§ 3.25 p.m.
§ Lord WALLACE of COSLANY rose to move, That the draft Employment Protection (Variation of Limits) Order 1978, laid before the House on 8th of November, be approved. The noble Lord said: My Lords, I beg to move the approval of the Employment Protection (Variation of Limits) Order 1978 and to speak to the Unfair Dismissal (Increase of Compensation Limit) Order 1978. For the convenience of the House, I intend to deal with both orders in one speech, and I have already advised the Opposition and the Liberal Benches to that effect. Of course, naturally, at the end of the debate I shall move each order separately to meet the requirements of the House.
§ The Employment Protection (Variation of Limits) Order 1978 is submitted for your approval in accordance with Section 148 of the Employment Protection (Consolidation) Act 1978. That section requires the Secretary of State for Employment to carry out each year a review of the limits of certain payments which relate to guarantee payments to workers on short-time and temporary lay-off, and to the weekly earnings limit laid down for the purpose of calculating redundancy payments, certain unfair dismissal awards and certain debts in relation to insolvency. In 909 accordance with the statute the Secretary of State has now completed the 1978 review.
The Secretary of State has to take three factors into account in the review:
the general level of earnings obtaining in Great Britain at the time of the review; the national economic situation as a whole; and such other matters as he thinks relevant".
If, in the light of his review, the Secretary of State considers that any of the limits should be changed, he must prepare and lay before each House the draft of an order giving effect to his decision which is subject to the Affirmative Resolution procedure. If he considers that any of the limits should not be varied, he must lay before each House a report stating his reason.
§ The Secretary of State has decided that all the monetary limits covered by the review should be raised by about 10 per cent., and that decision is set out in the order now before your Lordships. He has decided not to vary two of the limits involved in guarantee pay, and that decision is explained in the report which was laid at the same time as the order. If the order is approved in both Houses, it will come into effect on 1st February 1979. This follows the pattern established last year when the increases in the limits came into effect on 1st February 1978.
§ Let me now turn to the background to this decision. The first factor which the Secretary of State must take into account is the general level of earnings obtaining in Great Britain at the time of the review. The index of average earnings indicates that, averaged over the whole economy, the level of earnings has been around 14 per cent. higher in recent months than 12 months previously, about 13.9 per cent. higher in August and about 15 per cent. higher in September.
§ The second factor to be taken into account is the national economic situation as a whole. The Government continue to give priority to the need for continuing restraint and for keeping costs to employers as low as possible. In the light of this, my right honourable friend the Secretary of State for Employment has decided that, although the earnings figures would suggest an increase of nearer 15 per cent. the right figure is about 10 per cent. I will now explain what this means in practice with the various limits.910
§ First, guarantee pay. The increase of 10 per cent. in the guarantee pay limit means that, from 1st February 1979, the maximum guarantee pay for days on which it is payable will be £7.25 compared with £6.60 at present. Guarantee pay is normally payable for the first five days of short-time working in each quarter. The quarters commence on 1st February, 1st May, 1st August and 1st November, My right honourable friend is required by Section 148 of the Act to review both the five day limit and the period of a quarter within which it applies. He has decided to make no change to cither limit. The report which has been laid before the House sets out the reasons for not altering these limits. My right honourable friend is discussing with the TUC and CBI the proposals put forward in a consultative document on short-time working compensation last April. It is essential that we take into account the views of both sides of industry before bringing forward legislation later in the Session. While we are discussing the form that the new arrangements for compensating short-time working are to take, it would not be appropriate to alter the basis of the present payments.
§ Secondly, the weekly earnings limit of £100 on redundancy pay and other related payments. I take redundancy payments first since they are the parent of all the others. The effect of the order is to raise the weekly earnings limit to £110. That means that the new maximum redundancy payment will be £3,300; that is, 30 weeks at £110, which is the amount payable to a man of 61 who has served 20 years and gets one-and-a-half weeks' pay for each year of service. Now let me turn to the basic award of compensation for unfair dismissal. Because this award is intended to reflect the amount of redundancy payment which would have been received by an employer if he had been made redundant instead of being unfairly dismissed, it follows that this limit should remain in line with the redundancy payments earnings limit. Consequently, the order proposes that it too should be increased from £100 to £110. The new maximum payable will be exactly the same as the maximum redundancy payment; namely, £3,300.
§ The additional award which a tribunal may award where the employer has refused to comply with an order for 911 reinstatement or re-engagement is also currently subject to a £100 weekly earnings limit. There are no substantial reasons for allowing this limit to get out of line with the limit for redundancy payments. If it is right to keep the link between redundancy payment and the basic award of compensation for unfair dismissal, it is sensible to keep the limits in step throughout the unfair dismissal provisions and to adopt £110 a week also as the limit on a week's earnings for the purpose of calculating the additional award.
§ Finally, payments to employees in the case of an employer's insolvency. These too have been subject to a weekly earnings limit of £100, and the order raises them to £110. The additional cost to public funds of the proposals in the order is estimated at £1.75 million. That is the estimated additional cost to the Redundancy Fund.
§ To sum up the effect of the Variation of Limits Order. It increases by 10 per cent. the monetary limit for guarantee pay and the weekly earnings limit used for the calculation of a redundancy payment and for the purposes of certain unfair dismissal and insolvency awards. The guarantee pay limit goes up from £6.60 to £7.25, and the weekly earnings limit goes up from £100 to £110. Those increases take account of the three factors I described earlier and I hope commend themselves to your Lordships as being a reasonable outcome of the review.
§ Now the other order for which I seek your Lordships' approval is of a different sort. It has been laid before the House in accordance with Section 75(2) of the Employment Protection (Consolidation) Act 1978 and its effect is to raise the limit on the compensatory award for unfair dismissal from £5,200 to £5,750. That limit is not subject to the annual review I described earlier, but it may be raised from time to time. The compensatory award is given in addition to the basic award for unfair dismissal and it is tailored to the individual employee's loss. The limit on the compensatory award has been £5,200 since September 1974. Very few people get £5,200, but there were eight cases in 1977, and it seems right to make a modest increase in the limit in order to allow for the effects of inflation. Bearing 912 in mind the need to keep down costs to employers, my right honourable friend has decided to raise the limit by a little more than 10 per cent. to £5,750. That seems to me a sensible and reasonable proposal.
§ There is one final point that I should make on this limit. It will apply not only to unfair dismissal compensatory awards, but also to compensation which may be awarded by industrial tribunals in cases where complaints of discrimination in employment under the Sex Discrimination or Race Relations Acts have been upheld. This is because both Acts provide that the maximum amount of compensation which a tribunal can award shall be the amount specified for compensatory awards for unfair dismissals. These orders represent a modest increase in the limits which makes some allowance for the effect of inflation without adding disproportionately to employers' costs, and I hope therefore that your Lordships will approve the proposals. I beg to move.
§ Moved, That the draft Employment Protection (Variation of Limits) Order 1978, laid before the House on 8th of November, be approved.—(Lord Wallace of Coslany.)
§ 3.38 p.m.
The Earl of GOWRIE
My Lords, I am grateful to the noble Lord, Lord Wallace of Coslany, for outlining the orders, although I cannot say that I like them very much. We are not opposed to the principle of the awards enshrined in the orders, nor, in these wretchedly inflationary times, to an annual uprating. However, an increase of 10 per cent. to take effect next February is surely confusing and hard to justify.
Last February I acknowledge that there was a 10 per cent. increase in the maximum limits, but at least at that time the Government's guidelines—their pay policy, as it were—took the form of a 10 per cent. pay policy. But, notwithstanding local difficulties over pay policy, the Government say that they are now standing firm on a 5 per cent. pay policy. So, surely, unless and until the Government admit that the 5 per cent. policy is unworkable and too restrictive, the limits enshrined in these orders should be increased by only 5 per cent.
913 It is in fact the employers who will be hit by the increased awards. Between now and next February—when the new limits will come into operation—the Government say that they are resolutely determined to ensure that employers paying wage increases in excess of 5 per cent. will be subject to somewhat unspecified, and I would argue arbitrary and doubtfully constitutional, punishments and sanctions. Therefore, like it or not, it is quite clear that employers will be in for a hard time generally.
Therefore, it seems that there are not only double standards of treatment as between workers and employers where pay policy is concerned but also double standards of inflation. Only yesterday in another place the right honourable gentleman the Secretary of State for Prices and Consumer Protection revealed that the rate of inflation over the past 12 months was 7.8 per cent. The latest economic forecast published six days ago by the Treasury suggests:Price inflation will stay near the present rate of about 8 per cent. a year".Even if the Treasury performed its average forecasting error of 1.1 per cent. for the first half of the forecast riod, the figure is still, under its notation, expected to be less than 10 per cent.
I think that there is a further cause for concern. The gracious Speech referred to the Government's intention to implement a scheme to provide compensation for short-time working. Can the noble Lord, Lord Wallace of Coslany, explain whether the limits in the order before us—notably the limit on the amount of guaranteed pay payable to an employee in respect of any single day—will be varied to take account of overlap? In other words, will the limits for payment be overtaken by the proposed short-time working scheme?
While I am on that subject, I have one more question for the noble Lord. When do the Government plan to introduce the short-time working scheme which is outlined in the Queen's Speech? Are they in fact, varying the present guaranteed payment limits because they know very well that the scheme in the Queen's Speech is, in fact, window-dressing and has very little chance of being introduced in the present Parliament?
Perhaps one might not quibble over a few percentage points if the whole system 914 of employment protection and industrial tribunals was at present operating with the general confidence of the public. However, regrettably, since the case of the night shift sleeper in particular, this is no longer the case. Indeed, the system is something of a laughing-stock. Only last week, as if they did not at present have other problems on their hands, Vauxhall Motors were ordered to pay more than £7,000 in compensation to an employee dismissed for sleeping on the night shift. It is not for me to question the verdict of the tribunal where liability is concerned, but I suggest that the figure seems unduly large. The tribunal decided that the employee was 50 per cent. to blame, yet I understand that the employee received £4,894, out of a maximum compensation award of £5,200; in other words, he received over 95 per cent. of the maximum. Of course, we all take 40 winks on the job from time to time; it is not unknown in your Lordships' House. But if your Lordships were to receive £7,000 each time you nodded off in debate you would be richer than at any stage since Magna Carta.
In closing, I have two constructive suggestions to make to the Government. First, I think they should subject the workings of the Employment Protection Act—and especially the sections relating to unfair dismissal—to a thorough and immediate review. Secondly, they should postpone the implementation of these orders—and they are perfectly able to do that if they wish, as the orders are to come into operation only in February— until the 5 per cent. policy has been seen to be adhered to in accordance with recent and forthcoming negotiations. Otherwise, the upgrading will continue to be manifestly unfair to employers on whom, as I said earlier, the burden of the present counter-inflationary policy falls. It seems to me that it would be better to return to these orders in a more realistic climate, if and when realistic pay settlements are made.
§ 3.43 p.m.
§ Lord ROCHESTER
My Lords, we on these Benches should also like to thank the noble Lord, Lord Wallace of Coslany, for the clear way in which he has explained to us the aims and content of these orders. We agree with him that it is for the convenience of the House to take them together.
915 About the orders themselves we have little to say. As the noble Lord has explained, they are pretty straighforward in themselves, raising by 10 per cent. the limits on the amounts payable under certain provisions of the relevant Act in respect of redundancy compensation for unfair dismissal and so on. I am bound to say that I have some sympathy with the view just expressed by the noble Earl, Lord Gowrie, in questioning whether, at the present time a more appropriate increase in the limit might not be 5 per cent. as opposed to 10 per cent., having in mind the Government's general guideline on pay policy. However, our understanding is that these orders are not to be debated in another place until next week, and we believe that, because of their financial nature, this House should do nothing other than approve them today.
However, the occasion gives us the opportunity, very briefly, to contemplate the present standing of the Act from which, in a sense, these orders ultimately stem—namely, the original Employment Protection Act. As the noble Earl has reminded us, cases such as the £7,000 compensation recently awarded to the Vauxhall employee who was sacked after having been found asleep on the job, have brought industrial legislation of this kind into some ridicule. Of course, the higher the amounts that become available under orders such as those before us, the more disreputable this particular Act is at least in danger of appearing.
There is conflicting evidence as to how far mistrust of the original Act by employers—and particularly by those running small businesses, on which our economic success for the future so largely depends— stems on the one hand from lack of knowledge of the provisions of the Act, or, on the other hand, from inherent weaknesses in the legislation itself. But either way there is little doubt that, although the Act does much to protect existing jobs, it cannot in any sense be said to create those new employment opportunities that are so desperately needed by the country.
In our view, there is an urgent need to make a fundamental review of the workings of the Act. I very much hope that this will be done on the basis of its actual effects on our economic and 916 industrial performance, rather than on the extent to which it continues to accord with a particular political philosophy. It follows that when industrial legislation of this kind is revised it should take as much account of the views of the employers who actually have to operate it as of the views of the trade unions.
How cheering it would be if all this could be achieved in the last Session of the present Parliament, but I suppose that one has only to voice such a thought to be considered politically somewhat naive. Therefore, maybe it will have to wait until a new Government has been formed. In conclusion, I would simply say that it is greatly to be hoped that the outcome of the next General Election will be such as to enable a consensus to be forged on this subject, for it is very badly needed.
§ 3.48 p.m.
§ Lord BROWN
My Lords, this seems to be a suitable occasion on which to raise a subject which I have raised before in this House. The orders contain provisions to raise pecuniary amounts appearing in orders or Acts to compensate for the effects of inflation. Many Acts of Parliament specify financial amounts for damages or fines for crime or civil actions or, as in this case, financial amounts for compensation or allowances. In the past, my suggestion has been that the Government should consider the idea of taking a decision each year as to the amount by which financial amounts appearing in every Act of Parliament and every order should be raised if, indeed, inflationary trends make that necessary. That would save a great deal of Parliamentary time because, as we have seen, a number of Acts and orders are amended in this way. On the other hand, a large number of financial amounts appearing in Acts are not amended for very long periods of time. If inflation has gone on in the interim then the original intention of Parliament is defeated. In many cases one notes that fines or damages become ridiculous in the light of inflationary trends. If every Act containing financial figures had to be amended before both Houses in each year when inflation took a real effect on those amounts, then Parliament would be overburdened with such activity.
The last time I raised this, the noble and learned Lord who sits on the Woolsack 917 gave me the answer that to follow the recommendation I was making would imply that we accepted the progress of inflation inevitably into the future. I did not think that that was a sound reply. If we did not have inflation we should not need to do anything; if we have inflation it is surely right to take account of its effect on Acts of Parliament where, unless we do so, the original intentions of Parliament are clearly defeated by the advance of inflation. I make this point on this occasion, and I hope that if it goes on being made the Government will take some note of it.
§ 3.51 p.m.
§ Lord BOYD-CARPENTER
My Lords, the noble Lord, Lord Wallace of Coslany, will not, I hope, think it offensive if I say to him that I think he owes it to the House when he replies to make rather more of an attempt than he did in his opening speech to justify the Government's decision to increase the amounts dealt with under these orders by 10 per cent. Although there is some charge to public funds most of the cost of this will, as I understand it, fall on employers, and here perhaps I should disclose an interest. It would be at least interesting to know whether the Government, through the mechanism of the Price Commission, are going to make allowance for this when price increases are sought.
This is a charge analagous to wage payments and it comes into the costs of production. It will be quite unfair to put this additional load on employers without at least accepting that when applications are made for price increases the Price Commission and the Secretary of State for Prices and Consumer Affairs would take it into account. The amounts in individual cases are quite substantial. That leads me to a second and unrelated question. Can the noble Lord tell me —I suppose I ought to know, but I do not—whether the payments made under these two orders are subject to tax, or are they tax free payments? They are in some cases substantial amounts, and it would be interesting to know whether, in approving an increase in these already substantial amounts, we are or are not increasing the size of tax free payments.
Finally, I would ask the House and your Lordships to consider this: the Government have put us in a strange and 918 almost ironical position by producing these orders at this moment, as the noble Earl on the Front Bench pointed out. The Government are apparently still, according to the Prime Minister, wedded to no greater increase in actual earnings than 5 per cent. in the period ahead. Yet apparently they see no inconsistency in coming forward with proposals that those who are ex hypothesi not earning and producing, but are either redundant or being compensated for dismissal, shall receive an increase of 10 per cent. It must create a curious impression in the minds of economic commentators, ex-pecially in other countries, that the British Government at this moment are more concerned to build up the standards of life of those who are redundant or are dismissed than they are to maintain the standards of life of those who are working and on whom our whole economy depends.
§ 3.55 p.m.
Viscount MASSEREENE and FER-RARD
My Lords, I should like to support the noble Lord who has just resumed his seat, and also my noble friend Lord Gowrie, in what they have said. It seems inconsistent that when the Government have a pay policy of 5 per cent. they are raising the figures of compensation in these two orders by 10 per cent. What worries me is the effect of this whole Employment Protection Act on small employers. I declare an interest in that I have suffered under it. I first of all suffered under the Sex Discrimination Act, which is parallel to this order, in that I employed a woman, and the man who also came for the job went to the tribunal. Had it transpired that I had employed the man, then the woman would have gone to the tribunal, so it was really collusion. I had to go to the trouble and expense of fighting the case.
I should like to see a great deal of streamlining of the whole procedure of the hearings of these tribunals. I was surprised to hear the noble Lord, Lord Wallace of Coslany, say, I think, that the maximum award that can be awarded for unfair dismissal is £5,000. I cannot remember the exact figure but I thought that the maximum award that these tribunals can give is £13,400. What is surprising—I think it has surprised employers—is that the average awards last 919 year up to July 1977 were running at only £355. That the number of dismissed employees who were successful was only 33 per cent. shows the great number of irresponsible and vexatious claims that are brought before these tribunals. I understand that there were 41,000-odd applications, but the cases heard were 18,962. As I say, of those only 33 per cent. were successful.
This raises a point because the CBI says that the cost to employers of defending these cases varies between £400 and £1,200. The aspect of this that I do not like is that lawyers have now come into these hearings in a big way from the point of view of the defendant and the applicant. I thought originally that these tribunals were going to be hearing cases between laymen. When you get lawyers involved you have a great deal of delay and a great deal of expense. I believe it is true that, owing to the large proportion of claims that failed, it now costs at least £3,000 to employers, applicants, and public funds to make a single award of £525. To have such a great volume of litigation for such a small sum is surely exceptional.
May I make a few suggestions as to how this Act could be improved? No good employer objects to employees being well compensated if they are unfairly dismissed. Of course a good employer would not unfairly dismiss them, but you have bad employers and of course bad employees. If somebody is unfairly dismissed I am all for him having considerable compensation. Nobody objects to that. In this country if one is charged with an offence one is always innocent until proved guilty, but at these hearings any employee can say he has been unfairly dismissed and then the employer must prove he is not guilty. Surely that is turning our law upside down. I should like to see an employee making a claim having to say why he has been unfairly dismissed; it seems most unfair just to let him say he has been unfairly dismissed without having to explain why. In other words, the burden of proof should be reversed from the employer to the applicant, and I am sure that if we did that the number of irresponsible claims would be greatly reduced. There are a number of other suggestions I 920 should like to make but I do not want to speak for too long. I hope the Minister will give some hope that this legislation will be reviewed because as at present enacted it is unfair.
§ 4.2 p.m.
§ Lord GLENKINGLAS
My Lords, I agree broadly with many of the comments that have been made about the order. I am more worried about the order on unfair dismissal because we have been studying the way in which this has been operating recently and we have seen a particularly unhappy example of its operation. It is not for me or any other noble Lord to query whether the judges were right by saying that the sleeper was correctly or incorrectly found not guilty of being asleep on the job. What rather fascinated me, however, was that when he had been dismissed he was receiving, according to newspaper accounts—I know the newspapers can occasionally be a little inaccurate—considerably more than I or several noble Lords I see in the Chamber were receiving as Cabinet Ministers, so he was not being done too badly by the social services in being dismissed.
It is becoming more and more difficult for many of us—and I am glad I have got beyond the stage of employing a great many people—to find any reason for which we could, if we wanted to, dispense with anybody without penalty. If you dismiss somebody, almost however heinous his crime may be, because of the state of the law today it is likely his case will not come before any court within six, nine or even 12 months, and therefore you must go on paying the person in case the court says he is not guilty; if you sack him and the court says he is not guilty you are then liable for enormous damages. This does not seem either sensible or just in any real sense of the word.
I have considerable sympathy with the noble Lord, Lord Brown, of Machri-hanish—apart from the fact that he took his title from a very attractive part of Scotland—when he says that many of these things would be made much easier if one took account of inflation automatically on a great many issues. I will support him to the hilt if he will support the same effect on taxation when it comes to capital gains tax or other things in respect of which the Government gloriously 921 also completely forget inflation has an important part to play. If noble Lords feel that this order is not satisfactory I will happily support them in opposing it.
§ 4.5 p.m.
§ Lord HARMAR-NICHOLLS
My Lords, what disturbs me, apart from the comments made by some of my noble friends, is the cosy atmosphere in which this order is being debated. In my view it should not be looked on as the noble Lord, Lord Brown, suggested, as being just a rule of thumb extension that should not be debated at all but which should be built in. This is an occasion when we should—and we would be well within the rules of order in doing so—debate the general effect of the parent Act from which this legislation flows. There is no doubt in the minds of people who are still in business that the Act is a positive time bomb which is affecting any possbility of the 800,000 small businesses making their contribution to reducing the unemployment level.
There is no doubt but that while one finds criticism from all sides about the lack of investment and the lack of initiative on the part of management, where they have the finance and are eager to put investment into operation, the way this legislation is being operated kills all of that. In innumerable cases when the final decision has been made and everything else is in favour of extending a business or doing things which would take up some of the unemployment, that is killed by the fear and very real dangers that flow from this Act. I have examples of small business extensions which have passed every other test and where they would employ perhaps another 15 or 20 people, but those plans have had to be ended in the view of those making the investment because the Act means that managers are no longer allowed to manage their own show.
The noble Lord, Lord Wallace of Coslany, comfortably presented the order as though it were one of those little automatic things like the old age pensioners' £10 at Christmas and completely ignored the danger this is having on the general industrial vitality of this country. Far from agreeing with Lord Brown, I am disturbed that your Lordships' House, on an occasion when we are having a go before the other place, should not have 922 reflected on the legislation ladieng up to the present state of affairs. The suggestions of my noble friend Lord Gowrie were right, but the only points that came near to underlining the dangers that the Act is inflicting at a time when we need all the vitality and risk-taking we can get were made by my noble friend Lord Massereene and Ferrard.
I hope that on future occasions Acts of this sort will be examined because we have an opportunity to do that when reviewing orders of this kind. In other words, I hope noble Lords will reflect on what is the mood of the industrial and business life of the country. The way in which the order was presented and is being operated was a grievous mistake and examples such as the sleeper undermine the confidence we need if we are to get Britain out of the slough of despondency, falling production and higher unemployment.
§ Lord BROWN
My Lords, the noble Lord, Lord Harmar-Nicholls, knows very well that the point I was making had nothing to do with many of the points that have been made by speakers on the Benches opposite. It so happens that I agree with much of the criticism which has been made of the Act; it was right in conception but it is going wrong very badly and needs amending.
§ Lord HARMAR-NICHOLLS
My Lords, the noble Lord is absolutely right in that I am criticising him because he is in a better position than many of his colleagues on the Labour Benches to know the danger in this matter, but neither the tone of his voice nor his words at all reflected the danger that he knows exists. I have now gained a little support which we would not otherwise have had, but I should have liked to see the noble Lord make a real, robust speech with all the influence that that would have had, through coming from the other side of the House. But that has not happened.
§ 4.10 p.m.
Lord WALLACE of COSLANY
My Lords, I cannot agree with the noble Lord who has just sat down that the whole of my explanation of the order was presented cosily. Before I arrived in the Chamber I spent considerable time going into points on this very important matter, and if it was presented cosily, I can plead 923 only that that must have been due to my bedside manner. There is certainly no cosy atmosphere in the Chamber this afternoon. If the provisions of the Act need to be debated—and the noble Lord quoted many cases—then all I can say is, fair enough. The Opposition have debating opportunities; it is up to them.
I turn now to general criticism. Several noble Lords, including Lord Gowrie, Lord Boyd-Carpenter and Lord Rochester, raised the question of 5 per cent. rather than 10 per cent. Of course that is a CBI view. The CBI wished to have 5 per cent., while other organisations said 15 per cent. Last year there was a figure of 10 per cent. However, it was not a question of the rate of inflation to be considered, but rather a question of the average level of earnings increase and the Minister has to decide upon that basis. Under those circumstances, and taking into account the economic situation, inflation and so on, he decided on 10 per cent. He could have decided on 15 per cent. or 5, but basing it on average earnings—which he is bound to do by Statute—he took 10 per cent. as a reasonable and fair decision.
The noble Earl, Lord Gowrie, the noble Lord, Lord Rochester, and many other noble Lords referred to short-time working and, inevitably, the case of the sleeping worker arose. I am placed in a difficult position here because of the need to reply adequately, while at the same time observing certain proprieties affecting this and other cases. The position generally was that the tribunal had employer and employee representatives, and in this particular case the decision was unanimous. The worker was not receiving more than a Cabinet Minister, though he was receiving more than £100 a week—
§ Lord GLENKINGLAS
My Lords, will the noble Lord bear in mind that what I very carefully said was what one used to receive as a Cabinet Minister, not what a Cabinet Minister gets today, when inflation has brought about a very considerable advantage for Cabinet Ministers and sleepers?
Lord WALLACE of COSLANY
I wish, my Lords, that that also applied to Lords in Waiting, but that is another story. The general criticisms on unfair 924 dismissals, coming from the Conservative Benches, are welcome, but I would remind the Opposition that they were responsible for introducing the original provision in the Industrial Relations Act 1971. Great stress has been put on the sleeping worker. I have seen the newspapers, listened to the radio, and watched television, and I have noted that that is all that the media has concentrated upon. I have seen all the details of this case up to date, but noble Lords must appreciate that the time for an appeal has not yet expired, and so I must be very careful in what I say in case I affect any possible appeal which may be made. I think that noble Lords will accept that position.
With regard to short-time working and the legislation envisaged, I can say that that will come. Very detailed negotiations are taking place at present, but they will take some time, and so I cannot estimate the date when the legislation will be put before the House. Consultations are under way at present. If a short time working scheme is enacted, it will replace the guaranteed pay provisions.
In reply to my noble friend Lord Brown, who raised several points, I must point out to him that amounts can be increased only if there is a specific provision in the Act allowing the Minister to do so. The noble Lord, Lord Boyd-Carpenter, raised the question of the payments and asked about tax. I am advised that the amounts are tax-free up to £10,000, and beyond that tax is payable—
§ Lord BOYD-CARPENTER
My Lords, will the noble Lord amplify that a little? I understand that that figure is consistent with other figures, including "golden bowler" figures and others, but what about the weekly payments? Are they subject to income tax?
Lord WALLACE of COSLANY
I cannot answer that point immediately, my Lords. It is a very involved matter, but I shall certainly get the information and see that the noble Lord is fully advised.
Lord WALLACE of COSLANY
My Lords, I do not think that there is any other point with which I can usefully 925 deal at the moment. The noble Earl, Lord Gowrie, and other noble Lords referred to certain suggestions being put to the Minister. I can assure the noble Earl and other noble Lords that we shall put suggestions for improvements, as well as other proposals, to the Minister, and no doubt we shall in due course have a debate upon the general position of the Act. In the meantime—
§ Viscount MASSEREENE and FERRARD
My Lords, the trouble is that for many applicants who are successful a great part of the award goes in legal fees because the fees are so high. If only we could keep the lawyers out of this! The lawyers are having a field day in these hearings.
Lord WALLACE of COSLANY
My Lords, I agree that at times lawyers do not help; they complicate matters. The position is that the employer may engage a lawyer if he so desires, but the choice is up to him, and if he does not want to get an expensive lawyer, and possibly get confusing advice, he will deal with the matter in another way. The choice so far as legal advice is concerned is up to the employer.
§ Viscount MASSEREENE and FERRARD
My Lords, the employers would like to have a payment-in system, so that if an employee said that he had been unfairly dismissed, the employer could pay perhaps £200 or £300, and so much trouble would be saved. If the applicant considered that to be fair, there would be no case. If he did not consider it fair, he could proceed, though if he lost he would then be in a rather bad way.
Lord WALLACE of COSLANY
My Lords, I should like to make a helpful suggestion here. It is well known that employers have very powerful organisations, and surely it is not beyond the wit of those organisations to set up their own scheme to assist their members in this kind of matter, without involving them in great legal expense.
§ Lord MISHCON
My Lords, before my noble profession is further slandered —and here I declare an interest—may I ask my noble friend whether he agrees that the information available to him 926 would show that the contribution made by the legal profession in this particular sphere is to prevent the tribunals, quite literally, from being troubled with thousands of cases upon which lawyers have advised that there is no case? Will my noble friend also agree that the complicated legal matters and issues that now come into the working of the Act make the intervention of lawyers of help, as employers have undoubtedly realised? Will my noble friend further agree that employees are entitled to similar advice?
Lord WALLACE of COSLANY
My Lords, I would accept what my noble friend has said as far as the question of employees receiving advice is concerned. It is a well-known fact that trade unions have their own legal departments, anyway, and they are in fact very skilled at their job. So far as the general position of lawyers is concerned, I do not want to involve myself in too much criticism because there are too many eminent lawyers glaring at me at the moment from certain Benches; but no doubt the point will be taken.
§ On Question, Motion agreed to.