Grand Committee Report of 7 June 2004

Official Report of the Grand Committee on the Employment Relations Bill
(First Day)
Monday, 7 June 2004.
The Committee met at half past three of the clock.
[The Deputy Chairman of Committees (Viscount Allenby of Megiddo) in the Chair.]
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before I put the Question that the Title be postponed, perhaps I may remind your Lordships of two points of procedure. Noble Lords will speak standing, and the House has agreed that there will be no Divisions in Grand Committee. Therefore, unless an amendment is likely to be agreed to, it should be withdrawn. If there is a Division in the Chamber while we are sitting, and I understand that that is likely to be the case, the Committee will adjourn as soon as the Division Bells are rung and resume exactly 10 minutes later.
Title postponed.
Clauses 1 and 2 agreed to.
Clause 3 [Duty of employer to supply information to union]:
Baroness Miller of Hendonmoved Amendment No. 1:
Page 2, line 44, at end insert "and in the light of data supplied by the union in its application to the CAC which data must also be simultaneously transmitted to the employer"
The noble Baroness said: In speaking to Amendment No. 1, I shall speak also to Amendments Nos. 2, 9, 10, 32, 33 and 36. Amendment No. 1 is purely technical. It would facilitate the recognition process and enable the employer to comply with its obligations under the Act. Clause 3(2) requires the employer to supply the Central Arbitration Committee in a very short time—five working days—with details of the number of employees in various categories in various workplaces. However, some of those data will also have been supplied to the CAC by the union. The amendment would simply ensure that the data supplied by both sides matched.
The data supplied by the union to the CAC in support of its claim for recognition and the definition of a bargaining unit are not confidential. The union should be prepared to see that it and the employer are both talking about the same thing. The amendment would ensure that there was no delay while a possible dispute about the catchment area of the claim was resolved.
Amendments Nos. 2, 9, 10, 32, 33 and 36 all relate to the same issue—namely, information that might be required by the CAC which might be regarded as
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confidential either by the employer or, as is possibly more likely, by the employee or employees whose personal details the union is seeking to acquire.
Amendments Nos. 2, 9 and 33 are in identical terms. They would entitle the employer to withhold any information from the CAC—and, hence, from the union seeking recognition—which either the employer deemed to be commercially confidential or which might affect the security of the company or its employees. It is, I agree, less theoretically possible that information required in the course of the recognition procedures will be significantly commercially confidential. Nevertheless, that possibility exists. It is rather difficult to come up with an example because, like an elephant, it is impossible to describe, but you certainly recognise one when it comes in front of you.
Every business is different and has different concerns and different interests. In the case of one business, the number of employees that it has or their locations in the different branches of the concern are matters that the employer, for sound reasons—I stress, for sound reasons—may wish to keep secret from his competitors. If there is a valid reason for doing so, there is no reason why the employer should be forced to disclose the information for the furtherance of the union's recognition campaign. I cannot accept that the matter would be covered by some implied duty of confidentiality on the part of the union.
I certainly do not seek to impugn the integrity of any union in any way whatever. But, of course, unions, like everything else, are staffed by ordinary, fallible human beings, and an indiscreet piece of gossip, with no malicious intent at all, could do the damage that the employer was seeking to avoid with no adequate redress. However, of more serious concern is the situation of the employee whose details the union wants to obtain in order to contact him or her.
In Standing Committee in the other place my honourable friend the Member for Huntingdon drew attention to the plight of some of his constituents who were employed by Huntingdon Life Sciences and who were subject to campaigns of vilification, intimidation and attacks on their homes and property, such as their cars, and physical assault by gangs of what one could only describe from their behaviour as a kind of terrorism. Not only that, but in one instance their families were similarly intimidated as well as the suppliers of goods and services to the company.
Members of the Committee will recall the campaign against the export of live cattle and sheep—a perfectly legitimate, even reasonable, campaign, but carried to excess by the intimidation of individuals. One can envisage similar forms of violent protest against individuals in support of other campaigns exceeding the normal rights of free speech and the legitimate rights and forms of protest. I shall certainly not catalogue them here, for fear of putting ideas into some heads, but, doubtless, your Lordships could compile your own lists. But that sort of personal violence in support of one cause or another is nothing new, especially when the protagonists feel that they are driven to desperation.

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I should like to draw Members' attention to the fact that the companies registry now permits companies in cases that the registrar accepts as appropriate to withhold the personal details of directors or shareholders from the public register. That provision was expressly established with the case of Huntingdon Life Sciences in mind. However, the point is that if the shareholders and directors in any appropriate case are allowed to keep their personal details secret, why should the workers not be allowed the same right and privilege? I would have thought that that was the sentiment with which the unions would have agreed and accepted without hesitation.
The Minister in the other place did not dispute the point made by my honourable friends in support of a similar amendment to this. However, the honourable Member for Gordon, went on to say,
"if the honourable gentlemen have a legitimate concern, the amendment needs to be more tightly drafted".—[Official Report, Commons Standing Committee D, 3/3/04; col. 21.]
Well, my honourable friends and I—and, indeed some employers in sensitive fields—do have a legitimate concern and the Minister will, I am sure, be pleased to note that the amendment has been more tightly drafted to overcome the objection regarding who should decide whether the information is, in fact, commercially confidential or whether workers' security is at risk.
The answer to that is to be found in the second sub-paragraph of each of the three amendments. The Central Arbitration Committee itself will decide whether the case for an exception has been made out and the onus of proof will be on the employer to make that case to the satisfaction of the CAC.
Amendments Nos. 10 and 32 relate to the right to privacy, which is now part of the law of the land, relating to employees. The first of those amendments requires the consent of the individual employees before their addresses are disclosed to the union. Undoubtedly, obtaining that consent may hold up the recognition process a little, but there is no case that I can envisage where there would be some dire urgency in the recognition procedure. The delay would probably be minimal—for example, a simple note in the pay packet for those employees who still get them, or a notice in the factory to the effect that, "The union wants your address and we will be required by law to give it to them unless you tell the management that you object". In other words, silence will imply consent. Bearing in mind that the direct marketing industry, of which I used to be a member, has a "mail preference scheme" that enables individuals to opt out of receiving mail order offers, it is only right that workers should be able to protect their privacy in exactly the same way.
Amendment No. 32 defines "address". This is necessary as a result of modern means of communication. I propose that e-mail addresses should be excluded, because Members of both Houses have expressed concerns about unwanted e-mails or "spams". I also exclude mobile telephone numbers
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because that is another means of sending circular communications to people—in this case, ones that might arrive with a loud, audible signal at an inopportune time. I have not sought to exclude telephone canvassing, because that is regarded as a legitimate form of communication in elections these days, and it is obviously up to the employee to make his telephone number ex-directory if that is what he wishes.
Amendment No. 36 is similar to, but slightly different from, Amendments Nos. 2, 9 and 32. Those amendments relate to the withholding of commercially confidential information or information which might have an adverse effect on the security of the employer or any worker. Amendment No. 36 relates to a slightly different category of information—that which might damage the interests of the employer, the business or its workers.
There is no purpose in my burdening Members of the Committee with a series of hypothetical examples. The addresses of employees, while not necessarily affecting security and the nature of who does what work in a company and where, and while not necessarily commercially confidential, might need to be withheld to prevent, for example, the poaching of workers or harassment. The detail is unimportant at the moment. The amendment simply plugs a theoretical gap in the other three amendments.
None of the amendments in this group seeks in any way to wreck or nullify the recognition procedure. They are simply intended to provide an even-handed regime, whereby a union's right to campaign for recognition—from which we do not, even for one moment, dissent—is balanced against the legitimate rights of the employers and individual employees. Those are the rights to protect the employer's legitimate, commercially confidential interests, the security of the employee and the entitlement of the employee to privacy under the European Convention on Human Rights. I beg to move.
Baroness Turner of Camden: I hope that the Minister will not feel tempted to accept this amendment. The noble Baroness herself said that "commercially confidential" probably did not apply to all the information contained in sub-paragraph 2. The amendment's wording gives the employer the absolute right to withhold any such information.
It seems to me that the way in which these amendments are phrased gives an employer the opportunity to delay the recognition procedures. It is a loophole in the procedures which I do not think is a very good idea. The noble Baroness says that she is not against unions campaigning, and I am glad that she is not. However, it seems to me that if this proposal is accepted, it will have an inhibiting effect on campaigning by the unions. I am therefore not in favour of accepting this wording.
Lord Triesman: As the noble Baroness, Lady Miller, has explained, these amendments all relate to a concern about requirements in a number of the Bill's

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clauses for the disclosure of information, a matter which the Government, like the noble Baroness, take very seriously.
Clauses 3, 5, 15 and 18 all require the disclosure of information. The purpose of every one of them is not to allow unions privileged access to otherwise secret information. Their purpose is to ensure the sharing of information to enable better informed decision-making by the parties, the CAC and the workers. I am sure that Members of the Committee will agree that sharing information can help lead to agreement and to sensible bargaining positions, which can only be beneficial, in order to ensure that there is a smooth procedure and a positive dialogue between the parties. Conflict so often seems to result from the fact that people have not shared information adequately; they have misapprehensions and misunderstandings about each other's position and drift—sometimes by accident—into dispute.
3.45 p.m.
A number of general principles have underpinned the Government's thinking in constructing these provisions. First, in accordance with data protection rules, under none of the affected clauses would the identity or home addresses of individuals be disclosed to the union. Clause 18 additionally ensures that evidence supplied by the union containing the names of individual union members is not disclosed to the employer.
Clauses 5 and 15 are therefore constructed so that the names and addresses of workers are provided only to the CAC, which passes them to an appointed independent person. The independent person will send out communications on the union's behalf. The union will not, therefore, gain direct access to the workers or their details under these provisions. Those details will be safeguarded by an independent and respected organisation in accordance with the data protection legislation.
We have provided for direct disclosure to the union in Clause 3. The information to be disclosed is general information about numbers of workers, their categories and locations and nothing else. The Government do not believe that such information is ever likely to threaten either the commercial interests of the employer or the security of the business or of its workforce.
Furthermore, a number of the noble Baroness's amendments seek to introduce a procedure whereby the employers may apply to the CAC to withhold sensitive information. As I have said, the Government do not believe that the information required is likely to be sensitive in that sense. Putting in place an additional procedure and decision point for the CAC would therefore be unnecessary and simply create greater scope for mischievous employers to seek to delay the process.
Therefore, I can understand and sympathise with the spirit in which these amendments were tabled, but I do not believe that they are necessary. The
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Government have already taken steps to ensure that privileged or sensitive information is not placed in the public domain.
What I have said applies to all the amendments in this group. With the Committee's permission, however, I shall touch on some key aspects of individual amendments, which I think are most important in the general case for transparency.
Amendment No. 1 concerns the duty on the employer, which is introduced in Clause 3, to provide basic information to the union about the characteristics of the workforce in the union's proposed bargaining unit. The amendment seems to deal with the practical difficulties which the employer may possibly encounter when fulfilling this duty.
The duty introduced by Clause 3 applies only after the union's application to the CAC has been accepted as admissible by the CAC. A great deal of water will have flowed under the bridge before we reach that point. The union must have made a direct request to the employer for recognition, which might have been followed by a period of ACAS conciliation. Some dialogue between the union and the employer will have taken place in many cases, as well as written communication.
Only if that process fails to resolve the issue is the union entitled to make a formal application to the CAC for recognition. I should add that, under paragraph 34 of the statutory procedure, the union is already obliged to send the application to the employer as well. So, the second part of the noble Baroness's amendment which refers to this process is not needed because it is already there.
The CAC process of assessing the admissibility of a union's application involves various steps, and often includes an oral hearing and checks of union membership. The employer and the union frequently assemble and present additional information for the CAC to enable it to make this key decision. The process often teases out any definitional issues about the union's proposed bargaining unit. Greater clarity is achieved as a consequence of going through the process.
All that shows that the employer will normally have all the information that he needs to meet the duty imposed by Clause 3 by the time a union's application reaches this point in the procedure. I do not think it could be said that it would create an extra burden on employers. They are not suddenly confronted with the matter for the first time and they are usually very well versed in the case at that stage. In addition, the clause already provides safeguards for the employer in so far as the information he provides must be as accurate,
"as is reasonably practicable in the light of the information in … [his] possession".
The amendment seeks to place a further limitation on the accuracy of the information that the employer must supply by referring back to the union's original application to the CAC. It is hard to see the practical advantage of doing that. The only piece of information in the application that is relevant to the employer's

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duty is the definition of the proposed bargaining unit. It could be that the noble Baroness is concerned about the clarity of the union's proposed bargaining unit.
[The Sitting was suspended for a Division in the House from 3.50 to 4 p.m.]
Lord Triesman: With permission, I shall start one sentence further back on the brief and I hope that the Committee will not feel that I am just reading a carbon copy and have made a mistake.
I made the point earlier that if there were any doubt about the issues that were involved, it should have been explored in detail by the parties and the CAC before the admissibility decision was taken. The CAC would already have taken a view on the definition of the proposed bargaining unit. The obligation on the employer is therefore to provide the data relating to the unit so defined.
I turn now to Amendment No. 2, which would also amend Clause 3. As your Lordships will no doubt be aware, a similar amendment was tabled by the Opposition in the other place, as the noble Baroness said. She made the point, with which I completely agree, that this is technically a more proficient version of the amendment, indicating where responsibility for deciding the issue and the burden of proof should lie.
In the other place there was a lengthy discussion of the case of Huntingdon Life Sciences where, regrettably, the workforce has been subject to the worst sorts of threats and abuse from militant animal rights activists and great public disquiet was caused as a result. If I might echo sentiments expressed during that debate, I suggest to your Lordships that the information which must be shared with the union would not, if it were to fall into the wrong hands, help similar groups to take this sort of action against employees. The information will not contain the names or home addresses of any workers. Moreover, the union will have just as strong an interest as the employer in ensuring that the security of its members is not put at risk.
Having represented people working in life sciences and in some of the most controversial areas such as primate research in the university world, I know from personal experience that we went to the greatest possible lengths to protect members in that union context. Indeed, we held regular discussions with the Home Office and others to ensure that the members were protected. We would most certainly never, casually or in any other way, have placed any of our members at risk in any sense. I am afraid that knowledge about the whereabouts of people involved in this research arises elsewhere.
In practice, during negotiations over the bargaining unit this information is usually revealed by the employer in any case. The purpose of Clause 3 is merely to ensure that information is shared in a more systematic way and at the earliest possible moment.
I turn now to Amendment No. 32. This goes to the heart of Clause 15 and the new paragraph 166A it would insert into the statutory procedure. Its effect is
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more or less to wreck the clause and to ensure that the Secretary of State would not be in a position to use the power contained in new paragraph 166A.
The purpose of the power is in the future to enable QIPs to send union material to workers in the balloting unit by non-postal means. The amendment would make that impossible because it restricts the information which the employer must supply to the CAC—and thereby the QIP—to data which is relevant to postal communication only.
Clause 15 looks to the future. Its purpose is to enable communication to take place using new technologies. The clause gives a power to the Secretary of State to amend the duty of the employer so that he must provide a different sort of address to the CAC in addition to the worker's home address. This will enable the QIP to send communications by new means; for example, by e-mail.
New technologies are developing rapidly. We have seen the rise in the use of mobile phones, text messaging and even video phones. That is why it makes sense to take a power now to provide for e-enabled communications in the future at a time when such communications will be accessible to all and will have proved their suitability for this sensitive purpose. This will allow us to give careful consideration to the appropriateness for this purpose of new technologies as they develop.
We recognise that employers might have some concerns about disclosure of e-mail addresses to the CAC. In deciding when and how to exercise that power, the Government will have regard to those concerns. For example, we recognise that, as a matter of course, employers do not currently hold workers' personal e-mail addresses; indeed, it may be unusual for employers to hold them at all. However, the situation is changing and that is why we are taking the power to be exercised only when we are satisfied that the duty to supply e-mail or other addresses will not place an undue burden on employers.
It is as well to be cautious about such matters. I would not have predicted the extent to which new technologies are now in use had I been asked questions on the subject 10 or 15 years ago. However, because of the rapid development of technologies, we have all learned how quickly new technologies become commonplace in our working lives. Rather than being backward-looking, I hope that the explanation that I have given, although cautious, shows that we are trying to be forward-looking in a way that I believe we can all live with.
I apologise for replying at length, but the noble Baroness has rightly been concerned with the necessity to protect the parties and the workers from disclosure of sensitive information without their consent. I hope that I have reassured her that the Government have given careful consideration to the matter. We have taken every care to ensure that no genuinely sensitive information must be disclosed by one party to the other. Where such information must be disclosed, it must be disclosed only to trusted independent bodies

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in accordance with data protection rules. In that light, I respectfully ask the noble Baroness to withdraw her amendment.
Lord McCarthy: I support the Government's projection of the amendment. There appear to be three good reasons, some of which have been mentioned. First, the noble Baroness said that she did not want to use imaginative hypotheses, but she did. There is no concrete case of the kind of thing of which she complained happening in the existing procedure. The two parties in the procedure, the people on the CAC, and the unions and the employers using the CAC have never said that. There is no sign that those, on either side, who operate the existing procedure want such a provision or that they believe that it would help.
Secondly, there are remedies. As the Minister said, if there are problems of this kind, additional remedies arc being put on to the face of the Bill to deal with them. Clauses 9,11 and 16, which concern unfair practices, are designed to deal with any significant coercion, and they do that.
Thirdly, many of us have said for a long time—even before we had this procedure—that it is very good but it is very long and very complicated. In fact, the procedure for recognition is 80 pages long. We do not need a longer procedure; we need a shorter one.
Baroness Miller of Hendon: I am sure that the Minister is delighted to have support from the knowledgeable noble Lord, Lord McCarthy. I want to make a few short comments but, first, I thank the Minister for his explanation as to why the Government will reject the amendment. I do not want the Minister to think that I am completely stupid, but I do not understand what is meant by "QIP". I understand the IP, but what is the QIP?
Lord Triesman: It is the qualified independent person.
Baroness Miller of Hendon: I shall read extremely carefully what the Minister has said. While he was speaking, he sounded very sensible, but when I moved my amendment, I thought that that sounded sensible too. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Clause 3 agreed to.
Clause 4 [Determination of appropriate bargaining unit]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 3:
Page 4, line 5, after "be" insert "the most"
The noble Baroness said: In moving Amendment No. 3, I shall speak also to Amendments Nos. 4 and 5. This very small group of amendments gives effect to serious concerns expressed by the CBI and others that, as drafted, the Bill needs to establish a well balanced procedure for determining the appropriate bargaining unit.
As the Bill stands, the CAC is rightly required to take into account,
"the need for the unit to be compatible with effective management".
However, this does not go far enough. It is possible to demonstrate that any size of unit, geographically situated within an enterprise, fits into the very broad description of being compatible with effective management. The CAC should be seeking out not the unit which is merely compatible with effective management but the unit which is the most compatible in the circumstances of the particular enterprise. That is the purpose of Amendment No. 3. It would have the effect of preventing manipulation by a union to establish a fragmented bargaining unit on the basis of where it has strong support within an enterprise.
The amendment would ensure that the bargaining unit was indeed more suited to the needs of effective management instead of possibly one unit in the country being under one regime and another elsewhere being under another. That would be the antithesis of effective management. Amendment No. 3 would ensure that the CAC factored the degree of effectiveness and the size, nature and geographic situation of the proposed unit into its calculations.
Amendment No. 4 would take into account another omission from the proposed new clause. New paragraph 19B(3)(a) rightly instructs the CAC to take into account,
"the views of the employer and of the union (or unions)".
However, there is no indication of the weight, or even the relative weight, that the CAC should attach to each of the opinions.
The CAC will be acting not merely in a supervisory or facilitating capacity in recognition proceedings; in the case of some of its decisions—the nature of the bargaining unit, for example—it will also be acting in a quasi-judicial capacity. While it will have to make a decision one way or another on any of the issues that it has to decide, and probably one or either side, or even both sides, may be unhappy with part of the verdict, it is essential that it should give equal weight to the views of both.
There cannot be a presumption in favour of the unions any more than there can be a presumption in support of the status quo, which the employer may very well prefer. Each case must be decided on its own merits, based on its own individual facts, with no preconceptions or presumptions either way. The onus of satisfying the CAC must be shared equally by both parties.
Amendment No. 5 seeks to remove the entirely superfluous word "small" from new paragraph 19B(3)(c), which at present talks about the desirability of avoiding "small fragmented bargaining units". Not all fragmented bargaining units are small; the size of the unit should be irrelevant. The bargaining unit should be a reasonable one, consistent with what the Government call,
"the need for the unit to be compatible with effective management".
To sum up the reasoning behind these three very moderate, and I believe constructive, amendments, perhaps I may quote the Government's own words setting out the criteria to be applied over the constitution of a bargaining unit. In the White Paper Fairness at Work, the Government said:
"Where there is disagreement over the bargaining unit proposed by the union, the CAC will apply criteria, including the need for effective management, existing bargaining arrangements and the desirability of avoiding fragmented units within an undertaking".
The Government refer to "fragmented units" and not "small fragmented units". The White Paper continued:
"Employers must and will be free to organise their business in the way they choose".
I could not have expressed that concept any better myself. It is to give effect, as it were, to the Government's own stated objectives in the White Paper and their criteria that I have proposed these amendments. I beg to move.
4.15 p.m.
Lord McCarthy: The problem with these amendments is that they do not take into account the fact that in a recognition claim of a kind which gets to the CAC, there is disagreement—probably very sharp disagreement between the parties, otherwise it would not get to the CAC. The employer is resisting organisation. One factor used by the employer in such resistance is the definition of the bargaining unit. An employer who is resisting organisation, particularly compulsory organisation, through the legislation is bound to look for a bargaining unit concept which would minimise the number of workers who will vote for recognition. He is bound to want a bigger representation, so that more people who are unlikely to vote for recognition will be in the bargaining unit. There is nothing wrong with that; that is what industrial relations are about.
Conversely, the union will be concerned to try to structure the bargaining unit in such a way that when the vote is taken—if the vote is necessary; they might hope they may get 50 per cent and not have a vote—it will get its 50 per cent. You cannot just dream all this away. This is what the parties will be seeking to argue. For example, when people restructure a constituency, the Conservative Party wants it to look like this and the Labour Party wants it to look like that because its party will get more votes. These are the facts of life.
The Bill is trying to steer a way through the middle, not weighing too much on one side or too much on the other. I think it has done that very fairly. If you change the provision in the ways that are suggested, each change would strengthen the position of the employer's side. If it was not just an "effective" bargaining unit, but the "most effective" bargaining unit, you would never achieve it. Anything defined could be challenged and the employer could say, "Well, I know a way it could be more effective than that".
Similarly, on fragmentation, if every bargaining unit could be said to be potentially fragmented, there would be endless arguments about fragmentation. But
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we have a fairly good balance in this legislation. It is no good one side coming along and trying to put special words in which could in general strengthen it in the debates before recognition. It is not a simple thing like that. It has to be a balance; and the balance is in the Bill.
Lord Campbell of Alloway: I apologise for having been extremely late and not being able to attend to the affairs of this very important Bill because of other commitments. I totally agree with what the noble Lord has just said, but he does not seem to understand that there is always disagreement in any dispute. In the courts there is disagreement in any dispute. Of course one side in this dispute wants a smaller bargaining unit and the other side wants to have, putting it simply, a larger representation on the bargaining unit.
Are we concerned to adjudicate at this stage on the strength or weakness of either case? Is it not a fundamental principle of justice that as soon as the dispute arises both sides exchange the essence of their cases? That is the principle of justice, so that both sides know what they have to meet.
As regards fair provision, surely the amendment secures fair provision within that fundamental concept. I may be speaking from the wrong side of the Committee, as I have only just arrived, but that does not really matter. I sympathise in many respects with the aspirations of the trades unions. In this regard, on a fair disposition the amendment is wholly appropriate.
Lord Triesman: Amendments Nos. 3, 4 and 5 all deal with the process and criteria for the CAC's determination of the appropriate bargaining unit. I shall therefore speak to all three together, as did the noble Baroness, Lady Miller.
I make a preliminary observation. In different ways the noble Lords, Lord McCarthy and Lord Campbell of Alloway, made similar points. This is an area in which there will be disagreements and disputes. The issue is how to deal with those in a way that is fair and even-handed on the basis of the exchange of the best possible information.
As regards Amendment No. 3, the Government are well aware of the concerns of employers about the statutory criteria according to which the CAC must determine the bargaining unit in those cases where the parties are unable to agree a bargaining unit between themselves. Amendment No. 3 seeks to change those criteria so that the CAC must choose a bargaining unit which is not just compatible with effective management, but the most compatible with effective management. The Government cannot support that view. Currently, in those cases where the CAC must decide the bargaining unit, it first considers whether the bargaining unit proposed by the union is appropriate. That is right and proper. It is the union that initiates the process. It brings forward the idea of bargaining rights that it wishes to have recognised for certain groups of people. Inevitably, its proposal should be considered first.

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The CAC measures the union's proposed bargaining unit against the statutory criteria, the most important of which is the need for bargaining units to be compatible with effective management.
The CAC will seek to ensure that the views of the employer on the appropriateness of the union's proposed unit are considered very seriously. The employer is, of course, permitted to argue that the union's proposal is inappropriate for some reason; for example, because it is incompatible with effective management. To illustrate its points, the employer can refer to other bargaining units that avoid the problems it may see in the union's suggestion.
If the CAC finds that the union's proposed bargaining unit is not appropriate, the CAC formally considers alternatives, including any which may be proposed by the employer. It is not the case that the view of the CAC always flows in one direction. So far the data show that in a third of the CAC's decisions on the appropriate bargaining unit it has decided against the union's proposed bargaining unit as not being appropriate and has therefore provided an alternative proposal.
The CAC's procedure was the subject of judicial review in the case of Kwik Fit. I do not know whether one should declare an interest if Kwik Fit has ever supplied one with tyres, but in case that is necessary, it has done so in my case. Therefore, I declare at least that much interest. The Court of Appeal found that the CAC had correctly interpreted the schedule. The Government are in agreement with that view. The Kwik Fit case did demonstrate, however, that there was some confusion about the procedure to be followed by the CAC in setting the bargaining unit. Clauses 1 and 4 of this Bill therefore seek to clarify this procedure, as the noble Lord, Lord McCarthy, just said, in particular the role that the employer's evidence is to have in the CAC's deliberations. We want to ensure that all the parties are clear about the procedure the CAC will follow and how their evidence will be treated.
However, we do not believe that there is a case for changing the criteria for an appropriate bargaining unit or the way these are applied by the CAC. Getting the criteria for the bargaining unit decision right was a crucial part of the settlement at the time of the 1999 Act. The 1999 Act struck a balance between the interests that were expressed at that time by the CBI and other employers' organisations and the TUC—a balance, at least certainly in the view of the CAC and others, that was held to be a strong and critical basis for the settlement that has been achieved. To require the CAC to choose from the alternative bargaining units placed before it the one most compatible with effective management would constitute a significant change to that balance. Candidly, I am not sure how it would ever arrive at a decision as people argued about them.
In one third of cases where the bargain unit has had to be decided, the CAC has chosen the employer's or some other unit, rather than the union's. So while the union's proposed bargaining unit has been judged to
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be compatible with the statutory criteria in a majority of cases, in a substantial minority of cases it has varied or taken a different view about the bargaining unit to be chosen. I think this demonstrates how the process creates a good balance.
The amendment before us may go further than that, however. It implies that the CAC must choose the bargaining unit which is most compatible not just from those which are presented by the parties, but from all possible bargaining units. I would be loath to land the CAC with what I suspect would be an impossible and time-consuming task. It would have to satisfy itself that the bargaining unit could not be improved on even at the margins if this or that worker were added to or taken away from the bargaining unit. The permutations involved would be innumerable.
There is no one way of managing a business effectively. Anyone who has managed one will know that—I know that the noble Baroness, Lady Miller, has. There is no single model for what constitutes an appropriate bargaining unit. Collective bargaining can be effective in the context of bargaining units of all shapes and sizes as the range of collective bargaining arrangements which exist all over the United Kingdom will testify. The Government are of the view that the statutory criteria are working well and strike the right balance and that it is not appropriate to make a change.
Amendment No. 4 touches on matters similar to those we have discussed in Amendment No. 3. It would seem to reflect a concern that an employer's bargaining unit should be considered alongside that proposed by the union—a point made again by the noble Lord, Lord Campbell of Alloway—and that they should be given equal consideration. For the reasons I have outlined, the Government do not believe that would be appropriate.
However, that is not the effect of Amendment No. 4. The amendment would alter the criteria against which the CAC must test the union's proposed unit. It does not alter the fact that the union's proposed bargaining unit is accorded priority, in the sense that it was the first proposal, under the schedule. Furthermore, it amends those criteria in a way I have argued would be unnecessary.
Paragraph 19B(3) lists the matters, in addition to the need to ensure that bargaining units are compatible with effective management, which the CAC must take into account in deciding whether a bargaining unit is appropriate. The first of these is the view of the employer and of the union or unions. Amendment No. 4 would add that the views of each party should be given equal consideration.
I believe that this is an unnecessary addition as it is already clear in new paragraph 19B(3)(a) that the views of the employer and the views of the union are to be given equal consideration by the CAC. The Government are not aware of any suggestion that the CAC has failed to take properly into account an employer's views when considering whether any given bargaining unit is appropriate. Of course, the CAC

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may be more persuaded by the views expressed by one party, but that does not mean that it has not given each party's views due consideration.
The Government acknowledge that employers may be uncertain of the role of their evidence in the CAC's deliberations. That is why new paragraph 19B(4) seeks to clarify that when considering the appropriateness of any given bargaining unit, the views of the employer, which must be taken into account by the CAC, include any alternative which the employer thinks appropriate.
I turn finally to Amendment No. 5. The statutory criteria in the schedule for assessing bargaining units currently oblige the CAC to have regard to the desirability of avoiding small fragmented bargaining units within an undertaking. The new paragraph 19B of the schedule, inserted by Clause 4, repeats that obligation with no change in the wording. This amendment seeks to change that criterion so that fragmented bargaining units within an undertaking must be avoided, rather than small and fragmented units.
The intention behind the "small fragmented bargaining units" criterion was to avoid the proliferation of small bargaining units within a single firm. This could lead to complicated and costly bargaining arrangements.
However, it was recognised that there would always be specialist groups for whom a small bargaining unit was appropriate. Some of us will have seen them in professional life where a professional group has particular professional requirements. However, there is a group whose level of technical expertise and involvement puts it in a quite different marketplace for bargaining purposes from the generality of the people within the firm in which that group works.
Insisting that there must be a single bargaining unit covering all workers in a given undertaking would prevent the establishment of sensible bargaining arrangements which reflected the natural differentiation between groups of workers of the kind that I have just instanced. Certain categories of worker may have quite separate interests and may be represented by different unions from those that represent the majority of the workforce.
The criterion that small and fragmented bargaining units within an undertaking should be avoided allows the CAC to take into account the natural differentiation between groups of workers. At the same time, it respects the need to offset that against the inefficiencies of a single employer having to put in place excessively convoluted bargaining structures.
The Government are of the view that to delete the word "small" from this criterion would compromise the provisions of the law securing that bargaining arrangements can respect the differentiation. The amendment would restrict the ability of the statutory procedure to put in place arrangements which reflect the real world of industrial relations.
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The Government are not persuaded of the need for any of the changes to the statutory criteria for the appropriate bargaining unit or the CAC's procedure in applying them. I therefore respectfully ask the noble Baroness to consider withdrawing her amendment.
4.30 p.m.
Lord Campbell of Alloway: Before the noble Baroness speaks, would it be convenient if I responded briefly to the noble Lord? He has approached this matter objectively from his point of view and he speaks with a wealth of practical experience. Speaking for myself and obviously not for my party—I never have that privilege—I take on board what the noble Lord said about Amendments Nos. 3, 4 and 5. They are, frankly, of minimal consequence.
Amendment No. 2 is a slight worry because, first—
The Deputy Chairman of Committees: We have already dealt with Amendment No. 2.
Lord Campbell of Alloway: All right, I shall not speak to it. I thought that it was included in this group, but I can leave that matter alone. That makes it far simpler because my own request—it is a respectful request—is that the Government should consider the very important principle contained within Amendment No. 1—a principle which has arisen and to which I have already spoken. Inevitably, that amendment, even if not retabled by my party, would be retabled by me. It is a matter of fundamental principle and I ask that reconsideration be given to it.
Baroness Miller of Hendon: Perhaps I may return to Amendments Nos. 3, 4 and 5. I listened carefully to what the Minister and, indeed, what my noble friend and the noble Lord, Lord McCarthy, said regarding Amendment No. 3, in particular. I can foresee that it might be difficult to decide what was most effective rather than ineffective, and I shall read very carefully what the noble Lord said.
With regard to Amendment No. 4, I think that the Minister said that it is already stated in the Bill in the various places that he quoted that the opinions of both the union and the employer should be given equal consideration. I shall certainly look that up carefully. If that is so—one has to go and look for it—I would say to the Minister that it does not make any difference. My amendment provides a belt and braces approach and there should be no real objection to it.
However, I have a difficulty in understanding why the Minister does not like Amendment No. 5. The White Paper, Fairness at Work, which went out for consultation, talked about the desirability of avoiding fragmented units; it did not talk about avoiding "small" fragmented units. Unless I misunderstood, the Minister said that sometimes it was important that the unit was small. The Bill talks about avoiding that kind of unit. I was simply attempting to delete the word "small" because, as I said when I moved the amendment, I thought that the size was irrelevant and the word "small" could be important. That is why I tabled an amendment to that effect.

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Obviously, at this stage, I shall do as the Minister said and withdraw the amendment. However, for the reasons that I have given, I should be most grateful if he would reconsider the matter, as I shall. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 and 5 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 6:
Page 4, line 22, at end insert—
"19BA If more than 25 per cent of the workers in a bargaining unit determined by the CAC do not wish to be represented by the union, they shall retain the right to negotiate separately from that union.""
The noble Baroness said: In moving Amendment No. 6, I shall speak also to Amendment No. 7. Amendment No. 7 is a minor consequential amendment to Amendment No. 6, which necessitates the slight renumbering shown in the second amendment.
The substantive amendment is to Clause 4. It states in simple, virtually self-explanatory, terms that in a bargaining unit established by at least 40 per cent of the workers requesting union representation, if another substantial group of 25 per cent do not want to be represented by the union, or to have terms negotiated by the union imposed on them, they should have the right to negotiate on their own collective, separate behalf.
If 40 per cent of employees request union recognition, that is undoubtedly a substantial number, but if 25 per cent—a quarter of the workforce—want nothing to do with the union, that is also a substantial number. Theoretically, that 25 per cent could be another 40 per cent who wish to negotiate for themselves. They should have the right to express their own views to the employer in their own way in order to achieve their own objectives, even if they are different from those of the union. There is nothing to prevent an employer, at the end of negotiations, rejecting the deal wanted by the non-union employees on the grounds that, "If it's good enough for the majority, it certainly ought to be good enough for you".
It would be an equally valid argument if the employer insisted on the union deal on the grounds that, in words that the party opposite will undoubtedly recognise, the employer did not want the disharmony on the shop floor that would be caused by having a two-tier workforce.
The amendment, if accepted, would also have the side effect of resolving an issue of which the Minister is well aware—an issue over which his colleague in the other place, the Parliamentary Under-Secretary of State for Trade and Industry, expressed some sympathy when Clause 3 was debated in the Select Committee. I refer to the plight of the Plymouth Brethren—otherwise known as "the Brethren"—who do not want to be involved, whether as employers or employees, with any organisation outside their own sect. It is certainly not for me to comment on their beliefs, which some people might find objectionable on
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a variety of grounds. But they are a genuine, long-established sect and not one dreamed up for the purpose of avoiding the provisions of employment legislation. That has been their way for a number of years. Whether we agree with them or not, it might be right to countenance their somewhat isolationist views.
The amendment would have the effect of accommodating their beliefs as well as killing another bird with the same stone—that is, it would accommodate the more conventional views of a substantial part of the workforce of an enterprise who wanted to represent themselves rather than be represented by a specific union. The issue covered by the amendment is not merely one of counting heads. We are discussing not only the rights of a few dissident employees but those of a substantial minority—at least 25 per cent of the workforce. As I said previously, that would be the minimum that could be considered, but the figure could be higher.
As President Thomas Jefferson said in his first Inaugural Address more than 200 years ago,
"the minority possess their equal rights, which equal law must protect, and to violate would be oppression".
I invite the Government, with their large parliamentary majority, to protect the minority rights of workers by accepting this simple amendment. I beg to move.
Lord McCarthy: It is becoming increasingly difficult to accept the bona fides of these amendments and increasingly difficult to take seriously the statement of the noble Baroness that she is trying to help and to clarify. It makes one ask whether the Conservative Party would, if it ever came to power, repeal this legislation if it is not able to frustrate it totally before then.
It is amazing: we are to have the 10 per cent credibility test—it is not suggested that that should be got rid of; we are to have the 50 per cent membership test; and, if you do not pass that, you can have the 50 per cent ballot test. We also have the 40 per cent turnover test and, as if there are not enough tests to get through, we now have the 25 per cent breakaway test. There could be a situation in which three-quarters, or slightly fewer, of the workers in the bargaining unit wanted the union to be recognised but it would be perfectly possible for 25 per cent to go away and form their own union.
Most employers who are serious about this matter do not want to facilitate breakaway unions. If they are to recognise a union, they want it to be the one with the majority of workers in the defined bargaining unit and they want to negotiate with them. How on earth that could ever be spelled out on a series of ballot papers, I really do not know. If amendments such as this are tabled from the opposite side of the Committee, we cannot take them at all seriously.
Lord Razzall: I rise for the first time in this Committee, having watched with some amusement over the past hour and 20 minutes the immutable forces of capitalism meet the irresistible forces of trade

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unionism. I have some sympathy if not with the tone of the point made by the noble Lord, Lord McCarthy, at least with the substance of what he said.
As we all know, the Bill is a compromise between the views of the TUC, which were put very forcefully to Her Majesty's Government, and the views of the CBI, which were put with equal force at Second Reading. If this were a football match, I suspect that the CBI would get away with, at best, a score draw and even possibly an away win. Therefore, I think that any further attempt by the Conservative Party to water down what, from my point of view, has been a very satisfactory compromise should be regretted.
Baroness Miller of Hendon: Before the Minister replies, I want to thank the noble Lord, Lord Razzall, for at least saying that he did not agree with the tone. I want to place on record that I very much objected to the tone when we debated the Grand Committee stage of the Employment Bill in one of the Committee rooms. That became extraordinarily unpleasant for me—not because of the noble Baroness, Lady Turner, or, indeed, at that stage, because of the noble Lord, Lord McCarthy. However, there were suggestions that I was obviously one of the bad Conservative employers and so on. That is out of place when we are dealing with these matters in a Committee room and not on the Floor of the House, when the tone might be moderated somewhat.
Lord Razzall: Especially under "The Judgment of Daniel".
Baroness Miller of Hendon: I had not noticed that we were sitting under the picture of "The Judgment of Daniel", but the noble Lord, Lord Razzall, is correct. I await with interest the reply of the Minister.
Lord Campbell of Alloway: The noble Lord, Lord McCarthy, and I have known, and opposed, each other for near on 22 years. We understand each other perfectly. I wholly understand his approach and I am not at all surprised at the way in which he has expressed himself today. We shall continue to remain friends.
However, I want to say that there is a principle behind the amendment that is worthy of serious consideration. It has been well put by the noble Baroness. I am not sure where the 25 per cent comes from—I do not like it—but let us forget the percentage and get on to the principle. There is scope for accommodation to be made in this regard and I ask the Government to consider how they might wish to address it.
4.45 p.m.
Baroness Turner of Camden: This is a matter of principle. However, in my view, it is different from that enunciated by the noble Baroness, Lady Miller, and the noble Lord, Lord Campbell. We are talking about collective bargaining; in other words, if a majority votes for collective bargaining, the result should be collective bargaining and an agreement to that effect.
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If some people do not support the union's drive for collective bargaining, they do not have to join the union. However, there is no reason why the union's position should be undermined because a minority decide that they want some sort of breakaway arrangement. In my view, employers are unlikely to welcome that arrangement. They would sooner have everything determined by ballot, an agreement negotiated, and then the collective bargaining conducted in accordance with the terms of that agreement.
I can see no virtue in making provision in legislation for what amounts to breakaway organisations on the floor of a bargaining unit. I hope that my noble friend the Minister will not feel inclined to give much consideration to the amendment.
Lord Triesman: I have represented trade unions in bargaining and I have also been an employer and negotiated as an employer in bargaining. I hope that I can try to strike some of the balances necessary to achieve satisfactory industrial relations, bringing both those perspectives to view.
Amendments Nos. 6 and 7 are closely linked and I will take them together. Amendment No. 7 is a drafting and consequential amendment, which would be needed if Amendment No. 6 were accepted. I shall therefore confine the bulk of my remarks to Amendment No. 6, which contains the substance of the suggestions posed by the noble Baroness, Lady Miller.
The amendment seeks to create an opt-out from the scope of a statutory recognition award where a significant minority of the bargaining unit would prefer separate arrangements to determine their pay and other terms of employment. Major principles are at stake in the amendment, which cuts across some of the essential pillars of recognition procedure as a whole.
We have built a large number of checks and balances into the statutory procedure. In doing so, we have taken on board the genuine interests of all parties. As a result, the procedure has worked well, and people who have used it and spoken of it have tended to say that they found that it worked well—irrespective of whether they were employers or union representatives.
Recognition is achieved only after the union has demonstrated its case that the bargaining unit makes sense and that a substantial proportion of the unit favours recognition. For example, in recognition ballots, at least 40 per cent of the bargaining unit, plus a simple majority of the workers who vote, must vote for recognition in order for the union to succeed in its application. That 40 per cent threshold is controversial—not least with the unions and with some who sit on our Benches in the House.
However, it also has the great advantage of demonstrating that there is genuine and serious support for recognition to exist. It is only right and proper in any democratic process that the ballot result should be respected. The positioning of the amendment suggests that workers would be allowed to

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opt out of the recognition that would result if the union were successful in the ballot before it even took place. That may not be the intention of the noble Baroness, and we certainly would not want a situation in which parties were able to distance themselves from the outcome of an independent test of opinion that the ballot represents in advance of that test taking place.
I am sure Members of the Committee will accept that if workers were allowed to opt out at that stage, it would not be right for them to vote in the ballot at all.
But that appears to be what is achieved by this amendment. It allows workers, in effect, to opt out of the procedure. It is likely to destabilise bargaining arrangements and the democratic process by which they are established. It should also be noted that the Amendment does not seek to provide for the opposite circumstance where a minority of workers wish to continue to be represented by a union where the union is derecognised in respect of a larger bargaining unit. It seems to me that if the Amendment is motivated solely by a desire to respect the interests of minority groups, then it should also propose a converse right in respect of derecognition. I am not inviting that, I am just saying that that would have been the equity of the argument.
We have heard, quite understandably, about the case of the Brethren, who object to collective bargaining on religious grounds. The Government take very seriously our responsibility to ensure that religious freedoms are respected in this country. Ministers have met with representatives of the Brethren and listened to their concerns, both in respect of the Bill and at the time of the 1999 Act.
I accept that this is a very difficult issue. On the one hand, we want to respect the important freedoms of religious belief. Equally, we must respect the rights of workers to associate with one another in trade unions and to seek to be represented through their trade union. On balance, the Government take the view that allowing a minority of workers to opt out of the statutory procedure, even where they wish to do so on religious grounds, would inevitably damage the procedure as a whole. Therefore, we cannot accept the amendment.
Of course, the drafting of the amendment does not restrict the right of Brethren workers to opt out. I am sure that most reasonable employers would wish to be sympathetic to the concerns of religious minorities among their workforce. However, I suspect that employers would not relish the prospect of having to deal with a multiplicity of overlapping bargaining arrangements simply because that is the preference of a minority of workers. The noble Baroness, Lady Miller, as a useful shorthand for the problem that we would face at the very least, used the term "two-tier". I am grateful for Thomas Jefferson's endorsement of it, but bringing it into a slightly more modern context requires us to think about the matter carefully.
This proposal would potentially create two or more sets of bargaining units for the same types of worker. Two people doing the same job could be covered by two separate pay determination systems. One would
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be established for the recognised union and the other would be created for the minority of workers who would want to opt out. The paradox is that during the whole of the period that I was an active trade union negotiator, I faced employers who were very eager to ensure that the union side itself did not fragment in a way which meant that it would be impossible for them to achieve sustainable bargaining arrangements. They would frequently argue strongly and convincingly that unions, who did not always see eye to eye with one another, should, none the less, ensure that their efforts to reach a common bargaining position, common aims and a common bargaining process were put in place. There has been great encouragement from the TUC to try to achieve that kind of clarity and simplicity of operation, because of the benefits to all concerned. Sometimes a highly specialised group could not be fitted in, but, generally speaking, everyone wanted to avoid the problem that must inevitably occur where two people doing the same job could be covered by two separate pay determination systems. That way almost always led to conflict and a degree of chaos. I know that that is not the intention of the noble Baroness, but that is what would happen as a result of the amendment.
I shall not continue at greater length, because I believe that everyone would recognise that what is being tested here was not workable in practice. In that light, I invite the noble Baroness to withdraw the amendment.
Baroness Miller of Hendon: First, I thank the Minister for his explanation of why the Government would wish to reject the amendments. In answer to the noble Baroness, Lady Turner, I have a feeling that my noble friend said something similar in that he did not like the idea of a quota, a number, of 25 per cent. I think that the noble Baroness said that she did not understand where the 25 per cent came from—or something like that. I was trying to say that it would have to be a substantial amount. If there were a majority, the noble Baroness said that that should be it. At the moment under the Bill it is only 40 per cent of those who have voted. That is certainly not a majority, but that is how it stands at the moment.
Having said that, it is my duty to look at the Bill and if there are any items that need to be tested or spoken to—the Government have no objection to my doing that—the Government will answer accordingly. I do not believe that it is appropriate to say—the Government certainly did not say—that one hopes that the Conservatives will not repeal legislation in the future. The Government, whether a Conservative or a Labour government, will do what they consider best at the time. That does not mean that I should feel intimidated when moving any amendment that I feel needs to be considered.
I read very carefully everything that takes place in the House of Commons, where many Bills are guillotined in such a way that whole sections of clauses are not discussed. In this House we are fortunate to have the freedom to raise any matter on behalf of the people of this country. I did not pluck these

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amendments out of the air. The subject of the amendments has been mention to me by various organisations that have asked me to air them in Committee to find out the views of the Government. I have felt it my duty to do that and that is what I am doing.
Interestingly, when the first groupings list was issued, Mr Makower had listed most of these amendments separately. For the benefit of the Committee, I grouped them so as not to waste time unnecessarily. I am sorry that I have had to take time now to explain that. On the first day in Committee it should have been clarified that I will not always be attacked when I table an amendment that I legitimately consider needs to be aired for whatever reason.
It is interesting to hear a Minister in Committee say that he hopes that an amendment will be withdrawn because, of course, an amendment has to be withdrawn if it is not agreed to. So it is with pleasure that I withdraw it, but with not so much pleasure I shall consider the matter again and consider what the Minister has said.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 [Union communications with workers after acceptance of application]:
[Amendment No. 7 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 8:
Page 5, line 32, at end insert "so long as the relevant workers have consented to the disclosure of that information"
The noble Baroness said: I shall speak extremely briefly to Amendments Nos. 8 and 11 to the very important and significant Clause 5. The amendments relate to a different issue from the confidentiality amendments that we discussed earlier. Amendment No. 8 is a paving amendment, again qualifying the employers' duties to supply information about workers by making it subject to the workers' consent. We have already discussed that fully and I shall not take up the time of the Committee further at this stage. I have left the amendment on the record as a marker in case we have to return to the subject at a later stage.
The substantive Amendment No. 11 provides a reasonable limit to what the union may say to those whom it hopes to represent as a result of the recognition process. Of course, the union must be allowed, without censorship, to make the case to the workers, but the fact is that this material will be distributed pursuant to the proposed new paragraph 19E(1) by what is called the "appointed person". That gives the material the appearance of an officially sanctified communication and thus the appearance of veracity, no matter how contentious or how accurate it may be.
I accept that these days communications from official sources are sometimes justifiably regarded by the public with a great deal of healthy scepticism. However, such communications in the recognition
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procedure, while making the union's case as forcefully as is reasonably necessary, should indeed, and I believe must, avoid inflammatory and derogatory language.
5 p.m.
Contrary to what some noble Lords think, the days of "dark and satanic mills" or the grinding of the face of the workers by wicked capitalists have, thankfully, gone.
The amendment merely requires the unions to exercise a very small degree of moderation in the language they use, and gives the appointed person the power to ensure that they do so in any communication to which he lends his authority.
I certainly cannot imagine that any responsible union would argue against the basis of this proposition, or indeed would think that it was not necessary. But on the basis of belts and braces, I think that it should stand. I beg to move.
Lord McCarthy: I hope the noble Baroness will accept that I approach her looking for peace. I wonder whether she would agree that it would have been much better if the amendment had included a similar phrase about it not being right for any distribution of an inflammatory and derogatory nature about the union from the employer. Surely the provision should cover both sides. Employers can say inflammatory and derogatory things and they should not be allowed to, should they?
Lord Campbell of Alloway: I am rather puzzled about this. Perhaps I may ask a question. I do not know the answer, never having appeared before the tribunal. Is not the information given to the tribunal by the employers and the union confidential? Surely, it is not distributed to the press or public; it is information put before the tribunal, which has the privilege of confidentiality. If it contains derogatory or inflammatory material, that merely cuts against those who present it. Am I wrong about that?
Baroness Miller of Hendon: I cannot answer my noble friend on that point and perhaps the Minister can. But in answer to the point made by the noble Lord, Lord McCarthy, the amendment is to page 6, line 11. New paragraph 19E(1)(b) goes on to say,
"any information supplied by the union (or unions) to the appointed person".
It does not talk about any information supplied to the employer. That is why I put down the question on that particular point. It may very well be that one needs to consider the whole thing in its totality. I am not saying that I would not; I simply say that I put it down there because that was the particular part I was dealing with as I went through the matter.
I listened very carefully indeed to what the Minister said. I intend to withdraw the amendment in a moment, but before I do so he may wish to answer my noble friend while he has the opportunity.
Lord Triesman: I thank the noble Baroness, Lady Miller, for giving me a brief opportunity to respond. A

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good deal of the material, certainly in respect of Amendment No. 8, covers some issues which we have discussed. I re-emphasise on the distribution of information that there would be no question of materials being distributed more widely.
Obviously, the communications that the union wishes to use to go through this process in order to advance its case is a right that is limited in nature. It is right that the union should send written communications to the relevant workers. The union will not send these communications directly; it will give them to the suitable independent person appointed by the CAC who will distribute them to the workers on the union's behalf. The employer must give the CAC the names and addresses of the relevant workers and the CAC would pass those to the suitable independent person.
There is no question of a wider circulation. No doubt union members will be in direct contact with their union because unions obviously will retain the right to deal with, speak to and advise their members. That right is not interfered with in any respect by the procedures that I have described.
The burden of the issues has probably been covered. The argument has been advanced—I want to consider this very carefully—that the independent person status may change the status of communication that is received by giving it more apparent authority. I suppose that there is a balance to be struck between ensuring that flaws in direct communication, which fly wholly outside the procedure and are potentially vulnerable to all kinds of defects as a result, is a worse outcome than someone receiving something and considering that it is a rather formal communication because it has come from an independent person.
I make that point because the outcome of the whole process—the receipt of materials, the ballot if there has to be one and so on—appears to be one in which people will look hard at legitimacy; they will want to feel secure that the process has been set out in the proper detail; and they will want to feel that legitimacy has been achieved because the process has been worked through thoroughly.
In that light I say to the noble Baroness, Lady Miller, that I would prefer the procedure to take place with that step in it to secure appropriate validity in everyone's mind at the end of the process, as well as being the better option in the circumstances. That is why it is constructed in this way. I thank her for giving at least preliminary notice of her intention to withdraw the amendment. While I understand the nature of our procedures, none the less that is a courtesy that I respect.
Baroness Miller of Hendon: I am grateful to the Minister for picking up the point about a communication arriving in an official looking document which gives it more veracity. I shall read carefully what the Minister has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 9 to 11 not moved.]
On Question, Whether Clause 5 shall stand part of the Bill?
Baroness Turner of Camden: I speak on this clause because of what I find to be a rather puzzling innovation. I refer to the suitable independent person, the SIP. It looks to me as though opting for a SIP is the introduction to the processes set out in the Bill which lead to recognition. Obviously, I welcome any procedures that make it easier for a union to secure recognition. There is no doubt about that.
I should perhaps explain that I spent a substantial part of my union career campaigning for recognition. The union of which I was assistant general secretary was, and still is, a major union catering for white-collar employees in private industry and commerce. We recruited substantially in the finance sector. The employers at that time were not used to dealing with unions, except for internal house associations, which they had often been responsible for setting up themselves. When some of these house unions joined the union, the employers were often apprehensive and in some cases actively hostile.
Obviously, the union sought recognition, but it would not have done so had it not already had a significant number of the staff in membership of the union. We set up union committees and union representatives were elected from within the recruited staff. Access to non-members was therefore not difficult. We issued material via the elected representatives and meetings were held, either on site or adjacent to it, to which non-members were invited and at which union officials were able to explain the benefits of union membership.
Why, therefore, is the appointment of a suitable independent person required in order for the union to conduct communications with staff? A suitable independent person is clearly not in a position to speak for the union in the way that a union representative or official is able to. A suitable independent person will no doubt charge for services rendered and the charge, presumably, will have to be borne by the union. One can imagine the growth of new opportunities for entrepreneurial consultants of various kinds, all offering services. Is that what is envisaged? If so, why do we need it? I would be interested to know from the Government why it is thought to be either necessary or desirable.
I repeat that I am in favour of anything that makes it easier for unions to achieve recognition and easier for them to communicate with non-union employees. I do not believe that we need this new type of official who will be a charge of the process. If unions have a real case for recognition, they already have a substantial presence and they are able to communicate with members and non-members.
Lord McCarthy: My noble friend has made the case. She has said almost everything that we would want to say. However, I should like to draw the Government's attention to the Explanatory Notes. I, too, was mystified by the appearance of this character. He is not the same character who conducts the ballot; that is another superior person with a slightly different name.

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Paragraph 45 of the Explanatory Notes states:
"Clause 5 inserts new paragraphs 19C to 19F after paragraph 19B (which is inserted by clause 4). At present, a union(s) may only formally communicate with workers during the period for a CAC ordered ballot".
Unfortunately the term "formally" is not defined. The unions may only "formally" communicate, so I suppose they can talk to them—make a telephone call—but they cannot write a letter. It continues:
"Clause 5 provides a right for the union(s) to communicate with the workers in the bargaining unit"—
I take that to mean "formally"—
"from the point of the CAC's acceptance of the union's application".
My first question is: what is this formality that you can do through this character that you cannot do for yourself? Secondly, has anyone asked for this provision? Have the TUC or the CBI asked for it? I cannot find out. Whose idea is this? Suppose a union communicated with the workers without creating and going through this character and said, "We were only informal. Never mind, that is all right". Or suppose it said: "Well, we communicated with our members". After all, some of the people in the bargaining unit, as my noble friend said, must be members of the union. Some might have been members for 20 years; some might be shop stewards. We are being told that they cannot be communicated with formally. What can this mean?
Lord Campbell of Alloway: Briefly, and for the sake of the record, I say that I wholly—I have had little experience of this kind of affair compared with noble Lords who have spoken, but I have had some—support the objection to this independent person. In a way it is an insult to the competence of the trades unions to manage their affairs as they would wish. I do not understand it at all.
Baroness Miller of Hendon: I have only one tiny point to make about that. I leave aside the line about which the noble Baroness is concerned, that is the matter of the suitably qualified independent person; the parts the noble Lord, Lord McCarthy, took from the Explanatory Notes about "formally", although I have always understood that the notes were not exactly binding but were advice on the way; and the point made by my noble friend Lord Campbell. And, leaving those aside, Clause 5 is an important clause. It deals with unions' communication with workers after the acceptance of an application. I would have thought that deleting the whole of the clause would wreck that particular part of the Bill. The reason I say that is because I do not understand—but no doubt the noble Baroness or the noble Lord, Lord McCarthy, could advise me—why they did not table another amendment. New paragraph 19C(2) states:
"The union (or unions) may apply to the CAC".
It does not say that it is obliged to. Perhaps an amendment could have been tabled to delete that without actually going to the length of wishing to
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delete the whole clause. We put down some amendments, but I did not think it appropriate to try to delete the whole clause.
5.15 p.m.
Lord McCarthy: That was my first feeling. The noble Baroness drew my attention to this. She asked me what I thought about the part about Clause 5. I said, "Well, they don't have to apply if they don't want to. They only may do it". But, as the noble Baroness says, it leads in to certain advantages which you do not seem to get unless you decide to have this person. So there are advantages. They are being induced to go into this scheme, but I do not see why.
Baroness Turner of Camden: Perhaps I may explain to the noble Baroness why I put down the Motion to oppose the Question that Clause 5 stand part of the Bill. We are in Grand Committee. I wanted to voice my concerns about the clause to see what the Minister had to say about it. Obviously, the matter will not be pressed today as it cannot be in this Committee. The intention was to put on record my concerns about the SIP, what the position meant and to hear what my noble friend would say in reply. Then of course we can decide what to do further.
Lord Triesman: I shall take up the invitation to explain how we think this piece of legislation operates. The first thing I must say is that we are dealing here with that element of the legislation which deals with the CAC process and its formal processes and not with the whole of the generality which is built up to a pattern of recruitment and there being sufficient members. Indeed, I know precisely what the noble Baroness, Lady Turner, means because I myself was trained in these matters of recruitment in the forerunner union known as ASTMS. So I recognise the points that have been made.
Perhaps I may start by trying to answer the questions and then say more about the Government's intention in the clause. There were several important questions. The TUC supports Clause 5 and the extra ability—and it is additional ability—that it gives to unions to communicate with the workforce. It is not an alternative, but an additional ability. The union is free to communicate with workers by whatever means it sees fit. The use of the word "formally" simply refers to the access which the employer is obliged to facilitate as part of the formal procedure. So it is not a restriction or a want of trust. The point was made that it might be.
I was asked why the union should not distribute its materials itself rather than through the qualified independent person who might add to the expense and complexity. The Government need to protect the disclosure of personal information to the union. It is likely that some individuals—probably the minority, but who knows—might be unhappy about the union knowing their home addresses. Their interests need to be safeguarded in that respect. Hence we have devised a role for the qualified independent person to act as a go-between.

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It is a fairly simple mechanism. It builds on the existing system of communication which is set out for use during the balloting stage, and it is not expensive to the union. Of course unions can continue to use their normal recruitment methods to support their recognition case. The procedure does not stop unions organising off-site meetings or issuing general invitations to the workers to attend through notices in newspapers, leafleting or any of the many methods that over the years trades unions have tried to use.
The point really is about the statutory procedure. It already provides for unions to access the relevant workforce from the time when the CAC has arranged for the holding of a ballot. The access can take two forms. First, the union's written material can be sent to the workforce by the independent person appointed by the CAC. Secondly, unions are entitled to arrange workplace meetings.
I emphasise, because we are already a little down the track since the 1999 legislation, that these arrangements have broadly worked satisfactorily in the view of the people who have used them. There have been few disputes about arranging access, and businesses have not been disrupted as a result. The workforce know more about the union's position and are better placed as a result to make an informed decision when casting their votes.
Of course, this access is limited to the short period of the ballot—usually about 20 days. It is also very late in that process. Ballots on average occur about 15 weeks after an application has been lodged with the CAC. Unions have argued that they should be entitled to some form of access at a far earlier stage in the process. They point out that employers have unfettered access throughout the life of an application and have many more weeks to put across their arguments.
The Government see the force of those arguments. Clause 5 therefore provides arrangements which ensure earlier access for the union. This access will start at the point where the CAC accepts a union's application as admissible. That is a sensible point to require access. Everyone knows that the union's application is a "runner" at that point and that it meets the basic criteria of the procedure. Everyone can see that in a transparent way.
Concern has been expressed on this point in Committee in the other place. However, I emphasise again that workers' addresses would be seen only by the CAC and the independent persons. Communications would pass through them to the home addresses because that is the only way in which you can protect the confidentiality of home addresses. But it does not alter the rights of trades unions to continue to supply their normal communications.
I believe that the clause therefore strikes a fair balance. Access takes place outside the workplace and so avoids disruption. It has no cost to the employer. The workers will receive and read communications in their own time. Most importantly, the clause recognises the need for workers to be kept informed about the recognition campaign that is being conducted in their name and on
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which they will have the opportunity to vote later in the process. That is the right balance which historically has emerged. For those reasons I believe that the clause should stand part.
Lord Campbell of Alloway: I seek some clarification on this. Is it right that all the clause does is to allow the union to apply to the CAC to appoint an independent person to handle these communications? Can a union not do that already? Is there anything to stop it? I am looking at the draft Bill. Is there anything to stop a union asking the CAC to appoint an independent person to handle communications? So far as I am aware, there is not. So, what is all this about? What is the necessity for this? Is it to fit it into some new form of rigid statutory procedure? If that is the object, it seems a fairly futile one.
Lord Triesman: I do not think that it is a futile object. Several balancing objectives are in mind. I shall not go over them all again, but it seems to me that they are very important to the central thinking.
First, this is the part of the procedure where the employer is required to take part. Before the employer is required to take part, everyone should know the ground rules on which they are taking part. Otherwise at some stage there inevitably would be people who scream foul.
Secondly, the aim is to get material to every worker. It may well be that a small minority, a minority or even a majority of workers would prefer that their addresses remained confidential and were not handed to the union. This is a mechanism—having a cut-out in-between—for that purpose in the process. I think the bulk of the objections or the anxieties that they might have are fully answered—I might argue that they are more than fully answered—but they should certainly give rise to no apprehensions.
Lord McCarthy: I would like to know where they are fully answered. Is the Minister saying that they have been fully answered this afternoon? Where they should be fully answered is on the face of the Bill. For example, one of the issues that has given rise to concern is that new paragraph 19C(2) says:
"The union (or unions) may apply to the CAC for the appointment of a suitable independent person to handle communications".
That does not specify anything. Much of what the Minister has been telling us today has been about the advantages that would fall to the unions, because they could make the employer do such things. That is an advantage and it should be on the face of the Bill, whereas phrases such as "to handle communications" just give rise to worry.
Lord Triesman: I think it is always as well to read the whole of a clause, rather than a few words from it. The words,
"during the initial period between the union (or unions) and the relevant workers"
are precisely in the context of the process that I have described. That is the intention. Although it is not likely to be written into the text of the Bill, I have said

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this afternoon that there is no intention of disrupting other kinds of communication between a union and its members, nor is there, or has there been at any stage in the work on the Bill, that intention.
Lord McCarthy: We shall see if the Minister will accept an amendment of that kind on the face of the Bill at Report.
Lord Triesman: For additional clarity, I ought to set out—and this is an elaboration, not a retraction of any element—that the CAC has no such power at the moment. That question was asked. It has no such power but the Bill establishes a duty on the employer to supply the addresses to the CAC and that is a necessary condition for the communications to take place. I have stated that in general terms, but that answers the final point that was raised.
Baroness Turner of Camden: As I said earlier, it was never our intention to press the matter—indeed, we cannot in Committee. We were anxious to obtain from the Minister an explanation of what this was all about and we have had that explanation. We will consider his comments carefully and see whether there is any need for us to come back at Report with any other suggestion. In the meantime I shall not press our opposition to the clause.
Clause 5 agreed to.
Lord Lea of Crondall Lord Lea of Crondall moved Amendment No. 12:
After Clause 5, insert the following new clause—
"REQUIREMENT OF CACTO ARRANGE FOR BALLOT
In paragraph 22(4)(a) of Schedule A1 to the 1992 Act (duty of the CAC to make arrangements for a ballot in the interests of good industrial relations), after the words "the CAC is satisfied that" insert "because of special circumstances"."
The noble Lord said: As this is the first time I have contributed to this Committee, there are one or two preliminary remarks that I need to make before turning to the substance of the amendment.
First, I need to mention that I am a member of the CAC—a body of some 60 members. A dozen are independents who chair the panels on cases under the overall chairmanship of Sir Michael Burton. Two dozen are drawn from an employer's background and a similar number from a worker's background—I am one of the latter. I guess that each of the wing members such as myself takes about half a dozen cases in the course of a year.
I want to make it clear that I am not pretending to represent the CAC, which is obvious. On a separate point, there is actually no CAC policy on the matters that we are discussing, so there is no problem about that. The CAC would recognise the distinction between the technical matters upon which it is consulted, and policy matters, which are strictly for Parliament.
A good example of the former—a technical matter on which the CAC is consulted—is the resources and other implications of the handling of cases under the information and consultation regulations, which we will be hearing about later, that will follow from the Bill and are, in turn, the result of the transposition of the EU directive agreed under the Social Chapter three or four years ago. However, the CAC is obviously not a principal player in the policy issues involved in the directive.
To take another example, it is clear that on such issues as the cut-off of 21 or more workers for small firms, or the 40 per cent minimum yes vote in a ballot, the CAC does not take a view. There are other examples concerning the architecture of the recognition procedure, on which it does not take a view. I hope that that avoids any potential for misunderstanding.
5.30 p.m.
As has already been revealed in the contributions this afternoon, there is, happily, a great deal of information in the public domain on the experiences of employers and unions on the three years' work so far. There have been annual reports, case reports on the Internet and statements from the TUC and the CBI on the review of the 1999 Act.
Let me now address the specifics of Amendment No. 12. We are discussing the experience of applying the procedure for a union to seek that the CAC awards recognition without a ballot, based on being able to demonstrate that it has more than half of the bargaining unit in membership. The procedure set out in paragraph 22 of Schedule 1 to the Employment Relations Act 1999 is, I think, sufficiently familiar. There are three provisos, however, to paragraph 22(4) of Schedule 1 to the 1999 Act. Confusingly, it is called the 1992 Act, although it was not introduced by John Major or Mrs Thatcher or anybody of that party. That is a matter for the Public Bill Office. However, I will talk about the 1999 Act for convenience.
The provisos are exclusively put forward, in practice, by the employer. The employer will have been the resisting party, obviously. If not, it would have made a voluntary recognition agreement. Having challenged at the earlier stage, under the headings of designation and the bargaining unit, the employer will turn to the small print in paragraph 22(4)(a), which indicates that, despite the 50 per cent test having been satisfied, the CAC may order a ballot if it can be demonstrated that it needs to order one,
"in the interests of good industrial relations".
That time-honoured phrase, respected by everyone in this room, is questioned by no one. The problem is that the provision, as it stands, is rather hard to apply. Indeed, that is an understatement. Let me explain why.
We have heard reference this afternoon to the judgment of Daniel. The CAC could be in that position, with the union saying that to insist on a ballot in these circumstances of demonstrably over 50 per

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cent membership would be a provocation to good industrial relations. The employer, naturally, would say precisely the opposite.
Panels of the CAC may feel that they are on uncertain ground, with judicial review looming over them, whichever way they decide on this time-honoured form of words. The fact that Parliament was perhaps not as clear as it might have been, in retrospect, means that the opportunity can and should be taken to clarify what really is behind paragraph 22(4)(a) so that it does not lead to deadlock.
What are the weight and locus of the qualifications on the one hand, relative to the weight of the main substantive provision on the other? I submit, having looked at the history, that what was meant by paragraph 22(4)(a) was that some special factor needs to be adduced and put before the CAC—a factor which must be convincing in some objective sense with regard to disrupting industrial relations. If that is the case, it needs to be spelt out.
How can we find some test—some wording—which would help to ensure that it is convincing in an objective sense? I have put down these words to convey the meaning that there must be special circumstances. Let us see whether that is a good form of wording. It would not just reopen the earlier stages of the hearing when, for example, the employer was far from reconciled to the inclusion of managers in the bargaining unit and said that that would disrupt industrial relations. That had been decided by the agreement on the bargaining unit. By the stage under discussion, that would be water under the bridge. If that were not so and everything was up for discussion all over again, the CAC panel would simply be going round in circles.
The words "special circumstances" may not be totally without difficulty. But anyone who wishes to make that point should be careful—the only totally unambiguous way out of this would be to abolish the whole of paragraph 22(4). I know—it is self-evident—that my noble friend the Minister is not encouraging me to go down that road. Equally, I assume that he will accept that we need to sharpen up what paragraph 22(4)(a) covers.
I have put forward this amendment in an endeavour to resolve the problem in a way that is as near to consensual as we can find. I beg to move.
Lord Campbell of Alloway: I wholly understand the problem put by the noble Lord and wholly accept what he wants to achieve. The problem is that the words he proposes will not achieve it. If he were to use quite a simple concept and say that the CAC should be satisfied that arrangements should be made for the ballot in the interests of good industrial relations, he would put the exercise of discretion quasi-judicially within the CAC. That cannot be attacked on judicial review unless there is a taint of bad faith or quite exceptional unreasonableness. So I support the
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concept of the amendment but respectfully suggest that the object could be achieved if these words were used.
Lord Lea of Crondall: The difficulty is that that is where we are at the moment, more or less. In paragraph 22(4)(a), the first qualifying condition is that,
"the CAC is satisfied that a ballot should be held in the interests of good industrial relations".
As I say, it is the judgment of Daniel. We do not want to promote a philosophical discussion about the nature of industrial relations—I am sure that that was not intended. It was meant to cover a case—I suppose we can hypothesise about what such a case might be—in which there was some very particular factor that meant that just to give recognition without a ballot would be very ill judged in the context and that to do so would require a pretty special set of circumstances. Copies of Hansard in 1999 show that that was what was intended. At present, the problem of judicial review is that it is very hard to pin down the basis on which the CAC can do its job. That is why I suggest that there have to be special circumstances.
Lord Campbell of Alloway: With respect, if one inserts the expression "special circumstances" into the wording that I have suggested, one cannot do better because one cannot invoke judicial review. One is giving discretion to the CAC to exercise if it thinks that it is in the interests of good industrial relations and that special circumstances obtain. That is not a position which the High Court will investigate unless there is obvious unreasonableness or evidence of bad faith, and we are not concerned with bad faith with the CAC.
Lord Lea of Crondall: I am grateful to the noble Lord for endeavouring to be helpful. The problem of judicial review is not the only rationale for the amendment, although it is looming over the CAC on a number of occasions.
Lord McCarthy: If we look at paragraph 22 of Schedule 1 to the 1999 Act, it is clear that only one of these three qualifying conditions is necessary—any one will do. In a way, it would be more logical if heading (a) came at the end, but it does not, because (b) is quite precise and refers to,
"a significant number of the union members within the bargaining unit inform the CAC that they do not want the union (or unions) to conduct collective bargaining on their behalf".
There could be evidence for that. You could count that. That is a specific case in which you might say that because of that evidence, a ballot should be held in the interests of good industrial relations.
The qualifying condition in heading (c) is that,
"membership evidence is produced which leads the CAC to conclude that there are doubts whether a significant number of the union members within the bargaining unit want the union (or unions) to conduct collective bargaining on their behalf'.
Again, a precise test could be mounted for (c) so (b) and (c) seem to be all right. I do not know whether they are in practice—that is my question.

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Heading (a), which refers to the CAC being satisfied that a ballot should be held in the interests of good industrial relations, seems to be an attempt to have a generalisation. There might be many cases—(b), (c) (d), (e) and (f)—which we do not want to put on the face of the Bill so we will have the general requirement that the CAC must be satisfied. But because it is not defined, it is difficult to apply. Would it not be the case that you would get all that you want if you just abolished (a) and left (b) and (c) in place?
Lord Lea of Crondall: I have great sympathy with the proposition put forward by my noble friend. To be honest, I want an amendment which does not abolish either the whole paragraph or heading (a) because the balance must be maintained with great care and delicacy. I cannot fault the logic of what has been said about renumbering the headings so that (a) comes after (b) and (c). It would be very helpful. In the spirit of what was intended in 1999, I am quite certain that heading (a) was not seen as a catch-all measure to drive a coach and horses through the provision.
5.45 p.m.
Baroness Miller of Hendon: I have listened with great interest to the conversations between both sides of the Committee. It is interesting that all Members who have spoken have vast knowledge of trade union law and practice. I feel diffident in putting my tiny comment in the middle of it all, particularly as we have discovered that the Minister has great experience in negotiating on behalf of trades unions and as an employer. And my noble friend has great experience as a lawyer.
When I read Amendment No. 12 during the Recess, I came to the conclusion that what I said at Second Reading was extremely important. We need a consolidating Act. The amendment refers to,
"paragraph 22(4)(a) of Schedule A1 to the 1992 Act".
which I did not have with me. That schedule is to be found in the 1999 Act, which I also did not have with me. Now we are in debate on the Employment Relations Bill when all these issues arise. If an employee were trying to discover what his rights might or might not be in front of a CAC, it would be impossible to find any information in the framing of the provisions.
Heading (a), one of the three qualifying conditions which allows the CAC to conduct a ballot, provides that the CAC must be satisfied that a ballot should be held in the interests of good industrial relations. If it is so satisfied, does it not make it somewhat easier than adding the words "because of special circumstances"? We may enter a difficulty over court cases and so forth. I do not believe that the amendment has got to the nitty gritty of what the noble Lord is seeking and it makes things more difficult. However, like other Members of the Committee, I shall listen to what the Minister has to say.
Lord Lea of Crondall: Before the Minister rises, perhaps I may clarify my intentions. The CAC can be
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in the difficult position of disagreeing with an employer who says that there would be negative consequences for industrial relations. It is a value judgment against the employer and that is not easy territory for the CAC.
Lord Triesman: I thank my noble friend Lord Lea for his explanation and all Members who have taken part in the debate. There is a good deal of expertise in the Committee, which is always helpful on issues of this kind.
The amendment reflects a concern that there are no guidelines for the CAC in applying the condition in paragraph 22(4)(a)—the condition which allows the CAC to call a ballot of the workers in the bargaining unit where a majority of them are members of the union if it is satisfied that it would be in the interests of good industrial relations to hold a ballot.
Up till the end of March 2004, unions had claimed majority membership at acceptance in 57 cases. The CAC saw fit to order a ballot in 11 cases where the union opposed the ballot on the grounds that it had a majority in membership. In eight of these cases, this was in whole or in part because the CAC considered that a ballot should be held in the interests of good industrial relations. So only in a minority of cases has the CAC exercised its power under the paragraph. The factors or circumstances which led the CAC to reach these decisions were very varied and it would not be truthful to say, "There you are, there is a clear pattern".
I should add that there is no evidence to suggest that CAC panels have used their power freely or in a capricious or inappropriate way.
[The Sitting was suspended for a Division in the House from 5.49 to 5.59 p.m.]
Lord Triesman: I think that I had enumerated the cases and their outcomes, and was making the point that there is no evidence to suggest that CAC panels have used their powers freely or capriciously in ways that are inappropriate. None was presented throughout the review of the Employment Relations Act 1999. I am therefore far from convinced that there is a problem that needs to be addressed.
Moreover, the amendment does not seek to define what should be considered as special circumstances for this purpose, a point made by the noble Lord, Lord Campbell of Alloway. I believe that it would be very difficult to do so. The climate of industrial relations in any workplace may be affected by a number of circumstances which are quite specific to that workplace. What counts as a reason to believe that a ballot would improve industrial relations in one workplace may well lead the CAC to the opposite conclusion in another, depending on the attitude of the workers and the parties involved, the recent history of industrial relations at the workplace, and so on.
The Government do not believe, therefore, that it would be appropriate or practical to place a limit on the circumstances which the CAC is able to take into account in reaching a decision on whether paragraph 22(4)(a) is to apply. I ought to emphasise that members

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of the CAC, including, of course, the noble Lord, Lord Lea, are chosen for their industrial relations expertise. It is very real and very extensive expertise. The Government believe that they are well equipped to judge whether industrial relations are likely to be improved in any particular circumstance. And, of course, were the CAC to order a ballot in the interests of good industrial relations without sufficient grounds in a way that could be considered unreasonable, its decision could be the subject of judicial review, as we have already noted.
As the noble Lord, Lord McCarthy, said in relation to paragraph 22(4), in making these kind of judgments, it is possible to metricate some things. However, as regards industrial relations, it is impossible to metricate everything. Inevitably, some things will be matters of judgment about whether or not they help the relevant environment. Frequently when issues are discussed at ACAS, it is not a case of measuring something but of trying to find a balance in which everyone accepts that there has been a good industrial relations outcome. "A good industrial relations outcome" is one of the terms that is used frequently in the schedule and for very good reason.
In view of the broad range of situations the CAC may be asked to consider, I believe it makes sense to give it a broad discretion to take into account the circumstances it considers relevant in the light of its industrial relations expertise. Defining these circumstances would risk excluding matters which may well in some cases have a considerable bearing on the question of whether a ballot might improve industrial relations.
As regards the comments of the noble Baroness, Lady Miller, on producing another consolidation Act, I can well see the attraction of it. However, it is not standard practice to undertake frequent consolidations in legislation as they take up so much parliamentary time and absorb a large amount of the Government's legal resource. The case for undertaking another consolidation of trade union legislation has to be assessed against competing legislative priorities, although I acknowledge that it would be handy on occasion to reach for a single book to find the answers.
Therefore, I respectfully ask my noble friend Lord Lea to withdraw the amendment.
Lord Lea of Crondall: The difficulty is that we have a substantive proposition on the statute book that where 50 per cent of the bargaining unit are members of the union there should be the right to award the recognition without a ballot.
Noble Lords make extensive references to the delicate balances struck in 1999. Those delicate balances go back years before then. As is well known, I was, wearing my TUC hat, involved in writing the report, Your Voice at Work, of which the matter that we are discussing was a principal component. If there is evidence that this measure is continually being eroded, and that we have missed the opportunity to consider the matter at this stage, I fear that it will not
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add to people's confidence in the ability of the parliamentary process to deal with this kind of problem.
It was never intended that panels should be put in the position whereby the easy way out—everyone is human—is to say, "Let us require a ballot". That always sounds reasonable, but that was not Parliament's intention. It was not intended that whenever an employer says that there ought to be a ballot, that mantra should be accepted. I use the word "mantra" advisedly as who can be against good industrial relations? Who can be against having a ballot? However, the fact is that a ballot in many circumstances, not only from the union viewpoint—one has to see the opposite argument too—will involve the whole caravanserai of the hustings—I shall discuss Amendment No. 13 in a moment—and everything that concerns the manipulation of opinion.
All is fair in love and war but I refer to a certain tendency on the part of employers. This applies exclusively to employers because obviously all three of the provisos that we are discussing are employers' provisos, not union provisos, and will be deployed by employers. It would be a sad day if it were felt—I believe that trade unions consider that this is the case—that together the three measures undermined the 50 per cent membership provision and rendered it nugatory.
As has been said, the CAC is comprised of experienced people, but there are three people on a panel: one is independent, one represents the workers' side and the other the employers' side. People try to take a collegiate view, but it was not the intention that the easy way out, when there is any difficulty, should be to call a ballot. I shall reflect on the matter before Report. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lea of Crondall Lord Lea of Crondall moved Amendment No. 13:
After Clause 5, insert the following new clause—
"REQUIREMENT OF CAC TO ARRANGE FOR BALLOT (NO. 2)
In paragraph 22(4)(b) of Schedule Al to the 1992 Act (duty of the CAC to make arrangements for a ballot), after the words "on their behalf" insert "and the CAC is satisfied that the provision of the information was not initiated or induced by the employer"."
The noble Lord said: This is another modest amendment—it may be a mistake to make modest amendments—to make explicit what I believe is Parliament's intention; namely, to make explicit a way of handling what is now an unintended loophole in the wording of the 1999 Act.
Paragraph 22(4)(b) of Schedule 1 to the 1999 Act provides that the procedure for recognition without a ballot is subject to three different provisos. We discussed one of them a moment ago.
This one concerns the scenario where it is alleged that a significant number of employees in the bargaining unit who are union members do not want union recognition for collective bargaining purposes and they write to the CAC to this effect.
What is perplexing is that the consequence of the present wording is that any employer who does not want union recognition—and that, let us remember, is 100.000 recurring per cent of employers in the case we are studying, or else they would have concluded voluntary agreements, as my noble friend has already pointed out—is sorely tempted to go down the road of ghost writing letters or inspiring letters—a road full of moral hazard. It is easy to see how this can seem attractive. An employer will identify one or two union members, have a quiet word in their ear about their prospects—not too much need be said—and get them to help with a letter or a petition. Everyone in this room will, I think, appreciate that this is light years away from what was intended by the authors of the 1999 Act. We talked of members who of their own volition were to inform the CAC that they did not want the union to represent them for collective bargaining purposes. Such letters, if any such emerged, were meant to be considered if written individually direct to the CAC and certainly not if written on employers' headed notepaper or photocopied letters drafted by the employer with a space for the person to sign.
It was never intended that such letters should be put in front of workers in a one-to-one interview—a typical American technique—accompanied by hints about the worker's future prospects, and then transmitted to the CAC. Hence the purpose of the amendment is to make it absolutely clear that information under paragraph 22(4)(b) should not be taken on board if it is initiated or induced by the employer.
I know that the point could, of course, be made that if the union does not like this sort of interference with the views of its members, all it has to do is to agree to a secret ballot—I refer to the discussion we had five minutes ago—but that is a sort of blackmail and would be strongly considered a threat to good industrial relations on the part of the trade union.
I wish to say a few words about confidentiality and the protection of human rights. I was interested to hear the earlier discussion in this regard. A balance has to be struck between the need for the CAC to validate information and the protection of individuals who could be victimised. We can all agree on that. However, the rights of the individual are not protected if the employer can demand to know who has signed a letter as a union member stating that he or she does not wish the union to represent them in pay negotiations.
The fact that the union has, of course, already had to demonstrate its support through a petition—that is a quite separate part of the procedure—shows that we must be careful to use terminology with care.
The form of words that I have put down makes it absolutely clear that the CAC will not take into account as evidence—as purported evidence of the views of union members—"round robins" initiated or induced by the employer. The elimination of such letters would be no more and no less than what
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Parliament intended in the first place. I trust that there will be general support for this amendment. I beg to move.
Lord Triesman: The first and third conditions of paragraph 22(4) give the CAC some discretion. There is no corresponding discretion for the CAC to judge, in the light of the evidence before it, the issues that my noble friend Lord Lea has just raised—whether the information presented to it shows that a significant number of union members do not want to be represented in a collective bargaining arrangement by their union.
As my noble friend said, unions have alleged in some cases that employers have asked workers to sign letters under duress in order to make the case for ending the collective bargaining arrangement and the recognition that goes with it. They claim that the wording of paragraph 22(4)(b) is problematic because the CAC cannot consider whether the information provided to it is a genuine expression of union members' views or has been coerced or accumulated in some other way. This view appears to have been shared by at least one CAC panel. In the case of Brian Hewitt Construction Limited and the Iron and Steel Trades Confederation union, the panel's decision states:
"It is manifest from the language in paragraph 22(4)(b) that the issue is simply whether the CAC is informed by a significant number of union members that they do not want the union to conduct collective bargaining on their behalf'.
The panel's decision continues:
"The Panel is of the view that the law makers did not envisage the condition being manipulated in the manner that the Company has done in this case. However, the Panel is constrained by the open nature of the wording of the paragraph".
I do not intend to comment in any detail on any judgment of the CAC. However, when discussing the previous amendment, I said that the expertise of members of a CAC was a decisive factor regarding the CAC's judgment and jurisdiction. Therefore, I give weight to what a CAC panel has said. Clearly, however, this condition has posed difficulties for the CAC and the parties. As we have consistently made clear, the Government strongly condemn the pressuring or coercion of workers to sign anything or to make any statement against recognition. We equally condemn any attempt by a union to pressure workers to support it. Coercion is ruled out in either direction.
We consider, therefore, that there may be value in looking at this question. We are not convinced, however, that my noble friend's amendment gets it quite right. We must ensure that we do not prevent an employer letting union members know that they can inform the CAC if they want an issue raised. Nor would we wish to prevent an employer from assisting a worker to do so, if that was the genuine wish of the worker rather than the result of coercion.
Unions also initiate petitions and letters of support from workers at other stages of the process. It is obviously important that both parties should be able to inform workers about the ways in which they can make their views known.

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The issue is whether the CAC can take into account any evidence that undue pressure was involved. That is something we accept that we should give further consideration to. I am grateful to my noble friend for raising the matter. I hope that we can have further discussions with him to see what can be done. In that light I respectfully urge him to withdraw his amendment.
6.15 p.m.
Lord Lea of Crondall: I am grateful to my noble friend for saying that he will give the amendment further consideration, albeit not perhaps in its current form of words. I look forward to hearing what form of words the Government might consider tabling on Report in order to meet the point, the case for which the Minister substantially accepted. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Postal votes for workers absent from ballot at workplace]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 14:
Page 8, line 31, at end insert "of the close"
The noble Baroness said: In moving Amendment No. 14, I wish to speak also to Amendment No. 15. They are both drafting amendments that would clarify Clause 7, without altering it in any way. In fact, they would simply remove a drafting ambiguity.
In Clause 7, the Government have decided that there should be the facility for employees to cast their votes by post. As an aside, I can hope only that that facility will work better than the shambles which appears to be happening as regards whether people receive their voting papers for the forthcoming elections. The employee has to decide whether to avail himself of the opportunity,
"in advance of the ballot".
However, it is not clear whether that means before the ballot is called, or in advance of its closure. It is really not practical—in the words used by the two relevant sub-paragraphs—for the worker to make this decision before the start of the process. He may not even have heard about it until the campaign—if I may call it that—begins. The proper time for the worker to avail himself of the facility for postal voting is before the close of the poll when he knows all about it.
The effect of these amendments is simply to remove any possible ambiguity or doubt. I beg to move.
Lord Davies of Oldham: I am grateful that the noble Baroness spoke to Amendments Nos. 14 and 15 as they embrace exactly the same principle. I shall speak overwhelmingly to Amendment No. 14 while recognising that my arguments apply also to Amendment No. 15.
As the noble Baroness said, the amendments seek to extend the period in which a worker may reasonably request a postal ballot because he or she will be absent from the workplace on the day of a workplace ballot.
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As drafted, Clause 7 states that the CAC must make arrangements for a worker who is unable to vote in person at the workplace—because of matters relating to him or her as an individual—to have the opportunity to vote by post if the worker concerned requests it far enough in advance of the ballot for this to be practicable.
These amendments seek to ensure that such arrangements must be made where a worker's request is made far enough in advance of the end of the ballot. I respect, of course, the noble Baroness's intention which is to ensure that as many workers as possible have the opportunity to vote. Of course, we share that objective entirely. Indeed, that is why we introduced the right to vote by post for workers who are absent from the workplace for legitimate reasons, for example being on annual leave or having time off for public duties such as jury service.
However, the amendments will not in the overwhelming majority of cases buy workers much time. A large number of workplace ballots take place on a single day. All the others take place within two days although we found one case of a ballot taking as long as three days. Therefore, we are not talking about a significantly extended period for the worker to exercise his proper right to participate in the ballot.
Of course, these amendments may give workers who are unexpectedly absent on the day of the ballot, perhaps through illness, an opportunity to vote, rather than missing their one chance. However, this would mean that the worker was too ill to go to work but well enough to make his representation to submit a postal ballot before the close of voting, which, as I have indicated, constitutes a very limited period of time in most ballots.
So I am not convinced that the amendment would deliver any significant benefit. It would, of course, pose some practical difficulties for the qualified independent person appointed to conduct the ballot. Under this amendment the QIP could not be sure, even on the morning of the ballot, who would be voting in person and who would be voting by post. This would unnecessarily complicate the QIP's job and inevitably delay the process.
In any ballot or election there must be a cut-off for the sending out of postal ballot papers. Such limits apply in our public elections where we require persons to request a postal vote well in advance of election day. This is essential to ensure that the relevant authorities can keep track of how and when people are entitled to vote. It also ensures fairness so that no voter can gain advantage by voting after the majority have done so when a picture may already be appearing of how the various parties have fared.
Of course, this does mean that some voters who wish to vote are unable to do so. As I say, I recognise the noble Baroness's intention to make it as feasible as possible for people to cast their vote. However, accommodating people who discover on the very day of the ballot that they cannot vote at the last minute is neither practical nor fair to other voters.

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I fully understand the noble Baroness's motivations in tabling these amendments. Her intentions are good ones. However, I believe that the gains would be small indeed due to the short period of time within which such ballots are conducted. The amendments would pose significant disadvantages to the efficacy and integrity of the ballot procedure. On that basis I ask the noble Baroness to consider withdrawing her amendment.
Baroness Miller of Hendon: I am extremely disappointed with the Minister's answer to this simple amendment. Line 31 on page 8, Clause 7, states that the worker has,
"to be given the opportunity (if they request it far enough in advance of the ballot for this to be practicable) to vote by post".
The Minister commented that often the ballots are done in one day. I did not include the provision that they should request it far enough in advance—it is in the Bill. I was saying merely that if the worker has to decide whether the request is far enough in advance of the ballot, he needs to know when the close of the ballot will be. That is important. If a postal vote is requested, why must it be far in advance? If it happens in one day—one, two, three quick and it is over—it is an extraordinary state of affairs.
However, I shall read carefully what the Minister has said, but I do not agree with it and I am disappointed that he said it so quickly. In fact, he said in his opening remarks that he did not agree with the proposal, so I gleaned that even before I heard the explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 15 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 16:
Page 9, line 2, at end insert—
"(3) For the avoidance of doubt, it is hereby declared that nothing in Schedule A1 to the 1992 Act (collective bargaining: recognition) shall imply that a failure to vote by any worker for whatever reason shall be interpreted as if the worker is voting either for or against the proposal in any recognition or derecognition ballot."
The noble Baroness said: I would have thought that it was axiomatic that the only conclusion that could be drawn from the fact that someone did not vote in any ballot was simply that he did not vote. That is all it means. That applies to ballots under this Bill or in any other ballot or election.
However, I want to draw the Committee's attention to an exchange that occurred in the other place during its Second Reading debate. The honourable Member for Warrington North asked the Secretary of State:
"will she look once again at the rules on trade union recognition ballots, as, in effect, they count abstentions as no votes?".
I have to assume that the honourable lady would like them to count as "yes" votes because she went on to ask:
"How many members would have been elected if such rules applied to us?".
Instead of shooting this bizarre concept down in flames, the Secretary of State replied:
"My hon. Friend raises an important point. We looked at it during our review of the 1999 Act and we shall be tightening up that aspect of its operation under the current Bill".—[Official Report, Commons, 14/1/04; col. 823.]
To be fair to the Secretary of State—despite what one Member of the Committee said, I always try to be helpful and fair—I freely acknowledge that the Bill does not contain any provision to alter the implications of the abstention.
I am also prepared to recognise the fact that in the heat and pressure of a debate one can say something that goes further than one really intended. However, the fact is that these days, in a change to the rules of interpretation of Acts of Parliament, the judges are prepared to look at what Ministers have said during the passage of the Bill.
It is therefore important that there should be a clear statement from the Government on the parliamentary record that, as I said in my opening remarks, the only interpretation that can be placed on an abstention is that the person did not vote.
I look forward to the Minister's confirmation of what I believe is a self-evident truth and to give him that opportunity of saying so, I beg to move.
Lord Davies of Oldham: I know that the noble Baroness feels strongly about the issue because she raised it at Second Reading. It gives us the opportunity to clear up what might be a misinterpretation.
Important though a ministerial statements are on all occasions—we all weigh our words with the greatest of care and no one is better at that than the present Secretary of State—when the courts are looking at what Ministers intend, they are looking at something different from a response to an interjection in a winding-up speech. That is when a particular point is made and a Minister responds.
It would not be on every occasion that we would think that all ambiguities could be avoided. Sometimes the question itself can be slightly misunderstood. We have all made that mistake. In any case, interjections are part of the cut and thrust of debate. Therefore, when the noble Baroness says that it is important that ministerial statements form part of our legislative process because Minister's comments are often partly taken into account in future judgements, that is on a more substantial basis than a response to an interjection from a Back-Bencher from whichever side of the House. It happens very much in the context of a statement introducing a Bill or, perhaps, at the final Third Reading stage when a considered position is put forward by a Minister.
In this case a great deal is being made out of a small development. The Secretary of State was referring to Clause 7 of the Bill. The clause tries to permit as many people as possible to vote in recognition and derecognition ballots. It does that by providing for postal votes to be accorded to workers who are absent from work on days when workplace ballots take place. In this way workers on sickness or maternity leave or

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staff on residential training courses can exercise their entitlement to vote. The objective of the clause is a laudable one to which we can all subscribe. Its effect is to reduce the number of unintentional abstentions during these ballots. The turnout, and therefore the broad representativeness of the ballot, should increase at the margin as a consequence of the provision.
6.30 p.m.
It follows that my right honourable friend's remarks do not imply that the treatment of abstentions will be changed, as the noble Baroness was kind enough to recognise. The Bill does not change the concept of abstentions and how they will be treated and that is not the intention behind the Government's proposals. When workers decide not to vote at all, the CAC—as the noble Baroness agreed—should not draw any inferences about such preferences. Under the current statutory procedure, abstentions have their normal meaning as votes that are neither in favour or against the proposition in question. I am grateful for a further opportunity to put on the record that that will remain the case. That is why the amendment has given us the chance to clarify what I believe has been a misinterpretation of what occurred in the other place. I consider the amendment to be unnecessary because it is not intended that any change should be effected in this matter.
I should add that the Bill does not change the 40 per cent rule, either. We will debate separate amendments to be moved by my noble friends on the 40 per cent rule and we will be able to deliberate further. For now I am responding to this amendment and, I hope, with the assurances that I have given, that the noble Baroness will feel able to withdraw it.
Baroness Miller of Hendon: That is an unusual answer. I made it clear that the Bill does not change the matter. But I also said that the issue was raised in the other place when someone asked the Secretary of State if she would please look again at these rules, because, in effect, they count abstentions as "no" votes. That was the precise point that was raised. The Minister did not shoot that down out of hand and simply said that it was an important point that the Government would look at during their review of the 1999 Act.
If it was such an unimportant point, all that the Minister needed to say was to confirm that if someone does not vote it would simply mean that they had not voted.
If they abstain, it would count as a "no vote". That is not returning to my comments that it was not in the Bill, but I was talking about the interpretation that judges might put on the matter. I can tell the Minister that I have taken legal advice on that particular point. The Minister said that it would not be counted as something important. If that is the case, it would be extremely easy to put it on the record that I am correct—that if someone abstained it would just mean that they had not voted and would count as a "no vote" with no other obligation. That is all that the
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Minister needs to say, but I do not believe that I heard him say that. If I missed a couple of words, he will not mind repeating them so that they are on the record.
Lord Davies of Oldham: I certainly do not mind not just repeating that but adding to it for the third time. On Second Reading, when my noble friend replied, he said:
"We do not intend to change the status of abstentions in recognition ballots". —[Official Report, 29/4/04; col. 932.]
I sought to agree with the noble Baroness that there should be no change. I explained that, as I understood the position, there was no intention to make any change, nor could there be, as a result of an exchange in the other place between a questioner and the Minister. That would be fresh interpretation of the legislation, particularly as it is still passing through this House, and we have another opportunity to put it on the record that we do not intend to change the status of abstentions. That is the basis upon which I hope the noble Baroness will withdraw the amendment.
Lord McCarthy: Is it not the case that this is all rhetoric? In a sense that is right. At least 40 per cent of the workers constituting the bargaining unit have to vote for recognition. If 80 per cent of the workers constituting the bargaining unit abstain, one cannot reach the required figure. It does not affect the result. It is rhetoric.
Baroness Miller of Hendon: That was not the opinion of the noble Lord's honourable friend in the other place when this matter was debated. In any event, I shall certainly withdraw the amendment and look carefully at what has been said. But I have to repeat that sometimes, when a court is asked to decide on the true position of a case, it can take into account what is said during the course of the passage of the Bill and compare it with what the Bill says. It can be that one is different from the other. That has happened in many cases. The Minister said that this is a trivial point and that it would not apply. It does apply in some cases and it is necessary to have the matter on the record for the sake of clarification. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clause 8 agreed to.
Clause 9 [Unfair practices in relation to recognition ballots]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 17:
age 12, line 3, leave out "uses or attempts to use undue influence on" and insert "coerces or attempts to coerce"
The noble Baroness said: I shall speak to Amendments Nos. 17 and 18 together. They relate to the problem, or potential problem, of coercion or intimidation during the recognition process. Unfair practices in relation to recognition ballots is a general concept with which no one could disagree, but strangely enough, it was not in the Bill that was originally presented to the other place.
This new clause, which I suppose was an afterthought, because it was not in the original Bill but was in the Bill brought from the other place, introduced additional burdens on employers for when they are notified of the requirement to arrange a ballot on recognition. Employers have argued that these are extremely onerous and inappropriate and the Government have not given sufficient justification for this late insertion into the Bill. Certainly, they have not pointed to any case, event or practice that justifies it. However, the substantial amendments to the Bill introduced by the Government on 24 May go a long way, in my view, to meeting those criticisms, and I will revert to that when we discuss these government amendments.
One specific issue in the new measures is the meaning of the words "undue influence" in new paragraph 27A(2)(f) to Schedule Al of the 1992 Act. As an aside, that jumble of descriptions of the position of the paragraph shows what a nightmare jigsaw the current legislation is. I do not dare make another plea to the noble Lord, Lord Triesman, for an early consolidating Act.
"Undue influence" is a legal term of art, with a specific meaning assigned to it by judicial decisions going back a very long time. I found one case decided by your Lordships' House in 1857—almost 150 years ago. That is the leading case, and the then Lord Chancellor, Lord Cranworth, ruled that the essential element of undue influence was "coercion or fraud". The need for that essential ingredient has been followed in many subsequent cases. In 1885, the president of the probate and divorce division said,
"To be undue influence in the eyes of the law, there must be—to sum it up in one word—coercion".
Amendment No. 17 removes the inappropriate legal phraseology from the Bill and removes the temptation for some lawyer or other to try to suggest that normal reasoned argument or a moderate attempt at persuasion by an employer is somehow improper. It substitutes the plain simple concept that coercion is an objectionable and forbidden practice. With that word, there can be no argument as to what is or is not permitted.
Amendment No. 18 to this same provision makes it clear what its objective is, and introduces an element of even-handedness between the employer and the union, since it proscribes using coercion to persuade a worker to vote either for or against the proposition. I beg to move.
Lord Triesman: I shall speak to Amendments Nos. 17 and 18 together, as Amendment No. 18 is consequential upon Amendment No. 17.
The amendments seek to narrow the scope of unfair practices and unfair practice provisions by replacing the unfair practice of using or attempting to use undue influence with coercing or attempting to coerce a worker so as to influence or persuade him to vote for or against any proposition. I promise the noble Baroness, Lady Miller, that I will go back to the 1857 judgment
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to make sure that I have that right. All I can say now is that it is more recent than Thomas Jefferson, and is therefore closer to my own life.
I must confess that I find the formulation used in Amendment No. 18 a little difficult to grasp. It seems to conflate the concepts of coercion, persuasion and influence so that it would be an offence to attempt to coerce a worker so as to attempt to influence or persuade him. This seems more convoluted than I think was the intention, from what the noble Baroness said. I am not sure that the references to influence or persuasion add to the meaning. It would be simpler just to make it an unfair practice to coerce or attempt to coerce a worker to vote or not to vote a particular way. In addition, these amendments would create an imbalance in the schedule. Similar amendments would have to be made to Clause 12 to ensure that derecognition provisions mirror those for recognition.
I should add that the amendment does not deal with the possible case, important in these situations, where a worker is coerced to abstain from voting. So I think that the amendment is defective, even in its own terms.
6.45 p.m.
However, let me address the noble Baroness's difficulty with the existing wording of the clause. It appears she is concerned that undue influence is too broad a concept. Undue influence is a term borrowed from the law—the Representation of the People Act 1983—prohibiting illegitimate campaigning in public elections. It is borrowed from that because its clarity is always seen to be the greatest when trying to determine whether someone is being induced to vote in a fair or unfair way.
However, it also includes behaviours such as the threat to coerce or use force; causing or threatening injury, damage, harm or loss; and the impediment of the free exercise of the vote by fraudulent device or contrivance. Reducing the scope of this provision would mean, therefore, that activities other than coercion, but perhaps equally reprehensible activities, would not be caught. In particular, it is not clear that threatening behaviour would be an unfair practice under the procedure; nor would deliberately making false or misleading statements, impersonating another party or interfering with the voting process. I am sure that the noble Baroness, Lady Miller, would not wish any such behaviour to go unpunished under the statutory procedure; nor would she have intended that.
We are aware that the stakeholders have been unsure about the meaning of the words "undue influence". As we have made clear to them, attempting to provide an exhaustive definition of this term would limit the effectiveness of the unfair practices provisions in a way that no one would wish for or intend. We would inevitably miss some forms of improper campaigning, and experience in other countries has shown that, where parties are determined to intimidate, they can be very creative indeed in finding ways of getting round the law.

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We therefore need a general test that will catch all possible cases of intimidatory or similar behaviour. The term "undue influence", which exists in other legal statutes and whose efficacy has been seriously tested, serves a necessary purpose and the clause would be poorer without it.
The Government intend to produce a code of practice on unfair practices which will provide clear guidance to the parties on the meaning of "undue influence" and the kind of conduct it is likely to cover. We will of course consult fully with stakeholders on that code in draft.
These amendments could potentially—we believe that they would—undermine the effectiveness of the unfair practices provisions. Therefore, I respectfully urge the noble Baroness to withdraw them and I give the undertaking that the code of practice should deal with these matters exhaustively.
Baroness Miller of Hendon: I thank the Minister for his reply and his undertakings. Does he have any idea when the code of practice will be ready so that we can read it?
Lord Triesman: I was looking at that very question this morning. We would expect to have consultation in draft form within about three months. It would require affirmative resolution, so your Lordships' House will have the opportunity to look at it in proper detail, and we anticipate that it will be available for use early in 2005. Nothing in Clause 9 will come into effect until the code is in place.
Baroness Miller of Hendon: The Minister's last comment is helpful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 18 not moved.]
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 19:
Page 12, line 4, at end insert—
"( ) It is not an unfair practice within the meaning of sub-paragraphs (1) and (2) if the union as part of its campaign for recognition sets out in general terms the benefits of union membership."
The noble Baroness said: In moving Amendment No. 19, I shall speak also to our Amendment No. 26 to Clause 12, with which it is grouped. Both amendments deal with a similar issue: the first concerns recognition and the second derecognition.
Obviously, the Bill seeks to prevent pressure being put on employees—either by direct threat or in other ways—to try to ensure a particular result. There needs to be protection against intimidation and, of course, against violence. In the Bill, the Government have been anxious to ensure that they are seen to be even-handed. Therefore, the strictures apply to both employers and unions.
The Government's own amendments, which we shall shortly be debating, seek to clarify this clause. They specifically refer to the inadmissibility of violence or the dismissal of any employee. I am sure that most people would agree with that.
I think that those constraints are important, but a union seeking recognition and an employer opposing it are not in positions of equality. An employer holds all the cards. He can indicate in all kinds of ways that a pro-recognition vote would have devastating consequences. Therefore, the Government are right to spell out in their amendment that certain actions cannot be taken.
However, as the wording now stands, it would be possible for an employer to claim that a union was in breach of the provisions in these clauses simply because it was setting out as part of its general campaign the benefits of union membership. The employer could make an application to that effect to the CAC, claiming that offers were being made to employees in order to get them to vote for recognition.
Without an appropriate amendment to the wording of the Bill, the CAC could well feel that there was merit in such an application. Hence the wording of our amendment, which sets out clearly that it would not be an unfair practice within the meaning of the relevant sections of the Bill—either in relation to recognition or derecognition—if the union, as part of its campaign, set out in general terms the benefits of union membership. Of course, that is what unions do all the time. They produce leaflets setting out benefits for individuals, often including very important ones, such as access to legal aid and other individual benefits. That is part of a union's function.
The TUC is aware of this and has already written to me to point out that, without an amendment, the CAC could very well have cause for action simply because a union had emphasised the benefits of union membership as part of its general campaign for recognition.
I note that a code of practice will be produced and I am very pleased to hear about that. But it seems to me that, without something such as this on the face of the Bill, a difficulty could arise. A union rightly setting out in very general terms the benefits of union membership could, to some extent, have the whole recognition process interfered with by a reference to the CAC when that would not be necessary at all and, in any event, the union is simply setting out, as part of its general process, its benefits in order to attract members. I hope that the Government will see that the amendment has some merit. I beg to move.
Lord McCarthy: This is one of the most important amendments that we are asking the Government to consider. In a way, it is a very simple matter. The problem has been that the word "benefits" has been confused with the concept of a "bribe". A benefit is not a bribe and a bribe is not a benefit.
Recently, as a result of attempts to reverse the consequences of the Ullswater amendment, we have been talking a great deal about bribes—that is, bribes by an employer who tries to get people to leave a union by giving them certain incentives. We frequently said that employers were offering benefits, but they were offering a rather different—indeed, a totally different—kind of benefit from the kind that a union says it offers to its members and would-be members.

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Therefore, the whole idea of Clause 9, which concerns unfair practices in relation to recognition ballots, did not come about because of any specific bribes which unions gave, or were said to give, in order to get people to vote in ballots; it came about partly because of the benefits, which were really bribes, that employers gave to get people to leave a union.
Nevertheless, we are not against Clause 9. We favour the clause and we think that all, or most of, the items in it—those relating to coercion, undue influence and so on—could, and therefore should, apply to unions but not benefits because, in this context, benefits are different. Perhaps a different word should be found, but that is not the solution that we are putting forward in our amendment.
It is not only unions that use the argument of benefits. When a union is trying to gain recognition or membership, it says, "We handle grievances; we handle discipline cases; and we have a legal service. We got this much for our members last year". It quotes its achievements. There is no reason why employers should not quote their own achievements when they struggle to get people to vote the other way in the ballot. They may say, "Well, we gave you very good conditions. You are already earning more than most people who belong to trade unions". They say, "We have an effective, adequate system of information and consultation that does not require trade unions". They talk about their benefits and say, "If you join these unions, they will involve you in strikes and you will lose money". They put forward their argument for not having union representation and the workers and the workers' union put forward their argument regarding the benefits of trade union representation. That has nothing whatever to do with the kind of things that we are trying to strike at in Clause 9. That is why the Government should listen to what we are arguing and take an interest in, and be concerned about, our amendment.
Baroness Miller of Hendon: I ask a question and either the noble Lord or the noble Baroness can tell me whether I am wrong. My understanding is that there is nothing to prevent unions conducting recruiting drives at any time irrespective of the recognition process and that it would be perfectly in order for them to do that.
New sub-paragraph (2)(a) in Clause 9—the provision against undue influence—prohibits offering anything to a worker in return for the worker voting in a particular way. I comment mildly only that I believe there is quite a fine line between breaching that provision and the proposed amendment that would allow unions to campaign for union membership. I do not feel terribly strongly about the matter but I wondered whether one should not be rather careful about this as during the recognition process I believe that unions would be entitled to use records, addresses and so on. Would it be correct to use that for another purpose; that is, for recruitment?
Lord Triesman: As Amendments Nos. 19 and 26 make identical changes to Clauses 9 and 12 of the Bill,
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with your Lordships' permission I shall confine my comments to Amendment No. 19 for the purposes of simplicity. However, my remarks will apply equally well to Amendment No. 26.
I start by emphasising that the way in which the clause is framed is rooted in electoral law. It seeks, on the basis of a very well tried system, to ensure that people are not subject to inducements or commit improper actions.
My noble friends' amendments seek to address concerns that have been raised by the TUC with respect to the definition of unfair practices contained in paragraphs 27A and 119A. The TUC has indicated that it is concerned with the wording of paragraph 27A(2)(a). It is eager to ensure that it should not capture general statements by a union about the benefits of recognition, or, indeed, any other benefits that a union may provide.
The definition of unfair practices in relation to recognition ballots which we have set out in paragraph 27A(2) draws upon standards of behaviour for public elections as set out in the Representation of the People Act 1983. Paragraph 27A(2)(a) captures the offences of bribery and treating which are set out in that Act. Bribery is the offer of financial reward to a voter in exchange for his voting in a particular way, or for not voting at all. Treating is the offer of non-financial benefits.
Paragraph 27A(2)(a) states that a party to a recognition ballot uses an unfair practice if he,
"offers anything to a worker entitled to vote in the ballot in return for the worker's agreement to vote in a particular way or to abstain from voting".
I think we can all agree that bribery and treating of workers are practices which should be outlawed during recognition and derecognition ballots. Trade unions have, however, expressed concern that the wording of the provision may capture offers which will be legitimately made by a union in the course of a recognition campaign. For example, the union may wish to offer to deploy skilled negotiators who would push for negotiated improvements in terms and conditions if recognition were to be achieved.
Let me make it clear that the Government are in complete agreement with the trade union partners that this sort of statement, made in the course of legitimate campaigning, should not be considered an unfair practice. We are seeking to protect workers, unions and employers alike from underhand attempts to influence the outcome of a ballot. In doing so, we have taken care to ensure that the parties' right to engage in legitimate campaigning activity is not restricted. I use the word "parties" in the plural because it must be in the plural if this is to be a genuinely fair operation. Positive and responsible campaigning behaviour can only encourage participation and well informed voting choices. We intend to reinforce this in the code of practice.
I mention the code of practice again because that is where we shall be able to set out detailed guidance for the parties on the sorts of statements which constitute legitimate campaigning, without trying to write a list,

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which would never be an accurate or a fully exhaustive list, on the face of the Bill. There is no intention whatever to rule out statements of benefits.
However, the Government's legal advice is that paragraphs 27A(2)(a) and 119A(2)(a) do not have the effect which the unions fear. Put simply, that is because in order to fall within the meaning of an unfair practice, an offer must be made in return for a worker's agreement to vote in a particular way or not to vote at all. In the Government's view, it is difficult to see how the offer by a union of benefits such as improved representation as a consequence of recognition being achieved could be considered to have been made in direct exchange for a commitment by an individual worker to vote in a certain way. We do not believe, therefore, that amendments of this nature are required. In any case, I am not completely convinced that my noble friends' amendments would achieve the effect they desire. There are minor drafting points, as I know there always are at this stage so I shall not labour the point.
The Government are involved in ongoing discussions with the TUC at both ministerial and official level. The TUC have helpfully provided us with detailed explanations of their concerns and we are giving those very careful consideration. Should our deliberations reveal any doubt that the unfair practices provisions circumscribe the freedom of either party to engage in legitimate campaigning activity, we shall of course consider bringing forward amendments at a later time. I hope that I have been able to reassure my noble friends about their concerns. I respectfully urge them to withdraw their amendments.
7 p.m.
Lord McCarthy: The noble Lord has not been with us all that long, but we have been here so many times before. It is always said that legal advisers say that such matters will be in codes of practice, but they will never put them on the face of the Bill. It would be so much simpler if this were put on the face of the Bill. We do not necessarily want our words, but just give us some other words.
The Government made up the matter about negotiation; the noble Lord knows that much better than me. If there is a recognition campaign and one is trying to get membership, one will not stop to say, "You will have skilled legal advisers". That is very sophisticated. One says, "We shall get you more money", or, "Join this union and next week as soon as you have joined and we get recognition, we will put in a wage increase for another 10 per cent". That is a benefit. Some people may say that it is a bribe of some kind. So what? Cruel things take place and cruel things are said in such matters.
It is no good having legal advisers saying that in sophisticated situations it will not arise. It will arise. It is no good saying, "We are going to put in a code of practice", because we shall not see the code of practice until six or nine months after the Bill is on the statute book. The code of practice, as the noble Lord knows very well, will not be the law; it will be taken into
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account. There is no alternative: if one really wants to do something one should go away and make it up oneself or put something on the face of the Bill. I beg the Minister to put something on the face of the Bill, just for once.
Baroness Turner of Camden: First, I thank the Minister for the very comprehensive way in which he has dealt with our amendment. I am glad to learn that it is not the Government's intention to inhibit the campaigning that unions will do in pursuit of recognition. Of course, my noble friend Lord McCarthy is right. We want to see something on the face of the Bill. We are not wedded to our own words. This is Committee stage and this is a first stab. We tried this wording because we received from the TUC its views on the Bill. We did the best that we could at the time. That does not mean to say that we are wedded to the wording at all.
We want to consider what has been said. I share the view that we would like something on the face of the Bill. We want it made very clear that if unions set out their stall when they are campaigning, and say, as my noble friend has said, "We can do better for you than you can do for yourself; we are good at collective bargaining; we have a good legal aid system", and so on, that should not be seen as offering any kind of bribe to workers or giving any kind of excuse to an employer to head off to the CAC and complain that unions are utilising an unfair practice. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Triesman Lord Triesman moved Amendment No. 20:
Page 12, line 41, leave out from beginning to end of line 9 on page 13 and insert—
"27C (1) This paragraph applies if the CAC decides that a complaint under paragraph 27B is well-founded.
(2) The CAC must, as soon as is reasonably practicable, issue a declaration to that effect.
(3) The CAC may do either or both of the following—

(a) order the party concerned to take any action specified in the order within such period as may be so specified, or

(b) give notice to the employer and to the union (or unions) that it intends to arrange for the holding of a secret ballot in which the workers constituting the bargaining unit are asked whether they want the union (or unions) to conduct collective bargaining on their behalf.

(4) The CAC may give an order or a notice under sub-paragraph (3) either at the same time as it issues the declaration under sub-paragraph (2) or at any other time before it acts under paragraph 29.
(5) The action specified in an order under sub-paragraph (3)(a) shall be such as the CAC considers reasonable in order to mitigate the effect of the failure of the party concerned to comply with the duty imposed by paragraph 27A.
(6) The CAC may give more than one order under sub-paragraph (3)(a).
27D (1) This paragraph applies if the CAC issues a declaration under paragraph 27C(2) and the declaration states that the unfair practice used consisted of or included—

(a) the use of violence, or

(b) the dismissal of a union official.

(2) This paragraph also applies if the CAC has made an order under paragraph 27C(3)(a) and—

(a) it is satisfied that the party subject to the order has failed to comply with it, or

(b) it makes another declaration under paragraph 27C(2) in relation to a complaint against that party.

(3) If the party concerned is the employer, the CAC may issue a declaration that the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of the bargaining unit.
(4) If the party concerned is a union, the CAC may issue a declaration that the union is (or unions are) not entitled to be so recognised.
(5) The powers conferred by this paragraph are in addition to those conferred by paragraph 27C(3).
27E (1) This paragraph applies if the CAC issues a declaration that a complaint under paragraph 27B is well-founded and—

(a) gives a notice under paragraph 27C(3)(b), or

(b) issues a declaration under paragraph 27D.

(2) If the ballot in connection with which the complaint was made has not been held, the CAC shall take steps to cancel it.
(3) If that ballot is held, it shall have no effect.
27F (1) This paragraph applies if the CAC gives a notice under paragraph 27C(3)(b).
(2) Paragraphs 24 to 29 apply in relation to that notice as they apply in relation to a notice given under paragraph 22(3) or 23(2) but with the modifications specified in sub-paragraphs (3) to (6).
(3) In paragraph 24(5) for "10 working days" substitute "5 working days".
(4) An employer's duty under paragraph (a) of paragraph 26(4) is limited to—

(a) giving the CAC the names and home addresses of any workers in the bargaining unit which have not previously been given to it in accordance with that duty;

(b) giving the CAC the names and home addresses of those workers who have joined the bargaining unit since he last gave the CAC information in accordance with that duty;

(c) informing the CAC of any change to the name or home address of a worker whose name and home address have previously been given to the CAC in accordance with that duty; and

(d) informing the CAC of any worker whose name had previously been given to it in accordance with that duty who has ceased to be within the bargaining unit.

(5) Any order given under paragraph 27(1) or 27C(3)(a) for the purposes of the cancelled or ineffectual ballot shall have effect (to the extent that the CAC specifies in a notice to the parties) as if it were made for the purposes of the ballot to which the notice under paragraph 27C(3)(b) relates.
(6) The gross costs of the ballot shall be borne by such of the parties and in such proportions as the CAC may determine and, accordingly, sub-paragraphs (2) and (3) of paragraph 28 shall be omitted and the reference in sub-paragraph (4) of that paragraph to the employer and the union (or each of the unions) shall be construed as a reference to the party or parties which bear the costs in accordance with the CAC's determination.""
The noble Lord said: I shall speak to Amendments Nos. 20, 22, 29, 90, 91, 92 and 93. As the Committee will be aware, the measures contained in Clause 9 were added to the Bill in another place, as has been mentioned. As my honourable friend the Minister explained at the time those amendments were moved, intimidation is a complex issue. It has taken us some time to work out all the details and to consult key stakeholders on our full proposals.
Clause 9 currently contains a power for the Secretary of State to provide by order for the consequences of a finding by the CAC that a complaint of unfair practices is well-founded. The Government signalled their intention to bring forward amendments in your Lordships' House which would remove this power and put on the face of the Bill the remedies available to the CAC where it makes such a finding. I am pleased to present these remedies to the Committee in this group of amendments which provide the sanctions which apply where an unfair practice has been found to have occurred during the period of recognition ballots.
Grouped with the Government's amendments is Amendment No. 21 tabled by the noble Baroness, Lady Miller, which amends government Amendment No. 20. For clarity I shall deal only with the Government's amendments and I shall respond to the noble Baroness when she has moved her amendment.
The substance of the sanctions is contained in Amendment No. 20. The amendment deletes paragraph 27C, which contains the power for the Secretary of State to provide for the sanctions by order. It then adds new paragraphs 27C to F. Those provide that where the CAC finds that a complaint of an unfair practice is well founded it must, as soon as is reasonably practicable, issue a declaration to that effect. This signals clearly to the parties and, more importantly, to the workers in the bargaining unit that the behaviour in question was improper. If it considers it appropriate, the CAC may then issue an order against the party responsible—whichever party it may be—for the unfair practice to take such action as it considers reasonable to mitigate the effect of the unfair practice in question. In addition, it may decide that there should be a fresh ballot.
If the party in question fails to comply with the CAC's order or commits another unfair practice after it has received the CAC's order, then a second sanction may be issued against it. Later this week we shall see the start of the European football competition, to which many of us shall pay great attention, providing that the timetable of the House makes that possible. That is a heartfelt appeal. I believe that I have just described a yellow card and a red card system. In this case, the red card which the CAC may choose to award, depends on which party has committed a second unfair practice. If it is the employer who has ignored an order of the CAC or committed a second unfair practice, then the CAC will be able immediately to issue a declaration that the union is recognised. If the union is responsible for a further unfair practice or for failing to comply with an order to take mitigating action, the CAC may issue a declaration that the union is not entitled to be recognised.
This system is fair and workable. The CAC's ability to issue an order against a first-time offender ensures that the parties are given an opportunity to correct their behaviour. Should they fail to do so, however, this amendment provides for a strong sanction. I believe that this will act as a significant deterrent for any party contemplating furthering its own cause through illegitimate campaigning.
There are two exceptions to this "two strikes and you're out" approach. I have now mixed metaphors—one relating to football and the other to the United States— for which I apologise. The first concerns violent conduct. British industrial relations are peaceful industrial relations, which is good to say, and for the most part the parties seek to resolve their differences through dialogue. However, we know from the experience of other countries that certain parties have had resort to the violent intimidation of workers. There can be no place for such conduct in a civilised society.
The Government have therefore provided that, where a party is guilty of committing an unfair practice involving violence, the CAC will have the discretion to declare immediate recognition or declare that the union is not entitled to be recognised, even where it is a first offence. That would be a straightforward matter, quite apart from anything that may occur in terms of criminal law.
The same will apply to unfair practices by an employer which involve the dismissal of a union official. A union official is defined at Section 119 of the Trade Union and Labour Relations Act 1992. As well as a full-time officer of the union, a union official is any person elected or appointed in accordance with the rules of the union to be a representative of all or some of its members, including representatives who are employed by the same employer as the members whom he represents. In other words, this category covers the lay representatives of an unrecognised union.
The union's activist is normally vital to any campaign for recognition. He or she is the union's main point of contact with the workers and the main source of information about the progress of the campaign. Unfortunately, it is not inconceivable that a small minority of employers might seek to undermine the union's campaign by dismissing such a representative without justification. Unions allege that such behaviour has already occurred.
It is not hard to imagine the effect that that will have on the workers in the bargaining unit. The message is clear: vote for the union and you risk the same fate. Of course, employers must retain the right to discipline and dismiss their workers where that is called for. These measures do not seek to interfere with that right at all. However, where such a dismissal is made with the intention of intimidating other workers and damaging the union's ability to campaign fairly, the Government believe that it is right that the CAC should be able to impose the strongest sanction. Again, we are sending a clear message that such behaviour will not be allowed to undermine the statutory procedure.
These amendments have been designed to ensure that the CAC has sufficient discretion to ensure that it can take into account all the circumstances of the case before it. Cases where allegations of unfair practices are made may be complex, perhaps involving both claims and counter-claims about intimidatory behaviour. The context in which any unfair practice occurred and the behaviour of all the actors involved
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will be important in determining what sanction is appropriate and, in particular, whether it merits the strongest sanction. Moreover, a formal sanction may not be required where the intimidatory behaviour has backfired and workers have effectively punished the guilty party at the ballot box. The structure we have provided will allow the CAC to take into account all the circumstances of the case in order to decide whether a particular sanction is appropriate.
I draw the Committee's attention to the arrangements for the CAC to require that a further ballot be held. Where it finds that an unfair practice has occurred and the ballot has either closed or is already underway, it will he open to the CAC to order that a new ballot be held. The results of the first ballot may have been tainted in the eyes of the parties on both sides. We believe it is important that all the parties can have faith in the result of the ballot.
That is why it is important that the CAC should have the ability to order a further ballot where the result is above suspicion. We do not envisage that the CAC would choose to re-run a ballot where the party responsible for the unfair practice had lost the original ballot.
Amendment No. 22 makes it clear that, where the CAC exercises its discretion to call a second ballot, it is no longer under a duty to reveal to the parties the result of the first ballot. That is essential, otherwise it would taint the second ballot.
Amendments Nos. 29, 90, 91, 92 and 93 make consequential amendments to others parts of the Bill and to the parts of the schedule which contain cross-references to declarations of recognition by the CAC to include declarations under the CAC's new powers. I beg to move.
7.15 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved, as an amendment to Amendment No. 20, Amendment No. 21:
Line 38, at end insert "and in the event of such a declaration being made, the union shall not make another application to the CAC for recognition in respect of the same (or any similar) bargaining unit within the same employer for a period of 3 years of the making of such declaration"
The noble Baroness said: Before I begin, I sent a message to the Government side saying that I simply cannot stay tonight beyond 7.30 p.m. Therefore, I hope that we do not have to end in the middle of the grouping, and I shall be as quick as I can.
The Government's amendments to Clauses 9 and 12, introduced on 24 May, are intended to remedy deficiencies in the Bill following the GoNernment's introduction of the concept of dealing with unfair practices in relation to recognition ballots in new Clause 9 and in relation to unfair practices in relation to derecognition ballots in new Clause 12.
Subject to what I shall say in a moment about Amendment No. 21, I say at once that I appreciate the fact that the Government have implemented the promise that the Minister, the noble Lord, Lord Sainsbury, made to me to introduce amendments to

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meet the concerns that we had expressed to him about the original provisions, which we found to be very one-sided.
The new amendments do, indeed, go a very long way to meeting those concerns. In consequence, I was able to withdraw what I considered to be my somewhat more succinct amendments on that subject. However, I believe that some further tightening up of the provisions would not go amiss, and I hope that the Government will consider what I am about to say with a view to further tweaking. I do not expect the Minister to make a decision about that today. However, if, at some stage, he would like to write to me, I shall be happy to receive a letter.
I should like to see a union prohibited from relying on votes of persons who have been members for less than three months, who are in arrears with their union subscriptions or who have been made members of the union without paying any subscription. Members of the Committee who are members of a political party will recognise that that is a fairly standard provision—at least, it is in my party—to prevent a meeting being packed or a ballot box being stuffed.
I say at once that I do not suggest that to take part in a recognition ballot an employee must either be a member of a union or must promise to become one. The Bill, and the previous Acts that it is amending, do not impose any such qualification on an employee before he can vote in a recognition ballot. If the Government are willing to accept the principle of this point, I certainly agree that they should simultaneously remove any possible misunderstanding or ambiguity relating to the matter. I think that it is clear but the noble Lord may not agree.
The new paragraph and the Government's amendment should also make it absolutely clear that the decision about the existence of coercion or intimidation rests entirely within the discretion of the CAC. To avoid disruption of recognition procedures and litigation over possibly minor infractions by either side, the CAC should have the power to ignore it if it believes that any such activity is not significant to the outcome of the ballot.
That brings me to my Amendment No. 21. New paragraph 29D(4) proposed by the Government gives the CAC power to close down the recognition procedure if it is satisfied that a union has been guilty of what sub-paragraph (1) of that paragraph calls an "unfair practice".
My amendment to the Government's amendment would provide that, if the CAC found itself obliged to impose that drastic sanction, the recognition process should not be restarted for a period of three years. That is identical to the period already stipulated by Parliament—buried, I believe, somewhere in Schedule A1 to the 1992 Act, as amended by the 1999 Act, and referred to in the amendment tabled by the noble Lord, Lord Lea, which follows Clause 10.
It would be farcical for the CAC to dismiss the recognition claim because of union misconduct on Monday, only to find it starting it again on Tuesday.
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For the sanction to have any meaning at all, it needs to be coupled with a suitable period of self-denial. For the union to avoid the sanction, which only the CAC can impose, it simply must not indulge in what the Government have defined as an unfair practice.
The noble Lord, Lord Triesman, wrote to me following my speech at Second Reading. He complained that the amendment tabled in the other place by my honourable friend the Member for North West Norfolk to deal with intimidation said nothing about intimidation of workers by employers. I agree with that criticism as I know my honourable friend would, had he been allowed to debate his amendment, which under the rules of the other place he was prevented from doing.
The government amendment to Clause 12 covers the point. It gives the CAC the same sanctions over derecognition procedures if there is intimidation by employers as applies to unions in the case of the recognition procedure. The Minister in his letter to me mentioned union complaints of,
"evidence of this sort of behaviour by employers".
I do not doubt for one moment that such allegations may have been made. I cannot, of course, comment on their validity. I certainly do not want to get into a tit-for-tat argument about who has done what. I place on record that I am sure that the Minister and the Committee are at one in deploring any bad behaviour on either side in this kind of procedure. I beg to move.
Baroness Turner of Camden: The amendment is directed at unions in particular, so that they cannot apply for recognition for a period of three years. Does the noble Baroness, Lady Miller, consider that the same provision would be appropriate to an employer seeking derecognition but failing to get it? Would he be ruled out on the same basis? Would an employer be unable to attempt derecognition for three years?
Baroness Miller of Hendon: The noble Baroness makes an interesting and probably correct point. I shall certainly consider that.
Lord Triesman: I thank the noble Baroness, Lady Miller, for the way in which she has made her point. It was conspicuously even-handed. I also apologise for the length of my comments in introducing the new raft of material. It would have been silly to deal with serious new material casually.
Amendment No. 21 ensures that where the CAC has issued a declaration that the union is not entitled to be recognised because it has committed serious or repeated unfair practices, the union may not make a further application in respect of the same employer and the same bargaining unit for a period of three years.
The amendment is not necessary to achieve exactly that result. The Government's policy is that where the CAC declares that a union is not entitled to be recognised on the grounds of unfair practices, that union may not apply for recognition for the same bargaining unit, or a very similar one, for a period of three years. Like the noble Baroness, Lady Miller, the

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Government believe that it is important that once an application under the statutory procedure has reached its conclusion, there should be a period in which industrial relations are allowed to settle without the risk of continuous disruption through repeated applications. In the negotiations which led to the settlement contained in the 1999 Act, it was agreed that three years is a suitable period of time.
This policy is certainly not explicitly stated in Clause 9 because it is already provided for in the recognition schedule. Paragraphs 33 to 42 of the schedule set out the admissibility criteria which any application for recognition must meet in order to be accepted by the CAC. Paragraph 39 provides that an application for recognition is not admissible if the CAC has accepted an application in respect of the same or substantially the same bargaining unit in the previous three years (paragraphs 33 to 42).
Paragraph 39 will also apply without any need for amendment where the CAC had issued a declaration that the union is not entitled to be recognised under paragraph 27D(4). Such a declaration may be issued where the union has committed a violent unfair practice or repeated unfair practices, or because it has failed to comply with an order of the CAC to take action to mitigate the effects of an unfair practice that it has committed.
I should add that the three-year moratorium also applies in the case of derecognition, which was a question asked by my noble friend. I note that the noble Baroness has not tabled a corresponding amendment to government Amendment No. 27, but she was generous enough to say that it was an issue to which she would wish to attend. However, it is covered in the legislation. Where an employer's application for derecognition fails because he is guilty of committing unfair practices, a similar three-year moratorium will
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apply on further applications to derecognise the union. The same will apply to failed applications by a worker or workers.
The Government have already ensured that there will be a moratorium on further applications where a party loses its case as a sanction for having committed an unfair practice. For clarity that is needed. I respectfully ask that the amendment be withdrawn, given the assurances that I have been able to give. I believe that we have made the changes that my noble friend Lord Sainsbury said we intended to make. I am grateful to the noble Baroness for reminding the Committee of that as well.
Baroness Miller of Hendon: I am grateful to the Minister for his assurances and for the explanation that the amendment is not necessary. In those circumstances, I have pleasure in withdrawing my amendment.
Amendment No. 21, as an amendment to Amendment No. 20, by leave, withdrawn.
On Question, Amendment No. 20 agreed to.
Lord Triesman Lord Triesman moved Amendment No. 22:
Page 13, line 9, at end insert—
"( ) In paragraph 29 of that Schedule (duties of the CAC when informed of result of ballot), after sub-paragraph (1) insert—
"(1A) The duty in sub-paragraph (1) does not apply if the CAC gives a notice under paragraph 27C(3)(b).""
On Question, amendment agreed to.
Clause 9, as amended, agreed to.
Lord Davies of Oldham: This may be a convenient moment for the Committee to adjourn until Wednesday at 3.30 p.m.
The Deputy Chairman of Committees (Viscount Simon): The Committee stands adjourned till Wednesday next.
The Committee adjourned at twenty-seven minutes past seven o'clock.