HL Deb 11 November 1976 vol 377 cc827-9

[No.37]

After Clause 17, insert the following new clause:

Auditors of body which is both a company and a trade union etc.

—(1) Subject to subsection (2) below, this section applies to every body which is both a company and a trade union or employers' association to which section 11 of the Trade Union and Labour Relations Act 1974 applies.

(2) Where any such body as is mentioned in subsection (1) above has auditors who were appointed, before the coming into operation of this section, under subsection (3) of the said section 11 (duty to appoint auditors), this section shall not apply to that body until—

  1. (a) the term of office of those auditors expires, or
  2. (b) auditors are next appointed by or on behalf of that body under section (Appointment and removal of auditors) (1) or (2) above,
whichever of those events first occurs.

(3) Subsection (3) of the said section 11 and paragraphs 6 to 15 of Schedule 2 to the said Act of 1974 (qualifications, appointment and removal of auditors) shall cease to have effect in relation to bodies to which this section applies.

(4) The rights and powers conferred, and the duties imposed, by paragraphs 16 to 21 of the said Schedule 2 on the auditors of a body to which this section applies shall belong to the auditors from time to time appointed by or on behalf of that body under section (Appointment and removal of auditors) above.'

Lord WINTERBOTTOM

My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 37. Again this is a matter of substance, and a matter which I also find an interesting point. This new clause clarifies the position of a body which is both a company and a trade union or employers' association, in relation to its duties concerning the qualification, appointment and removal of auditors. Its effect is that auditors appointed for the purposes of the Companies Acts are also to act as auditors for the purposes of the Trade Union and Labour Relations Act 1974, and are to have the rights and duties prescribed by that Act. Section 11(3) of that Act (which requires auditors to be appointed to audit the accounts of trade unions and employers' association) will therefore cease to apply to such bodies.

At present, a body which is a company and either a trade union or an employers' association is required both by the Companies Act 1948 and by the Trade Union and Labour Relations Act to appoint auditors, but the requirements of the two Acts relating to the qualification, appointment and removal of the auditors differ, and in some respects are incompatible. This creates considerable uncertainty for the bodies concerned. Although there are relatively few such bodies, this is an unsatisfactory situation which would be made worse by this Bill, which extends the rights of auditors.

This new clause overcomes the difficulty by providing that the auditors of a company which is also a trade union or an employers' association are to be appointed in accordance with the provisions of the Companies Acts, and they are to have the rights conferred by and be subject to the duties imposed by virtue of the 1974 Act as well as those imposed by the Companies Acts. In practice, the same auditors already act for the purposes of both sets of legislation. This Amendment merely regularises the position. The TUC and the CBI have been consulted about this Amendment and are both content, and the Certification Officer who is responsible for overseeing the provisions relating to the auditors of trade unions has been informed by the Department of Employment.

Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Winterbottom.)