HL Deb 03 July 1963 vol 251 cc974-89

7.20 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Carrington.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD AILWYN in the Chair.]

Clause 1 [The rights of employer and employee to a minimum period of notice]:

LORD CARRINGTON

moved, in subsection (3), to leave out "be void" and to insert "have effect subject to the foregoing subsections". The noble Lord said: I will, with your Lordships' permission, speak to Amendment No. 2 as well as No. 1 since they go together. As it stands at present, Clause 1(3) makes void any provision in a contract of employment for less notice than the minimum entitlement under subsections (1) and (2). Clearly something on these lines is necessary to ensure that the rights to notice in the Bill prevail over any less generous rights that may be in the contract, but I am told that the present wording could lead to a good deal of uncertainty in some cases, and the Amendments seek to prevent this.

The possibility of uncertainty arises in this way. If the notice provisions in an employee's contract are made void by Clause 1(3), no definite fixed entitlement is substituted by Clause 1, subsections (1) and (2), but instead there is simply a guarantee that the entitlement will not be less than the minimum in those provisions. When a contract does not contain any provision on notice—and that would apply to a contract if the notice provisions had been made void by Clause 1(3)—the courts take the view that it may only be terminated on reasonable notice or on the customary notice, if there is a custom which can be applied to the case under consideration. Therefore, as a result of the terms on notice being made void an employee might turn out to be entitled to much more than the minimum in Clause 1(1), or alternatively obliged to give much more notice than the minimum in Clause 1(2). I think your Lordships will agree that this uncertainty is wrong and might give rise to litigation. So the Amendment has been put down to take care of the point. I beg to move. Amendment moved, page 1, line 22, leave out ("be void") and insert the said words.—(Lord Carrington.)

On Question, Amendment agreed to.

LORD CARRINGTON

I beg to move Amendment No. 2.

Amendment moved— Page 1, line 22, leave out ("subsection") and insert ("section").—(Lord Carrington.)

On Question, Amendment agreed to.

7.23 p.m.

LORD JESSEL

moved to add to the clause: (7) Subsection (1) of this section and Schedule 2 to this Act shall not apply in relation to the termination of the contract of employment of any person due to short-time working or temporary cessation of work arising out of a strike either in the establishment in which that person is employed or elsewhere.

The noble Lord said: I dealt fairly fully on the Second Reading of the Bill with the point raised by this Amendment. It seeks to make it clear that when there is no work for employees, owing to a strike in their own factory, or in another factory which supplies essential material and therefore makes further production impossible, the employer is not bound by the provisions in regard to notice of Clause 2 and Schedule 2 of the Bill. My noble friend Lord Carrington, when replying to me in the Second Reading debate, gave me what I thought was an encouraging answer, to the effect that the provisions of this Bill will not affect the right of employers to lay off workers temporarily without notice in circumstances where the terms of the contract permit. He went on to say [OFFICIAL REPORT, Vol. 250 (No. 98), col. 1527]: A temporary lay-off of this kind can be distinguished from termination of employment, and the Bill applies only where termination is concerned. I hope that my noble friend adheres to that point of view. If he does, I think he will accept my Amendment, which merely clarifies the opinion he has already expressed.

It is only fair to say, however, that I have another reason for wanting this Amendment included in the Bill. That is that some of my friends in the engineering industry are doubtful whether, if notice to terminate employment is given, as is necessary under their national agreement, it can be described as a layoff. It is clear, I submit, that the operative contract of employment has been terminated, and it is only by this means that the employers covered by agreements like that in the engineering industry can avoid the necessity of continuing to pay the weekly guarantee when, through no fault of their own, and owing to causes beyond their control, there is no work available. I beg to move.

Amendment moved— Page 2, line 13, at end insert the said subsection.—(Lord Jessel.)

LORD LINDGREN

I hope that the Minister will not accept this Amendment. It is unnecessarily provocative. I would agree generally, having listened to the words read out by the noble Lord, which he attributed to the noble Lord in charge of the Bill, that it is common, if there is no work through some disaster upset, or a strike, for the employer to send men home. But that is not terminating a man's contract. Sometimes, it is true, when an employer sends a fellow home, and says to him "Come back on Wednesday", he says "I will have my cards". Then it is he who has terminated the contract and left the employment. But an employer does not terminate the contract and give a man his cards, telling him not to come back or wait at home until he is sent for, over the problem of a strike. Happily, industrial disputes are temporary, and it is accepted within industry that temporary arrangements arising from a situation like that are arrangements with both sides. I hope this Amendment will not be accepted, mainly for the reason that it is provocative, and I do not think that we should be unnecessarily provocative in legislation.

LORD CARRINGTON

As he said, my noble friend raised this matter on the Second Reading, and I gave an answer at very short notice. Since then I have had an opportunity of examining the point at rather greater leisure and in rather greater detail. There is no doubt that my noble friend has raised a difficult point, but an interesting one. What his Amendment sets out to do is to give the employer the right to terminate an employee's contract without being bound by the Bill if the termination is due to short-time working or lay-off resulting from a strike of other employees, whether in the same establishment or elsewhere. I appreciate this argument. Most industries are covered by collective agreements which guarantee employees a minimum weekly wage. In engineering, for example, employees are guaranteed employment for four days in each normal pay week, and if there is not enough work to go round for four days employees are nevertheless guaranteed earnings equivalent to the time-rate for 34 hours' work.

At present, an employer can usually free himself from the obligation to pay the guaranteed wage by giving his employees a week's notice of termination. At the end of the week the employees are, in effect, dismissed, though there may well be an understanding that they will be re-engaged when production picks up. The aim of my noble friend is that the employer should still be able to do this after the Bill comes into force in the special circumstances of short time working or lay-off arising from a strike of other employees, whether in the same establishment or elsewhere.

I think there is the greatest difficulty about accepting this Amendment. Its effect would be that an employer could get rid of employees for good on short notice, or even none—it would depend on the contract—because of a temporary hold-up that was not due to any action the employees in question had taken. I think it would be very difficult to justify altering the Bill in that way. Another point is that even if the employer did re-engage the employees later, they would have lost their record of continuous employment and would have to begin afresh to qualify for the rights they have under this Bill. This would not necessarily happen, but it could happen.

I think those are two formidable objections to this Amendment, and make it worth inquiring whether the engineering industry, which my noble friend has particularly in mind, is not in a position to make satisfactory arrangements to sort out these difficulties. The first point is that the situation which arises when there is a strike of employees in the same establishment is already adequately covered by many, if not all, collective agreements. In engineering, for instance, the guaranteed wage agreement is automatically suspended in these circumstances. In other industries I believe the guarantee would cease to apply either straight away or after a short period. The Bill will not in any way disturb these arrangements.

As regards a hold-up due to a strike elsewhere, there are many collective agreements under which the guaranteed wage would cease to operate either straight away or after a short period. Again, the Bill does not interfere with these arrangements. But I recognise that this would not always be the position, and engineering is a case in point. For the status quo to be maintained in engineering, the agreement would need to be altered to permit the guaranteed wage to be suspended at one week's notice in the event of work being held up by a strike outside the establishment concerned. So, to sum up, I say that I think there is great difficulty, for the reasons that I have given, in amending the Bill in the way that my noble friend suggests. But I think he has raised a good point and, as I have made clear, the Bill does not prevent satisfactory arrangements in industry to meet the difficulties. I would suggest that the way to meet his point is that the industry, the employers and the unions, should get together and come to some arrangement over this difficult point. I hope, in view of what I have said, that he will feel it possible to withdraw his Amendment.

LORD JESSEL

I should like to thank the noble Lord for his reply. I appreciate that probably my Amendment makes what I would call too big a hole in the notice arrangements of the Bill. I will read what he has said most carefully. It may be that I shall feel that I ought to raise it again on Report stage, but to-day I shall be pleased to withdraw my Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 1, as amended, shall be agreed to?

LORD SHACKLETON

There is one small point on subsection (3). I take it that the fact that there will be written into a Statute a provision that payment in lieu of notice can be given will not affect the position that such payments are normally free from tax? I do not know whether the noble Lord is in a position to answer that question.

LORD CARRINGTON

I am afraid that, off the cuff, I could not answer that question. I do not know the answer. But I will find out, and the noble Lord can raise it on the next stage of the Bill, or I will write to him and tell him the answer.

Clause 1, as amended, agreed to.

Clauses 2 and 3 agreed to.

Clause 4:

Written particulars of terms employment

4.—(1) This section shall apply in relation to terms of employment only if and so far as those terms are not contained in a written contract, and no account shall be taken under this section of employment during any period when the hours of employment are normally less than twenty-one hours weekly.

LORD CARRINGTON

Amendments Nos. 4 and 5 go together. The object of these two Amendments is to clarify the position of an employee whose normal weekly hours increase so that he is brought within the scope of Clause 4, or fall so that he is no longer covered by it. The effect will be that when an employee whose normal working hours have been 20 a week has them increased to, say, 22 a week and so becomes entitled to a written statement under Clause 4, the provisions of Clause 4 will apply as if the employment had begun on the date when his normal weekly hours were raised. The employer will have to give him a written statement within 13 weeks of that date. I think that this is a minor, but a useful, clarifying Amendment, and I beg to move.

Amendment moved— Page 2, line 38, leave out ("and") and insert ("(2)").—(Lord Carrington.)

On Question, Amendment agreed to.

LORD CARRINGTON

I beg to move.

Amendment moved— Page 2, line 40, at end insert ("and this section shall apply to an employee who at any time comes or ceases to come within the exception in this subsection as if a period of employment terminated or began at that time").—(Lord Carrington.)

On Question, Amendment agreed to.

7.35 p.m.

LORD LINDGREN

moved, in subsection (2), to leave out "thirteen weeks" and insert "forty-eight hours". The noble Lord said: On behalf of my noble friend Lord Williamson, I beg to move the Amendments which stand in his name. He has asked me to apologise to the House for not being able to move the Amendments himself, but I am sure your Lordships will excuse him when I say that this is due to a family bereavement and that he has had to attend a funeral arising from it.

When one looks at the Explanatory Memorandum of the Bill one finds that paragraph 1 says: The purpose of this Bill is to require a minimum period of notice to terminate employment and also to require employers to give written particulars of terms of employment. To my simple, working-class mind, there does not seem anything particularly difficult in that; yet here we have a Bill of 13 pages, with 8 clauses and two Schedules, and, as a Bill, it seems a wee bit of a mess. Though I may not be strictly in order on these Amendments, may I say here that I think this Bill is a little difficult, because the vast majority of employers are good and maintain conditions far better than those which are outlined in the Bill. While I doubt whether the best of the employers will ever degrade their existing conditions by bringing them down to the minimum that this Bill provides, there is always the danger that instead of being a minimum for employers, this will become a maximum.

Then we come to Clause 4. This is going to give an employer 13 weeks to tell a fellow what his rate of pay is, how many hours of work he has to do, when he has to clock on and when to clock off. I have never heard of anything so ridiculous. There is nobody who goes for a job but who, at the first opportunity of meeting either the employer, the foreman, or whoever is setting him on, does not ask what is the rate of pay, how many hours are to be worked, whether there is any overtime, and what are the overtime rates. He is given the information by the employer. Why we should have 13 weeks in which an employer has the opportunity to set out the rates of pay and conditions of the employee, just beats me. I think it is silly.

I am surprised because the Ministry of Labour is responsible for this Bill. They have a knowledge of what goes on in industry. The Ministry of Labour must know that practically every employer has set out, either on a printed form or on cyclostyle sheets, the rates of pay of the various grades of employees within the industry, and the general terms and conditions of employment, often including with these the fringe benefits as well. To say that a man starting on a Monday morning should work for 13 weeks before the employer informs him of the terms and conditions, is I think, just foolish.

With your Lordships' permission, we can take Amendment No. 7 with this Amendment. Not having been satisfied with giving the employer 13 weeks within which to set out the terms and conditions of employment, the Bill then says that when the employer does so, they need not be the conditions operating at the time when he informs the employee; he can even put them back for a week. We know that in industry rates of pay change. There could have been an award throughout the industry starting on a Monday morning. The employer gives the man his terms and conditions on the Tuesday morning, and he can back-date them to the previous week, when the rates of pay, if not the conditions of employment, were out of line with what is laid down.

I suggest that the Amendment put down by my noble friend Lord Williamson is a very modest one indeed. All he is saying is that we should amend this clause so as to give the employer 48 hours in which to furnish the employee with the terms and conditions of employment, and that the conditions and terms of employment should be those operating at the date when he is given them. What I have said covers Amendment No. 7 as well. I beg to move this Amendment.

Amendment moved— Page 3, line 1, leave out ("thirteen weeks") and insert ("forty-eight hours").—(Lord Lindgren.)

LORD CARRINGTON

I have some sympathy with some of the things the noble Lord, Lord Lindgren, has said, but I do not think that on behalf of the Government I can accept this Amendment. I hope to explain why. I thought that the noble Lord seemed to imply that employers would always wait thirteen weeks before giving a written statement. But the thirteen-week period is a maximum, and I am certain that many employers will give the statement a great deal earlier than that. I hope that all of them who can give it early on will do so. In exactly the same way I hope that the minima in this Bill will not be treated as maxima, and vice versa. There is obviously a good deal to be said for this written evidence of the terms of employment being available as early as possible.

However, I must say that the proposal that the statement should be given within 48 hours of starting work is completely impracticable. It may be that many larger employers would be able to hand their employees printed statements of their terms and conditions the moment they take them on. But the smaller employer is much less fortunately placed. He may well have to make a fresh statement for each employee he engages, and he cannot always be expected to do so within 48 hours. There may be all sorts of other practical difficulties. For example, the employee may have been a member of a pension scheme run by his previous employer and it may take a little time to establish the position on the transfer of his rights to his new employer's scheme.

Another point is that it is common for there to be a probationary period of two, three or four weeks after engagement before an employee is taken on permanently. In the engineering industry, for instance, there is a four-week period of probation during which the employee's employment can be terminated at the end of any day. I think that it would be very reasonable for the employer to decide in these circumstances that he would not give the employee the written statement until the probation has been completed. There are also very strong practical reasons for not reducing the time limit below thirteen weeks. Where employment is temporary or seasonal it would be unreasonable, and in many cases impracticable, to try to compel the employer to provide a written statement. Agriculture provides a very good example of this because a farmer with, at most, one or two regular employees, and no office staff, may engage large numbers of people—perhaps 100 or more—to harvest vegetables or pick fruit crops. These people come and go and the farmer simply has no means of telling who has been with him for how long. Quite obviously, it would be ridiculous to ask him to give them written statements—which, incidentally, would not very often be of any interest to those to whom they were issued. If the present Amendment were adopted, it would be necessary to give written statements to people taken on for any sort of temporary work, such as snow clearing in winter and that kind of work, and I should have thought that that was absurd.

The second point raised by the noble Lord opposite was that providing for terms of service to be up to date on the day they are given; in other words, that the written statement ought to be completely up to date on the day it is given and that the Bill should not allow it to state the terms as they were at a date not more than a week before. This is a question of what is reasonable and practicable. The employer may draw up the statement so that it is absolutely up to date, but by the time it has been typed and gets to the employee agreement may have been reached on the alteration of one of the terms in a relative collective agreement, or there may have been a minor change in a pensions scheme. That is the sort of thing that is bound to happen, and of course we must allow for it. This the Bill does, and I find it hard to believe that that sort of thing would lead to much abuse. So although I have sympathy with the noble Lord, and I agree with him that these written statements should be provided as soon as possible, I do not think that we should lay down a period less than that already in the Bill.

LORD SHACKLETON

I honestly do not think that the First Lord has made any case at all for the thirteen-week period. We have been told a little about hop-pickers and people picking vegetables, and, on the strength of this, this tremendous piece of legislation which is going to cover every worker in industry is going to be geared to certain casual workers, most of whom are agricultural. It is, of course, an absurd lowest common denominator to apply. The noble Lord said that there might be difficulties over sorting out pensions. There is not the slightest difficulty in dealing with this. In so far as the pension situation is obscure it cannot at that moment be stated. All that is required under Clause 4 is that there should be terms and conditions relating to pensions and pension schemes". If you do not know whether or not the individual is covered you cannot state those terms and conditions, and it may well in any event take longer than thirteen weeks to ascertain.

This has now become rather worse because the reasonable period of five weeks which was in the Bill originally was removed in another place by Government action and was extended to 26 weeks. It is true that it is a practice throughout a large part of industry to treat employment as temporary or provisional for four weeks and during that time to be on one day's notice. Surely within the four or five weeks anybody can produce a statement of the terms of contract, bearing in mind that the contract exists from the moment the individual is taken on. I do not believe the noble Lord particularly believes in his case. I confess I myself do not take a strong view on the 48 hours, but I should have thought that thirteen weeks was quite excessive. To that extent, I strongly support my noble friend in the arguments he has put forward.

LORD LINDGREN

I, too, am not satisfied with the reply of the noble Lord, Lord Carrington. It is fantastic, because in the vast majority of industries the trade union rates, conditions of employment, general overtime rates, conditions for night work, and so on, are well-known to employers. The day has gone when the employer paid Tom 2d. an hour more than Dick and Harry. They all get the same general standard rates and conditions of employment. In fact, with the majority of employers—the bigger ones, at any rate—the conditions of employment, rates of pay, et cetera are printed.

The argument was put forward that the small employer could not do this. Well, he must be a very small employer if he has not got a typist who can type out a stencil and run a few forms off on a duplicator. When it comes to farmers, I do not have a great knowledge of how to speak for them, but I have always understood that their records, calculations, and scientific organisation these days is good. I understand they have quite an experienced office staff behind them, and looking after them would not be difficult. I think that what has been stated has been an excuse for delays. I do not think it is really required, but in view of the time I would not ask my colleagues to go into the Division Lobby. However, I certainly will not withdraw the Amendment, but would prefer it to be negatived.

On Question, Amendment negatived.

On Question, Whether Clause 4, as amended, shall stand part of the Bill?

7.51 p.m.

LORD SHACKLETON

Clause 4 is the most difficult clause in the Bill, and want to say a few words on it, not on this occasion in the interests of the employee, but in the interest of the unfortunate employer who has the problem of interpreting it. I should like to draw your Lordships' attention to subsection (1) and subsection (2). Subsection (1) says: This section shall apply in relation to terms of employment only if and so far as those terms are not contained in a written contract … The wording has now been amended in a small degree, but it does not affect the basis of what I am going to say. Subsection (2) says: Not later than thirteen weeks after the beginning of an employee's period of employment with an employer, the employer shall give to the employee a written statement identifying the parties, specifying the date when the employment began, and giving the following particulars of the terms of employment … Subsection (1) does not say anything about its being necessary for the employer to give such a statement. It looks to me, therefore, as if the statement that must be given in all circumstances—and I spent quite a long time seeking legal advice on this matter, without getting a very clear definition—the absolute minimum that will have to be given by any employer, if he already provides a contract, will be the written statement identifying the parties and specifying the date when the employment began. If my interpretation is correct this seems to me to be the most useless thing he could do.

There are quite a number of employers who do put their employees on to written contract, and this written contract will probably cover most of the points that are covered in the Bill. If there are any which are not, it will be relatively easy for the employer who does this to add them, but he does not necessarily give a copy of that to the employee. In fact it is very likely that he will not do so, for the perfectly good reason that in the course of time that contract will be amended; and these amendments may well be made by letter, which is itself likely to be a written contract. In those circumstances, the employer cannot give a copy of the contract. Therefore the individual worker will either have nothing given to him or he will have merely a piece of paper telling him the name of the employer, which he probably knows, and the date when he began employment, which he again probably knows.

We are inflicting upon industry a great deal of additional paper. In the case of many firms the turnover may be very large indeed. Indeed, a firm with which I am associated may have a turnover of as much as 4,000 people in the course of a year. This is rather lower than the average of the particular trade. This provision means 4,000 extra bits of paper. It is arguable that we could give everybody a copy of the contract, but that would mean 4,000 rather more expensive bits of paper. It is arguable that we should, in addition, give a written statement as well as the contract, but that would be a rather dangerous thing to do and would need special certification. If one gave a copy of the contract, it would presumably have to be a certified one; or if it were a counterpart agreement it might attract stamp duty.

I do not think this matter has been fully thought out. Indeed, that applies to a great deal of this legislation which has been rushed through in too much of a hurry, and I feel that some sort of clarification ought to be given on this. This is not a minor point. I want to urge that, whatever is the right interpretation, some amendment should be made to this clause so that it will be rather clearer to those people who have to interpret it. It may well be that the Government will produce a satisfactory statement or guide to employers, though my experience is that when one finds a particularly tricky bit of legislation a guide may merely quote that tricky bit, because it is so important that they should get it right, and in the event they will have to go back to lawyers to advise them. Large firms have lawyers to advise them, and they will probably sort out these difficulties; but the small man, or the farmer, will not be able to do this. In the case of the farmer, he will probably get guidance from the National Farmers' Union or some other organisation.

I do not think this is good enough. It has been a criticism of this Bill that it has been much too hastily drafted without sufficient consultation. This is the sort of difficulty that we get into, and I wonder whether I might press the First Lord, first to say what he thinks this means, and, secondly, to attempt to make it rather clearer.

LORD CARRINGTON

Speaking as a farmer I am very grateful for the solicitude which the noble Lord, Lord Shackleton has shown. I think he has raised an interesting and useful point. Of course I would not agree with him that this legislation has been ill-considered, because if we follow to its logical conclusion what the noble Lord is saying the Government would never accept any Amendment from the other side of the House at all since the Bill would be perfect. This is what the Committee stage is for, and we all ought to be grateful to the noble Lord for having raised this point. Certainly it is not the intention of the Bill to do what the noble Lord suggests might be the consequence. The intention is that subsection (1) should, so to speak, prevail and that all the rest of the clause would fall to the ground. If the conditions in subsection (1) were carried out, then it would not be necessary to do any of the other things concerned in Clause 4.

However, my Lords, the noble Lord has raised one or two interesting points, and in view of what he has said I should like to take them away and have a look at them, and perhaps on the next stage of the Bill either he can put down an Amendment or we could meet in order to decide whether or not any Amendment is necessary. I will give the noble Lord an undertaking to look at this before the next stage of the Bill.

8.0 p.m.

LORD McCORQUODALE OF NEWTON

I wonder whether, as the Minister is going to look at this point, he will look at one or two others. It is true that this is a very complicated measure which is endeavouring to deal with a perfectly simple proposition, as was put forward at the beginning. I think that it is probably necessarily so. I know that the lawyers at the Ministry spent many anxious nights trying to get this right. We talk about the employers all the time. Who are the employers? Who are the employed persons? All the employers are employed persons. Are they going to give themselves written contracts of employment? Will the managing director get one from the chairman, and will the chairman get one from the managing director? No suggestion is made in this about top management; yet presumably top management comes in as much as anyone else. I should like to endorse what the noble Lord, Lord Shackleton, said, that it is essential, before this Bill comes into force, that some simple child's guide for this clause should be issued.

LORD SHACKLETON

I am afraid that on the Motion, "That the clause stand part", I am now going seriatim through some of the difficulties. I have had a discussion lasting an hour and a half with a very experienced lawyer, who was as mystified as I was on a number of points. On subsection (5), if there is a written contract I take it that there will be no need to inform the employee in writing of the nature of the change.

The next point I should like to ask the noble Lord is this. Presumably, this piece of paper which is going to be given will have to indicate its origin. This is another ticklish point which I should like him to think about. Presumably, it will also indicate that it is from the employer. It will need to have his address, or something will have to be put on it. If the individual who receives this piece of paper says, "Would you mind signing it?", then, as I understand it, it will immediately become a contract; whereas, in fact, under the requirements of the Bill it is not intended to be a contract. It may put the employer in an awkward position in that, while not purporting to be a contract, it will become a contract, and to be valid it may need to have a stamp put on it. Will the advice which is given to employers, therefore, include advice that in no circumstances must they sign this piece of paper? If I may say so, this is another example of how I think this clause has not yet been fully thought out.

LORD CARRINGTON

I do not imagine that the noble Lord will expect me to answer a detailed point of that kind, of a very legal nature, without any notice. I will of course as I have said, look into the matter. He has asked me a question and, of course, I will look into it.

LORD SHACKLETON

I thank the noble Lord. I was merely expecting the usual courtesy of an assurance.

Clause 4, as amended, agreed to.

LORD CARRINGTON

I understand that, through the usual channels, it has been agreed that we should adjourn the Committee stage at this point. Accordingly, I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.