Grand Committee Report of 26 March 2002

Official Report of the Grand Committee on the
  Employment Bill

    The Committee met at half-past three of the clock.
    [The Deputy Chairman of Committees (Lord Brabazon of Tara) in the Chair.]:
    Clause 33 [Complaints about grievances]:
    Baroness Turner of Camdenmoved Amendment No. 167:
    Page 38, line 40, at end insert—
    "( ) Nothing in this section applies to a case in which the employer has effected a constructive dismissal of an employee."
    The noble Baroness said: We now turn to a discussion on constructive dismissal, which we have mentioned at various times throughout the discussions in Committee. This is one of the most difficult areas of industrial relations work. Constructive dismissal can be said to occur when working is made so difficult for an employee that it becomes impossible for him or her to continue in work.
    It can take many forms. Demands may be made upon the employee that he or she simply cannot meet and that is being done knowingly by the employer. There may be a series of demotions or transfers to work for which the employee is not suited and has not trained. There can be overwork. There can be subtle forms of harassment. There can be bullying, which—as my union knows because it has done a great deal of research on the matter—occurs often within industrial and commercial environments. In fact, one of my colleagues is promoting a Bill backed by my union called Dignity at Work Bill, which will be discussed tomorrow in your Lordships' House.
    There could be failure to pay wages or deductions from wages. On a construction site, an employee may be asked to do work which he may feel is unsafe for him, although it is true that an employee blowing the whistle has some protection. That protection is largely thanks to legislation originally promoted in this House by my two noble friends when we were successful in getting the Offshore Safety (Protection Against Victimisation) Act on the statute book following the "Piper Alpha" disaster. We do, therefore, occasionally have some successes. That Bill was promoted by me but was drafted by my noble friend Lord Wedderburn and supported and spoken to by my noble friend Lord McCarthy.
    Nevertheless, there are industries where the whole working environment is inherently hazardous and where the availability of so-called "illegals"—perhaps illegal immigrant workers—who are prepared to do any work at low rates and not to make any complaint, can act as a pressure on existing workforces. Many
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    examples can be given of pressure that can be exerted by employers to get rid of employees without incurring any financial penalty.
    If there is a union environment, protection can usually be given to such an employee. However, remember when I was a union official and was approached for advice by employees who were not members of a union, I would tell them that the last thing they should do was resign. I would say, "Never resign. Stick it out if you can because if they want to get rid of you, make them pay for it".
    However, the situation can sometimes be much too stressful for that to be a workable possibility. The employee may then feel that he or she has no alternative but to resign from the employment. What we call "constructive dismissal" then takes place.
    The object of our amendment is to ensure that constructive dismissal should be treated as an exceptional case and the individual concerned should not be expected to go through the various procedures laid down in this part of the Bill. The relationship will have broken down anyway and it will simply not he a reasonable and practical proposition.
    I hope, therefore, that my noble friend the Minister will agree that this is an exceptional set of circumstances as regards an employee and that therefore the full procedures laid out in Section 33 should not be expected to be followed before the individual concerned can proceed to an employment tribunal. I beg to move.
    Lord McIntosh of Haringey: As my noble friend Lady Turner rightly says, constructive dismissal is one of the most difficult areas of employment law and for that reason I approach it with considerable care. The amendment deals with the application of the admissibility criteria to cases of constructive dismissal. We have made it known that, unlike other cases of unfair dismissal, we are minded to apply the admissibility regime—that is, the regime set out in Clause 33—to some cases of constructive dismissal. Perhaps I may explain why. In cases of unfair dismissal, the employer is obliged to use one of the statutory dismissal procedures. Therefore, the employer should be in no doubt about the employee's attitude towards the dismissal.
    In contrast, employers may be entirely unaware of the employee's concern in cases of constructive dismissal. Millions of employees resign or quit voluntarily each year. Most leave without ever giving a full explanation to the employer, and there is no reason why they should do so. In a proportion of those cases, the employee left because he had a serious grievance against the employer. He may not have raised that grievance with the employer while in employment. In some cases, the first an employer hears about a grievance is when he receives a copy of the tribunal application claiming constructive dismissal. That is the situation which we want to avoid. We want an issue to be aired to enable the parties to find a resolution themselves before an application to a tribunal is made.

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    However, we recognise that constructive dismissal cases come in a variety of forms. Some may present particular difficulties when applying the admissibility regime. For example, what should happen when an employee resigned because the employer disciplined him unfairly without following the statutory procedure? We shall need to give careful attention to this issue when drafting the relevant regulations. Of course, we welcome the views of those whom we shall consult when we prepare the regulations. For that reason, I said that we are minded to apply the admissibility regime to some cases of constructive dismissal because we are minded not to apply it in other cases. The guiding principle in drafting the regulations is clear. We want to ensure that both parties are aware of a complaint before a formal application is made to a tribunal.
    My noble friend Lady Turner of Camden asked what happens where constructive dismissal involves serious prior harassment of the individual. The general exemptions from the application of the admissibility criteria will also apply to cases involving constructive dismissal. Therefore, if an employee resigns following a physical assault. for example, we shall ensure that the regulations exempt such an individual from the admissibility criteria. That is another example of a case where the admissibility criteria would not apply.
    We believe that there is a good case to apply the admissibility regime to some, but not all, constructive dismissal cases. However, as I and my noble friend Lady Turner said, it is an extremely complicated area and it will require careful drafting in the regulations. I hope she will agree that the matter should be sorted out in regulation.
    Baroness Turner of Camden: I thank the Minister for that explanation of the Government's position. I am not entirely happy with it, as he can well understand. As I believe he will have realised, my noble friends and I have been anxious to have some of these issues included on the face of the Bill rather than be left to regulations. It seems from the Minister's explanation that there could be a great deal of uncertainty. Some cases will be subject to the admissibility rules and other cases will not. It seems to me that no one will quite know where he stands. I consider that to be a rather an unsatisfactory situation. We shall have to think about it carefully to see whether we need to proceed with the matter any further. In the meantime, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Razzallmoved Amendment No. 167A:
    Page 38, line 40, at end insert—
    "(11) An employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer, done on the ground that any action was taken, or was proposed to be taken, by or on behalf of the employee to comply, or which would comply, with any of the requirements of Schedule 2, Part 2.
    (12) An employee may present a complaint to an employment tribunal that he has been subjected to a detriment in contravention of subsection (11) above."
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    The noble Lord said: This amendment touches on various analogous points that we have already debated but it raises a new point. The amendments in this group are designed to give free-standing protection to an employee who complies with the steps of the statutory agreements procedure and, as a consequence, is subject to any kind of detriment by his or her employer. Obviously, in many cases where complaints relate to breaches of statutory rights, the employee will already have protection from detriments, but the clause would extend the protection to all grievances. Members of the Committee may well ask why, in the circumstances of the Bill, this is necessary, but it is really necessary because of the penalties that an employee will face for failure to comply with statutory procedures.
    For example, under Clause 31, his or her award would be reduced and under Clause 33 he or she would be prevented from making a claim. If, under the legislation, the employees are required to raise grievances internally, we feel that they should be protected from detriment by their employer when they do so. I beg to move.
    Baroness Turner of Camden: I rise to speak to Amendment No. 190 because it is grouped with the amendment moved by the noble Lord, Lord Razzall. As regards Amendment No. 190, I am indebted to Professor Hepple for the text. Members of the Committee will know that Professor Hepple is a distinguished expert in the field of labour law and is well known to a number of us. He expressed considerable surprise that the Bill, which introduces a number of new concepts, does not include a no-detriment clause. As my noble friend Lord Wedderburn said, "no detriment" means "no victimisation" in lay terms.
    It is essential that an employee should not be afraid to exercise the rights which Parliament has said he should have. The aim of the two new sections in the amendment is to provide some protection for an employee in such circumstances.
    The first part of the amendment, proposing new Section 47D, lays down that an employee has the right not to be subjected to any form of victimisation because he has presented, or is presenting or proposing to present, a claim to an employment tribunal, or because he proposes to utilise the statutory or other disputes resolution procedure.
    We all know that unscrupulous employers exist—if they did not, much of our legislation would not be necessary. However, vulnerable employees exist as well. The unions are there to protect such people, but as we know only too well, there are non-union environments. We have to enable an individual who feels that he has rights that he wants to pursue, to be able to do so without being intimidated in any way.
    The second part of the amendment, proposing new Section 104C, deals with dismissal and spells out very clearly that if an employee is dismissed and the reason, or if more than one reason the principle reason, is that he has presented or proposes to present a claim to an ET, or has sought to use the statutory or other disputes resolution procedure, that dismissal will automatically be regarded as unfair.

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    The amendments are admirably clear and direct. We have been talking about deterrent effects mainly because some of the provisions of the Bill seemed directed towards deterring employees. It is hoped that the amendments which we have proposed will have a deterrent effect on an employer. An employer who is enraged because one of his employees has dared to challenge him by taking a case to an ET will know that if he tries to take out his anger on his employee in any way—and particularly if he attempts to dismiss or does dismiss the individual concerned—he will automatically be regarded as having unfairly dismissed the employee, with the financial consequences that this may entail.
    It is no use having rights in legislation if people are too scared or too intimidated to enforce them. I hope that the Minister will agree that these amendments are entirely desirable and that they should be included in the Bill—and if not this wording, similar wording—to ensure that employees are enabled, without being scared or intimidated, to utilise the rights the law gives them.
    Lord Wedderburn of Charlton: I am sure that the noble Lord, Lord Razzall, will not mind if I say that our proposal for the new clause has certain advantages.
    Lord Razzall: I think it is better.
    Lord Wedderburn of Charlton: The noble Lord thinks it is better—that is admirable. It is a disadvantage of our procedure that in merely speaking to Amendment No. 190 it probably will not be printed in full in Hansard. Could I make a plea that Hansard prints Amendment No. 190 in full? If that is not likely to be done, I shall read it but I do not believe that Members of the Committee will be happy if I do so. My noble friend summarised it.
    The other point that has caused a great deal of attention among commentators who have been looking at the Bill is why on earth the Bill does not have a victimisation clause. Every employment protection piece of legislation from, I believe, 1971 onwards has had provision that where you create a right for employees, and in some respects obligations, one puts in a provision that the employee has a remedy if the employer imposes upon him or her a detriment—that is, victimises him or her—for exercising those rights and pursuing those obligations. It is perhaps the most glaring omission from the Bill that it does not contain such a provision. I wonder whether the Minister can give us any reasons for that, other than the fact that workers' interests are not entirely fully dealt with in the draft of the Bill?
    3.45 p.m.
    Lord McIntosh of Haringey: It certainly helps matters if the noble Lord, Lord Razzall, believes that the wording of Amendment No. 190 is better than his own drafting. The principal difference—
    Lord Razzall: Perhaps I may interrupt the noble Lord. Academia often beats the Law Society.
    Lord McIntosh of Haringey: There is a significant difference, quite apart from issues of drafting, which is that the amendment tabled by the noble Lord, Lord Razzall, deals only with detriment, whereas Amendment No. 190 deals also with dismissal. That is a significant point and I need to address myself in particular to Amendment No. 190.
    We sympathise with the underlying intention of the amendment and have looked carefully at it. There is no criticism of its drafting. As regards unfair dismissal, there is protection in the Employment Rights Act 1996, and elsewhere, for employees who are dismissed for asserting a wide range of statutory right; for example, the right not to suffer unlawful deductions from wages. To dismiss an employee in those circumstances is regarded as automatically unfair. That applies whether the employee asserts a right simply by alleging that his employer has infringed it, which might be done by instituting a grievance procedure, or by complaining to a tribunal.
    Under the general unfair dismissal legislation, a dismissal must be fair in the circumstances. It is beyond dispute that since dismissals for asserting a statutory right are automatically unfair by statute, no sensible tribunal would find a dismissal for using one of the statutory dispute procedures fair It is implausible to suggest that such a dismissal could ever be fair—any more than it could be fair to dismiss an employee for making use of voluntary procedures. An employer who said, "I sacked him because he raised a grievance against me, or said he was proposing to", would never be able to convince a tribunal that the dismissal was fair.
    Turning to detriment short of dismissal, there is currently protection against detrimental treatment on a range of specific grounds, mainly set out in the 1996 Act. While additional protections against detriment have, from time to time, been added to this list, the Government have not added to them wholesale and are, in my view, entirely right to have taken this cautious view. There is no evidence that broad rights not to suffer detriment are needed and I need hardly say that any such broad rights would add greatly to the potential for tribunal complaints.
    I do not therefore believe that the case for having a protection against detriment, as is proposed in the amendment, is made out. Our aim is to get employers and employees to sort out disputes in a sensible way, ideally within the workplace. I cannot feel that it would be helpful to that aim to allow employees to complain to tribunals helpful to that aim to allow employees to complain to tribunals if they think that any reversal or failure to progress in their working lives is traceable to some past attempt to resolve a dispute.
    Lord McCarthy: Hansard will tell us what the Minister said, but we do not know when we are going to meet again. I would like to clarify what the Minister

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    said. He seemed to me to be saying that he accepts that workers might suffer a detriment. He regretted that they might well suffer a detriment, but the trouble was if we did anything to mitigate their suffering it would add to the number of tribunal cases. Is that what he said?
    Lord McIntosh of Haringey: Hansard will indeed record what I said. I said that I sympathise with the idea but, as regards unfair dismissal and detriment, I said there are remedies in the existing legislation, in particular in the 1996 Act.
    Lord Wedderburn of Charlton: I understand that, but my noble friend said two things. First of all, as regards dismissal, he said there could never be a case where the employee would fail if detriment in the way of dismissal were imposed upon him for presenting or proposing to pursue a complaint.
    Lord McIntosh of Haringey: I did not say never.
    Lord Wedderburn of Charlton: The Minister says that he did not say never. We will look at Hansard. Then I moved from dismissal because I thought the Minister had some case on dismissal, although I did not like the word "never". Let us move to detriment. He says there are remedies available already in a case—and I want to be quite clear about this—which the individual specified by the amendment could pursue under the 1996 statute. The individual is someone who, let us say, is suspected of presenting, or proposing to present, a complaint by reason of Section 33, or one that is contrary to Section 33. He says, "I do not like being shut out from the tribunal", and then he is victimised. The employer says, "No more overtime", or whatever it is. Which section of the 1996 Act could he rely upon for his remedy?
    Lord Razzall: Before the Minister replies, could he perhaps also answer the question I would like to put, which may be the same question in similar form? If an employee has failed to comply with the statutory procedures under Clause 31 his or her award will be reduced, and under Clause 33 he or she will be prevented from making a claim. Is the Minister saying that if employees are required to raise grievances internally, have failed to comply with the statutory procedures but detriment thereafter ensues, under no circumstances will those clauses be applied against that employee?
    Lord McIntosh of Haringey: I did not say, "prevented from making a claim". This is a common misunderstanding. There is no possibility of preventing people from making a claim. We say that when the admissibility criteria apply there has to be a letter and there has to be a wait of 28 days. Once those very minimal requirements have been gone through there is no question of preventing anybody from making a claim. Indeed, if a claim is made which is not
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    admissible, that can be corrected by overcoming the objections to the claim and the claim can then be made subsequently.
    Lord Wedderburn of Charlton: I repeat my question to the Minister: which section?
    Lord McIntosh of Haringey: I said that currently there is protection against detrimental treatment on a range of specific grounds, mainly set out in the 1996 Act. I do not have the facilities to go back to all legislation. On that matter I will have to write to the noble Lord. Lord Wedderburn.
    Lord Wedderburn of Charlton: I appreciate that but I must protest that the Government come to this Committee and reject an amendment which is quite specific and which adds a normal remedy for workers who are victimised. The Minister says there are remedies already. When I ask him where they are, he does not tell me; he is not prepared for it. He does not come with a section, he does not come with an Act. I am not asking him to survey hundreds of years of legislation. He mentioned the 1996 Act; I assume he knew where to find it.
    Lord McIntosh of Haringey: What I said was that currently there is protection against detrimental treatment on a range of specific grounds mainly set out in the 1996 Act, but not necessarily only in the 1996 Act. The noble Lord, Lord Wedderburn of Charlton, is entitled to an answer, but I cannot give him an answer off the cuff, and I have offered to write to him.
    Lord Wedderburn of Charlton: It is not a question of giving an answer off the cuff; it is central to the argument. I must protest again. I am sorry. The Minister looks bored and fed up. I can well believe he is fed up because he has made a case which he cannot substantiate. If one says to workers "You have a remedy already", one must tell them, or at least their advisers, where it is. The Minister says it might be in some other Act. Which other Act? If it is in the 1996 Act, which section?
    Lord Razzall: May I dare to suggest that the Minister should reflect on what the noble Lord, Lord Wedderburn of Charlton, has said, perhaps before we get to Report stage, and provide us with the answer to the question the noble Lord has put and in the meantime the amendment should be withdrawn?
    Lord McIntosh of Haringey: Before the amendment is withdrawn, I have undertaken to write to the noble Lord, Lord Wedderburn of Charlton, already. I will copy the letter to everyone else who has taken part in the Committee, and my letter will include a reflection on the matters that I am asked to reflect on.
    Baroness Turner of Camden: Before the Minister sits down, would he perhaps look again at the two new Sections 47D and 104C that we are proposing? The Minister said that he sees nothing wrong with the drafting of the new sections, nor do I get the impression from him that he is anything other than

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    sympathetic to what I was saying. I would be pleased if he would be good enough to look at these two new sections again before Report to see whether any steps can be taken to meet the arguments that we have put.
    Lord McIntosh of Haringey: Certainly, and if the noble Baroness, Lady Turner of Camden, would like us to have a meeting with Professor Bob Hepple on the subject, we would be happy to do that as well.
    Lord Razzall: I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 33 agreed to.
    4 p.m.
    Lord McCarthymoved Amendment No. 168:
    After Clause 33, insert the following new clause—
    "AVAILABILITY OF ACAS CONCILIATION
    Where a complaint is communicated to a tribunal but section 33(2), (3) or (4) prohibits its presentation to that tribunal, then notwithstanding that section, the communication shall be treated as an application falling within section 19 of the Employment Tribunals Act 1996 (c. 17) (conciliation procedure), and regulations shall provide for a copy to be sent to a conciliation officer together with such other information as will assist that officer to bring about a conciliated settlement of the claim, and for the Secretary of the tribunal to send to the applicant and the named respondent a notice of the availability of the services of a conciliation officer."
    The noble Lord said: I am in a hinterland between Clause 33 and Clause 34. Clause 33 has gone, but not quite gone.
    This amendment is another example of what they call "a probing amendment" in this place. I did not know about probing amendments until I came to this place. If I understand what they are for, they are where one does not know any more than the Government seem to know why something has been done or not done. Without knowing what the answer will be, because one is puzzled and perplexed one tables what is called a "probing" amendment.
    What we are probing is the absence of ACAS in this new system. The Government say—and I want to quote from them subsequently in the Government response to Routes to Resolution—that one of their central objectives is the promoting of conciliation. After all, conciliation comes before a hearing and is the way in which, as the Government say, a very substantial number of settlements are in fact arrived at, or workers abandon their claims for various reasons. The Government want to promote conciliation. Of course they do; it is much cheaper than hearings, and it can work quicker than hearings. It might also provide better remedies than hearings. It may after all, if it works quickly enough, provide reemployment or reinstatement. One does not know what conciliation can do. The Government want to promote conciliation, I see that.
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    Why, therefore, is it absent from this period when the 28 days run? If one looks at the words of the amendment, noble Lords will see what we propose:
    "Where a complaint is communicated to a tribunal bat section 33(2), (3) or (4) prohibits its presentation to that tribunal"—
    we are in the dead period—then, notwithstanding that section, it states,
    "the communication shall be treated as an application falling within Section 19 of the Employment Tribunals Act 1996".
    That section authorises ACAS to come in in all other ordinary tribunal cases, after the application has been sent. The parties are told that ACAS is sent a copy and that there is a possibility of conciliation. They are told what it does and if applicants say that they want to get into the conciliation process, that is it. They get a telephone call and the process begins. Why is that taken up during this period, if the aim is to promote settlements?
    We have some guidance in that regard. On 8th December, the Minister in another place said:
    "The applicant should be required to complete at least one step of the procedure, the sending of the written complaint, before the tribunal can admit an application. In addition, a period— say, four weeks—should elapse after the step one letter".—[Official Report, Commons Standing Committee F, 18/12/01; col. 195.]
    At that point, I thought that the Minister would go on to talk about conciliation, but he continued,
    "has been sent before an application can be admitted".
    He went on to explain the reason for that. It is that that,
    "ensures that the parties have time to begin discussing the grievance, which should ensure that the grievance is at least aired and clarified before an application is made. If the dialogue proved productive, I would expect many potential applicants to defer submitting their tribunal application beyond the end of sot period while the procedure was used more fully".
    Why can they not have help during that period? After all, ACAS specialises in the discussion, elaboration and clarification of agreements. It specialises in trying to get the parties to see that they have some area in common and in narrowing the area of difference and not promoting a specific settlement, because that would be mediation. It hopes that the parties will come to see that there are some grounds for a meeting or that one side or another wants to give in. That is what it is all about. Why should that not happen during this period if the Government want to promote a settlement that is not a settlement using the tribunal?
    The Government's response to Routes to Resolution contains a strange page and a bit about the promotion of conciliation. One fundamentally disagrees with almost every part of that. It says, for example, that the ability to have a fixed period of conciliation and a period when there is not conciliation will promote conciliation. I cannot see why that is. It states that as a form of conciliation, which it is not,
    "if you broaden the scope of compromised agreements you promote conciliation".
    You do not; you provide a substitute for conciliation. It continues:
    "We should promote the use of alternative dispute resolutions",
    but it says nothing further about that.

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    The interesting thing is what the response says about conciliation as it sees it. It admits that three-quarters of tribunal claims are settled or withdrawn before a tribunal hearing takes place—presumably, it gives conciliation credit for a significant part of that. It goes on:
    "In many of these cases, the tribunal would have wasted time and effort on these claims, which would have been better spent on claims which do require a determination".
    I suggest that that sentence is absolute nonsense. It asserts that the tribunal would have wasted time, but that is not the case because literally, this arises before it gets to a tribunal. If anybody was wasting time, it would be ACAS. Perhaps they really meant to say, "In many of these cases, ACAS will have wasted time", or, "In many of these cases, the tribunal might have wasted time". How do they know? What is the evidence that tribunals or ACAS are going around wasting time, which would have been better spent on cases that require a determination. I do not think that they understand the first thing about conciliation or that they appreciate the way it works. I do not think that the people who wrote the government response know the difference between what happens when the parties get together and argue (that is one process), when ACAS comes in and conciliates (that is another process) and at the appearance at a hearing (that is a third process). Those are discrete and different processes and they are the reason why, if it works, people get something out of the system. My question is a simple one: during this period, when you condemn inaction for 28 days unless the parties can reach a settlement with themselves, why do you exclude a process that most people would say can solve most of the disputes? I beg to move.
    Lord McIntosh of Haringey: The first criticism that my noble friend Lord McCarthy makes involves the lack of an explicit reference to ACAS in this part of the Bill. Basically—on the availability of ACAS—ACAS can already provide conciliation to parties in advance of a tribunal application in certain circumstances. There is no reference because that facility will remain in place—the Bill does not affect that position.
    It is possible that ACAS could be involved in a case in the period before the employee presents an admissible application to the tribunal. What I think lies behind this amendment is the assumption that failure to meet the admissibility criteria will debar or prohibit the employee from applying to the tribunal a second time. As we have said in response to a number of earlier amendments, this is not the way in which we intend the admissibility regime to work. As a general rule, applicants who originally make an inadmissible application would be given a second chance to make an admissible application.
    In other words, employees would be given another opportunity to open up a dialogue with the employer by initiating the statutory grievance procedure. If they then fail to sort out the problem between themselves using the procedure, the employee can make a second application to the tribunal which meets the
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    admissibility criteria. Where that happens, ACAS would be informed that an admissible application had been made and ACAS's conciliation services would be offered to the parties in the normal way.
    The failure by applicants to meet the admissibility criteria with their first application does not close off the opportunity to involve ACAS at some stage before the matter reaches the tribunal. We do not need to make special provision to secure ACAS involvement, as the amendment seeks to do.
    Lord McCarthy: I am sorry, but I shall read the conciliation procedure, which is the basis on which ACAS intervenes, as stated in Section 19 of the Employment Tribunals Act 1996. It states that employment tribunal procedure regulations,
    "shall include in relation to the employment tribunal proceedings, in the case of which any enactment makes provision for conciliation—
    (a) provisions requiring a copy of the application".
    But he cannot have it, because he has to complete it within 28 days. However, it states,
    "provisions requiring a copy of the application by which the proceedings are instituted, and a copy of any notice relating to it which is lodged by or on behalf of the person".
    But we do not have those pieces of paper. It goes on,
    "against whom the proceedings are brought, to be sent to a conciliation officer".
    That is how they get in in the first place. Paragraph (b) goes on,
    "provisions securing that the applicant and the person against whom the proceedings are brought are notified"—
    they have to be notified—
    "that the services of a conciliation officer are available to them".
    They are available to them because ACAS has authority, based upon the fact that there has been an ET1. That is their authority. It continues:
    "(c) provisions postponing the hearing".
    Someone has to postpone the hearing; otherwise, as happened in the old days, one might get to a hearing; of course, one would not get there now, but never mind. But never mind. Paragraph (c) states:
    "provisions postponing the hearing of any such proceedings for such period as may be determined in accordance with the regulations for the purpose of giving an opportunity for the proceedings to be settled by way of conciliation and withdrawn".
    That is how the arrangement works. I am not saying that there never has been a case in the history of man when ACAS has been involved in a hearing before they got the piece of paper.
    That is not what is supposed to happen. In all other cases, it is absolutely clear when ACAS becomes involved. What the Minister does not answer is why the Dickens that cannot apply in this case. He says, "We know that ACAS sometimes gets in round the back door". How is it supposed to know what is going on, what its authority is and what papers to work from? Why the Dickens cannot that be in the Bill?
    Lord Wedderburn of Charlton: Before my noble friend proceeds to withdraw the amendment, does he also not agree that the reply we have been given means

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    that being prohibited from presenting a complaint is, in the view of the Minister, not a terribly serious matter, because one will go away and make a second complaint? Therefore, it does not seem that the tribunals will be relieved of many hearings. The Minister says that the prohibition will generally be followed by a second complaint that will get to the tribunal. How can the Government save 40,000 cases out of that?
    Lord McIntosh of Haringey: Perhaps I may try again because I have not come very far with what I have said so far. First, many grievances are handled internally by employers without ever involving a third party. I believe that that is common ground. It is the normal way in which disputes are resolved between employees and employers That is a matter of fact and that is the pattern of behaviour that we want to encourage. We certainly do not want to say that ACAS should always be involved and the noble Lord, Lord McCarthy, does not want that either.
    What I said was that ACAS can already provide conciliation to parties in advance of a tribunal application in some cases. That is provided for in Section 18(3) of the Employment Rights Act 1996. It provides for ACAS to conciliate before an application is made. The point I am trying to make is that that will continue; that is not affected in any way by the Bill.
    Lord McCarthy: The point is that in the good old days nothing got in the way of the application. There was no possibility that one would needed a barrier. The worker could not even write a postcard. If the worker could write a postcard, he would be sent an ET1 and the whole process would begin; the data would be collected and off we would go.
    Unless the Minister can bring me figures to show that the great hulk of ACAS entries are brought in without using the formula, I do not see why he objects to the proposal. I do not see why he is being so difficult. Of course, a great number of settlements are achieved in the normal way without bringing in ACAS. However, at present if the individual worker thinks he is getting nowhere he can blow a whistle. The whistle he can blow is to send either an ET1, or whatever, to the ET service and say, "I want conciliation". He is really saying, "I want some help. I want conciliation". He gives notification and ACAS has authority. The applicant has asked for him to come in and that is the usual way forward. The Minister does not answer me by saying that the normal way is not to use it or that the normal way is to settle the matter domestically. That is a completely de novo situation.
    One of our main criticisms of the Bill, and we have made it over and over again, is that it has been produced in a factual vacuum. Provisions have been put on the face of the Bill by people who do not understand the consequences of what they are doing. They are now imposing conditions. They say they impose those conditions to help the worker and I accept that. However, the critical condition in this context is they have their 28-day wait. In that period, they give no help at all.
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    If we were living in the 1970s—I am not saying that I want to go back to living in the 1970s—there would be a stoppage and, by God, ACAS would come in then. Things would happen and the Bill would be changed, but all we have are our arguments.
    Lord McIntosh of Haringey: I do not know whether the noble Lord, Lord McCarthy, was thinking of withdrawing the amendment but I want to make an apology first. I said wrongly that Section 18(3) of the Employment Rights Act 1996 provides for ACAS to conciliate before an application is made. It is Section 18(3) of the Employment Tribunals Act, not the Employment Rights Act. I apologise for that.
    I am grateful for what the noble Lord, Lord McCarthy, said about the context in which we are debating the issue. After all, the Bill, for the first time, gives all employees access to dispute procedures. Three million employees will be covered by procedures who were not previously covered by procedures, and that is the context in which we have to look at it. In those circumstances, surely the issue of what happens in 28 days is of secondary—I will not say minor—significance.
    4.15 p.m.
    Lord Wedderburn of Charlton: Before the Minister sits down, will he not appreciate that Section 18(3) applies at a time where,
    "a person claims that action has been taken in respect of which proceedings could be brought by him before an employment tribunal".
    The situation we are discussing is a case where he is prohibited from presenting a complaint. I appreciate that Section 18(3) is a general provision about conciliation, but it applies where action has been taken in respect of which
    "proceedings could be brought by him before an employment tribunal".
    I do not understand why even the citation of the right Act and this section does not help the Minister.
    Secondly, does the Minister not understand that the Government have already amended Section 18 in Clause 24, to cut out a duty to conciliate in certain situations and impose a power. We objected to that at the time, but how Section 18 helps the Minister I do not know.
    The point that my noble friend and I are pressing is that under Section 19 there is the natural route for the case to reach the ACAS conciliation officer. Section 19 provides that where one has a complaint that is presented to the tribunal one sends it as a matter of course to the conciliation officer. When the Government's provisions prohibit access to justice, why not allow the matter to go as a matter of course to the conciliation officer? It might help to get a settlement. That is all there is.
    Lord McIntosh of Haringey: There is no question of prohibiting access. We are saying that in order for an application to be admissible it has to pass some very minimal criteria. We are talking about writing a letter and we are talking about waiting 28 days. When there

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    is a failure to meet the admissibility criteria, there is no debar or prohibition on the employee from applying to the tribunal a second time.
    Lord McCarthy: This is why I say that the Government do not answer questions. They never answer questions. The question is a simple one. Why not allow the employee to go to ACAS in the usual way? What damage does it do? Why should he wait 28 days? What assistance would that be? If ACAS cannot solve the matter, he will have to wait 28 days. If the Government want to facilitate settlements, in the name of God why cannot that be put on the face of the Government's Bill?
    Lord McIntosh of Haringey: Because we want first to encourage settlements of the kind which nearly all settlements are—that is, settlements between employer and employee—and we want to do that first.
    Lord Wedderburn of Charlton: The Government want to promote settlements but in order to do that they do not send the case to the conciliation officer in the normal course of things. Conciliation officers help settlements. Has not the Minister met a few? Has he not talked to them about what they do? Of course they are not present in all settlements, but I am surprised that the Government under-rate the value of ACAS conciliation officers. They are enormously important in promoting settlements. We are trying to help the Government here. Why are they so resistant?
    The Minister must understand that there are people who say that these perfectly reasonable and sensible amendments are resisted because the CBI will not have them. That is what people way. If we are left without any rational argument for rejecting them, we will have to listen to those people more.
    Lord McCarthy: We must bring the matter back on Report. We cannot let this go here. I believe that the Government are simply being obstinate. Let them to go ACAS; let them ask ACAS; and let them tell us what ACAS says in particular about this part of the Bill. What do they think the conciliation officer does on the telephone? What do they believe the first question is? The conciliation officer rings an applicant—that is the usual way—and asks, "Where have you got to?" If the applicant says, "We've had a settlement"—God knows the organisation has enough work to do—he says, "Do you think we can help?". No one is getting in the way of domestic settlements; why the hell should they? I urge the Government to think about it, and we shall come back to the issue on Report. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Wedderburn of Charltonmoved Amendment No. 169:
    After Clause 33, insert the following new clause—
    "COMPLAINTS PROHIBITION PROVISIONS
    (1) Where an employee is prohibited from presenting a complaint to an employment tribunal by reason of section 33, the following provisions shall apply.
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    (2) A breach of duty or unlawful act under a jurisdiction specified in Schedule 4 by any party named as respondent or otherwise in the complaint, shall constitute and remain, if proved before a court or tribunal, an illegal act or unlawful means for the purposes of any enactment or any rule of law notwithstanding the prohibition."
    The noble Lord said: I fully appreciate that Amendment No. 169 is a somewhat technical amendment. It posits a situation where,
    "an employee is prohibited from presenting a complaint to an employment tribunal by reason of section 33".
    In view of what the Minister said, he will not like the word "prohibited" and he may prefer the situation to be described without that word. I cannot think why he does not like the word "prohibited". But under subsections (2), (3) and (4) of Clause 33 as it now is, the employee,
    "shall not present a complaint to an employment tribunal".
    Therefore, perhaps we can rephrase it with the words "arising in that situation".
    An employee alleges that an unlawful act has taken place for which he wants a remedy but he is not able to present the complaint. In the general law, an act which is a breach of duty, in particular under a statute but generally, is capable of being unlawful means for the purposes of a general common law.
    This is a complex area but I hope that I may summarise it accurately in the following way. Unlawful acts can be relied upon by a person whose business, trade or employment is interfered with by a person in an action in the High Court, or, indeed, county court, for damages and perhaps even an injunction. In other words, it is not an action in the tribunals but it impacts upon that because here the employee is alleging—by hypothesis, for the moment we assume that it is correct—that it is an unlawful act on the part of the employer. However, he cannot present that to the tribunal. In other words, this is an act by the defendant in respect of which his right is unenforceable. Whether he goes a second time is not within the purview of the argument. I am talking about a case where he does not. The Minister's confidence that every worker will go a second time is perhaps an important message to trades union advisers. However, in this case there is, by hypothesis, an unlawful act which is unenforceable.
    Unlawful acts include not only a breach of statute but also a breach of contract. That arises under the Bill since the House of Lords decision in Rookes v Barnard [1964] Appeal Cases 1129. According to Lord Justice Dilhorne in the case of Department of Transport v Williams [1993] in The Times of 7th December in the Court of Appeal, it also includes the breach of any statute.
    Here a breach of contract arises if it amounts to a failure to operate the procedures properly because Section 30 of the Act will make it so. It is also a breach of the statute because Schedule 2 and Section 29 require it to be operated. Therefore, we have a case that falls strictly within the doctrine, with an exception. Where the employee suffers damage therefrom, he can sue in tort—that is, "t", "o", "r", "t", which usually gets spelt, but not in Hansard—for

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    unlawful interference with his employment. So an employer who refuses to answer a written statement—that might happen—is giving the employee that situation as he is deprived of his remedy at that point.
    Without going into the very complex case law that governs this point, the essential ambiguity in the law is that the cases do not make it wholly clear whether an unenforceable act of an unlawful kind is still actionable under this doctrine. It is my submission that the better authorities suggest that the action would still lie in the ordinary common law courts. All that the amendment does is to clarify that ambiguity, if there be one, and to state that where the unlawful act is unenforceable, it remains—I quote the amendment—
    "an illegal act or unlawful means for the purposes of any enactment or any rule of law notwithstanding the prohibition".
    That is, notwithstanding the fact that the employee cannot present a complaint to the tribunal and enter the doors of its jurisdiction. I beg to move.
    Lord McIntosh of Haringey: I shall not make a point about the word "prohibition"—my noble friend generously anticipates what I shall say. I will only say that, rather than prohibiting applications on a permanent basis, the proposed regime will apply in ways that will ensure that employees have a second opportunity to make an admissible application, if their first was inadmissible.
    The issue is about whether an illegal act somehow becomes lawful. Clause 22 is about the circumstances under which employees may have access to the tribunal system. Of course, there have always been conditions limiting access to the tribunal system. Most notably, applications must generally be made within a specific time limit. Clause 33 adds new conditions—it is not a legal question, but a political question. We think that the conditions are both reasonable and proportionate, and we think that they bring significant benefit to both parties in encouraging mutual dialogue before an issue has to go to a tribunal. That is an issue of policy, however, and not an issue of law. The issue of law is that there are already conditions limiting access to the tribunal and Clause 33 adds to them.
    However, what Clause 33 does not do is to change the underlying employment rights themselves. When an employer has infringed those rights, that infringement does not of course become lawful simply because the employee has not—or has not yet—been able to challenge the legality of the employer's action before a tribunal.
    In that sense, Clause 33 operates in the same way as the existing time limits on making applications to a tribunal. The tribunals can already refuse to accept an application that is out of time. When they do so, an unlawful act does not become lawful as a result, but it means that the employee cannot seek a determination or remedy from the tribunal for the alleged unlawful act. We do not have provisions of this nature that apply to the existing law on the time limits and there is no reason to suppose that they will be necessary in this context either.
    4.30 p.m.
    Lord Wedderburn of Charlton: I am grateful to the Minister for his reply and for not making too much about our use of the word "prohibited", which is quite accurate, but which he does not like. I make these comments only: the case of two applications is irrelevant. I am concerned with the application. I am not concerned with time-barred claims; limitation of action. Limitation of action is a quite different juridical category. I am not concerned with policy questions, other than making the law clear. I do not understand why this is such a high political issue. I thought it was an issue that arose from the case law, which the Minister has not discussed. I refrain from citing the case law on unenforceable rights. They leave a slight question mark, which is in all the books. I thought that the amendment might clarify the matter. The Government, for reasons I still do not understand, will not have it, but there is nothing to do at this stage but to beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Wedderburn of Charltonmoved Amendment No. 170:
    After Clause 33, insert the following new clause—
    "COMPLAINTS ON ONE OR MORE GROUNDS

    (1) The Secretary of State shall by regulations make provision for applications to an employment tribunal which include more than one ground of complaint, including complaints under more than one jurisdiction.

    (2) Where such an application is made on one or more grounds to which section 33 applies, and one or more grounds to which that section does not apply, subsections (2) and (3) of that section shall not apply to it."

    The noble Lord said: This is a small point, which relates back to Clause 33. Perhaps I take the nub of Clause 33 again.
    "An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if

    (a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and

    (b) the requirement has not been complied with".

    This essentially probes the meaning of Clause 33 in that respect.
    "An employee shall not present a complaint".
    I have always wondered why the clause was drafted in that way. I take it it was more to do with the instructions to the draftsman than the draftsman himself because I cannot believe that the draftsman would not have wanted to refer to the technical terms which exist at present in the law and would not have drafted it as:
    "An employee shall not present an originating application to an employment tribunal".
    However, the subsection does not say that. It says "a complaint".
    The reality is that in many cases a complaint, or at least an originating application, will include a number of cases. If the Minister would like to look at the statistics of cases which come to a hearing in employment tribunals, produced annually by the Employment Tribunals Service, he will find that the

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    130,000, which are enumerated, are listed under the major head of what is being presented in the applications. If one looks at the number which present multiple grounds of complaint, one gets a much larger total by specifying them all out.
    Many complaints have multiple grounds. The subsection provides that where the tribunal—we have learnt most valuably in our debates that there is to be a tribunal, or at any rate, a tribunal chairman notified through the secretary—sees an originating application submitted on multiple grounds, some of which fall within Section 33, in order to avoid the tribunal having to engage in a long process of assessing which grounds fall within Section 33, those complaints or originating applications should not be prohibited from being presented under the section. I beg to move.
    Lord McIntosh of Haringey: Let me start by agreeing that applications which are called multijurisdictional—in other words, which involve two or more complaints—are by no means unusual. My noble friend Lord Wedderburn is saying that they are the majority of cases and that seems entirely possible. Employees often allege in a single application that an employer has infringed a number of employment rights. That often occurs in cases of unfair dismissal. However, as we have explained, the admissibility criteria will not he applied to cases of unfair dismissal, other than in some constructive dismissal cases, nor will they generally be applied to former employees. The scope for the admissibility regime to be applied to multi-jurisdictional cases is not as great as may appear. However, we recognise that such cases will occur and that we need to have systems in place to deal with them.
    The amendment highlights this issue. It proposes a rule for the application of the admissibility criteria to cases where proceedings are brought both under a jurisdiction or jurisdictions to which Clause 33 applies, and under a jurisdiction or jurisdictions to which it does not apply. It proposes in these circumstances that where the admissibility criteria do not apply in relation to any one or more of the complaints, they are not to apply to any of the complaints made at all. I hope that I describe the impact of the amendment correctly. It appears that I am.
    We recognise that the regulations will need to deal with the special circumstances raised by complex cases involving several complaints. In drawing up the regulations, we will be guided by several considerations. Where possible, we want to avoid unnecessary and wasteful processing of complaints. It follows that we do not want to compel employees in all circumstances to treat each element of a complaint separately, thereby forcing both them and the employer to undertake separate rounds of the three steps for each part of the complaint.
    On the other hand, we see no reason in principle why in the case of multi-jurisdictional applications, the admissibility regime cannot normally be applied successfully to those complaints which attract it. That is, however, a matter that can be dealt with in the
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    regulations to be made under the clause. We do not think it is desirable to limit the discretion we have in this area by imposing limitations in the Bill.
    The regulations will need to deal sympathetically with situations of the kind encouraging closely related complaints to be linked. We will also need to cater for circumstances where a complaint evolves through a dialogue between the employer and the employee. Sometimes, an employee only recognises the full nature of the complaint through the discussions. Again, we will need to allow for those circumstances, ensuring wherever possible that employees are not required to send a second letter listing a further grievance where that grievance has already been aired orally at the meeting under the statutory procedure.
    I can assure my noble friend Lord Wedderburn of Charlton that we appreciate the issues raised by multiple complaints. They are certainly complex issues. We will need to address them carefully in the regulations. As we have said, we will consult on the draft regulations to find the best approach. However, I am afraid that that does not mean that we can accept the general exclusion of the admissibility criteria in these cases.
    Lord Wedderburn of Charlton: I am grateful to the Minister for what he says. Of course the amendment is not primarily about unfair dismissal; it is about grievances because they fall within paragraph 6 or 9 of Schedule 2.
    However, as regards the record and what we know about it, we have raised a new point. I am glad that the regulations will purport and try to deal with this matter. I am not entirely sure from what the Minister has said how he will deal with it. I appreciate that like so much in the Bill we will have to wait until the tablets of stone are delivered in what are likely to be volumes of regulations as far as I can see. We look forward to that. I am glad that it is being considered. In that spirit, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Schedule 4 [Tribunal jurisdictions to which section 33 applies]:
    [Amendments Nos. 171 and 172 not moved.]
    Lord Razzallmoved Amendment No. 172A:
    Page 67, leave out lines 21 to 24.
    The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 176A and 176B, which make different points technically but the same point in substance. That point is very straightforward. It goes hack to the issue of detriment which we touched on during debate on an earlier amendment. The parts of Schedule 4 all relate to claims of detriment where the employee claims that he or she has suffered a detriment as a result of claiming a statutory right. In those circumstances, the employee has already put the employer on notice that he or she is taking steps to enforce a statutory right. Therefore, it is difficult to see the justification for preventing the employee bringing a claim when the new complaint is that the employer has reacted badly to the initial complaint. Simply

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    deleting the sections may be a cumbersome way in which to attempt to deal with this matter, but I am sure that the Minister takes the point on board. I beg to move.
    Lord McIntosh of Haringey: The grouping has betrayed us to some extent because we discussed much of this issue previously when we debated the amendments which paved Amendment No. 172 and so on. However, I must take these four amendments on their own. They seek to leave out a number of detriment jurisdictions from Schedule 4 to which, of course, Clause 33 applies. A number of amendments relating to detriment have already been debated. Our view is well known. We do not believe that these jurisdictions should be omitted from Schedule 4 but there is a case for exemptions in some circumstances.
    Amendment No. 172A seeks to omit Section 146 of the Trade Union & Labour Relations (Consolidation) Act 1992, which is concerned with detriment in relation to trade union membership and activities, and paragraph 156 of Schedule Al of the same Act, which is concerned with detriment in relation to union recognition rights.
    Amendment No. 173A seeks to leave out Section 48 of the Employment Rights Act 1996, which is concerned with detriment in relation to such issues as health and safety cases, working time cases, employee representatives, protected disclosures and leave for family and domestic reasons.
    Amendment No. 176A seeks to omit Section 24 of the National Minimum Wage Act 1998, which is concerned with detriment in relation to the national minimum wage. Amendment No. 176B would leave out Schedule 3 to the Tax Credits Act 1999, which deals with detriment in relation to tax credits.
    It has been argued that employees who have already had detrimental action taken against them will be inviting further victimisation by initiating the statutory grievance procedure. However, I do not see why writing a Step 1 grievance letter to an employer should normally be an intimidating step to take. After all, as my noble and learned friend Lord Falconer pointed out yesterday, if the employee subsequently wanted to make a complaint to an employment tribunal, that would need to be set down in writing.
    As we said earlier, there should of course be exemptions for things such as bullying or the threat of violence, and the regulations will address that. I hope that it will provide some reassurance to the noble Lord, Lord Razzall. But I do not see any need to provide what, in effect, would be a general exemption where detrimental action has been taken by omitting the lines in Schedule 4 as proposed by the amendments.
    4.45 p.m.
    Lord Wedderburn of Charlton: The Minister is right that we touched on this matter previously and I have looked very carefully at the debate. However, I do not understand why the Government insist that their
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    procedures—that is, Step 1 or any other step— must be gone through where the employee has been victimised. This is not a case where he is simply pursuing his rights.
    I understand the Government's arguments, although I do not agree with them, in relation to a case where a worker is pursuing his rights. There they are adamant, even under the Disability Discrimination Act, that he must satisfy their procedures before he can go to a tribunal. I do not understand the logic in saying that the worker will be excluded when he is bullied—or, as I understand it, that that will apply in certain cases of bullying—but that he will not he excluded where he is victimised for pursuing his rights. A large number of the cases in Schedule 4—that is what we are again discussing—are detriment jurisdiction cases. In fact, if one added them up, one would, I think, find they constituted a very high minority of cases—not half but a high percentage of cases are detriment cases, in which a worker is victimised for proposing to pursue his rights. If you want to protect him where he is being bullied, why will you not protect him where he is being victimised?
    Lord McIntosh of Haringey: I have nothing to add. We have debated this issue before.
    Lord Razzall: I accept, as the Minister indicated, that we have debated this before. Perhaps the grouping is slightly unfortunate, because we should have considered this matter in relation to Amendments Nos. 167A and, particularly, 190. If Amendment No. 190 is agreed to, none of these amendments would be necessary.
    Having heard the debate—particularly that on Amendment No. 190—and listened to the Minister's undertaking to the noble Lord, Lord Wedderburn, the appropriate thing for me to do is to withdraw the amendment and to consider how to return to this whole issue on Report. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    [Amendments Nos. 173 to 178 not moved.]
    Schedule 4 agreed to.
    Clause 34 [Procedural fairness in unfair dismissal]:
    Lord Wedderburn of Charltonmoved Amendment No. 179:
    Page 39, line 5, at end insert "or in Part 2 of that Schedule (grievance procedures)"
    The noble Lord said: We now come to Clause 34, which is generally known in the discussion of the Bill as the Polkey clause. However, the amendment is not essentially to do with Polkey; it concerns the first provision in new Section 98A, which Clause 34(1) would include within the provisions of the Employment Rights Act.
    New Section 98A would provide that an employee who is dismissed is to be regarded as unfairly dismissed if three conditions are satisfied. First, if one of the

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    procedures concerning dismissal and discipline applies; secondly, that that discipline procedure has not been completed; and, thirdly, the non-completion of the procedure,
    "is wholly or mainly attributable to failure by the employer to comply with its requirements".
    We understand that, and we do not need to be told what subsection (1) of new Section 98A means. What we ask in the amendment is why is it so limited? What is inserted is a discipline procedure under Part 1 of Schedule 2. Our amendment would include grievance procedures in Part 2 of that schedule.
    If I may put the Bill's proposal in this way, if the employer does not complete, because of his failure, the discipline procedure and dismisses, that is an unfair dismissal. However, we have already seen in a number of debates that the ACAS code is right in saying that, in the course of discipline—or, indeed, a number of other things—a grievance can arise and the employee may be pursuing a grievance procedure.
    The amendment raises the question: why should it equally not be an unfair dismissal if dismissal eventuates where the employer has failed properly to complete a grievance procedure? The Minister, I am sure, will not say that that could not happen. It may happen in a small number of cases but it could plainly happen that the employer fails to write or does not take whatever other step is required under the standard procedure or under the modified procedure.
    Its seems to us a matter of even-handedness that the employee should be equally protected in a case where a grievance procedure has not been completed, because he is quite properly protected in a case where a discipline procedure has not been completed by reason of the failure of the employer. I beg to move.
    The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): New Section 98A(1) of the Employment Rights Act 1996, which will be inserted by Clause 34, will make it automatically unfair to dismiss employees without following specified minimum procedures. Those specified minimum procedures are the disciplinary and dismissal procedures in Schedule 2, and the new protection provides both an extra incentive for employers to use them and compensation for employees if they do not. Where an employee raises a grievance and is later explicitly dismissed, nothing would be added by providing that failures by the employer in the course of the grievance procedure would render the dismissal unfair. It would be a superfluous protection since, in these circumstances, it is for the employer to follow the disciplinary and dismissal procedures; any failure to do so will be automatically unfair.
    However, the amendment may be intended to apply where an aggrieved employee resigns because of the employer's conduct and claims that this was a constructive dismissal—in other words, in cases where it is assumed that the disciplinary and dismissal procedures have not been followed because the employer did not consciously dismiss the employee.
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    Although I cannot support the amendment, I should like to take the opportunity to tell Members of the Committee how we expect to deal with constructive dismissals.
    We intend to provide in regulations under Clause 31 that employees who resign and complain that they have been constructively dismissed will generally have to follow one of the grievance procedures, either before or after resigning, if they want to take a case to a tribunal. In such cases the employer is liable to an enhanced penalty if he has not complied with his side of the grievance procedures, but I think it would be wrong for any such failure to render the dismissal automatically unfair. The link between the employer's action or inaction and the potential consequences would be too tenuous.
    However, where an employer takes disciplinary action against an employee, he will of course have to follow the disciplinary and dismissal procedures in doing so. If the employee considers that the disciplinary action was a fundamental breach of contract entitling him to resign and claim constructive dismissal, and the tribunal agrees, there may be a case for providing that any failure by the employer to follow the disciplinary and dismissal procedures when taking that action will render the constructive dismissal automatically unfair under new Section 98A(1) of the Employment Rights Act 1996. But this is a difficult area. It is arguable, for instance, that it should only be the case where the employer contemplated dismissal rather than some lighter punishment. This is the kind of issue which we shall need to consider before making regulations about the application of the procedures. I can assure Members of the Committee that we will consider it and we will of course consult on whatever we propose. However, I believe that it would be unwise to make specific provision at this stage. I therefore invite my noble friend to withdraw the amendment.
    Lord Wedderburn of Charlton: I am grateful to the Minister for his explanation of the Government's position. Of course, I understand that they do not want to put anything in the Bill—they never want to put anything in the Bill—but we have some glimmer now of how they might deal with some of the cases that could arise in respect of our amendments. He has been rather more forthcoming than my noble friend Lord McIntosh was in his discussion about constructive dismissal. If I understand him right, in at any rate most constructive dismissal cases, the employee must follow the grievance procedure—I think that that is what he said.
    We know that, in certain situations, which in law will be dismissal, the employee has got to follow the grievance procedure. Yet he will not be protected by the protection of automatically unfair dismissal if the employer fails to fulfil and complete the grievance procedure—at any rate, not on that ground alone.
    I thought the Minister was hinting that our case could not really arise because in order to dismiss properly, the employer must complete the discipline procedure. But, with great respect, that does not

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    finalise the argument. Under the grievance procedure in Step 7(3), an employer must inform the employee of his decision as to his response to the grievance. That is nowhere mentioned in the discipline procedure because the discipline procedure is drafted separately. So if the employer does not inform,
    "the employee of his decision as to his response to the grievance"
    he is in breach of the grievance procedure.
    Perhaps I may give one example; there could be others. If he is in breach of the grievance procedure, fulfils the discipline procedure but then dismisses, why on earth should the employee not be able to say, immediately and automatically, "That is an unfair dismissal" and why should the tribunal not agree with him?
    With the greatest respect, I believe that once again the Government's response is technically inadequate and in policy terms quite indefensible. Why should this apply only where the discipline procedure has been broken by the employer? Why should it not arise, as in the example I have given, where the grievance has not been completed by the employer?
    I ask that question again. I shall read Hansard with great interest. On what I have heard today, I do not think I shall find an answer, except that the Government will not do it. The Government must understand that there is a theme running through their refusal even to consider the amendments. I do not ask that our wording should be accepted, but they refuse even to consider these amendments as proper for the Bill because they are always amendments that improve the position of the employee. It is therefore not unreasonable to believe that they are under pressure from employers' organisations not to accept any amendment which improves the position of the worker.
    Ministers must understand the history of this matter. We objected to some of the proposals put forward in Routes to Resolution. We said that the research, which was unpublished, did not justify the conclusions the Government raised. We are then told that that has little significance from the point of view of policy making. The Secretary of State drives Clause 33 through the Joint Committee on Human Rights; through what, with great respect, last time we called a misleading prospectus. We then receive a refusal to accept any amendment that improves the position of the employee. The record will show that that is so.
    Therefore, why do the Government have to object so strongly to a tiny amendment that would, I accept, apply only to relatively few cases, but cases where the justice of the case would demand that the dismissal be automatically unfair? I place that on the record. The Minister may not wish to answer it now but I put to Ministers that they have a case to answer. I suggest that a pattern is emerging whereby every measure which would improve the position of the employee is rejected. It is not even taken away for further consideration. I hope that organisations which represent workers in this country will notice that and
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    draw their only conclusions about the representations that should be made to the Government before we reach the Report stage.
    Lord Sainsbury of Turville: Perhaps I may respond to the last point. My response clearly covered the technical position that the noble Lord raised. We have two criteria to this Bill. The first is whether it improves industrial relations in the workplace; and the second is the criteria of fairness. That is what we shall judge all the aspects of the Bill by and we are under considerable pressure from all parties in that. The first of the two criteria in which we are interested is improvement of the workplace relationships and the second is social justice. We shall stick to those two principles.
    Lord Wedderburn of Charlton: I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    5 p.m.
    Lord Wedderburn of Charltonmoved Amendment No. 180:
    Page 39, line 10, at end insert —
    "(1A) In cases of unfair dismissal falling within subsection (1), the tribunal shall, if the employee expresses such a wish under section 112(3), make an order under section 113."
    The noble Lord said: Amendment No. 180 refers to what is already in the Bill; namely, that where an employer has failed to complete the discipline procedure but dismisses, that is an automatically unfair dismissal.
    In unfair dismissal, in our law in the tribunals, the primary remedy is, theoretically, that the worker should get his job back. That is called "reinstatement" or "re-engagement on similar terms". I shall call it reinstatement. Other systems regard it as obvious that this should really apply. In practice in our system, something like 0.03 of the successful cases achieve reinstatement. Of course, there are some cases where the employee does not ask for reinstatement, and it would be absurd to provide the remedy there. However, that does not explain the astonishingly small number of orders for reinstatement or re-employment in our system.
    In Italy, reinstatement is the primary remedy and in enterprises of above 15 workers, where it applies at the moment in full, that is effective. Let me underline what we are talking about; a very large number of workers who are unfairly or arbitrarily dismissed. We are talking about workers who are just shoved out without justificatory motives, as the Italian system puts it— justified motives. It really works there and that is why Sylvio Berlusconi has put forward a programme to decimate the remedy under pressure from employers in Italy. There is more than an echo in the Bill of a stony Berlusconi approach. I am perhaps assuming too much. Perhaps I am assuming that the Minister will resist this amendment. We have to become accustomed to such things.
    I want to put to the Minister a case in which an employer has dismissed a worker without regard. Let us take a really bad case. The employer has ignored the

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    discipline procedure and he has not investigated the case. That happens and there are cases in the law reports. I can think of a case where the employer simply said, "Go and clear your desk in the office and get out. Be off the premises in five minutes". When the worker was not, he was escorted out.
    The worker may say, "I want to pursue the primary remedy of reinstatement". He may be misguided and if it were me I would not go near the place again. However, there may be all kinds of reasons—for example, continuity of employment and pension rights—why he wants an order of reinstatement. Surely, in such a case he should receive it. I beg to move.
    Lord Sainsbury of Turville: The amendment deals with the part of Clause 34 which will make it automatically unfair to dismiss an employee without following the new statutory procedures. The effect of the amendment would be to replace the discretion which tribunals have to order an employee's reinstatement or re-engagement, if that is what he wants, with an obligation to make such an order where the dismissal is found to be unfair because the minimum procedures have not been followed.
    I cannot agree that this should be the case. Whether reinstatement or re-engagement is desirable can depend on many variable factors that are unrelated to the reason for the dismissal being unfair. It would not therefore be wise to require these remedies to be ordered simply on the say-so of the employee where one particular reason for the dismissal being unfair applies.
    There is a very simple case here as to whether one replaces the discretion of the tribunals or not. We do not wish to do so, and I therefore ask the noble Lord to withdraw the amendment.
    Lord Wedderburn of Charlton: I am not sure whether that was the short answer or the long answer. In my submission and with great respect, it is a pretty inadequate answer. The Government do not think it is wise to give a worker this right and yet he is a worker who has been put out on the street without regard to the dismissal procedures and the disciplinary procedures on which the Government place so much reliance to improve industrial relations. I refer to people who do not improve industrial relations but dismiss workers arbitrarily. It would not be wise to give an automatic remedy of re-employment against them, because, of course, the remedy of reemployment or reinstatement may have legal consequences, quite apart from the reality of any reinstatement.
    The Government do not seem to want to bother about such cases. They tell us that is not wise and that the tribunal has a discretion. Of course, the tribunal has a discretion; that is why we moved the amendment. But in this case there should be no discretion in terms of application of the primary remedy and consequences which flow from it.
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    However, I see once again that any improvement in the worker's position is to be resisted. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Wedderburn of Charltonmoved Amendment No. 181:
    Page 39, line 12, leave out "in relation to" and insert "connected with".
    The noble Lord said: Amendment No. 181 is a drafting amendment which we hope the Government will accept. With Amendment No. 181 are grouped Amendments Nos. 185 and 187.
    Amendment No. 185 relates to Section 112 of the Employment Rights Act 1996 which deals with remedies, orders and compensation in the case of unfair dismissal. Where the employee is unfairly dismissed by reason of the failure of the employer to observe discipline procedures, the employment tribunal is told to make a special award of four weeks' pay to be paid by the employer to the employee.
    This raises a very central point. The Government's case is that their new structure improves industrial relations—in our view an admirable objective—by getting a settlement of cases rather than litigation (an objective which we have shared and said so) by a variety of provisions, especially those in Clauses 25 and 30, Schedule 2 and Clause 33, and now Clause 34.
    When we come to the particular point in Clause 34 of an extension of what is regarded as automatically unfair dismissal and the remedies for that, the purpose of the sanction—and no right is worth much without an adequate sanction—must be to deter the employer from ever doing such a terrible thing. It is our case that throughout the Bill—and I just make the general point—the sanctions which are inserted by the Government are wholly inadequate to be a deterrent against these acts which are regarded as disruptive of employment and industrial relations.
    Here, the additional award is to be four weeks' pay for an automatic unfair dismissal which breaks even the most minimal rules of civilised employment life. First of all, we ask whether the Government have done any research as regards who is deterred by one, two, three, four, 10 or 12 weeks' pay as an award? Have they done any work on the question? There has been work done in the past. It may be that that is some time ago and they have better research.
    Quite frankly we are a bit sick and tired of being told that it is a matter of judgment, or it would not be wise to do anything different from what the Bill does. Those are semantics of the lazy. The semantics of the lazy always advance their arguments as wise and tell you nothing else. What I want to know is whether the Government have done any social research on the effect of sanctions. Perhaps I have missed it; I would be delighted to know about it as it would extend my knowledge.
    If the Government do not have the results of inquiries on the reasonable period of an award, whether that is four weeks' or 10 weeks' pay, they must tell us what other reason they have for referring to the

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    period of four weeks. Our belief, looking at the work that has been done on unfair dismissal cases generally, is that for these very bad employers—we are talking about an employer who cannot even operate minimal civilised standards on the Government's own hypothesis—an award of four weeks' pay is not likely to have a deterrent effect.
    A good employer, of course, will not want to behave in this manner anyway, quite apart from the matter of an award of four weeks' pay. However, bad employers have to be deterred by something rather large. Our amendment seeks to replace the figure four with 12 because we could not think of a better figure. It could be 24, or it could be higher. There are systems in western Europe which impose penalties much larger than this for certain types of unfair dismissal. Indeed, there are some that go beyond the award of compensation but that is not our culture and custom.
    What led the Government to say "four weeks" here? In connection with that, what thinking about sanctions generally informs their proposals in the Bill? I beg to move.
    Lord Sainsbury of Turville: I speak to the group which comprises Amendments Nos. 181, 185, 187, 188 and 189. Most of these amendments deal with the part of Clause 34 which will make it automatically unfair to dismiss an employee without following the new statutory procedures. An important aspect of it is that an employee who is dismissed in these circumstances will generally receive four weeks' pay, whereas at present an employee whose dismissal is unfair on purely procedural grounds may receive no compensation at all. The mechanism for achieving this in most cases is that the tribunals must increase the employee's basic award to four weeks' pay if it would otherwise be less. Where the tribunal orders his reinstatement or his re-engagement in a comparable job, and there is therefore no financial compensation on which that lower limit of four weeks' pay can be set, the tribunal must make a separate award of four weeks' pay.
    One of these amendments, Amendment No. 185, would increase the award where a dismissal was found to be unfair because the minimum procedures had not been followed, and the employer was ordered to reinstate or re-engage the employee, from four weeks' pay to 12. I consider this excessive, especially since another amendment, Amendment No. 186, which we are debating separately appears, if I am right in thinking that it inadvertently refers to Section 112(6) of the 1996 Act instead of Section 112(5), to provide tribunals with the power to increase compensation from 12 weeks' pay to as much as they see fit. We believe that employers should generally incur a penalty for not following the new procedures; we believe that a "one size fits all" penalty is right, and we believe that four weeks' pay is a reasonable amount.
    I should point out, of course, that this is the minimum for dismissal simply because the procedures are not being followed. I believe that it is right and proper to adopt our figure rather than trying to seek a deterrent.
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    At the moment, a tribunal does not order both a financial award and reinstatement; it is one or the other. In future, because we are introducing a minimum four-week penalty for an automatically unfair dismissal under Clause 34, it will be possible for a reinstatement order to be accompanied by a four-week penalty. Amendment No. 187 relates to the circumstances where an employer then fails to comply with an order for reinstatement or re-engagement. In those circumstances, the 1996 Act provides for the tribunal to award the employee both compensation for his loss as a result of that failure and compensation for unfair dismissal in the normal way. In other words, the tribunal considers what level of financial penalty is appropriate in the light of all the circumstances.
    Under our proposals, the penalty could never he less than four weeks' pay if the dismissal was unfair on procedural grounds, although in practice it is almost certain to be more. The reason that it cannot be less than four weeks' pay is because we are providing a minimum award for dismissals in breach of the statutory procedure. But that is the same reason why the employee will already have received his four weeks' pay. Therefore, we propose that the four weeks' pay that he has already received should be deducted from the compensation that he now receives. The employee in this particular set of circumstances would otherwise benefit twice from the four-week minimum, whereas employees in the generality of unfair dismissal cases would not. That deduction therefore strikes me as entirely right but Amendment No. 187 would prevent it, and that, by the same token, must be wrong.
    In cases where reinstatement or re-engagement is not ordered—in other words, in the great majority of cases where financial compensation is awarded—the mechanism that we have chosen for awarding four weeks' pay where the dismissal was in breach of statutory procedures is that the tribunals must increase the employee's basic award to four weeks' pay if it would otherwise be less, as I mentioned at the beginning. Amendment No. 188 would change that to at least four weeks' pay, while Amendment No. 189 would remove the discretion given to the tribunals not to make an award if it would result in injustice to the employer.
    To give the tribunals discretion to vary the size of the award would risk complicating their proceedings while they attempted to delve into the extent or nature of the employer's failure or the motives which lay beneath it, which might be far from easy to discern. As to removing the tribunals' ability not to make an award if it resulted in an injustice to the employer, I do not believe that it would be right to fetter their discretion in that way.
    The Deputy Chairman of Committees (Lord Murton of Lindisfarne): A Division has been called on the Floor of the House. The Committee stands adjourned.
    [The Sitting was suspended for a Division in the House from 5.18 to 5.30 p.m.]
    Lord Sainsbury of Turville: I assume that Members of the Committee were following me every step of the

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    way in my earlier argument, so I shall go back to the beginning of the paragraph that I was in the middle of, rather than right to the beginning of the whole speech.
    In cases where reinstatement or re-engagement is not ordered—in other words, in that great majority of cases where financial compensation is awarded—the mechanism we have chosen for awarding four weeks' pay where the dismissal was in breach of statutory procedures is that the tribunals must increase the employee's basic award to four weeks' pay if it would otherwise be less, as I began by mentioning.
    Amendment No. 188 would change that to at least four weeks' pay, while Amendment No. 189 would remove the discretion given to the tribunals not to make an award if it would result in injustice to the employer. To give the tribunals discretion to vary the size of the award would risk complicating their proceedings while they attempted to delve into the extent or nature of the employer's failure or the motives which lay beneath it, which might be far from easy to discern.
    As to removing the tribunals' ability not to make an award if it would result in injustice to the employer, I do not think it would be right to fetter their discretion in this way. However, we expect an award to be made in the vast majority of cases. This provision is certainly not a get-out for employers who plead ignorance or poverty, if that is what Members of the Committee fear. "Injustice" is a tough test, and we do not expect it to be met in many cases.
    Finally, Amendment No. 181 addresses the second part of Clause 34. The clause currently refers to,
    "a procedure in relation to the dismissal of an employee",
    and the amendment would substitute "connected with" for "in relation to". It is not quite clear to me what difference the wording is meant to make. The essential feature of this provision is that, if a procedure is in principle potentially relevant to the reasonableness of a dismissal, but a failure to follow that procedure in fact makes no difference to the decision, that failure will not by itself make the decision unreasonable.
    The procedures that are relevant in this context seem to be procedures "in relation to" the dismissal, and that is what the Bill says. It may be that Members of the Committee feel that the phrase "connected with" would somehow narrow down those procedures to which a "no difference" argument could be applied but, even if that were true, I do not think it would be helpful.
    What is important, for the clarity of all concerned, is that the "no difference" argument should clearly be available in respect of all those procedures that go beyond the statutory minima, which may be relevant to the outcome. I believe that that is what the Bill does and, therefore, no amendment is needed. I ask the noble Lords to withdraw the amendment.
    Lord Wedderburn of Charlton: I am grateful to my noble friend for his explanation of—or, at any rate, his attention to—the amendments. Dealing with his last
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    point first, there is some reason to believe that a procedure "connected with" the dismissal of an employee would be a little wider than a procedure "in relation to" the dismissal of an employee, and that is why we moved the amendment; "in relation to" is somewhat circumscribed, but I leave it there.
    So far as concerns the other amendments, the proposed deletion of what I might call the deduction subsections— that is, new subsections (4) and (5) in the new Section 98A of the Employment Rights Act, which are printed on page 39 of the Bill—about the way in which deductions should be made from a compensatory award, might well, we think, operate unfairly as against the employee. Compensatory award is for his actual loss and these amounts are to be deducted from his actual loss compensation. We do not believe that that is fair; that is why we proposed their removal.
    So far as the other matters are concerned, once again we felt that the sanctions that were proposed are inadequate to provide any deterrent effect against an employer taking part in dismissals which, on any showing, cannot possibly be justified and would, in fact, automatically be unfair under the Bill. Our sitting was suspended, so I hope that my noble friends will forgive me if I am wrong, but I do not believe that the Minister advanced any real justification for particular sanctions, such as four weeks and the like. Our proposal is that this should lie, as it were, on the table, to be addressed perhaps on some other occasion. In that regard, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Lea of Crondallmoved Amendment No. 182:
    Page 39, line 14, leave out from "that" to end of line 15 and insert "the fairness of the dismissal was not affected by his failure to follow the procedure"
    The noble Lord said: This amendment concerns the Bill's provisions to overturn the House of Lords' judgment in the Polkey case. This case was originally judged in a lower court in 1979 and reversed in the House of Lords in 1988. The judgment stated that procedural failings could render a dismissal unfair but that if following them would have made no difference, compensation should be reduced or eliminated. My noble friends will say more about the details of the judgment; let me simply say that it was a very reasoned—and indeed reasonable—judgment. There is no independent evidence to show that it has been operated since then in a capricious or unreasonable way.
    The Government appear to argue that, nevertheless, that places too much weight on minor procedural breaches, creating havoc with the real intentions of the law. That in turn is hotly disputed in relation to the debate which has been going backwards and forwards about Routes to Resolution and so on. Some of us had the impression that some of the arguments are just being straightforwardly taken from employer representations.

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    In committee in the other place on 18th December, Mr Alan Johnson agreed to an amendment tabled by Mr Rob Marris, with the result that new Section 98A(2) of the Employment Rights Act 1996, which is about unfair dismissal, appears as it now does in lines 11 to 15 on page 39 of the Bill. The burden of that provision, I think, is that failure to follow a procedure would not by itself make action by the employer unreasonable. However, Mr Marris would be the first to say that that does not go very far in addressing the problem. The fact is that procedural niceties are at the heart of the Bill.
    Moreover, this matter involves not only the question of the scope and interpretation of the statutory default procedure in Part 2 but also the scope and interpretation of enhanced voluntary procedures, including the vital question of the ACAS code and the danger of the statutory procedure now being a safer bet for the employer than the ACAS code.
    In using such language—"a safer bet for the employer" —some Members of the Committee may ask whether that is just a product of a rather fevered imagination. Let me quote Alan Johnson. In the other place, he argued:
    "If we did not reverse the no-difference test, employers would rightly wonder why they should move to a more sophisticated code if they could be found to be wrong".—[Official Report, Commons Standing Committee F, 18/12/01; col. 228.]
    I have to say that I have now read that sentence several times and the more I read it, the more I seem to find myself taking part in the Mad Hatter's tea party. I will read it again:
    "If we did not reverse the no-difference test, employers would rightly wonder why they should move to a more sophisticated code if they could be found to be wrong on a minor error of procedure, irrespective of the fundamentals of the case".
    It has unfortunately become a general perception that the Government are showing some lack of confidence in the tribunals at a time when we know that they would like the number of cases to be reduced. On that aspect, let me repeat that we would like the number of cases to be reduced as well, but on the basis that domestic procedures are at least up to the basic ACAS standards, with a degree of joint ownership and commitment for which the Government, so far, are not making provision.
    We cannot reiterate too often that the best way to reduce the gap between the default procedure and the ACAS procedure is to introduce the major benchmarks of the ACAS code into the default procedure. It is a dangerous path down which we would be treading if we were to juxtapose, as did Alan Johnson—and perhaps he would not wish to repeat what he said word for word but he juxtaposed in a slightly unfortunate way—the statutory code and the ACAS code. Indeed, it is that gap which I and many of us find the most worrying feature of the Bill as a whole.
    Perhaps we should take some comfort from the thought that this will be easier when we have a sight of the promised, or hinted at, amendment to the statutory procedure on the examination of the facts of the case and so forth. Be that as it may, Amendment No. 182 cuts through some of the ambiguity and clearly states
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    that the employer would have to show that the fairness of the dismissal was not affected by his failure to follow the procedure. That, as we understand it, is precisely what the Government are aiming at, and we cannot see why we cannot say so on the face of the Bill. I beg to move.
    5.45 p.m.
    Lord McCarthy: I intervene early in what will undoubtedly be a prolonged debate because I want to widen the considerations that should govern the Government's approach towards procedure and the whole issue of deciding discipline and grievance applications. More detailed arguments will subsequently be put forward by my noble friend Lord Wedderburn in relation Amendments Nos. 183 and 184.
    The point I am trying to make is that the Government are misunderstanding the function and role of procedures in doing the two things which the noble Lord, Lord Sainsbury, said were the central criteria that he wanted; namely, fairness and improvement in industrial relations. Fairness and improvement in industrial relations are closely bound up with the provision of adequate procedures.
    The trouble is that the whole debate about the amendment of Polkey has become highly politicised and highly divisive. It would be impossible for anybody who had not studied this subject in considerable detail to understand the position taken, for example, by the CBI.
    The CBI sees this once again as a crucial change. It states in its evidence to us that it is essential that: we should clear away the procedural considerations. It states that all procedural failings, no matter how minor, could lead to a finding of unfair dismissal. That is not true, but that is what the CBI believes.
    The CBI states that this change will enable firms to introduce internal procedures beyond the statutory procedure without leaving themselves open to a finding of unfair dismissal based on a minor technical error. Again, I suggest that that is not true. It even states that it is not in the interests of the worker that there should be a procedural element. They will disadvantage employees who are able to bring successful cases under the current law, but under the current rules successful claimants typically receive little benefit. They are awarded minimum compensation since they have suffered no loss and are often confused about whether they have won or lost. That is a very extreme view to take of the significance and importance of the procedural element, saying that it is absolutely essential to get rid of the procedural element in this context.
    One cannot square what the CBI says with what Judge Prophet said—the man who is supposed to know what goes on in tribunals. In his evidence to the Minister in another place, he said that the Government are putting in a potentially disastrous clause, and he goes on and on about the consequences of that.
    It seems to me that what is being lost in all this is the function of procedure in deciding between workers on the basis of fairness, and on the basis of a desire to

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    improve industrial relations. They are the two important elements which the Minister earlier told us he was concerned about and what he wanted to see.
    It seems to me that the opposite is the case. This element of employment protection law has no downside. There is no disadvantage in encouraging an employer to go through a procedure, even if he were to come to exactly the same result if he had not gone through a procedure. Going through a procedure is an educated element; it is an educated process. There is no downside.
    It is right and proper that an employer should be encouraged to see whether he is being fair, and to let the worker see that he is being fair. It is right and proper that an employer should give dismissal on the grounds provided by the legislation. There is nothing wrong with sacking people on grounds of conduct and capacity rather than anything else, and there is nothing wrong in asking people to use the procedure in order to demonstrate to the worker that they are being fair.
    I would have thought that the amendment would particularly lend itself to the Government at this time. They would want to accept it especially because of what they want to do; they want to discourage people going to tribunals. I want to discourage people going to tribunals, if I can provide them with a satisfactory alternative.
    We disagree about the elements of the satisfactory alternative; we want to see other measures put into the statutory procedure. However, there is one thing that will make some workers—I do not say large numbers—see the point of staying within their domestic procedure; it is because in some way they have a fair investigation of the kind they believe they might receive if they go to a tribunal.
    Let us suppose that the employer says to the workers, "We are going to have a hearing. You are going to have somebody who represents you, and we are only going to dismiss you if we have clear legal grounds. We do not dismiss anybody in this organisation illegally because we want to obey the law— in fact we want to go further than the law". If the employer takes that approach to the organisation, if he takes that approach in his industrial relations, if he is manifestly fair and if he makes a point of being fair, that will encourage workers not to go to tribunals. Inside their organisation they will be getting the full rigour of an adequate procedure.
    I do not care whether it turns out to be that the employer might find that it was an unfair dismissal even in some significant aspect or if, on other grounds, there would not have been an unfair dismissal. This is not important. What is important is that employers should be seen to be fair. They should be seen to practise what is a small shadow, sign or example of the kind of practice one receives in tribunals. In such circumstances ACAS can say, "Well, you seemed to have the elements of a fair procedure when you reached this point. The employer was there and you had an opportunity of making your case. Do you think you will get anything different if you go to a tribunal?
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    You have had a fair crack of the whip". That is what people want—a fair crack of the whip. They do not want to be told, "Because you could have been sacked anyway, we are not bothering with the procedure". That is not good industrial relations, it is not equity and it is not fair. On the basis of their own beliefs and their own statements to us this afternoon, it is not what the Government should want.
    Lord Wedderburn of Charlton: I support the amendment moved by my noble friend Lord Lea of Crondall and I speak also to the two amendments standing in my name and in the names of my noble friends Lady Turner and Lord McCarthy. All three amendments aim to do not quite the same but very similar things. They aim to put in Clause 34(2) an explicit statement that whatever else the subsection provides the dismissal must remain fair if it is to pass muster.
    This is a complex area of the law and I would hope that for the first time it receives full treatment from the Committee and from Ministers. When the Government published their response to consultation in 2001, on page 23 they stated the following about unfair dismissal legislation:
    "The consultation document also proposed that, provided the minimum procedural standards set out above are met, tribunals should disregard a procedural mistake by an employer making a dismissal, if this made no difference to the outcome. Responses were mixed on the merits of this proposal. Employers and their representatives, including the CBI, strongly supported it. They considered the emphasis should be on the merits of the case … Others including the TUC opposed the proposal, which they thought sent wrong messages about the correct use of procedures".
    There were the opinions set out, and the Government have taken the side of the CBI proposals—except that they cited one other authority. They quoted the evidence sent to them by the Northumberland County Council. I have not been able to trace the litigation in which the Northumberland County Council has been involved and I did not know that it was a leading authority on this area of the law and of practice. However, the Government chose to quote its evidence as follows:
    "It would seem good sense to allow tribunals to disregard procedural mistakes if there would be no difference to the outcome of the case".
    The Government were misled into using the same phrase,
    "if there would be no difference to the outcome of the case".
    But even that, if it were justifiable, which, in my submission, it is not, is not what is provided in Clause 34(2), which introduces the new Section 98A. Subsection (2) states that:
    "Subject to subsection (1)—
    that is, subject to the rule that an employer who does not observe minimal procedures and dismisses is guilty of an unfair dismissal—
    "failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure".

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    My noble friend may wish me to read more of the response and I am willing to do so, if he wants me to?
    Lord Sainsbury of Turville: No, I was waiting to hear the quotation.
    6 p.m.
    Lord Wedderburn of Charlton: I am sorry, I misunderstood what was going on. What the section deals with is not an outcome but a decision by the employer. Discussion of abstracts where what is dealt with is concrete are always somewhat Hegelian and often rather misleading. The new section states that, where the decision of the employer would not have been different, albeit that he has not followed a procedure which he supposedly should have followed, that by itself will not make his action unreasonable. If it is not unreasonable under Section 98, it will not be an unfair dismissal.
    As my noble friend Lord Lea pointed out, there has been considerable confusion about what the effect of this clause, now as redrafted in Committee and in another place, would be. My honourable friend the Minister, Mr Johnson, said at on 18th December (col. 210 of Commons Hansard) that where the statutory minimum procedures are concerned the Government are strengthening the position and the principle in Polkey. He went on to say that he would give examples. In my submission, looking carefully at the record, he never did.
    He said more than once that the aim was to strengthen Polkey but later at col. 228, which my noble friend Lord Lea read and which was a very puzzling pronouncement, at least one thing is clear. The Minister used the words "if we did not reverse the no difference test". Also at col. 228 he makes clear the fact that the change to Polkey referred to disciplinary procedures above the minimum. So he is strengthening Polkey but he is changing it. We do not understand what he really had in mind at all.
    One of the reasons for that was that he was fed with the argument that although page 39 of the Bill changed the law—there would not be much point in enacting it if it did not—it did not change the basic principle that a dismissal must be reasonable and fair in order to be justified by the employer. It does not change that rule totally but, if the Government mean that the employer's decision to dismiss what the employer would have decided if he had followed the procedure that he omitted to follow—if they mean that that decision to dismiss must be on the supposed facts fair or reasonable—they can take their pick among the three amendments and accept one or the other, or say they accept them in spirit and will put forward their own words.
    One cannot read the transcript of the Committee stage in another place without realising that there is a terrible mess, How has this mess arisen and, more importantly, how has the lack of confidence among trades unions and commentators on a wide scale arisen as regards the effect of the Government's amendment to the law in Clause 34 under new Section 98A(2)?
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    In my submission, it has arisen from two factors. It has done so, first, by underrating the vital importance of procedure in employment relations, to which my noble friend Lord McCarthy has already spoken. I underline what he said. The second reason is that everyone discusses the case of Polkey v AE Dayton Services Ltd, reported in 1998 appeal cases, without ever bothering to see what the noble and learned Law Lords actually said in deciding that case. I intend to put on the record what they said in that case because it illuminates the manner in which this clause could well alter the law unless an amendment of the type that we have tabled is accepted.
    It is often thought that, by talking of a failure by an employer to follow a procedure in respect of or in relation to dismissal, new subsection (2) refers to an extra contractual procedure or something which is specifically laid out at the place of work. Of course, it could refer to such a case. But Polkey was not such a case. In Polkey, in a reorganisation van drivers' duties were changed such that four van drivers were replaced by three other workers. However, only one of the four drivers was considered suitable for transfer to new duties. Accordingly, the other three were made redundant.
    In Mr Polkey's case, the first that he knew about it was when he was called into the branch manager's office and told that he was being made redundant. This was a flagrant breach of the principle that one must consult the employee before redundancy and, indeed, warn him of the impending redundancy. That procedure was suggested in the industrial relations code of practice at the time and, as the industrial tribunal said, nothing excuses the failure of employers to consult. It was not a written procedure which they failed to operate; it was the basic procedure of warning and consultation.
    What did your Lordships' Judicial Committee decide? The noble and learned Lord, Lord Mackay of Clashfern, the then Lord Chancellor, giving the leading judgment, said—I quote from the Industrial Relations Law Reports of 1987 at page 504; I do that because it is easier to bring a copy of the volume to your Lordships' Himalayan meeting rather than carry the full volume of the appeal cases:
    "the subject matter for the Tribunal's consideration is the employer's action in treating the reason as a sufficient reason for dismissing the employee. It is that action and that action only that the Tribunal is required to characterise as reasonable or unreasonable. That leaves no scope for the Tribunal considering whether, if the employer had acted differently, he might have dismissed the employee. It is what the employer did that is to be judged, not what he might have done. On the other hand, in judging whether what the employer did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as a consequence of not consulting or not warning [a worker]".
    Later, as part of that strand of the judgments, in criticising the judgment of one member of the Court of Appeal, he also said:
    "With much of what he says"—
    that is, the Lord Justice in the Court of Appeal—
    "I would respectfully agree but I cannot accept it all. For example, in referring to a case of dismissal for misconduct where the evidence of misconduct could be capable of explanation and no

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    explanation has been invited before dismissal, the examination of which the learned Lord Justice speaks is an examination of matters other than the [employee's] conduct which could not be known to the employers until after the decision to dismiss had been reached and therefore it was not available to the employer at the time he reached that decision. Perhaps the point is highlighted most plainly in the very last sentence which I have quoted. The consequences of the failure determine whether or not the employee suffered an injustice".
    He continues:
    "This is not to be confused with the question whether the employer acted reasonably".
    He says quite clearly that the two questions are separate.
    Those are the first two matters that are addressed in the speeches in the Polkey case. The noble and learned Lord, Lord Bridge of Harwich, sets out the third, which is a similar strand of argument but which in fact is materially different. Perhaps I should say what we have covered already. What we have covered already shows that this whole matter is part of not allowing the employer to add extraneous and other reasons to those that were with him at the time. The question immediately arises whether, in upsetting the Polkey rule in new subsection (2), the effect of the Government's Bill would be to upset that rule. There are many who believe that it will.
    The noble and learned Lord, Lord Bridge of Harwich, added the third strand of argument. He said at page 508 of the same report,
    "the application of the so-called British Labour Pump principle",
    that is, the previous case law,
    "tends to distort the operation of the employment protection legislation in two important ways. First, … if the Industrial Tribunal, in considering whether the employer who has omitted to take the appropriate procedural steps acted reasonably or unreasonably in treating his reason as a sufficient reason for dismissal, poses for itself the hypothetical question whether the result would have been any different if the appropriate procedural steps had been taken, it can only answer that question on a balance of probabilities. Accordingly, applying the British Labour Pump principle,"
    that is, the previous case law,
    "if the answer is that it probably would have made no difference, the employee's unfair dismissal claim fails. But if the likely effect of taking the appropriate procedural steps is only considered, as it should be, at the stage of assessing compensation, the position is quite different".
    He said:
    "The second consideration is perhaps of particular importance in redundancy cases. An Industrial Tribunal may conclude, as in the instant case, that the appropriate procedural steps would not have avoided the employee's dismissal as redundant. But if, as your Lordships now hold, that conclusion does not defeat his claim of unfair dismissal, the Industrial Tribunal, apart from any question of compensation, will also have to consider whether to make any order under s.69 of the Act of 1978".
    He went on to explain—I quote again—that it could,
    "if it thinks fit, make an order for re-engagement under that section and in so doing exercise a very wide discretion as to the terms of the order. In a case where an Industrial Tribunal held that dismissal on the ground of redundancy would have been inevitable at the time when it took place, even if the appropriate procedural steps had been taken, I do not, as at present advised, think this
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    would necessarily preclude a discretionary order for re-engagement on suitable terms, if the altered circumstances considered by the Tribunal … were thought to justify it".
    From those passages I draw these points. First, the matter is of particular importance where appropriate procedural steps should have been taken and were not, and one cannot allow the failure to do so to justify the dismissal. That goes to the very root of the entire structure of the employment protection legislation, which the Government on their own ascertain are leaving unchanged in other parts of the employment protection legislation in the Employment Rights Act 1996. It leaves that legislation unchanged, they say, and claim that it will operate without any difference. Yet it changes the very rule which, in the words of the noble and learned Lord, Lord Bridge of Harwich, is fundamental to its operation, and then says it will make no difference. The matter is a logical absurdity. It is changing what the noble and learned Lord, Lord Bridge, said was the basis of his decision and thinking about what is now the Employment Rights Act, and then says that it will make no difference to the Employment Rights Act. That is Polkey. It is only in later cases that we have had it confirmed—most of the discussion is assumed—that it does apply. Its rationale, its reasoning and the three strands of its reasoning apply to other cases of unfair dismissal.
    The latest case, I think, is that of Whitbread v Hall, in 2001, IRLR page 275. Mr Hall was a manager of a hotel. While he was away on holiday, irregularities took place in the stock control operations. On his return, the area manager suspended him, pending further investigation, but a disciplinary hearing was immediately held, chaired by the area manager herself. In the face of this, Mr Hall admitted the offences. The area manager decided to dismiss him for—the report says—"gross misconduct". He appealed against that decision, which was heard by the operations manager, but was still dismissed after it.
    The tribunal was particularly concerned about the role of the managers, especially the area manager who had acted as prosecutor and judge. It was quite clear that, since he had admitted the misconduct, the employer would have dismissed anyway—in the words of the clause, "would have decided to dismiss". But, under the Polkey rule, the Court of Appeal had absolutely no difficulty in a short judgment in saying that the employer could not use that argument—that he would have dismissed anyway—to cure the fact that he had not even operated the elements of natural justice in the procedures that he should have operated.
    Lady Justice Hale says that this view is supported by—and I quote from page 278:
    "authority at the highest level, albeit in the context of unfair dismissal for redundancy rather that misconduct".

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    She then cites Polkey v A E Dayton Services Ltd in the House of Lords. She continues:
    "These expressions of principle undoubtedly apply to dismissals for misconduct as much as they apply to dismissals for redundancy. They are binding upon us. They clearly indicate a procedural as well as a substantive element in the band of reasonable responses open to employers faced with such misconduct".
    She cites another case to the same effect. She says it is difficult to say,
    "that the offences were so heinous as to admit of only one answer. Dismissal had been decided by the employee's immediate superior who had a bad relationship with him and had gone into the process with her mind made up".
    The clause would include the case of an employer who went into the process with his mind made up. That is why there is this lack of confidence in the Government's curious argument that the arrangement will not affect tribunal decisions in respect of reasonableness and fairness.
    If the Government have some answer why the facts in Whitbread v Hall would not be affected by this clause, they had better give it. The reason they had better give it is that, in Committee in another place, the Minister, my honourable friend Mr Alan Johnson, said on more than one occasion, in reply to the decisions of tribunals with which he was pressed in that case, that the Government had looked at all the cases since Polkey, and they thought that the great majority would not be changed by Clause 34.
    I want to know which were the minority cases that would be changed by Clause 34. I say that Whitbread v. Hall might well—indeed probably would—be one of them. I want to know what survey the Government did of all these cases which Mr Johnson said on numerous occasions they had considered and the majority of which would not be changed by Clause 34. It is the opinion of eminent authority who have looked at the Bill that many such previous cases might well be changed by Clause 34 which inserts the new Section 98A(2). It would very likely include an employer who,
    "would have decided to dismiss the employee if he had followed the procedure".
    Such an employer would he one whose mind was made up, who was adamant that this employee must go, who had said, "Get out and clear your desk", and who would not have changed his mind if he had operated either the ACAS code procedures or any other procedure that he should have consulted. It is quite absurd to say that it is impossible for a tribunal to see this clause as something which would affect that argument. Tribunals have great experience and the employment appeal tribunal in particular is likely to look very carefully at this clause.
    Therefore, if we look at it carefully, the question for the Government is: why not say what you mean? The Government say they mean that this clause should be enacted but that it has to it a hidden extra; namely, that it will only operate to exculpate the employer where the dismissal is reasonable or fair in every respect. We say in these amendments that the decision should have been fair and reasonable and for a sufficient reason, or, if you like, in the amendment of the noble Lord,
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    Lord Lea, that the decision and the dismissal are in all respects fair. Alternatively, in our other amendment in the group we propose a formula on fairness.
    I cannot understand why the Government should insist on not saying what they mean. That is what it comes to but they have to address, not simply by a few words here or there, what they are doing in changing the law as expressed in the Polkey judgment of your Lordships' Judicial Committee. As the noble and learned Lord, Lord Bridge, made clear and the noble and learned Lord, Lord Mackay of Clashfern, with respect, agreed, that was an assessment of the basis of the entire employment protection legislation in regard to dismissal—not allowing the employer to rest upon some reason other than those known to him at the time and not allowing the employer to escape from procedures which he should have followed by saying that it would have made no difference to his decision to dismiss, including the case where his mind was so closed that nothing could affect his decision to dismiss.
    The Government must not legislate things that appear to be absurd or uncertain or, indeed in this case, what may well turn out to be again unfair to workers who are unfairly dismissed. Please will the Government say what they mean? Please can they accept at least the spirit of one of this congeries of amendments?
    6.15 p.m.
    Lord Gladwin of Clee: Understandably, my noble friend Lord Wedderburn is concerned with details of the law and the effect of cases heard not only in the employment appeal tribunal but also in the Court of Appeal and in your Lordships' Judicial Committee. My concern is with the industrial relations impact of this. The clause refers to the failure by an employer to follow a procedure. That is not the statutory procedure but a procedure which, in my experience, is often fairly comprehensive and sophisticated.
    New Section 98A(2) states that,
    "failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded … as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee [even]"—
    and I have inserted the word "even"—
    "if he had followed the procedure".
    It just so happens that I have been in contact with a number of human resource directors. I hate the title; I used to call them personnel directors and that means something to me. It is offensive to use the term "human resources" in that connection. They are concerned—I refer to the Industrial Society's brief—about the impact that this measure will have on companies. Most of the major companies represented by the CBI have these procedures. They are not caught by the statutory procedure. We know who is caught by the statutory procedure—the 600,000 workplaces that have nothing at all.

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    Where an employer has fairly sophisticated procedures, human resource managers have told us that it will be even more difficult to persuade managers to follow a procedure if they think they can get away with it by arguing that the employee would have been dismissed anyway.
    I cannot interpret subsection (2) to mean anything else. If the employer shows—to whom, to an employment tribunal?—that his decision to dismiss the employee would have been taken anyway, even if he had followed the procedure, my fear, which I know will be denied, is that the impact of the statutory procedure will encourage the sophisticated ACAS-type procedures to wither on the vine. Why should an employer, under pressure from his own line managers, maintain sophisticated procedures if he can get away with sacking people who, it may be considered, were going to be sacked anyway? I cannot interpret the clause to mean anything else. My concern is the impact of the measure on industrial relations.
    Lord Sainsbury of Turville: The amendments before us propose alternative wording for the "no difference" element of Clause 34. It may be useful if we first remind ourselves of what Clause 34 does.
    I am not seeking to hide the fact that this clause changes existing unfair dismissal law although I do not believe that the changes are quite as fundamental as some have suggested. I make no apologies for that. We are making changes to statute which we believe are right and necessary.
    I believe that these changes contain two key elements of our package of measures which, taken together, will promote better procedures and core minimum standards in handling workplace disputes.
    In the first place, as we have discussed, Clause 34 underpins the importance of the statutory minimum procedures by making it automatically unfair for employers to dismiss employees without following the procedures, thus reinforcing their central and escapable importance to all dispute resolution.
    Secondly, of course, the clause provides for a partial return to what is known as the "no difference" test in unfair dismissal cases. I recognise that this in part reverses the Polkey judgment, and that it interacts in complex ways with various other judgments over the years which the noble Lord has mentioned. However, I want to focus on the substance of the new law which we are introducing. Is it fair? Will it contribute to better workplace relations? I believe that the answer to both those questions is yes.
    As to the first question, the fundamental fairness, if, first, the employer can demonstrate a fair and substantial reason for the dismissal; if, secondly, he has followed all the relevant statutory procedures; if, thirdly, he has acted reasonably in all other respects; and if his only error is a procedural one which the tribunal is satisfied has made no difference to the outcome, then I believe it is right that the dismissal should be considered a fair one. That is what this clause provides for. I do not believe that it is a
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    fundamental change to the principles of existing unfair dismissal law. It does not alter the basic tenets that there must be a fair reason for the dismissal and that the employer must act reasonably. But I believe that, taken for what it is, it is a sensible change and I make no apologies for it.
    Will this change enhance dispute resolution in the workplace? I believe that it will. Many employees have expressed real concerns that tribunals currently place too much weight on minor procedural breaches. As a result—I make this point to my noble friend Lord Lea—many employers believe that introducing detailed in-house procedures is a losing game. Because they can never plead "no difference", they fear being caught out by a tribunal if they are found to have made the slightest error in following their own procedures.
    Lord Wedderburn of Charlton: I am most grateful to my noble friend. I appreciate that that is what employers complain about, but can my noble friend cite a case where he believes that that is so? Will he tell us which of the cases decided in the reports would have fallen within that compass? And will he tell us the effect of the clause upon the law which will apply? The law here is trying to improve industrial relations. Is he confident that the effect on the legal principle will do what he says it will do? Which cases is he thinking of?
    Lord Sainsbury of Turville: It is important to focus on practical realities here. Perhaps I may quote the well-known British Airways case. An employer who dismissed a number of employees for racially harassing their colleagues lost his case solely because of procedural error, even though the tribunal acknowledged that it would make no difference to the outcome and awarded no compensation to the employees.
    Perhaps I may give the full facts of the case. Following investigation of an allegation, there was a full initial disciplinary hearing during which the employees were given the opportunity to comment on records of interviews with those who had complained about them. The manager charged with hearing the appeal held interviews with the dismissed employees but also decided to speak personally to those who had complained of harassment in order to gain a feel for their credibility. Because the dismissed employees did not see transcripts of the second interviews with the complainants, the tribunal found that the dismissals were unfair on procedural grounds. Under the new proposals, the tribunal would have discounted the procedural error since it made no difference to the dismissals, which were fair in every other way.
    Lord Wedderburn of Charlton: In order to ensure that I have understood my noble friend the Minister, would that now be a fair dismissal?
    Lord Sainsbury of Turville: Yes. As I said, the tribunal would have the ability to discount the procedural error since one could form the view that it made no judgment to the dismissals, which were fair in every other way. That is what we are talking about when we discuss these particular cases. If my noble

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    friend considers that it would be fair to say that those people were unfairly dismissed in that particular case, of course he has the right to do so. However, I believe, and it is the Government's view, that it would not be a case of unfair dismissal because, if the tribunal had formed a view, it would have made no difference that that procedural error was not followed.
    Lord Wedderburn of Charlton: I intervene in order to ensure that we understand what my noble friend is saying. In a case where employees have not been provided with transcripts of what they are alleged to have done wrong, that would now be a fair dismissal. The Government are happy that the clause would change the law in respect of the Polkey principle in that regard and in similar cases where employees have not been told what they are doing wrong and not given the details. The Polkey principle would be changed and they would all be fair dismissals. My noble friend is quite happy about that.
    Lord Sainsbury of Turville: I believe that my noble friend should read what I have said in Hansard tomorrow. I was referring specifically to a procedural error. The error was that the transcripts of the interviews had not been given to the people in those circumstances. On that basis, which is regarded as a procedural error, the view is that the tribunal could find in those cases that it was not an unfair dismissal.
    6.30 p.m.
    Lord McCarthy: My noble friend reads one case. On the basis of what he says, I agree with my noble friend Lord Wedderburn, or I think I agree with what I think he thinks. It does not seem to me that that is proof of the need for a change. We do not know how significant, how important, that was, and we do not know what might have happened. No one knows; one makes guesses. An employer comes in and says, "I would not take any notice of it", but there you are, we do not know.
    In any event, it is one isolated case. I want to know whether the Government have done any research or whether they intend to do any research in order to find out how frequent that has been. What are the cases where the existing law has resulted in people being declared unfairly dismissed exclusively on some failure of procedure? How often does that happen, what are the circumstances and what are the cases?
    Other people say other things and I have read Judge Prophet many times in this Committee, and I do not apologise for doing so, because the man is the president of the tribunals service in England and Wales. He has an exemplary record of dealing with these problems. After saying this is a potentially disastrous clause, he says:
    "It sends out the wrong message in that it suggests that disregarding internal procedures understood by employees, unions and employers is not important".
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    I have made that point and he makes it too. This is the point I am trying to make to the Minister. This is what Judge Prophet says generally happens,
    "tribunals every day accept that minor procedural lapses"—
    and the Minister's position is that that was a minor procedural lapse,
    "by employers do not necessarily cause a dismissal to be unfair. However, if the lapse is more serious"—
    the Minister says his lapse was not serious—
    "for example, in not showing the employee a proper hearing, it is sensible for the finding to be one of an unfair dismissal with the justice of the particular case … deciding the appropriate compensation".
    Is it the case that most cases where the Polkey rule comes in are of the kind that Judge Prophet describes, or is the case that most of them are of the kind that the Minister says is exemplified? This is a matter for research. I ask, almost certain of the answer I shall receive, whether any research has been done into which is the typical case.
    Lord Sainsbury of Turville: I think there is a rather more fundamental issue. The issue here is whether those cases are fair or not. We cannot have a situation where we say, "This is the situation. It does not happen very frequently, therefore we should pay no attention to it even though it is unfair". I find that an extraordinary argument.
    The noble Lord said quite specifically that if this case is unfair, we should take action to tackle that. The fact that there may be a few or many cases like that is irrelevant to the issue that it should be tackled. I find it extraordinary that the noble Lord should argue that simply because it happens infrequently it should not be tackled.
    However, when we turned to this issue, I was asking what impact that has on human resource managers or, as I also like to call them, personnel managers.
    Lord McCarthy: The Minister misrepresents me and I must protest. I did not say that at all. Judge Prophet says that there are insignificant cases and there are significant cases. He says,
    "In the insignificant cases we do not declare unfair dismissal".
    However, he goes on to say,
    "In the significant cases, we do declare unfair dismissal".
    I do not believe the Minister wants to say that even in the significant case, where it made a real difference, Judge Prophet is wrong and that both significant and insignificant cases should go down the river. I think what he is trying to say is that most cases are insignificant. The overwhelming majority of cases are insignificant. There are very few significant cases which we would call an abuse. I say that that can he settled only by research.
    Lord Sainsbury of Turville: The noble Lord is not focusing on the fact that there is the no-difference test here. That is used to determine whether these procedural issues are of importance and that seems a very good way to do it. I return to the point that if one does not have that situation, one will have a situation where many personnel directors will feel that they will

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    not put in elaborate additional procedures. If on a small procedural matter they can fall foul of it, why should they put in the more elaborate procedures?
    The argument that managers will, therefore, not follow procedures—because they will take the view that they can always fall back on the no-difference principle—is not one that people would take. They would then have to argue that it would have made no difference and it is for the tribunal to make that decision. My own view is that on that balance, one is more likely to have a situation where personnel directors say they will have the minimal kind of procedures, rather than one in which personnel managers say that they will just not bother about the procedures because they will rely on the no-difference test. That situation is unlikely to arise.
    Lord Wedderburn of Charlton: I have tried to listen carefully to what the Minister is saying. I have two difficulties. First, as the Polkey case and hundreds of other cases show, this is not only about putting in extra procedures. It is about that and of course the effect of the clause will, arguably, cause people not to have elaborate procedures and just to rely on the minimum. But in the Polkey case, what was wrong was a failure to consult in line with what has become the ACAS code. The Minister's argument has to be addressed to that.
    Secondly, the Minister appears to be saying something different from his honourable friend Mr Johnson in the other place. I quote what Mr Johnson said:
    "In the great majority of such cases that we have looked at, the failure was in procedures that would have fallen within the new minimum standards and clause 34 will be in line with the Polkey judgment. Less frequently, the procedural breach relates to a procedure that would have gone beyond the new minimum procedures. It is only in such cases that we propose to allow employers to argue that following the procedure would have made no difference to their decision to dismiss".—[Official Report, Commons Standing Committee F, 18/12/01; col 211.]
    He seems to be saying that there are very few such situations. What the Minister said was that there were quite a number of such situations, as in the case that he cited, where the employer failed to follow basic principles of—some people would say—natural justice, or a right to be heard, or a right to see the evidence. In all those cases, my noble friend says he would be happy to see the dismissals fair. I am not sure whether that is what the Minister said in another place at col. 211. He indicated that most of the cases they have looked at would be in line with the Polkey judgment after Clause 34. Which is it?
    People want to know and they want to know because this is very uncertain. My case rests on the great uncertainty which will be injected into the law at this point because the Government are changing judgments which are fundamental in their attitude to the entire structure of the law. You cannot tinker about without taking a concluded view as to how far this change will go. The Minister seems to say it will go quite a way, but the Minister in another place did not seem to agree. What is this survey of the majority of
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    cases? Can the Minister tell us something about it? As my noble friend said, the Government say they have looked at it, but can the Minister tell us what they looked at and what they concluded?
    Lord Sainsbury of Turville: I was asked to give an example of the kind of situation we are talking about. I gave an example of that. I gave no view on their frequency and I am not differing in any way from what Alan Johnson said in the other place. He said that that was the judgment that had been formed from the ones that we have looked at.
    I turn to the amendments. I understand that in tabling the amendments the noble Lords sought to shore up reasonableness and fairness in unfair dismissal cases where the employer presents a "no difference" defence. Similar concerns about whether the measure ensures that a decision must be fair in all other respects and whether it means that employers who successfully argue "no difference" will be found to have acted reasonably on that ground alone were raised in the other place.
    I cannot stress too much what I have already said. Even when an employer is able to show that following a procedure beyond the statutory minimum would have made no difference to his decision to dismiss, for the tribunal to reach a finding for the employer the dismissal must be otherwise fair. The employer must still show that he dismissed the employee for one of the potentially fair reasons that are set out in the Employment Rights Act 1996—we are not changing that. And he must still act reasonably in all other respects in dismissing the employee, as Section 98(4) of the 1996 Act requires—we are not changing that either. The amendment we accepted to the clause in the other place has, I think, made this crystal clear. It spells out that a "no difference" line of defence where a procedure has not been followed does not by itself mean that the employer has acted reasonably.
    To the extent that the amendments seek to clarify this point, they are unnecessary. Moreover, they introduce undefined concepts of fairness and reasonableness which would risk the development of a different test of these concepts for new Section 98A from that which the tribunals otherwise apply in dismissal cases. I do not think that that would be desirable.
    Amendment No. 184 seems to go further, unless I mistake its purpose, by putting an obstacle in the way of ever successfully invoking a "no difference" defence. I take that to be the purpose of the words,
    ""having regard to procedures which he was obliged to, but did not, follow".
    Their flavour seems to be that failing to follow a procedure which one is obliged to follow is intrinsically unfair and unreasonable. That is not our view. We believe that failure to follow the absolute letter of procedures beyond the minimum, no matter to how small a degree, should not be unfair if following it would have made no difference to the employer's decision to dismiss.

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    Finally, the amendments all put the burden on the employer to demonstrate the fairness of the dismissal, or its reasonableness, or both, without defining those concepts. As Members of the Committee will be aware, once the employer has demonstrated that he has dismissed the employee for a potentially fair reason, it is neither for him to show that he acted reasonably nor for the employee to show that he did not. It is for the tribunal to make that judgment. That has been the position for more than 20 years and I see no reason to change it.
    I ask my noble friends to accept my assurance that the effect of this measure will not be as far-reaching as they may fear, and to withdraw the amendment.
    Lord Lea of Crondall: It is very clear that there remains the greatest anxiety about the consequence of this clause being left as it stands. It was put most vividly by my noble friend, Lord Gladwin. The issue of who is right and who is wrong about this interpretation—us or the Ministers—leads me to say that we do not want to come back in X years' time with various negative consequences for industrial relations and say, "We told you so". We want to take this debate forward. Between now and Report in particular we trust that Ministers will read very carefully what we have been saying; we will do the same.
    In support of my noble friends, Lord Wedderburn and Lord McCarthy, we seem to have the paradox that we are looking at a case which has been going backwards and forwards where no compensation was awarded and that was thought to be a terrible thing. Of course, in one respect it can be put the other way round—here was a case where the result was that there was no compensation. Even if that is not a very satisfactory position, it has to be set against the first point that has been made very strongly—commensurately strongly —with the problem we are confronting. Moreover, I have to say that on the question of human resources directors thinking that they might as well get out from under the sophisticated procedure, I do not think that characterisation of most human resource managers is accurate, for the reasons that my noble friend Lord Gladwin gave earlier.
    That is not what is being said by the people who are attempting to put in a quality benchmark—a kite mark—which is what we all want for the ACAS-type voluntary procedures; we also want improvement in the default procedures. We wish to ensure acceptable procedures but the main disincentive to the ACAS-type procedures involves whether there is a very much softer option in the default procedure. That is the area which I understand Ministers will take some time over Easter to look at. We understood from comments on the clauses concerning the examination of facts and so on in the default procedure—which of course has some procedural consequences—that there can be no doubt that there will be some procedural strengthening of the default procedure. This is what was said the other day. I trust that the indication from my noble friend Lord Sainsbury is that I am not totally wrong on that and that the matter is being considered.
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    There is time straddling Easter; clearly we shall return to this matter, on which we have now spent an hour, at Report. That we shall do so is a racing certainty—easier than betting on a horse in the Grand National. We will come back to this at Report.
    Lord Wedderburn of Charlton: Before my noble friend withdraws the amendment, as he plainly is about to, would it be possible for the Minister to confirm what my noble friend has just said—that these matters will be reconsidered to this fundamental degree?
    Lord Sainsbury of Turville: I can confirm that. I am sorry that I did not say that earlier, rather than just nodding my head.
    Lord Lea of Crondall: I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    [Amendments Nos. 183 and 185 not moved.]
    6.45 p.m.
    Lord Wedderburn of Charltonmoved Amendment No. 186:
    Page 39, line 32, at end insert ", but in a case where it considers that an award limited to that provided for under section 112(6) results in injustice to the employee, it shall award such sum in addition to the award under that subsection as it considers just and equitable"
    The noble Lord said: I simply interpose that I did not move Amendment No. 184A, which deals with the case of misconduct, because we took the view that this had been dealt with in our earlier discussion. We are delighted that the Government are going to give fundamental reconsideration to this whole question. I understood that that is what the Minister indicated at the end of our debate on the previous amendment.
    Amendment No. 186 is a small amendment—
    Lord Sainsbury of Turville: I beg your pardon, but I do not think that the word "fundamental" passed my lips.
    Lord Wedderburn of Charlton: I apologise to my noble friend—the word "fundamental" did not pass his lips. Perhaps what he regards as serious reconsideration we shall try to see as fundamental, or vice versa. Anyway, some reconsideration is going to take place, and we look forward to it. In that reconsideration, we hope that Amendment No. 186 could also be considered, even if only as a footnote. We are rather keen on the footnotes to this discussion because every single word will matter. When this arises in litigation—it will do so as soon as this part of the Bill is put into force and comes into effect—it will be tested. We hope that it might include some evenhandedness; that is, albeit at present the Bill allows for adjustments in cases where there might be an injustice to the employer, as set out on page 39, line 32, we have a case where an employment tribunal, even in the case

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    of unfair dismissal, which is automatically unfair, is not required to make the mandatory award where it would,
    "result in injustice to the employer".
    First, I hope that the Minister will explain what that means. If he cannot explain it in terms of a general formula, perhaps he can give us an example of a case where an employer has dismissed in a manner which is automatically unfair and in breach of the fundamental procedures and where normally an award will automatically be made against him of at least four weeks' pay, if that is thought to be an adequate sanction. However, now the proviso runs:
    "An employment tribunal shall not be required to make an award under subsection (5) if it considers that such an award would result in injustice to the employer".
    What kind of injustice do the Government have in mind? What kind of case are they thinking of where the employer throws out the employee without consideration of any procedure, deprives him of his job and his wage and then says, "It would be unjust to make an award against me"? I wonder whether we could have an example of that.
    However, accepting that that is what the Government want—no doubt they have some real life cases in mind—we wish to add in Amendment No. 186,
    "but in a case where it considers that an award limited to that provided for under section 112(6)"—
    my noble friend kindly indicated in a previous debate that that should be Section 112(5), but we are very happy to accommodate his suggestion—
    "results in injustice to the employee, it shall award such sum in addition to the award under that subsection as it considers just and equitable".
    If there is provision for a case, which we cannot imagine, where it would be an injustice to award the amount against the employer, there may well be a case for saying that such sum should be awarded as just and equitable if the limit on that award would be an injustice to the employee. We have deployed "sauce for the goose, sauce for the gander" arguments in relation to previous clauses in the Bill. This is another example. I beg to move.
    Lord Sainsbury of Turville: The amendment also deals with the part of Clause 34 which will make it automatically unfair to dismiss an employee without following the new statutory procedures. As I explained when speaking earlier to Amendment No. 185, an employee who is dismissed in such circumstances will generally receive four weeks' pay. In most cases, that will be achieved by increasing his basic award to four weeks' pay if it would otherwise be less. Where the tribunal orders his reinstatement or re-engagement, it must make a separate award of four weeks' pay.
    The earlier amendment would have increased the award where the employer was ordered to reinstate or re-engage the employee from four weeks' pay to 12. As I explained, we consider that to be excessive, all the more so since the current amendment appears—it is obviously referring to Section 112(5), as my noble
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    friend said—to provide tribunals with the power to increase compensation from 12 weeks' pay to as much as they see fit. Not only do we believe that four weeks' pay is a reasonable amount; we believe that a "one size fits all" penalty is right. To give the tribunals discretion to vary the size of the award would risk complicating their proceedings while they attempted to delve into the extent of the nature of the employer's failure or motives which lay beneath it, which might be far from easy to discern.
    Baroness Turner of Camden: Before the noble Lord sits down, would he not agree that there is in new subsection (1B) on page 40 provision to make an award or not make an award—or not increase the amount of an award—where an increase would result in injustice to the employer. However, there is no parallel provision to provide similarly to an employee who otherwise might suffer an injustice and there does not seem to be any kind of equality about that.
    Lord Sainsbury of Turville: The purpose of this amendment is to say that if this does appear to lead to an injustice it should be removed. This is what, in the context of this particular clause, seems to me to be the right thing.
    Lord Wedderburn of Charlton: I understand what my noble friend the Minister says in reply to my noble friend Lady Turner. However, the Bill is concerned with the matter in two places. A special subsection is introduced to deal with "injustice to the employer". When we suggest that perhaps some even-handed introduction should be made to deal with injustice to the employee, it seems we are outside the scope of the Bill's imagination.
    This again illustrates the way in which this is a one-sided Bill. When the Government reconsider matters over Easter, I earnestly ask them to consider whether this is not a one-sided Bill. The minimum statutory procedures are unfair in a variety of respects which we have shown, and after indicating the same point on a large number of clauses, we now come to the fact that the Government are willing to make express provision—although it is still not at all clear to me exactly where it would apply—for cases of what they call "injustice to the employer".
    As soon as we suggest that the Bill should deal with cases which are very easy to imagine where an amount of four weeks' wages or any other award might create an injustice to the employee because he has been dismissed—not just dismissed, but dismissed in a way that breaks the very fundamental rules of civilized behaviour—no, the Government cannot possibly introduce a provision that might give the tribunal a discretion, which is what we are asking for, to deal with cases of injustice to the employee. The Minister really must understand that he is defending a Bill which is unfair, lop-sided and not even-handed.
    I am sorry the Minister will have to spend so much time on the Bill over Easter. I wish him well in the break to which we are all coming. However, in his labours over Easter could he possibly suspend disbelief

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    and imagine that it is possible that this Bill is one-sided? The refusal of this amendment is the final proof that someone, in of all things a Labour government, can introduce provisions for injustice to the employer. I cannot quite imagine what the cases are, but I do not make complaint fundamentally of that. What I complain of is that a Labour Government, however new or old, have put themselves into a Berlusconi mindset where they cannot even consider or take away for Easter, and in bed read before they go to sleep, some provision for injustice to the employee.
    I did not expect the Grand Committee to be such a shock. I have been a member of my party for some 56 years, and I have never heard anything of the kind ever suggested before. However, perhaps times are changing. It may be that those who reconsider over Easter regard my suggestions as quite outrageous; that the only thing that Parts 2 and 3 of the Bill are capable of dealing with are injustices to employers, as they are seen by the draftsmen, and not injustices to employees.
    It may look a small amendment, but it speaks volumes for what has gone into the construction of this Bill. All I can do at the moment, is beg to leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    [Amendments Nos. 187 to 189 not moved.]
    Clause 34 agreed to.
    [Amendment No. 190 not moved.]
    7 p.m.
    Lord Wedderburn of Charltonmoved Amendment No. 191:
    After Clause 34, insert the following new clause—
    "INTERIM RELIEF
    In section 128(1)(b) of the Employment Rights Act 1996 (c. 18), after "or in" there is inserted "section 146 or in"."
    The noble Lord said: It has been shown already that it is possible to discuss the remedy of interim relief within the confines, perhaps generously understood, of the new structure of unfair dismissal law and detriment law that is introduced by the Bill.
    Interim relief now applies to a large number of cases, including the right to be accompanied. It seems to us that it should include an interim relief against the suppression of trade union membership and trade union activities. That would be achieved, we submit, by introducing Section 146 of the consolidation Act 1992 into the Employment Rights Act, at the place which is suggested by the amendments. I beg to move.
    Lord Sainsbury of Turville: This amendment concerns interim relief, which is a remedy that employees may apply for if they consider that the reason, or principal reason, for their dismissal was on certain inadmissible grounds. One such ground is that they were dismissed on grounds of their membership, or non-membership, of a trade union, or their participation in the activities of an independent trade union. That is provided for in Section 161 of the Trade Union and Labour Relations (Consolidation) Act 1992.
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    The interim relief procedure, which has to be started promptly after dismissal, is designed to protect the employee by securing either that he is reinstated, or re-engaged, or, failing that, that his contract continues. As its names suggests, it is an interim remedy that does not determine the merits of the case.
    The amendment seeks to add Section 146 of the Trade Union and Labour Relations (Consolidation) Act to the list of jurisdictions in respect of which interim relief is available. That section is concerned with action short of dismissal on grounds related to union membership or activities. It does not mesh at all with the interim relief provisions because, as I have indicated, they are available only when an employee claims to have been dismissed for certain automatically unfair reasons. Therefore the amendment is defective not just in form, but also in substance. An employee claiming under Section 146 has not been dismissed (unless he has been dismissed since for a different reason), and the remedies of reinstatement or continuation of the employment contract available under the interim relief provisions are therefore incapable of being applied.
    Those who suffer detriment because they are trade union members, or because of trade union activities, may already complain to a tribunal and get a remedy. Interim relief is available for dismissal for certain inadmissible reasons because in that case the employee has lost his job. It is relevant only in that case, and I can see no case for a procedure beyond what is already available. I therefore hope this amendment will be withdrawn.
    Lord Wedderburn of Charlton: I am grateful to the Minister. He is of course quite right that acceptance of this amendment would require some further changes in the detail of the notion of what is interim relief.
    However, it is quite remarkable that although, when the employee suffers the final detriment of being deprived of his job, he can get interim relief. It seems that the Government are quite happy with the suggestion that the remedy should be expanded—and that would need further amendments to the 1992 Act, where he suffers perhaps the most catastrophic reduction in his earnings or in his position at the place of work—and that he cannot get any interim remedy. This goes to speed in the tribunals, and it is time, as has been said in various commentaries, that the notion of interim remedies should he considered on a wider basis. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Wedderburn of Charltonmoved Amendment No. 192:
    Before Clause 35, insert the following new clause—
    "STATUTORY PROCEDURES
    (1) Section 1 of the Employment Rights Act 1996 (c. 18) (statement of initial employment particulars) is amended as follows.
    (2) In subsection (4) there is inserted—
    "(hh) an explanation of the effect of all relevant statutory procedures under the Employment Act 2002.""

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    The noble Lord said: There is a sense in which some of this matter has been discussed already but it refocuses the minds of Members of the Committee on a very important matter. The amendment asks the Government to consider adding to Section 1 of the Employment Rights Act 1996. That is the section under which the employer must give—I note the phrase that has been used since it was first introduced in 1963—to the employee a statement of written particulars. It is true that under Section 3 of the 1996 Act, the employer must give to the employee, along with the written particulars, a note which specifies, as Section 3 puts it—a note about disciplinary procedures and grievance procedures and, as a matter of fact, about pensions, other than procedures relating to health or safety at work. The employer must give a note informing the employee of:
    "(ii) a person to whom the employee can apply for the purpose of seeking redress of any grievance relating to his employment, and the manner in which any such application should be made, and
    (c) where there are further steps consequent on any such application"—
    that is, of a grievance procedure—
    "explaining those steps or referring to the provisions of a document explaining them which is reasonably accessible to the employee".
    As a matter of practice, we know that the ability of the employer to refer to other documents reasonably accessible to the employee causes workers considerable difficulty when they are advised to go and look at what the grievance procedures are. And now they have a new situation created by this Bill. The new situation is created because into their contracts of employment is implied the provisions of Schedule 2. Schedule 2 sets out the statutory provisions in regard to procedures concerning disciplinary matters on the one hand and grievance procedures on the other. So, when one takes a job and makes a contract which contrary to lay opinion is not always a written contract—one makes a contract of employment as soon as one is taken on if one is lucky to find a job. Then the employer gives one the written particulars and a note, as he is required to do under the Employment Rights Act 1996. But he can say in that note, in regard to disciplinary procedures and grievance procedures, "You must go and look at some other document about the details of these matters". I have quoted from Section 3 on grievance procedures.
    We do not think that that is good enough. When an Act of Parliament says, "These are the procedures which must be fulfilled on each side, by the employer and by the employee. Here in Schedule 2 are the procedures", it is not good enough for the employer simply to say, "Go away and look at Schedule 2, which is reasonably accessible to you in the woodshed, or even behind it". We think that the obligation should be to give to the employee something which both sides will understand, so that they will know where they stand. The employer, after all, has to give a huge number of details in the written particulars. I will not read out paragraphs (a) to (k) of Section 1(4) of the
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    Employment Rights Act 1996, but anyone who has not read them should go away and have a look at them because they contain a long list of things which the employer must set out—although in some cases he can refer to other documents, limiting what he actually has to write.
    We say that, among that list, should be a new paragraph (hh), which is in the amendment. The employer should explain the effect of all relevant statutory procedures. It is no good saying that an explanation is more than he is required to do at the moment. If I take Section 1(4)(d)(iii), he must set out details as to the pension schemes.
    I often wonder whether some of the details which are put into written particulars really fulfil Section 1(4) in that and similar respects, but this is no greater burden. Indeed, it is not a greater burden because what in fact will happen is that the Department of Trade and Industry, in its somewhat subsidiary Employment Relations Department, will issue to employers a little leaflet which explains what the statutory procedures are. They provide all sorts of regulations and forms and all sorts of documents. I am sure that they will provide employers—big, small and medium—with a document that explains the statutory procedures. The employer will not have any great difficulty in attaching one of those, or even a photocopy, explaining the statutory procedures to the written particulars which, at the moment, he is obliged to provide under paragraphs (a) to (k) of Section 1(4) of the Employment Rights Act 1996.
    I have tried to puzzle what sort of objection there will by from the Government to this proposal. I am sure—I have an apprehension—that there may be some objection, as there is to so much of what we suggest. It cannot be that things would be too clear, because that would contradict the Government's aim for clarity. It cannot be that it is a big burden, because it is a very small addition to what is already in Section 1. I apprehend that the Minister's department will assist this process by having an explanatory document.
    My noble friend Lord McIntosh nods his head— there will be such documents. It would be quite reasonable—indeed, it would be in the employers' interests—that everyone should know where they stand under the contract of employment as fashioned by the Act. I appear to be getting approval even from the official Opposition for these notions. They are not very revolutionary—they are very modest. They will allow everybody to know where they stand. I begin to feel that possibly the Government could accept the spirit of the amendment. I beg to move.
    7.15 p.m.
    Lord McIntosh of Haringey: Let us start with the common ground, because the ground of difference is relatively minor. The common ground is that the essential purpose of the Bill is to ensure that all operators operate, and all employees have access to, certain statutory minimum disciplinary and grievance procedures. Once those procedures are in place, it is clearly essential that all concerned are made aware of

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    the procedures so that they can make good use of them in practice. The written statement of employment particulars is a key document in the employment relationship, setting out the key terms and conditions of that relationship. Other clauses in the Bill strengthen the role of this statement by ensuring that there can be potentially significant penalties on employers where they fail to provide it properly.
    It is clearly right that it is in the written statement that the application of the new statutory procedures should be communicated. That is where important issues such as pay, hours and so on are formally set out between employer and employee. It equally forms the best mechanism for formally setting out the disciplinary and grievance procedures which will be operated between the two parties to the employment relationship.
    I would like to stress, in case there is any doubt, that the effect of existing law, taken together with the amendments which we are introducing under Clauses 35 and 36 of the 1996 Act, will be to make it obligatory on all employers to issue a written statement that includes details either of the statutory procedures or of something better but not something less. That is not at issue. The problem with the amendment is that it goes beyond this basic position and would oblige employers to explain the effects of the statutory procedures.
    The advantage of the current position is that those employers who simply operate the statutory procedures will know, clearly and unambiguously, what it is that they must set out in the written statement. They must set out the statutory procedures. There is no need for these employers to agonise or worry. They will be able to copy out the information which the Government and other agencies will provide. I confirm—I did so by nodding my head to my noble friend Lord Wedderburn—that we will of course be producing a document, I hope in plain English. We shall do in consultation with ACAS and the other relevant agencies. That means that employers will be able simply to cut and paste the relevant text from our website if they want to. They will know that in doing so they are fulfilling their legal obligations. Everybody will know where they stand.
    If we were to force employers to explain the effect of the statutory procedures, we would be introducing the possibility of doubt and differences between different employers. I believe that the Bill sets out the statutory procedures in clear and simple terms, but it is far from obvious what "explaining their effect" would mean in practice. I notice that in all the citations that my noble friend made from legislation, none involved explaining the effect. Since this would be a statutory requirement, employers would worry about what it meant. Some would want to cover their backs by setting out at length, in lawyer-speak and with all sorts of caveats and complications, all the possible effects of the statutory procedures in practice, which would be very difficult to do. Others might take a more minimalist view. It would not be clear who was right.
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    The written statement is designed to be a simple, clear and understandable picture of the employment relationship between the two parties. It would not be right for us to turn it into a legal textbook and, though I recognise that that is not the intention of the amendment, I am afraid that that could be the result. I noted what my noble friend Lord Wedderburn said about going away and looking at Schedule 2. That certainly would not be an acceptable way of presenting the statutory requirements.
    Lord Lea of Crondall: I am grateful to the Minister for giving way but, before he leaves this point. I want to clarify something. My noble friend Lord Wedderburn explained, as we all know, that it is one thing to have a statutory requirement to glue something to the noticeboard. We earlier discussed whether "explain" is the right word or whether another word should be used. In relation to XYZ Electronics in Kings Lynn, Schedule 2 requires somebody to say, "If you have a grievance and you are in the transport depot, you have to write to Mr Struthers. You must do that within X days. Then we will have a meeting within Y days". That is not the same as saying that we rest on something that is a standardised DTI/ACAS procedure which is circulated on the website and glued to a noticeboard at the headquarters in Kings Lynn.
    Lord McIntosh of Haringey: No. Clearly, the procedures which the noble Lord, Lord Lea, describes are part of what it is required employers should do. That is the procedure. That is not explaining the effect. Clearly, if you set out the requirements and you set out the procedures whereby they are brought into effect, you then say, "You go and talk to Mr Struthers" or whoever else it may be. That is not the same thing as is asked for in the amendment, which is explaining the effect.
    If there is any explaining of the effect to be done, it should not be done on an individual basis by individual employers, who may come to different conclusions from the next door employer about what the effects of statutory procedures would be. If there is any explaining of the effects to be done, surely it should be done—as it will be done—in a booklet produced by the Department of Trade and Industry in collaboration with ACAS and with the other agencies, which will be made available to employers and to employees. Is not that the right way to do it?
    I make one final point before I sit down. It needs to be made clear that the obligation on employers is not to operate the statutory procedures, full stop; it is to operate the statutory procedures or something better. Many employers will have procedures in place which go beyond the statutory minimum. To oblige employers to spell out the effect of these statutory procedures would be a distraction from the task of setting out what the detailed procedures are—that is what my noble friend Lord Lea and the Government want—and that could easily lead to confusion about what procedures actually apply in a particular case.

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    I hope that the distinction between procedures and explaining the effect is clear.
    Lord Wedderburn of Charlton: It is clear, but the effect of the relevant statutory procedures means explaining to the worker how they affect him. My noble friend asked me for a precedent. The Act has a precedent. In the note which accompanies the written particulars, the employer is obliged to include in a note—and I quote from Section 3(1)(b) —
    "specifying (by description or otherwise)—

    (i) a person to whom the employee can apply if dissatisfied with any disciplinary decision relating to him, and

    (ii) a person to whom the employee can apply for the purpose of seeking redress of any grievance relating to his employment, and the manner in which any such application should be made."

    I appreciate that the department, in its usual helpful way, is going to give to every employer the advantage of having a piece of paper in which—without being a legal textbook that the Minister referred to—the general understanding of the department of the nature and effect in general terms of the relevant statutory procedures will be set out. Employers will be able to rely on that as part of what they give to the employee at the time of engagement or some weeks afterwards, as they are entitled to do.
    In addition to that I thought that we needed an explanation of the legal effect. "Effect" may be the wrong word. The Minister has understood it to mean precisely beyond what his department can say about the legal effect—some further words on the legal effect. As usual, he may have a better word than effect.
    The amendment was meant to take up the model of Section 3 of the Act, to which he has not referred; namely, the effect of the relevant statutory procedures at that place of employment. He says that there may be further procedures. Very good; let them be set out. Presumably they will be set out in the note on disciplinary and grievance procedures. However, the Act as it stands will not refer explicitly to Schedule 2 of the 2002 Act, even though—I know that Ministers do not like to refer to this—the Government have made it obligatory in every contract of employment. We believed that the employer might welcome the chance of saying, "Here at this place of work, these are the relevant statutory procedures and this what the Department of Trade and Industry employment relations department or section says they generally mean in their application to all contracts of employment. This is the effect of them here. If you have a grievance under these statutory procedures, just as in regard to Section 3, you go and see Joe Bloggs or Mary Poppins".
    The employer cannot use Section 3 to refer to some other document. In a sense, we consider it to be wrong and unfair to both parties that the employer should be able to use Section 3 to say that one must go and look at some other document. We believe that the note, or, as we say here, the written particulars—of course, we would not object if it went into the note—should set out some explanation of what the "effect" means here and now, today, tomorrow and at this place of work.
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    There is probably a better phrase which will cure the ambiguity which has arisen between my noble friend the Minister and myself.
    At this place of work, surely the employer and employee should have a document to which they can refer in a case of complaint. After all, we are not dealing with a situation where everything is at peace and all is right with the world. The Bill impacts on situations where there is a complaint, or where, under the previous Clause 34, there is an unfair dismissal or where there is a grievance. There, the statutory procedures come into play. We believed that it would be advantageous if both the employer and employee could have a document which not only said what the statutory procedures were but which also set out what they meant in general legal terms or in lay language—the department will provide that—and if in the written particulars there was also an explanation of the effect at that place of work.
    I take it that the Minister does not accept that if the amendment made it absolutely clear that it would be desirable for the employer to say, "Here at this place of work, this is the way that we apply"—he nods; I am confused.
    Lord McIntosh of Haringey: I believe that I said so in answer to my noble friend Lord Lea, but let me set it out. The parts which state that if one is in the transport department one talks to Mr Struthers are part of the procedure. They should be set down.
    As I listen to my noble friend Lord Wedderburn, I believe that the difference between what he calls "effect" and what I call "procedures" is getting a little closer than seemed to be the case at the beginning. I agree with him that certainly the document which is required from an employer should not hide behind references to other documents; in other words, it should be as self-sufficient as it reasonably can be. When it comes to interpretation, as he calls it in non-legal language, so far as possible that should not be the statutory responsibility of an individual employer, as proposed in the amendment, but the responsibility of the department, of ACAS and of all the agencies.
    I hope that if we agree on that, we can agree that that is a better way forward than the amendment which we have before us. I do not find myself disagreeing in objective with what my noble friend Lord Wedderburn is arguing; it is simply the wording of the amendment which could be confusing.
    Lord Wedderburn of Charlton: I am immensely grateful to my noble friend the Minister. If it is only the wording of the amendment, we can rely upon its spirit. If only we could spend this time over Easter together, when all this work is going to be done. My noble friend must not reject these offers! My noble friend would do well to listen to us over Easter and indeed, for much longer.
    In view of what he has said, I feel sure that the Government, when they reconsider these matters, will come up with a proposal. It will not have the word "effect" in it, I see that because the word "effect" is

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    ambiguous. I have some confidence that the Government will come back with something which at least is in the spirit—
    Lord McIntosh of Haringey: I do not want to give a false impression. I think the Bill provides that already. I do not think there is anything we need to come back with but it is something that I ought to write to my noble friend Lord Wedderburn about in order to make that entirely clear.
    Lord Wedderburn of Charlton: I shall look forward to the postcard from wherever the Minister is over Easter! But I do not think that the provision is in the Bill already. The Minister will look long and hard
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    before he finds it there already. This is a good amendment, badly phrased. I believe that he will think about it when he relaxes a bit and find that this is something to which the Government will feel constrained to respond. With that, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clauses 35 to 37 agreed to.
    Lord McIntosh of Haringey: This may be a convenient moment for the Committee to adjourn, until Tuesday 9th April at 3.30 p.m.
    The Committee adjourned at twenty-eight minutes before eight o'clock.