INDUSTRIAL RELATIONS BILL

HL Deb 13 July 1971 vol 322 cc215-70

4.9 p.m.

Report stage resumed.

LORD DRUMALBYN

My Lords, with the permission of the House, I should like to make a personal statement, because I am afraid that I misled the House, quite inadvertently, by something that I said. I said words to the effect that "reinstatement" was defined in the Labour Party's Bill as re-engagement of the employee either by the employer by whom he was dismissed, or by the successor of that employer, or by an associated employer. I have been able to refresh my memory from the exact text since then and I find that that is not accurate.

What I should have said was that there are two things there plainly: first, re-engagement of an employee either by the employer by whom he was dismissed or by a successor of that employer, or by an associated employer; or, second, where re-engagement does not take place, then under that Labour Bill an order to be made for reinstatement in the employment from which he was dismissed either in the position he held immediately before the relevant date or in a different position which in the opinion of the tribunal would be reasonably suitable. My Lords, I apologise unreservedly to the House for having made this statement.

LORD DIAMOND

My Lords, I do not know whether it is your Lordships' practice for somebody on this side to rise and say how grateful we are to the noble Lord for what he has said, but I should like to do so.

LORD STOW HILL

My Lords, my noble friend Lord Diamond having said that, and I having wanted to say it very much but thinking I should not be in order to make an observation on a personal statement, I was going to move the next Amendment in order to give myself the opportunity of saying how very grateful I am to the noble Lord and how I honour him for having got up immediately to correct his mistake. It is extremely easy to make mistakes of that kind and, having known him for a great many years as a Member of Parliament, I may say that it is exactly what I should have expected from him.

THE LORD CHANCELLOR

My Lords, I understand that Amendment No. 85B is not moved.

LORD STOW HILL

My Lords, I did say that: I had intended to move it in order to make the observation that I made earlier regarding the noble Lord's statement, but I did not know whether, if I did so, I should be going against the rules of the House. But I said that I thought there was no useful point in moving the next Amendment.

THE LORD CHANCELLOR

They are on the same point: I thought that we were discussing them together.

4.12 p.m.

LORD DIAMOND moved Amendment No. 85B:

Page 81, line 12, after ("so") insert ("reinstated").

The noble Lord said: My Lords, I am in your Lordships' hands. The Amendment is down in the names of Lord Diamond and Lord Stow Hill. My noble friend has explained why he was proposing to move this Amendment, which was in order to offer courtesy to the noble Lord, Lord Drumalbyn. I am proposing to move this Amendment in order to continue discussion of the substance of the matter now that a totally new situation has emerged. I hope that will be in order.

I beg to move this Amendment. There is no need for me to repeat the arguments that went on on the previous Amendment. We had reached the situation where both sides of the House were agreed that reinstatement would be a very good thing to include in the Bill if it could be so prescribed, and difficulty arose because we were informed it had never been used in a legal context. Then my noble friend Lord Stow Hill produced the legal context in which it had been used. That then was explained away, erroneously, by the noble Lord, Lord Drumalbyn.

Now let me, if I have your Lordships' patience, recite to your Lordships' House what in fact the text provided, because to every fair-minded person I think it makes absolutely clear that not only is "reinstatement" a word which has been used many times in a Bill which provides for exactly what the Government want to provide in this paragraph, but that without the word "reinstatement" it is obviously going to have a different effect. Clause 37 of the Industrial Relations Bill which received a First Reading, is the clause where this word is first used. I shall read only the part of it that is relevant. If your Lordships wish me to read it all I shall be pleased to do so. Clause 37 says: Where, on reference of a claim to a tribunal under this Part of this Act, the tribunal finds that the employee was unfairly dismissed… that is what we are considering— and that he has not been re-engaged as mentioned in subsection (2) of this section "— and so on.

May I refer now to what subsection (2) says in relation to re-engagement: (2) In the preceding subsection the reference to the re-engagement of an employee as mentioned in this subsection is a reference to the re-engagement of the employee either by the employer by whom he was dismissed or by a successor of that employer or by an associated employer. So we now get back again to the first part— the tribunal finds that the employee was unfairly dismissed and that he has not been re-engaged as mentioned in subsection (2) of this section, the tribunal

1. (a) shall make an order for reinstatement under section 38 of this Act if, in accordance with that section, reinstatement is the appropriate remedy or…"—

something else, or compensation.

We now therefore turn to Clause 38 and this describes an order for reinstatement. This clause is about 20 lines long, and with your Lordships' permission, I think I must read it in order to make the point clear: For the purposes of this Part of this Act reinstatement is the appropriate remedy where—

1. (a) the tribunal is of the opinion that in the circumstances it would be practicable for the employee, if he agreed, to be reinstated in the employment from which he was dismissed, either in the position which he held immediately before the relevant date or in a different position which in the opinion of the tribunal would be reasonably suitable to him, and
2. (b) the employee agrees to be so reinstated.

(2) Before determining whether it would be practicable for the employee to be reinstated as mentioned in subsection (1)(a) of this section, the tribunal shall take into account any representations relating to reinstatement of the employee which may be made to the tribunal by or on behalf of the employer at the hearing or which in accordance with industrial tribunal regulations have been made by or on behalf of the employer before the hearing. (3) Where the tribunal is of the opinion that it would be practicable for the employee to be so reinstated, the tribunal—

1. (a) shall indicate to the employee whether the reinstatement would be in the position which he held immediately before the relevant date, or, if it would be in a different position, shall indicate to him the nature of that position…"

and so on.

Subsection (4) reads: An order for reinstatement under this section shall require the employer, on such date as may be specified…to reinstate the employee in his employment and shall indicate…the position in which the employee is to be reinstated.

My Lords, I have read practically the whole of that clause and the relevant part of the preceding clause. It is absolutely clear that "reinstatement" is repeatedly used in this clause to describe a situation which all of us on this side of the House are anxious to achieve and which we believe that the Government are also anxious to achieve. Therefore I have no alternative but to put the view again before the noble Lord and to ask him whether, in the light of the inadequate information which he had at his disposal when he rejected the earlier Amendment and in the light of the additional information which is now available to him, he will be good enough to reconsider the matter between now and Third Reading. Here is a really important issue. We are all trying to achieve the same thing. The noble Lord thought there was no method of doing it. We found that impossible to believe, and we found an example by which it could be fully and satisfactorily done. I hope that the noble Lord will give this matter further consideration.

THE EARL OF BALFOUR

My Lords, I wish to say only a few words. First of all, I think that the apology and explanation given by my noble friend Lord Drumalbyn made the position even more clear than it had appeared from his earlier statement. We are dealing in this clause with the unfortunate man who has been dismissed. He has then gone to the trouble of going to the courts. The counts have investigated the matter and come to the question of either trying to get that person back into employment with his previous employer or leaving the man unemployed, with his compensation. If the word "reinstatement" is to be taken to its fullest extent, it means then that the courts have the choice of either arranging for the employer to pay that man compensation or that he is reinstated in exactly the same job, making the whole position extremely difficult. If, on the other hand, the courts have the wider opportunity of encouraging the employer to re-engage that man—if necessary at the same salary, but doing a slightly less important job, or something like that—I feel that this goes a very long way towards getting that man back in employment. From what has been said by the noble Lords opposite, it appears to me that they would rather have the person either reinstated completely or left unemployed, with compensation. This is not the sort of thing that I should like noble Lords on this side of the House to support.

4.22 p.m.

LORD DRUMALBYN

My Lords, as I said before, I sympathise with the objectives of the noble Lord opposite, but on this occasion I do not sympathise with his logic. He will remember—in fact he read it out—that the Labour Government's Bill, which got only as far as First Reading, included the word "reinstatement". There is no difference between us here. I said that, so far as I knew, and I was told, the word had not been used in any Act of Parliament. It had been used in a title and in a rubric and it has been used in a Bill. That is the first point. The second point is that the Labour Government's Bill provided for reinstatement by order of a tribunal. The present Bill does not provide for reinstatement by order; it provides for re-engagement by recommendation, a recommendation for re-engagement. The noble Lord read out the two paragraphs concerned, and the alternatives were perfectly clear. First of all, there was the possibility that the employer would reengage or that a successor of that employer would re-engage, or that an associated employer would re-engage. Secondly, if that was not done, there could be an order for reinstatement in the same employment—that is, in the employment from which he was dismissed—either in the position which he held immediately before the relevant date or in a different position.

My Lords, is it not abundantly clear that this proves the point I was making: that, without any doubt whatsoever, reinstatement is included in "re-engagement"? Either the man could be re-engaged by the same employer or a different employer—that is an associated employer or a successor—or he would be reinstated in the employment from which he had been dismissed, either in his original position or in a different position. This shows that reinstatement has at least two meanings, even under this Bill, and can have more. So it is abundantly clear that reinstatement is included in re-engagement. I invite the House to follow that logic rather than the logic of the noble Lord in this matter.

LORD DIAMOND

My Lords, we cannot pursue this point endlessly. I regret that the noble Lord has not seen fit to give himself time to reconsider this matter, especially as he says it is his view, and the view of the Government, that reinstatement, as the word is used in common parlance, should be a remedy open to the tribunal. It may be reinstatement in the original position or in some other position, but certainly reinstatement. I am sorry that he has not given himself time to think about it further. I do not wish to delay progress of the Bill by dividing the House again. All we can say is that we are doing the best we can to make it clear to all concerned, and we hope the Government will co-operate to make clear that the words are intended to include reinstatement and that it is the Government's desire, as Hansard will record, that it should be so interpreted. In those circumstances I do not think my noble friend Lord Stow Hill wishes to comment further in this debate.

LORD PARGITER

My Lords, there is one point I should like to make, before we finally withdraw. I should like to be clear on the tribunal's rights with regard to compensation. Assuming that the tribunal can order an employer or recommend an employer to re-engage a person, and if it is shown that this involves a considerable loss, would the tribunal be entitled to order compensation as well as re-engagement?

LORD DRUMALBYN

My Lords, perhaps I may answer that point. The tribunal cannot order; in this case it makes a recommendation.

LORD DIAMOND

My Lords, as I was saying, I think it would be appropriate if I sought your Lordships' permission to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD DRUMALBYN moved Amendment No. 85C:

Page 81, line 42, after ("and") insert ("where the organisation is a trade union or an employers' association, that it was taken against the person who presents the complaint, and (whether the organisation is a trade union or an employers' association or not) that the action specified in the complaint").

The noble Lord said: My Lords, earlier debates have demonstrated that there is a wide measure of agreement in all parts of the House that the right of complaint about breaches of rules or guiding principles by trade unions or employers' associations should be restricted to the complainant party, and that complaints by extraneous parties should be excluded. Amendments to Clauses 81 and 82 already accepted by the House secure that effect so far as complaints made to the Registrar are concerned. This Amendment extends the same principle to complaints brought to an industrial tribunal.

I hope that noble Lords will agree that it is unnecessary to go over those arguments again, but there is one point that I should make to your Lordships. It will not have escaped your Lordships' attention that the clause as amended, although restricting the right of complaint against a registered organisation to injured parties, imposes no such restriction on complaints against unregistered organisations. So, where the other conditions are satisfied, the complainant will not be required to show that the action of an unregistered organisation was taken against him before his complaint under this clause can be heard.

We can see no means of avoiding this distinction. We would have done so if we could. If the right of complaint were restricted to the party against whom the action was taken, certain breaches of rules by unregistered organisations could not be complained of at all. For example, it is very doubtful whether any individual member could show that the action of his organisation in improperly removing or failing to appoint an official was directed against him. Similarly, probably no individual would or could complain of a rule specifying the manner in which the rules of the organisation can be altered or revoked was breached.

I think noble Lords on all sides of the House would agree that it would be wrong to allow such a loophole to exist, and so we have reluctantly concluded that we cannot restrict the right of complaint to injured parties so far as unregistered organisations are concerned. Registered organisations do not present the same problems because in Clause 83 the Registrar has power to investigate on his own initiative breaches of rules or guiding principles, and that is a safeguard. In practice I do not think this will cause unregistered organisations undue difficulty or embarrassment. There must have been a breach of rules or guiding principles before there can be a complaint—or an alleged complaint, at any rate—and the tribunal will be able to award costs where frivolous or vexatious cases are brought. This should deter malcontents and dissidents who are trying to harass unregistered organisations without due and reasonable cause. I beg to move.

LORD STOW HILL

My Lords, I feel a little puzzled by what the noble Lord has just said. I cannot understand why there should be that distinction between a registered organisation and an unregistered organisation. In the case of a registered organisation the complaint under Clause 66 can only be made by a person against whom the action is directed, but not in the case of an unregistered organisation. May I now put the question to the noble Lord in this form: suppose we have a registered and an unregistered organisation and their rules are precisely the same. The only difference is the name, otherwise the words from beginning to end are precisely the same. A member of the registered organisation who wishes to complain under Clause 66 that an action has been taken against him which infringes the general principles of Clause 65 proceeds under Clause 107. A member of an unregistered organisation looking at precisely the same rules and deciding that those rules involve an infringement of the principles of Clause 66 against him presumably also uses the same clause. As I read Clause 66 it does not relate only to a registered trade union: it includes an unregistered trade union or an unregistered organisation of workers.

I am sure it is entirely my fault, but I should be grateful if the noble Lord would make the position a little clearer to me. I did not follow it, and although I cannot say that I feel violently about it I think that if we are making a change the reason for that change should be made clear. It seems to me that a member of an unregistered organisation might just as well be a person against whom an action is taken as a member of a registered organisation. I am sure it is my fault that I do not understand, and I shall be glad if the noble Lord will explain it a little more fully in his reply.

LORD DRUMALBYN

My Lords, perhaps I can try again. The difference between the member of the registered organisation and the member of the unregistered organisation is this: a member of a registered organisation has a choice; he can make his complaint either to the Registrar or to the tribunal, but in either case it must be a complaint about action taken against him. In the case of the registered organisation the Registrar himself has the power to investigate other cases, so he can investigate cases that are not taken against any particular person. But in the case of the unregistered organisation, if we were there to confine the right to complain only to actions taken against an individual, then in the case of those actions that were of a more general character, for example faults on voting procedures, and the like, there would be no means at all of their being brought to the tribunal. Therefore, so far as unregistered organisations are concerned we cannot confine such cases to actions against the person making a complaint. We have to allow it to go wider and allow complaints to be brought by persons against whom action has not been taken personally—or should I say whom action has not prejudiced in some way in their personal capacities. I hope I have made it clear.

LORD STOW HILL

I thank the noble Lord.

Clause 110 [Complaint of breach of duty under section 57]:

THE LORD CHANCELLOR

My Lords, I beg to move Amendment No. 85D, which is a purely drafting Amendment.

Amendment moved—

Page 84, line 5, leave out ("authorised") and insert ("determined").—(The Lord Chancellor.)

4.38 p.m.

THE LORD CHANCELLOR moved Amendment No. 85E:

After Clause 111 insert the following new clause—

Application to Industrial Court for declaration with respect to collective agreement .—(1) Any party to a collective agreement in writing may make an application to the Industrial Court for a declaration with respect to any question relating to any provisions of the agreement. (2) Any such application shall specify the question or questions on which a decision of the Industrial Court is sought and, with respect to each such question—

1. (a) shall indicate the provisions of the collective agreement to which it relates, and
2. (b) shall contain, or be accompanied by, a statement of the facts in consequence of which it is claimed that the question arises.

(3) An application under this section—

1. (a) shall not be entertained by the Industrial Court if it relates to a collective agreement which contains a provision (however expressed) stating that the agreement is intended not to be legally enforceable, or
2. (b) if it relates to a collective agreement which contains a provision (however expressed) stating that part of the agreement is intended not to be legally enforceable, shall not be entertained by the Industrial Court in so far as it relates to that part of the collective agreement.

(4) On an application under this section the Industrial Court, having regard to its findings in respect of the facts stated by the applicant and in respect of the construction and effect of the provisions of the collective agreement to which the application relates, may, if the Court considers that it would be just and equitable to do so, make such declaration with respect to any question specified in the application as the Court considers appropriate.

The noble and learned Lord said: This is a fairly substantial new clause, and the purpose and effect of it will be to give a new jurisdiction to the Industrial Court in respect of written collective agreements which are enforceable. It arises from the two speeches made by the noble and learned Lord, Lord Wilberforce, and the noble Lord, Lord Tangley, in the course of the Committee stage, and it is one of two or three Amendments which have been made in response to the criticisms they then put forward. The position under the Bill as it stands at the moment is that one can go only for a declaratory judgment declaring the rights of the parties under an agreement if one goes by way of complaint of something that the other party has done wrong. We think this is unreasonable and it ought to be possible to get a declaration of right by either one or both parties to an enforceable agreement before relations have deteriorated to the point at which the parties are at arms' length. Of course those who do not wish to invoke the aid of the Court can instead agree to voluntary arbitration arrangements of their own for the same purpose, and in some cases the wiser parties already do so. They can continue to do so under the terms of this Amendment. As I have said, it is limited to written collective agreements, and those which are not enforceable and those which contain disclaimer clauses are excluded under the terms of subsection (3) of the new clause, paragraph (a) applying to those where the disclaimer is general and paragraph (b) applying to the cases where the disclaimer is partial.

Subsection (4) makes it clear that the jurisdiction which is conferred by the new clause is discretionary; that is to say, the Court will make its declaration only if it is just and equitable to do so. That corresponds to the existing jurisdiction of the High Court in such cases, where the remedy by way of declaration is discretionary and the discretion is not always exercised, although in recent years parties to agreements have found it more and more convenient to utilise the power of the Court to make declarations of right in such cases where they are not hypothetical or academic or premature. It is additional to the procedure by way of complaint which already exists, and I hope it will be found convenient and useful to the parties to collective agreements where these are enforceable under the Act. I beg to move.

LORD STOW HILL

My Lords, I should have thought this was an extremely valuable new jurisdiction, and I quite agree, if I may say so, with the noble and learned Lord that it obviously will conduce to peaceful relationships, in that it will enable the parties to collective agreements to ascertain how they stand before relations become strained, and I would wholly support the Amendment. I should just like to ask one question of the noble and learned Lord. It may be that I have missed something, but the new clause is clearly designed, as the noble and learned Lord has said, to apply to collective agreements which are legally enforceable; that is to say, it excludes collective agreements which have a provision stating that the agreement is not to be legally enforceable. What I am looking for and have not yet discovered is the following. Clause 34, which relates to collective agreements which are made enforceable unless they are expressed not to be enforceable, only relates to collective agreements made in writing after the commencement of this Act. In other words, collective agreements made before the commencement of this Act were probably unenforceable in any event because of Section 4 of the Trade Union Act 1871, or even if they were not expressly made unenforceable by virtue of that section were unenforceable by their nature, on the ground that the parties did not intend to enter into contractual relationships.

I would have thought, therefore, that in the new clause there would be some provision limiting the application to collective agreements entered into in writing after the Act was brought into force. I looked at the definition of a collective agreement in Clause 162, to see whether there were some words which imported the provision in Clause 34 that the collective agreement must be one entered into after the commencement of the Act. I cannot find language in that new clause; it may be that there is some; I would be grateful if I might have my attention drawn to it if there is. If I am right in thinking there is not any such language in that new clause, and if I am right in assuming, as I do from what the noble and learned Lord said, that he intends the new clause to apply to collective agreements made enforceable by Clause 34, would it not be appropriate somewhere in the new clause to insert a provision that it should only have application to collective agreements in writing made after the Act comes into force? It may be I have missed something, but I make the point in case it has been overlooked.

LORD PARGITER

My Lords, there is one point I should like to be clear about. One assumes that the noble and learned Lord's reference to the Industrial Court would in effect mean that their decision would be legally enforceable. If that is so, I can see the logic of it not being applied to agreements which are not legally enforceable, because obviously if something is basically not enforceable it would be very difficult to enforce the part. I would have thought there might be some provision by which agreements not legally enforceable might be referred to the Industrial Court, or a tribunal, with a view to interpretation, with a view to avoiding difficulties that might arise in unenforceable agreements. I should like the point, whether that is so, cleared up. If the decision of the Industrial Court is not legally enforceable, there seems to me no reason why it should not apply to any body or person, whether it is an agreement legally enforceable or not.

THE LORD CHANCELLOR

My Lords, I will consider, if I may, the question raised by the noble Lord, Lord Stow Hill. I had assumed that because there is the presumption against retrospection in all legislation that would be enough, but the point is obviously worth considering and I will consider it. I cannot tell him what will be the outcome.

LORD STOW HILL

My Lords, I am very grateful to the noble and learned Lord.

THE LORD CHANCELLOR

My Lords, the question raised by the noble Lord, Lord Pargiter, is rather an interesting one. The new clause as drafted is clearly designed not to refer to agreements not legally enforceable. An order when made will be binding on the parties, but of course it is not directly enforceable because it will simply state what the rights of the parties are and will leave it to the parties to discharge their obligations under the rights so defined. If they break the agreement, the agreement will be interpreted in the light of the declaration, and the breach of the agreement would be a proper subject of disputatious proceedings which would yield in the end an enforceable judgment. One of the virtues of a declaratory judgment is that it does not imply necessarily an adverse order, except perhaps as to costs, between the parties disputing the rival interpretations of the agreement.

As regards the possibility, which is a slightly different one, which Lord Pargiter raised that you could refer to the Court questions as to the meaning of agreements which are not legally enforceable, clearly this is not within the terms of the new clause. I do not know of any fundamental reason why, if an agreement was capable of a precise construction—which many such agreements are not—you should not refer those matters to the courts, but at the moment I think I am right in saying the courts would decline jurisdiction. They would say that they could not entertain proceedings relating to provisions which did not give rise to legal obligations, because they are, after all, courts of law, and certainly this new clause does not extend the jurisdiction of the courts to cover this class of case. What it does is to extend to the Industrial Relations Court the jurisdiction at present inherent in the High Court to make declaratory judgments even though no complaint has been made of breach of contract. It is an interesting question, but the answer is that it is not designed to apply to non-enforceable agreements, and I think it might be controversial if it were so designed.

Clause 112 [Power to confer jurisdiction on industrial tribunals in respect of damages for breach of contract of employment]:

THE LORD CHANCELLOR

My Lords, I should at this stage indicate, as I have to the noble Lord, Lord Stow Hill, who I think is handling Amendment No. 85G, that I have a Manuscript Amendment in my noble friend's name designed to deal with the same point, but in the meantime I must call No. 85G.

4.50 p.m.

LORD STOW HILL had given Notice of his intention to move Amendment No. 85G:

Page 84, line 44, at end insert— ("and (c) in relation to claims for any payments due under a contract of employment")

The noble Lord said: My Lords, I am very grateful to the noble and learned Lord. The Manuscript Amendment which he has referred to does precisely deal with the point which I sought to raise with two Amendments, Nos. 85G and 85H. The general objective was that Clause 112, very sensibly, vests in the industrial tribunal a number of claims which might otherwise have gone to other courts, notably the county court. They are claims for damages. But there are also other claims which arise immediately under contracts of employment (holiday pay, and so on) which it was thought could very conveniently be combined with such claims for damages. The object of Amendments Nos. 85G and 85H was to include those claims in the claims which might go to an industrial tribunal. The noble and learned Lord, as he has said, in much more suitable and felicitous drafting, brought about precisely the result we had in mind in drafting the two Amendments. That being so, may I ask the leave of the House to not move Amendment No. 85G and, in due course, may I make a similar application in relation to Amendment 85H.

4.52 p.m.

THE LORD CHANCELLOR moved Manuscript Amendment No. 85J:

Page 85, line 44, at end insert— ("and for the purposes of this section a claim for payment of any sum payable under a contract of employment shall be regarded as a claim for damages for breach of the contract, and any reference in this section to damages shall be construed accordingly.")

The noble and learned Lord said: As the noble Lord, Lord Stow Hill, explained, he put down a couple of Amendments which were designed to achieve the purpose of making it clear that a claim, for instance, for arrears of wages, would be amenable to the general terms of the clause. The point really is that technically a claim, for instance, for arrears of wages, or for liquidated sum by way of damages, might not be considered to be covered by the expression "damages" in the clause. This may be right. Indeed, when I first saw the noble Lord's Amendments I was briefed, as it were, to say that the word "damages" included it. But rather respectable legal authorities take a different view, and I am not sure that I do not myself. For that reason, I asked the draftsman to draft an Amendment which would be acceptable to him to achieve the result which the noble Lord had in mind. The present Manuscript Amendment is simply the draftsman's method of expressing the thoughts that lay behind Lord Stow Hills' previous Amendments. I have no particular views about the draftsmanship but, as it has come from the professional, I would naturally prefer it. I beg to move.

LORD STOW HILL

My Lords, I only rise to express my indebtedness to the noble and learned Lord the Lord Chancellor, and I hope that the House will accept the Amendment.

Clause 115 [General principles as to assessment of compensation]:

4.55 p.m.

LORD DIAMOND moved Amendment No. 85F:

Page 87, line 41, leave out from beginning to end of line 44.

The noble Lord said: My Lords, this Amendment arises in the clause dealing with compensation, subsection (2) of which says: The loss sustained by the aggrieved party,…shall be taken to include—… (b) loss of any benefit which he might reasonably be expected to have had but for those matters ".

The four following lines, which this Amendment seeks to remove, say, subject, however, to the application of the same rule concerning the duty of a person to mitigate his loss as applies in relation to damages recoverable under the common law of England and Wales or of Scotland, as the case may be.

All your Lordships are familiar with that duty in relation to damages. What I am advised is, first of all, that what we are concerned with here is not damages; and the point I want to put is that if these four lines were left in, the purpose of the clause would not be achieved in certain circumstances. One of the purposes of the clause is, I imagine, to deter discriminatory dismissals. Let us suppose that there is an unfair dismissal, which is clearly discriminatory, in circumstances in which there is a strong labour market, and the employee, carrying out his duty under these four lines, moves heaven and earth to get himself another job and succeeds in doing so over the weekend, shall we say, and finds himself engaged on the following Monday at a similar remuneration. Then, I suspect, under these principles there would be no compensation payable at all. There will have been a discriminatory, unfair dismissal, but there will be no compensation. I do not think that that is intended—I am sure it should not be intended. I am sure that would do nothing to discourage, in those rare cases where it might occur, discriminatory treatment by employers getting rid of an unwanted person for improper reasons, and improper under the terms of this Bill. I think the case is a clear one. I beg to move.

THE LORD CHANCELLOR

My Lords, the ordinary rule of law is that whether you are seeking damages or any other form of compensation you are not to make a profit out of somebody else's wrongdoing, but that you should be put in the same position as if the wrongful act had not been done. We have been discussing re-engagement and reinstatement for a long time, and that would be one way of doing it. Another way of doing it is by looking to see what the financial loss in each case has been and making it all up.

There are, of course, exceptional cases where the law allows vindictive damages for bad behaviour, or damages to compensate for injured feelings. I think they are becoming increasingly rare. The old breach of promise action is a very good example of this. There are cases where this is done, but it is pure compensation for wrongful, unfair industrial practices here; and the object is not to put the injured party into a better position than if the injury had not been inflicted, but in as good a position as if the injury had not been inflicted.

With respect to the argument of the noble Lord, Lord Diamond, if the injured party is the employer, he must then try to mitigate the effect on the workman. If the injured party is the workman, he must try to mitigate the penalty on the employer. But the fact is that it can be either in this case. I am surprised that he has not seen this. He took the case of wrongful dismissal, which I will come to in a moment; but this clause could, after all, operate to reduce the amount of compensation awarded against a trade union when, for example, an employer had complained to the court about an unfair industrial practice by the union, in consequence of which it had sustained a restriction of output or of some service it had contracted to provide. This might well indeed be a very considerable limitation upon the amount of compensation awarded against the union.

The principle is surely a just one and one should, I think, forget whether one side in a dispute is likely to gain by it rather than the other side. It cannot be right, for instance, when a workman has been dismissed unfairly, that he should deliberately refuse one job after another in order to "whack up" the compensation payable by his former employer. It also cannot be a just action by the former employer for him to sit upon the damage which a trade union may have inflicted upon him by an industrial practice which was wrong, in order to "whack up" the compensation which it may be compelled to pay, when he could be taking a perfectly reasonable series of steps to reduce the damage to himself by his own action. Both are unreasonable sets of actions and they should not be compensated, either under the existing law or under any law that I would consider just. If the noble Lord had said that these words were otiose and that without them the court would give effect to the very reasonable principle which I have been trying to describe, I am not sure what I should have said in reply. But now that he proposes to omit them, not because they are otiose but because they are offensive, I find myself opposed to his Amendment.

LORD DIAMOND

My Lords, the noble and learned Lord will not expect me to regard his last statement as a very persuasive or forceful argument. I take exactly what he said and I realise his difficulties, but with the greatest respect to the noble and learned Lord he has not met the difficulty that the legislation as proposed does not carry out Chapter 9 of the Donovan Commission's Report. It goes against the whole spirit of that. It may, in fact, be necessary to have an additional paragraph dealing exclusively with the case of the employer who seeks to get rid in a discriminatory way of an unwanted employee and suffers no penalty at all for doing so.

The noble and learned Lord said that nowadays there are very few cases indeed involving more than the damage suffered. We are not putting forward this Amendment in order to enable an employee to make a profit. We are not putting it forward in order to challenge the common sense proposition that everybody should mitigate their loss and should seek to look after themselves as far as possible, whatever has happened. We are putting this Amendment forward because the legislation, as drawn, offers no discouragement to discriminatory sacking of an unwanted employee, thereby committing an unfair practice. In the circumstances I have described, an employer could get rid of an unwanted employee at no cost to himself. I do not think that that is a satisfactory way of drafting the legislation, but I do not dispute that the legislation as drafted suits all the other circumstances which the noble and learned Lord described. I can only hope that the Government will bear this point in mind. I do not think I can press it any further than that, and in the circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.4 p.m.

LORD STOW HILL moved Amendment No. 86:

Page 88, line 8, at end insert— ("Provided nevertheless that this subsection shall not apply to any proceedings on a complaint based on subsections (1) and (2) of section 5 or on section 22 of this Act.

The noble Lord said: My Lords, this Amendment relates to a comparatively small point, but it is not in any sense a Party point. It is what I ventured earlier to call a civil liberties point. I think it is of some importance, and it deals with an aspect of our affairs about which we should be extremely careful. The Amendment is sought to be made to subsection (3) of Clause 115, which provides as follows. Where the Industrial Court or industrial tribunal has to deal with a complaint (and that means any complaint under the Act, as it will be) and finds that the matters complained of, were to any extent caused or contributed to by any action of the aggrieved party in connection with those matters". the Court may reduce, or indeed cancel, any sum which it might otherwise have awarded in order to compensate for any loss established by the complainant.

That is not a new concept in our legislation, although it is not one which is widely applied. But it is applied in the case of contributory negligence. The ordinary case of which one knows relates to street accidents. If you step off the pavement without looking right in front of an oncoming motor car, and you then sue the driver of the motor car for damages for injuries that you have sustained, the amount which the court may otherwise be disposed to award to you if you establish that the driver was negligent can be, and is, reduced by the court by taking into account your own contribution through your own neglect in not looking before you stepped off the pavement; and as a result you may get a very small sum indeed. It is that concept which is embodied in subsection (3) of Clause 115, and I do not complain at all of that in a general sense. What I seek to do by the Amendment is to say that that principle shall not apply when the Court is dealing with a complaint under Clauses 5 or 22; in other words, a complaint by a worker who asserts that his rights under Clause 5 have been infringed or, under Clause 22, that he has been unfairly dismissed.

May I look for a moment at the situation apart from the worker? When industrial action takes place between management and union, it often follows as the result of a long and complicated series of transactions, disputes and negotiations. I should have thought it was perfectly acceptable in principle that in that situation the Court should be entitled, if one party complains that the other is guilty of an unfair industrial practice to look also at the conduct of the complainant and take that into account. The Court has a general equitable jurisdiction and will try to do what is fair. In ordinary circumstances, unless some error creeps in, it will reach a just result which will balance the provocative conduct, if any, of the complainant against the wrongful conduct of the respondent. The situation is not really quite the same when one is considering the case of the worker, and I ask the House to say that the principle should be excluded when a worker is the complainant under either Clause 5 or Clause 22.

This matter was debated in Committee. I raised it and the noble and learned Lord the Lord Chancellor gave an answer which I have since considered very carefully. When I raised the matter, the criticism that I made of the wording of the Bill was that it was much too general, and too wide in scope. That is not a criticism that I am making at the moment. However, I went on to sayߞand this is an argument which I respectfully ask the House to consider again—that you might well get the case of a worker who was at a very serious disadvantage. For the purpose of my argument, I took what I frankly conceded was a rather extreme case. I took the case of a worker who makes himself thoroughly unpopular by disseminating unpopular doctrines. I took the case of a Maoist, or somebody whose hair was too long, or who made himself unpopular because of some personal habit which other people did not like.

My Lords, that, I agree, is rather the extreme case, and the noble and learned Lord, while accepting that one has a perfect right to use extreme examples to point an argument, would say that we should rely on the courts to arrive at a common-sense view. I entirely accept that, but the courts are put in particular difficulty when they have an obligation to consider provocative conduct. What are they to do in that situation? I submit that in our democracy we should be anxious to protect the unpopular person. People can become unpopular and disliked by their associates for reasons for which they are hardly to blame, for personal characteristics or personal views; and various things can be considered wrong about them according to ordinary judgment and ordinary taste. That may over a period of time produce a feeling of strong resentment—a very unjust feeling, but nevertheless most people suffer from it.

Society cannot come to their rescue as often as perhaps it ought. One ought perhaps to try to protect a person who has the misfortune to be disliked, but it is difficult to do so because in many situations there is no way of bringing help to such a person. But I suggest that it is going rather further than is wise to enact that when we get that sort of case the Court should have to look at any evidence or argument produced on the part of a man's employer to the effect that he had received a lot of representations—for example, that the man should be dismissed, or that he was a person whom his fellow workers could not get on with and they were trying to egg on the employer to get rid of him. That is not something which should be encouraged.

I submit that that is the kind of situation against which we should strive and we should go to the rescue of a person who finds himself in that position. That is all that this Amendment seeks to do. If it depended only on the extreme, unlikely case, I would not have ventured to move it, but I submit to the noble Lord, particularly in reply to the argument which he used and which I agree has force in it, that when you are dealing, not with the extreme case but with cases which do not involve any exceptional quality for which other people look on an individual with disfavour, and a person is unlucky enough to be unliked and becomes the victim of a campaign—round robin letters, or something of that sort—because his fellow workers want to get rid of him, or perhaps not his fellow workers but a foreman or shop floor manager or anyone else, we should not enable—or rather require, for this is not a question of enabling but requiring—the Court to take into account the fact that other people want to get rid of him. I submit that the principles of subsection (3) of Clause 115 should not be applicable when the Court is called upon to deal with a complaint by a worker, either under Clause 5, which sets out his general rights, or Clause 22, which enables him to bring a complaint in the event of his being unfairly dismissed. I beg to move.

5.14 p.m.

THE LORD CHANCELLOR

My Lords, I yield to no one in my desire to help people who are simply unpopular, because many people are unpopular for reasons which are wholly creditable to them, but this Amendment goes far beyond that. It is not, I think, a fair analogy to introduce the question of contributory negligence in common law. If somebody were to punch me in the face and break my false teeth, I daresay, if I were eager to bring an action at law—which most lawyers are not—I could get quite considerable compensation from him. I would get the cost of my false teeth, something for my pain and suffering and possibly something for the insult. But if the evidence was that I had insulted the other man first—made fun of his religion, his race or the colour of his skin, or even his political idea—I dare-say that most reasonable juries and most reasonable judges would reduce the amount and I should probably end by getting only the cost of repairing my false teeth.

That is really the only principle involved in this clause. Provocative conduct, either by an employee or by an employer, ought to be taken into account in assessing the amount of compensation. This is the principle which is adopted, and I should have thought, leaving legal questions aside, that it was a very sensible general line. The noble Lord, Lord Stow Hill, says, "All right; apply it to the employer, but we will not apply it to the workman in two cases, one under Clause 5 and one in the unfair dismissal case." I do not myself see why. I think that what is sauce for the goose is sauce for the gander, and in that I am strongly fortified by powerful and independent witnesses.

I am first entitled to call the noble and learned Lord, Lord Donovan, whom I am happy to see sitting on the Cross Benches, to my aid. I quote him sometimes when I agree with him, and sometimes when I disagree with him. In paragraph 553 of the Donovan Report this very situation is referred to in the case of unfair dismissal. The noble Lord definitely came down on this side. He said: The labour tribunal must, in our view, be free to take into account such circumstances as the nature of the employer's business, the employee's age, seniority and opportunities for alternative employment, the circumstances and manner of the dismissal, the extent to which the employee's actions were blameworthy and the effect of the dismissal on future pension rights and any other relevant considerations. I have even more powerful witnesses on my side, because I think one can call in aid the Labour Government Bill which had a First Reading. Clause 41 of that Bill deals with deductions from the basic amount of compensation in cases of unfair dismissal and says: If it appears to the tribunal that, apart from the reason by reference to which the dismissal has been found by the tribunal to have been unfair, any actual omission on the part of the employee (not being an act or omission of a kind falling within any of paragraphs (a) to (e) of Section 36(1) of this Act) was a contributory reason for the dismissal, the tribunal may deduct from the basic amount of the compensation such amount as appears to the tribunal to be appropriate in the circumstances. In other words, the Donovan Report and the Labour Government, having considered this very point, came to much the same conclusion as we have come to. The only comment I make is that this general principle affecting provocative conduct which is genuinely provocative and not just annoying should apply right across the board. An employer, for instance, against whom a complaint is made of an industrial practice which is unfair and who has repeatedly broken the terms of the industrial code of practice, even though he is not himself guilty of an unfair industrial practice should have this principle applied against him. I do not see why it should not apply both ways and in all cases. My impression is that the common-sense rule that what is sauce for the goose is sauce for the gander is an adequate reason for rejecting this Amendment.

LORD STOW HILL

My Lords, that is the answer. The noble and learned Lord does not accept the case I made. May I make one or two points in reply? The noble and learned Lord says that what is sauce for the goose is sauce for the gander. But I am not complaining about the application of this particular doctrine in the case both of the employer and of the trade union. If it can be shown against the trade union that the trade union itself was guilty of conduct which was provocative, then in the event of the trade union complaining against the employer—for example, under Clause 36, that the employer was in breach of a collective agreement—then precisely the same doctrine can be prayed in aid in diminution of any compensation paid to the trade union. So it is not in the least true to say that I am simply seeking something for the worker which I am not prepared to concede to the employer. I have conceded to both sides of the table; but I seek to except the worker because he is in a particularly difficult and vulnerable position, or he may be if he is one of these unpopular people.

The second witness which the noble and learned Lord prayed in aid was Mrs. Castle and her Bill. She obviously had in mind the sort of situation with which I am dealing, because there is excepted from the kind of conduct that can be taken into account (if I am right, having quickly read it) conduct which is within Clause 36, which, if I cite it correctly, deals in general, for example, with this situation: that the employee (otherwise than in a case falling within subsection (c) of the next following subsection) professed or practised, or did not profess or practise, a particular religion or religious doctrine, or belonged to or otherwise upheld the aims of, or did not belong to or otherwise uphold the aims of, a particular political party, or upheld or did not uphold a particular political doctrine". The example that I gave when I previously argued the case, which I agree was an extreme example, was the case of a man who was a Maoist. That would be within that clause, and I should have thought, if I correctly read the effect of the Labour Government's Bill, that that is precisely the sort of situation in which the effect of the Labour Government's Bill would be that provocative conduct consisting in upholding the doctrines of an unpopular political Party should not be taken into account against him. But the House has heard both sides of the argument. If this does not commend itself to the Government, so be it. I do not think I would be usefully taking the time of the House in pressing the matter further or in asking the House to divide upon it, and I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 116 [Limit on compensation to be awarded against trade unions]:

5.24 p.m.

LORD DIAMOND moved Amendment No. 87:

Page 89, line 2, leave out ("£25,000") and insert ("£15,000").

The noble Lord said: My Lords, your Lordships will recollect that this is a matter we discussed at the Committee stage. The Bill refers to a series of steps in relation to the limit of compensation awarded against a trade union. The steps are: step one, £5,000; step four, £100,000. There are four steps mentioned in the Bill. What the Amendment deals with is step two, which is clearly out of line with the other steps. The Government said on the last occasion that they would give this matter consideration. I hope they will; and the Amendment has been put down both to give them an opportunity to express the results of that reconsideration and to suggest a figure which really would be in step. The present figure is grossly out of step in that one case. I beg to move.

EARL JELLICOE

My Lords, the noble Lord has moved this Amendment with his usual arithmetical skill, and, although I did not take part in the discussion of this particular clause at our Committee stage, I should like to say why, after reconsideration, we feel that, despite what the noble Lord has said, and said with considerable moderation, we feel we have got the sums right here. I think I should first of all very briefly recapitulate our purpose in including this clause in the Bill.

My Lords, we recognise, and I think everybody recognises, that the losses which can be sustained by a company can be very large indeed in these sort of circumstances. They can be so large that if awards of compensation were based on the actual losses sustained a union could in fact be broken by a single judgment. I should like to make it clear that we have taken the view—and it is implicit in what my right honourable friend the Secretary of State for Employment has said in his introduction to the Code of Industrial Practice—that any such result would be completely contrary to our purposes and to the purposes of the Bill, which are to develop and maintain, so far as possible, stable relationships between the two sides of industry. That is why, my Lords, we believe that we should try to establish reasonable limits which would, on the one hand, afford a deterrent against irresponsible industrial action and, on the other hand, not be a crippling blow to any union.

I should like to make it clear that the limits which are set out in subsection (2) of this clause were arrived at after very careful consideration of a whole variety of considerations—the size of the trade unions, their resources in terms of finance, the distribution of their membership and the sort of losses that they could themselves inflict upon a particular company. I should also like to underline the fact that there is nothing punitive in this aspect of the Bill. What we are here considering are limits to how much an injured party can recover of the losses which he has actually sustained. I would make it clear that we recognise that any limits which one draws here can be held, arguably, to be artificial, and that there is therefore an element (you might so call it) of rough justice. I think there are only two ways to avoid that. One would be to adopt some sort of rigid formula; for example, the average earnings of those members of a particular union who might be on strike. This would be enormously complicated. The other way would be to have no limit at all, and this would be open to just the sort of objections that I have suggested.

The noble Lord has to a certain extent, I think, based his argument on the fact that the steps are uneven here, and I would straightaway recognise and accept that they are uneven here. But I think there is a good and sufficient reason for that, my Lords. I have had some figures worked out for me, and I see that under the limits in Clause 116 the liability per head of average membership would be up to nearly 520 pence per person for unions under 5,000. That comes down to 205 pence for unions in the range we are discussing, 5,000 to 25,000; to 93 pence in the 25,000 to 100,000 range; and to 32 pence in the 100,000 and above. There is—and I would be the first to concede this—an uneven incidence here. I would only say that this is quite deliberate. This tapering off has been deliberately imported into the Bill because of a very important consideration, and the consideration is this. Let us take, for example, the very large unions: the T.G.W.U. or the General and Municipal Workers or the Union of Shop Distributive and Allied Workers. The membership of that latter union, for example, goes right through all the food processing and food distribution industry. Its membership is involved in thousands of firms; and, therefore, it could be simultaneously involved in a very large number of industrial situations potentially at the same time, and therefore at risk. This is what is always possible with a very large union, and this is in fact the reason for this particular form of tapering which, on the face of it, I would readily grant, might appear to be illogical. But I think there is a logic here, and I hope in view of that, and in view of what I have said by way of prior explanation, the noble Lord will agree, whether or not he assents to my arguments. But this is a matter which has engaged a good deal of Her Majesty's Government's attention since the Committee stage. It has certainly engaged mine.

LORD SHINWELL

My Lords, I should like to make a few observations on the point made by the noble Earl. He has referred to the apparently uneven amount of compensation which was required to be paid. In the clause under review there is something rather more uneven than the figures. It could happen that a union with 5,000 or fewer than 5,000 members might engage in what is regarded as unfair industrial practice and, as a result, create havoc not only for the industry or industries concerned but for a great many other industries and trade unions whereas a union with 100,000 members, or maybe even a million members, might engage in what may be regarded as an unfair industrial practice but of such a minor character as to create harm much less injurious than that created by a smaller union with a much lower membership.

That is where the uneven character of this provision emerges, and I should have thought, although the noble Earl did not agree with it, that on the whole it might be better not to specify the actual amount and limit of compensation but to leave the matter to be adjudged by the tribunal. The noble Earl said in that regard that it might involve a serious and adverse effect on the union or unions concerned. In matters of this sort, however, one has to judge by the nature of the offence and the relation of that offence to the position of other unions and other industries likely to be involved. I should have preferred an Amendment—if I may say so with great respect to my noble friend Lord Diamond, who has studied these matters more closely than I have—which expunged entirely the figures mentioned in the clause under review and left it entirely open to the industrial tribunal to decide.

With great respect to the noble and learned Lord the Lord Chancellor, I am putting the point to him because my knowledge of the law is uneven, and I have more often been at one end of the court than the other—though not for anything but political offences, such as obstruction at meetings. I venture to put to him the point that compensation in civil cases is not always specified in actual sums. It is left to the court to decide what should be the amount of compensation. Speaking again without any knowledge of the law or of the methods judges employ, or of how their minds work, I venture to suggest that they would determine the amount of compensation according to the nature of the offence, whether in a libel action or a civil case. Would it not be better, therefore, not to have a clause which specifies figures and amounts, and which is a kind of threat, a sort of shadow hanging over the trade unions, but rather to leave it to the good sense of those who will be on the industrial tribunal to come to a conclusion having regard to the nature of the offence? That is what I should have preferred, but I am in the hands of my noble friend Lord Diamond and my colleagues on the Front Bench—it is for them to decide. The uneven character of the figures does not interest me very much; I am more concerned about the uneven principle that is embodied in this clause. I would rather see that rejected than that the Bill should be rigid, and almost doctrinaire and definite, in a matter where one finds it impossible to be definite because of the possibly uneven character of the offence.

THE LORD CHANCELLOR

My Lords, though perhaps I should not do so, I shall rise to the fly cast by the noble Lord, Lord Shinwell. He is perfectly right. Of course courts award compensation in relation to the evidence, and in cases of this kind it will be in relation to the amount suffered, and this is so under the Bill. What the battle between the noble Lord, Lord Diamond, and the noble Earl, Lord Jellicoe, is about is the arbitrary limit set at various stages as a ceiling on compensation, not as a rigid yardstick by which compensation should be awarded but as a ceiling on what the courts can do. This exercise in mathematicianship is something that I will leave to the noble Lord, Lord Diamond, but it is not the sort of thing the noble Lord, Lord Shinwell, was complaining about.

LORD SLATER

My Lords, I was interested in what my noble friend Lord Shinwell had to say. I agree more or less with everything he had to say with regard to this item, although I have never looked at it in the same sense as he has done regarding the figures. As cited by my noble friend Lord Diamond in talking about the steps for the reduction from £25,000 to £18,000, the noble Earl the Leader of the House said that is not a crippling blow to trade unions. How many trade unions have we in this country recognised as such? The number of recognised trade unions, or forms of society with trade union standing, is anything from 200 to 300. They call themselves trade unions. The noble Earl and members of this Government ought to remember—and I have said this before this Bill was introduced—that there is the Whitley machinery inside the Civil Service in this country, and if you were to examine that Whitley machinery you would find that what I say is correct.

I can tell your Lordships that every employee works to a code principle that if he commits a misdemeanour he suffers the penalty of a loss of a day's work or two hours' work, or some such penalty. This is according to the conciliation machinery agreed between the parties. May I take it that all the conciliation machinery which has been operating within industry and the Civil Service is now to be cast out, following the introduction of this clause which relates to penalties which may now be imposed, and that trade unions will have to subject themselves to it irrespective of the forms of agreement drawn up in accordance with the Whitley machinery which have been in operation for such a long time? What has been said by my noble friend Lord Shinwell and the questions which I am posing relate to individuals whose terms of employment permit the employer to dictate the penalties for a misdemeanour or loss of production.

LORD DIAMOND

My Lords, I am grateful to my noble friends Lord Slater and Lord Shinwell for their support. I was particularly interested in what Lord Shinwell said about the recommendations he made to me. May I just explain that if I put down an Amendment to delete the parts of the Bill which I do not like, the Amendment would be one to leave out Clauses 1 to 166 (or whatever the figure is) and Schedules 1 to 9, and that would cover the matter. But at this stage, my Lords, I do not think we should make a great deal of progress by working in that way. So I have sought to put forward the most modest Amendment, and one which I felt sure the Government would be wise to accept.

I have not challenged the principle of limitation, or the principle of the steps, or the movement from step 1 of £5,000 to step 4 of £100,000. I have not challenged step 3, which is £50,000. I am merely saying that step 2 is absurdly out of line; and the noble Earl, who was good enough to give the matter further consideration, said that he hopes I am satisfied that lie has given the matter a great deal of further consideration. I am completely satisfied about that. I feel quite as benevolently disposed towards the noble Earl as was the schoolmaster towards the pupil to whom he had given the task of doing a sum, when the pupil came to him and said, "Not only have I done it at once, I have done it 10 times; and here are the 10 answers". I am not impressed with the noble Earl's arithmetic or the argument for the £25,000. It is clearly out of step. The figures he was good enough to add to it reinforce the extent to which it is out of step. But if the noble Earl is not prepared to move on the matter I do not think that we can do any more. I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 117 [Limit on compensation awarded under s. 103, s. 106 or s. 109]:

5.45 p.m.

LORD DIAMOND moved Amendment No. 87C:

Page 89, line 13, after ("106") insert ("(except in the case of an award of compensation increased under the provisions of sub-paragraph (b) of subsection (4) of section 155 of this Act").

The noble Lord said: My Lords, as printed the Amendment refers to "section 155". I do not know why it refers to that clause, except that possibly it was so described in somebody's handwriting. If so, that was an error. It is perfectly obvious that the Amendment refers to Clause 115 and I hope that your Lordships will permit me to move it in that form. Clause 115(4) refers to the circumstances where on a complaint relating to dismissal an industrial tribunal has made a recommendation and that recommendation has not been complied with. It goes on to say: (b) if the tribunal or Court finds that the reason for which the recommendation was not complied with was that the employer in question refused or failed to make such an offer, and the tribunal or Court considers that he acted unreasonably in doing so, the tribunal or Court shall increase that assessment, to such an extent (in either case) as in the cir- cumstances the tribunal or Court considers just and equitable. So we have a circumstance where a recommendation is made and an employer says, "Nothing doing". The Court or tribunal is satisfied that the employer has acted unreasonably in respect of the Court's recommendation over an unfair industrial practice and therefore the Court does the only thing it is allowed to do under the Bill; it increases the compensation or the amount payable—and I make no objection to that.

Also in the clause we are considering there are limits to the amount of compensation awarded under the various provisions. All I am proposing in this Amendment is that in respect of that circumstance—that is to say, a case of an award of compensation being increased under the provisions of the subsection I have read out—these limits should not apply. I think it right that limits should apply in other circumstances, but these are peculiar circumstances which deserve appropriate treatment. The appropriate treatment is described in the Bill and it would remove the discouragement to the kind of treatment referred to if the penalty were limited in the way described. I propose the Amendment to leave out that lightening of the burden.

THE LORD CHANCELLOR

My Lords, it is as well, I think, that we should see the context in which this Amendment is proposed. Clause 117 provides compensation for an individual workman in the case of unfair dismissal. There are two other clauses which for the sake of clarity I will ignore for the purposes of this argument as they are irrelevant in respect of this Amendment. It is the limit on the amount that an industrial tribunal can award to a workman. We were concerned to limit the amount which an industrial tribunal could award for a variety of reasons which were all canvassed in the course of the Committee stage debates. One which I think was acknowledged on both sides to be arbitrary, and equally acknowledged to be unavoidable, was that we have no idea as yet what the work load will be in the case of unfair dismissals, and we must not, therefore, leave the very largest claims to afflict the tribunal.

Another was that the tribunals are working in a new field and to give them an unlimited jurisdiction would be to give them jurisdiction equal to that of the High Court. They are composed of individuals perhaps not above, possibly not equal to, county court status, and it would be a step in the dark to allow them unlimited jurisdiction. These figures were arrived at on the basis of two years' pay at a figure of £40 a week. The latter figure was chosen to coincide with the limits under the Redundancy Payments Act, 1965, which is a respectable precedent and a comparatively recent one. We think that it is likely to cover all the probable cases.

The noble Lord, Lord Diamond, seeks to engraft an exception and to remove the limit in cases where an employer has been given a recommendation under the earlier clause to re-engage an employee and has failed to do so. It is common ground that compensation ought to be awarded in this case, so to that extent there is no difference between any of us. The question is whether this is a logical reason for exempting a case from the limitation which would otherwise have been imposed on the tribunal. But one can see that it is irrelevant in this case. I suppose that the justification for the noble Lord's proposal is that it is particularly bad if the employer is unwilling to comply with the recommendation. From some points of view I would agree with the noble Lord, but not from the point of view of the amount of compensation. That is awarded on the basis of actual loss. It is not a penalty.

I wish that we could avoid this idea altogether, because it is compensation for loss that is awarded, whether against a trade union in other cases or against an employer for unfair dismissal. There is no case for thinking that the actual loss to an employee is likely to exceed £4,160. Much the worst case that one can conceive of, from the point of view of actual loss, has nothing to do with moral obliquity on the part of the employer. It is the case where an employee either does not or cannot get another job. That is the case where the ceiling will come into question, and this is not more likely to happen where an employer has refused a recommendation of re-engagement than in any other class of case. It has nothing to do with the Amendment proposed. There are a good many points in this field where the two sides are not at odds with one another. I submit to the House that when we come to analyse the Amendment it is without merit and ought to be resisted.

6.23 p.m.

LORD SHINWELL

My Lords, attention so far has obviously not been directed to subsections (2) and (3) of the clause. Subsection (2) makes provision for the Secretary of State, presumably by issuing regulations requiring possibly an affirmative order in another place, to calculate the amount of a week's pay for the purpose of the preceding subsection. Subsection (3) makes it possible for the Secretary of State—and this applies more clearly to the Amendment proposed by my noble friend Lord Diamond—to issue regulations by order which would enable the sum mentioned in subsection (1) to be increased. It reads as follows: The Secretary of State may by order made by statutory instrument provide that, subject to such transitional provisions (if any) as may be contained in the order, subsection (1) of this section shall have as if, for the references to £4,160 and £40, there were substituted references to such larger sums as may be specified in the order. So the Secretary of State has power to increase the amount from £4,160, based on a calculation of £40 a week, to a larger sum. But the point is that subsection (2) provides that the calculation should be on the basis of a week's pay, not £40 a week—£40 is the limit. A week's pay might be based on the standard rate, on basic pay; and in a variety of industries in the United Kingdom basic pay is much lower than the actual earnings that a worker receives. For example, in the engineering industry—and some of my noble friends associated with the union concerned may correct me if I am wrong—the basic pay is about £16.50 a week: my noble friend says £18. In the mining districts, it is much lower.

If the tribunal has to calculate on the basis of a week's pay in order to assess the compensation for any wrong done to a worker by an employer, then the amount of compensation would be very small indeed. As in the argument I ventured to adduce on the previous Amendment, on the amount of compensation that could be imposed on a trade union for committing an alleged unfair industrial practice, a great deal depends on the circumstances in each case. A worker on a lower wage may have a large family, though he may get family allowances and various fringe benefits. There may be ill health in the family. He may be paying higher rent, not affected by what has been told us to-day about the Government's proposed housing finance. Therefore, it seems to me that the figures are all irrelevant. The question of what a man should receive ought to be determined according to the circumstances—what he has been earning, not over a period of weeks but over two or three years; what his financial circumstances are; his way of living and the rest of it. I am bound to say that what is proposed is irrelevant to the situation that is likely to emerge.

Though I support my noble friend's Amendment, because in his wisdom he no doubt considers it the right thing to do, I point out that the Secretary of State can by order increase the amount but, on the other side of the coin, he can base the calculation on a much lower weekly pay, as a result of which the man concerned can be very adversely affected. I do not know why the Government have had to resort to this mathematical calculation, because it is not relevant, it does not make good sense, nor is it likely to provide good justice.

LORD DIAMOND

My Lords, again I am grateful to my noble friend for his support, and I look forward on the next Amendment to meeting his point of view even more clearly than has been possible on this Amendment. The noble and learned Lord who sits on the Woolsack has explained why he does not regard this as an exceptionally topical case. I have re-read the original terms carefully, and I can see that it need not necessarily be regarded as the worst of all cases. I still think that it should be excluded from the limit, but the noble and learned Lord is not prepared to help us. I do not think it would be proper to take up the time of the House further and, with your Lordships' permission, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

6.2 p.m.

LORD DIAMOND moved Amendment No. 87A:

Page 89, leave out lines 17 and 18 and insert— ("(b) £6,240 (that is to say 104 × £60 whichever is the greater.")

The noble Lord said: My Lords, I beg to move Amendment No. 87A. I hope that this Amendment will meet my noble friend Lord Shinwell's point more precisely, and that the Government will look upon it with considerable sympathy. At the moment, the limitation which is provided for the compensation payable is the amount of 104 weeks' pay or 104 times £40, whichever is the less. First of all, I want to say that £40 a week is rapidly becoming—and it looks like continuing its rake's progress—less impressive than at one time it was. Therefore, if one is going to look to the future, it is likely that £40 will increase to considerably more than £40 as an estimate of good weekly earnings. I have therefore sought to meet that point by providing for a figure, not of £40 a week but of £60 a week. The Bill will not be applied for some long time—one does not know how long yet—and it is reasonable to suppose that £60 a week will more likely be the figure that the Government will have in mind as an impressive figure than the £40 a week. So the first suggestion I want to put to your Lordships' House is that instead of having a figure of £40 a week, we should have a figure of £60 a week.

Equally, if not more important, is the proposal to remove the words "whichever is the less" and to substitute the words "whichever is the greater".

LORD BEAUMONT OF WHITLEY

Hear, hear!

LORD DIAMOND

That is really of fundamental importance, my Lords, and I am delighted to hear the distinguished representative of the Liberal Benches signifying his agreement. We have been over this case before. I do not know how the words "whichever is the less" came in. They are clearly not appropriate or just. Justice would require that there should be a figure calculated on the basis of £60 a week, but that if there was a higher figure earned, then the higher figure should be paid. It is as simple as that. There is, I realise, a provision under subsection (2) for the Secretary of State to calculate the amount of a week's pay, but I do not think that affects the broad point that we are making on this Amendment. I do not want to waste the time of the House in going over the arguments that we covered in Committee. I beg to move the Amendment as it stands and hope to get the support of the Liberal Party, if that support is necessary. But even more I hope—and I am sure that the Liberal Party feel the same way—that the Government will meet the Amendment, so that that support will not be necessary.

LORD BEAUMONT OF WHITLEY

My Lords, when we discussed this Amendment at the Committee stage, I made the point that I thought 104 weeks' pay was the right type of provision. I accepted that there should be a limit, but I thought, in fairness to everyone concerned, that it should be a limit related to the amount of pay which a person was earning. My noble friends and I wanted to see the removal of lines 16, 17 and 18 on page 89. But we were not successful, and so we come to this Amendment on Report stage. I still hold to my beliefs about that point. This Amendment obviously does not completely meet the point that my noble friends and I were making, but I think it goes quite a long way, particularly by substituting "whichever is the greater" for "whichever is the less". That will remove a great deal of injustice, as it seems to me, to those who earn more than £40 a week.

The noble and learned Lord on the Woolsack said that the Redundancy Payments Act 1968 provided a precedent for this particular sum of £40 a week. I follow Lord Diamond's argument, and I calculate that on compound inflation by the time this Bill comes into force £50 a week will be the equivalent weekly wage. The noble Lord, Lord Diamond, mentioned subsection (2). Subsection (3) gives the Secretary of State power to order by Statutory Instrument. But I think we should start higher than that. I think the real guts of this Amendment is in "whichever is the greater", and that this is a matter of ordinary justice between individuals. If compensation is going to be fixed, as obviously it is in some cases, on what a man's job is worth to him, then it should be based all the way through on the wages earned. Therefore we support the Amendment.

THE LORD CHANCELLOR

My Lords, listening to the two speeches that have just been delivered has led me to reflect in a melancholy manner on the inflationary effects of opposition. The Labour Party proposal for compensation for unfair dismissal relied in Clause 40 of their Bill upon a most elaborate formula which I shall not endeavour to recount. Not having done the computation myself, I have none the less able assistants who have done it for me. The maximum proposed by the Labour Bill in such cases as these was £1,920, except where a reinstatement order existed, when the maximum compensation was £2,640. Now, because we have suggested £4,160, or two years' pay, whichever is the less, they say that a great deal more is necessary in order to do justice between man and man. It leads me, I am sorry to say, to reflect, as I said, upon the inflationary effects of opposition. Of course the Liberal Party, which went much further, never having been in power at all within living memory, suffers from the complaint of the inflationary effect of opposition to an almost unlimited extent.

That really provides the short answer to this Amendment. I explained in answer to the last Amendment the general purpose of this ceiling, and once more am I surrounded like St. Paul with a cloud of witnesses. One, of course, is the previous Labour Government whose Bill I have already cited, but here again I rely upon the support of the noble and learned Lord sitting on the Cross-Benches, looking like a little cherub aloft. He said—and I am here quoting from paragraph 554: While we do not favour a scale of compensation, we think it desirable for practical reasons to fix a ceiling to the amount of compensation which can be awarded. This will make it easier for employers to insure against the risk of being obliged to pay compensation. It would in our view be reasonable to provide that the maximum should be an amount equal to the employee's wages or salary for two years; and that, as in the case of compensation under the Redundancy Payments Act, in the computation of this amount there should be ignored wages or salaries in excess of £40 a week—a limit the Secretary of State should have power to raise. So the short answer is that we have done about twice as well as the Labour Party when they were in power, although not so far as the Liberal Party would be willing to go, never having known the realities and responsibilities of Office. Now we have gone the full length, at any rate in this modest respect, of what the noble and learned Lord recommended, and we are full of virtue and exuding unctuousness. I therefore suggest to your Lordships that the Amendment should be rejected.

LORD SHINWELL

My Lords, I am in full agreement with the rebuke of the noble and learned Lord who sits on the Woolsack to the Liberal Benches. They have no right to talk, because for many long years, as the noble and learned Lord the Lord Chancellor has just told us, they have not been responsible in any fashion for administration. So they have become completely irresponsible and whichever Amendment is accepted, any Amendment proposed by them I would reject.

LORD BEAUMONT OF WHITLEY

My Lords, may I ask the noble Lord whether he is at one with his own Front Bench, because on this matter I am at one with his Front Bench.

LORD SHINWELL

My Lords, there is one matter on which I would join issue with the noble and learned Lord the Lord Chancellor, and that is his reference to the propositions in the White Paper produced by the Labour Party and in their proposed legislation. Of course, the figures suggested by the Labour Government were much lower than the figures suggested by the Conservative Government in preparing legislation under this Bill; but when the Labour Government produced their White Paper and proposed legislation there was never a thought that after a couple of years or so a Conservative Government would be pitchforked into office and become responsible for a series of inflationary processes such as we have not witnessed so far this century. That is the position.

The Labour Government must not be blamed for the position. They were not aware that the economic position would become so serious, so transformed in such an adverse way as we are now experiencing. All the arguments adduced by the noble and learned Lord the Lord Chancellor fortified the contention that I ventured to put before your Lordships in the course of the debate on two previous Amendments; namely, the absurdity of being explicit and definite about figures. Of course it is impossible to foresee what the future will bring, to envisage the degree of inflation or reflation over a period of years—it is quite impossible. Who can tell? Speculation, conjecture and astrology should play no part in our calculations at all. We have to deal with the facts and what the situation is likely to be when a case comes before the industrial tribunal, as before a court of justice, and all the circumstances must be taken into account and a decision recorded. That is the sensible way of dealing with a situation of this kind. But I am bound to say that much which has been said this afternoon concerning these Amendments makes me feel the more convinced that it was unwise to introduce any figures at all. It would have been much better to have left the position open to be resolved by the good sense of those eminent people who are likely to be appointed to the industrial tribunal.

6.16 p.m.

LORD SLATER

My Lords, it is always interesting to listen to the noble and learned Lord who sits on the Woolsack, particularly when he begins to take the Labour Party to task because of the proposals which they seek to introduce. The thing which struck me very forcibly was that he keeps referring to the Donovan Commission's Report, but only when it suits his case. The Government and the Secretary of State were not prepared to accept the recommendations of that Commission in full detail, and to implement them. Why? They leave the door open because they seek to criticise what the Labour Government were prepared to do when they were in office and the proposals that they sought to bring forward for the benefit of people in this country. It is true, as my noble friend Lord Shinwell pointed out, that prices are shifting and the cost of living is going up. This has happened only because of the policies pursued by the present Government, and if they continue to pursue them prices will fluctuate even more. We talk of something in the region of £40 a week for people in industry. That figure will fluctuate, and that is why people are leaving the basic industries, such as the mining industry, and seeking an increase in wages of £9 a week at the present time. Therefore I say to the noble and learned Lord who sits on the Woolsack, "Yes, it is an old Parliamentary trick, and an old political method, that if you can find anything which has come from somewhere else and which you are not prepared to accept in toto, but only the parts that will advance your particular argument, then for God's sake take it and put it across." That is what the noble and learned Lord the Lord Chancellor has endeavoured to do in all our debates here when quoting the Donovan Commission's Report. I should have been very pleased if we could have got the noble and learned Chairman of that particular Commission on his feet to take the noble and learned Lord the Lord Chancellor to task, if at all possible, because of the statements that have been made.

LORD DIAMOND

My Lords, there are two issues involved in this Amendment: the minor one is the figure, and the major one is the essential element of justice. As to the figure, the noble and learned Lord who sits on the Woolsack has given us two examples of £4,160 (the figure given in the Bill) which are both dated 1968 or earlier. The Donovan Report was issued in June, 1968, and I believe that the Commission were appointed in 1965; so the recommendations speak for any time between 1965 and 1968. We know not when this Part of the Bill is likely to be implemented, but probably it will not be before 1972 or 1973. Therefore there is a considerable period of time involved. The Lord Chancellor's argument proves and proves conclusively, as all his arguments do, that the figure of £4,160 certainly cannot stand, nor can the reference to the Redundancy Payments Act, which again is an earlier reference, except in demonstrating that one thing is certain: that the figure of £1,460 is out of date. On these two conclusive arguments why do I say that the figure is of the lesser importance? Because, as has been pointed out, there is provision for this figure to be increased but we think it right that the target figure should be clearly indicated at the present time, and therefore that the figure should be based not on £40 a week but on £60.

The other argument which impressed me concerned possible injustice—and I do not want the noble and learned Lord to think I was not impressed by his argument about the noble Lord, Lord Donovan, looking like a cherub up aloft; I thought that was an excellent example. I was going to see whether he was suitably clad for this weather as a cherub, but perhaps that would not be quite in keeping with your Lordships' traditions. But the major point with which we are concerned is the essential injustice in having a lower figure than the real compensation based on so much a week. This was the essence of the Liberal Amendment

in the previous case. It is the greater part of our Amendment. We have had no reply to that of a satisfactory nature, and I therefore invite your Lordships to demonstrate our view on this Amendment in the usual way.

6.21 p.m.

On Question, Whether the said Amendment (No. 87A) shall be agreed to?

Their Lordships divided: Contents 56; Not-Contents 100.

CONTENTS
Addison, V.	Evans of Hungershall, L.	Popplewell, L.
Archibald, L.	Gaitskell, Bs.	Raglan, L. [Teller.]
Ardwick, L.	Gardiner, L.	Ritchic-Calder, L.
Beaumont of Whitley, L.	Garnsworthy, L. [Teller.]	Rusholme, L.
Bernstein, L.	Hall, V.	St. Davids, V.
Beswick, L.	Henderson, L.	Shackleton, L.
Blyton, L.	Heycock, L.	Shepherd, L.
Brockway, L.	Hilton of Upton, L.	Shinwell, L.
Buckinghamshire, E.	Hoy, L.	Slater, L.
Burntwood, L.	Hughes, L.	Sorensen, L.
Carnock, L.	Jacques, L.	Stocks, Bs.
Champion, L.	Janner, L.	Stonham, L.
Chorley, L.	Kennet, L.	Stow Hill, L.
Collison, L.	Kilbracken, L.	Taylor of Mansfield, L.
Davies of Leek, L.	Lindgren, L.	White, Bs.
Delacourt-Smith, L.	Lloyd of Hampstead, L.	Winterbottom, L.
Diamond, L.	Morris of Grasmere, L.	Wootton of Abinger, Bs.
Donaldson of Kingsbridge, L.	Nunburnholme, L.	Wright of Ashton under Lyne,
Douglas of Barloch, L.	Platt, L.	L.
NOT-CONTENTS
Aberdare, L.	Cullen of Ashbourne, L.	Macpherson of Drumochter,
Ailwyn, L.	Daventry, V.	Margadale, L.
Albemarle, E.	Denham, L.	Massereene and Ferrard, V.
Allerton, L.	Derwent, L.	Merrivale, L.
Alport, L.	Drumalbyn, L.	Milverton, L.
Amory, V.	Dundee, E.	Monck, V.
Balerno, L.	Ebbisham, L.	Mowbray and Stourton, L.
Balfour, E.	Eccles, V.	Napier and Ettrick, L.
Barnby, L.	Exeter, M.	Northchurch, Bs.
Belhaven and Stenton, L.	Falkland, V.	Nugent of Guildford, L.
Belstead, L.	Ferrers, E. [Teller.]	Oakshott, L.
Berkeley, Bs.	Ferrier, L.	O'Neill of the Maine, L.
Bessborough, E.	Fortescue, E.	Rankeillour, L.
Birdwood, L.	Fraser of Lonsdale, L.	Rochdale, V.
Bledisloe, V.	Goschen, V. [Teller.]	Rothermere, V.
Boston, L.	Gray, L.	Rothes, E.
Boyd of Merton, V.	Grimston of Westbury, L.	St. Aldwyn, E.
Brabazon of Tara, L.	Hailes, L.	St. Helens, L.
Brentford, V.	Hailsham of Saint Marylebone,	St. Oswald, L.
Bridgeman, V.	L. (L. Chancellor.)	Sandford, L.
Brooke of Cumnor, L.	Hankey, L.	Sinclair of Cleeve, L.
Brooke of Ystradfellte, Bs.	Hatherton, L.	Somers, L.
Brougham and Vaux, L.	Hood, V.	Stonehaven, V.
Buccleuch and Queensberry, D.	Hylton-Foster, Bs.	Strang, L.
Burton, L.	Jellicoe, E. (L. Privy Seal.)	Strange, L.
Carrington, L.	Kemsley, V.	Strathclyde, L.
Chesham, L.	Killearn, L.	Tenby, V.
Clwyd, L.	Kilmany, L.	Teviot, L.
Colgraic L.	Kilmarnock, L.	Vivian, L.
Colville of Culross, V.	Kinnoull, E.	Wakefield of Kendal, L.
Cork and Orrery, E.	Lauderdale, E.	Ward of Witley, V.
Craigavon, V.	Lloyd, L.	Windlesham, L.
Crathorne, L.	Loudoun, C.	Wrottesley, L.
Cromartie, E.	MacAndrew, L.
Resolved in the negative, and Amendment disagreed to accordingly.

Clause 118 [Contribution to compensation on complaint under s. 106]:

6.29 p.m.

LORD STOW HILL moved Amendment No. 87B:

Page 90, line 23, at end insert (" in respect of any sum payable by way of any such compensation.")

The noble Lord said: My Lords, this Amendment relates to a very short point, and my objective really is to seek clarification and to remove possible ambiguity. Clause 118 provides for payment of a contribution at the instance of somebody who has been ordered to pay compensation for an unfair industrial practice and who claims a contribution against somebody who has induced him by pressure to embark upon that unfair industrial action. Subsection (3) of Clause 118 enables the tribunal, if it thinks that there is a case for contribution, to award such contribution as—and these are the relevant words—" to constitute a complete indemnity". I do not know whether those words are meant to include an indemnity for the costs of the proceedings. This is a small technical point. If one looks at the measure of compensation as defined in Clause 118, which enables expenses reasonably incurred by the complainant in consequence of matters to which the complaint relates to be taken into account, I should have thought that those words were not appropriate to cover the costs of proceedings. The words "to constitute a complete indemnity", read without any qualification, would include an indemnity as to the costs of proceedings. Those costs may be very heavy and one should know what is the intention of the Government with regard to this matter. Do they intend the indemnity to include the costs of the proceedings or do they not?

By this Amendment I seek to put in words which will make it perfectly clear that the indemnity will extend to the whole figure ordered to be paid by way of compensation but will not go beyond that and include any indemnity as to costs. I personally think that an indemnity as to the amount of compensation would be adequate, but I have not a very strong view about it, one way or another. I would prefer that it should not include costs. Therefore my first question to the Government would be this: do they intend the indemnity to be one which could include costs? If the answer to that question is "No", then I would submit that in order to make that clear beyond a misunderstanding it is necessary to include some words such as I have put on the Marshalled List, namely: in respect of any sum payable by way of any such compensation".

I beg to move.

THE LORD CHANCELLOR

My Lords, this matter is limited to proceedings under Clause 106; namely, proceedings before an industrial tribunal for unfair dismissal. I was not aware that it was the practice of the industrial tribunals to award costs. If it is, they are minimal, and if it is their practice, then the intention of the Government is that the indemnity, if any, should not include them. I will consider this matter further as I was given a slightly different idea of the purpose of the Amendment when I was preparing myself to meet it. I thought the noble Lord was making a different point and I was prepared to answer that point, but I will let the noble Lord have a more considered statement. The position about costs in industrial tribunals is that regulations may include provision for the award of costs or expenses, including allowances payable under Section 12(3) of the Industrial Training Act, other than allowances payable to members of industrial tribunals or assessors, but I do not fancy that these will be at all substantial. The intention is that the indemnity should not include the award of costs.

LORD STOW HILL

My Lords, I am grateful to the noble and learned Lord, first, for the intimation he has given as to the intentions of the Government and, second, for the statement he has made that he will go into the matter further. With that expression of gratitude, may I ask the leave of the House to withdraw the Amendment?

Amendment, by leave, withdrawn.

Clause 121 [Action initiated by Commission]:

LORD DIAMOND

My Lords, the purpose of putting down Amendment No. 88 is to persuade the Government of the merits of it. If one has succeeded in that, one should waste no more time. I beg to move.

Amendment moved—

Leave out Clause 121—(Lord Diamond.)

LORD DRUMALBYN

My Lords, I am grateful to the noble Lord for his brevity. The noble Lord put down an Amendment which we discussed on the Committee stage of the Bill, and I said that I would reconsider the clause in the light of what he had said. We have done that and we accept his Amendment.

LORD DIAMOND

My Lords, I am most grateful to the noble Lord. I had hoped that this was one of the reasons why he had added his name to the Amendment.

On Question, Amendment agreed to.

Clause 122 [Report of Commission on reference under s. 120]:

EARL FERRERS

My Lords, I beg to move this Amendment on behalf of my noble friend, and perhaps at the same time we might consider the following three Amendments, all of which are consequential upon the deletion of the last clause. I beg to move.

Amendment moved—

Page 92, line 30, leave out (" (a) ").—(Earl Ferrers.)

On Question, Amendment agreed to.

EARL FERRERS

My Lords, Amendment No. 88D is consequential upon the previous Amendment. I beg to move.

Amendment moved—

Page 92, line 33, leave out from ("Act") to end of line 36.—(Earl Ferrers.)

On Question, Amendment agreed to.

EARL FERRERS

My Lords, this Amendment No. 88E is also consequential. I beg to move.

Amendment moved—

Page 92, line 38, leave out ("or of the regulations").—(Earl Ferrers.)

On Question, Amendment agreed to.

EARL FERRERS

My Lords, I beg to move Amendment No. 88F.

Amendment moved—

Page 92, line 38, leave out from ("to") to ("and") in line 40 and insert ("that question").—(Earl Ferrers.)

On Question, Amendment agreed to.

Schedule 3 [Chief Registrar and Assistant Registrars, National Industrial Relations Court and Commission on Industrial Relations]:

6.39 p.m.

LORD STOW HILL moved Amendment No. 88A: Page 139, line 31, after ("of") insert ("mental or physical").

The noble Lord said: My Lords, I think I can take this matter quite shortly. On the Committee stage we had a considerable amount of discussion on the need for the Industrial Court and the members of the Industrial Court to be seen to be, and recognised as being, a completely independent tribunal and entitled to the public confidence that goes to any tribunal in this country. There was some discussion as to the power of the Lord Chancellor and the Secretary of State to remove an appointed member on the ground of incapacity or misbehaviour—a power which resides in paragraph 6 of Part II of Schedule 3. The noble and learned Lord felt that the power to remove would not really trespass upon the respect owed to an independent tribunal of that sort, upon the basis that it did not really vest in the Executive any excessive power of removing an appointed member, and his ground for so thinking was that the words "incapacity or misbehaviour" enshrined, as it were, the comparative irremovability of appointed members. Clearly, the Lord Chancellor and the Secretary of State must have a right to remove an appointed member for misbehaviour, and the question really centred upon the word "incapacity". The discussion was whether the power to remove for incapacity was in any sense open to criticism. The noble and learned Lord's view was that it was not open to criticism, upon the basis that it would be construed as meaning incapacity (may I use the expression broadly) on the ground of some physical or some mental limitation. If it is so construed, I personally would not have the least possible criticism of it. Clearly, the Lord Chancellor and the Secretary of State, in the event of an appointed member becoming incapacitated in that sense in carrying out his duties, must have the possibility of removal.

I am not arguing that that is not in fact what would be attributed as the meaning of the word "incapacity". All I am seeking to do is to put it beyond any possible doubt that the word "incapacity" is limited in that sense. In order to remove any conceivable doubt, this being a matter of important principle, I seek to add the words "mental or physical"; in other words, the power of removal would arise only on the ground of mental or physical incapacity, or misbehaviour. The addition of the words I propose would, I submit, make it perfectly obvious, so far as the appointed members are concerned, that, apart from misbehaviour, they hold their office without any possible fear of interference from the Executive unless they are physically or mentally unable to do that for which they are appointed. That, I submit, is the right result. It is the intention of the Government, as I think the noble Lord made clear, and it is an intention I would entirely endorse, if I may respectfully say so. I simply seek to put it beyond the least question that that is the only situation in which the power to remove could arise, apart from misbehaviour; namely, if it is demonstrated that the appointee has become mentally unable to do the work, owing to nervous breakdown or something of the sort, or physically unable to do the work. I beg to move.

6.44 p.m.

EARL FERRERS

My Lords, we are grateful to the noble Lord for having moved this Amendment. I should like to say at the outset that I do not think there is anything of difference between us at all. As he explained, my noble and learned friend is just as anxious as is he to see that "incapacity" covers mental and physical incapacity. The noble Lord will remember that when the Bill was first introduced the words which we had in the Bill were different from those that we have now: the words were "unfit to continue in office or incapable of performing his duties". Noble Lords opposite considered that this was not quite so specific as it should be, and it was for that reason that the Government moved an Amendment at the Committee stage to import the words now in the Bill. These particular words, "incapacity or misbehaviour", were the words which the Opposition in another place had used in the Courts Act. I suggest to the noble Lord that it would be desirable that the same phraseology should be used in this Bill as in the other, in order to avoid any possibility of misrepresentation. I am quite certain that the Bill will be interpreted only as it is intended, which is that "incapacity" should refer to mental and physical incapacity. But I would suggest that it would be best for this Amendment not to be accepted, simply in order that the legal phraseology may be kept the same in different types of legislation.

BARONESS GAITSKELL

My Lords, I intervene not so much to support the Amendment as to oppose paragraph 6, which I think is absolutely ridiculous. The whole thing is really laughable. It is the kind of sentence or phrase that might be put into any contract or at the end of any kind of rules and regulations for governing boards. It is completely obvious and quite unnecessary.

LORD DONALDSON OF KINGS-BRIDGE

My Lords, without going so far as to agree with everything that my noble friend has just said, I would support this Amendment on the grounds that the word "incapable" has a perfectly clear meaning which does not necessarily involve either mental or physical, incapacity; in other words, it is perfectly possible for a Home Secretary, for political reasons, to say, "This man is incapable; I am going to sack him". That could never be proved, whereas if we limit it to mental and physical, these terms are subject to proof. I think there is substance in the Amendment, and I think it should be looked at very carefully.

LORD STOW HILL

My Lords, I am grateful to both my noble friends for their contributions and to the noble Earl for his answer. May I say to my noble friend who has just spoken that the point I was trying to make was much better expressed by him than by me. I feel that "incapable" is just conceivably susceptible of the meaning of incompetent, and whilst I think, if one is using percentages, that "incapacity" is probably about 95 per cent. safe, I was trying to make it 100 per cent. safe. On the other hand, I see the force of the argument that, as a matter of draftine, it is not desirable to use the word "incapacity" in the Courts Act and to use a different connotation of words in this Bill. The result of so doing is that attention is called in the course of argument, should it ever arise, to the difference of wording between the two Acts, and it is sought as a result to limit or extend one set of words or the other. Weighing those considerations, the slight uncertainty, on the one hand, and the difference in the wording, on the other, I feel convinced, on balance, and persuaded by what the noble Earl has said, that it is probably not desirable to press the Amendment, and I would ask leave to withdraw it.

Amendment, by leave, withdrawn.

LORD DRUMALBYN moved Amendment No. 88B:

Page 140, line 46, leave out ("practicable") and insert ("appropriate").

The noble Lord said: My Lords, in the absence of my noble friend, may I move this Amendment with which my name is associated? Your Lordships will recall that in Committee the noble Earl, Lord Dudley, moved an Amendment part of which would have substituted "appropriate" for "practicable" in this paragraph. On that occasion my noble friend Lord Jellicoe said that the suggestion appealed to him and he undertook to look at it between then and Report stage. We have looked at it, and I do not think I need do more than say that we are grateful to my noble friend for having brought this matter to our attention. My noble friend Lord Jellicoe was not able to agree with everything that was said on that occasion, but he did express the feeling that in regard to the word "practicable" the appropriate word was "appropriate", and the Amendment would substitute that word for "practicable". I beg to move.

On Question, Amendment agreed to.

6.50 p.m.

LORD DRUMALBYN moved Amendment No 88G:

Page 140, line 46, at end insert ("and except as provided by sections 82(7) and 146(6) of this Act, and except in proceedings on an appeal under section 113 or section 114 of this Act, the Industrial Court shall not be bound by any enactment or rule of law relating to the evidence which is admissible in proceedings in other courts.")

The noble Lord said: My Lords, the aim of this Amendment is to release the Industrial Court from strict adherence to the rules and laws of evidence. The Government have repeatedly indicated their intention that the Industrial Court should be a plain man's court, and that is why it has its tripartite composition, which is somewhat unusual. That is why it has the discretion it will enjoy in awarding its remedies; and that is why we intend that informality will characterise its proceedings. In order to do justice to this conception the Industrial Court must be as flexible as possible in its procedure, and that is the principal reason for the Amendment. Adherence to the rules of evidence normally observed in the courts would, for example, oblige parties to follow various Rules of Court laid down in the Civil Evidence Act 1968 before certain statements could be produced in evidence. The court would also be restricted in the types of second-hand hearsay evidence which would be admissible. In this matter we are following the practice of industrial tribunals, which are similarly free from the obligation to observe the formal rules of evidence. This follows from the regulations made under Section 46 of the Redundancy Payments Act 1965. The wording there in this respect has been carried over into Schedule 6 of this Bill. Industrial tribunals will continue to enjoy freedom from the formal rules of evidence, and the Amendment puts the issue beyond doubt in respect of the Industrial Court.

Perhaps I may say a word about the two exceptions contained in the Amendment. First, when the Industrial Court is hearing appeals from decisions of an industrial tribunal or the Registrar, such appeals will, at least in the case of tribunals, be entirely on points of law, with legal representation highly probable. The facts will generally not be in dispute. Since the proceedings are likely to consist mainly of technical argument between opposing counsel, there is little purpose in suspending the normal law of evidence. The second exception concerns information given to the Registrar or to a conciliation officer in the course of their conciliation duties. Since it is important that the relationship between the conciliator and his client should remain confidential and free from inhibition, Clauses 82(7) and 146(6) provide that what was said, or conveyed, during conciliation shall not be revealed in subsequent proceedings without the consent of the party concerned. The Amendment retains this protection.

I fully recognise that noble Lords opposite would prefer that this Bill did not establish the new Industrial Court at all. Given the intention of the Government that this Court shall be established, it is surely in everyone's interest that it should work effectively. By this I mean that the Court should deal flexibly, informally, and speedily with all the different types of case that come before it. This will, of course, be to the advantage of all who appear before the Court, whether as applicants, complainants, or respondents. I therefore commend the Amendment to the House as a useful means of increasing the Court's effectiveness, and I hope the House will agree.

LORD STOW HILL

My Lords, I should just like to ask a question with regard to this Amendment. I am entirely in sympathy with the spirit of it. I think that the greater freedom which this allows does conduce better to the purposes of that part of the Bill which relates to the legal proceedings, whether that part is right in principle or wrong. I cannot quite understand what the effect of the exceptions in relation to appeals under Clauses 113 and 114 of the Bill is going to result in. One is there considering an appeal to the Industrial Court. The tribunal from which the appeals come—whatever the tribunal may be, whether it is the industrial tribunal or any of the others specified in the Bill—will have been free of any limitation as to the type of evidence that it is to consider, and the rules on which that evidence is to be tendered. Then, when the matter goes on appeal to the Industrial Court, the clamp is to come down; the rules as to evidence, as they are normally understood, must then be put into operation and obeyed. I think that is right.

Not infrequently a situation arises in which, in an appellate court, even though the matter may be one strictly of law, it becomes necessary to consider some issue of fact which was not decided in the court below but upon which the issue of law depends. If that issue of fact, in the rare case, should come before the appeal tribunal and the appeal tribunal should decide that evidence must be given as to that fact, that evidence is apparently to conform to the rules of evidence. Some of the facts, therefore, before the appeal court will have been ascertained in the court below without the rules of evidence being applied; other facts will have been ascertained in the appellate court, the rules of evidence having been strictly applied. It seems to me that great inconvenience may result. The result of applying the rules of evidence may produce a different finding in a given situation of fact.

Perhaps I may continue while the noble Lord gains sustenance from his advisers? There probably is a simple answer to this, but if there is not I would suggest that the Government should consider this a little further, because some rather bizarre results might eventuate from the application of two systems of evidence brought into play in relation to a set of facts on which a given case depends in the appellate court.

LORD DRUMALBYN

My Lords, I am grateful to the noble Lord. I was anxious to know whether the existing jurisdiction of the industrial tribunal over the Redundancy Payments Act covered an appeal and, if so, whether the same kind of circumstances existed there as those he is talking about. I am assured that the same kind of circumstances do exist. There is, at the present time, an appeal to the High Court, and presumably in the High Court the laws of evidence apply with their full vigour. If that is so I should have thought that exactly the same thing would occur in regard to an appeal from the industrial tribunal to the Industrial Court on a matter of law. I hope that is a satisfactory answer.

LORD STOW HILL

My Lords, if the House would be so kind as to allow me to say two words, may I thank the noble Lord and sympathise with him in having this sort of thing shot at him. That is the fate of a Minister, and he is very gallant in his dealing with these points. The mere fact that there is a precedent does not ensure that it is a good precedent, but I do not take it any further.

On Question, Amendment agreed to.

6.59 p.m.

LORD DRUMALBYN moved Amendment No. 88H:

Page 141, line 24, leave out ("(e) of section 155(1)") and insert ("(f) of subsection (1) of section 155").

The noble Lord said: My Lords, I beg to move Amendment No. 88H, and may I invite the House to consider Amendment No. 88J at the same time. These are forward-looking Amendments. They are contingent really upon the acceptance by the House of Amendment No. 93J which, as noble Lords will have seen from the Marshalled List, seeks to add to the categories of information protected from disclosure under Clause 155 an additional item; namely, any information obtained by an employer for the purpose of bringing a prosecution, or defending any legal proceedings. Of course it would be wrong for me to anticipate what the House might decide on Amendment No. 93J, but for the purpose of enabling us to have a meaningful discussion on these Amendments to Schedule 3 it would be helpful to assume its acceptance for the time being.

Where a trade union disputes an employer's claim that information it has sought under Clause 56 is protected from disclosure by Clause 155, the matter will have to be resolved by the National Industrial Relations Court. Clearly, where the purpose of the proceedings is to determine whether the information in question is protected—for example, whether it is personal or confidential information falling under subsection (1) of Clause 155—the Court should be able to hear the evidence in private, and paragraph 20 of Schedule 3 enables its rules so to provide. The purpose of these Amendments is therefore simply to enable the Court's rules to allow it to hear in private evidence consisting of legally privileged information. I hope the House will agree that such information should enjoy the protection afforded by Clause 155, when we debate Amendment No. 93J. Amendments Nos. 88H and 88J are really consequential drafting Amendments to the Schedule and this, I am afraid, is a consequence of the order in which we are taking the business. My Lords, I beg to move.

LORD STOW HILL

My Lords, I hope that the House will agree to this Amendment. Amendment No. 93J is in the name of the noble Lord, Lord Drumalbyn, my noble friend Lord Diamond and myself and, as has been said, this Amendment is consequential on that.

LORD DRUMALBYN

My Lords, I am much obliged to the noble Lord. This is the second time that we have anticipated Amendments which we are going to accept.

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 88J.

Amendment moved—

Page 141, line 27, leave out ("the said paragraph (e)") and insert ("paragraph (e) of that subsection").—(Lord Drurnalhyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I suggest that this may be a convenient moment to break for an hour. I beg to move that further consideration of this Bill be adjourned, to enable the Mersey Docks and Harbour Bill to be considered on Second Reading.

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