TRADE UNION AND LABOUR RELATIONS BILL (Hansard, 16 July 1974)

§ THE LORD PRIVY SEAL (LORD SHEPHERD)

My Lords, I beg to move that this Bill be now read a second time. At the outset I acknowledge and appreciate the very great difficulties that confront the House in considering this Bill. If it is difficult for a Minister, I fully appreciate how much more difficult it must be for the Opposition and other interested Members. For this reason I had copies of the Bill distributed by hand on Friday afternoon. Of course, it had to be selective, but the distribution was made after consultation through the usual channels. I wish to make clear that anything I can do I will do to help Members between now and Third Reading. Noble Lords need only approach me direct or through my office. I hope that the House will understand that I mean this offer most seriously, and I say it in a spirit of well-meant co-operation.

My Lords: Industrial Relations are a domain where peace comes only by willing co-operation. In other walks of life, where people disagree they can simply part; but if management and employees disagree they cannot just take up their marbles and go home. They still have to learn to live together if the enterprise is to continue and to prosper. To a large extent they must forge their own law of association and forget contracts and tort and other legal chains. They must, in a word, evolve the common law of the shop. They cannot do that by fighting each other in the courts …". My Lords, those words are not mine. They belong to the late Lord Donovan, in whom so much wordly wisdom was vested. They were spoken at the time of the Second Reading in this House of the Industrial Relations Bill on April 5, 1971, at column 45 of the OFFICIAL REPORT. This House debated at great length and in great depth the possible consequences of what we now know as 1012 the Industrial Relations Act. While, of course, I could not claim that every argument and every point of view put forward at that time by the late Lord Donovan is reflected in the Bill before this House today, his direct critique of industrial relations goes, I think, to the heart of the matter. He said: Industrial relations are a domain where peace comes only by willing co-operation". It is not a game—and it should never have been turned into a battlefield. It must surely be the task of Government always to seek willing co-operation, always to help to achieve industrial peace. This cannot be brought about by Government alone. The right framework is necessary. It was this which the Industrial Relations Act failed to provide.

Of course, it is generally recognised that the Act did not succeed. Those who expressed such high hopes three years ago in the lengthy debates in this House have, of course, been disappointed. Lord Jellicoe, in our Second Reading debate (April 6, 1971) went so far as to say that it was the Government's belief—right or wrong—that over a period of time this Bill should do much to strengthen, to buttress and to encourage the resolution of industrial disputes in this country, and with that bring a more hopeful climate of industrial relations and greater prosperity and … a breakthrough into a higher plateau of economic performance which has been denied to this country for far too long. Ever since the 1971 Act reached the Statute Book, instead of resolution there has been added confusion. We have suffered a painful and bewildering three years. The very expression "Industrial relations" has now gathered to itself complexities of meaning which can hinder clear-headed analysis. To those of us on this side of the House, the past three years have not been full of surprises; but, while we must reflect on failure I must admit we would prefer to analyse this repeal Bill as positive and effective legislation.

First of all, though, let us talk about failure. I think it must be true to say that noble Lords from all sides of this House—whether their interests lie most heavily with management or unions—readily admit that the Industrial Relations Act did fail; that it did not achieve industrial peace. I am not going to say that the record of strikes during the past 1013 three years—a damaging record in all conscience—is the direct outcome of the Industrial Relations Act. But few of us could doubt that the atmosphere of mistrust and ill-temper—the industrial air we breath—has in no way helped men of reason and conciliation. It has made the rôle of the moderate infinitely more difficult. However commendable intentions may be, it is my belief that any law in the field of industrial relations which fails must be a bad law; we pay for it very dearly indeed.

The late Lord Delacourt-Sraith, who played such a valiant part in our consideration of the Act, and whose lady we welcome here this afternoon, thought that the Industrial Relations Act was "legalism run mad". I am fairly certain he was right, but perhaps the gravest errors grew first from failing to appreciate an obvious fact of life; good industrial relations are very much good human relations. An Act of Parliament which, by its nature, implies a deep lack of trust in one section of the community is unlikely ever to improve the human condition.

At root, trade unions consist of workpeople for the benefit of workpeople. Understandably, the members of any such union feel themselves chiefly responsible for the welfare of their colleagues. Almost half of the working population in this country are members of one union or another. The history of trade unionism in this country is a proud one and the T.U.C., in times of crisis, given its rightful discretion, is capable of exercising wide responsibilities. In 1969, for instance, when the T.U.C. promised to grasp the nettle of demarcation disputes, it was as good as its word. Every year since then between 80 and 100 demarcation disputes have been dealt with within the ambit of unionism itself; the old worry of strikes in that area of industrial relations has been pre-empted time and time again. That, my Lords, represents worker responsibility for workers and, as a natural consequence, worker responsibility for the welfare of the community at large. That is what we must seek to strengthen and encourage.

I have implied that what was basically wrong with the Industrial Relations Act was a failure of imagination. By that I mean imagination which draws upon the common experience of a nation's 1014 history, the reactions of individuals under stress, the interwoven and incredibly variable forces of reason and feeling—among individuals and groups of individuals; the everyday notion of loyalty.

Bearing that in mind, I should like to offer a plain man's analysis of the two crucial subjects in the Industrial Relations Act where disagreements were bound to deepen and develop into open hostility: they are registration, and the closed shop. These are particularly important because the provisions in the repeal Bill, in part, take the form they do because of the reaction to the provisions of the Industrial Relations Act and the way they were operated. Could it be otherwise given the basic failure of those who designed the Act: the imaginative gap between legislators and the attitude of ordinary workpeople, trade unionists and indeed employers?

Let me start with the closed shop. The previous Administration took the view that the closed shop was such a bad thing that it should be specifically outlawed in one of its forms (the pre-entry closed shop) and made unenforceable in the other form (the post-entry closed shop). They ignored the advice of the Donovan Commission which said that, prohibition of the closed shop must be rejected"— advice based on years of expert research; and they failed to understand the collective values inherent in the closed shop. Of course it is right to stress the rights of the individual—unions are just as much concerned about that as we are. But, for balanced judgment, we really must try to appreciate the rationale of the closed shop. It does indeed help unions to obtain and then retain higher levels of membership which can match the power of the employer. But, at the same time, it can provide stable employment and stable industrial relations in industries where entry control is vital for the maintenance of established standards.

Let me put it more dramatically. When there is a mining disaster we can do nothing except stand by and admire the men who, without hesitation, organise and carry out the rescue of their comrades. We accept all that as an admirable, instinctive, community enterprise. My Lords, it is that same sort of instinct, that unity of purpose, which insists on the closed shop. In a mining village the 1015 closed shop is as much a part of the social fabric as the strength of character which can cope so heroically with sudden injury and death. If we can accept that, we may understand why the Donovan Commission forecast that prohibition of the closed shop could not in any case be effective, and why that has been exactly the experience of the last two years during which, in theory, the closed shop has been outlawed.

The Donovan Commission said: The law would presumably declare such things to be void, but this of itself would not necessarily deprive them of practical effect". And that is just what happened. I am not surprised to recall that the Industrial Relations Act itself was amended in the course of its passage through Parliament to include provision for the "approved closed shop". The agency shop, which was supposed to replace the closed shop, never got off the ground.

Registration, the second subject I want to discuss, is, in a sense, the more difficult to treat coolly as a political concept. In the context of the Industrial Relations Act it is, at once, a system, a requirement, an enticement—an iron door bearing the words, "Trust Me". But let me try to explain our views. We have two main objections to the system of registration introduced by the 1971 Act. First, we object to the obligations which registration imposes upon a union. In our view, these amount to a quite unacceptable degree of interference in the internal affairs of unions, representing another example of the general theme running throughout the 1971 Act—that unions are somehow not to be trusted to run their affairs properly. In particular, we object to the detailed requirements as to the rules of trade unions and employers' associations set out in Schedule 4 to the 1971 Act.

Our second main objection to the registration system under the 1971 Act is that, for the first time, we were all obliged to discriminate between registered and unregistered unions. This goes much deeper than semantics. For the sake of apparent coherence, for the sake of an impossibly vast legal structure, we were prepared to contemplate the loss of hard-won democratic rights—rights which unions have enjoyed since the turn of the century. The crucial immunity for 1016 inducing breach of contract—introduced by the Trade Disputes Act 1906 for the benefit of any person—is restricted to registered unions and their officials. That has meant that unregistered unions—in effect, the bulk of the union movement—are at present in the same position as they were at the time of the Taff Vale case of 1901. Their funds are at risk every time that circumstances oblige them to take industrial action without notice.

But I think the most telling case against the registration system is that it has not worked. The opposition of the unions has been united. The Register itself wears a very odd look. Although over 200 organisations are registered as unions, the majority are small and obscure organisations, many catering only for the employees of a single firm. These 200-odd organisations represent only about 10 per cent. of the total union membership of this country. Less than half of them were to be found on the pre-1971 Register. I cannot think that this was intended by the previous Government. It certainly makes no sense in industrial relations terms and makes a nonsense of the whole registration system of the 1971 Act. We think that the time has come to sweep away the registration system altogether and start on a fresh basis.

My Lords, I hope you will understand why I have thought it right to dwell for so long on past history. I thank your Lordships for your patience. I realise I have yet to offer a plain man's guide to the Bill before us, but at this point I must make it clear that the Government see this Bill as only one of the measures which they propose to take in the industrial relations field. There are important areas which it does not cover. The Government are committed to the establishment of an independent conciliation and arbitration service. That is not dealt with at all in the Bill. However, as noble Lords will know, plans are going ahead for the establishment of the service as soon as possible on an administrative basis. My right honourable friend the Secretary of State for Employment published a consultative document on May 17. His proposals have been generally welcomed by industry. Of course, the service will not have its full range of functions until it is put on a statutory basis. That must await the 1017 Employment Protection Bill for which the Government intend to publish a Consultative Document in the autumn with a view to introducing legislation as soon as possible.

Some noble Lords may consider that the present Bill is not short enough, but if it had covered all the matters on which the Government intend to legislate, as well as putting the C.A.S. on a statutory footing, we should have had a very long Bill indeed. And the Industrial Relations Act would have remained on the Statute Book for much longer than we think right. Hence, also, the question of trade union membership rights is not dealt with in the Bill except in so far as they are relevant to the question of unfair dismissal. There is no equivalent of the right to belong—only protection against dismissal. This, again, is for the Employment Protection Bill.

In the Consultative Document published on March 22, it was stated that consideration would be given to providing, either in this Bill or in a later one, safeguards against arbitrary exclusion or expulsion from union membership. This is a most important area which was examined at some length by the Donovan Commission. Though neither they nor other advocates of safeguards have claimed that there is a major problem here, we know that Donovan did suggest special appeals machinery. My noble and learned friend the Lord Chancellor may well have more to say on this subject later this evening. I will content myself with saying that we shall be consulting further with the T.U.C., this being an area where it is important to obtain a solution which takes proper account of existing procedures which, on the whole, work well. It is largely that consideration which has led the Government to conclude that the matter is best dealt with in the Employment Protection Bill.

My Lords, what, then, does the Bill itself do? Rightly, in our view, it repeals most of the provisions of the Industrial Relations Act. The main exception to that principle are the provisions of the Act dealing with unfair dismissal, which by and large are re-enacted in Schedule 1 of the Bill, though with a number of important improvements. Apart from transitional provisions designed to facilitate the winding up of the machinery of 1018 the Industrial Relations Act, the Bill has these main purposes: it lays down provisions concerning the status and regulation of trade unions and employers' associations; and it provides legal immunities for those carrying out certain acts in contemplation or furtherance of a trade dispute.

Clauses 2 to 8 deal with the status and regulation of trade unions and employers' associations. So far as unions generally are concerned, the Bill proposes a return to the pre-1971 position, under which no union was, or could be, a corporate body. My Lords, unions are essentially voluntary in nature. However, the Bill provides that unions are to have certain of the attributes of corporate bodies; for example, the power to sue and to be sued in their own names. The Bill was amended in another place so that bodies on the Special Register of the 1971 Act can retain their corporate status and generally attract the immunities in respect of activities in regard to the regulation of relations between employers and workers if they satisfy the definition of "trade union" in the Bill. Organisations on the Special Register were very concerned that no account was taken of their circumstances in the Bill as published; and the Amendments which were made recognise their special problems. Employers' associations, because they may have other objectives as well as the regulation of industrial relations, will be permitted to be either bodies corporate or unincorporated associations.

With the abolition of registration and the Registry of Trade Unions and Employers' Associations, the affairs of unions and employers' associations will once again be dealt with by the Registry of Friendly Societies. This is intended to be only a temporary arrangement pending the establishment of the Conciliation and Arbitration Service as a statutory body. The Bill will require the Registry of Friendly Societies to maintain lists of unions and employers' associations satisfying the relevant definition. Any union or employers' association which has been previously registered or, in the case of unions, affiliated to the T.U.C., will be put on the list without formal application. The Bill lays down administrative and accounting requirements with which all unions and employers' associations 1019 except temporary bodies and the employer and union sides of joint negotiating committees will have to comply. Clauses 10 to 14 deal with restrictions on legal liability and legal proceedings.

My Lords, many of the provisions represent a return to the position existing in 1970 before the Industrial Relations Act. However, a number of changes have been made designed, in part, to modernise the law, to meet developments in case law in the 1960s and to give protection to incorporated employers' associations and Special Register bodies in respect of acts done in connection with the regulation of relations between employers and workers.

Clause 10, which deals with immunity from action in breach of contract, stems from Section 3 of the 1906 Act. Unlike Clause 2(5), which continues the protection against liability for restraint in trade and the immunity from tort, which is the subject of Clause 11, it applies to persons and not simply to the organisations. The 1906 Act gave protection against action in breach of contract of employment. The present Bill protects against breach of all types of contract. This provision has attracted a good deal of comment and criticism, both in the debates in the other place and in the Press. Basically, however, the Government believe that the position before 1971 was unsatisfactory. This was the verdict of the Donovan Commission, which recommended that the law should be clarified and simplified and that Section 3 of the 1906 Act be extended to cover all contracts. It is the case that the majority of the Donovan Commission recommended that the immunity should be limited to registered trade unions. However, the Government consider that such a limitation is undesirable. Nearly all industrial action interferes directly or indirectly with commercial contracts. Experience has shown that employers are reluctant to sue workpeople. That this is not a tendency to be encouraged is amply confirmed by the experiences of the Industrial Relations Act.

Clause 11 is a modernised version of Section 4 of the 1906 Act. As in the case of protection against liability for restraint in trade, Clause 11 applies without restriction to unincorporated employers' 1020 associations and to trade unions, but only to acts in pursuance of the regulation of relations between employers and workers in the case of incorporated employers' associations and Special Register bodies. This distinction seems much more appropriate than that in the Bill as originally published, as it puts the majority of employers' associations on an equal footing with trade unions. Incorporated employers' associations are much more likely to have functions which extend beyond industrial relations. In the case of all organisations, incorporated or not, the immunity from tort is considerably restricted if the act is not in contemplation of furtherance of a trade dispute. Clause 11(2) is a revised and clearer version of Section 4(2) of the 1906 Act—a section renowned, I understand, for the obscurity of its drafting.

Picketing is the subject of Clause 12. Although this is a subject which always seems to attract controversy, I hope that this will not be the case in our debates because Clause 12 simply carries forward into the repeal Bill the effect of Section 134 of the Industrial Relations Act, which in turn was the same as the 1906 Act except that the right to picket a person's home was removed. The right to picket peacefully is important to workers and to trade unions.

My Lords, there is much else one could say on the details of the Bill, but I am conscious of the time. Perhaps we shall have an opportunity to deal with some of the other clauses in Committee. I hope I have said enough about this Bill to persuade your Lordships to give it a Second Reading. We think that this Bill will make some advance in the field of industrial relations. It should not be judged on its own, but as part of a series of proposals which this Government will bring forward in the next months and in the next few years. My Lords, I beg to move that the Bill be now read a second time.