EMPLOYMENT BILL

HL Deb 07 July 1980 vol 411 cc949-1010

Report stage resumed on Clause 7.

[Amendment No. 11 not moved.]

Lord McCARTHY moved Amendment No. 12: Page 8, leave out from beginning of line 42 to end of line 10 on page 9.

The noble Lord said: My Lords, this is the amendment by which we wish to delete those provisions in the Bill for additional requirements in respect of new union membership agreements. What we are saying is that, given the qualifications that the Government have introduced in respect of old union membership agreements so far as the existing members are concerned and so far as personal convictions are concerned, we do not see why there should be an additional separate provision dealing with new union membership agreements.

This argument is partly based upon the central argument which we advanced earlier; that the closed shop, subject to reasonable provisions for conscientious objection, is a justifiable aim of trade union objectives and partly due to the fact that we would maintain that the kinds of qualifications and conditions which the Government are imposing in respect of new union membership agreements are in fact something which no reasonable person, looking at them objectively, could believe that any trade union could actually carry out. It is not merely the fact that the Government are insisting upon a procedural method of taking the ballot which does not give the trade unions concerned any statutory rights whatsoever in so far as the way in which this procedure is carried out, though we have sought to move amendments to that effect and they have not found favour with the Government. It is not only the fact that the Government are insisting, under the provisions of this clause, on what we regard as a quite unrealistic figure of 80 per cent. which has to be voted in favour of this new form of union membership agreement—and not just 80 per cent. of those voting but of those eligible to vote—which we regard as a quite unnecessary and extreme form of qualification to make in respect of union membership agreements. But, in general terms, we would argue that this is to place the union security arrangements of working people in trade unions far beyond the kinds of qualifications and statutory limitations which in fact are placed upon other organisations, and in particular professional organisations and their arrangements to maintain membership.

This matter has been referred to by previous speakers tonight, but I do not think it has been fully developed. For example, if one looks at the classic work on the professions, Carr-Saunders and Wilson in their classic study of the professions, they say quite clearly at page 319—and this has not been objected to by anybody, so far as I know—that it is the purpose of professional associations, and not simply of trade unions, to intervene to achieve a state where some degree of monopoly of function is granted to the practitioner professional associations.

Thus, they say, no one who is not a member of one of the four Inns of Court, is allowed to plead a case before any of the higher courts while the Royal College of Veterinary Surgeons, for example, is required under the Veterinary Surgeons Act to admit to membership all those who pass their examination and thus qualify for the register. In fact, of course, the register of qualified veterinary surgeons consists of the membership of the RCVS; but that is only the position in respect of the registered profession.

In respect of the non-registered professions, similar forms of protection, partly by injunctions and partly by other statutory ways, are introduced in order to mark out and support professional organisations in their attempts to achieve what is in effect 100 per cent. membership. Carr-Saunders and Wilson say that the hallmark of qualifications ofprofessional associations is the achievement of a 100 per cent. membership. Thus, they say, it may be said that in a sense all unregistered professions are attempting to achieve 100 per cent. membership in various ways. We would argue that these ways are not subject to these kinds of statutory limitations. They do not have to go through the fine needle of a vote of this kind. Therefore, we would suggest, even at this late hour, that the Government should be fair and square and agree with this amendment.

The Earl of GOWRIE

My Lords, as the noble Lord, Lord McCarthy, has very clearly put it, the effect of these amendments—I take it that he is also addressing himself to Amendment No. 15; I see that he nods his head—would be to remove the provision that the dismissal of an employee in a closed shop will be unfair, as we deem it to be unfair, if the union membership agreement takes effect after the commencement of Section 7 of the Employment Act 1980, as we trust it will become, but has not been approved in a secret ballot of those to be affected, showing at least 80 per cent. support among those entitled to vote. The burden of the argument of the noble Lord, Lord McCarthy, was that this figure of 80 per cent. is unreasonably high.

The Opposition have made no secret of their disagreement with our closed shop ballot proposals. But we have consistently, and in considerable detail, spelled out our reasons for insisting that not only should the new closed shop be subject to approval by the employees who will be covered by it, but that that approval must be given by an overwhelming majority of those employees in a secret ballot. It seems to me to be most extraordinary that noble Lords opposite are seriously asking us now to renege on this commitment. I can only again refer them back to some of the remarks made by the noble Lord, Lord Houghton of Sowerby, to the effect that membership or non-membership of a closed shop raises issues of public policy far beyond the provisions of any normal kind of organisation, and issues of whether, in fact, one may pursue one's job at all. That is why it seems to me that the onus on people seeking to make new closed shops must be an overwhelming degree of support.

We regard it as very important indeed that employees should be consulted about the introduction of any new closed shop. Any such introduction marks a substantial change in whatever existing terms and conditions of employment there may be for an employee, and it is only right that his opinion should be registered. It is also right, in our view, that a closed shop may be introduced only when there is a very large majority in favour of it, and we settled on at least 80 per cent. as indicating an overwhelming majority. We got that figure not out of the blue but after consultations and it, also, is the kind of figure for membership which unions have traditionally looked for in the past before they have sought a closed shop agreement. So it seems to us to he in line with best practice in this area.

Some people—not, I think, in fairness to him, the noble Lord, Lord McCarthy, at any rate, very strongly tonight—have argued that this provision is designed to halt the spread of new closed shops. Of course, we acknowledge that 80 per cent. is a high figure, but it is deliberate because, as I said, we believe that a new closed shop should take effect only where it is definitely and positively desired by an overwhelming majority of those who are likely to be affected. The arguments for this have been clearly rehearsed not only at Committee stage but also in a slightly different context earlier this afternoon. No more needs to be said to justify our position, and we hope that these amendments will be opposed.

The LORD CHANCELLOR

My Lords, I should just like to add something, because I really think that I ought to correct the noble Lord, Lord McCarthy, on the position about the professions. What he seemed to say is a very commonly held error, but it is a complete error, if I understood him correctly. The aim of a professional association, like any other organisation, is to get as wide a membership as possible, but it is certainly not the intention of any such membership to have a closed shop.

Yes, in order to be a member of the Bar you have to pass certain examinations and to be called to the Bar, but you do not have to belong to the Bar Council which has a membership of, I guess, somewhere between 80 and 90 per cent., which is now absorbed into the Senate of the Inns of Court. To be a solicitor, you have to pass certain examinations and take certain training to take up a practising certificate. But you do not have to be a member of the Law Society, which is the professional association and which has, I suppose, a membership of, again, between 80 and 90 per cent. And to be a doctor you have to get on the medical register which involves certain qualifications, but you do not have to he a member of the British Medical Association which is the professional association concerned and so on. There is every kind of difference between the qualification to practise your profession, and compulsory membership of your professional association. The one I heartily support; the other I would absolutely abhor.

8.26 p.m.

Lord McCARTHY

My Lords, it is with very great respect that I cross swords with the noble and learned Lord the Lord Chancellor on this point, but let me first deal with the points raised by the noble Earl, Lord Gowrie. He said, first, that other people have been consulted. He said that he got his 80 per cent. as the result of consultation. I should like to know whether those consultations included the Trades Union Congress, the trade unions and those who have the practice of running union membership agreements. I do not think that is the case. Nobody who knows about closed shops would have advised him to have ballots of this kind. The figure of SO per cent. is normal where unions recruit 80, 85 or even 95 per cent. of membership without the closed shop, before they go forward and demand a closed shop. That has nothing whatever to do with the figure of 80 per cent. in the context of a ballot. So I do not think there is any connection with that at all.

Secondly, the noble Earl said that this would halt the spread of the closed shop, and I am suggesting that it would halt the spread of the closed shop. He has not actually answered the question whether or not he wants to halt the spread of the closed shop. In this respect I suggest to him—and it has been said elsewhere in this House tonight—that so far as the closed shop is concerned the 1971 Industrial Relations Act was much better. The Industrial Relations Act allowed a registered union to opt for the alternative of the agency shop, which in many ways would have been a satisfactory alternative for trade unions.

I know that in the context of the 1971 Act the trade unions said that they did not want the agency shop. They did not want it, because in the context of the 1971 Act the agency shop was connected with the whole question of registration. It was the whole issue of registration which the unions found unacceptable in 1971. Nevertheless, separated off from the issue of registration there were more acceptable ways of pursuing union membership agreements in the 1971 Act than there are in this Bill. We remain convinced that one of the aims of the Government in introducing the ballot provisions is to make the negotiation of new closed shops impossible.

So I come to what the noble and learned Lord the Lord Chancellor has said. First, with great respect, I have not talked about the British Medical Association and I have not talked about the Law Society. I know that both the British Medical Association and the Law Society do not operate 100 per cent. membership practices. Also, I have not talked about the Bar Council. I have talked about the four Inns of Court. It is impossible to plead a case before any of the higher courts unless you are a member of those institutions. And I have not just talked about the registered professions, because I accept, if this is the point, that in respect of the registered professions there are for the most part statutes which set up statutory organisations, and it is the statutory organisations which regulate the professions.

I am talking even more about the unregistered professions, because in the unregistered professions, as Carr-Saunders and Wilson say, it is the professional title, which is not necessarily descriptive of membership of the association but which becomes the monopoly of the association, which is the key to the control over entry and over membership. It is in the unregistered professions, above all, that we find practices analogous to the closed shop of trade unions, and the Government do not propose to do anything at all about that. Therefore we do not propose to withdraw this amendment.

8.29 p.m.

On Question, Whether the said amendment (No. 12) shall be agreed to?

Their Lordships divided: Contents, 40; Not-Contents, 106.

CONTENTS
Birk, B.	Janner, L.	Stewart of Alvechurch, B.
Blease, L.	Kaldor, L.	Stewart of Fulham, L.
Brockway, L.	Lee of Newton, L.	Stone, L.
Brooks of Tremorfa, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Strabolgi, L.
Chitnis, L.		Strauss, L.
Collison, L.	McCarthy, L.	Taylor of Mansfield, L.
David, B.[Teller.]	Morris of Kenwood, L.	Underhill, L.
Davies of Leek, L.	Northfield, L.	Wall, L.
Elwyn-Jones, L.	Oram, L.	Wallace of Coslany, L.
Gaitskell, B.	Peart, L.	Wedderburn of Charlton, L.
Goronwy-Roberts, L.	Phillips, B.	Wells-Pestell, L.
Hale, L.	Rhodes, L.	Whaddon, L.
Hatch of Lusby, L.	Ross of Marnock, L.	White, B.
Houghton of Sowerby, L.	Shackleton, L.

NOT-CONTENTS
Adeane, L.	Gowrie, E.	Penrhyn, L.
Ailsa, M.	Gray, L.	Rawlinson of Ewell, L.
Airey of Abingdon, B.	Gridley, L.	Reigate, L.
Auckland, L.	Grimston of Westbury, L.	Renton, L.
Avon, E.	Hailsham of Saint Marylebone, L. (L. Chancellor)	Robbins, L.
Bathurst, E.		Rochdale, V.
Bellwin, L.	Hankey, L.	Rochester, L.
Berkeley, B.	Hanworth, V.	Romney, E.
Blake, L.	Hatherton, L.	Rugby, L.
Bridgeman, V.	Hives, L.	Sackville, L.
Brookes, L.	Holderness, L.	Sandys, L. [Teller.]
Brougham and Vaux, L.	Hunt of Fawley, L.	Seear, B.
Campbell of Croy, L.	Hylton-Foster, B.	Seebohm, L.
Clitheroe, L.	Ilchester, E.	Sempill, Ly.
Cockfield, L.	Kemsley, V.	Sharples, B.
Cork and Orrery, E.	Kimberley, E.	Sidmouth, V.
Cottesloe, L.	Lindsey and Abingdon, E.	Simon, V.
Craigavon, V.	Long, V.	Soames, L. (L. President.)
Cromartie, E.	Lyell, L.	Stamp, L.
de Clifford, L.	McAlpine of Moffat, L.	Strathcarron, L.
De La Warr, E.	MacAndrew, L.	Strathclyde, L.
De L'Isle, V.	McFadzean, L.	Sudeley, L.
Denham, L. [Teller.)	Mackay of Clashfern, L.	Swinfen, L.
Dormer, L.	Macleod of Borve, B.	Swinton, E.
Drumalbyn, L.	Mais, L.	Torphichen, L.
Duncan-Sandys, L.	Marley, L.	Trefgarne, L.
Dundee, E.	Merrivale, L.	Trenchard, V.
Ebbisham, L.	Middleston, L.	Trumpington, B.
Ellenborough, L.	Monson, L.	Tryon, L.
Elliot of Harwood, B.	Mottistone, L.	Vaux of Harrowden, L.
Elton, L.	Mowbray and Stourton, L.	Vickers, B.
Ferrers, E.	Murton of Lindisfarne, L.	Vivian, L.
Gainford, L.	Netherthorpe, L.	Ward of Witley, V.
Gisborough, L.	Nugent of Guildford, L.	Wigoder, L.
Gladwyn, L.	Orkney, E.	Young, B.
Godber of Willington, L.	Orr-Ewing, L.

Resolved in the negative, and amendment disagreed to accordingly.

8.38 p.m.

Lord MACKAY of CLASHFERN moved Amendment No. 13: Page 9, line 16, at end insert— (" (3E) In determining for the purposes of subsection (3B) and of section 58A(2) whether a person belongs to a class of employees, any restriction of the class by reference to membership (or objection to membership) of a trade union shall be disregarded.")

The noble and learned Lord said: My Lords, I beg to move this amendment. As your Lordships will be aware, the current statutory definition of a union membership agreement in the Act of 1956 says that for the purposes of the Act, employees are to be treated in relation to a union membership agreement as belonging to the same class if they have been identified as such by the parties to the agreement, and the Act goes on to say that they may be so identified by reference to any characteristics whatsoever.

For most purposes this definition works entirely satisfactorily, but it has recently come to our attention that in the context of our proposals on ballots where new closed shops may be sought, the definition may work in such a way that non-union members may be disfranchised from the ballot. This is because as currently drafted those who must be allowed to participate in the ballot are those in the relevant class, and "class" may be defined so as to exclude existing employees who are non-members. It is highly desirable that existing non-union employees should be exempted by the union membership agreement from having to belong to the union—they are in any case protected by the Bill—but it is highly undesirable that such employees should be disfranchised in the ballot. It is to avoid any possibility of this that we have tabled this amendment, which does not alter the definition of "class" in the statutory provisions presently in force. I commend the amendment to your Lordships.

Lord WEDDERBURN of CHARLTON

My Lords, this amendment from the Government cannot be allowed to pass without three comments. I follow the noble and learned Lord the Lord Advocate when lie says that, because of the definition in Section 30(5)(a) of the 1974 Act of the word "class", it would be possible to arrange between the union and the employer that the class of employees who are covered by the union membership arrangement are the union members within a certain plant and not the other existing employees. I understand his problem about that being a possible abuse of the law as it is seen by the Government, but this is an excellent illustration of the road down which the Government are being taken by the arrangements to which my noble friend Lord McCarthy was objecting in the last amendment. It means that when we get into this degree of legal regulation, of bargaining patterns and bargaining arrangements—including union membership arrangements—we have to put a stop to what might be a quite sensible situation. We will not bother to swap examples, but I can understand the noble and learned Lord's example of a possible abuse in his eyes. I am sure he could easily see that I might say there would be a situation where it might be quite sensible to say, All the union members in a shop—not George and Bill because they have been here 20 years and no one has bothered to recruit them, but all the union members and all future employees". A sensible management and a sensible union cannot now do that and they cannot now do it because of the words of this amendment.

It goes further: the class cannot be restricted by reference to membership. The noble and learned Lord and I know perfectly well that the first litigation on this will raise the question of whether the boundary is described by implicit reference to union membership. The world being as it is, some arrangement will be made and someone will allege that there is an implicit reference. This is to introduce into labour law what I sometimes tend to call the tax evasion mentality. We shall be down the road to the tax evasion approach to statutes and to arrangements which have to regulate bargaining practices.

The point to make on this amendment is that of course we will resist it because it is an illustration of the kind of thing to which the Government's arrangements in this Bill will lead more and more, which are quite alien to the commonsense attitudes which are common on the shop-floor between trade union and management in Britain.

Lord MOTTISTONE

Before the noble Lord sits down, is it entirely right that Bill and George (as he described them) should be excluded from voting? Why should Bill and George, because they have been with the company for 20 years and are not union members, be excluded from this voting pattern? He put it across very plausibly, as he always does—and very charmingly—as though it was a foregone conclusion, but I question whether it is a foregone conclusion. I should have thought that Bill and George would want to vote, and why should they not?

Lord WEDDERBURN of CHARLTON

My Lords, as I have not sat down, perhaps I may respond. The noble Lord is putting it to me in the terms of the noble and learned Lord the Lord Advocate. I was putting it in a different way, where George and Bill did not mind whether they voted or not, but where management and union wanted all future employees (perhaps for perfectly good industrial reasons) to be members of the union. Whether Bill and George voted in the ballot is not the real question. Of course if that is the question, then the noble and learned Lord has his point, but if I have a situation—and I am sure the noble Lord, Lord Mottistone, could think of such an industrial situation—where it was said, "For the future we will have everyone in the union", the most sensible way to do that is to define the UMA by reference to existing union members and all future employees. That now they cannot do and it is very odd. That is the kind of thing that the Government will be thinking about in their Green Paper. I fear what will come in the Green Paper; it will be more of this kind of thing.

Lord MACKAY of CLASHFERN

My Lords, what will be in the Green Paper is for another day. So far as this particular amendment is concerned, I really understood the noble Lord, Lord Wedderburn, ultimately to see good sense, including Bill and George in the voting, and ask your Lordships to agree to this amendment.

On Question, amendment agreed to.

8.45 p.m.

Lord WEDDERBURN of CHARLTON moved Amendment No. 14: Page 9, line 16, at end insert— (" (3E) Where for the purposes of this section the question falls to be determined whether it is the practice for employees to belong to a specified independent trade union or to one of a number of such trade unions, no account shall be taken of the fact that an employee is not a member of any such trade union if his dismissal would have been unfair by reason either of subsection (3B) or of paragraph (b) of subsection (3C) above.").

The noble Lord said: My Lords, this has become known in the trade on our side, as it were, as the Iolanthe amendment, because it was the amendment which I strove to move in your Lordships' Committee and the noble and learned Lord pointed out to me that the word "not" had been left out, so I was unable to move it. It now comes in a slightly different form and it addresses itself to this problem: the dismissal of a non-union member in a union membership arrangement is only fair—putting aside for the moment all questions of conscience and personal conviction and the matters we have been debating in such an excited manner this evening—if it is the practice that employees of the same class as his belong to one or more of the specified trade unions; that is clear law under Section 58 and, of course, there has been a line of case law in which this has caused a certain degree of difficulty. In the well-known case of the Ferrybridge Six in 1976 the tribunal which found that some 1,000 out of 39,000 employees of the Central Electricity Generating Board were not in the proper specified unions held that there was an insufficient practice. Then the words in the statute were slightly changed by the Act of 1976. But it does not seem to have made much difference, because in the case of Himpfen amp; others v Allied Records Limited in 1978 the employment appeal tribunal held that nine out of 42 workers who were not in the specified trade union was not a big enough practice and so the dismissal of non-unionists was unfair.

This amendment tries to call upon the Government to prevent their new structures from destroying the possibility of maintaining union membership arrangements altogether. That is to say, if we now take on board after cases like the Himpfen case, nine out of 42, no practice, or the Sarvent case, 1,000 out of 39,000, no practice, we now have a statutory situation where, putting aside questions of conviction and conscience, we have the existing employees who are there and cannot be dismissed (and as we have just heard we cannot even arrange for the UMA to get round that in any way). We have the new UMA which also has to have the ballot and then those who are not members of the specified unions on the day of the ballot, who keep out of the union —they are non-unionists—and it becomes fairly obvious that the ability to prove a practice in the terms in which the courts have so far demanded it, becomes almost impossible.

What this amendment attempts to do is to say, "All right; have your statutory exemptions for the existing employees or the employees who are not members on the day of the ballot, but do not judge the practice by reference to them as well as the trade unionists". The Government must know that in a large number of cases all the talk about an 80 per cent. majority, or conscience, or deeply-held personal convictions, or political convictions, or ethical objections, or Plymouth Brethren, or Roman Catholicism, or Moslem or agnostic objections, are all beside the point. There just will not be the practice. There will not be sufficient people in the union to satisfy the Himpfen test.

So if the Government are not going to accept this particular way of doing it—and this is only one of a number of ways of doing it—I hope that when the noble and learned Lord replies he does at least address himself to this question. It could be that in practice this is the way in which effective 100 per cent. union membership arrangements, plus the statutory exemptions cannot be carried on. This may be the way in which a closed shop is destroyed, through lack of practice, much more significantly perhaps than all the matters we have been debating in earlier amendments this evening. I beg to move.

Lord MOTTISTONE

My Lords, does the noble Lord not think that he has postulated a very plausible case, but it is all anticipating a situation which may or may not occur in real life? It would seem to me that he is jumping ahead to assume that there are various factors built into this Bill which will not operate and which will not be successful, and the theme of the attitude of mind in industry that is developing over the months will not continue to develop in that way.

Would it not be much more appropriate to keep in mind the very situation he describes, which could be a real one but on the other hand might well not be, and use it, certainly for introduction, to advise the Government at a later stage when perhaps we might find further legislation is necessary? Every Act that is passed there are always deficiencies. We see them every day. It could well be that this is the sort of thing which needs to be kept in reserve for future legislation, rather than trying to inflict it on this Bill, based on a theoretical situation which the noble Lord sees so clearly but which I find it much harder to see as being a real case that will occur in the future.

8.51 p.m.

Lord MACKAY of CLASHFERN

My Lords, the matter which is now before your Lordships is the same point essentially as the noble Lord raised on Committeee. Perhaps I should say, for the record, that he rather suggested that I had not understood the point at that time. What I did not understand was the relationship of the point he was making and the amendment he was proposing. However, that difficulty has been resolved and we now have the amendment and the point fairly clearly related.

I understand perfectly the concern which is being expressed in this amendment. It is that a number of employees, perhaps quite a large number, should in future be exempted from any requirement to join a union because they are not union members when a closed shop is introduced. As a result, it is argued, a tribunal might in future, when looking at the statutory definition of a closed shop, a union membership agreement, find that there was not in fact "an agreement or arrangement which has the effect in practice of requiring the employees for the time being of the class to which it relates to be or become a union member". So the question really is what is to be regarded as amounting to a practice in relation to the particular situation.

Lord WEDDERBURN of CHARLTON

My Lords, it is not, of course, a question of the existence of the union membership agreement and its definition, but its practice under Section 58. It comes to the same point, but it is the position under Section 58, not the definition.

Lord MACKAY of CLASHFERN

I think that has been made clear. I must say I think it is the same point, and that is why I am seeking to address it in this particular way. If the doubt the noble Lord has given expression to were to eventuate, the legal position of all union membership agreements would be uncertain and this would be both confusing and disruptive.

So far as we are concerned, I can assure the House that the Government have no intention of undermining the statutory definition of a union membership agreement by Clause 7 of the Bill. If we were persuaded there was any serious risk of that, then we should certainly wish to accept the amendment suggested or introduce something with a similar effect. The union membership agreement, as we see it, exists wherever there is a practice of requiring employees "of the class to which the agreement applies" to be members of a union. The 1974 Act does not define "class and this can be any category or description of workers which the agreement uses, or the tribunal finds to exist, in relation to any requirement of union membership. Agreements normally will describe whom they cover, and this is the class. It is possible that a tribunal might sometimes be called upon to determine whom a more informal arrangement covers, but its decision will turn on the relevant factual evidence. Those whom in practice the agreement or arrangement covers will be the class. Indeed it would be strange if it were otherwise.

Recent research has shown that most closed shop agreements in fact provide exemptions. The work of LSE researchers, published last November, showed that some two-thirds of agreements exempt existing employees in post when a closed shop is introduced. If the doubt expressed in the amendment were a real one then it would already apply to most existing closed shops; these would not, if the proposers of this amendment are correct, satisfy the current statutory definition of a union membership agreement. However, it is not correct, for the reasons which I have already tried to give, and closed shops, both before and after this Bill is enacted, will continue to satisfy the statutory definition of a union membership agreement when they provide exemptions from the requirement of union membership for existing employees and other categories of worker, so long as in relation to the class as a whole the practice is to belong to the union.

The noble Lord referred to the Himpfen case and this is a special one on its own facts, in my view. The nine employees in question in that case had previously been promised by management that they need not join the particular union, and it is thus not surprising that the Employment Appeal Tribunal held that it was not the practice to require them to join. So I do not think that case really affords any light on the general situation; it was a very special case indeed. So, for these reasons, I do not believe this particular amendment is necessary, and I think it is undesirable in that it would unsettle the understanding in relation to existing union membership agreements. So I would ask your Lordships not to accept it.

Lord WEDDERBURN of CHARLTON

My Lords, I must say one or two words, first, to the noble Lord, Lord Mottistone. I am usually accused of jumping ahead, but I did not want to wait, as he seemed to want to do, until the closed shop arrangements are destroyed and then wait for later legislation from this Government. The noble and learned Lord the Lord Advocate keeps telling us that we must not look ahead to the Green Paper and later legislation but we had better concentrate on this. There is a serious risk. I was interested that the noble and learned Lord went as far as he did in saying that if the risk materialised the Government would consider introducing something. I should have thought the case is now strong enough for the Government to think again before Third Reading, in this sense: that the matter is clearly not just theoretical; secondly, because if the noble and learned Lord considers the passage of Amendment No. 13, you cannot use that way out of the problem; you cannot define your union membership agreement boundaries by reference to union membership in any way at all.

The risk is plain that more and more of these situations will arise. Indeed, he referred to the research of the London School of Economics, and the interesting thing is that a number of heads have been put together around that research since it was published, asking, how long it would be before the legal decision in the Himpfen case percolated through into industrial practice and people began to ask themselves how many of these exemptions they could give without risking the practice which is necessary to maintain it.

Since it is a legal point I must join issue with the noble and learned Lord on the Himpfen case, which clearly had two ratione decidendi. One was the promise to the employees, and on page 691 the tribunal mentions lack of practice and says "on that ground, too, we differ from the tribunal". It is clearly a separate ground of the decision. It takes time for legal decisions to filter down into everyday practice. It is only now, just as that research was being considered, that the lawyers and others were considering the effect that that decision would have.

Would it be perhaps possible—I know it is a late stage of the Bill and I shall not get an answer now—for the Government to consider by Third Reading a different way, and that is perhaps slightly to change the wording in terms of what practice is required, to loosen it a little if there is any risk at all? That would be industrially rather more sensible than waiting for a deep sense of resentment, which will certainly appear in the trade union movement if they find that by some mischance this legislation, as it were almost by a side-wind, knocked out the validity of a large number of union membership agreements. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 15 and 16 not moved.]

Clause 18 [Acts to compel trade union membership].

9 p.m.

Lord McCARTHY moved Amendment No. 17: Page 9, line 36, leave out subsection (1).

The noble Lord said: My Lords, this amendment deals with the question of exclusion of rights. In effect what we are suggesting is that the Government should agree at this late stage to cancel all limitation on unfair dismissal rights for employees of less than two years' service in firms of under 20. What we are saying is that this case has not been proved and that as time goes by more and more evidence is being put forward in objective surveys, some of them initiated by the Government themselves, which indicates that the case has not been made.

The fact is that we have been presented with a whole range of evidence from the ORC surveys, the PSI surveys, the Warwick surveys and from the testimony of organisations such as the Institute of Personnel Management. As I understand it, the Government's view on this matter has changed. It was eleborated both in the other place and in Committee in this House. In particular, the noble Earl, Lord Gowrie, developed a series of arguments as to how far Governments could be expected to base legislation upon the results of surveys. Nevertheless, the noble Earl, Lord Gowrie, is not above—as most of us are—using surveys when those surveys appear to support what he is saying. For example, at. column 364 of the Official Report for 10th June he told my noble friend Lord Wedderburn of Charlton when this matter was discussed last time that the PSI survey evidence indicated that 17 per cent. of respondents had said that the Employment Protection Act had had a major impact upon them.

That general statement that the PSI survey has said, with various numbers in various ways, that the Employment Protection Act has had a major impact on them, has been used by Government spokesmen repeatedly in order to justify what they are doing in respect of small firms. However, at this late stage we feel we must point out that, although it is true that the PSI survey said, for example, that the EPA had a major impact on 17 per cent. of respondents, what it did not say was that that impact on respondents took a form which would justify what the Government are doing.

The overwhelming impact of the Employment Protection Act upon respondents as— was shown most clearly in the PSI follow-up survey which was done as regards 36 firms—was that it took the form of improvements in procedures, of improvements in methods of recruitment and of improvements in the way in which firms went about selecting, training, recruiting and retaining labour. Nowhere else were those improvements more clear than in the small firms.

Therefore, to say that 17 per cent. or 24 per cent. of respondents said that they were influenced by the Employment Protection Act in various ways, is not to say that the Employment Protection Act militated against taking on more people, or that in any way it particularly militated against taking on more people in small firms. The fact is, of course, that the Government and anybody else, if they are to initiate surveys of this kind, must accept the essential principle of using surveys in the formulation of policy, which is that you do not, with respect—not if you are intending to be serious—select those parts of the surveys, those bits of the tables, those scraps of evidence which may assist you in your argument: you decide on the balance of the evidence before you, on the general drift of the evidence, whether that evidence in general tends towards your position.

The stance of the Government in respect of both the PSI and ORC surveys, in respect of unfair dismissal and indeed of maternity rights, reminds one of nothing so much as the remarks of Beatrice Webb to her research assistant Margaret Cole. Margaret Cole came back with two great piles of information, one of which supported the view of the minority report on the poor law and the other which did not support the view of the minority report on the poor law. Beatrice Webb said, "Which supports us and which does not? That which does not support us throw away. We shall write the report on the basis of the evidence that supports us". That is the way in which the Government are approaching these kinds of surveys. We suggest that that is not a professional way of looking at information of this type.

If we look at the overwhelming support of the general drift of the PSI survey, the ORC survey, the Warwick survey and all the other surveys, we see that they indicate that, far from the legislation having a disadvantageous effect upon small firms, in fact it has an advantageous effect on small firms: it makes them rather more careful and rather more structured in their approach towards employees, towards taking on employees, towards training employees and in the end towards the dismissal of employees. It makes them in the end see that they have to have more systematic, structured ways of dealing with these problems.

The fact is that the Government have given in to ignorant, uninformed outcries by sections of its support. The noble Earl, Lord Gowrie, said at column 364 on the 10th June: We are quite happy and secure to rest upon our impression, our political judgment, our manifesto commitment: on the fact that this concern was shared by the two other principal political parties"— in other words, I would say, on anything but the evidence, on anything but the facts. Therefore, I beg to move this amendment.

Lord LYELL

My Lords, we believe that this particular clause, in spite of the very interesting arguments that have been advanced by the noble Lord, Lord McCarthy, provides a very limited exemption. We intend to allow small employers flexibility if they want to do various things and among them would be to expand their business, to meet any needs and particularly short-term needs. We believe that this clause and this measure also benefit employees because it is much better for employees to have some form of limited protection than no job at all.

But the justification for making special provisions for the small firms under this particular legislation has been very fully debated. The noble Lord, Lord McCarthy, mentioned the fairly lengthy debate that we had at an earlier stage, and indeed that debate went fairly late. There was also the further debating that took place in another place. However, the Government have said many times that the surveys commissioned by the Department of Employment do indeed show that the employment policies of significant numbers of small firms have been influenced by the Employment protection legislation.

I think that the noble Lord, Lord McCarthy—indeed all of us—would agree that survey evidence is not necessarily conclusive only on its own feet. The Government certainly have received other evidence and all kinds of evidence, especially spontaneous letters which have been sent to the Department of Employment. Indeed, we have all sorts of other very strong findings from organisations. We have examples from all kinds of employers' organisations, particularly from Scotland, that employment legislation has been a barrier to the smaller firms; and I think they are a substantial proportion of the economy of the country, in spite of some of the phrases used by the noble Lord, Lord McCarthy. I think he used the expressions "ignorance" and "prejudice". I am glad that I remembered and got it right. The noble Lord may say that, but we think such comment is a trifle unfair.

We cannot give an approximate figure of the number of positions that will be created by the reduced kind of protection that we are suggesting in this clause. What we do say is that we hope that employers, particularly the small employers, will no longer feel to the same extent as they do now, and have done for the last five or six years, that it is employment protection legislation which is the last straw in making them decide not to take on extra employees and expand their business. This is one of their problems which they feel particularly strongly about and which we can do something about. It is often pointed out to us—indeed, we have a fairly substantial amount of evidence—that what really worries the smaller employers is the high interest rate and the shrinkage of the home market. Issues like these may lie outside our control, but we do not think that that is any reason why we should not try to help employers where we can.

Noble Lords opposite will agree that Clause 8 provides merely a longer qualifying period for the employees employed in the smaller firms; for instance, firms employing 20 people or fewer. This clause does not change the status of any employees who may be dismissed on trade union grounds and certainly we have no intention of denying to any employees in small firms the right to join a trade union or to take an active part in it by leaving unchanged the qualifying period for the protection against dismissal on medical grounds. We have heard it said that employees in small firms need more protection because small firms' personnel policies are less sophisticated. We would admit this and we would acknowledge that personnel policy in a small firm is different from that in a large firm, but this certainly does not mean that the small firms are ready to dismiss unreasonably. Certainly we wish to encourage small firms, as well as large firms, to be good employers and to carry out good employment practices, and that is why we are going to be producing for employers a leaflet on unfair dismissal provisions.

But we do regard employment protection rights as important. While we think that the balance must be restored between the need for statutory protection for employees and the burden which it imposes on employers, we do not think it would be right, as we have pointed out many times in your Lordships' House and elsewhere, to give special treatment to small firms in any way which would create a permanent class of employee who had no protection whatever. We recognise that protection is necessary in the small firms just as it is in large firms. I should like to make it very clear that this provision will have no effect at all on employees who already are in their jobs when this Part of the Act comes into force, and we shall make this very clear in the relevant commencement order.

I should like to conclude by saying that all of us heartily agree with the opinions which were expressed by the noble Lord, Lord Spens, and echoed by the noble Baroness, Lady Secar, in the Second Reading debate, that in the course of this Bill and in the course of other employment protection legislation we must explain the legislation in a way which the small businessman can read and, above all, can understand and interpret. To that end, and as the Government have already announced in another place, we shall be producing for employers a guide on the unfair dismissal provisions when the amending legislation is on the statute book. For that reason we hope noble Lords will see that this amendment is unnecessary and we believe the clause should stand.

Baroness SEEAR

My Lords, the noble Lord says the Government are issuing a leaflet explaining in detail how the unfair dismissal provisions work, but it is a great pity they do not wait to see whether, when the small firms have this information, it relieves their anxiety. There is a great deal of evidence—everybody is quoting evidence tonight, and we have all got our evidence—that the objection to the unfair dismissal clause in the minds of many small employers is based on a misconception. Up and down the country we are told that we cannot dismiss anybody. Nothing will persuade people that the fact of the matter is that far more employees lose cases of unfair dismissal than win them. This is a fact that simply has not penetrated the minds of a large number of small employers. If we could get that into their heads, I believe that any need that may exist for the relief of these provisions would fall to the ground.

May we not ask the Government to accept this amendment and then to see what will be the effect of better information—which, indeed, the previous Government should have given people—on how the unfair dismissal provisions work? When that is got over, I do not believe it will be found necessary to relieve employers of any of the provisions of the Employment Protection Act.

Lord MOTTISTONE

My Lords, does the noble Baroness not think that the fact that small employers have a misconception about this matter is because the legislation which led them to think that, even if it is not true, was passed by the party of the noble Lords opposite? It is as simple as that. A move in the direction of trying to help the small employer and positively doing something that he thinks will help him—it does not matter if you think it will help him or if all the statistics do not bear out the fact that it will help him—is the reason for having part of this legislation directed towards the interests of the small employer.

I shall not quote statistics to a greater extent than anyone else because we have had too many, but the fact of the matter is that the noble Baroness, Lady Seear, is right. It is what people think that matters. They think that the legislation is against them now, and when this Bill, as it stands, passes they may think that the legislation is in their favour and the particular logjam to which she referred will no longer exist.

Lord McCARTHY

My Lords, I am very disappointed at what the Government have said, but not surprised. The noble Lord is quite right; there is an ideological element in this; the work of Dr. Stanworth shows that this is the case, that the attitude of small firms is related to their ideological beliefs—I not say prejudices—about the Government that introduced this legislation. That is a fact. The noble Baroness, Lady Seear, is perfectly right in saying that the Government would do much better if they told people the facts about unfair dismissal legislation rather than pandering to the prejudices of small firms in this way. All the evidence indicates that small firms have a whole range ofprejudices, not just about unfair dismissal legislation but about the effects of taxation legislation and planning authority rules. The evidence indicates that they are absolutely obsessed by all kinds of factual inaccuracies about the world which surrounds them.

That is only one point. By moving in this way and lifting these particular narrow provisions from their back, the Government are only reinforcing their prejudices. As the noble Lord, Lord Lyell, said, the Government rely on apocryphal evidence, upon anonymous letters and upon the testimony of vested interests. I hope that he will place all this in the Library because we should like to see some of this evidence. With great respect, the attitude of the Government—I do not say of the noble Lord necessarily—towards the evidence which has been put forward by a whole range of surveys about unfair dismissal and maternity rights would not gain them a passmark in the paper on social methods at the noble Lord's old university. It is absolutely deplorable, and we intend to press this amendment to a Division.

Lord LYELL

My Lords, by leave, perhaps I could reply briefly to one point.

The LORD CHANCELLOR

My Lords, with the leave of the House.

Lord LYELL

My Lords, with the leave of the House—and I hope that I shall have it as greater Providence has not yet struck me down—may I say that the noble Baroness, Lady Seear, raised one particular point which I think was relevant to what the noble Lord, Lord McCarthy, had to say. It was that small employers were very worried about the legislation, and that we should have legislation which was, indeed, clear. I know, and I am sure that noble Lords all round the House will know, that it is not so much what is written into the legislation as what employers believe that is said and feel how the legislation treats them. Above all, with small firms it is the amount of time that the proprietor or the management have to spend on particular cases of this type.

The case has been made by the noble Baroness, Lady Seear, and elsewhere, I think by the noble Lord, Lord McCarthy, that the vast proportion of the cases which go to tribunals do not end up in the employee's favour. I would not necessarily believe that that is conclusive evidence. The time that is taken by management in having to go to the tribunals is one of the bugbears which we believe should be spared management. That is all I wanted to point out.

9.19 p.m.

On Question, Whether the said amendment (No. 17) shall be agreed to?

Their Lordships divided: Contents, 43; Not-Contents, 105.

CONTENTS
Birk, B.	Janner, L.	Seear, B.
Blease, L.	Kaldor, L.	Shackleton, L.
Boston of Faversham, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Simon, V.
Brockway, L.		Stewart of Alvechurch, B.
Brooks of Tremorfa, L.	McCarthy, L.	Stewart of Fulham, L.
Chitnis, L.	Morris of Kenwood, L.	Stone, L.
Collison, L.	Northfield, L.	Strabolgi, L.
David, B.	Oram, L.	Strauss, L.
Donaldson of Kingsbridge, L.	Peart, L.	Underhill, L.
Elwyn-Jones, L.	Phillips, B.	Wallace of Coslany, L.
Gladwyn, L.	Ponsonby of Shulebrede, L. [Teller.]	Wedderburn of Charlton, L.
Hale, L.		Wells-Pestell, L.
Hatch of Lusby L.	Rhodes, L.	Whaddon, L.
Houghton of Sowerby, L.	Rochester, L.	White, B.
Irving of Dartford, L.	Ross of Marnock, L.	Wigoder, L.

NOT-CONTENTS
Adeane, L.	Gisborough, L.	Onslow, E.
Ailsa, M.	Glenkinglas, L.	Orkney, E.
Airey of Abingdon, B.	Godber of Willington, L.	Orr-Ewing, L.
Atholl, D.	Gowrie, E.	Penrhyn, L.
Auckland, L.	Gray, L.	Rawlinson of Ewell, L.
Bathurst, E.	Gridley, L.	Reigate, L.
Bellwin, L.	Grimston of Westbury, L.	Renton, L.
Berkeley, B.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Robbins, L.
Blake, L.		Rochdale, V.
Bridgeman, V.	Hankey, L.	Romney, E.
Brookes, L.	Hanworth, V.	Rugby, L.
Brougham and Vaux, L.	Harvey of Tasburgh, L.	Sackville, L.
Buxton of Alsa, L.	Hatherton, L.	Saint Oswald, L.
Camoys, L.	Hives, L.	Sandys, L. [Teller.]
Campbell of Croy, L.	Holderness, L.	Sempill, Ly.
Clitheroe, L.	Home of the Hirsel, L.	Sharples, B.
Cockfield, L.	Hornsby-Smith, B.	Soames, L. (L. President.)
Cork and Orrery, E.	Hunt of Fawley, L.	Stamp, L.
Cottesloe, L.	Hylton-Foster, B.	Strathcarron, L.
Craigavon, V.	Ilchester, E.	Strathmore and Kinghorne, E.
Cromartie, E.	Kemsley, V.	Sudeley, L.
de Clifford, L.	Kimberley, E.	Swinfen, L.
De La Warr, E.	Lindsey and Abingdon, E.	Swinton, E.
De L'Isle, V.	Linlithgow, M.	Torphichen, L.
Denham, L. [Teller.]	Long, V.	Trefgarne, L.
Dormer, L.	Lyell, L.	Trenchard, V.
Drumalbyn, L.	McFadzean, L.	Trumpington, B.
Duncan-Sandys, L.	Mackay of Clashfern, L.	Tryon, L.
Dundee, E.	Marley, L.	Vaizey, L.
Ebbisham, L.	Merrivale, L.	Vaux of Harowden, L.
Ellenborough, L.	Middleton, L.	Vickers, B.
Elliot of Harwood, B.	Monson, L.	Vivian, L.
Elton, L.	Mottistone, L.	Ward of Witley, V.
Exeter, M.	Mowbray and Stourton, L.	Young, B.
Ferrers, E.	Murton of Lindisfarne, L.
Gainford, L.	Netherthorpe, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 18 to 22 not moved.]

Clause 10 [Contribution in respect of compensation]:

9.30 p.m.

Lord WEDDERBURN of CHARLTON moved Amendment No. 23: Page 11, line 30, leave out ("and the tribunal") and insert ("the tribunal shall first determine whether or not the dismissal is unfair in accordance with Part V of this Act. (2A) Where the tribunal").

The noble Lord said: My Lords, I will, with permission, speak at the same time to Amendment No. 36. We canvassed this matter in Committee, but looking through the Official Report of the debates, my noble friends and I felt that the situation was not wholly satisfactory, and the tenor of the Government's arguments both here and in another place made us bold to bring the issue back, albeit in a slightly different form. To be brief about the history of the matter, when the Government first introduced the joinder procedure in another place—the joinder of the union or the shop steward or the official who is to pay the contribution for an unfair dismissal—they had a two-stage procedure in mind, as was made clear by the Minister's right honourable friends; that is, that the tribunal would first hear whether there were grounds for a joinder (in the sense that pressure had been used industrially to force the unfair dismissal) and then they would decide to join the union or the official for the contribution third party proceedings. Having carried that view up to a late stage in another place, they then went back on it and said that the employer's claim to join the union must be effective before the hearing, and that meant that everybody would come into the tribunal with all sorts of issues alive from the very beginning without distinction; the employee's claim of unfair dismissal against the employer, the employer's defence to the claim of the unfairness of the dismissal, the trade union's contention on that issue, the employer's claim of contribution against the union and the union's reply to that.

The trouble with that is that the Act makes it clear in what is now Section 63 of the 1978 Act that it is a basic principle that unfair dismissal is to be judged on what the employer did without reference to industrial pressure, and in Committee the noble and learned Lord made it clear that the. Government did not mean in any way to detract from Section 63. He also suggested (on 10th June at col. 397) that the tribunal was perfectly able to sort out all these issues, despite all the various bits of evidence coming to it on the three or four different points during the course of the hearing. When we thought about it, we thought we should ask the Government what their objection really was to having not a two stage procedure—as they themselves suggested at first, because the Government's first suggestion was for a two stage procedure to see if there was pressure—but a statutory procedure which says, "First determine the unfairness of the dismissal and then determine the issue: Was there industrial pressure and, if so, should there be a contribution?"

That does not require two hearings. It requires only the evidence and arguments to be presented in a particular way. If the noble and learned Lord will tell me that it will all be in the industrial tribunal regulations, then I will reply before he says that and tell him that that is not satisfactory. This is a very new procedure and we have many objections, as we made clear in Committee, to the whole notion of the third party proceedings. But if they are to be there and if the Government really do not wish to detract from Section 63—that is, that the pressure should not be considered in determining unfairness—then it is not quite fair not to give the tribunals (not to give the trade unionists at any rate) clear confidence in the fact that the unfairness of the dismissal will be heard before the evidence is given of the pressure which is alleged to have caused it. I do not see how it would cost the Government anything at this stage to be a little more relaxed and engaging than they have been in dealing with our amendments.

Lord MACKAY of CLASHFERN

My Lords, I shall try to be engaging and, if possible, relaxed, and that of course is the procedure we think the tribunal should have—a relaxed procedure without tremendous constraints imposed unnecessarily by Parliament. Section 63 of the 1978 Act is left untouched, and accordingly the question of unfair dismissal must be determined apart from any question of pressure. But why do the tribunal need to have directions that they must first determine whether or not the dismissal was unfair?

I thought that I detected in the noble Lord's speech on the amendment a confusion between determination and the evidence. He seemed to be suggesting at one point at least that they would have to determine the question of whether the dismissal was unfair before they would hear the evidence about pressure, and that would lead to the kind of double dealing that we spoke about on Committee. I believe that the industrial tribunals are of sufficient stature to determine their own procedure in this matter, knowing that there are two distinct questions: first, the question of unfair dismissal; and, secondly, the question of pressure on any contribution that may arise from that. They are directed by Section 63 to determine the question of unfair dismissal apart altogether from any question of pressure. In our view that is all that is required of them. I shall not say what the noble Lord anticipated I might say, and therefore I do not require to answer the answer that he gave—before I said it. I ask your Lordships not to agree with the amendment.

Lord WEDDERBURN of CHARLTON

My Lords, plainly we must leave this as a disagreement. I meant to say previously that some anxiety will be caused among some practitioners in the tribunals over the fact that the matter is left in this way. However, in view of the situation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

9.36 p.m.

Earl DE LA WARR moved Amendment No. 24:

Page 11, line 43, at end insert— ("Indemnity in respect of union membership clauses. 76B.—(1) If in proceedings before an industrial tribunal on a complaint against an employer under section 67 the employer claims that—

1. (a) he and another person (in this section and in section 76C called "the contractor") were parties to a contract requiring that work done by employees of his for the purposes of the contract should be done only by employees who were members of trade unions or of a particular trade union,
2. (b) the complainant could not, consistently with that requirement, be employed on that work,
3. (c) the employer had requested the contractor to consent to the employment of the complainant on that work notwithstanding that requirement,
4. (d) the contractor had withheld his consent,
5. (e) apart from the work to which that requirement (or any similar requirement under other contracts to which the employer was a party) related the employer had no work available which was suitable for the complainant to do, and
6. (f) the employer would not have dismissed the complainant but for that requirement,

then, subject to subsection (2), the employer may before the hearing of the complaint require the contractor to be joined, or in Scotland sisted, as a party to the proceedings. (2) An employer may not by virtue of this section require more than one person to be joined, or in Scotland sisted, in proceedings in respect of any complaint. (3) Where a person has been joined, or in Scotland sisted, as a party to proceedings before an industrial tribunal by virtue of subsection (1), and the tribunal—

1. (a) makes an award of compensation under section 68(2) or 71(2)(a) or (b), but
2. (b) finds that the claim of the employer (as specified in subsection (1)) is well-founded,

the tribunal shall order that person to pay to the employer an amount equal to the amount of that compensation. Contribution in respect of indemnity under s. 76B. 76C.—(l) If in the proceedings referred to in section 76B the contractor claims that he was induced to withhold the consent referred to in subsection (1) of that section by pressure which a trade union or other person exercised on him by calling, organising, procuring or financing a strike or other industrial action, or by threatening to do so, the contractor may before the hearing of the complaint require the person who he claims exercised the pressure to be joined, or in Scotland sisted, as a party to the proceedings. (2) Where any person has been joined, or in Scotland sisted, as a party to proceedings before an industrial tribunal by virtue of subsection (1), and the tribunal—

1. (a) makes an order under section 76B, but
2. (b) finds that the claim of the contractor (as specified in subsection (1)) is well founded,

the tribunal may make an order requiring that person to pay to the contractor a contribution in respect of the contractor's liability to the employer by virtue of the order under section 76B. (3) The amount of any contribution ordered to be paid under this section in respect of any such liability shall be such as the tribunal considers to be just and equitable in the circumstances, and may constitute a complete indemnity.").

The noble Earl said: My Lords, I beg to move this amendment, but before speaking to it I have to ask for the indulgence of your Lordships in view of some of the phraseology that I shall use. For reasons connected with the lawyers when the amendment refers to the "contractor", I shall call him the "client", and when it refers to the "employer", I shall call him the "contractor". This may seem double dutch to your Lordships, and it did to me until the lawyers explained it; but, of course, the chap who pays is in fact the contractor, and I suppose that there is somebody called a contractee. However, since this appears confusing to me as a layman, I am using ordinary lay words and I hope that I shall be able to carry the understanding of your Lordships. The legal advisers felt strongly about this matter, and who am I to take issue with the majesty of the law?

The amendment arises from the amendment of the noble Lord, Lord Orr-Ewing, at the Committee stage about union-only clauses in commercial contracts. My noble friend Lord Caldecote, whom I am sorry to say is not with us because he is in New York on his company's business, in the earlier debate concentrated on the question of where financial responsibility should lie when the result was unfair dismissal. My noble friend the Minister was sympathetic and so we are, with the help of the Government, moving the amendment in its present form.

The amendment does not solve all the problems of these very common and very unattractive type of clauses. Contractors, builders—call them what you will— dislike them intensely. Under the Bill as it now stands a contractor's position could be made worse because from now on he might have to face large claims for unfair dismissal, and of course he may be forced to accept these clauses if he wants to stay in business.

So the first part of the amendment—the proposed new Section 76B—gives the contractor the right to join the client who insists on it in any resulting claim for unfair dismissal. Then, subject to the sequence of events—which I shall not run through—which are set out in the proposed new Section 76B (1)(a) to (f), the offending client will himself be landed with the Bill for the whole of any compensation awarded against the employing contractor to unfairly dismissed employees. This should make anyone who feels like making these monstrous union-only demands on a contractor think two or three times before he makes them—and, in my submission, quite right, too!

This, then, very briefly, covers the first part of the amendment, and deals, for instance, with a Left-Wing local authority who puts these clauses in just because it wants to, without any particular pressure from a union or unions. But very often the client himself, if he is, say, a big builder on a large building site, finds himself forced by direct union pressure to demand from his sub-contractors these fearsome union-only undertakings. In cases such as these, the person who has been subjected to these union pressures, which ultimately.down the line, result in dismissals, can under the proposed Section 76C join the union. The tribunal, if it then finds the dismissal to have been unfair, can require the union to pay as much of the compensation as it deems fit. So these two new sections, when taken together and added to the existing Clause 10, seek to ensure that whoever is originally responsible for this type of unfair dismissal is the party who ultimately gets "clobbered".

Of course, it goes without saying that the person who really suffers is the poor fellow who loses his job, but I hope that, by providing that the financial penalty is awarded against the offending party, these vicious practices will be squeezed out of business life. It is for that reason that I hope this amendment will be supported by noble Lords, and that it will find favour with my noble friend the Minister. I beg to move.

Lord ROCHESTER

My Lords, my noble friends and I have sympathy with this amendment. I am not sure that I altogether followed the definitions used by the noble Earl, Lord De La Warr, but I am quite prepared, with him, to put it all at the door of the lawyers. At any rate, I think I understand well enough what it is that he is aiming at, and personally found it rather easier to comprehend by reference to what the noble Viscount, Lord Caldecote, at Committee stage, I think called the client-employer, if that does not make confusion worse confounded.

At any rate, we have sympathy with what underlies this amendment as being one which, in the circumstances which the noble Earl has described, places responsibility for dismissals which are clearly, it seems to me, unfair, where that responsibility belongs; namely, with the person I shall call a client-employer, and ultimately with the union or unions concerned. If I have understood that correctly, I and my noble friends are happy, on that basis, to support this amendment.

9.45 p.m.

Lord WEDDERBURN of CHARLTON

My Lords, perhaps a different voice should be allowed to intervene for a moment. Noble Lords seem to assume that situations of this sort are a priori vicious and monstrous; and, of course, their sympathies, or apparent sympathies, are with the man who has lost his job. Also they are worried about the large firm forcing a contract on the small firm that they do not like. That happens so often in society that one wonders why we have not heard their voices on that more often. The idea that there is anything new in a group of workers who have organised in order to acquire a balance of bargaining power, trying to spread the principle of unionism by various pressures through their employer, through his customers and so on, is as old as trade unionism in the modern world itself. The union label of the 19th century in certain trades, among bakers, hatters and then in the general unions, tried to use this form of pressure, such as they had of it, to extend trade unionism. There is another set of values here in the organised workforce which also ought to have its say.

But the Government have gone down the road of joinder and are listening to the siren voices of those who now invite them into the stream of double-joinder and triple-joinder, so that soon we shall have dozens of people joined in tribunals. That hits at one other point. They have gone past the point which Donovan told us not to pass; he told us not to use the industrial tribunals for cases involving industrial conflict; not to use the industrial tribunals for anything other than employee against employer. Now, under Clause 10 (and now under this double-joinder situation, even more delicately) the tribunals will have to judge what is a just and equitable contribution; and in order to judge that they must judge the merits of the strike.

The Government may wish to reflect on that when they have the Act on the statute book: that they will have to judge the merits of the employers' contribution to the strike; and they will become politicised. Another sad thing about this Bill is that in the sociological sense the industrial tribunals and the Employment Appeal Tribunal are about to become politicised, to be pushed into an area where the Donovan Report said that if you are trying to do something legal, do not do it in the same courts as those that build up confidence on unfair dismissal cases. Here is an example of the natural development of Clause 10, the double joinder; and in the Green Paper no doubt we shall have others, and it will wreak havoc with the confidence that the tribunals have built up.

Lord MOTTISTONE

My Lords, will the noble Lord not agree that all that this is trying to do is to share the cost of some sort of action? It is not that anybody is being prevented from doing anything. It is that anybody who is responsible for initiating a particular framework is going to have to pay his share instead of it all being carried, possibly, by a victim company who appear in the sense of a victim because they did not initiate the action which is involved in this amendment. I should have thought that the noble Lord is rather over-gilding the situation and making more of it than would be reasonable. However, I will leave it to my noble friend on the Front Bench to deal with the problem.

The Earl of GOWRIE

My Lords, I think that my noble friend, Lord Mottistone, brought the noble Lord, Lord Wedderburn, down to earth. I think that the metaphor that I used to use in childhood is appropriate: that the noble Lord, Lord Wedderburn, was over-egging the pudding in this particular context and my noble friend brought him back to the amendment. I would say to the noble Lord, Lord Wedderburn, that, of course, there are always good reasons in anything governing collective behaviour for not doing things; but I think he must realise that the time has come for unions to re-enter the community, as it were, and for themselves to start looking critically at practices which are not simply forcing Governments into activities but which are alienating most ordinary people from the movement itself. I share with the noble Lord, Lord Wedderburn, a feeling that that would be highly undesirable. We believe in trade unions; we believe in unionism. We are extremely unquiet at practices which attempt to discredit responsible unionism, and they give us no satisfaction whatsoever.

In that general context, I welcome the amendment as being a sensible and necessary provision bringing some justice into the area of contracts requiring union labour only. It is necessary in our view because it protects sub-contractors from having to meet the cost of compensation for unfair dismissal cases—that was the point clearly brought out by my noble friend Lord Mottistone—arising only because the dismissal of the non-union member happened to be forced upon the employer or contractor by a union labour clause in the contract. This amendment ensures that sub-contractors will be fully indemnified in such circumstances should they be forced to join their client. It also enables the client to produce the contract to join the union to any proceedings and the union in turn may have to indemnify him for anything up to the full amount of compensation involved.

There was considerable feeling among noble Lords at Committee that union labour only clauses needed to be countered and countered strongly. We sympathise with such views but we doubt whether some of the solutions that were proposed at the Committee stage were practicable. They vitally affect the interests of other parties who have not been consulted directly on the matter and at heart impinge on the wider issue of immunities which is, as your Lordships are aware, going to be the subject of a Green Paper later in the year. It is really the essence of our approach that we start in this Bill from a profoundly unsatisfactory situation in that the law, for historical reasons, has grown up in this country based on immunity rather than rights and obligations; but the fact that that situation is unsatisfactory or open to question does not mean to say that nothing can be done within the context of the overall immunity framework. The difficulties do not attach to the amendment we are discussing. It is commendably modest and deals with the cost issue brought out by my noble friend Lord Mottistone. As my noble friend Lord De La Warr said, it will provide a real disincentive against such practices, and I therefore commend it to your Lordships.

I should like just to add that we do not intend to leave the matter at that. Particularly in view of the concern of many parties about such contract clauses, there is in our view clear scope for a voluntary initiative on this matter and we are anxious that employers should desist from and resist the placing of union labour only requirements on contractors. We have recently written to the CBI—who are themselves on record as opposing such clauses—enlisting the CBI's aid in such a voluntary initiative. The code of practice on the closed shop will give a lead by including a declaration to the effect that the practice of imposing union labour only requirements on contractors is unreasonable.

The contractors themselves might explore further how they might co-operate together to resist the spread of this practice and my right honourable friend the Secretary of State for Trade is considering whether any amendment to restrictive trade practices legislation may be required to facilitate that kind of co-operation. I should say that there has been special concern about the use of such clauses in public sector contracts. I do not know frankly how prevalent the practice of union labour only clauses is among public sector purchasers; but I can say that I know of no instance where a Government department or a health authority has used a clause of this kind, and certainly our standard forms of contract do not contain such a clause.

In any event, the Government will take care to ensure that voluntary action taken in the private sector is appropriately reflected in the public sector. Also, of course, we should expect these industries and authorities, as responsible employers, to have full regard to our forthcoming code of practice on the closed shop. The amendment is not all that will be done to counter union-labour-only clauses. Nevertheless it is a necessary and a fair first step, which protects the position of subcontractors, and I would urge the House to support it.

On Question, amendment agreed to.

[Amendment No. 26 not moved.]

Clause 11 [Notice to employer]:

9.56 p.m.

Lord McCARTHY moved Amendment No. 27: Page 12, line 24, leave out subsection (2).

The noble Lord said: My Lords, this amendment is to take out subsection (2) of Clause 11: that is really to leave out the second part of the Government's new set of provisions requiring in maternity cases for the exercise of maternity rights, additional processes of notification. The fact is, as the House knows, that Clause 11 restricts the present rights of return in three new ways: first, by additional application procedures; secondly, by additional confirmation procedures; and, thirdly, by additions to the procedure for notice and the period of notice of the final decision to return. We suggest that the House should agree to delete the second part of that, which deals with confirmation procedures.

The argument of the Government for the need for additional confirmation procedures has always been that in the absence of a formal confirmation procedure the employer, and especially, of course, the small employer, who is always so dear to their hearts, is put in a difficult position. He has no way of knowing whether a woman who goes out on maternity leave will in fact come back, and in the period in which she is away he has to hold open her job and, especially in the small firm, it is said that this is a difficult problem.

I think it is worth reminding the House why we have provisions of this kind at all. We have such provisions, and indeed we have all the maternity rights introduced under the Employment Protection Act, because it was thought to be an essential element in providing for a situation of non-discrimination so far as women in employment were concerned. The argument was that if women were to have a fair chance of progress and promotion in jobs, when they necessarily found they had to be absent for maternity reasons they had to have some right of return and some right of reinstatement or, quite clearly, they would be put in a disadvantageous position so far as men were con- cerned. So, in a sense, this was always a part of the policy of non-discrimination.

In general terms, in that sense, it was not opposed by the party opposite. Their argument has always been a much narrower one in terms of the impact of these particular aspects of maternity rights on employers. The credibility of this argument, it seems to me, has always turned, and must always have turned, upon assumptions about the proportions of the labour force, especially, but not entirely, in small firms, who were entitled to exercise such rights, and the proportion or percentage of the labour force who actually did exercise those rights. If a significant part of the labour force of a small or medium-sized firm were entitled to exercise these rights and if they did actually exercise them, then of course it might be reasonable to say that they were unduly restrictive so far as the employer was concerned.

It is true that until comparatively recently we have had to deal with this problem in a kind of welter of apocrypha—anecdotal evidence. Thus, at columns 406 and 407 of the Official Report for 10th June the noble Earl, Lord Gowrie, said: The whole emphasis of these very minor changes"—

that is, the changes proposed in the Bill— to the existing legislation is to remove the disincentive effects on employers, particularly very small employers, of taking on new women. That must be a matter of judgment and it is hard to quantify… The right of employers is to provide"—

I think that Hansard meant the need of employers— for the sudden unexpected event within the context of their business which makes it impracticable to take the woman back on that particular day. To formalise notification in the way which appears superficially equitable to the noble Lord would, in fact, rob the employer of this flexibility".

As I understand the argument, what was being said, without supporting evidence—and perhaps there was not supporting evidence at that time—was that there was a fairly frequent need for the employer to hold open jobs, especially in the small firm, and that this was a disincentive, maybe even to the employment of women, and particularly women of maternity age, in small firms. But, fortunately, we now have the facts. The report of the Policy Studies Institute on maternity rights, which was commissioned by the last Government, now enables us to avoid apocrypha.

The noble Earl, in answer to a Question which I asked him in the House the other day, admitted that he did not have this evidence at the time when the Government concocted their Bill. He said, on the one hand—and I am quoting from column 344 of Hansard for 2nd July—that such surveys are useful. He went on: I find considerable justification for the Government's measures in this survey if I am prepared to look through a particular lens".

I want to look through some of the lenses at the maternity rights provisions of the PSI survey, to see what kind of lens it would be. Fortunately, the noble Earl went on to say some other things about his attitude to these surveys. He said: You cannot place any judgment of any coherence on surveys of this kind"—

though, of course— They are useful…I give very little weight to surveys"—

though, of course, he finds— considerable justification for the Government's measures in this survey".

He went on: It seems to me to have very little relevance".

So in the light of what we now know of the Government's attitude to the PSI survey, what do we find? Let me just give a few of the facts from this survey. First, 40 per cent. of women in small firms, about which the Government are particularly concerned, have no rights at all because they are part-time workers. Secondly, so far as women as a whole are concerned, only 50 per cent. in all firms who have maternity situations have statutory rights, because they have not been at work long enough to qualify for their statutory rights. Thirdly, 50 per cent. of those who have statutory rights have no intention of returning. Fourthly, in small firms—and this is where we really get to the point—of, for example, 28 women, only 15 per cent. of pregnant women give notification of their intention to return. If we put all these figures together we see, as the writer of this survey shows in his last chapter, that there is no substantial quantifiable problem, so far as maternity rights are concerned, even for large firms. For example, firms who employ 100 women, on average, will be troubled by four women going off to have babies each year and only 50 per cent.—namely, two women in a firm employing 100 women—will have statutory rights at all. Only one of those two women will give notice of a desire to return, and only once in three years will one woman come and demand reinstatement. This is the extent of the problem.

Coming to small firms, we find that, on this basis, firms with 25 women—partly because small firms, for the reasons I have given, will tend to employ fewer women with statutory rights—will be in the situation of somebody coming along and demanding reinstatement once every 12 years. If firms employ 10 women, they will find that somebody will come along and ask for reinstatement, in the exercise of their statutory rights, once in 30 years. This is the measure of the problem on evidence available to the Government and sponsored by the Government. In such a context, I cannot see how the Government can cover their nakedness. They must accept this amendment.

10.6 p.m.

The Earl of GOWRIE

My Lords, I am very glad—indeed, I am grateful to him—that the noble Lord, Lord McCarthy, recognised that there is a relatively narrow difference between the party opposite and ourselves and that both are equally committed to equal opportunity for women at work. I have special departmental responsibilities in this area and the one thing that tends to raise my choler in an otherwise, I hope, patient temperament is any suggestion that the Government have anything other than an enormous interest in women entering work, remaining in work and returning to work, should they leave, whether for maternity or for any other reason. We have that interest politically, we have it morally and we have it economically.

The noble Lord and I have crossed swords over this narrow difference of the PSI survey—and, indeed, of another survey which was not raised by the noble Lord, Lord McCarthy, this evening—on several occasions in the past. Those of your Lordships who are gluttons for the punishment of discussion about industrial relations legislation may have spent last Sunday watching the noble Lord, Lord McCarthy, and my honourable friend the Under-Secretary in another place debating this same issue on television at 12 o'clock. I cannot remember the identical arguments on television at 12.30, or whatever it was, last Sunday, but as I remember it, the noble Lord, Lord McCarthy, produced his survey and my honourable friend produced a letter from the Scottish Development Agency. They waved these pieces of paper at each other, and enlightenment and a good time was had by all viewers, I hope.

Our contention is that it is extremely difficult to measure the disincentive effects of any activity. One can ask people who employ women, or who have employed women, what the effects of a given piece of legislation or a legislative proposal may be. But it is very different to quantify what the effects may be on very small businesses, which are in issue here, because one does not know whom they might or might not have taken on.

I am not dismissive of surveys. Indeed, I was one of those responsible for having the PSI survey published, as I think at Question Time the noble Lord, Lord McCarthy, was kind enough to recognise. But it is semantically wrong of the noble Lord to call surveys of opinion facts. They are not. They are surveys of a given sample of opinion. We weigh them but we do not give them any more weight than that. The noble Lord is peculiarly indifferent to surveys which do not fall within the bounds of his interest, like attitudes towards the closed shop and other matters, so I think that there is a certain amount of sauce for the goose and sauce for the gander in these particular survey arguments.

Having got that off my chest, and I hope I shall not need to repeat it in connection with all the other maternity amendments, I should like to come quickly to this particular amendment, the effects of which would be to remove one of the provisions in the clause enabling an employer to obtain confirmation within a reasonable period after the baby's birth that the woman intends to return to work. We are not talking here about any rights or non-rights of returning to work after having a baby; we are simply talking about what notice might be given to the employer. I am not one of those who has the distrust of anecdotal evidence expressed by the noble Lord, Lord McCarthy, not being a sociologist; one of the main criticisms of the present maternity legislation is that an employer cannot be sure whether an employee really intends to return to work, and he may have no contact with her from the time she leaves until she is on the point of returning. That makes a nonsense of his manpower planning and obviously it bears more hardly on a very small employer than it does on a larger employer.

The notification that the Bill proposes—the additional notification—is merely an easy-to-understand solution to this admittedly narrow problem and I cannot believe that it will be a burden of any kind to the women concerned. We have modified the original proposals so that the woman is not expected to take the initiative in sending this notification, and so that she is reminded that she will forfeit her right to return if she does not reply in time. In fact, all she has to do is to answer a letter, and it really is rather insulting to women to assume that this will be an immense burden to them.

If is it not reasonably practicable for her to reply within two weeks, she does not even have to; she must simply reply as soon as she can and only those employers who really need to know whether she still intends to return will ask for this additional notification; that is, not earlier than 49 days after the birth. But for those who do send the written request the information will be a very real help to them in their manpower planning. We have dealt with many issues of great moment in this Report stage and we shall have more issues of great moment tomorrow and maybe later today, but I really do not think that this is an issue of great moment. However, I think it has sufficient weight for a sufficient number of women and a sufficient number of employers to be a modest improvement for all concerned. It imposes no large burdens and I ask the House to resist the amendment.

Lord McCARTHY

My Lords, I am very disappointed in what the noble Lord has said. I agree with him that it is not a matter of great moment; it is a matter where the Government's arguments are particularly thin. It is a matter where they cannot argue, as they can justifiably argue on a large part of this Bill, that they believe that it is necessary to change the balance of power in industry and therefore they have to do something about the collective power of workers organised in trade unions. This has nothing to do with that. For the most part this is about unorganised women. That is what we are complaining about. To respond to the statement that surveys are tossed about this House and that we have attitudes to surveys that do not fit with what we want to see in surveys, I must press the noble Lord that what one says about surveys is quite technical; what kind of credence one gives to a survey is a matter of the response rate, it is a matter of whether or not there are leading questions, a matter of whether it is sent out by interested or disinterested parties and a matter of how far one thinks there is a representative structured sample. On all these four tests the surveys that we are using from the PSI and the ORC and the Warwick Survey are immeasurably superior to the 2 per cent. and 3 per cent. biased samples which come from organisations of small employers and institutions which turn out to be front office organisations for the Conservative Party.

So it is quite untrue and most unfair to say that we are using biased surveys. We are trying to use the general principle of surveys with the balance of the evidence and the drift of that evidence, and we are saying that if you take that general principle the surveys that we have, most particularly the PSI in this case, do not support the position taken up by the Government.

Finally, when he says it is insulting to say that women cannot fill this form in, may I say that we are not suggesting that women cannot fill the form in; we are suggesting it is an additional burden. We have put down a whole series of amendments trying to control the way that that burden should be distributed, suggesting, for example, that there might be a standard form. All these things have been rejected by the Government. Therefore, although this is not an important issue and by no means the most important issue, it is one of the most deplorable issues upon which the Government have maintained their usual obstinacy.

On Question, amendment negatived.

[Amendment No. 28 not moved.]

10.16 p.m.

Lord WEDDERBURN of CHARLTON moved Amendment No. 29: Page 13, line 4, at end insert— ("(4) There shall be added to subsection (3) of section 64 of the 1978 Act the words "or to the dismissal of an employee which is unfair by reason of section 60 of this Act where that employee has been continuously employed for thirteen weeks."").

The noble Lord said: My Lords, it seems to be falling to me to move the more dove-ish amendments tonight—an unusual role, but one that gives me some hope that perhaps before the night ends the Government will lean sufficiently in our direction to say that we have some merits. This amendment relates to a question discussed in your Lordships' Committee, where we put forward an amendment to strike out the need for a qualifying period of service in respect of women dismissed by reason of pregnancy. I appreciate what the noble Earl has said, that this would be one of the matters in which he has a particular interest. My noble friends are not taking my words in the manner I meant, and I am sure the noble Earl did not understand them in that light.

We put forward the fact, for example, that the Equal Opportunities Commission is very disturbed about the way in which there is evidence that women are dismissed on grounds of pregnancy in a rather unfair manner. We do not have a survey to offer the noble Earl on this subject and I suspect he has not got one to offer back. But there is a series of well known situations, no doubt more known to him through the Commission than to me, and in the debate in Committee he was not disposed to deny that there was a problem. What he did say was that our suggestion to get rid of the qualifying period of service was wrong. On 10th June, at column 411 of the Official Report he said: Employers could be understandably anxious at the prospect of employees with no service being able to bring claims for unfair dismissal on this ground".

I take that point, that to give no service qualification period was perhaps an incorrect suggestion to meet the problem. He went on to say in the same column that the last Government found no reason to distinguish between this sort of dismissal and the generality in terms of the qualifying period, and I assure him that it never gives me great anguish to say that my own party gets things wrong in the same manner that the Government may be getting them wrong. We said in Committee that we hoped the Government would think about this matter again and take this opportunity to extend a small piece of justice towards women dismissed in this situation.

We suggested that there should perhaps be a shorter qualifying period, in the sense that pregnancy is not a similar ground for dismissal, surely, on reflection on the experience of the legislation that we now have, as the ground for misdemeanours like misconduct. If the noble Earl repeats the point that they cannot be treated in the same way as inadmissible reasons—that is, dismissal by reason of trade union activity—that is no doubt a fair point in reply to what we put forward in Committee. But is it not the case that there is sufficient evidence for the Act to be adjusted so that women who are dismissed by reason of pregnancy enter into the right to complain of the unfairness of that dismissal after a modest period of service? If the Government think we have chosen the wrong period, thirteen weeks, no doubt that could be put right on Third Reading. But surely there is a case for this Act to carry forward a small piece of law reform in industrial relations. Previously the noble Earl did not deny that there was a problem. The Equal Opportunities Commission says that there is a problem. Could the Bill perhaps be the place where a small piece of justice is offered to women who are apparently fairly frequently being dismissed on grounds that are rather unjust and in many cases do not have the 52 weeks which at present is necessary? I beg to move.

10.21 p.m.

The Earl of GOWRIE

My Lords, I too feel certainly extremely dove-ish at this point. I am a little puzzled that the noble Lord sees a problem here. He has fairly met my point in advance—that is, that the previous Government saw no reason to make this special distinction for pregnant women in unfair dismissal, but they may have been wrong. Indeed, they may have been wrong and we have looked at the matter with as clear and as objective eyes as we have been able.

We are all, as he said, surveyless in this area. It seems to me that my instincts are that nowadays two incomes are extremely important to many households and that many women who are pregnant, particularly younger women, are quite happy to work on until quite a late stage in their pregnancy and to return to work relatively soon after their delivery. We spoke about that when discussing the previous amendment.

Therefore, as a matter of instinct or hunch, I would be reluctant to see anything pass into statute which might be against the interests of women, in that it could conceivably make employers more reluctant to take on married women who were perhaps evidently pregnant. However, I do not lay enormous weight on that. What I would give more weight to is that the noble Lord, Lord Wedderburn, is well aware that I am a lay figure, but I understand from my notes that pregnant employees have the protection of Section 60 of the Employment Protection (Consolidation) Act 1978, and that that provides that dismissal solely on grounds of pregnancy is automatically unfair. So it would seem to me that, as regards the dismissal of a pregnant woman that came to an industrial tribunal, the onus would be on the employer to show that there were very severe reasons for his having dismissed the employee, because Section 60 of the Employment Protection (Consolidation) Act is so unambiguous. So, I think that my resistance is in no ill spirit, but I simply cannot see that what the noble Lord is suggesting is in any way needed.

Lord WEDDERBURN of CHARLTON

My Lords, I did not rehearse the whole argument that we rehearsed in Committee. One of the factors of which the noble Earl will of course be aware, and which must be in his brief but which neither of us has mentioned, is that until this year there was some expectation that the Sex Discrimination Act might cover a case of this kind. But in the decision of Turley v Allders Department Stores, mentioned in Committee, that view now appears to be incorrect. So no help can be afforded to the pregnant woman, without a qualifiying period, who is dismissed by reason of the Sex Discrimination Act.

It is a little difficult for me to take the matter very much further. That there is a problem seems to be generally agreed. The fact that Section 60 puts a requirement upon the employer does not alter the point about the qualifying period. I am rather disappointed that the Government could not see their way to introduce an amendment along these lines. Obviously, it is the kind of point which is not that controversial in party terms, but perhaps one could ask the Government to have a final look before they bring the Bill forward for Third Reading. In that spirit I beg leave to withdraw the amendment.

The LORD CHANCELLOR

My Lords, I think that the noble Baroness was rising when the noble Lord sought to withdraw the amendment. Perhaps it would be better if I do not put the matter to the House yet.

Baroness SEEAR

My Lords, I am grateful. I only wish to rise to support this amendment, or at least to support the suggestion that the noble Earl the Minister should look at it again. As he has said, this is not a matter of great importance, but it is one that can be of quite significant importance in individual cases. If it is really covered already in the Act then of course there is no point in covering it twice. But if there is any doubt as to whether it is covered, then surely the shorter period which is proposed in the amendment has much to recommend it. It would do little harm to have it incorporated and it would be extremely welcome in many quarters if the Government were to see their way to think about it.

The Earl of GOWRIE

My Lords, I understand that I need the leave of the House to reply; I will try to do so very quickly. I am advised that what I said about Section 60 of the Act is right. But the noble Lord, Lord Wedderburn, is quite fair in raising the Turley v Allders Department Stores case. The issue there was not that the lady in question was pregnant, but the qualifying period. Therefore the issue is whether one should make this special distinction on qualifying period which the last Government did not see as being necessary and which at the moment we do not see as being necessary in respect of pregnant women.

I think it would be going too far for me to say that I will look at this point between now and Third Reading. I could not offer real hope of bringing in an amendment to this effect between now and Third Reading, but I will undertake, as a Minister directly responsible here, to monitor the situation over the next six months or a year. There is no reason why we should not return with an amendment, should life prove that one is needed. Our contention is that it is unlikely that that will happen, but I will keep a very close eye on the situation, and if any of your Lordships wish to keep me up to the mark on that statement in the form of questions or examination of some kind I will do my best to give fair answer.

Lord WEDDERBURN of CHARLTON

My Lords, I feel we are doing rather well on this amendment. If the noble Earl, in the course of his consultations, could have special consultation, as I am sure he will, with the Equal Opportunities Commission on this matter, who knows, it may be that by the time the Bill has gone back to another place there could be a small drop put into it that would bounce back here very quickly and, from us, on to the statute book. But I note that the noble Earl is not giving us that assurance. I am glad he is going to look at the matter. I beg to leave withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 30 not moved.]

Clause 12 [Right to return]:

10.29 p.m.

Lord McCARTHY moved Amendment No. 31: Page 13, leave out lines 6 to 20.

The noble Lord said: My Lords, this brings us to Clause 12, which is the other clause dealing with maternity and particularly with the right to return. The effect of our amendment, which is to leave out lines 6 to 20 on page 13, is in fact to set aside the situation which the Government are proposing, where the right to return is reduced for women employed in firms with less than five employees and where the employer can argue that it is not reasonably practicable to permit them to return and that he cannot provide suitable alternative work on not unfavourable conditions. We are suggesting that those parts of the Bill should be deleted.

Once again I have to return to the PSI survey. Obviously, if the figures are correct, those with less than five employees still face the problem, once in every 60 years, of a woman who actually wants to return. That is the basis and extent of the problem. Again, if we look not simply at the PSI survey but at many other surveys which have been done and many other fieldwork investigations on women's employment in small firms, we find that, quite contrary to the views which are often expressed on the other side of the House, women in firms of very small size are paid significantly less than they are paid in firms of somewhat larger size. They find it rather more difficult to return to work after they have had babies because there is little chance in firms of that size that there will be flexi-time arrangements, creche arrangements and things of that kind.

Therefore, we are not dealing here with a group of women who are not in need of the statutory protection; they are in fact very much in need of the statutory protection and we know on the basis of the PSI survey that the extent of the imposition on the small employer is quite frankly negligible.

I think that the Government should try to appreciate, even at this late hour, what a provision of this kind in practice will mean to almost certainly an unorganised person working in a small firm. The fact is that on many occasions she will be told that it is not reasonably practical for the employer to re-engage her. What does she do when she is told something of that kind? The fact is that she can only find out whether or not that is reasonable for the employer to say by going to a tribunal. Only if she takes the case to a tribunal will she find someone who will tell her whether or not the employer's interpretation of his legal responsibilities is, in fact, reasonably practical. We would suggest that if the Government think about this they must come to the conclusion that this is a curiously mean-minded aspect of the Bill, and that in the great majority of cases women in situations of this kind will not challenge what is said by the employer as to whether or not it is reasonably practical.

The noble Earl is quite justifiably proud of the provisions in other parts of the Bill, which we shall reach in a moment, except that we have no amendments to move dealing with the ante-natal rights that he has inserted in the Bill. This suggests to me that his heart is in the right place. Although he says that he is dove-ish tonight—and he has not yet flown into our dovecote—perhaps he might offer us a small olive branch. He could feel a little warmer still, not simply about ante-natal provisions, but about deleting this particular part of this rather nasty clause. I beg to move.

The Earl of GOWRIE

My Lords, although it is not directly relevant to the amendment, I think it would be worth reminding the House that relative to our European Community neighbours, we treat issues of pregnancy and employment very well. We have a generous amount of leave permitted in the United Kingdom—up to 29 weeks after the birth as against an average in other Community countries of six to eight weeks of paid post-natal leave. Therefore, I think that we have nothing to be ashamed of here. As the noble Lord, Lord McCarthy, fairly said, I am indeed proud of the fact that we are adding to this Bill a new right giving women leave for ante-natal care and ante-natal tuition. I think that this is a good thing to have done.

But there is a talon concealed in the dovecote of the noble Lord, Lord McCarthy, because there is a slight implication here that we are taking away a right which has been given to women in respect of reinstatement. If we examine what the real situation is, although that is technically true, in the real world I do not think it would be regarded as in any way emotionally true. We are not trying to create a two-tier system or to renege on any women's rights. We are simply recognizing certain practical realities of the working place and saying that employers do not have to do what is not reasonably practical for them once they can show, either to the satisfaction of the employee, of the woman who seeks to return herself, or—if she does not accept that—to the satisfaction of the tribunal that it is not reasonably practical for the firm to take her back. This exemption relates only to the very smallest of firms and is strictly defined. It is having six employees or fewer. It is not a blanket exemption, and the onus is quite clearly on the employer to prove that he qualifies that it is not reasonably practical for him to give her her job back, otherwise all the rights of reinstatement, subject to the notification procedures which we have discussed, remain for women.

I do not think that we can reasonably go further than that. I think that we have the balance right regarding the interests of the very small employer. When I talk about his interests I am not simply and cynically, as the noble Lord, Lord McCarthy, seemed to suggest, appealing for his support or his vote. I am concerned about potential disincentive effects which, in my judgment, cannot be measured by surveys, whether conducted by the PSI or anybody else, on hiring women who are pregnant or who may become pregnant. That is why I would hope, in the interests of women as well as in the interests of the smaller employer, that this modest provision can go forward and the amendment be resisted.

Lord McCARTHY

My Lords, the noble Earl makes four points. He says first that we are better off in many respects than other countries. So in some respects we are, but in general in other countries they do not have qualifying periods so that we are not universally better off. Secondly, he says in the real world he does not feel there would be much resentment of this. If he would look in the postbag that I am sure he gets, as I do, from women's organisations, from the Equal Opportunities Commission, from all kinds of pressure groups in the women's movement, he will find that this is an aspect of the Bill which is particularly resented by them.

He talks about the onus of proof when women get to the tribunal. Of course I accept that. The central point I was trying to make is that, for the most part, women in this context will not get to tribunals. They would have to go to a tribunal to find out about the onus of proof and to find out whether their employer has reasonably interpreted this Bill. I would suggest that the great majority of women who receive a letter saying it is not reasonably practical will feel that they have to conform to what is being said. Finally, he said it is not reasonable to go further. It is not only reasonable to go further; it is easy—he could drop this part of the clause.

The Earl of GOWRIE

My Lords, before the noble Lord sits down, and with the leave of the House, may I answer one point of fact that he made about my postbag, or about the representations which have been made to me. We did proceed throughout this Bill by means of consultation, and I am perfectly happy to admit to the noble Lord that when we suggested that this particular exemption apply to firms of 20 employees or fewer we did get substantial representations from women's organisations and indeed from individuals. Since, in sensible response to a problem which we were always trying to target on the very small employer (and maybe at 20 we drew the very small employer too widely) we changed our minds and altered it down, I for one have received nothing at all.

On Question, amendment negatived.

10.39 p.m.

Lord WEDDERBURN of CHARLTON moved Amendment No. 32: Page 13, line 9, leave out ("employees") and insert ("workers").

The noble Lord said: This is one of two points that follow my noble friend's description of this part of the Bill about which there is a rather deep division of opinion between the Government Benches and ourselves. Approaching it, as we do, with the belief that this is a very unfair and unnecessary relaxation of the rights of women in very small firms, we naturally wish to press the Government upon two matters that were discussed in Committee but were not quite the same as these amendments. The first is this Amend- ment 32, which I quite appreciate in a sense goes with an amendment we did not move, Amendment 18, because it relates to a cut-off point for rights in small firms. Amendment 18 was about the cut-off point of 20 employees for unfair dismissal rights. This is the cut-off point of five workers for maternity rights to retire.

The proposal that the word "employee" should not be used rests, I think, on a number of grounds. First, we are encouraged that the Government themselves accepted at Committee stage a clause—Clause 2 of the Bill as it now is—which is not about the same matter but which applies a cut-off point to the area in which the employer must respond favourably to a trade union request for a ballot on his premises. The cut-off point there, in Clause 2(3)(b), is where the number of workers employed by the employer added to those of an associated employer does not exceed 20. The word "workers" is used and we think that is very sensible.

In Committee we had some discussion about the great difficulty today in employment law of recognising an employee as against a worker; that is, an employee who is employed under the old term "contract of service" or "contract of employment", stricto sensu, and the worker who is defined in the 1974 Act, a definition that came from the 1971 Act, working under a contract of service or with services other than for a professional client.

We suggest to the Government that there are good reasons for making the cut-off point in this Bill the same in all three respects. Therefore I raise the amendment here, where it seems to us particularly important to make the cut-off point one of "workers", for three reasons. The first is, as my noble friend has suggested, that the women whose rights are being cut down are likely to be weakly organised in unions and not to be in any way cognisant of the law. They simply will know the number of people who are around at the place of work; they certainly will not be able to distinguish, any more than the Court of Appeal can sometimes easily distinguish today in the light of recent case law, the worker from the employee. Only the lawyer can do that, and according to the Court of Appeal he often gets it wrong. So first of all it is a common sense reason: if you want people to know the situation you use the wider definition.

Secondly, if there are employers of women who have enterprises where the workers do not exceed five, they will be less able to evade the statutory provisions if the word "worker" is used rather than the word "employee". That is to say, if there is a very bad employer in a small enterprise, once he has passed the point of five employees in the strict sense of the meaning here he will employ his sixth or seventh person under contracts for services, and the case law which we discussed in Committee shows that there is an extraordinary number of people around in British industry who are now working as self-employed people.

That brings me to the final reason: that what is known in the construction industry as "the lump" is not by any means now confined to the construction industry. There is, in a sense, a black economy, to use the Italian term, in many areas of British industry where people are in many respects self-employed, technically speaking, and this is causing a great deal of case law in the courts. It is desirable, in statutes relating to labour law, wherever possible, to put pressure against the development of those practices.

So on the grounds of common sense, of knowing where you are—you can know where you are if you know there are five workers; you cannot know whether the sixth one is an employee, but you can know she is a worker—on the grounds that it would be some obstacle, at least, to evasion by the bad small employer, and on the grounds of policy in labour law generally, I beg to move Amendment 32: that "workers", not "employees", is the right word to use here for the cut-off point.

10.45 p.m.

Lord ROCHESTER

I oppose the amendment, my Lords. We have already demonstrated our sympathy to the Labour Front Bench in what they have had in mind in seeking not to distinguish between women simply on the grounds that some work for larger firms than others. One of the grounds in particular which the noble Lord, Lord Wedderburn of Charlton, has put forward in support of the amendment is that he wishes to raise above five the number specified in the clause. But I am very unhappy about the way in which he is setting about it—by seeking to substitute for the word "employee" the word "worker"—because I recall well from my industrial experience that what irritates management (I see the noble Lord, Lord Mottistone, grinning; he may have had the same experience in this connection) is being categorised as something other than workers.

Secondly, the amendment seems to me to go in the opposite direction from that in which, in terms of sound personnel policy, we should be proceeding, towards something more like what is called a single status system of employment. Either we are all workers or we are all employees, but not one or the other, and of the two terms, for the reasons I have given, I very much prefer the word "employees". Had I realised that "workers" appears elsewhere in the Bill I might have had something to say earlier, but in respect of this amendment, that is my feeling and I hope it will be resisted.

Lord MOTTISTONE

My Lords, I am pleased to speak following the noble Lord, Lord Rochester, who kindly mentioned my reaction to his statement while he was speaking. I was looking forward to the debate on this amendment, having missed No. 18, to see exactly what noble Lords opposite meant. The House may remember that in between the two, the noble and learned Lord the Lord Chancellor pointed out the importance of plain English. It would seem to me that plain English about workers is more important than what appears in some Act passed by noble Lords opposite in 1974, and it is a pity if they sought to define "worker" in some technical way which distinguishes it from "employee". I was intrigued—although I found it difficult to follow—by what the noble Lord, Lord Wedderburn of Charlton, was saying about self-employed labour, which somehow implied that self-employed labourers were not workers. What the Government could well do is first to sort out the fact that they have "worker" in Clause 2, which is obviously at loggerheads with what is elsewhere. As the noble Lord, Lord Rochester, said, we must be consistent. Secondly, they might seek the opportunity on Third Reading to get rid of whatever definition noble Lords opposite put in their 1974 Act, so as to have it straightforward and accept the fact that all people who work in an enterprise are workers.

Lord MACKAY of CLASHFERN

My Lords, as for the amendment—which is all I propose to deal with—I would certainly suggest that it is unlikely that an employer will change the character of the people working for him once he gets to the number which is important for this clause, and I do not think he would do it for that purpose alone; he might of course have other reasons, and the noble Lord, Lord Wedderburn, referred to those, but we are not dealing with those here. The important point from our point of view is that the clause is dealing with the burden of the employment protection legislation, and it seems highly relevant in that context to use the employee as the person who is important for the purpose of counting numbers. If one were dealing with some other form of protection, the workers might be important.

I also wish to point out that in the way that it is expressed the amendment refers to workers employed by the employer. So, in any event, employment is implied in the formula that the noble Lord is producing. I am therefore not sure that his amendment achieves anything at all, but if it does then it is an undesirable thing. I invite your Lordships not to accept the amendment.

Lord ROCHESTER

My Lords, with the leave of the House, may I ask whether the noble and learned Lord considers that there is anything in the point made by the noble Lord, Lord Mottistone, and myself; namely, that there should at least be some consistency in this matter throughout the Bill?

Lord MACKAY of CLASHFERN

My Lords, I have heard it said that consistency is the hobgoblin of little minds, but whether that would apply in this context I would not say. I think it is fair to say that Clause 2 deals with a situation somewhat different from that with which we are concerned here. Perhaps I might be allowed to leave it at that, at least at this time.

10.52 p.m.

Lord WEDDERBURN of CHARLTON

My Lords, my attempt to move the amendment briefly has proved to be a lesson to me not to do such a thing when one has a legal point to put over and one might be misunderstood. As the noble and learned Lord the Lord Advocate knows, the words "employee" on the one hand, and "worker", on the other, are found throughout the new employment laws. There is no question of a difference in status or of any stigma being attached to the one or the other. Indeed, the distinction was not introduced in the 1974 Act. If it appeared in a general way, it came in first perhaps in the 1971 Industrial Relations Act, although the distinction can be found earlier, with slightly different definitions.

The situation is simply that an employee is someone who falls under the employment protection laws, and is employed under a contract of employment in the old sense, while a worker is defined as a term of art, including the employee, but also one or two other people, such as people who work for services, rather than under contract of service, or who are employed by Government departments.

Therefore, there was no question of status or stigma being involved. The question was the one to which the noble and learned Lord addressed himself: whether, just because the employment protection laws speak in terms of the employee—and rightly so; that is understandable, because one needs the contract of employment on which to operate—the cut-off point should therefore be defined in terms of employees when they have all the other undesirable features.

It is a strictly legal issue, but it involves the policy, and I note that the Government have decided to continue with the traditional method. I suspect that before employment protection law develops much further the cut-off point will be defined by way of workers, even though the rights apply to employees; and here I accept what the noble and learned Lord says. There is not really any discrepancy in cutting off by reference to the one, even though the rights inhere in the other. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 33 and 34 not moved.]

Clause 15 [Action short of dismissal relating to trade union membership and activities]:

Lord McCARTHY moved Amendment No. 35: Page 16, line 43, at end insert— ("(1A) There shall be added to section 23 of the 1978 Act, the following subsection: — (8) For the purposes of this section, an act done by an employer in respect of an employee shall not be regarded as an act compelling that employee to be or become a member of a trade union by reason only that it affords to workers who are members of an independent trade union a benefit or advantage which is not afforded to that employee").

The noble Lord said: My Lords, we regard this as a very important issue. Your Lordships will remember that we raised it at the Committee stage. It deals with the scope and meaning, as we see it, of Clause 15(1) where, your Lordships will remember, the Government proposed in effect to delete the words "which is not independent", so that the provisions of Clause 15(1) apply to both independent and non-independent unions. So it becomes actionable for an employee to have action taken against him by his employer to compel him to belong to a union—any union. We have argued that this in fact creates a very wide series of problems for a trade union and for employers outside even the area of the formal union membership agreement, which is the area to which the rest of the clause applies.

Your Lordships will, I hope, remember that at the Committee stage of the Bill we introduced an amendment which was designed to modify this situation and indeed to restore the previous position. But in that debate we were told by the noble and learned Lord the Lord Advocate that such things could be done by the tribunals, and that in any case it was difficult to say, to suggest and to assume that all kinds of things—some of which we had mentioned—which represented mere inducements to membership, would necessarily be regarded by the tribunals as constituting compulsion.

It therefore seemed incumbent upon us, if we wanted to try to have some impact upon the Government at this stage, to seek some basis for making a distinction between some of those pressures, inducements, incentives or encouragements, which we sought to argue at the Committee stage were the very stuff of industrial relations, to get people to join trade unions and to encourage people to remain in trade unions, and to leave them outside the ambit of the Bill while trying to go with the Government's desire to in some way protect workers who had had compulsion placed upon them, short of dismissal, to join a trade union. That is indeed what we would say our amendment is trying to do.

In some ways it is a probing amendment. If the Government wish to tell us that they do not like this particular form of words and they will go away and look for other words, we shall be very pleased to withdraw the amendment. But what we would really like them to face is the question that, unless something of this kind is done, then there is a very real possibility that tribunals would have to decide whether or not a whole range of practices represented compulsion. As we said, those practices are the very stuff of which industrial relations are made up—shop stewards ensuring, as they always do, that only trade union collectively designed and recognised procedures are used by non-unionists, so that non-unionists can use only trade union grievance procedures; the allocation of overtime by shop stewards; the allocation of rotas by shop stewards; decisions by shop stewards taken, in effect, in the absence of non-unionists but which nevertheless commit non-unionists as to what piece-work prices shall be; and negotiations among trade unions and employers as to benefits for members only.

We want to have a form of words which have a sporting chance to rule out practices of this kind, realising that such an interpretation might well mean that tribunals would rule in certain other practices, short of dismissal, as constituting compulsion; for instance, some of the examples given by my noble friend Lord Wedderburn when this issue was discussed on Committee. For example, he gave the case of the employer who suspended a non-unionist until he agreed to join a union; or the example of the union which operated a practice of refusing to promote non-unionists. Things of this kind, and other forms of threats of sanctions of various sorts, might reasonably, under the terms of this part of the Bill, if this amendment was accepted, be regarded as compulsion.

The answer which the noble and learned Lord the Lord Advocate gave my noble friend Lord Wedderburn at that time of night was that, although it might he possible to distinguish between these cases, he would rather that these things were left to the tribunal. He said—and I quote from col. 593 on 12th June: The noble Lord, Lord Wedderburn, gave a number of examples and invited me to comment on them".

Then he went on to comment. The cases he gave all fall to be settled by the criterion: does the action in question amount to seeking to compel the person to join the union?

We accept that. He went on: Certainly so far as the first case is concerned I would think that it did not…".

If I remember it, that was the case of refusal to allow access to a trade union procedure. I would think very much the same of the second case"—

I think that was the suspension case— if the ill-feeling was generated in some way which was independent of compulsion to join the union. The breakaway case",

which was another case mentioned by my noble friend Lord Wedderburn, is a little more difficult. I think it would depend on a full account of the circumstances. I doubt whether the noble Lord's example gave sufficient of the circumstances to enable a confident answer to be given".

That is our very point—to enable a confident answer to be given.

We should like to see some direction given to the tribunals on the way that they might interpret this part of the Bill, and we should like to see the way in which that direction was given to make a distinction (as we say in the amendment) between acts which are done by an employer which could be said to be compelling an employee to become a member of a trade union and acts which (as we put in our definition in the last part of the amendment) afford to workers who are members of an independent trade union a benefit or advantage which is not, in effect, afforded to a non-unionist, or, as we would put it, to an employee bringing a case to a tribunal. In other words, if the only benefit or incentive is something given to the workers who are members of an independent trade union, some benefit or advantage, and that is the only form which the alleged compulsion takes, we would say it should not be part of the terms of Clause 15(1). 1 beg to move.

Lord MACKAY of CLASHFERN

My Lords, this matter seems to be causing undue difficulty to noble Lords opposite. As my noble and learned friend the Lord Chancellor said earlier, the test is one of plain English: whether the action in question was for the purpose of compelling the person affected to be or to become a member of a trade union. Surely that is a test which is reasonably easy to apply and, as my noble and learned friend the Lord Chancellor said on the last occasion, the judges do not have much difficulty in determining what is the purpose. Surely it is easier to leave it on that general test than to try to test it in relation to particular examples as this amendment seeks to do. The amendment suggests that it should not be such action if the action is by reason only that it affords to workers who are members of an independent trade union a benefit or advantage which is not afforded to that employee. It must depend on the circumstances, the nature of the benefit, the way in which, and the purpose particularly with which, this course of conduct is pursued. If the refusal of these benefits is part of a deliberate strategy to compel nonmembers to join by refusing them improvements in terms and conditions of employment that they would normally expect, then this would fall foul of the clause. I would therefore suggest that this amendment, instead of helping matters, only hinders matters and the simple test (which is, after all a test of previous legislation) is much better, and this amendment should not be given support.

Lord McCARTHY

My Lords, the noble Lord does not help. If he looks at the amendment, he will see that we are saying "by reason only". We are not saying there would be a general policy to force people into unions in the way he suggests. Obviously, if there was an attempt to force people into unions as part of a whole series of motives, the tribunal would say that it was compulsion. We say "by reason only", solely, just that—that it affords the workers who are members of an independent union benefits or advantages not afforded to the employee. The hour being so late at night and we being so far into the Bill, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 36 not moved.]

Lord DEN HAM

My Lords, I beg to move that further consideration on Report be now adjourned.

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