unless they have a reasonable prospect of success. It is too draconian to allow no room for the use of existing deposit procedure, which is still intended to be the main weapon against cases that appear to have no reasonable prospect of success, striking out cases intended to be used only for those cases that are hopeless.
Moreover, we do not want tribunals to have the power to hear evidence at pre-hearing reviews. Such reviews are intended to be relatively quick and based on the contents of the originating application and notice of appearance, any representations in writing and any oral arguments advanced by the parties. If evidence were to be heard the review would take longer, thereby nullifying its value; that is, it would be more like an ordinary hearing. For that reason, I cannot accept the amendment and urge that it be withdrawn.
Baroness Miller of Hendon: I am comforted by what the Minister said on Amendment No. 87. If he is saying that the Explanatory Notes explain that what I am asking for can happen, that, so far as I am concerned, is perfectly satisfactory.
I am not so content with what the Minister said about Amendment No. 88. It uses the phrase, "failed without reasonable excuse", and the tribunal has the discretion either to do that or to adjourn to a later date. My amendment takes care of that. I hope that the Minister will look at that again.
I think that I accept what the Minister said about Amendment No. 90, but I shall read his comments with care. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 88 not moved.]
Clause 26 agreed to.
Clause 27 [Practice directions]:
[Amendment No. 89 not moved.]
Clause 27 agreed to.
Clause 28 [Pre-hearing reviews]:
[Amendment No. 90 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon: I am sorry, I have not spoken to Amendment No. 89.
The Deputy Chairman of Committees (Lord Lyell): We have moved on.
Baroness Miller of Hendon: I have missed my opportunity.
The Deputy Chairman of Committees: I hope that the noble Baroness will have another opportunity to discuss that amendment. I do apologise.
Baroness Miller of Hendon: That is quite all right. In my haste to get out, for obvious reasons, I overlooked the amendment.
6.15 p.m.
Lord Wedderburn of Charltonmoved Amendment No. 91:
Page 35, line 6, at end insert—
"(aa) for authorising an employment tribunal to strike out an originating application—

(i) in the circumstances provided for in rule 15 of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (S.I. 2001/1171); and

(ii) where the application manifestly discloses no reasonable grounds for bringing the claim,

but so that no application shall be struck out on the ground only that the tribunal considers the claim to be based on weak grounds.""
The noble Lord said: This is the first of some amendments where, to put it generally, individual employment protection law intersects with collective issues. I say that because, although we can say that most of what we are concerned with in the Bill is, of course, employment protection legislation and regulations as they affect the individual employee, nevertheless it is quite impossible to keep distinct individual employment protection and collective industrial relations as between organised employees and trade unions or, indeed, those in groups outside trade unions and their employers.
The amendment concerns the interlocutory injunction which the High Court can grant against industrial action. The reason the problem arises is partly through the rules that apply to this court order against collective action, which can be granted on the basis not of a proven course of action or proven liability on the part of, in effect, the union, but where the employer or third party has shown that there is the likelihood of a liability in a trade dispute in the defendant calling for industrial action. That is to say, where perhaps the ballot has not been properly held or where for some reason that is so.
This intercepts with the problems both of striking out and of what is to follow in subsequent amendments. As far as striking out is concerned, which is what the amendment is about, there is no more serious step to take on the part of a court or tribunal than to strike out the application or claim of a claimant. Clause 28 would so amend the law, as the Minister has made plain in another place, that it would allow the tribunal on a pre-hearing review to strike out an originating application.
Our amendment suggests that this nuclear response to a claim should be specifically described and defined in its possibilities under the Bill. The amendment suggests that an employment tribunal should be allowed to strike out a claim from an employee in two sets of circumstances.
The first are circumstances which are already in the employment tribunal rules and which this amendment would apply to pre-hearing reviews under Clause 28. Perhaps it is convenient if I briefly summarise what those are.
A claim can be struck out at the moment under Rule 15, which is mentioned in the amendment, in five situations: first, where there is notice of withdrawal of

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a claim—that is obvious; secondly, where the parties agree it should be withdrawn as struck out—that is obvious; thirdly, where the application is scandalous, misconceived or vexatious; fourthly, where the applicant or respondent has conducted proceedings in a manner that is scandalous, unreasonable or vexatious; and, lastly, where there has been want of prosecution—that is obvious.
We have no objection to the new pre-hearing reviews applying in those situations. They are well understood and we think that the power should go that far. However, we think that should be said in the Bill and not left simply vague, as at the moment, as was explained in another place by the Minister, to whom I shall come.
We also think that it is not unreasonable that an application which discloses no grounds for the claim, which is usually expressed as "no reasonable grounds", should also come within the power of striking out. I understand that that far, we are at one with the Government. However, what we object to is what is said in the Explanatory Notes. I do not know on the basis of what advice these notes were concocted but I quote them. The Explanatory Notes say about this clause:
"Although rule 15 of the main Employment Tribunal Rules of Procedure permits the strike out of certain cases, including weak cases"—
I pause to say that Rule 15 does not say, "weak cases"; quite the opposite. I continue with the quotation. Although that is so,
"it is arguable that the current rules do not allow the strike out of weak cases at a pre-hearing review. At present the power to strike out is limited and rarely used".
And then it goes on:
"The objective"—
that is, the objective of this clause—
"is to limit the number of very weak cases reaching a full hearing by confirming the tribunals' power to strike cases out at this stage in the process".
There are two or three problems with very weak cases and weak cases. First, to know whether a case is weak, as opposed to disclosing no cause of action, you have to engage in some sort of assessment of the claim and the defence. It is absurd to suggest that weak cases should be the subject of a striking out at this stage, especially in a pre-hearing review. And our amendment states,
"that no application shall be struck out on the ground only that the tribunal considers"
—and, I interpose, considers at a pre-hearing review, because that is what the clause is about—
"only that the tribunal considers the claim to be based on weak grounds".
I am glad to see that my noble and learned friend Lord Falconer of Thoroton has joined us because he will be, I am sure, the first to admit that sometimes cases which appear to be based on weak grounds succeed—if they have good enough counsel, that is. The suggestion made in the Explanatory Notes is quite wrong and that is why the amendment is being moved.
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As a matter of fact, if it were not for the Explanatory Notes, I am not sure that we would have thought that the Government would dream of suggesting this. But they do and they go on to cite three cases where they think the strike out power should be available. I refer to page 18 of the Explanatory Notes. They say, first:
"Cases in which the facts have already been litigated and the applicant has no fresh or different evidence but insists on pursuing the case".
I would not object too much to that. Secondly, they state:
"Cases where the facts are not in dispute but the interpretation placed on those facts by one party is clearly wrong".
Perhaps I may interpose a comment: this is typical of the drafting of parts of the Bill and Explanatory Notes. They are written by people who seem to think that they can impose a formula and it will apply itself naturally to the facts.
Whether a case is clearly wrong is a matter of legal interpretation. If it means, of course, that there are no reasonable grounds for such a claim and it manifestly lacks a cause of action, that is within our amendment. But what the tribunal considers to be wrong about the interpretation in law of a set of facts in a claim can be the matter—and should be the matter if parties wish to argue it—of argument.
The third example which is given in the Explanatory Notes, is:
"Cases in which a party's application is not itself sufficient to lead to a successful outcome for him".
However, they then add,
"and the party has stated at pre-hearing review that no further evidence or witnesses will be called".
I appreciate that, if he is not going to give any evidence, it might be easy to say that he could not win, but once again the tribunal should not have power simply to strike out—I insist on italicising the words "strike out"—or to use the nuclear weapon against the claim simply because it thinks it is not sufficient to win.
Here it is of some importance to note what the Minister said in another place on 13th December because I believe that our amendment is in fact what the Minister appeared to intend. He says, speaking of a tribunal, and I quote:
"It should have the power to strike out the case at that stage"—
that is, at a pre-hearing review—
"if it believes there is so little chance of success that it is not appropriate even that a deposit should be paid"—
which of course does apply to weak cases—
"and the case heard. That it does not is an anomaly in the system. We are not making a radical change. We are tidying up employment tribunal procedures. It is questionable whether there was ever an intention to prevent employment tribunals from striking out cases at the pre-hearing stage".
Obviously there was because that is why the Bill would allow them to introduce that. The Minister continued:
"However, the reference in the Bill to preliminary consideration implies that there must be a full hearing, irrespective of how unreasonable and misconceived the case is.".—[Official Report, Commons, Standing Cttee F, 13/12/01; cols. 114–115.]

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Perhaps we do not have the words quite right; I am always willing to believe that. But we say that where the application manifestly discloses no reasonable grounds, the tribunal should have power to strike it out. That is, if you like, the High Court rule. I have put in the word "manifestly" for a very simple reason and that is that the Explanatory Notes have so muddied the water by talking about weak cases that it is very important that the Bill should be absolutely clear on this and that we should know what the Government intend. I believe that my honourable friend the Minister in another place meant that; I believe that that is what our amendment says. I beg to move.
Baroness Turner of Camden: I also would like to support the case that has been made by my noble friend Lord Wedderburn of Charlton. Like most trades union officials, I have had some experience of taking cases to tribunals. The usual, very frequent experience, is that an individual who wants his case taken becomes totally obsessed with his case and refuses to accept that he has a weak case even though one may feel that he has. Therefore, often one has had the experience of taking what one may believe to be a weak case to a tribunal, but, nevertheless, when one gets there, one somehow manages to persuade the tribunal that there is a case there.
It seems to me that to have a situation in which the tribunal can strike out weak cases without them being heard is not a very good idea at all, and would certainly have a very deleterious effect upon individuals who otherwise might feel they had a case and would want their day in court. I hope that the Government will look with some favour upon the amendment.
Lord Rotherwiek: I briefly would like to say that we agree with the amendment as it substantially accords with our Amendment No. 90.
Lord Sainsbury of Turville: I find it rather difficult to substantiate the last point. It seems to me that Amendment No. 91 takes the opposite approach to Amendment No. 90 that we discussed earlier, in that it seeks to make it more difficult to strike out cases. As I said, we envisage that strike out will occur only very rarely.
What the clause does is to take out the implication that the preliminary hearing review is in some sense preliminary and must therefore be followed by a full hearing.
Rule 15, to which the amendment refers, provides power to strike out an originating application or notice of appearance at any stage of the proceedings on the grounds that it is scandalous, misconceived or vexatious, or that the proceedings are being conducted in a scandalous, unreasonable or vexatious manner. As I have already said, we expect proceedings to be struck out only when cases are hopeless; that is to say, those at the extreme end of the spectrum covered by the terms "vexatious", "misconceived" and so on. I stress here the word "misconceived" because it is those cases to which the Explanatory Notes refer.
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In the light of Clause 28, it will in due course be necessary to amend Rule 7 of the main employment tribunal rules of procedure to allow for strike out. The new rule will need to specify when the strike out power may be exercised, reflecting what I have said about it being used only in extreme cases that are scandalous, unreasonable or vexatious and not simply those that are weak in the terms that I think the amendment refers to.
In the light of what I have said, I hope that the Committee will agree that this amendment is unnecessary and that my noble friend will withdraw it.
6.30 p.m.
Lord Wedderburn of Charlton: I appreciate what my noble friend said and I am grateful to him for trying to explain what the Government intend, but really, we have to take the Explanatory Notes as meaning what they say. There was a discussion recently in the Committee about plain English. The Explanatory Notes are absolutely plain: they want the tribunal— and this is important—at a pre-hearing review to have power to strike out weak cases.
My noble friend the Minister has taken his stand on quite different grounds; he says the measure applies to hopeless cases. In so far as hopeless cases are cases that do not disclose a cause of action or any reasonable grounds at all for the claim, that is what our amendment says. The amendment offers the Government something on all of this; it does not leave things in limbo and obscure.
I must say that I am surprised that my noble friend did not say explicitly that he would take away this amendment and think about it. He says it really applies to hopeless cases. Well, I suppose our amendment applies more or less to hopeless cases. He says he wants the power to apply the measure to the cases in Rule 15, but our amendment says it should apply to cases in Rule 15.
What else does he want? Does he want the measure, as the Explanatory Notes say, to apply to weak and very weak cases? If he does, we shall oppose it, and we shall oppose it on Report, because this is going far beyond what is proper not to allow. There are enough clauses in this Bill that do not allow workers their day in court and try to stop them arguing anything. The power to strike out is a nuclear weapon in the hands of the court or tribunal and it should not be exercised except within the compass of the traditional principles of the ordinary courts.
This is an attempt, it seems—at least, I thought it was an attempt—to give the tribunals a wider power. That is what the Explanatory Notes say. But if it is to apply only to hopeless cases or, as my honourable friend the Minister appeared to say in another place at columns 114 to 115 of Hansard on 13th December, the Government are just tidying up an anomaly and just want to give a power to strike out at pre-hearing review only where this is a hopeless or impossible case, that is what our amendment offers. I hope that my noble friend will reconsider this matter but, if he will not,

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then we shall have no prospect except to come back to it on Report. All I can do is to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charltonmoved Amendment No. 92:
Page 35, line 6, at end insert—
"( ) Section 9(3) of that Act shall cease to have effect."
The noble Lord said: This amendment relates to Section 9(3) of the Employment Tribunals Act. It is about deposits. There is a special rule in the tribunals which operates to the disadvantage of an employee who is ill-advised enough to bring a very weak case. If ICI brings a very weak case in the High Court, it is not asked to pay a special deposit, but if a worker brings a weak case in the tribunal he can be asked to pay a deposit. It can come back to him if he wins but he can lose it. I have no objection to this system, although at the time that it was introduced it was discussed whether it was desirable. I would like the Minister to say something about its operation in response to this amendment, because this amendment would strike out the Secretary of State's power to increase the deposit. Of course, it was recently increased to £500 from, I believe, £150. The question is whether the logic and experience of deposits should leave the Secretary of State the power by regulation—I stress that—simply to propose an increase. Regulations increasing the amounts of compensation, deposits or anything else frequently go through both Houses but they are rarely discussed and there is no chance of amendment. My noble friends and I see no reason at all why the power to increase deposits by regulation should continue, unless we have some news about what is happening.
How many deposits have there been? How many deposits have been forfeited? How many deposits have contributed, in the view of tribunals or the presidents of the tribunals, to the relaxation and diminution of very weak cases? What research has been done on the question of deposits? If this power to increase the deposit is retained, is there any intention of using it? If one does not want to use it, why does one want it? If it is not broke, do not fix it. That is a general principle and my noble friend Lord Gladwin was advancing it to the Government. This amendment raises the same point. Let us have some news about deposits and see whether there is any reasonable prospect of any kind that anyone will want to increase them. I beg to move.
Lord Sainsbury of Turville: Section 9 of the Employment Tribunals Act 1996 permits employment tribunal procedure regulations to include provision for pre-hearing reviews and they do include such provision. Pre-hearing reviews may be held where an application or a defence appears to be weak. If, having conducted such a review, the tribunal finds that a case has no reasonable prospect of success, it may require the payment of a deposit before the case can proceed to a merits hearing.
When this piece of legislation was made in 1989, the amount of the deposit was not to exceed £150. Last year that was increased to an amount not exceeding
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£500. That increase was made under Section 9(3) of the 1996 Act, which says that the Secretary of State may, from time to time, by order substitute for the sum specified in Section 9(2)—that is, the £150 as it was originally and the £500 as it is currently—such other sum as may be specified in the order. An order made under that subsection is subject to the negative resolution procedure.
It seems to me that, even in these days when the Government have very largely dealt with the problem of inflation, on a Bill such as this there should be the ability to increase the sum if, because of inflation or other reasons, it is thought sensible to do so. I do not believe that there is any intention to do so at this stage and, in fact, the system seems to work reasonably well.
The number of pre-hearing reviews in the financial year 2000–01 was 299 and the number of deposits ordered was 234, of which 48 were paid—those 48 were all applicants. Of those 48 cases, 19 were subsequently withdrawn, four were struck out—for example, for want of prosecution—two were not yet decided, three were settled, 11 were lost and had to pay costs, eight were lost but no costs were awarded and one was won.
Strike-outs at a pre-hearing review will be exceptional and only when a case is so weak as to be hopeless. Going back to the two previous years, in the past two calendar years—1999 and 2000—there were two instances in which applicants won their cases after a deposit was ordered. However, in one of those cases, it was the employer and not the applicant who was ordered to pay the deposit although it was refunded to him after the full hearing. Those figures suggest that the system is working rather well. It seems perfectly reasonable to have the flexibility of such a power, which, after all, has been exercised just once in order to ensure that the maximum amount of deposit is adequate if circumstances change. I therefore do not see merit in the amendment, which would do away with the power, and accordingly cannot accept it.
Lord Wedderburn of Charlton: I begin by thanking the Minister for this unusual disclosure of the statistics on the matter. He has saved researchers a great deal of work and I shall read Hansard with interest. However, they relate to a very small number of cases out of 130,000: 234, of which 48 deposits were paid, two are not yet decided and four struck out. We are talking about a minute number. That does not suggest there will be a need to increase the deposit. I forget exactly what the figures for 1999–2000 proved—I am terribly sorry—but one case proved something. That is such a small sample that to have it as the basis for retaining a power to increase deposits with one small exception seems unreasonable. The exception, of course—and it is astonishing to hear this from the Government—is in case there is rather serious inflation. I have the greatest confidence in my noble friends and am sure that they will pursue policies that will not increase inflation. I am astonished to hear the Minister say that there is a serious risk that that course of events might require an increase in deposits. If that were so, this would be another case in which the matter should not be dealt with by regulation and the Secretary of State should

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not have the power to secure an automatic increase in deposits. Deposits are a very serious matter for a worker. He may be told, "Yes, you can come to a tribunal. We think your case is weak; £500, please". If there is a little inflation, it seems that the sum could be £1,000. That is unreasonable. The Government must explain to parliament exactly why they are doing that and they must face amendments, conditions or qualifications, especially if they are the cause of the inflation because they failed in their policies. However, they would put the cost on the poor old worker who has what is thought to be a very weak case. That is not very reasonable and I hope the Government will reconsider this matter, because deposits are still a matter for discussion. I appreciate that they are relatively new. However, we have now got some figures for the past two years—they are down to one case and two cases, and we will think about the matter again. I hope the Government will also think about it again. It is not obvious that there should be a power by regulation to increase deposits. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 agreed to.
6.45 p.m.
Lord Wedderburn of Charltonmoved Amendment No. 93:
After Clause 28, insert the following new clause—
"DISMISSALS TN CONNECTION WITH INDUSTRIAL ACTION
In rule 9(2) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (S.I. 2001/1171) all the words after "delict;" shall cease to have effect."
The noble Lord said: In this amendment, we come to the relationship between individual employment claims and collective issues. The Minister indicated to me very kindly that I mis-addressed at one point Amendment No. 91, and I apologise to the Committee for doing so. I now address Amendment No. 93.
Amendment No. 93 concerns the question of interlocutary injunctions. The interlocutory injunction is a device whereby an employer or a third party can obtain an order from the High Court, banning the organisation of industrial action, not where there is a clear case that he has the right to do so but where, on the authorities since the Ethicon case in 1975, there is what Lord Diplock called, and I quote,
"a serious question to be tried",
or, as others have put it, where there is the likelihood or a serious issue as to whether the defendants have not observed all the particularities of the law in this respect. Of course, in the organisation of industrial action, that now includes not merely pursuing a trade dispute but observing all the detailed requirements of the ballot and notices under the 1992 Act.
where there is a possibility and a serious issue, and where the balance of convenience, as the courts put it, is on the employer's side, the High Court may well, and probably will, issue an injunction. That jurisdiction interacts with the new provisions which were introduced in the Employment Protection Act 1999 in
Section 285A. We shall return to Section 285A in later amendments moved by noble friends and myself, and by the noble Lord, Lord Lea of Crondall.
Where the industrial action is protected, the new Act in 1999 introduced a new rule about individual employment law on unfair dismissal. It is usually summarised by saying that for six weeks an employer may not dismiss an employee by reason of the industrial action without fear, or without liability, of an unfair dismissal. As a matter of fact, that does not do justice to the section, because there are some other twiddly bits, as a student once said to me, in the section. However, it is a fair summary, I think my noble friend will accept, of what we begin with after the 1999 Act.
The question therefore arises: if the employer obtains, or indeed has grounds to obtain, an interlocutory injunction, and he is minded to dismiss an employee by reason of the strike action—it happened recently at a well known dispute in Carnarvon in Wales, where it has given rise to a great deal of difficulty—is the individual employee still protected during his six weeks?
This was confronted by the new Employment Tribunal Regulations 2001, Statutory Instrument 1171, by the introduction of Rule 9 in Schedule 1. Rule 9 says, and I summarise, that where this situation arises, the tribunal may adjourn the proceedings where specified civil proceedings have been brought until such time as the interlocutory proceedings—strictly, we no longer speak, I suppose, of interlocutory proceedings in the Rule of the Supreme Court, but I quote the phrase from the rule—arising out of the specified civil proceedings have been concluded.
So, while the interlocutory claim goes on to judgment, the worker may find that his claim for unfair dismissal is adjourned. In fact, my understanding is—my noble friends with experience in this matter will correct me if I am wrong—that most tribunals regard it as proper to adjourn the unfair dismissal proceedings until judgment is given in the interlocutory proceedings in the High Court for an injunction.
The amendment does not challenge that. Personally, I regard it as unfortunate that a worker should have to wait during proceedings, which may conclude merely on the basis of a serious question to be tried for his protection, to know whether he has protection under the 1999 Act in the six-week period of protection. The issue will arise in later amendments whether six weeks is adequate and whether it should be confronted.
What this amendment goes to is a later part of Rule 9 in the Employment Tribunal Regulations. It states:
"The interlocutory proceedings shall not be regarded as having concluded until all rights of appeal have been exhausted or the time for instituting any appeal in the course of the interlocutory proceedings has expired".
I fully appreciate that that would be the average lawyer's understanding of proceedings in the High Court for an interlocutory injunction. You have to wait for the appeals. But in this case the person who is

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being made to wait, and the person who is being deprived of protection, is the employee who, by hypothesis, has been unfairly dismissed.
Interlocutory injunction cases can take some time. I know it is a long time ago, but in the leading case of Stratford v Lindley in 1964 the proceedings were begun on 3rd February 1964 and were concluded in the House of Lords on 28th July of that year. Other cases have taken much longer. In the Merkur case of 1982 they extended from 23rd July 1982 to 21st April 1983. It should not be thought that interlocutory proceedings are necessarily quick.
Even last year, one of the London Underground cases against the National Union of Rail, Maritime and Transport Workers took over a month to reach a decision in the High Court itself. You may say that a month is not six weeks, but during that month the worker concerned did not know what his status was. Even if he has to wait for the first judgment, why on earth should he wait for the appeals? It was not clear in that case whether there would be an appeal or not, it was thought there probably would be. Therefore, it is virtually impossible to advise such an employee during the proceedings on appeal in interlocutory injunction cases.
Therefore, as regards the point of interaction—which comes up very centrally on the Bill, because the Bill is concerned with employment protection rights and especially unfair dismissal rights—will the Minister reassure us that the Government will think about this matter? We hope that they will think about it not merely in the review of collective issues which we are told is going to come, but think about it now. It concerns real people who are dismissed from their jobs, who do not take back a wage the next week and who are made to wait for the natural proceedings of our courts on appeal when there have been other proceedings launched in the High Court for injunctions against their trade union. Indeed, it may not be their trade union; it could be that they have joined the industrial action without being members.
My noble friends and I suggest that it is a matter of justice that this rule about appellate proceedings on interlocutory cases on industrial action injunctions should be reviewed, and we hope that the Minister can give us some assurance that it will be. I beg to move.
Lord Sainsbury of Turville: This amendment concerns the way that tribunals process claims of dismissal which result from industrial action. The Employment Relations Act 1999 makes it unfair to dismiss employees for taking part in "protected" industrial action unless it lasts for more than eight weeks. Industrial action is protected where an employee is induced to take it by his union and the union, in doing so, complies with the legal requirements governing the organisation of such action.
The employment tribunal rules provide that a tribunal may adjourn proceedings where civil proceedings have been brought challenging the legitimacy of the industrial action. The rule provides
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that the period of adjournment extends until the interlocutory proceedings arising out of the civil proceedings have been concluded. In particular, Rule 9(2) of the Employment Tribunal Rules specifies that interlocutory proceedings are not to he regarded as having been concluded until all rights of appeal have been exhausted or the time for bringing an appeal in the course of the interlocutory proceedings has expired.
The amendment would do away with that part of Rule 9(2). It would mean that tribunals could not adjourn claims while an appeal was heard in the civil courts or while an appeal might be brought. The effect of the amendment would be to introduce a considerable degree of uncertainty. It is futile for tribunal proceedings to continue, let alone conclude, when the courts may subsequently decide that the industrial action is legitimate or, as the case may be, is not legitimate after all. This would involve the tribunals and the parties to the claim in a pointless waste of time. If the courts were to decide on appeal that the industrial action was not legitimate, the applicant's claim for unfair dismissal would fall and the time the tribunal had spent on the claim would be wasted.
If, on the other hand, the court of first instance held the industrial action to be unprotected, but on appeal it was held to be protected, the amendment could result in a tribunal dismissing applications that should have been admitted and held to be unfair. I cannot believe that Members of the Committee would approve of that result.
We accept that there is an interaction here, and I believe that we accept that that can have an impact on the applicants. But it is difficult to see how one can resolve the issue until the final proceedings have taken place on whether or not the industrial action is legitimate.
Although I recognise that Members of the Committee may have tabled this new clause in order to ensure that tribunal cases are not unduly delayed because of actions in the courts, I cannot accept it because it seems to be a recipe for confusion for all the parties involved.
Lord Wedderburn of Charlton: I am grateful to the Minister for not pointing out the glaring inadequacy of my presentation of the amendment. I always used to say in seminars, "Never quote a section unless you've got it in front of you, especially after six o'clock at night". I should have referred not to six weeks but eight weeks, and I should have referred to Section 238A. I have a feeling that I referred to another section. I take the opportunity to apologise immediately to the Grand Committee. It obviously vitiates my presentation of the amendment.
The Minister says that my proposal would lead to confusion. It might be difficult to apply, but it would not lead to confusion for those who are unfairly dismissed; it would give them a remedy.
We meet these situations sometimes. The courts construct these rules of procedure, and the people who suffer—the Minister seemed satisfied with that—are

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those who have been unfairly dismissed. The eight, not six, weeks will run out; the other conditions of Section 238A will not apply; a person will be unfairly dismissed; and the case will be adjourned. Now, under the new clauses in the Bill, especially Clause 33, people may find that they lose their ability to go to a tribunal.
The Bill hangs together. One cannot discuss this matter without looking at Clause 33, but the Minister made no reference to that. People will be prohibited from presenting a case to a tribunal if they have not done everything that Clause 33 requires. That is the reason why this becomes very important. I entirely appreciate the difficulties which the Minister very reasonably pointed out in relation to our amendment. I hope that he will look at the matter again; we certainly shall. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
Lord McCarthymoved Amendment No. 94:
After Clause 28, insert the following new clause—
"DRAFT OF REGULATIONS
Not less than 30 days before—

(a) making regulations, or

(b) prescribing or prescribing requirements in relation to any form or matter,

under this Part, the Secretary of State shall publish a draft of his proposals."
The noble Lord said: We must take in two amendments here—Amendments Nos. 94 and 200— because Amendment No. 94 does for Part 2 of the Bill what Amendment No. 200 does for Part 3; otherwise they are identical.
We are seeking to insert a new clause which concerns the publication of the draft regulations 30 days before,
"making [those] regulations, or … prescribing or prescribing requirements in relation to any form or matter",
connected with those regulations.
I have said several times thus far that what is meant by "publication" differs from one case to another. Who is supposed to be told about these matters and who is supposed to be consulted? In this case, we are suggesting that there should be the widest circulation possible because the regulations will be published and we are covering all the central controversial provisions in the Bill. My noble friends and I have tabled significant amendments only to Parts 2 and 3. We are going along with Parts 1 and 4. Therefore, we are asking that all 20 or so clauses, every single one of which depends upon regulations, should set the context or make a definition so that people know what they will be facing. We have already discussed much of that but we shall be discussing it again at great length, for example, when we reach Clause 33.
I turn to the regulations which the Minister will not be putting on to the face of the Bill—at least, thus far he will not do so. The Minister will not tell us a great deal about what will be in the regulations—at least, thus far he has not done so—and he will not let us see
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them. We are saying that the Minister should at least allow everyone to see them 30 days before they are brought into force.
I do not want to continue with this matter further, although I may do so if the Minister does not accept the amendment. However, I should have thought that the issue was self-evident. Indeed, as he sometimes does, the Minister may well say to me, "Well, of course we are going to do that", and that is why I shall not continue further. The difficulty with the Bill—it has many difficulties—is that so often it appears to be terrifying but then ceases to be terrifying because the Minister says, "When you see the regulations, you will realise that it will not hurt". Sometimes he sounds like King Lear:
"I will do such things,—
What they are yet I know not,—but they shall be
The terrors of the earth".
At other times he says to us, "Not at all, not really; you'll hardly notice it". If the Minister will not amend the provision, perhaps it will be possible to see the regulations 30 days before he brings them in. I beg to move.
Lord Sainsbury of Turville: The employment procedure tribunal regulations which are intended to be covered by Amendment No. 94 are subject to the negative resolution procedure and must lie before both Houses of Parliament for 21 days before taking effect.
In addition to the statutory requirement to consult the Council on Tribunals, we normally consult the main bodies representing employees and employers, including small employers, lawyers and other representatives, well in advance of the employment tribunal procedure regulations being made so that we can take account of their views. We have already made clear our intention to conduct a full public consultation on the changes to the regulations which will result from the Bill.
Likewise, in producing forms which may be prescribed by the Secretary of State outside of the regulations, the Employment Tribunal Service will, on her behalf, consult the tribunal presidents as well as normally consulting tribunal users and other relevant bodies, including ACAS. Sometimes it may not be necessary to consult more widely than the presidents where, for example, a quick, minor tweaking of the form is required. Those most affected by changes of any significance will be aware of them and will have had the opportunity to comment on them long before they take effect. Therefore, the amendment is unnecessary.
So far as concerns Amendment No. 200, the Government also intend to conduct a wide public consultation on drafts of the regulations to be made under Part 3 of the Bill. These are the regulations to be made under Clause 31, which is concerned with adjustment of awards, under Clause 32, which is concerned with consequential adjustment of time limits, and under Clause 33, which is concerned with complaints about grievances. The consultation will ensure that the regulations achieve clarity and are comprehensive without being over-prescriptive. In

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particular, there will be pre-consultation with such people as the tribunal judiciary, ACAS, employer and employee organisations and employment lawyers.
Therefore, those most affected by the regulations will be made aware of what we have in mind and will have ample opportunity to comment before the regulations take effect. They will be subject to the affirmative resolution procedure. Accordingly, the amendment is unnecessary and I that it and Amendment No. 94 will be withdrawn. Even the threat of the noble Lord, Lord McCarthy, going on about this at some considerable length cannot persuade me to accept the amendment.
Lord Wedderburn of Charlton: My noble friend the Minister is obdurate on this matter. My noble friend Lord McCarthy has been most modest—we all have—in agreeing to group Amendment No. 94, which is about Part 2 of the Bill, with the other amendment, which is about Part 3. There are points that could be made separately but the general point my noble friend made in moving this amendment is surely not answered by saying—the Minister will forgive me if I cannot quote his exact words—that the usual bodies will be consulted. They would include employers organisations; I take it that it will include the CBI, the TUC, the presidents of the tribunals, ACAS and employment lawyers, whoever they may be. There are various employment lawyers organisations, although there are many people who are not in those organisations. That really will not do.
The Bill and the regulations made under Part 2 and Part 3 in particular—I say that because we are allowed to take them together—affect more than 20 million contracts of employment. It implies terms into the 20 million contracts of employment, and we cannot know what the terms are until we see the regulations.
Members of the Committee may be surprised to hear me plead for individuals but I happen to believe that the individual is very important. Employees who have contracts of employment may or may not come to know of what filters down from these grand bodies who have the privilege of being told what is going to happen, but then again they may not. What is the objection to publishing drafts of these regulations widely? That could be done on the Internet, young people—many people—would say. What is the objection to putting them on the Web? Why not? I have only recently come to grips with this new electronic world and I am beginning to understand the advantages of it. I do not suggest that they be put on a chat line or something of that sort but what on earth is the objection to publishing the drafts of the regulations that apply to 20-odd million people? What bureaucratic nonsense is it to say that they will just be given to those grand bodies who may or may not tell Joe in Burnley what his new contract of employment is? I cannot understand the approach from a Government who I thought were in favour of freedom and disclosure of information to people on the legal and other obligations that will rest on them.
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I ask the Minister to at least tell us that he will think again about this matter. There is a very strong case for publishing a draft. I know that the matter has to go through the procedures of this House and another place, but we all know that regulations can be put before another place and this House and people do not notice what happens. It may be that some Member of this House will take it upon himself or herself to notify all 20 million employees. If so, well and good, but what on earth is the objection to publishing a draft?
Baroness O'Cathain: I thank the noble Lord, Lord Wedderburn, for giving way. Surely, putting the regulations on the Net is fine. It is fine. There is nothing wrong with that. However, is this not the road of the trade unions; to talk to their members, to communicate everything to them and to inform them how to deal with the situation?
Lord Wedderburn of Charlton: The noble Baroness is absolutely right. But trade unions are not organs of the state; they are voluntary bodies. I am surprised that the noble Baroness thinks it the particular job of trade unions. I would have thought she would be glad that a lot of people did not belong to trade unions. I thought that was the Conservative position but never mind! They are not organs of the state and it is not their job in constitutional practice to be the organs whereby state law is transmitted to individual people. It may be that one can say that of ACAS; that they must to do their best to promote the position. However, what resources ACAS would then need, I do not know. I am saying that this involves 20 million-odd individuals. The law is going to say, "This is the new set of obligations that you are going to be subject to, supposedly under this Bill, in your 'contracts of employment'".
We shall come back to the use of the juridical device of the implied term in the contract of employment because it is a very important choice by the Government. Nothing is more important in this Bill than the choice of the implied term "by statute in the contract of employment" in the devices and machinery that they wish to impose, some of which are wholly admirable. But I cannot understand why people cannot be informed of the situation. I believe it is true to say that almost half the households in the land are on the Internet. The noble Baroness tells me that I am wrong. A lot of people are on the Internet and I am only just catching up with these things. What is wrong with giving them the opportunity to read a draft of what is going to apply to them in regulation so that they can write to their MPs and say, "I don't agree with that."?
Lord McCarthy: The answer to the noble Baroness—as she ought to know because it is in SETA 1998—is that only 20 per cent of people who get to tribunals get to trade unions. Eighty per cent of people who come before tribunals now are not trade unionists. Therefore, even if the trade unions made it their job that all their members knew about all these provisions, there would still be 80 per cent of people left outside.

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I am not withdrawing the amendment yet; I merely wanted to make the point to the Minister. I would like to know the basis on which all these top people are going to be consulted. He said, for example, that the TUC will know months before. Those most affected will know. Presumably they will know because the regulations have been written. They exist; someone has them. These top people will not just be told at dinner parties or sherry parties or over glasses of weak white wine! They will have the actual regulations.
If they have the regulations, and if the regulations have been published months before, why can everybody else not have them? Why can they not be available on demand? Why could you not charge a small sum for them? Why could you not put them in what used to be called the Ministry of Labour Gazette, now called Labour Market Trends? Why can you not put them in a published form a month before they come to publication? The Government have them. They say they have them because they are telling all these top people what is in them.
Surely in that case, this is an exceptional set of circumstances. My noble friend Lord Wedderburn is quite right in saying that I should have made this point more forcefully in my speech. I am not sure that this is the first time, but it is not very frequently, that governments write things out and shove them into individual contracts of employment in this way. They are an employed term of contract. This is something most unusual. So we are not saying that we are creating a precedent here in which in future all regulations have to be published. We are talking about something most unusual that goes into everybody's contract of employment.
It affects not only people who go to tribunals. It affects how they raise grievances with the employer and what happens when they are disciplined. People who never fill in an ET1, who are just dealing with their grievances and with their disciplinary consequences of their actions, ought to know that these provisions are in their contracts of employment.
Baroness O'Cathain: I thank the noble Lord for giving way. This is a very important point, joking apart about sherry parties, which are very passé now anyway. The real point is that any employer who suddenly realises that this is so important that it must he put into a contract of employment has the responsibility—as my experience tells me—to ensure that every single employee knows about it and is written to about it.
Lord McCarthy: Yes, but that will happen when it is law. It will not happen before it is law. If the Government have nothing to worry about—if King Lear is not in the play and nothing dreadful is going to occur—they ought to want people to see the regulations before they are passed. These are draft regulations and one cannot expect employers to tell people things that might not be in there in the end. We are talking about the draft and we are asking for people to have some influence and we are saying that it should not just be top people.
7.15 p.m.
Lord Sainsbury of Turville: In the danger of introducing a little information into this debate and bringing it to a close, perhaps I may say that I am disappointed in the exploration of the Internet by the noble Lord, Lord Wedderburn. If he had been exploring it thoroughly, the noble Lord would now know that it is established DTI policy to place all consultative documents on the department's website. In fact, it is DTI policy to paste practically everything on the website.
Lord McCarthy: How can it be placed on the Internet if it is not published?
Lord Sainsbury of Turville: Of course we can put things on the Internet and the document will be there for everyone when we have a consultation to see it. Even those who do not receive the document will be able to see it on the website and comment on it. The point has been taken.
Lord Wedderburn of Charlton: If my noble friend seeks to educate me in the ways of virtual reality—which I am very ready to learn about—this is not a funny amendment. The amendment affects over 20 million people. We are not talking about a consultative document. This is another mystification.
With great respect to my noble friend on the advice he has given, it is a little tiresome of the Government to take refuge in consultative documents. I am talking—and my noble friend has talked—about draft proposals of regulations. If they are to be consultative documents and put on the web, I take it that the amendment is accepted because they are going to be published. Publish a draft of his proposals including publishing on the web, so long as we can print the in off but not if we cannot. If they are going to be put in a form where we could have them printed, I do not see why we should be put to the expense of using our paper and our printers. If the Government are going to publish them on the web, why not make hard copies?
I take it that the Government intend to publish a draft of the proposed regulations not merely for the grand bodies, which is what we were told at first, and not merely for a select audience, but to the population at large. If that is what my noble friend means—and I am not asking him to accept the amendment formally, of course, I understand his hands are tied—in spirit, have we at least managed to transmit by osmosis, or some form other than argument, the spirit of the amendment to my noble friend? It seems we have.
Lord McCarthy: I am not so fond of osmosis. I want to ask the Minister a direct question. What he said previously and what he says now will appear in Hansard. Is he telling me that in not less than 30 days he will publish a draft of his proposals for the regulations in Part 2 and Part 3 of this Bill on the web?
Lord Sainsbury of Turville: The noble Lord could amend that; within 30 days we will publish it. Is he saying within 30 days before?
Lord McCarthy: Before, yes.
Lord Sainsbury of Turville: What I can say is that all draft regulations are published, or put on the website, for everyone to see. I cannot give an assurance on the timing of that at this point. There is a minimum of six weeks for doing that.
Lord McCarthy: Therefore, six weeks before Parliament is asked to pass the regulations, they will all be put on the web?
Lord Sainsbury of Turville: I believe it is actually 12 weeks, but I can give the assurance that it will be six.
Lord McCarthy: So 12 weeks before Parliament is asked to pass them?
Lord Sainsbury of Turville: I believe it is 12 weeks, but I can certainly give the assurance on six.
Lord Gladwin of Clee: I thought that we had dealt with that issue some time ago—at our previous sitting—when there was an exchange between myself and the noble Lord, Lord Bassam. I do not have Hansard to hand but my perception is that when I asked him whether they be published, he said, "Yes, like we published Routes to Resolution". I said, "So it is 'Son of Routes to Resolution'," and he agreed.
There is some discussion about the way in which that document was published. Many people do not have access to the Web. My understanding was that the draft regulations would be published in the way that I understand the phrase, "being published". That does not involve sitting at a computer; I want it in my hand. Am I going to get it at least six weeks—maybe more—before they become law? I think I am getting a yes.
Lord Sainsbury of Turville: The answer is yes.
Baroness Miller of Hendon: I beg the pardon of the noble Lord, Lord Wedderburn or Lord McCarthy, but I came in during the middle of that last amendment and I missed something. When I first came in they were talking continually about top people and they subsequently talked about grand bodies. Could I confirm that the top people they were referring to meant the grand bodies that were going to have sight of these things?
Lord Wedderburn of Charlton: The noble Baroness is very kind in asking us to repeat that point. She should never miss a moment of this exciting Grand Committee; one never knows what she might miss. The top people were mentioned in the Minister's explanation. We have passed a long way beyond that now, as the noble Baroness will appreciate. We now know that the drafts of regulations are going to be published for the populous at large to read weeks before they are put before Parliament—or at any rate weeks before they are made effective in any way.
I have to say—the comments of my noble friend Lord McCarthy were very important in this respect—that that is not a normal practice. I have tried to find
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out on occasion; my noble friend, Lady Turner, mentioned social security. It is sometimes extremely difficult to find out what the department or the ministry intends to do with regulations that suddenly appear in a proposed form. This is particularly important because these regulations—entered into through the Bill—involve the contracts of employment of everyone in the land. That is why the drafts should be published, and I am very glad that we have assurance that it will. No doubt my noble friend will wish to withdraw the amendment in the light of the discussion that has taken part.
Lord McCarthy: Of course I shall read Hansard very carefully to see if all those wonderful things were really said. If there is any doubt about the matter I shall come back to it on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 [Statutory dispute resolution procedures]:
Baroness Miller of Hendonmoved Amendment No. 95:
Page 35, line 25, at end insert—
"(4) A minor and inconsequential breach by an employer or employee of the requirements of Schedule 2 shall not result in his suffering any discrimination in any proceedings before an employment tribunal and the employer shall not be deemed to have wrongly dismissed the employee."
The noble Baroness said: One of the many contributions made by English lawyers to jurisprudence was the system we call "equity", which more or less began to overcome the rules of the common law courts. They imposed a system of strict pleading whereby a perfectly valid case could be dismissed simply on account of some technical, and sometimes quite a minor, error in drafting the court documents.
The amendment proposes to introduce the centuries-old concept created by the courts of equity into the rules of the employment tribunals. I hope that the Minister—I am not sure which Minister will respond—will share my very laudable ambition.
Schedule 2 has introduced very extensive and complicated procedures for dispute resolution and for dealing with dismissal cases. The fact is, however, that in many cases the litigants on both sides will be unrepresented by lawyers, by a union or by another expert advisor, at least in the early stages of the dispute. It is conceivable—indeed, it is highly likely—that some technical error might occur in the processes laid down by the schedule. It would be an injustice if an otherwise valid claim or defence should be arbitrarily dismissed because of some minor technicality. The amendment is intended to do no more than to prevent that kind of injustice.
The amendment makes it absolutely clear that it is only minor and inconsequential breaches of the requirements of the schedule that will qualify to be overlooked with the case proceeding on its merits. The old established legal maxim is "De minimis non curat lex", which means that the law does not concern itself

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with trifles. This principle is used by the civil courts, particularly the appellate court, to justify the refusal to countenance matters of small import.
There is no reason why the same principle, relying on the tribunal's common sense, should not be used to ensure that cases are not dismissed due to some pettifogging technicality, thus denying one of the parties justice. I beg to move.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): The amendment, which was clearly set out by the noble Baroness, seeks to ensure that neither the employer nor the employee will suffer detriment where failure to comply with the procedures is "minor and inconsequential". The amendment was put in a very legalistic way, if I may say so.
However, as presently drafted, the procedures are clear and uncluttered. Each action within them is simple to understand and apply. There are no convoluted twists and turns. We have resisted any attempts to introduce unnecessary intricacy. At Second Reading, the procedures were described as "skeletal". Therefore, I feel there is only limited scope for "minor and inconsequential" breaches to occur. The problem that the amendment seeks to address is more apparent than real.
The statutory procedures are drafted as a series of concrete actions. So far as possible, we have sought to avoid introducing anything that has a qualitative element into the procedures. By doing so, we have reduced the scope for uncertainty or disputes to arise. Parties should know where they stand.
The amendment would potentially confuse the picture, providing special treatment for "minor and inconsequential" breaches. It would lead to an issue arising as to whether or not a breach was "minor and inconsequential". What one party might think was "minor and inconsequential" could be a matter of considerable significance to somebody else. We are doubtful, therefore, whether the noble Baroness's proposal would improve the functioning of dispute resolution procedures or the operation of the proposals made. It would lead to uncertainty and dispute.
That said, we want to remove so far as possible any remaining scope for insignificant and inconsequential breaches to arise. Later, we are due to debate Amendment No. 118, which in our view identifies an area in which the text may inadvertently provide scope for such minor breaches to occur.
I should also point out that there are important regulation-making powers in Clauses 30, 31 and 33. This gives us scope to address some of the practical problems that may arise when requiring people to follow the statutory procedures to the letter. There will be occasions on which it will be simply impracticable to follow the procedures; that is a different issue from the "minor and inconsequential" issue that the noble Baroness raised. The impracticability situations arise, for example, where individuals may be hospitalised or seriously ill. The regulations will define the
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circumstances in which employers or employees would not be required to follow the relevant procedure in each and every detail. In light of what I have said, I hope the noble Baroness will feel able to withdraw her amendment.
Baroness Miller of Hendon: I have to say to the Minister that I am disappointed that my legalistic amendment did not find the same favour with him as it found with me. Members of the Committee may laugh but I thought that this was the one that might just do the trick. We are not getting very far. The noble Lord, Lord Wedderburn, keeps talking about the measure being "set in stone", but I do not believe that this Minister heard all of that. However, no doubt the longer he stays with us, the more he will hear it.
I promised to be brief. I shall read very carefully what the Minister said. I am not sure that I agree with him, but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 agreed to.
7.30 p.m.
Schedule 2 [Statutory dispute resolution procedures]:
Lord Lea of Crondallmoved Amendment No. 96:
Page 64, line 7, at end insert—
"( ) When a disciplinary matter arises the employer should first establish the facts promptly."
The noble Lord said: We are now addressing the quite novel procedures set out in Schedule 2. By ensuring a proper examination of the evidence, this amendment will enhance the degree of natural justice in the default procedure and, equally important, the confidence that we can embody in it a modest degree of what I might term "joint ownership" and credibility and acceptability.
Along with other amendments put down to Schedule 2, we are laying down on the face of the Bill benchmarks which Ministers may say are implied by the Schedule 2 procedure or which will be made more explicit in a regulation. If that is the case, we are of course in the same territory that we were in in relation to Part 2 of the Bill. In other words, the issue concerns what should be on the face of the Bill and the lack of any credible parliamentary procedure to scrutinise or amend such secondary legislation.
There is virtual unanimity right across the independent bodies of lawyers and organisations such as the Industrial Society that this part of the schedule will be seriously inadequate unless something along the lines of this and subsequent amendments is incorporated. We are not even talking about best practice but minimum practice which is not second nature to the firms which currently have no procedures and which have to be brought kicking and screaming into the 21st century straight out of the 19th.
An issue which also applies to all the other points which are to be debated under Schedule 2 is the need to put a floor of minimum practice not so far beneath

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the ACAS code that it may appear to act otherwise as a nod and a wink from public policy to the effect that we are now content to see the ACAS code diluted.
To sum up what we seek to achieve in the amendment, assuming that the Government expect employers to behave in this way—in other words, that they expect them to investigate the facts in a transparent way; I use the word "expect" as in "England expects every man to do his duty"—then let us say so on the face of the Bill. After all, we do not want to wake up one morning to be told that we cannot achieve this in secondary legislation because the provision should have been written into primary legislation.
Perhaps I may also make a point at this juncture in order to avoid repeating it in relation to other amendments tabled in my name and that of my colleagues as regards the relationship of this new default procedure to the ACAS code. I have christened it a "default procedure" precisely because the ACAS one is the benchmark procedure. It would be very odd to have two benchmark procedures, both supported by Her Majesty's Government, which say different things. That is not to say that they should, in all respects, be identical on every point, either in length or substance. After all, the ACAS code was agreed by the ACAS council as a voluntary code. The TUC and the CBI were party to it on that basis. However, we are in the unique situation of there being the prospect of one benchmark procedure undermining another.
There must be an irreducible minimum on particularly significant points in the ACAS code where these contradictions would be undesirable, to say the least. Perhaps I may draw attention, for example, to paragraph 4 of the ACAS code, which refers specifically to the need for the rules to be accepted as reasonable, both by those covered by them and by those who operate them.
Finally, perhaps I may relate the amendment to the consideration which has been referred to on many occasions—namely, the expectation or intention that this new procedure, and the built in delay in going to a tribunal, will divert some cases into settlements within the procedures of the establishment. That is fine, or at any rate everyone hears what has been said about it. Let us note that if there is to be a settlement procedure; otherwise, we are relying on a theory of deterrence which has been adequately adumbrated on several previous amendments.
Let me conclude on a positive note. If we get Schedule 2 right, and encourage both parties—both sides as we used to say—to find procedures which are mutually acceptable—and we have a long way to go—that will provide in the medium term a step forward for many millions of workers in an adult and civilised employment relationship. However, that will only apply if there is a de facto acceptance that the ACAS code underpins the credibility of Schedule 2 as a means of securing acceptable settlements and complements the role of the tribunals. I beg to move.
Lord Gladwin of Clee: I shall be very brief as I am conscious of the time. The problem here, as my noble friend has said, is that, as it reads, Schedule 2 is not fair. It is no good my noble friend shaking his head; it is just not fair. The amendment and subsequent amendments seek to remedy that. At the moment we are being told by personnel directors that it will be more difficult to persuade line managers to follow the correct procedure when they realise that "they can get away with it".
This skeleton needs changing. The best way to change it, and the way to deal with the perception that my noble friend the Minister was talking about earlier this afternoon, is to change it on the face of the Bill. I hope that my noble friend will recognise the force of that argument and at least be prepared to take this measure away and come forward with amendments, or perhaps indicate on the face of the Bill regulations that they may be considering. As regards the bald statement about the four procedures, people should understand that there is more to that than they read on the face of the Bill. I go back to where I started—any reader of this schedule will recognise it as being unfair as it stands.
Lord Sharman: Amendments Nos. 100 and 112 are grouped with Amendment No. 96 and address the same issue in a different way. The purpose as we see it is to include both within the standard and the modified dismissal and disciplinary procedures a requirement that employers should conduct an investigation prior to dismissal. The purpose of this is to ensure that the minimum procedures have at least the capacity of the requirements for a fair dismissal.
As drafted the procedures are in our view unsatisfactory because they create an additional hurdle for employers without delivering any benefit in exchange. An employer who complies with the appropriate procedure will protect himself against a finding that the dismissal was automatically unfair, but because the statutory procedures are inadequate they will not do enough to assist the employer in demonstrating that the action taken to dismiss was not an unfair dismissal for any other reason. That is unsatisfactory for all parties.
A sensible procedure would as a minimum contain all the elements which could make a dismissal fair. In a case of dismissal for misconduct, for example, an employer will still have to show that he or she genuinely believed that the employee was guilty of misconduct and that that belief was based on reasonable grounds after a reasonable investigation had occurred. Because this reasonable belief is a requirement for a fair dismissal, proof that it existed should be included in the statutory procedure after a reasonable investigation. Because this reasonable belief is a requirement for a fair dismissal, proof that it existed should be included in the statutory procedure.
The amendment requires employers to conduct an investigation prior to dismissal as they would be required to detail the evidence—that is, the proof—that they had conducted such an investigation to detail that evidence on which they would rely. With the

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amendment, the procedure would, in our view, at least contain all the requirements that could make a dismissal fair and give additional legitimacy to the new hurdle employers will now have to overcome.
Lord Wedderburn of Charlton: I appreciate what the noble Lord has just said, and the manner in which it impacts on quite a large number of amendments which are to come. I am not protesting about the groupings; I know only that we are still in Committee at nearly twenty minutes before eight when a guarantee was given at the earlier sittings that we would end at 7.30 p.m. Nevertheless, it is good that this matter should be aired first, albeit at this late hour. I hope that the Minister will not reply to the reasonable points put forward when the amendment was moved simply by saying that that would create uncertainty in Schedule 2. We shall come to that issue when we consider on subsequent amendments. I should have addressed them tonight, were it not so late, in relation to this amendment. I give notice that I will raise that, and I hope that my noble and learned friend will not open that question tonight. I also hope that he will not say that the law that exists is very clear and the matter will just go on in the future and will not be affected by his schedule. Such a prediction about what the courts would do would be regarded as most unwise, and I doubt if he would advise in an opinion that the present law will be unaffected by Schedule 2. However, that is a wider debate and to advance it at this stage of the night would be quite improper. We shall come to it the next time that we consider the matter.
Lord Falconer of Thoroton: In different ways, these are very important amendments. Whatever the time that they have been reached, I am afraid that I have to set out what our argument is in relation to it, particularly as my noble friend was keen they should be dealt with now.
They deal with the need for the employer to investigate complaints before instigating disciplinary action against an employee. I have absolutely no difficulty with the underlying thrust of the amendments. Employers should investigate the facts of the situation before they take disciplinary action or dismiss an employee. That applies to virtually all cases, even where, on the face of it, the case seems clear-cut; we all know that.
Lord Wedderburn of Charlton: With the greatest respect, the amendment and that grouped with it do not deal with investigation; they talk about detailing the facts. Later amendments deal with investigation. Could my noble and learned friend deal with them then?
Lord Falconer of Thoroton: The first amendment says,
"When a disciplinary matter arises the employer should first establish the facts promptly".
I see it as difficult not to establish the facts without some form of investigation. It seems to me totally unreasonable to suggest that when one is talking about establishing the facts, one does not address the issue of
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investigation. Indeed, that occurred in the speeches made by my noble friend and the noble Lord, Lord Sharman. That is a perfectly reasonable approach to take.
Often, investigations can reveal key facts that may have eluded the employer at first sight. The ACAS code rightly puts much emphasis on the need for employers to establish the facts before disciplining an individual. Tribunals take the ACAS code into account when assessing individual unfair dismissal cases. The Bill does not change that role for the code. Tribunals will still take the code into account, including its guidance on investigation.
We will be asking ACAS to revise the code in due course to ensure that it recognises the statutory procedures. The code will then give guidance on the totality of employers' obligations, both in respect of the obligations under the statutory procedures and the wider obligation to act reasonably when dismissing employees. That wider obligation can of course mean that the employer is obliged to take additional procedural actions outside the statutory procedures. It is worth stressing that we are not changing the existing obligation on the employer to act reasonably. We are not subtracting from existing employee rights, as some people appear to think.
Indeed, my noble friend Lord Wedderburn suggested that was what we were doing in his reference to predicting what the law might be. I can put no other construction than that on what he said. The issue for us is whether we should specifically mention these issues in the statutory procedures themselves.
I turn to Amendment No. 96 first. It obliges the employer to establish the facts promptly when a disciplinary matter arises. As far as possible, we have tried to draft the procedures as a series of discrete concrete actions. This achieves clarity and enables the parties easily to ascertain whether a step has been undertaken. We are concerned that this amendment undermines this approach. It would be unclear what the employer should precisely do in order to "establish the facts promptly" in accordance with Amendment No. 96. The amendment would therefore import a new uncertainty into the procedures. This will cause difficulties and give extra scope for disputes to arise as regards compliance with the procedures.
As Members of the Committee will know, disciplinary cases take many forms, they deal with a wide variety of workplace problems—persistent sickness, dangerous working, incapacity and alleged misuse of property. There is therefore no standard approach which an employer must follow when investigating an issue. Investigations can be simple or complex depending on the circumstances. It is often not clear how much physical or documentary evidence should be assembled. It is not always clear which employees or managers should be asked to provide evidence as witnesses. Indeed, it is often not clear whether experts should be called in to provide their views. For example, the involvement of medical experts in sickness cases may or may not be necessarily required, as the ACAS code recognises.

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Certainty, or the lack of it, is a very important matter for employers. As my noble friend will appreciate, there is a close relationship between the schedule and Clause 34. He will know that it would be automatically unfair for an employer to dismiss an employee without following in its entirety the statutory dismissal procedure. We therefore need to make the obligations on the employer crystal clear. I am afraid these amendments fail this test.
Amendments Nos. 100 and 112 spoken to by the noble Lord, Lord Sharman, both require the step 1 letter in both the standard and modified procedures to detail the information on which the employer relies. Again, they are drafted in open-ended ways which make it unclear what information the letter must contain. Must it be all the information, however minor? We think that this is likely to inject uncertainty in the procedures and increase the number of disputes over whether they have been followed.
There is also a real danger that many employers would feel obliged to enlist the services of a lawyer when drafting this initial letter. The letter itself may need to be long and detailed. Indeed, the amendments specifically require the evidence to be detailed. The three-step procedure would become excessively bureaucratic if we went down this road.
We also need to be conscious that these procedures would apply to companies of all sizes, including very small businesses. Many small businesses make very limited use of written communication, some would not have access to word processors. The approach suggested in these four amendments would therefore be seen as particularly intrusive by many small employers. It would be counter-cultural.
In conclusion, we cannot accept these amendments. However, the Government note and understand the points which Members of the Committee and others have made. I know the strength of feeling on these issues from the many representations we have
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received. The Government therefore intend to give further consideration to these matters with the aim of coming forward with amendments to the schedule at Report stage. This issue is by no means as simple as it looks. However, we will use our best endeavours to find a solution to it. In the light of these remarks, I would ask the noble Lord to withdraw his amendment.
Lord Wedderburn of Charlton: When the Government reconsider Schedule 2—it is very good news that they will do so, but they will still be pressed by amendments to direct their attention next time we meet—will they also consider the relationship of the matter we have been discussing to Section 92 of the 1996 Act, whereby the employee has a right to ask for reasons for his dismissal?
Lord Falconer of Thoroton: When we are considering the amendments we will consider all aspects of the amendments.
Lord Lea of Crondall: The Minister has indicated that the Government will look very carefully at this whole area, and I trust that he will also be looking carefully at Hansard in order to look again at all the points that have been made. I am grateful that we were able to deal with the matter today. It is difficult for me to be here on Wednesday afternoon and I hope that other people are not too inconvenienced by it. I thought that the Committee was to rise between 7.30 and 8 p.m., but that is a misunderstanding.
I trust that on that basis we will be able to look at this afresh when the matter is debated further at the Report stage. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sainsbury of Turville: This may be a convenient moment for the Committee to adjourn until 3.30 p.m. on Wednesday.
The Committee adjourned at eleven minutes before eight o'clock.