HL Deb 10 June 1980 vol 410 cc166-252

2.53 p.m.


My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(The Earl of Gowrie.)

On Question, Motion agreed to.

House in Committee accordingly.

[The Earl of Listowel in the Chair.]

Clause 3 [Unreasonable exclusion or expulsion from trade union]:

Lord WEDDERBURN of CHARLTON moved Amendment No. 19A:

Page 5, line 27, at end insert— ("or to any rule of a trade union or any agreement to which a trade union is a party

[Lord Wedderburn of Charlton.] providing for an appeal within a reasonable time by an applicant for membership against refusal or by an expelled member against his expulsion.")

The noble Lord said: It falls to me to move Amendment No. 19A, standing in the name of myself and of my noble friend. When your Lordships' Committee rose last Tuesday night, my noble friends and myself were delighted that at last the noble Lord, Lord Lyell, relented and the Government at last agreed to reconsider a matter in Clause 3, which we are still discussing, in the light of our amendment. We are hopeful that they will be equally generous today, but more speedily. We hope to make good progress with the Bill, as indeed we did when the noble Lord, Lord Lyell, and the noble and learned Lord the Lord Advocate took up the Government's case last Tuesday. We have high hopes that this amendment will at least find favour with them, linked as it is with Amendment No. 21, which my noble and learned friend Lord Elwyn-Jones will move later.

Clause 3 gives to the industrial tribunals and then (it is perhaps never to be forgotten) to the appellate courts above them the power to decide, on the basis of reasonableness, who is to be and who is not to be a member of a trade union in respect of unreasonable expulsions and unreasonable refusals to admit. But in coming to that decision they have to take account of subsection (11), which provides: Any provision in an agreement shall be void in so far as it purports to exclude or limit the operation of, or to preclude any person from presenting a complaint or making an application under, this section, and the following section, with the exception of the operation of conciliation officers and agreements made with conciliation officers.

It appears from previous discussions that the Government are not in disagreement with my noble friends and myself that this clause and subsection (11) cover the area which might loosely be called, first, the rules in the trade union rule book, which are the internal appeals machinery, the contractually agreed appeals machinery against disciplinary offences and, especially here, expulsions (and, I shall show, even refusals to admit in some cases); and, secondly, agreements between unions, whether or not they are contractual, and in that second category a group of agreements and principles which are indeed contractual in the last resort, the so-called Bridlington procedures and principles of the Trades Union Congress, more correctly described, perhaps, as the Trades Union Congress disputes principles and procedures.

As to the first, the rendering as void of the internal appeals machineries set up within each union, it is perhaps worth stressing that such arrangements do not exist only in every rule book of every reputable and bona fide trade union in the country—appeals from decisions of the branch or from the region to the executive committees, and sometimes to other bodies to which I shall come. It is also worth noting that in some cases—indeed, in many cases still—the High Court itself, when faced with a complaint by a member against a trade union which is within its jurisdiction (which, broadly speaking, may be called a complaint that the union has broken its rules in expelling him, or that the union has failed to observe the principles of natural justice) does not regard the appellate machinery of the union itself as void. Indeed, it is still true to say that where the rules lay down an expectation that the member against whom action has been taken will exhaust the internal appeals machinery (what is usually called "exhaust his internal domestic remedies") before he goes to the court, on many occasions the High Court will still tell him that he must do that before he comes to the High Court. It is true that if there is an unreasonable delay or some other factor of injustice, then even in face of such a rule the court will take jurisdiction; but the proposition which I have just advanced to your Lordships' Committee is, I think, fully sustained by the judgment of Mr. Justice Goff in the case of Leigh v. National Union of Railwaymen in 1970. So that the High Court in a sense trusts at least reasonable internal appeal rules of the unions, and does not put them aside.

But in Clause 3(11) the Government's Bill appears to take very little heed of the appeals machinery inside the union. In another place, in Committee, it appeared from the debate that the Government were accepting that in very many cases the obligation or expectation that a member should go through the internal appeals machinery in face of expulsion or refusal to admit would be a clause in an agreement or a provision in an agreement which purported to exclude or limit the operation of the section. I can see that that may be an arguable case. That is why we are moving this amendment to say that there should be excluded from that rendering as nugatory these agreements of internal appeals machineries.

It is worth stressing that the actual machineries laid down in trades union rule books are quite different from the kind of account which normally appears before the public in the media. I have here the rule books of the two largest unions in the land, the Transport and General Workers' Union and the Amalgamated Union of Engineering Workers, the second being the engineering section. The Engineering Workers have three pages of carefully drawn appeals machinery and a final appeals court with lay members drawn one each from the 11 divisions sitting wholly independently of the executive committee hearing appeals against decisions of the executive and other bodies. The Transport and General Workers' Union has a series of appeals machineries from branches and divisions through the regions to the national executive council and also an appeals committee beyond that in certain cases. Indeed, the rule book illustrates a development which has been going on in trade union rules over the last few years in providing that where a person is refused membership of the union he or she may appeal to the regional committee albeit there is no contractual right to do so, because, not being a member, he or she will not have acquired any such contractual right. The union observes that machinery.

No doubt mistakes occur in the administration of trade unions as in other bodies; but I must submit from my experience (and my noble friends are supporting this point) that most British trade unions have appeals machineries which are properly used and far better than the appeals machinery of some institutions including some of the professional institutions. We say it is quite wrong that the matter should be left at risk that all those machineries, instead of being contractually binding (as they have been since 1957), might suddenly be rendered void, because, if they are rendered void, it will be difficult for the industrial tribunals to take them into account in coming to a determination of "reasonableness", which is the overriding test under this clause.

This becomes more important when we approach the question of inter-union arrangements and the Trades Union Congress. There are many inter-union arrangements which solve problems, and which are necessary to solve problems, in the multi-union system of industrial relations which history has bequeathed to us. The most important are the Trades Union Congress disputes principles and procedures. They are central. What is usually called "Bridlington" is a set of principles, not in themselves contractual but which operate as a contract binding on all the unions affiliated to the TUC—12 million workers—and operated as a contract because they are incorporated into TUC rules.

Disputes between unions as to overlapping membership, or poaching of members, or the right to organise in one place or another, are first conciliated by the TUC staff and, if not solved, may be referred to a disputes committee consisting of experienced trade union officers who are not interested (in the sense of having an interest) in the dispute, and the decision of the disputes committee is binding upon the disputant unions. The disputes committee approach the job, it is perhaps not irrelevant to remind your Lordships, under a regulation which says: The basic approach of the disputes committee shall be to seek to obtain an agreed settlement of a permanent or interim character acceptable to all the disputants. The committee may at any time make such recommendations as it sees fit. Whenever the disputes committee considers it to be necessary it shall make an award and in deciding the dispute the disputes committee shall have general regard to the interests of the trade union movement and to the declared principles or policies of Congress but shall in particular be guided by the principles governing relations between unions as amended by the General Council and adopted by Congress from time to time". Those are the so-called "Bridlington" principles. The hard work of the Trades Union Congress staff and the experienced trade union officers who work at this problem day after day is scarcely noticed in the publicity given to trade union affairs. In 1979 there were 111 reported disputes. After conciliation, only 16 were referred to disputes committees and at the end of the year only seven remained unsolved. There are no headlines for the hard toil that trade union officers and TUC staff give to this saving of many hundreds of thousands of hours which might otherwise be lost to British industry.

Most trade unions affiliated to the TUC will have in their rule book the link between the TUC's disputes under Bridlington and their own rules. This is a point of particular importance in regard to subsection (11) because this rule, too, it appears, stands at risk of being rendered void. Since 1956 the TUC has recommended its affiliated bodies to include the following rule in their rule books and many dozens of its affiliated unions have adopted most of it. The rule reads: Notwithstanding anything in these rules"— that is, the rule book of the union— the General Executive Council may by giving six weeks' notice in writing, terminate the membership of any member if necessary in order to comply with the decision of the disputes committee of the TUC". In 1976, before Mr. Justice Foster in a case in the High Court, the validity of this rule was challenged under common law and the matter was left with the rule not declared unlawful, and, still less, void.

The first question to the Government on this amendment must be this. Will the TUC model rule which is on the rule book of nearly 100 unions be rendered void, or is it valid under Clause 3(11)? That is a matter which the Government advisers must have decided by now. I am not asking about some vague formula, but about the model rule which has been there since 1956. Is it void or not? In looking for guidance on this, I found much more reassurance from the noble and learned Lord the Lord Advocate in what he said last Tuesday than I did from his right honourable friends in another place. Last Tuesday the noble and learned Lord (in column 1379 of Hansard), when speaking about the Bridlington procedures, said this: I give the unreserved assurance that there is no intention whatsoever in this Bill on the part of the Government to undermine those procedures". I think it would be fair to quote a further passage. He went on to say: A tribunal, under the provisions of Clause 3, and particularly Clause 3(5), will have to determine whether, in all the relevant circumstances, a trade union has acted reasonably in excluding or expelling a person. The tribunal, therefore, will of course include in its consideration the question whether the action was taken in pursuit of the Bridlington procedures or similar arrangements". But when I look at the remarks of his right honourable friend on 14th February in Committee in another place I see that he did not speak in quite the same terms. In speaking of the Bridlington type arrangements and of various amendments being moved by the Committee, he said: The amendments do not go so far as to say that the tribunal should be bound by it, but they do say that it should be taken into account by the tribunal. If we were to write that into the clause, the effect in the case of the first amendment would be to make the tribunal take account of an agreement that might be in conflict with subsection (11)".—[Official Report, Commons, Standing Committee A, 14/2/80; col. 419.] In colum 420, he said: In so far as [the amendment] protects actions properly taken in accordance with Bridlington arrangements, the amendment is not necessary. But it goes further and asks tribunals to have regard to union membership agreements or arrangements which may seek to curtail rights otherwise created by the clause, and which subsection (11) declares to be void in so far as they do so—". At that point he was interrupted by a Member of the Committee who said, I do not think so". He went on: and on those grounds the amendment is unacceptable". He says to the Member who interrupted him: But Clause 3(11) makes void agreements or arrangements that have the effect of contracting out of the provisions of the rest of Clause 3". That is a very particular interpretation. Subsection (11) does not talk about contracting out; it talks about any provision in any agreement which purports to exclude or limit the operation of the clause. So a further question arises. First, if the Government are so clear that the existing Bridlington arrangements are not rendered void by subsection (11), will they frame their own amendment and come back on Report and put that in the Bill?

Secondly, if what they are worried about is that some Bridlington type agreement —to use the phrase of the noble and learned Lord's right honourable friend—will be void because it will go too far, will they not at least give an assurance on this amendment that they will come back with a form of words which allows for the existing arrangements and arrangements like them not to be rendered void? The burden of the Government's arguments again and again under Clause 3 is: "Do not worry, it will all be all right because the industrial tribunal will be reasonable. It will always be reasonable, so do not worry." If that is right, then the Government really should not introduce clauses which might have the effect of rendering Bridlington and internal rules void, because we can rely, they say, upon the industrial tribunals and, presumably, the employment appeal tribunals, the Court of Appeal and the Judicial Committee of this House on appeal to be reasonable and to know what to follow and what not to follow in terms of a reasonable expulsion. So why include a clause which any lawyer worth his salt could say rendered Bridlington or a particular internal union appeal rule void?

It is arguable that the words "in a provision which purports to limit the operation of this clause" covers many appeal procedures inside unions, and possibly arguably—strongly arguably, some people say—the Bridlington arrangement itself and the model rule. So it will not do to say that there is no other way of doing it. It will not do to say: "We must have this very broad clause that will make everything void, just in case the tribunals take account of it when they should not", because, on the Government's own admission, the tribunals are never going to take account of anything when they should not. I sometimes think that the industrial tribunals are regarded by the Ministers on the Government Front Bench as so wise that all courts of appeal could be abolished, because, being tripartite, they will always come to the same decision.

It is a distinct possibility that the various arrangements which I have described, inside many unions, between many unions, in the TUC and its unions, and their contractual arrangements, the whole Bridlington arrangement dealing with whatever problems arise of an inter-union kind—and heaven knows, they have fallen off astonishingly in number in the last decade, largely because of work done by the TUC—all of those are at risk, at the minimum of being void. I say that that is to legislate an act of industrial vandalism. It is, in fact, to get rid of or make void many bits of machinery which keep the wheels of industry going. I hope very much that the Government have thought again and will accept the amendment which we have put forward; or, if they do not, that they will at least assure us that on Report they will replace subsection (11) which, as it stands, would do grave damage to the operation of British industry. I beg to move.

3.14 p.m.


I should like to support this amendment because of its close association with Amendment No. 21 to which we shall shortly come and with the principle of which I very much agree. I do not intend to say more than that on the amendment which has just been moved, except that I wonder whether I may make what is really a procedural point at the start of what looks like being a very lengthy Committee stage of the Bill for this week.

A good many amendments have been tabled substantially in the same form as in another place. I think it is fair to say, from my observation at least, that this applies to both sides of the Committee. I cannot think that this is right, any more than it was right, as the noble Lord, Lord Houghton of Sowerby, pointed out, that we should have been required to vote on whether Clause 1 should stand part of the Bill when opposition to the Bill was not pressed that far even in another place. In my view, it would greatly assist the Committee if fewer amendments were moved and, as far as possible, only those that dealt with major points, particularly where they have been insufficiently debated in another place or where, as in the case of a closed shop, there have been material developments since in the situation. In the same way, I wonder whether I may take the great liberty of suggesting that we could do with rather fewer Divisions than appear to be in prospect.

It was said by the noble Lord, Lord Wedderburn of Charlton, at Second Reading that he proposed to press every line of the Bill in Committee. One allows for a great deal of exaggeration in the heat of debate; but to the extent that this is done, I cannot think that it will give pleasure, even to his noble friends, particularly if it occurs at three o'clock in the morning. So I take leave to suggest to the noble Lord and also, if I may, with respect, to the noble Lord, Lord McCarthy, that they consider very carefully the desirability of speaking briefly and pressing amendments selectively, at least in the case of those that have already been debated in substantially the same form in another place. I hope that I said that without too much offence and I think that it comes better from someone on these Benches than from someone either on the Government side or on the Labour Opposition. I hope that it will be taken in the spirit in which it is offered. Having said that, I am pleased to support this amendment.

3.18 p.m.


It was very necessary that my noble friend Lord Wedderburn should have explained the background to the Bridlington arrangements. In this country we pioneered so much in the way of the formation of trade unions that much of the structure is now pretty well obsolete. It follows that instead of the structure of industrial unionism with one union per industry, we have a large multiplicity of unions even within one industry, many of them indeed organising the same type of labour. This leads to differences and difficulties which would not be with us if we had a structure of industrial unionism. Therefore the points made by my noble friend in explaining Bridlington are vital in understanding the reasons for this amendment.

We tend at times like this almost to look upon the trade unions as organisations which are trying to find excuses to keep people out. I have spent many, many years of my life trying to induce people to get in; and the thought that we go around looking at dots and commas, and so on, in an effort to show just how we can exclude everybody in sight, is really grossly misleading people as to our purpose.

My noble friend mentioned the constitution of the number of unions, including my own, the engineers. He mentioned the final appeal court. I would challenge contradiction in trying to show any more democratic set-up in any kind of organisation, either employers or employees, than the manner in which the final appeal court in the engineering union is brought together. It is elected by the members of the union. The whole membership of the final appeal court are rank and file members of the union. We will not have any full-time official present, except the secretary of the union, to read out the minutes. So the whole thing is conducted by rank and file people examining the cases put before them. That, I should have thought, is a democratic set-up which could not be beaten anywhere.

I can tell your Lordships of very many occasions when our executive council —a full-time body of seven people—have appealed to the final appeal court against members who have done something or other, and the final appeal court has turned down the executive flat time after time. I see my noble friend Lord Pargiter here. He, like myself, has spent a lifetime in the movement and could probably emphasise what I am saying. The idea that there is any sort of red tape concerning some erring member who goes to an appeal court and is not considered as being a bona fide type of person is quite wrong. I hope, therefore, that the type of legislation against which we are now protesting will be at least made better by the acceptance of the kind of amendment that is being moved.

I have mentioned the engineers. I know this applies certainly to practically every one of the large unions affiliated to the TUC, and why we should find it necessary to try to hem them in on all sides with this kind of thing, I really do not know. On Second Reading my noble friend emphasised that a great deal of what is deemed to be increasing the powers of the trade unions is nothing of the sort, but is merely getting back to the basis of the 1906 Act. I hope the Government will look at this amendment in the light of what my noble friend and I are saying, because there is now a need for this Government in particular to try to prove that they are not simply trying to lie on the trade unions in every possible way, because this is the feeling that many of us have. By accepting an amendment like this they will do something at any rate to mitigate the damage they are doing.


In spite of the sweet reasonableness of the noble Lord, Lord Wedderburn of Charlton, and other noble Lords who have supported him, I would hope that the Government will leave these matters to be decided under the Bill as it stands. After all, provision is made for conciliation under subsection (11) where it is used. Provision is made for resort to a tribunal and to an appeal under subsection (8) to the Employment Appeal Tribunal. I do most seriously suggest to your Lordships that if we are going to have it as a necessary part of this procedure for adjusting complaints in these very delicate circumstances, there should also be resort, as a prior condition, it seems, under this amendment and that of the noble and learned Lord, Lord Elwyn-Jones, which is to come later; and if it is to be a condition precedent to the procedure under the Bill as it stands, then I think it is going to be dealt with in a very cumbersome manner. Delays are inevitable and, bearing in mind the difficulty which the individual trade union member may inevitably feel himself to be in when he wishes to appeal against explusion or exclusion, he will have much more confidence in a totally external and independent procedure such as the Bill has mentioned.

The noble Lord, Lord Wedderburn, said that the two largest unions in the country—both of which, I should mention, are affiliated to the Labour Party—have rules carefully drawn, which are reasonable. I do not doubt that; but what if those rules are amended in ways which become or appear to become oppressive to individual members, perhaps by introducing still further procedural steps? Those rules could not then be regarded any longer as carefully drawn and reasonable.

As to the appeals machinery, the noble Lord has said it is properly used. Within the limitations of the present law, I have no doubt that is true: I am not in a position to challenge it. But, surely, if we make it a condition that this appeals machinery shall be used, then the tribunal or, if the case is referred to it, the High Court (and that is not impossible, I think) then we have to consider whether the union rules are sound, whether they have been properly applied and whether the appeals machinery is sound and properly applied. Then ultimately there will be procedural wrangles instead of decisions upon the main issues; and the main issues are carefully set out in this clause, particularly in subsection (2). Surely it is best for the machinery envisaged by the Bill to be used to decide those issues instead of the matter being made cumbersome and complex by introducing this further step.

A noble Lord: Hear, Hear!

3.27 p.m.

The LORD ADVOCATE (Lord Mackay of Clashfern)

May I begin by reminding the Committee that the opening words of subsection (11) are: Any provision in an agreement shall be void in so far as it purports to exclude or limit the operation of … this section. It does not make automatically void an agreement of the kind to which the noble Lord, Lord Wedderburn, referred. It makes it void only if such an agreement impinges on the section— … in so far as it purports to exclude or limit the operation of … this section. This amendment falls, I would agree, to be considered along with Amendment No. 21, to which the noble Lord, Lord Rochester, referred. The Government in the other place undertook to give serious consideration to this matter, because it is a matter which is important. On considering it, what we did was to lengthen the time within which a complaint must be taken to the industrial tribunal by the complainer. That gives the complainer the option of waiting until that period of six months has expired in which one would have anticipated that reasonable procedures of this type might well have reached a conclusion. If they have not, we would say it is unreasonable to expect the complainer to wait longer than that when a decision to exclude him—and I take that as the example for simplicity—has been taken. There is nothing to prevent the rules of a union being in such a form that the exclusion will not take effect until the appeals procedure has been exhausted. In other words, there is no exclusion until the final decision has been taken, and in that case, of course, the six months' period does not begin to run subject, of course, to the requirements of subsection (9)(a), which limits the total time a person has to wait before he hears one way or the other.

This present amendment in my submission would include a case of this sort. A union rule might forbid an appeal to a tribunal until any internal appeals procedure, perhaps the independent review committee procedure, was exhausted. The delay in making an application to a tribunal arising from exhaustion of these procedures might be very unreasonable from an individual's point of view. The individual might have lost his job before having an opportunity to exercise his statutory right of appealing to a tribunal, and the delay involved might take him well beyond the six months within which he is expected to make any complaint. But this amendment seems to go even further than that. Clause 3 (11) makes void an agreement, … only in so far as it purports to exclude or limit the operation of … this section". The amendment, therefore, as I read it would validate rules or agreements which did so exclude or limit the operation of the clause. Any other purpose it might have is unnecessary because any other rules or agreements are not voided by the subsection.

Under the amendment, a rule which provided an appeals procedure and directed members to use this and give up any statutory rights would be valid and could therefore result in individuals being stopped from using the rights of this clause altogether. Not only could union rules provide an appeals procedure and forbid the use of the statutory rights under Clauses 3 and 4, but the union membership agreement itself could incorporate an appeals procedure, perhaps concluding with an outside independent arbitrator to determine the question and lay down that the individual must not make use of his statutory right to appeal under Clauses 3 and 4. In my submission, the amendment would really destroy the clause altogether if it permitted that kind of thing. Accordingly, in my submission to your Lordships, the extension of time which the Government have given for the complaint to be lodged deals properly with this matter and I would invite your Lordships to reject this amendment.

3.32 p.m.


I cannot express how disappointed I am at the Government's response. First, may I say to the noble Lord, Lord Rochester, that we welcome his support for this amendment. I accept the point that he made about the number of amendments in the spirit that he put it to us. I feel bound to say, in fairness to my noble friends as well as myself, that we started with about five times as many amendments, that our noble friend the Chief Whip put us through our paces, that we went away late at night with wet towels and came back with these amendments. If they overlap the amendments that were taken in another place that may well, as we think it does, reflect the fact that in another place the Government were singularly obdurate and unrelenting in refusing to accept a large number of reasonable amendments which have to be argued properly again, to which they gave no answer except usually, "No".

Turning to the points that have been made on my amendment, may I say to the noble Lord, Lord Renton, that of course I appreciate that the clause leaves the agreements made with a conciliation officer under Section 133 of the 1978 Act. But those, of course, are agreements which, if they fail, will lead to proceedings in the industrial tribunal. Secondly, both he and the noble and learned Lord the Lord Advocate to some extent addressed a different amendment from the one which I am moving. My noble and learned friend will move an amendment in somewhat different terms, but all this amendment does is to say that the internal appeals machineries and the Bridlington machinery should not be void or that such agreements should not be void.

If the noble Lord and the noble and learned Lord say that some of them may be unreasonable, I would say that there is no evidence of that in British trade union practice; but if it be right then at least the tribunal could take account of it. What is the point of saying that they are necessarily void? The noble Lord, Lord Renton, says there will be procedural wrangles. To address the first of the arguments put by the noble and learned Lord, the Lord Advocate, it is indeed true that the clause says they are void in so far as they purport to limit the operation of the section. That does not make things better; it makes them worse. What a field day for a couple of lawyers to argue about the Bridlington arrangement, to which the noble and learned Lord addressed not a single word.

It will not pass without notice in the trade union movement that the Government's reply on this amendment did not mention the TUC Bridlington procedures in any way to explain whether and how far they are valid under this clause. In so far as they limit the operation of the section they are void. What is Congress House, what are the trade union headquarters, to do about that except to go and ring up their lawyers? And their lawyers will not know until it is decided. It is really no good the Government saying, "Oh, but we've dealt with this. We've extended the time during which, after the exclusion or the refusal to admit, a complainant can come to the tribunal, because now we've amended our Bill to give him six months rather than three".

It is true they did that. But that gives the complainant the option. What rights does the trade union have if its internal appeals machinery should be exhausted? What right does the TUC have to see that the Bridlington machinery is gone through in the interests of peace in industry? It gives the complainant, the individual, as always, all the rights, and the individuals who form the trade union movement, with whom he is in dispute, no rights at all. That is the attitude of the Government in this Bill and that is the attitude against which we are complaining. I have no objection to a complainant being given a six months' limitation period; that is perfectly reasonable. But I do object, and my noble friends object, when a provision is left in an Act, as this will be, which to some extent makes void agreements which are necessary for the exclusion of wrangles in British industry day after day.

After all, they get enough publicity when a bad one breaks out, when everyone is at fault, probably, not so many miles from here—employer and unions and everyone alike. But when things go well not even the Government, in drawing up a Bill, are prepared to give them credit. All that this amendment would have done would be to validate such agreements. It would not have made them binding on the tribunal, and the arguments which the noble and learned Lord addressed to the second point are irrelevant to this amend- ment. However, as the noble Lord, Lord Rochester, has pleaded, we should not have too many Divisions. Divisions take time. The Government's position is noted. We can only hope that they will come back to it on Report, because if they do not they really cannot expect the trade union movement to believe that this Bill is anything other than an anti-trade union Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.38 p.m.

Lord WEDDERBURN of CHARLTON moved Amendment No. 20:

Page 5,1ine 27, at end insert— ("(12) No person may make a claim under this section by reason of a refusal of his application for membership by a specified trade union where he objects to membership of another specified trade union, to which it is the practice for the class of employees of which he is one to belong.").

The noble Lord said: I think I can satisfy your Lordships by being brief with this amendment, although it is a somewhat complex one. It attempts to add to Clause 3 a subsection which would avoid a quite unnecessary case ever getting to a tribunal. Clause 3 applies where there is a union membership agreement, usually, but rather loosely, called a closed shop. The hypothesis on which the clause proceeds is that there is an agreement between the employer and one or more independent trade unions that certain practices shall be observed in terms of the workforce belonging to the specified trade unions. It is a commonplace in such arrangements that there will be more than one trade union. Sometimes there is one trade union and that is enough, but usually in our situation there are more than one. That, of course, is what makes quite irrelevant the arguments of bodies like the European Commission dealing with situations where they expect different types of union pluralism.

Let us take an example to which this amendment is addressed, where an employer has a workforce with three unions—a craft union and two general unions. The craftsmen belong to the craft union. The stokers belong to general union A and the rest of the manual workers belong to general union B, and that has been the practice over many years. Suppose someone comes along and seeks to get a job—because last week the Government said this clause must apply to those seeking work—and then claims admittance to union A. Union A may say to him, "You really can't join us because the practice at this place of work, agreed by the employer, agreed by all the unions, agreed by everybody else, is that we provide for the stokers and general union B provides for the others. You're one of the cleaners. We'd love to have you, but union B is your union". But he insists. He says, "No. I want to join union A and I'm going off to the tribunal to say that this is an unreasonable refusal of admittance".

The worry of it is that the things said in another place make one wonder whether the obvious reply that is to come from the noble and learned Lord, namely, that no tribunal would ever consider such a case to be made out as a reasonable case of unreasonable refusal, is really the Government's expectation.

In order to save time I shall not read it, but if the noble and learned Lord looks at what his honourable friend said on 22nd February, at column 586 of the Official Report, he will see a somewhat lengthy passage in which Mr. Mayhew describes a case where someone quite reasonably refuses to go into one union rather than another, because one is led by Communists and the other is not. I suppose that other people might object because one is led, as the Government Benches hopefully expect every day, by Conservatives and the other is not. But if that is to be the type of reasonableness test applied, I suppose it is possible that such a case could give rise to a favourable award by a tribunal.

At least, I put this in the alternative to the Government. If it is a case where no tribunal would ever say about a refusal to admit, contrary to an agreed practice—which I stress is agreed by the employer, the unions and everybody else in the union membership agreement—"It is reasonable to exclude that man. He has applied to the wrong union. He must apply to the right union. That is the reasonable course", then the Government should accept the amendment, because that will make things clear to us which, from the debates in the other House, they are not.

If, however, it is not so, then the amendment is needed even more, because I can- not think of a way in which bargaining structures would be more fragmented, in which industrial peace would be more disturbed, in which employers and personnel managers would be more frequently driven to despair, than if the clause gave a statutory right to someone to join a union which employer and unions in a place of work had agreed it was not the practice of that grade, qualification or class of employee to join.

We have arrangements between employers and unions. They give rise to practices. We have used the word "practice", because that is the word on which the dismissal law depends. I ask the Government whether, in the face of those alternatives, they have any choice but to accept this amendment or, at least, to clarify the clause along lines which are parallel if they find the drafting inadequate. I beg to move.

3.42 p.m.


The Government's answer to this amendment is similar to the answer which I gave to Amendment No. 12. The justification which the noble Lord, Lord Wedderburn, put for the amendment is that it would be entirely reasonable that an application which was founded on circumstances such as those should be refused. What we say is that it is far better that the general principle of reasonableness should be the test, than that the Bill should be cluttered up with a lot of particular cases.

Nobody can think of all the cases and we are, therefore, strongly of the view that it is much better that the general principle should be adhered to and that each case should be determined on its merits. If it be true, as the noble Lord said, that the result of applying the standard of reasonableness to this case would be as he said, then that is the result which we would expect from the tribunal.

Baroness SEEAR

I very much hope that the noble Lord, Lord Wedderburn, will not press this amendment. I entirely agree with him that it would make for the most frightfully confused bargaining, if people joined what was not the right union for the bargaining unit that they should be in, and that it is highly desirable that the objective which he seeks should be followed.

On the other hand, there can be—and I have a case in mind—the very exceptional case where an extremely awkward industrial relations situation can be resolved by allowing something of this kind to happen. I believe it would happen only very rarely and, therefore, I think it most improbable that bargaining units will be confused in this way. But if it is in the legislation that it may not be done, then the very exceptional case which can be eased by an unusual procedure of this kind would become illegal. So, while supporting the objective of the noble Lord, I think it would be much wiser not to have it in the legislation.


In view of what the noble Baroness has said, may I add that we contemplate a code of practice in which it would be possible, after discussion, to deal in a much more appropriate way with a large number of particular cases, perhaps as illustrations of the general principles.


May I say to the noble Baroness, Lady Seear, that, accepting as I do that she agrees broadly with this amendment, we agree that there may be cases where the practice should be broken. But the difference in our approach to industrial relations from hers is that we say it should be done by agreement, not by the fiat of an industrial tribunal. That is the basic difference with the Government as well. We say that there are not a lot of cases such as this. I traverse the argument of the noble and learned Lord the Lord Advocate, if I may address him, that there are a lot of other cases of this kind. There are not a lot of other cases of this kind. This is a very particular point, which is singular and central, and to give the matter over to the control of the industrial tribunals is to take a chance. After all, Grunwick was not a very important factory in terms of the British economy, and yet it blew up into a great national cause célèbre, apparently because of legal proceedings.

It is possible for an industrial tribunal on such matters as this to make a decision which trade unions do not regard as reasonable. There is not a national consensus about all these matters; but where there is an agreement between an employer and his own unions it should not be upset. It is possible for an industrial tribunal to be unreasonable and, with respect, it is also possible for the Court of Appeal to be unreasonable, in the eyes of a large number of people in this country.

To give over the control of the bargaining units and arrangements to courts and lawyers is what the Government are insisting on, in being, once again, unrelenting and not accepting an amendment of this kind. It is to that, we insist again, that the trade union movement—and, I fear, the Government will find, as it is spelled out to them, many employers, too—will come to object as they came to object to the Act of 1971, when they see what it means. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.47 p.m.

Lord ELWYN-JONES moved Amendment No. 21:

Page 5, line 27, at end insert— ("(12) No person may make a complaint against a trade union under this section who has not exhausted any appropriate internal appeals procedure of that union relating to exclusion or expulsion from union membership, and who has not exhausted the procedure of the Independent Review Committee established by the Trades Union Congress.").

The noble and learned Lord said: This amendment, as your Lordships have already heard, is linked to some extent with No. 19A, but deals with a separate matter. Its purpose is to promote voluntary procedures for dealing with refusals of union membership or expulsions from a union, instead of—as I submit the language of the Bill now does—encouraging employees to by-pass those voluntary procedures or, certainly, discouraging them from having recourse to them.

It is significant that in paragraph 16 of the Government's own working paper in July 1979, it said: The provision of this statutory right"— that is, the right that we are talking about; namely, complaints in respect of arbitrary exclusion or expulsion— would not conflict with voluntary procedures in handling these types of problems. It would be clearly valuable to individuals and unions that such proceedings should continue to be available where parties avail themselves of them. The more effective voluntary procedures are made, the greater the chance that these cases could be satisfactorily dealt with without recourse to the law".

That is not the approach of the Bill. Without the amendment which I move, the Bill would encourage complainants not to exhaust the appropriate internal appeals procedures, but, on the contrary, to go straight away to either the industrial tribunal or the Employment Appeal Tribunal. The outcome of this would be that an arrangement, painstakingly hammered out, possibly, between union and management or within a union after consultation, could be summarily ignored.

In the circumstances that we are considering, instead of having the industrial tribunal or the Employment Appeal Tribunal in the background, which is where they ought to be, they will always be well in the foreground, especially with the blaze of publicity that would frequently, at any rate, attend these proceedings. It is far better that those tribunals, if they are to have jurisdiction in this field, should be a recourse of last resort. The words of the Donovan Commission on this were wise. They said that you cannot have labour courts operating on individual matters between employer and employee if you also give them the much more politicised role of determining collective disputes or, and I emphasise this, relations between trade unions and their members. This, I concede, reflects the general Donovan preference, which is also our preference, for consensus and voluntarism over legal compulsion.

Dealing with exclusions from unions in closed shops they said: Complaint should in the first instance lie to the executive committee of the trade union concerned. It is desirable that trade union rules should be revised to make provisions to this effect where this has not already been done". Most unions, as my noble friends Lord Wedderburn of Charlton and Lord Lee of Newton have already explained, do have rules to this effect, and we have heard about the appeals procedures within unions and under the auspices of the TUC.

There is also a source of recourse to which I should like to refer and which has proved to be of great value; namely, the Independent Review Committee which is referred to expressly in my amendment. This was established by the TUC in 1976, following closely the model recommended by Donovan. The Independent Review Committee exists to consider appeals from individuals who have been dismissed or given notice of dismissal from their jobs as a result of being expelled from or having been refused admission to a union in a situation where trade union membership is a condition of employment. Its chairman is my noble friend Lord Wedderburn of Charlton and another member is my noble friend Lord McCarthy, to both of whom the noble Earl, Lord Gowrie, was good enough to say that they had served on the committee with distinction. I am sure that the noble Earl did not mean that as an ironic courtesy.


No, I did not.


The third member is Mr. Doughty, a former General Secretary of the Technical and Supervisory Section of the Amalgamated Union of Engineering Workers.

The review committee is completely independent in reaching its decisions. Although I concede that its terms of reference are limited, in the field where it has functioned it has shown itself to be of very considerable value. Employees should be encouraged, not discouraged, from having recourse to it in appropriate cases. In the three years following its establishment, 45 cases have been referred to it. This, incidentally, suggests that the problem we are considering, as my noble friend Lord Lee of Newton indicated, is not so great as the Government imply and contrasts starkly with the many thousands of unfair dismissal cases. Of the 45 cases referred to the committee, 17 were outside its terms of reference. Of the remaining 28, 12 did not proceed; but of these, several were settled with the aid of the committee's staff. Of the cases which went to a hearing before the committee, 10 complainants were ordered to be readmitted or admitted. The union concerned—this is the important and encouraging matter—in every case complied without demur with the decision of the committee. The complainants in those cases were all given their cards, which after all is the crucial point.

Emphasis is placed in the Independent Review Committee upon its informality. Conciliation is stressed before and after the hearing. It is both able to and bound to engage in conciliation to a far greater extent than the courts think it right to do. Latterly the committee has placed great emphasis on post-hearing conciliation, directed particularly at ensuring that the complainant does not remain unemployed if he is unemployed at the time of the hearing. In many cases, I submit that the procedures in this committee may be far more effective not only in establishing a good result for the complainant in the particular case but also in establishing good industrial relations. Certainly it is a procedure which should be tried first in the appropriate case, within its terms of reference, before launching into a battle before one of the tribunals. Accordingly, in the light of experience in this field, I submit that it is essential to urge and press for the acceptance and use of these voluntary procedures, and that a condition of establishing that result should be to require the exhaustion of those appropriate internal measures before recourse to the tribunals. I beg to move.

3.57 p.m.


One of the Government's intentions in promoting this legislation is to encourage some people to by-pass the trade union. That is their purpose. The Government are suspicious of the tribunal procedure of a trade union. They do not trust the trade union tribunal procedure. They want these people to put their case before the courts. In other words, they want publicity. They want those who are representing the trade union before the court to be reprimanded and to be castigated so as to afford an opportunity to the press, who have no particular enthusiasm or affection for the trade unions, to publicise the case to their heart's content, in order to damage the reputation of the trade union movement. That is the purpose of it.

I have followed the argument of my legal friend to the best of such ability as I possess, but I do not pretend to have any real knowledge of legal matters, and if I intervene at all it is because I happen to have in my pocket (I may be among the few in this position) a trade union card. However, my union card is almost unique because I do not pay any subscription. I am, and have been for 50 years or so, an honorary life member of a particular union for services rendered—that is all. That is my only claim for intervening in this discussion. If anybody challenges me I will produce the card. Indeed, I brought it with me deliberately this morning. I do not usually carry it with me; we have far too many papers in our pockets. But let me return to the point.

There is a vast difference in the procedure of trade unions nowadays as compared with the situation when I first joined a trade union in the year 1903, which is quite a long time ago. Eventually I became the national organiser of a trade union—without the knowledge, I note, that it is possible (I mean what I say) to use some person to make a claim against a trade union, not because he wants to be a member of it or because he objects fundamentally about exclusion from that union but because he is concerned about political motives. I have experienced that myself many years ago.

To return to the point, either the Government—and I am saying this with the utmost respect to the Minister responsible—are suspicious of the procedure in operation in a particular union or regard its procedure as improper, not properly drawn up or something of the sort, or they want deliberately to encourage the by-passing of the trade union and its tribunal procedure in order that the matter should receive the utmost publicity. If that is their purpose then we say goodbye to any improvement in industrial relations in this country. If anything is going to exacerbate this situation, it will be that.

I just want to add this, which may as well be said. I have been watching what has been happening with the trade union movement for some years now, not with great passion. Many things have happened that I have disliked. It is a personal matter. There is sometimes leadership which troubles me. Many things have happened in recent years that I would much rather had not happened. I merely say that in passing, but I should like to see industrial relations improved; I should prefer more consensus than confrontation. Sometimes I listen to debates on economic matters, as, for example, that most interesting debate the other day on productivity, or to debates on how to improve the economic situation, only to discover at the end that there is no implementation but that the Government pro- duce the usual ministerial replies—the sort of thing I used to do myself.

When I have to listen to that type of thing I ask myself whether we are ever going to put things right. By that, I do not mean ideologically that we are going to create a different atmosphere, far different from what has existed in the past, and that we are going to have happiness and contentment and love and kisses all round. I do not believe that is possible in my time, or even long after my time. There will always be problems, but here is an opportunity to deal with one aspect which concerns our industrial situation and our economic and social existence, and I beg of the Government not to make things worse.

With others in your Lordships' House, in another place and among the general public, I have watched with intense interest the endeavours of Mr. Prior to push through legislation which is regarded by many of his colleagues as being far too moderate. I can recall—and I am sorry that he is not present, but I make no complaint about it—the activities of the noble Lord, Lord Drumalbyn, when in 1970–71 we had to deal with industrial relations legislation. I can remember how enthusiastic were the Members on the Conservative side of the House, and how depressed we on the Opposition side of the House were because not one of our amendments was accepted, yet many of them were intended to improve the legislation and were not moved for the purpose of "taking the mickey" out of the Minister or of the Government. There was no biased political motive involved, but not one of our amendments was accepted. Are we to have the same situation now? Is it not possible that in this situation we are all concerned, without exception, with improving industrial relations, encouraging more co-operation? Is it not possible that the Government may sometimes be wrong and that some of our amendments may be right?

Therefore I will ask noble Lords on the other side of the Committee to look at this matter very carefully and consider what it means. Do not throw too much of this legislation into the courts. I do not distrust them, nor am I suspicious of them, but there ought not to be too much publicity about matters which could be settled by consensus within the ambit of the trade union movement. It is possible, if not probable; let us try it out.

4.5 p.m.


I am sure most of your Lordships would be in warm agreement with the general spirit of the speech of the noble Lord, Lord Shinwell, and, if he will allow me to say so, it must be a unique contribution, coming from someone who was an active trade unionist before the Act of 1906. I doubt whether we shall have any other contributions in this House—and certainly not in another place—based on so prolonged an experience and (if he will allow me to say so) on such a spirit of warm, human generosity as the noble Lord so often shows.

I certainly fully agree with him that one of the great problems that this House has to face in deciding what the legal background to industrial relations shall be after this Bill becomes an Act is whether or not what we are doing helps towards that relaxation of tension and reduction in confrontation which all of us want to see. The only point on which I would differ a little from the noble Lord is his bringing those general sentiments with which we all agree into rather close relationship with this particular amendment.

I differ with diffidence from any amendment moved by the noble and learned Lord, who has not only filled the Office of Lord High Chancellor of Great Britain but, if he will allow me to say so, the even more distinguished and eminent office of Recorder of the Royal Borough of Kingston-upon-Thames. However, I thought that the noble and learned Lord rather skated over what is to me a rather important aspect of this matter. He just touched on the position in the interim of the complainant while these procedures are going through.

I am concerned as to what is to happen to a man who ex hypothesi is in dispute over union membership, or the question would not have arisen. His job is either in jeopardy or he has lost it or he cannot get one. From that man's point of view a speedy settlement of the dispute is of very great importance. Whatever anybody may say, few people relish being unemployed, and he and his family are likely to be in that situation while this matter is being settled, when we are concerned, as we are concerned in this clause, with a closed shop situation.

As I understand it, there is no guarantee in this amendment—and the noble and learned Lord will correct me if I am wrong —that the procedures of the union will be carried through rapidly. As your Lordships know, there have been cases where a complainant has been regarded by the union—perhaps rightly—as an awkward customer. In those circumstances he does not always stand very well with the union. What guarantee is there, if he cannot exercise his rights under the provision to go to the tribunal until these procedures have been exhausted, that these procedures will be carried through speedily? I am not suggesting, though it could be the case, that there would be deliberate delay, but I am suggesting that there might be, as in many bureaucracies—and the larger unions have their own bureaucracies—some delay in the process. What this amendment would do, as I understand it, is to deny to the man in that position—a man who is, as a matter of definition, in a vulnerable and unhappy position while all this is going on—the right to go direct to the tribunal.

It does seem to me that this man should have this option. If he has confidence in both the fairness and the expedition of the union procedures he may well, being accustomed to them, go ahead with them. What I would object to is compelling him, whatever his own feeling is about these procedures, to go through them as a necessary condition precedent before he takes advantage of the tribunal. Unless, therefore, much better argument is given for depriving this man—and there are a number of them, all of them as a matter of definition in an unhappy situation—of the option which the Bill at present gives them, I very much hope the Committee will reject the amendment.

4.12 p.m.


I do not know why the noble Lord, Lord Boyd-Carpenter, imagines that going to the ultimate, to the tribunal, could be any quicker than the usual procedures within the trade union movement. I have taken cases of this type, where an individual has been annoyed about a decision, the day after the occurrence. I agree with him that expedition is vital in this kind of case. May I widen this a little? Those who have been used to negotiation in industry will know that the custom and practice far more often gets a settlement than reference to a tribunal or court, and so on. We are all aware of the fact that you cannot start at the far end; you work your way through. Indeed, the noble Lord will know from his experience in industry that in thousands of instances which are never recorded settlement is made at the point where the dispute arose, in the factory, where the two sides discussed the matter. In the vast majority of cases that is where it is settled.

Especially in the engineering industry, if one cannot settle it at factory level it goes to what we call local conference. At that stage the employers make their representations and the employees make theirs, and it is only when you go through those stages that you go to the final appeal court. We would not understand how it could come about in an individual case that we jump over all these procedures, which have been worked out over the years and which have proved their effectiveness in keeping peace in industry, and go to the final point. It seems to me that it is vital to go through those procedures so that new minds are brought to bear on the problem. We would not understand how you would get a position where a person jumps the whole of the procedures and gets straight to the final point. You might as well not have the procedures, and if we did not there would be huge problems in industry every day.

This is the vital reason why this amendment should be accepted. It does not take away any of the final power which an individual has; I would oppose it if it did. It does not take any rights away from him. I would have thought that going through the procedures gives a far better chance of having the point discussed by people who are au fait with the whole situation, than going to the tribunal in the first place.


Any amendment moved by a former Lord Chancellor not only commands but deserves respect, but on this occasion I think the respect is deserved mainly because of the undisguised innocence displayed by the noble and learned Lord. He is asking your Lordships to accept an amendment which would create a condition precedent to the procedure used in the Bill. The condition precedent is to consist, at first instance, of the trade union committee or official or whoever it may be acting as judge in their own cause, and, secondly, an appeal to an independent review tribunal of which a noble Lord on the Opposition Front Bench is chairman, the next most important member is the noble Lord, Lord McCarthy, and there are other trade union members on this body.

It seems to me that, although one has enormous respect for those noble Lords and the members of that tribunal and can accept all that has been said about the good work they have done so far, to introduce as a condition precedent procedures of that kind would be most unfair, especially in the cases of exclusion; because in the cases of exclusion we are not dealing with people who are already members of the union concerned; we are dealing with people who because they are not members of it are not known in it, are not familiar with its procedures, and therefore are unlikely to get the kind of sympathetic treatment which total impartiality requires. Under the noble and learned Lord's amendment we would not get total impartiality until the opportunities offered by the clause in the Bill are taken up. Therefore, I very much hope that your Lordships will not accept this amendment.


I would like to speak in favour of this amendment. Although what I said earlier on, on a procedural point, may appear to have application to this amendment too, there are in my view special reasons for its inclusion now in much the same form as it appeared in another place. May I take this opportunity of thanking the noble Lord, Lord Wedderburn, for the gracious way in which he received what I had to say on the procedural point?

Those of us whose task it has been to acquaint ourselves in some detail with what went on in another place in Committee will know—and if we had forgotten we have since been reminded by the noble and learned Lord the Lord Advocate—that when Clause 3 was discussed there the period within which a complaint had to be presented before it could be entertained by a tribunal was three months, not six months as now stipulated in subsection (6). In Committee at least two Conservative Members gave some support to the principle that existing trade union procedures should be exhausted before a complaint was taken to a tribunal. Much of the discussion at that time centred on what was a reasonable time to allow to enable those procedures to be used.

The Minister showed some sympathy, too, with the principle of voluntarism underlying the amendment, and he undertook to look into the matter further, as the noble and learned Lord the Lord Advocate has told us. As he rightly said, it was dealt with very briefly on Report by the Government simply extending the time limit in subsection (6) of this clause from three to six months. The Opposition did not divide the House on the Question—I think it occurred rather late at night—but it made it plain that it did not accept that as a solution to the problem; and nor, my Lords, do I.

I have for long argued in this House for the establishment and the observance throughout industry of agreed negotiating procedures between employers and trade unions. Even where they already exist, a major cause of there now being so much unofficial industrial action is that it is taken before such procedures are exhausted. I recognise that this amendment deals with quite different procedures within individual unions or established by the TUC, but it seems to me that precisely the same principle should apply to these cases as under joint negotiating procedures and that if orderliness is to be maintained in industrial relations generally—as it so badly needs to be—then people excluded or expelled from trade unions should positively be encouraged to use the relevant union procedures before having recourse to outside bodies.

I hope that that principle will commend itself to at least some noble Lords on the other side of the Committee who have industrial experience. Indeed, I had hoped—and I still hope—that we had reached the point in the Bill where the Committee for once could unite on common ground. I do not attribute to the Government the same somewhat base motives in this matter as the noble Lord, Lord Shinwell, appeared to do. I hope that the noble and learned Lord, the Lord Advocate—if it falls to him to reply—will, whatever his brief may say, at least express now some sympathy with the principle underlying this amendment, upon which I have endeavoured to expand, and the willingness of the Government to look a little further into the whole question. It seems to me that the Opposition, for its part, should not find it too difficult to accept—as it did in tabling Amendment No. 19A—that there is a need, which is not explicitly mentioned in the amendment, for hearings under union appeals procedures to be carried out within a reasonable time.

There is the difficulty to which the noble Lord, Lord Renton, referred concerning the Independent Review Committee of the TUC. To reach some consensus it may even be that there would have to be an acceptance that the inclusion of reference to that committee should not be insisted upon. For my part, I have a quite open mind on the matter, but I recognise that it presents some difficulty because, under its own terms of reference, as I understand it, that committee cannot hear a case until the voluntary procedures of the union concerned have been exhausted. That was a point which was referred to by, I think, the noble Lord, Lord Boyd-Carpenter. The precise form that any revised amendment might take at the Report stage—if that proves in any way a possibility—is something that I do not quite know. I suppose that it might in some way include provision for hearings under union procedures to be completed in a period of not more than, say, three months—that is, half the overall time limit which is now envisaged in subsection (6).

It seems to me that it would be an occasion for general satisfaction if the principle underlying this amendment could somehow be included in the Bill and go forward from this House with all-party agreement. It is, of course, for the mover of the amendment, the noble and learned Lord, Lord Elywn-Jones, and indeed for the Minister to decide between them whether this is really feasible. But if an attempt could be made to bring us all together in some such way as I have suggested, then I certainly should be happy to engage in any off-stage discussion—if I may put it that way—and lend my name also to any amendment that might be brought forward either by the Government or by the Labour Opposition on Report. I ask that we endeavour to find some common ground upon this principle, which seems to me to be a very important one to uphold in the area of human relations in industry.


I shall intervene only briefly. I should have thought that one of the matters which the Government must consider in not only this legislation but any legislation is what is the end product. There is another dictum which we use from time to time—namely, not only must justice be done, but it must be seen to be done. If an individual can by-pass the whole of union machinery and go straight to a tribunal, then what will be the end product, whatever the decision of the tribunal? That is what really matters. We must have a decision which is seen by all concerned to be practical and proper in all circumstances. The trade union machinery is devised to do just that, but if it is deliberately bypassed by an individual, what will be the result on the shop-floor after it it all over? I ask the Government to consider that point.

4.28 p.m.


I think that it has already been made clear that the Government very seriously considered the principle behind the amendment. I would say to the noble Lord, Lord Shinwell, that I am sure we would all agree that, in view of his life's work, he well deserves a free union card. As regards the present situation, the Government have made it abundantly plain that they would not want the matter to be dragged forward prematurely to the industrial tribunal. That is not the purpose of their present structure. The fact that they have extended the period within which a complainant may go to the industrial tribunal to permit of these procedures being gone through is, I think, eloquent evidence of that. So, the matter has been seriously considered. It is a matter, of course, which will be dealt with in the code of practice, but the question as to whether we can accept the amendment goes rather further.

The Independent Review Committee has itself acknowledged that the main concern of individuals appealing to it is to retain or regain their jobs. It must be borne in mind that the longer the process of appeal —appeal of whatever kind—the less likely it is that an individual who is not a member of a union as specified by a closed shop agreement, will be able to regain or remain in his job.

As I said earlier, union internal rules over expulsion or exclusion vary greatly. In some cases the individual is not refused membership or expelled from membership until the appropriate procedures have been exhausted. If that is the situation then the right to go to the industrial tribunal will not begin to run until that has happened, subject to subsection (9). Accordingly, if these procedures are important from the point of view of the union—and from our point of view they are—then it is very easy for the exclusion or expulsion only to take effect when they are completed by the proper provision in the union rules.


Will my noble and learned friend amplify that a little? How would he apply that principle to the case where the man is not already in employment but is seeking employment in a closed shop industry and, therefore, membership of a union?


In the situation of which I am speaking there is no express answer from the union until the procedures have been exhausted in the union. Of course, it is for that reason that we need a reasonable time provision, which is the subsection that we debated earlier. Therefore, if the union rules have the structure that, on an application being made, there is no effective answer until all the procedures have been gone through and it only becomes final and definitive at that stage,—


Why then cannot we put into the Bill the six-month rule starting from the moment the complaint is made?


I am sorry, but I am not sure that I completely understand that.


The noble and learned Lord seems to think that to go through the procedure will take a very long time, plus six months before it goes to the tribunal. Why do we not say in the Bill that from the moment the man makes his complaint the six-month rule will be included?


To take the one case of exclusion—I do not want to complicate matters by taking both—the present structure is that the complaint becomes competent once there is an exclusion by the union. Depending on the form of the union rule, that exclusion may be at the level of first instance, if I can call it that, or only after all appeals have been gone through. The right of appeal may well render ineffective the decision at first instance until the appeal is disposed of. In that case there is no exclusion until that happens. Of course, we have said that where an applicant in that situation does not receive an answer on the point, after a reasonable time he can treat his application as having been refused, Therefore, effectively the present structure gives the union a reasonable time to go through its own internal procedures and decide the question, if it adopts this form of machinery.

On the other hand, if the exclusion becomes effective at the time it is given at first instance, the right to complain will, of course, run during the period when the appeal procedures are taking place. That is a matter within the union's choice, depending on how the union rules are framed in that situation. If the individual has, effectively, been excluded and the appeal then takes effect within the appeal procedures, and there is also an application to the Independent Review Committee, that of course could take a considerable time.

I should perhaps pause here to say that I have paid tribute already to the Bridlington procedures, and we fully appreciate the importance of this work and of the work of the Independent Review Committee. I am sure that they do an extremely good and valuable job, and nothing that I say or that we propose in the Bill is intended to undermine that in any way. We want to make full use of that work, and I hope that the code of practice will make that even plainer.

However, we must not forget that if the union has excluded the person during the time that all this is going on, he is having a good long time to wait. This is not just a question about the union card—although that is very important; it is also the question of his job. One criticism—perhaps it is not a criticism, but a comment—that has been made on the work of the Independent Review Committee is that it has been able to get individuals back their cards, but not their jobs. Of course, I appreciate what the noble Lord, Lord Wedderburn of Charlton, has just said, that that is a matter for the employer. I entirely appreciate that, but we are dealing with practical matters. We are dealing with employers against a background of the union having refused the card in the first place. So the complaint to the Independent Review Committee has led, in quite a number of cases, as the noble and learned Lord, Lord Elwyn-Jones, said, to the employee getting back his union card, but in these cases, generally speaking, he has not got his job back.


I accept everything that the noble and learned Lord has said, but I trust that he will not leave the matter without pointing out that when the person goes to the industrial tribunal, the industrial tribunal can order, not his card to be returned to him, but compensation. However, that tribunal cannot tell the employer to take him on for a job.


I entirely appreciate that, and that is the reason for the procedures to obtain compensation, with particularly enhanced compensation if the industrial tribunal orders reinstatement and the employer refuses to make it. Therefore, what I am really aiming at is this. However good these procedures may be, they do not eliminate the need for some procedure which ultimately gives rise to compensation for the individual. In this field, as in many others, to delay too long the individual's right to receive his compensation is to deny him justice; delaying justice for long is to deny justice. I am sure that those who warmly supported the noble Lord, Lord Wade, in his promotion of the Bill of Rights will remember that one of the provisions of the Convention on Human Rights is that everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. That is, of course, what the industrial tribunals are—fair and impartial tribunals established by law.

Accordingly, our attitude to this matter is that we have done quite a lot to adhere to the spirit of this amendment by extending the period, making it very easy for the complainant to allow these procedures within the union—including the Independent Review Committee—to become exhausted before he goes to the tribunal at all. We consider that that is the right attitude to take. Of course, it is clear that when a person goes to the industrial tribunal, the procedure before the tribunal is in the hands of the tribunal.

These proceedings could be subject to conciliation by a conciliation officer, in accordance with Section 133(2) or (3) of the 1978 Act. As a result, industrial tribunal proceedings may be stayed until either the appropriate union procedures have been exhausted or the committee has heard the case, or both. The attitude of the union, the speed with which unions and the committee handle a case and the individual's own circumstances will all be relevant factors.

In my submission to your Lordships, in the light of all the circumstances, what the Government have already done to meet this amendment is appropriate, and I would invite the noble and learned Lord Lord Elwyn-Jones, to consider withdrawing his amendment; but if he is not minded to do so, I would invite your Lordships not to agree with it.

4.39 p.m.


I must say that I am very disappointed in the noble and learned Lord's failure, if I may say so, to respond to the reasonable approach of the noble Lord, Lord Rochester, and to my own pressing of the fact that the Bill should do its utmost to promote the voluntary procedures that are available instead of doing the opposite, as it does; namely, to encourage direct and immediate, or as early as possible, access, by-passing the voluntary procedures to the tribunals.

I confess that I was dismayed by the speech of the noble Lord, Lord Renton. It seemed to me to be castigating and questioning the integrity of my noble friends sitting upon the committee; and by denigrating the committee for its partiality, or absence of impartiality, it seemed to me to be reflecting upon the impartiality of those who constitute it. If he did not mean to intend that, of course I shall hear him.


I am grateful to the noble and learned Lord for giving way. Of course I did not mean that, and I hope that I made it clear. What I tried to point out was that the noble and learned Lord's amendment purports to make statutory a procedure in which, in first instance, the unions are judges in their own cause, and finally under that procedure they go to an independent review committee whose members, however impartial, however learned, however distinguished, are people who are associated with particular attitudes which are being strongly contested on both sides of this Committee. In the circumstances, I should have thought that we should have to consider whether we were letting justice be done and appear to be done by accepting the noble and learned Lord's amendment.


Unions are not judges in their own cause in their procedures. I am informed that there has never been any complaint about the partiality, or apparent partiality, or alleged partiality of the committee that I have mentioned.

With regard to the time factor, we are certainly prepared to consider that. May I remind your Lordships that procedures in appeals to the Employment Appeal Tribunal will not be exactly speedy. I do not know how soon a date could be arranged. There are the appeals available to the Court of Appeal, to the House of Lords. It must not be thought that we are in the presence of quick procedures here. I understand that the arrangements that are made in many of the unions now where issues of this kind arise and there are references to appeals are that more and more collective agreements are providing for withdrawal of any threats of dismissal before, or pending, the hearing of appeals to the independent committee. I understand that to be the case. That tendency is increasing in the process of building up the authority of the independent committee.

I am further informed that, on expulsion, if a man appeals to the national executive of his union he will normally remain a member until the process of appeal is completed, so the threat of unemployment does not arise inevitably, as has been suggested.


Will the noble and learned Lord give way? On this point of the threat of unemployment, if the matter proceeds in the case of a man already in work, as he has outlined, this certainly would be an alleviation. But would he explain how this helps the man, such as a former constituent of mine, who was denied a job solely because the union in a closed shop situation would not admit him to membership?


The rules of the union provide in that situation for appeals which would be available. I do not know what happened in the individual case to which the noble Lord has referred, whether his constituent appealed or what the outcome was. Unions provide in their rules for appeal procedures.

I should have thought that, as my noble friend Lord Shinwell stressed in his speech, what we want to do at this time is to build up these voluntary procedures as best we can and keep in the background the recourse, as he has said, to the highly publicised proceedings before these tribunals. I assure the noble Lord, Lord Rochester, that we shall certainly look again at the time element here between now and Report stage. In the meantime, I do not withdraw the amendment, and I advise those who support it to stand firm in the Division Lobby.

4.45 p.m.

On Question, Whether the said amendment (No. 21) shall be agreed to?

Their Lordships divided: Contents, 87; Not-Contents, 142.

Airedale, L. Gosford, E. Parry, L.
Amherst, E. Hale, L. Peart, L.
Amulree, L. Hampton, L. Pitt of Hampstead, L.
Ardwick, L. Hatch of Lusby, L. Plant, L.
Balogh, L. Hayter, L. Rhodes, L.
Banks, L. Henderson, L. Ritchie-Calder, L.
Birk, B. Houghton of Sowerby, L. Rochester, L.
Blease, L. Howie of Troon, L. Ross of Marnock, L.
Blyton, L. Hutchinson of Lullington, L. Sainsbury, L.
Bruce of Donington, L. Ilchester, E. Seear, B.
Burton of Coventry, B. Jacques, L. Sefton of Garston, L.
Byers, L. Janner, L. Segal, L.
Caradon, L. Kaldor, L. Shinwell, L.
Chitnis, L. Kilbracken, L. Stewart of Alvechurch, B.
Cledwyn of Penrhos, L. Kilmarnock, L. Stewart of Fulham, L.
Collison, L. Kirkhill, L. Stone, L.
Cooper of Stockton Heath, L. Leatherland, L. Strauss, L.
Crowther-Hunt, L. Lee of Newton, L. Tanlaw, L.
David, B. [Teller.] Leonard, L. Taylor of Mansfield, L.
Davies of Leek, L. Listowel, E. Underhill, L.
Davies of Penrhys, L. Llewelyn-Davies of Hastoe, B. [Teller.] Wallace of Coslany, L.
Donaldson of Kingsbridge, L. Walston, L.
Elwyn-Jones, L. Lloyd of Kilgerran, L. Wedderburn of Charlton, L.
Evans of Claughton, L. McCarthy, L. Wells-Pestell, L.
Foot, L. MacLeod of Fuinary, L. Whaddon, L.
Gaitskell, B. Maelor, L. White, B.
Gladwyn, L. Masham of Ilton, B. Wigoder, L.
Glenamara, L. Northfield, L. Wootton of Abinger, B.
Gordon-Walker, L. Pargiter, L. Wynne-Jones, L.
Goronwy-Roberts, L.
Abercorn, D. Denham, L. [Teller.] Howe, E.
Ailesbury, M. Derwent, L. Inglewood, L.
Airey of Abingdon, B. Donegall, M. Ironside, L.
Alexander of Tunis, E. Dundee, E. Keyes, L.
Allerton, L. Ebbisham, L. Killearn, L.
Amory, V. Eccles, V. Kilmany, L.
Ampthill, L. Elton, L. Kimberley, E.
Auckland, L. Emmet of Amberley, B. Kinloss, Ly.
Avon, E. Energlyn, L. Kinnaird, L.
Bellwin, L. Evans of Hungershall, L. Lauderdale, E.
Belstead, L. Exeter, M. Lindsey and Abingdon, E.
Berkeley, B. Fairfax of Cameron, L. Long, V.
Bessborough, E. Faithfull, B. Loudoun, C.
Birdwood, L. Ferrers, E. Lucas of Chilworth, L.
Boothby, L. Ferrier, L. Lyell, L.
Boyd-Carpenter, L. Forester, L. McFadzean, L.
Bradford, E. Fortescue, E. Mackay of Clashfern, L.
Brentford, V. Fraser of Kilmorack, L. Macleod of Borve, B.
Bridgeman, V. Gage, V. Mancroft, L.
Burton, L. Gisborough, L. Mansfield, E.
Caccia, L. Glenkinglas, L. Marley, L.
Caldecote, V. Gore-Booth, L. Massereene and Ferrard, V.
Camoys, L. Gormanston, V. Milverton, L.
Carrington, L. (A Principal Secretary of State.) Gowrie, E. Monckton of Brenchley, V.
Grantchester, L. Monson, L.
Chelwood, L. Gray, L. Montgomery of Alamein, V.
Clifford of Chudleigh, L. Gridley, L. Mowbray and Stourton, L.
Clwyd, L. Grimston of Westbury, L. Murton of Lindisfarne, L.
Cockfield, L. Hailsham of Saint Marylebone, L. (L. Chancellor.) Newall, L.
Cottesloe, L. Norfolk, D.
Craigavon, V. Halsbury, E. Nugent of Guildford, L.
Cranbrook, E. Hankey, L. Orkney, E.
Crathorne, L. Harvington, L. Orr-Ewing, L.
Cullen of Ashbourne, L. Hatherton, L. Pender, L.
Davidson, V. Hawke, L. Piercy, L.
de Clifford, L. Henley, L. Porritt, L.
De La Warr, E. Hives, L. Redmayne, L.
De L'Isle, V. Hood, V. Renton, L.
Richardson, L. Somers, L. Trumpington, B.
Roberthall, L. Spens, L. Vaizey, L.
Rochdale, V. Stamp, L. Vaux of Harrowden, L.
St. Aldwyn, E. Strathcarron, L. Vickers, B.
Salisbury, M. Strathmore and Kinghorne, E. Vivian, L.
Sandford, L. Swinton, E. Ward of Witley, V.
Sandys, L. [Teller.] Teviot, L. Westbury, L.
Selkirk, E. Tranmire, L. Wise, L.
Sharples, B. Trefgarne, L. Wynford, L.
Skelmersdale, L. Trenchard, V. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.54 p.m.

On Question, Whether Clause 3 shall stand part of the Bill?


Both today and when your Lordships last debated this matter we moved a whole series of amendments and we do not think we have made anything like sufficient progress with them to put ourselves in the position where we need not oppose this clause. Indeed, we still believe the clause to be fundamentally unnecessary. It should never be lost sight of that, so far as exclusions or expulsions are concerned, the position is considerably dealt with by the existing common law, and the Government have done nothing to explain what the relationship will be under the new situation between the decisions of the industrial tribunals arising out of Clause 3 and the jurisdiction of the common law courts arising out of their practice of regarding the trade union rule book as a contract between members.

Therefore, we are not satisfied, and particularly we are not satisfied on a number of very serious points about which the Government have told the Committee they have no desire whatever to change the existing position and in respect of which we have tabled a number of amendments which have been and are, as I said they would be when we last debated this subject, intended to be declaratory of the position the Government say they adopt; for example, in relation to creating a liability in tort or taking into account the consequences of the Bridlington procedures. On all those matters, about which we consider the Government have themselves said they have no desire to change the existing position, they have not found it possible to accept our amendments.

It is most of all in respect of the TUC Bridlington procedures that we are uncertain and fearful about the consequences of the clause. It is not simply that the Trades Union Congress may find its procedures made void or set at nought, but the effect this may have on the very wide functions in which the TUC now takes part in respect of inter-union disputes. For example, the very presence of the TUC at this moment in seeking to solve the Isle of Grain dispute arises out of Bridlington. If the general secretary of the TUC were able, as we hope he will, to find some solution to that dispute, then if it has to be enforced on unions in the TUC it will be enforced via those Bridlington procedures. If individual members of one union or another are not satisfied with the result, whether they are members of the GMWU or ETU, if they go along to whichever union has the job and ask for entry to that union, they will be refused entry according to the Bridlington procedures.

We have to say that if provisions of this kind are incorporated in Acts of Parliament, the continued operation of the dispute resolutions and activities of the TUC under Bridlington will be put at nought. There are many unions today which are quite reasonably saying, "We have submitted ourselves to the principles of Bridlington, often against our interests and often against the pressure, the just contained pressure, of powerful sections of our membership. If we are to be told that if we observe Bridlington, sections of that membership may be able to go to industrial tribunals, to courts and perhaps to the highest court in the land and reverse the Bridlington procedures, we cannot see ourselves continuing to operate and observe those Bridlington procedures ". It is because of fears of that kind that I agree with my noble friend Lord Wedderburn of Charlton when he says that this clause is an act of vandalism, and it is on that basis that we ask the Committee to reject it.

5 p.m.

The Earl of GOWRIE

Clause 3 embodies one of the major changes in the closed shop law which we promised the electorate last year. In our view it will provide a new and readily understood right against unreasonable exclusion or expulsion from union membership in situations where a person's job depends upon such membership. The idea behind such a right is not at all new, as noble Lords opposite will be aware. The Donovan Commission suggested that individuals should have a legal right of appeal to an independent body against exclusion or expulsion. The Labour Government of that day put forward such a right in their 1969 White Paper In place of Strife. Our 1971 Act included it in its provisions on member's rights, and Section 5 of the 1974 Act of the Labour Government gave individuals a right to complain to a tribunal of arbitrary exclusion or expulsion. Even the last Administration appeared to accept the case only to be persuaded to try first a new voluntary body, the TUC's Independent Review Committee, which has been referred to during our debates on previous amendments, but in doing so it promised to review its effectiveness and came forward with a legal provision if necessary.

It is not hard for us to see why this particular issue will not lie down or go away. In our society union membership is often not a voluntary issue. Over 5 million workers are in closed shops and for them union membership is necessary to get, or keep, a job, or even to pursue a career at all. The right that we are providing in Clause 3 is clearly necessary. As the Donovan Commission put it, it may well be thought unacceptable that a citizen's livelihood should depend upon the will of a few other citizens being members of a trade union committee or branch committee". That is unacceptable. People should be protected from unreasonable loss of their livelihoods, whatever the source.

Of course union members do have certain common law rights, but often these are insufficiently clear or not easily enforceable, and the rights of applicants for membership are perhaps even more doubtful. What we are providing is a much more straightforward right, based on the reasonableness or the unreasonableness of the union's action, just as in 1971 we introduced a general test of reasonable- ness for determining whether an employer dismisses unfairly; and that was the basis of unfair dismissal even in the last Government's legislation. Even the Opposition would agree with Donovan that a trade union can sometimes be in the wrong.

The noble Lord, Lord McCarthy, and indeed the TUC, have expressed fears that the clause will disrupt the workings of their Bridlington principles and procedures, or arrangements which unions make in order to comply with those principles, or awards of the TUC Disputes Committee. I understand that concern, which was expressed very reasonably by the noble Lord, Lord Lee of Newton, earlier this afternoon. We acknowledge that Bridlington is a necessary and important feature of the industrial relations scene. It improves inter-union competition, to which the number and structure of British unions inevitably give rise, and it ameliorates ill consequences there.

However, I believe that here the fears of the noble Lord, Lord McCarthy, are exaggerated, as are the fears of the TUC. The arrangements that the TUC and Opposition Members have described are sensible, and we pay tribute to them, but I do not know of any reported case under Section 5 of the 1974 Act where an exclusion or expulsion in order to comply with a Bridlington award was found to be unreasonable. However, I know of one case in which the tribunal specifically endorsed the application of Bridlington; that was the case of Bannister v. APEX. We will consider providing satisfactory guidance in the code to meet some of these fears expressed by noble Lords this afternoon. Clauses I and 2 of the Bill empower us to do this. I am sure that that will satisfy any of the real fears that remain. In the light of that undertaking, I ask noble Lords not to press a Division on this clause.


Bearing in mind that we are in Committee, there is one very important point that the Government have not answered. The noble Earl may think it right that I should put the point to his noble and learned friend the Lord Advocate—or indeed to the noble Earl himself as it is a legal point. The question has been raised, but I think not answered, about the competing jurisdictions which the clause establishes. I should like to give a brief example of this. A person applies to join a union and is told by the union, "No, we refuse your application, and we do so partly because you do not meet certain rules". The person then goes to the industrial tribunal, which says to him, "We agree with you. The rules are not reasonable. You must be admitted". Obviously that is a case possible under the clause. The tribunal then says to the union, "Either admit him or pay compensation under Clause 4", a clause to which we are to come.

At that point another person goes to the High Court or, I anticipate, in another jurisdiction, the Court of Session, and says, "Your jurisdiction is to ensure that the rules are obeyed". Nothing in the Bill changes that. This admission of the person would be ultra vires the ruling, and the High Court must grant an injunction, and the Court of Session, I suspect, must grant interdict. Further than that, because the money will be paid in order to effect a purpose which is contrary to the rules, and, therefore, ultra vires, the High Court must grant an injunction to stop the money being paid.

I appreciate that the last point may seem extraordinary, but are the Government thinking of introducing a provision on Report at least to clarify the outlines of an answer on this matter on which at the moment the Bill is totally silent?

The Earl of GOWRIE

While I do not in any way wish to pre-empt the legal knowledge of my noble and learned friend, which, it must be obvious to everybody, is considerable and is in advance of mine, as is the knowledge of the noble Lord, Lord Wedderburn of Charlton, my understanding is that this is really an extremely finnicky hypothetical situation. I say this because any sensible industrial tribunal concerned with the reasonability or unreasonability of expulsion or exclusion

will be perfectly aware both that union rule books exist and what they are. The tribunal will not be in the position of adjudicating on whether such rules were or were not reasonable when originally drawn up. The tribunal will accept that the particular union has such and such a practice, and I should have thought that that would be quite enough to enable most industrial tribunals to make a sensible judgment on whether an exclusion was reasonable or unreasonable. Presumably the applicant would have some notion of what were the rules of the union to which he was applying.

I also consider—and this is a general view of mine about the proceedings of this Committee stage, which are becoming almost legendary in their snail's pace; at this rate we shall be here until seven or eight in the morning—that when considering the Question, Whether the clause shall stand part?, is not the best time to raise issues of the kind which we have just been discussing. I have tried briefly and succinctly to give the general policy principles relevant to the Question, Whether the clause shall stand part?, and my noble and learned friend has dealt very comprehensively and in detail with some of the finer points of the amendments. That, I think, is how we should proceed, though, rather more rapidly. I ask noble Lords not to press for a Division on a clause of so wide a general principle as this.


I cannot accept what the noble Earl says. He has not moved one iota from the position set out in the replies to the amendments. He still relies entirely on reasonableness as interpreted by trade tribunals, and that is not enough for us.

5.9 p.m.

On Question, Whether Clause 3 shall stand part of the Bill?

Their Lordships divided: Contents, 156; Not-Contents, 58.

Abercorn, D. Ampthill, L. Belstead, L.
Ailesbury, M. Amulree, L. Berkeley, B.
Airedale, L. Auckland, L. Bledisloe, V.
Airey of Abingdon, B. Avon, E. Bolton, L.
Alexander of Tunis, E. Banks, L. Boothby, L.
Allerton, L. Barrington, V. Boyd-Carpenter, L.
Amory, V. Bellwin, L. Bridgeman, V.
Burton, L. Hailsham of Saint Marylebone, L. (L. Chancellor.) Montgomery of Alamein, V.
Byers, L. Morris, L.
Caccia, L. Halsbury, E. Mowbray and Stourton, L.
Caldecote, V. Hampton, L. Murton of Lindisfarne, L.
Chelwood, L. Hankey, L. Newall, L.
Chitnis, L. Hanworth, V. Norfolk, D.
Clifford, of Chudleigh, L. Harvington, L. Nugent of Guildford, L.
Cockfield, L. Hatherton, L. Ogmore, L.
Cottesloe, L. Hawke, L. Orkney, E.
Craigavon, V. Henley, L. Orr-Ewing, L.
Crathorne, L. Hives, L. Pender, L.
Cullen of Ashbourne, L. Home of the Hirsel, L. Porritt, L.
Davidson, V. Hood, V. Rawlinson of Ewell, L.
de Clifford, L. Hornsby-Smith, B. Renton, L.
De La Warr, E. Howe, E. Richardson, L.
De L'Isle, V. Inglewood, L. Rochdale, V.
Denham, L. [Teller.] Ironside, L. Rochester, L.
Derwent, L. James of Rusholme, L. St. Aldwyn, E.
Donegall, M. Keyes, L. Salisbury, M.
Dowding, L. Killearn, L. Sandys, L. [Teller.]
Dundee, E. Kilmany, L. Seear, B.
Ebbisham, L. Kilmarnock, L. Selkirk, E.
Eccles, V. Kimberley, E. Sharples, B.
Elton, L. Kinloss, Ly. Skelmersdale, L.
Emmet of Amberley, B. Kinnaird, L. Spens, L.
Evans of Claughton, L. Lauderdale, E. Stamp, L.
Evans of Hungershall, L. Lindsey and Abingdon, E. Strathcarron, L.
Exeter, M. Lloyd, L. Strathmore and Kinghorne, E.
Fairfax of Cameron, L. Lloyd of Kilgerran, L. Swinton, E.
Faithfull, B. Long, V. Tanlaw, L.
Ferrers, E. Loudoun, C. Teviot, L.
Ferrier, L. Lucas of Chilworth, L. Tranmire, L.
Forester, L. Lyell, L. Trefgarne, L.
Fortescue, E. McFadzean, L. Trenchard, V.
Fraser of Kilmorack, L. Mackay of Clashfern, L. Trevelyan, L.
Gage, V. Macleod of Borve, B. Trumpington, B.
George-Brown, L. Mancroft, L. Vaizey, L.
Gisborough, L. Mansfield, E. Vaux of Harrowden, L.
Glenkinglas, L. Marley, L. Vickers, B.
Gormanston, V. Masham of Ilton, B. Vivian, L.
Gowrie, E. Massereene and Ferrard, V. Ward of Witley, V.
Grantchester, L. Meston, L. Westbury, L.
Gray, L. Milverton, L. Wigoder, L.
Gridley, L. Monckton of Brenchley, V. Wise, L.
Grimston of Westbury, L. Monson, L. Wynford, L.
Young, B.
Allen of Fallowfield, L. Gosford, E. Pitt of Hampstead, L.
Ardwick, L. Hale, L. Plant, L.
Balogh, L. Hatch of Lusby, L. Rhodes, L.
Birk, B. Henderson, L. Ritchie-Calder, L.
Blease, L. Howie of Troon, L. Ross of Marnock, L.
Blyton, L. Jacques, L. Sefton of Garston, L.
Brockway, L. Janner, L. Segal, L.
Bruce of Donington, L. Kaldor, L. Stewart of Alvechurch, B.
Burton of Coventry, B. Kirkhill, L. Stewart of Fulham, L.
Collison, L. Leatherland, L. Stone, L.
Cooper of Stockton Heath, L. Lee of Newton, L. Strauss, L.
David, B. [Teller.] Leonard, L. Taylor of Mansfield, L.
Davies of Leek, L. Listowel, E. Underhill, L.
Davies of Penrhys, L. Llewelyn-Davies of Hastoe, B. [Teller.] Wallace of Coslany, L.
Donaldson of Kingsbridge, L. Wedderburn of Charlton, L.
Elwyn-Jones, L. McCarthy, L. Wells-Pestell, L.
Gaitskell, B. Northfield, L. Whaddon, L.
Glenamara, L. Pargiter, L. Wootton of Abinger, B.
Gordon-Walker, L. Peart, L. Wynne-Jones, L.
Goronwy-Roberts, L. Phillips, B.

Resolved in the affirmative, and Clause 3 agreed to accordingly.

5.18 p.m.

Lord HOWIE of TROON moved Amendment No. 21A: After Clause 3, insert the following new clause:

"Requirement to participate in industrial dispute

(.No employee who is a member of a recognised profession or organisation which requires adherence to a code of professional conduct as a condition of membership or of professional standing shall be required by any trade union of which he is a member to take action in the course of an industrial dispute which is in conflict with the requirements of such professional membership or its code of conduct.")

The noble Lord said: I do not wish to delay the Committee very long, especially after the strictures from the Liberal Front Bench earlier today, but I do not think that this particular matter was raised in another place. It was referred to obliquely, I think, in Committee, but not quite in the form in which I have put it. It deals with a point which I raised in the debate on the Second Reading of the Bill; that is, the possibility of a conflict of loyalties on the part of a professional man, a member of a professional institution, between his duties to that professional institution and his loyalties to a trade union of which he may well be a member. I speak as one who approves wholly of professional men being members of appropriate trade unions; I am not presenting this as a means of evading trade union membership in any way.

The point is a fairly narrow one and it is likely to arise on a very small number of occasions; but, though the number is small, it is nonetheless significant. It might well deal with the industrial problems of something between a quarter and half a million people; probably nearer the smaller number than the latter—not an enormous army, but, nonetheless, not a platoon. The problem might not be large or great in the cosmic scene, but it is very real for the individual engineers who are caught in what they see as a dilemma, in what they see as a conflict of loyalties, both of them real, to their institution, on the one hand, and to the union, on the other.

I have put this proposition in the form of a new clause rather than as an amendment either to Clause 3 or to Clause 6, partly because I do not think that the problem or the dilemma can be dealt with within the structure of the Bill as it stands at the moment. That is so because Clauses 3 and 6 deal with matters such as exclusion or exemption from union membership or with compensation for loss of employment; and I am really dealing with the problem of professional people who wish to be members of a trade union, who do not want to be excluded, but who, at the same time, do not want to lose their jobs. The Bill does not in fact deal with them.

The new clause refers to a code of professional conduct; and that is really the crux of the matter. Most professional institutions bind their members to abide by a code of professional conduct as a way of conducting their professional affairs. The Institution of Civil Engineers, for instance, of which I am a member, has a rule of professional practice that a member, in his responsibility to his employer and to the profession, shall have full regard to the public interest, particularly in matters of health and safety. That rule of the Institution of Civil Engineers is taken seriously. Similar rules in other professional institutions are taken just as seriously by the members of these other organisations—and not only by the members but by the institutions, in the sense that transgression of that rule in the case of the Institution of Civil Engineers could, in the extreme case, mean expulsion from the institution. That, possibly, could lead to loss of employment in cases, which do exist, where membership of the institution is a condition of employment. The area in which the public interest, in matters of health and safety, is of extreme importance to the civil engineers that I am talking about—and I use them only as one example among many—is in matters dealing with sewerage, with water supply and with the rather less dramatic matter of gritting icy roads in winter time.

The code of professional conduct does not bar members of these institutions from joining trade unions or from being active members of trade unions. Nor does it limit in any way their right to strike. Where the conflict arises is not in the right to strike but in the behaviour during strike or any other alternative means of industrial action. Some professional engineers would feel compelled to defy a union instruction which they believed was in conflict with their obligations under their professional code of practice. In water supply, for example, some engineers would believe that it was their professional duty, regardless of any instruction from their union, to ensure that a water supply was maintained to any community. It would not be quite enough for them merely not to cut it off; they might feel obliged to secure the water supply.

In that very dramatic (and, I admit, fairly unlikely) circumstances, I can well see the members of such unions as NUPE or NALGO getting "uptight". If they regarded their grip on the water supply as industrially important, they would be upset if professional engineers tried to ensure the water supply that they were trying to cut off. These are very marginal and unusual cases, but in such circumstances it is virtually certain that there would be demands for the expulsion of the engineers from the union of which they were members; and expulsion from the union, in a closed-shop situation, certainly would be the equivalent of loss of employment. So the dilemma on whose horns these members and others are impaled is that to defy their union in a closed-shop situation could in the extreme lead to expulsion from the union and loss of employment, while if they breach their code of professional conduct, they could be expelled from their professional institution and, in a small number of cases, could lose their jobs. Either way they jump, therefore, they lose their job. For a professional man, that is not a satisfactory situation.

I believe that the Government have a duty to do something in legislation to resolve this conflict of loyalties, this conflict of duties, this dilemma. The Govenment are aware that it exists and in the 1972 industrial relations code of practice they recognised it and said: Professional associations, employers and trade unions should co-operate in preventing or resolving any conflicts which may occur between obligations arising from membership of a profession and those which the professional employee owes to his employer and to his trade union, if he belongs to one. The Government are not unaware of the conflict. The Government realised that the dilemma exists and in 1972 the code of practice was drawn up to recognise the fact. But the code of practice does not take us very far. It is not binding. I believe that the situation at present is that it can only be presented as evidence in any inquiry which might proceed subsequently.

I say that the Government have a duty to deal with this. The noble Earl (who is not in his place at present) justified Clause 3 as having been promised to the electorate last year at the election. It was quite proper of him to do that; but other promises were made, too. In The Right Approach to the Economy, which was published before the election, the party opposite wrote: If voluntary agreements do not provide adequate safeguards for individuals, we should be prepared if necessary to legislate to guarantee them. The word to note is "guarantee"; that is a very firm word. In their manifesto, the party opposite said: Those with personal convictions must be adequately protected". In the discussions on this Bill in another place the problem which I have raised on this clause has been recognised as coming under the general heading of "personal convictions"; and the manifesto said that personal convictions should be adequately protected. I do not believe that the compensation for loss of job which the Bill prescribes can be described as adequate protection. Nor do I believe that Clauses 3 and 6 of the Bill as it stands provide a guarantee of adequate safeguards. I believe a clause of the nature of the one which I have put forward today would provide these safeguards. I beg to move.


I have great sympathy with what the noble Lord, Lord Howie, of Troon, has said. On the other hand, I can almost hear the noble and learned Lord the Lord Advocate saying in reply that if special situations such as those with which this amendment is concerned are included in the Bill as affording reasonable grounds why people should not be excluded from union membership, then the Bill will become cluttered up—the noble and learned Lord has already used that phrase once this afternoon—with a whole host of other situations calling similarly for special treatment.

The noble and learned Lord the Lord Advocate will however recall that at Committee stage in another place my honourable friend Mr. Cyril Smith moved an amendment in somewhat similar terms under Clause 6 of the Bill dealing with the closed shop. He eventually withdrew it when the Minister in another place said—and I quote from col. 797 of the relevant report of the Standing Committee for 28th February—this: The code of practice on the closed shop will discuss general criteria regarding the reasonableness of a decision to exclude or expel an individual from a union, and consideration will certainly be given by the Government to including in the code of practice advice on the attention that ought to be paid to professional ethical codes". I realise that that code of practice has to do or will have to do with a somewhat different matter. But I wonder nevertheless whether the noble and learned Lord is able to tell us about the outcome of the consideration of the Government in that regard. It might help some of us to make up our minds as to the attitude we should take on this amendment. As I have said, we have a lot of sympathy with its general principle.

5.33 p.m.


The Government have considerable sympathy with the reasons for which this amendment is moved. We were grateful to the noble Lord, Lord Howie of Troon, for raising this matter at Second Reading. My noble friend Lord Gowrie replied briefly on that occasion, and we have sought to re-examine the matter since then.

The problem is an important one, particularly in the circumstances of a union membership agreement or closed shop. However, although the particular circumstances mentioned in the amendment are not covered in terms in the Bill, we do not think that we require specific provision to deal with them for reasons to which the noble Lord, Lord Rochester, has already referred. I have mentioned them already this afternoon. We have taken the view that the correct place for general principles which may assist is in the code of practice; and, accordingly, this particular subject is one which would fall to be considered in relation to that.

If I could now examine the situation under the Bill, assuming a conflict arose such as the one to which the noble Lord, Lord Howie, referred, the individual faced with the type of conflict will have two courses of action open to him under the provisions of the Bill. First, he may, after consideration of his position, feel that he must resign from his union. If he does so on the basis of a deeply held personal conviction related to his professional code of ethics (which could well be the case) against being a member of a union which required him to take part in some unacceptable action, he may have an objection on these grounds within Clause 6.

Alternatively, he may choose to ignore his union's instructions and comply with his code of conduct. The provisions of Clause 3 will be of assistance, in that if he is expelled from the union, either directly or because he refused to comply with some lesser disciplinary action by the union—such as a fine, for example—he would be able to complain that his expulsion had been unreasonable.

It is true that that theoretically leads to compensation only, and I entirely agree with the view that compensation is not much of a substitute in that situation. But it is a substitute to some extent. We hope that the result of having this provision will be to provide a strong deterrent to this kind of action so that a union would have regard to the convictions of its members on professional grounds such as those which the noble Lord has explained to us.

Therefore, although there is no direct remedy which is absolute in the sense of giving him a complete right to remain in position if the union decided that he was not to be so, we believe that the right to go for compensation—and it would be enhanced compensation in this case—is a right which would make the union take a reasonable view in the matter. I hope that this explanation is sufficient to enable the noble Lord to see his way to withdrawing this amendment.

Baroness SEEAR

I should like to ask the noble and learned Lord to think again about this amendment. It is a matter of fundamental importance, especially as unionisation reaches higher levels and includes people with very heavy professional responsibilities. I know that the noble Lord said that it will be considered in the code of practice; but this, even at its best, is a weak defence in comparison with a right written into an Act of Parliament to obey the ethics of his profession, and the code of his profession, rather than to comply with the requirements of the union.

I can well see that it is undesirable—to use a much-used phrase this afternoon—to clutter up the legislation with matters of relatively minor importance. However, a clash of this kind between the ethical requirements of a profession and the closed shop requirements of a union is a matter of major importance and not a minor issue. The noble Lord said that compensation is no real substitute. Surely in this case it is especially true. It is no real substitute for being able to continue to comply with the professional code of one's own profession. Is it too much to ask the Government to take this back and think yet again?


I very much agree with what the noble Baroness has just said. I must confess that I was less than happy over my noble and learned friend's reply. Indeed, if I may say so, I had the impression that he was not happy about it either; but I may have misjudged him. It is an issue of great and growing importance with the fairly modern tendency of professional people to become enrolled in trade unions. It was probably not a very serious problem at the time of the 1971 Act, and I wonder whether it has been looked at afresh in present circumstances.

I am bound to say that I should have been a little more encouraged if my noble and learned friend on behalf of the Government had made it clear that the Government took the view that if there is, unhappily, a clash between the professional obligations of a professional man or woman and their duties to their unions, there is no doubt that loyalty to the professional obligations should prevail. That certainly is the view that I hold, and many people who have been subjected in their lives to a professional discipline undoubtedly so feel.

If the noble Lord, Lord Howie of Troon, will allow me to say so, I do not feel wholly happy about the drafting of this amendment. For that reason, I hope that he will not press it to a Division. I should be a little reassured if my noble and learned friend could give a slightly warmer welcome to the general idea behind the amendment. Perhaps he could give an undertaking that some further thought will be given to this matter with a view to dealing with it explicitly in the Green Paper which we have been promised?


I was very glad to hear the noble and learned Lord the Lord Advocate give the Government point of view in this matter. I listened with great interest to my noble friend Lord Howie. Having been in a professional position where I was also a member of a trade union, I appreciate that problems arise. It seems to me that the proper way to deal with these problems is through a code of conduct and not through writing it into an Act of Parliament. My reason for thinking that, in part, is that it is very undesirable to put professional people belonging to a particular professional association in a special legal position inside a trade union. I think that causes real problems and it is therefore a very undesirable thing to do. I would therefore hope that the noble and learned Lord the Lord Advocate would maintain the position of the Government in this regard.


I am sorry that my noble friend felt that the response I had given was not adequate. I said, on behalf of the Government—and I repeat—that we certainly appreciate very much the great importance of this problem. I do not think we differ at all from the noble Lord, Lord Howie, from the noble Baroness, Lady Seear, or from my noble friend on this matter. The only question that arises concerns the best way of dealing with it.

In our view, the best way is to deal with it is in the code of practice which the Bill requires to be taken into account in the determination of approriate cases. That appears to us to be really as strong in effect as the clause that is proposed, although it does not expressly deal with that particular point; because ultimately this clause would only give direction as to what is to be taken into account by the tribunal. Therefore, although we certainly understand the problem and appreciate its importance, we consider that this is the best and most practical way of dealing with it in the circumstances.


I am willing to yield to the criticism of the noble Lord, Lord Boyd-Carpenter, as to the drafting of the amendment, which I am sure is perfectly right. I do not think it is quite as feeble as the Minister intimated just a moment ago: I believe it is a little sturdier than he seemed to make out. However, I am rather inclined to agree with my noble friend Lord Wynne-Jones, when he expressed some doubts as to whether professional people should be in a special relationship within trade unions. I quite see that that is a very real difficulty and, having been myself a member of a trade union for many years, I quite understand the problem. Clearly, it would be better if the problem were dealt with within the rules of the union. Some unions do deal with it, but by no means all of them do. Some realise the position and deal with it precisely—indeed the clause has been taken from a union rule book more or less, though not entirely, intact.

Again, the matter could be dealt with in the union membership agreement itself. That would be another way of dealing with it, but that does not always happen either. If these things happened we should not need the legislation; but, since these things do not always happen, perhaps we do need the legislation to back it up.

I think this is a matter of great importance. I am not sure that I take the argument that the Bill should not be cluttered up with special cases, because it is cluttered up with all sorts of things already that I am not sure are totally necessary, although they may appear to be desirable to others of your Lordships. But in view of the comments that have been made I do not intend to press my amendment to a Division today. I hope, though, that the Government will undertake to look at the matter rather more closely and perceptively—that may sound insolent but it is not meant to be —than they have been willing to do up to now. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 [Compensation]:

5.45 p.m.

Lord ELWYN-JONES moved Amendment No. 22: Page 5, line 30, leave out from ("application") to ("for") in line 31.

The noble and learned Lord said: With the leave of the House, I should like to move Amendments Nos. 22 to 29 en bloc. That would at least mark some numerical progress on the Bill. It may be convenient for the Committee to consider also Amendment No. 33, which is interlinked with the amendments.

Clause 4 deals with compensation to be paid to a complainant whose complaint against a trade union under Clause 3 that he has not been admitted or re-admitted has been declared by the industrial tribunal to be well founded—whatever "ben trovato" may mean in its full significance I know not—"se non è vero" but we shall see. The clause provides a dual jurisdiction to deal with the problem of compensation to both the industrial tribunal and the Employment Appeal Tribunal. I know of no other example in labour law of such dual jurisdiction. In my submission, the clause is a recipe for confusion for all concerned, whether they be employees, employers or trade unions, and it will produce a position of unacceptable complexity.

It appears that if two members of a trade union are expelled at the same time but one is re-admitted to a union while the other is not, the one who was readmitted will go for compensation, for the period when he was unemployed, to the industrial tribunal, with an appeal on law and on fact to the Employment Appeal Tribunal—that is to say, a complete rehearing of the case before the Employment Appeal Tribunal with witnesses, union representatives, employers and the lot. Then perhaps there is further appeal to the Court of Appeal and then to the House of Lords. That is the recipe for industrial peace which is contained in so many parts of this Bill. That is the procedure which will face him.

But if the second union member is not re-admitted to his union, he does not go to the industrial tribunal but straight to the Employment Appeal Tribunal for enhanced compensation. One of the dangers of this procedure is that it may well lead some employees in that position to become deliberately obstructive to the point where no union would take them, in order to hope for the maximum of compensation.

Another feature of Clause 4, which may well in time become as notorious as another Clause 4 in the history of our politics, is the different measure of compensation which is awardable in the two cases I have mentioned. In the case of the re-admitted employee who will go to the industrial tribunal, under the provisions of Clause 4(4)(a), his compensation will be—and here I quote— … such as the tribunal considers appropriate for the purpose of compensating the applicant … for his loss as a result of the refusal or expulsion which was the subject of his complaint. That suggests purely economic loss, his loss of earnings.

As to the employee who is not readmitted to the union, Clause 4 (4)(b) provides that his compensation shall be such as the Employment Appeal Tribunal—and I quote— … considers just and equitable in all the circumstances". I ask what is the purpose of this differentiation as to the method of computation of the compensation. Is its purpose to establish a wholly different calculation of compensation for the second case, with an element of penalty? I think the Committee are entitled to know, as are those who will be affected, what tests the Employment Appeal Tribunal is to apply.

Another problem which I see arising is this. What is the position where an expelled member is re-admitted to the union but to a different section, for example, to a non-craft section with different rights and obligations? Is he to have the enhanced compensation or not? Quite apart from these important questions of principle, we on this side of the Committee oppose the giving of primary jurisdiction to the Employment Appeal Tribunal. The EAT is intended essentially—that has been its history and that has been the key, I submit, to its acceptance—as an appeal body determining questions of law only. The lesson of the National Industrial Relations Court, with direct jurisdiction over facts in very heated and much publicised industrial issues, ought to have been learned, but clearly it has not been learned.

In many cases expulsion from a union will be associated with a strike because union members may well refuse to work with a non-unionist. This will plunge the EAT into having direct primary jurisdiction in the area of industrial disputes, which I submit was the very rock on which the NIRC broke. I am dealing with this briefly in view of the appeal for brevity. For these reasons of principle and practice I move these amendments.


I do not think all these amendments can be moved en bloc, because, if Amendment No. 22 is agreed to, Amendment No. 23 will have to be put in a different form. Perhaps it would be wise to move Amendment No. 22 first and then see how we go on.


I am appalled how quickly I have forgotten what I learned over five years. The noble Lord is, of course, right.


Although technically we are speaking to Amendment No. 22, perhaps I can range a little more widely to save time later. The situation is that cases of appeal over unreasonable exclusion or expulsion from a trade union under Clause 3 are subject to a two-stage procedure. First of all, an industrial tribunal will give a declaration of rights regarding membership. Whether or not a union complies with this, an issue of compensation might arise although often the applicant will simply want his union card in order to prevent loss of his job. The procedure recognises this by requiring a separate and subsequent claim for compensation to be made and a time-lag between the determination by an industrial tribunal and that claim.

The issue of compensation, however, is quite different, depending on whether the union has complied with the declaration of rights. If it has done so then it will generally just be a matter of compensating for the loss suffered until membership was granted or restored in accordance with the declaration. That is a simple matter of past loss by the time the tribunal hearing would take place. If the union does not comply with the declaration then the question of compensation may involve future loss because the chances are that the person, having been deprived of his union card, will continue to suffer loss in the future after the date of the hearing.

In this situation we consider that the two-stage procedure is justified and the question arises whether there is a case for giving the two stages to the same or separate bodies. We believe there is a good case for giving the second stage of compensation to the Employment Appeal Tribunal where a union has refused to comply with a tribunal declaration, because in that situation there is a standing declaration by the industrial tribunal which the union has refused to comply with. These cases will necessarily be the most delicate and contentious arising out of Clause 3 and may well arouse publicity and ill-feeling, and it is better that they are removed from the scope of industrial tribunals and referred to the EAT, which is a body of similar status to that of the High Court, with lay members of particular expertise, seniority and experience. The Employment Appeal Tribunal has power at the moment to award compensation on appeals to it, although very often it will remit the matter.

So far as the extent of the award of compensation is concerned, "just and equitable" appears a reasonable formula. It is important that in a case where there is future loss the award should be on the same lines as that available for unfair dismissal where the employer unreasonably refuses to comply with a tribunal order of re-engagement. Accordingly, although Amendment No. 33 is fairly far on, that is the answer in respect of it. I therefore submit to your Lordships that this is a reasonable way of dealing with cases of the most important and delicate kind, which, of course, we hope will be very few in number.


I venture to submit that in his answer the noble and learned Lord the Lord Advocate has really established my case in that he has conceded that these cases that will go to the EAT will be delicate and contentious and arouse ill-feeling. There will be massive publicity attendant upon them, as my noble friend Lord Shinwell indicated at an earlier stage in the debate, and this is the very way in which the standing and acceptance and acceptability of the EAT will be undermined. We are again going straight on the road to the unfortunate experiences that we had with the National Industrial Relations Court. I plead with the noble and learned Lord to think again about this. I am concerned to maintain the respect and confidence of both sides of industry in the Employment Appeal Tribunal and I think this is a grave and dangerous path upon which we have trodden. I tried to argue this in another part of the Bill. I ask the noble and learned Lord to think again about this matter. If he is willing to say he will do that in the light of what I have said, then I will not press the amendment.


I think this matter has been very thoroughly considered before we have come to this point and therefore I do not think I could do more than say what I have said already.


Then we shall have to seek a remedy, but in the interests of time we may divide on the Question, Whether the clause shall stand part of the Bill? I urge the Government to think about this. If I may say so, I have discussed it with those who have responsibility in the judicial field, and it fills them with alarm and despondency.

Amendment, by leave, withdrawn.


What does the noble and learned Lord want to do? Does he want to move the remaining amendments en bloc, or not move them?


I will not move them.

[Amendments Nos. 23 to 29 not moved.]

Lord MCCARTHY moved Amendment No. 30: Page 6, line 27, leave out ("thirty") and insert ("twenty").

The noble Lord said: In the light of the words of the Deputy Chairman of Committees, I would not dream of moving Amendments Nos. 30, 31, 32, 34 and 35 en bloc. However, what I would like to do is speak first to Amendment No. 30 although considering Nos. 31, 32, 34 and 35 in what I want to say along the way. All these amendments relate to each other. They are probing amendments, much in the form in which they were put down in another place. They are intended to try to discover from the Government what is the logic and the basis of the maximum compensation which is written into the Bill. We were told in another place that the basis was the compensation for other forms of dismissal, which we were told in February 1980 would be in the region of £13,000. It is not quite clear to us, in the first place, how that sum is derived from the particular clauses in this Bill.

We were told quite a lot in another place about why the Government put the figures that they did into subsection (7)(a)— an amount equal to thirty times the limit for the time being imposed by paragraph 8(1)(b) of Schedule 14 to the 1978 Act". It was not so clear how the Government came to take the figure in subsection (8)(c), which relates, as I understand it, to compensation when cases go to the EAT— an amount equal to fifty-two times the limit for the time being imposed by paragraph 8(1)(a) of Schedule 14 to the 1978 Act".

So we are proposing here a series of amendments—and I am now moving No. 30—which reduce the figures or the estimates for the sums, of one kind or another, which are put in at various places in the Bill—

"Page 6, line 27, leave out 'thirty' and insert 'twenty'.

"Page 6, line 32, at beginning insert 'two-thirds of'"

and so on. I am not suggesting to the Committee that our figures are any more scientific, or any more carefully worked out, than those of the Government. They are just somewhat lower. What I am asking is this. What is the logic whereby our figures should not be accepted, in place of those of the Government?

There are several arguments that we could pray in aid. First, as I have said, it is not clear that the Government's figures will come out at precisely the same as the figures for other forms of unfair dismissal, especially in the light of what the Government propose to do in relation to the basic award. The additional award for unfair dismissal is a very exceptional and unusual sum, which is imposed in very few cases, and it is not clear to me whether the sum of £6,240, which is included in the additional award, is put into the calculation of £13,450 in respect of this award: and, if so, why it is put there.

Further, we are dealing here with something which is quite different from unfair dismissal on normal grounds. Exclusion from a union may be due to a failure to submit to the more mild penalties and disciplines of the union, as I sought to explain when we discussed this subject previously, and it is not clear to me that for circumstances of that kind one needs a maximum such as this. Furthermore, it is usually the case that anybody who is excluded from a union is subsequently able to obtain re-entry to that union, unless the reasons are particularly grave.

For example, people who lapse and run out of time can almost always quite easily get entry back into the union if they are prepared to pay an entry fee of the subscriptions of a week or two. Or people who are expelled from a union for various disciplinary offences usually find, after a short period, that on payment of an entry fee they can get back into the union. In all these ways, expulsion from a union is not necessarily the same as unfair dismissal of the normal kind. We do not see why the figures should be the same, and we are asking the Government to justify them. I beg to move.

6.4 p.m.


The Committee will be very grateful to the noble Lord, Lord McCarthy, for explaining his amendments in fairly great detail. I hope that I can be fairly brief and non-contentious in answering the noble Lord, but I hope that the Committee will forgive me if I take a gentle dig at my erstwhile tutor. I was fascinated to see, in Amendments Nos. 32 and 34, the word "quotient". Perhaps the noble Lord believes that these amendments are fairly simple, and he asks me a clear question about the sum of £6,240. But perhaps he can explain to me the word "quotient", because this is a very complicated legal Bill. I had a look in the dictionary to find that it is, any number contained in a certain quantity". I wonder whether the noble Lord really believes that that is a relevant and easy definition of the word "quotient". Certainly it is not how I understand it.

The general aim of the large number of amendments which the noble Lord has put down is to reduce substantially the compensation which may be awarded by industrial tribunals and the Employment Appeal Tribunal to individuals who may have been unreasonably expelled or excluded from a union. Your Lordships will know that similar amendments, which were also said to be of a probing nature, were debated in Committee in another place. We agree that Clause 4 appears to be fairly complex, but believe that the principle behind the compensatory levels is straight forward. The formula for the calculation of compensation is exactly the same, for the purpose of this provision as for unfair dismissal under the Employment Protection Act. Our aim has been to ensure that the maximum scales of compensation under Clause 4 shall be the same as those for unfair dismissal.

This parallelism seems reasonable, because the financial effects for an individual who is expelled or excluded from a trade union where there is a closed shop are likely to be similar to those flowing from unfair dismissal. Loss of employment may not always be the consequence of exclusion or expulsion from a union, but the formulae in Clause 4 merely set maxima: tribunals will award compensation within those maxima according to the circumstances.

It could be argued that maximum compensation awarded in exclusion or expulsion cases should be higher than in unfair dismissal cases. This is because exclusion or expulsion can remove access to not just a single job but a whole industry or trade if there is a single dominant union. In such cases, exclusion or expulsion could seriously affect an individual's career prospects and his earnings expectations. Nevertheless, the Government have decided that it is sensible that compensation in such cases should be subject to a limit, as it is in cases of unfair dismissal—


Will the noble Lord allow me to ask a brief question? In unfair dismissal, the limits in the Government's Bill apply to someone who is 61 and has 20 years of service. If the man is younger or has less service, the maximum possible for him to recover is much less. Why should this maximum apply to people of all ages and service for expulsion from a union?


If the noble Lord will have a little patience while I turn the page, I am coming to that point. I hope that the noble Lord will hold on, because I have some detailed notes, though not necessarily about a person of the age of 61. Is it the 61st year or when the person is 61 and one day? It may assist the Committee if I attempt to explain briefly the scheme of compensation under Clause 4. Under subsections (7) and (8), the maximum amount of compensation, which is payable in cases of unreasonable exclusion or expulsion from a trade union, is, in the case of an applicant who is admitted or re-admitted to a union following an industrial tribunal declaration, the equivalent to the sum of the basic and compensatory awards in unfair dismissal cases.

If the application is to the Employment Appeal Tribunal, because the applicant has not been admitted or re-admitted to the union, the maximum amount is augmented by the additional award which may be available in unfair dismissal cases in which an order for re-engagement or reinstatement is made, but not complied with. That may go some way towards satisfying the noble Lord, Lord McCarthy. I am just coming to the noble Lord, Lord Wedderburn.

The formula for calculating the basic award, which he will find in Section 73(3) of the 1978 Act, gives one-and-a-half week's pay for years of service for the whole of which the employee was not below the age of 41, one week's pay for each complete year below 41 and not below 22, and half a week's pay for complete years below 22 and not below 18. Therefore, we see that the limit on compensation under subsection (7)(a) and subsection (8)(a) is equivalent to the maximum basic award which can be paid. The maximum is 20 years' service, multiplied by one and a half weeks' pay. We say that no more than 20 years' service can be taken into account when we calculate the basic award.

These figures are indeed arbitrary, and noble Lords opposite, especially the noble Lord, Lord Wedderburn of Charlton, asked why they are marked out as they are. I will try to take on board his 61-year-old person. I wonder why he queries these figures and details. May I ask him to consult his right honourable friends in another place because it was they who determined, when they were in Government, the formula, which I am afraid I may have been detailed and pedantic about, for unfair dismissals compensation. I do not think that we can recommend that these amendments should go through as they are.


As a matter of principle, I agree that if a man is unfairly dismissed or excluded as a result of a tribunal decision he ought to be compensated in some form. Before I proceed with my general observations, I should like to ascertain from my noble friend Lord McCarthy whether we intend to withdraw this amendment or go to a Division. If we are to go to a Division I shall join him wholeheartedly because, as I shall demonstrate, the final concept is fantastic.

For some years there has been a great deal of talk about how to deal with trade unions which are troublesome, recalcitrant, disruptive. A whole lot of adjectives could be used about them, most of them disrespectful. I can understand that. However, it has been suggested that if trade unions are too troublesome, truculent and disruptive members may be sent to prison. There has been some attempt at compromise, because it has been suggested that this might create some difficulties. I can imagine what they are and that the Home Office would be very troubled about it. Therefore, trade unions ought to be fined. The question which occurs to me—I cannot find the answer and I hope that somebody will find it for me—is this. Who will provide the compensation? If it is the trade unions who have got to find the compensation, that is an easy matter!

I imagine that if I were in charge of a particular branch of a shop floor I would say, "My lads, we have been asked to pay £5,000 because one of our friends has been unfairly dismissed, so they say. We don't think he has been unfairly dismissed but he has gone, so there it is and we have got to pay £5,000, £6,000 or £10,000. Where are we going to get the money from? We have been spending a lot of money lately on administration, and we have had strikes and so on. But we have got to raise the money, so we shall have to raise contributions. You will have to pay a little more by way of levy: not the political levy but the industrial levy". Then the lads would say, "That's all very well, but we pay enough already". The reply would be, "Oh, that's a simple matter to deal with. We will just ask for higher wages. We will let the employers pay for it ". So what will happen in the long run? The employers will have to find the compensation. This is what the Government are leading up to.

I wonder who has thought this out—carefully, methodically. It could not have been the legal people; they are much too intelligent, or are supposed to be. Who are the people who have framed this? Have they not thought it out carefully? If you fine people where is the money to come from? The trade union will have to find it. But there are complications. They are at their wits' end, so they say they will ask the lads to pay an extra contribution; but the lads say that if they have got to come to the aid of the union they cannot afford to be bankrupted; they will declare a strike. The trade unions would then say that they could not have a strike and that they had got to stop this sort of thing, but it would be up to the shop floor to say. It is the shop floor which has got to decide. We are always told that it is the shop floor, anyway, that decides what the leaders do. That is the concept which appears in the newspapers—Conservative newspapers, of course. So there will be a bit of trouble, and the employers will say that they cannot afford extra wages. However, the compensation has got to be found somewhere, so wages will have to go up. And out of the extra wages the compensation will be found.

If that is challenged, can noble Lords opposite tell me the escape route? How does one deal with a situation of that kind? The only way to deal with it is not to make fools of yourselves and think you can take it out of the trade unions, or the shop floor, or even of the employees. You cannot do it. In the long run it is the taxpayers who will have to find the money. All we can say in extenuation is that for years and years, or weeks and weeks, or months and months, or days and days, or even minutes and minutes of our lives we have tried to prevent the Government from embarking upon this perilous adventure. We have failed, and we have to accept the consequences.


I do not think that we can accept entirely what was said by the noble Lord, Lord Lyell, although I rather enjoyed his essay. I am not quite certain what he read for it, but I enjoyed it. We are trying to say two things and I do not think that the noble Lord has proved that we are wrong. We are trying to say that in the case of this Bill the circumstances are not similar in respect of unfair dismissal and in respect of compensation. Therefore, the sums should not be similar. We are trying to say that there is no rationale behind the sums which the Government have put into the Bill. I understood the noble Lord to say that he admits this; he said that it is arbitrary.

Since neither of these points has been established to our satisfaction, I am afraid that we cannot accept what the noble Lord said. However, in view of the lateness of the hour, I do not want to press this amendment to a Division.

May I assure the noble Lord, Lord Shinwell, that we take his points very seriously, but that we think the appropriate point at which to take them up is when we divide on clause stand part.

So far as "quotient" is concerned, I can assure the noble Lord that there is nothing wrong with his definition. If, however, he cannot see its application to the amendment he can, if he likes, have the word "result". "Result of the sum under (a) and (b) above" comes to the same thing. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 31 to 35 not moved.]

6.18 p.m.

Lord WEDDERBURN of CHARLTON moved Amendment No. 36:

Page 6, line 46, at end insert— ("( ) The amount of compensation awarded under this section shall be reduced by the amount of any damages awarded by the High Court in consequence of a cause of action which arises from substantially the same facts as the complaint under section 3 above. ( ) The amount of damages awarded by the High Court shall be reduced by the amount of any compensation awarded under this section where the complaint arises from substantially the same facts as the cause of action in respect of which those damages fall to be awarded.")

The noble Lord said: I can be very brief on this amendment. Although Ministers may find this hard to believe, this is an attempt to help the Government to understand what we believe is a very deep-seated problem in the Bill, one which was not debated in another place. I thought it right to raise one basic aspect of it by way of a brief question in respect of the last clause; namely, in relation to the breach of union rules which might give rise to an injunction in the High Court if it were caused by industrial tribunal proceedings.

The noble Earl answered the question on the previous occasion by saying that it was not appropriate to raise it on clause stand part, otherwise we should all be here until eight in the morning. Therefore it is raised this time by way of a probing amendment. The same facts may give rise to a claim in the High Court of expulsion contrary to the rules and also to a claim before an industrial tribunal for compensation for unreasonable expulsion. The amendment is obviously meant to suggest what would no doubt happen; namely, what the court or tribunal would take into account in assessing damages or compensation: the amount that had been awarded in the other court.

In saying that, I put to the Government the fact that this is an aspect of a very deep-seated problem in the Bill and ask them the question: if they do not accept these amendments, will they be bringing forward at Report amendments of this character and amendments dealing with the other aspects of the inter-relationship of jurisdictions between the tribunals and the EAT and the High Court and the Court of Session which will arise if Clauses 3 and 4 are enacted. I beg to move.


The situation which is provided for in these amendments is a situation which I suppose could happen, although generally speaking we would think that a person would be content with one or other; but if a person in the common law case wrote to the High Court, we believe that the court would follow its normal practice in awarding any damages to a successful plaintiff by calculating the loss suffered by him as a result of the defendant's wrongful treatment. The calculation of the loss would take into account any compensation the individual may have received from the union under Clause 4 of the Bill and similarly the other way round, as the noble Lord envisaged. So our view is that these amendments are not required because this is exactly what would happen in any event, assuming this situation arose. I appreciate that the noble Lord has posed another question which does not arise directly in relation to these amendments, and perhaps I may take leave to answer it on some suitable occasion.


I am grateful to the noble and learned Lord for the spirit of his reply. I accept that this is what would happen normally. The amendments are meant to raise the problem with the Government, and perhaps in doing so I may also say that the question surely arises whether the High Court should have power to stay the proceedings in the tribunal if the two sets of proceedings overlap. It would be very unfortunate if, as he accepts could happen, there were two sets of proceedings proceeding contemporaneously. On that basis, in the hope that the Government will deal with this matter expressly on Report and in the two jurisdictions, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 4 shall stand part of the Bill?


It is only logical that we should oppose this clause since we opposed Clause 3 of the Bill and this clause is intended to extract the compensation which arises in circumstances in which trade unions are found to be responsible for unreasonable exclusion or refusal to admit. So it is logical that we should oppose this clause. But I think there are additional reasons which have arisen out of the debates which we have had in regard to the amendments. The Government would not give us any reassurance about the very reasonable concern which we expressed in regard to the position of the EAT. We still believe that the compensation element in this Bill is too high. It has not been rationally justified, and it strikes us as being extremely arbitrary in the very different circumstances from the normal unfair dismissal case. The noble Lord, Lord Wedderburn, has recently made the point about the considerable concern we have as to the position of High Court actions. On none of these things have the Government been prepared to budge an inch. Therefore we oppose the Motion that the Clause stand part.


I should like to mention one matter which is wholly different in nature from the substantial matter raised by the noble Lord, Lord McCarthy. It is in fact a very small matter which I have already mentioned to the noble and learned Lord, Lord Elwyn-Jones, who utilised it in the course of one of his inimitable throw-away lines when moving an earlier amendment. It is the slightly unusual expression in Clause 4(1) about a complaint being declared to be well-founded, and that of course refers back to the similar use of the same expression in Clause 3(7). I am a little unhappy that a complaint being well-founded may not be coterminous with a complaint being successful, and I rather assume that what the Government have in mind is that the complaint should have been found to have succeeded. I raise this matter, asking the noble and learned Lord, the Lord Advocate, whether he might care to reflect upon this matter and to put my fears at rest in due course.


I think the substantial matters which have arisen on this clause have been the subject of debates in relation to the amendments, and I am grateful that we saved time by taking a Division on all of them at once, so I do not wish to waste time now. I am happy to accept the suggestion made by the noble Lord, Lord Wigoder, that I should deal with this question in due course.

6.25 p.m.

On Question, Whether Clause 4 shall stand part of the Bill?

Their Lordships divided: Contents, 136; Not-Contents, 63.

Abercorn, D. Gisborough, L. Mottistone, L.
Airey of Abingdon, B. Glendevon, L. Mowbray and Stourton, L. [Teller.]
Alexander of Tunis, E. Glenkinglas, L.
Allerton, L. Gormanston, V. Moyne, L.
Ampthill, L. Gowrie, E. Murton of Lindisfarne, L.
Auckland, L. Gray, L. Norfolk, D.
Avon, E. Greenway, L. Northchurch, B.
Banks, L. Gridley, L. Nugent of Guildford, L.
Barrington, V. Grimston of Westbury, L. Ogmore, L.
Belstead, L. Hailsham of Saint Marylebone, L. (L. Chancellor.) Orkney, E.
Bessborough, E. Orr-Ewing, L.
Bledisloe, V. Halsbury, E. Rawlinson of Ewell, L.
Bolton, L. Hampton, L. Redmayne, L.
Boyd-Carpenter, L. Hankey, L. Renton, L.
Bradford, E. Hanworth, V. Robson of Kiddington, B.
Bridgeman, V. Harvington, L. Rochester, L.
Brougham and Vaux, L. Hatherton, L. St. Aldwyn, E.
Burton, L. Hawke, L. Salisbury, M.
Caldecote, V. Henley, L. Sandford, L.
Carr of Hadley, L. Hives, L. Sandys, L. [Teller.]
Carrington, L. (A Principal Secretary of State.) Home of the Hirsel, L. Seear, B.
Hood, V. Sempill, Ly.
Chelwood, L. Howe, E. Sharples, B.
Clifford of Chudleigh, L. James of Rusholme, L. Skelmersdale, L.
Cockfield, L. Keyes, L. Somers, L.
Colwyn, L. Kilmany, L. Spens, L.
Cottesloe, L. Kilmarnock, L. Stamp, L.
Craigavon, V. Kimberley, E. Strathcarron, L.
Cranbrook, E. Kinloss, Ly. Sudeley, L.
Cullen of Ashbourne, L. Lauderdale, E. Swinton, E.
Davidson, V. Lindsey and Abingdon, E. Teviot, L.
de Clifford, L. Lloyd of Kilgerran, L. Thurso, V.
De La Warr, E. Long, V. Torphichen, L.
De L'Isle, V. Loudoun, C. Tranmire, L.
Denham, L. Lucas of Chilworth, L. Trefgarne, L.
Derwent, L. Luke, L. Trenchard, V.
Donegall, M. Lyell, L. Trevelyan, L.
Dowding, L. McFadzean, L. Vaux of Harrowden, L.
Dundee, E. Mackay of Clashfern, L. Vickers, B.
Ebbisham, L. Mackie of Benshie, L. Vivian, L.
Eccles, V. Mansfield, E. Wakefield of Kendal, L.
Evans of Hungershall, L. Marley, L. Ward of Witley, V.
Exeter, M. Monckton of Brenchley, V. Wigoder, L.
Faithfull, B. Monson, L. Wise, L.
Ferrers, E. Montgomery of Alamein, V. Wynford, L.
Forester, L. Morris, L. Young, B.
Fortescue, E.
Allen of Fallowneld, L. Gregson, L. Peart, L.
Ardwick, L. Hale, L. Phillips, B.
Balogh, L. Hatch of Lusby, L. Pitt of Hampstead, L.
Birk, B. Irving of Dartford, L. Plant, L.
Blease, L. Jacques, L. Rhodes, L.
Blyton, L. Janner, L. Ritchie-Calder, L.
Brockway, L. Kirkhill, L. Ross of Marnock, L.
Brooks of Tremorfa, L. Leatherland, L. Shinwell, L.
Burton of Coventry, B. Lee of Newton, L. Stewart of Alvechurch, B.
Caradon, L. Leonard, L. Stewart of Fulham, L.
Cledwyn of Penrhos, L. Llewelyn-Davies of Hastoe, B. [Teller.] Stone, L.
Collison, L. Taylor of Mansfield, L.
Cooper of Stockton Heath, L. Longford, E. Underhill, L.
David, B. Lovell-Davis, L. Wallace of Coslany, L. [Teller.]
Davies of Leek, L. McCarthy, L. Walston, L.
Davies of Penrhys, L. MacLeod of Fuinary, L. Wedderburn of Charlton, L.
Elwyn-Jones, L. Maelor, L. Wells-Pestell, L.
Gaitskell, B. Milner of Leeds, L. Whaddon, L.
Gardiner, L. Northfield, L. White, B.
Glenamara, L. Pargiter, L. Wootton of Abinger, B.
Goronwy-Roberts, L. Parry, L. Wynne-Jones, L.
Gosford, E.

Resolved in the affirmative, and Clause 4 agreed to accordingly.

Clause 5 [Determination of fairness of dismissal]:

6.34 p.m.

Lord BALOGH moved Amendment No. 37: Page 7, line 9, leave out from ("circumstances") to second ("the") in line 10.

The noble Lord said: There are two approaches to the problem of labour relations in modern economies which are characterised by the concentration of power on both sides of industry, which paralyses the ordinary balancing mechanism of a market economy and substitutes market power for market forces. The civilised way of dealing with this question is by having a package of measures agreed between the two sides, which ensures relative peace. The alternative is the method by which point by point the monopoly strength of one part of the bilateral monopoly situation is strengthened. Heath Mark 1 and the present Government have adopted this method: they want radically to restrict, through legislative action, the power of the unions. The attack on the unions after 1970 created such an atmosphere of tension and bitterness that it brought down the Government, because the bitterness prevented Heath Mark 2, which would have been quite sensible, being accepted by anybody. This Government, like the Bourbons, have forgotten nothing and learned nothing.

This clause is an illuminating example of this spirit, mainly concentrating on strengthening the strong for its own sake. What has the size of a firm to do with the fairness or unfairness of dismissal? Evidently the small firms are to be allowed to be more unfair than the large ones. The Government asseverate their desire to strengthen the small firm, and of course superficially this measure does strengthen the attraction of entrepreneurship in small industries; I would admit that. But what they have forgetton is that the very same measures, the very same atmosphere, will make the best workers emigrate from the small to the large firms. Yet the Government's whole industrial policy is said to be an encouragement of industry of small size.

Moreover, the problem of quantifying the size of the firm, its relationship with the amount of compensation and the judgment on fairness and unfairness, makes it quite impossible to have anything but judicial legislation, legislation in secret smuggled into this Act. It seems to me it is a bad act in a bad spirit and ought to be deleted.


At Second Reading I made plain that we on these Benches were not altogether happy about the way in which under this Bill companies were to be treated differently depending simply on their size, however that may be judged, the number of people employed and so on. We have for a long time advocated that more needed to be done for the encouragement of small businesses, but, as I pointed out then, it is often the employee in a small firm who is more vulnerable and in need of protection than others. If, therefore, I have understood this clause and this amendment correctly, I think we have some sympathy with some of the points at least that the noble Lord, Lord Balogh, has just enunciated.

The Earl of GOWRIE

We have come to Clause 5 of the Bill. I think there are some misconceptions, judging from what the noble Lord, Lord Balogh, has said, if I heard him aright. It might be convenient if I reminded the Committee what Clause 5 is about. It amends Section 57(3) of the 1978 consolidation Act, so that the question whether the dismissal was fair or unfair shall depend, not as it depends at present under the present law on whether the employer can satisfy the tribunal that in the circumstances he acted reasonably in treating the reason for dismissal as a sufficient reason for dismissal, but on whether in the whole circumstances, including the size and administrative resources of his undertaking, he acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee. Accordingly, the effect is to neutralise the burden of proof—that is how we see it—as to establishing the reasonableness of the dismissal, and specifically to require the tribunal at least to take into account the size and the administrative resources of the employer's undertaking.

The amendment moved by the noble Lord, Lord Balogh, nullifies one of the two principal purposes of the clause, because it removes the requirement that tribunals should take into account the size and administrative resources of the employer's undertaking when it comes to decide or determine whether the employer acted fairly or reasonably.

The part of the clause which the noble Lord seeks to amend simply spells out what should be good practice on the part of tribunals. It is not creating, as it were, two classes of citizenry in respect of undertakings: it is spelling out that the tribunal should take into account matters which sensible tribunals probably would take into account. It is providing a bit of statutory underpinning. It is doing so because the Government have received many representations alleging that tribunals have attached too great an importance to the requirements of the ACAS Code on Disciplinary Practice and Procedures. People say that small firms cannot be expected to comply with all of the code and that the structure of the code itself is geared much more towards large businesses which have formal personnel divisions and practices. In smaller firms there is, of course, closer contact between management and employees. That has many disadvantages, but it can make it more difficult to give formal warnings to people without souring working relations. As the noble Lord, Lord Rochester, will know, with the single-tier management as exists in many small firms, it is also more difficult to refer disciplinary matters or appeals to a higher level.

I wish to emphasise that we are talking about the administrative resources of a firm. We have no intention whatever of asking or allowing small employers to act less reasonably. All that we are doing is making it clear that smaller firms are not necessarily acting unreasonably if the procedures which they adopt in circumstances of this kind are inevitably slightly different from those adopted by large firms, and if such procedures take into account the size and resources. Therefore, the clause reassures employers that tribunals will look at the particular circumstances of the individual firm in each case. That is all that this part of the clause is intended to do.

The noble Lord, Lord Balogh, in moving the amendment, gave us perhaps a warm-up for what may be the remarks he will make on the general debate on Government policy tomorrow in your Lordships' House. I wish to say a little about our approach to small firms and the employment protection legislation. We have constantly emphasised that the purpose of this and allied provisions in the Bill which we shall be coming to later, is to reduce the burden imposed on employers, particularly small employers, without at the same time removing essential protections from employees. Our judgment is that the legislation on unfair dismissal has had, in the main, a negative psychological effect on small employers and we have considerable evidence that it has been a real deterrent to recruitment.

I wish finally to set these very limited changes in context. We are trying to stimulate small firms, because this area seems to offer some prospects for employment growth. We cannot, of course, give even an approximate figure of the number of jobs that may be created. But what we can at least say is that we hope that employers, particularly small employers, will no longer feel to the same extent that the employment protection legislation is maybe the last straw in making them decide not to recruit, or not to take on, an extra employee. That, at least, is one of the problems that we can do something about. It is often pointed out, of course, that what really worries small employers is high interest rates and the shrinkage of the home market. Issues like those may lie outside our control or may temporarily have to give way to wider economic needs, such as the need to reduce inflation or public spending. But that does not mean that there is any excuse for us not to try to help small employers where we can, and that is the point of the clause.


Is the noble Earl really telling us that he now has another reason for this part of the Bill? Way back in another place, and to some extent on Second Reading in this House, the Government were saying that they actually had evidence; that they had surveys and that those surveys indicated that small firms were really hurt by these provisions in the Employment Protection Act. Then, when it was pointed out to them that most of those surveys had a 2 per cent. response rate and that at least one of them was run from the Conservative Central Office, they changed their minds.

The second argument that we heard—and we heard it from the noble Earl on Second Reading—was that it was not a matter of evidence. He admitted that there was no evidence, or rather that the balance of the evidence was against him, but he said that it was psychological. He said that these provisions would make small firms feel psychologically better; they did not really need them, there was not any evidence, but they would feel psychologically better. Now he tells us that it is good practice. These are directions to the industrial tribunals as to how they should carry out their work—and, of course, they are not really necessary, because it is good practice and they are doing it already.

All day today, and during a considerable part of our discussions on the last occasion we debated this Bill, we sought to get the noble Earl to put things into the Bill which were declaratory of the existing position, what one might call "good practice". And over and over again he has told us, "Leave that to the tribunals", or, "Leave that to the code". But this is something which is such good practice that it cannot be left to the tribunals. This is something which is such good practice that it cannot be left to the code. This is something which is so good for the small firm that it must actually be put there by statute.

The noble Earl gave us two examples. He said that the exsting code will be very hard on small firms—although, of course, if it is good practice, and that is what the tribunals are doing, it is difficult to see why—in respect of notice and in respect of discipline. In respect of notice, there is absolutely no reason why a firm of one man and two girls cannot give notice if the man wants to sack one of the girls. One does not need size to give notice and one does not need size to write letters. The second reason he gives is levels. He says: "How can they have appeal procedures?" There are no firms with only one level. It is always possible to appeal to someone, and if they do not want to appeal to someone in the firm they can appeal to an independent outside.

The fact is that there are no reasons why the provisions of the code cannot apply to small firms. The fact is that they should apply to small firms. The fact is that the small firms are the very people who need the code and they do not need the Bill.


There is a point that I should like clarified. Reference has been made to "neutralised". Neutralisation means the equality of two different people. How can there be a neutralised position as regards a person working in a firm whose entire life revolves around his employment—his joy, his happiness and his home? What is really meant, is it not, is that he has the burden of proof put upon his shoulders under this Bill and Clauses 5, 6 and 7 revolve around that point? I do not want to delay the Committee, but I should like a further explanation of "neutralisation"

The Earl of GOWRIE

All that I said was that we were trying, as the noble Lord acknowledged in the latter part of his remarks, to neutralise the burden of proof. That seems to me to be a reasonably sensible thing to do. I take the point of the noble Lord, Lord McCarthy, that we are providing a statutory underpinning of good practice. Sometimes the judgment of the noble Lord, Lord McCarthy, and my judgment will differ widely about whether a statutory underpinning is necessary. I have mounds of evidence here which I have cut short, but which I should be very happy to go into in detail. Our judgment is that the onus had shifted too far, and that a corrective was needed, and that is exactly what we have done.


In his usual charming and convincing way the noble Earl suggested that this is a code of practice. A code of practice of five lines? What sort of code of practice is it? Who will create the real precedents which are important? This Bill simply pushes the tribunal, which may comprise fairly weak men and women, for we do not always have Dennings around. It will itself set a precedent in discrimination against people employed in small firms. Cruelly speaking, this is one way of making people work, imposing discipline and all that.

But our situation is very different. Our situation is that we have a shortage of skilled labour; and skilled labour in a small firm is very much more important than it is in a large firm which is semi-automated or fully automated. Therefore, it seems to me that what the noble Earl has said is a very charming contribution to the English language, but no more.

6.51 p.m.


I do not quite understand the pressure from the noble Lord, Lord McCarthy, for the small firm to be subject to the procedures of this clause. It is rather as though he was trying to force them to the tribunals when they did not need to go there. It also seems to me that he was "twitting" my noble friend Lord Gowrie for not producing statistics to back up his case—although my noble friend, as we now know, has them before him; and I suspect that he does not have any statistics to prove that small firms, as he ended his speech, particularly need the treatment of his amendment. That is what he rather indicated.


If the noble Lord will allow me, I am not talking about what small firms need: I am talking about the employees who work in small firms. They are the people who need the provisions of the Employment Protection Act, not their employers.


I would question that. I do not know how well the noble Lord knows small firms, but I have a great deal to do with many of them, and on the whole they have better labour relations—they must have—than many larger and even medium-sized firms. If they do not work, they are not successful; they cannot make a success of their business if those concerned are not at least reasonably able to get on together. Therefore, we are talking about the exceptions; we are not talking about the normal run of small businesses.

The noble Lord, Lord Balogh, said earlier that these employees would emigrate to big firms. I do not think that they would. People who like working in small firms stay with small firms. They might emigrate to a competitor, but that is the sort of thing that the employer has to take into account quite independently of any legislation. I do not think that we shall find that this sort of myth about the small firms is borne out in practice.

I should like to make one final point. My noble friend spoke about making a situation more neutral, and as I read the Bill at present, it contains nothing which does not say that the size and administra- tive resources of big firms should not be taken into account as well. It does not say that, just because they are small, they must be taken into account. It could well be that the tribunal might say to itself, "These people are very well organised in this big firm and, therefore, they ought to have done better". It is a neutral situation. The size of the firm is a relevant factor. Whether it is big or small will balance the attitude the tribunal takes to the case in question. It gives them the opportunity to do that. I would suggest that this is very much an amendment which will make the Bill worse rather than better, and I hope that it is rejected.


I should like to intervene for a moment. Why are we worrying about small businesses when there are areas—and Hampstead is one of them, coming under Camden Council—where every small business has disappeared? In Hampstead there are a few rubbishy, cheap dress shops and a few food shops, and every woman has to walk a mile and a half to get a reel of cotton. There are no ironmongers and there are no businesses of any useful value to the ordinary housewife in Hampstead. Every one of them has shut down. One shop where one could buy cotton, and which has been in existence for 100 years, has had to close down. So much for what the Government have done for small businesses.


I should like to raise one small point on the question of small businesses and complying with the requirements of the law as it is at present. Presumably the first thing that an employer, large or small, has to do is to provide a contract of employment. I should have thought that that involves the small employer in much greater difficulties than the matter of issuing the necessary warnings prior to dismissal. Incidentally, as a good deal of the question of dismissal may well depend upon the contract of employment, is this the first move, and soon shall we be having complaints about the contract of employment as well and, therefore, small firms will not he required to adhere to that either? Once we start this particular erosion of conditions, it does not end there.


I should like to set at rest the mind of the noble Baroness, Lady Gaitskell, because what she has said about the retail shops in Hampstead would not be true, for example, in Huntingdonshire where there are hundreds of small businesses, some of them progressive manufacturing businesses. Of course, every farm is a small business. But quite apart from that, I would say that throughout my former constituency there are hundreds of retail shops which are doing well.


Yes, but they are not doing well in Hampstead, and they are not doing well in these large villages. Why? Why have they been shut down? There was no need for them to be shut down.

The Earl of GOWRIE

In view of the terms of indignation of the noble Baroness, Lady Gaitskell, and precisely because things are not good for small businesses, she should follow us into the Lobby over this kind of corrective amendment.


On the contrary, I would say to my noble friend: "Look at the Government's economic policy. That is what is throwing firms out of Hampstead".


I say to the noble Baroness, Lady Gaitskell, that one reason why so many small businesses have closed down is the Employment Protection Act. That legislation is unique in our law. It allows a claimant to enforce his rights straightaway, before the case has been tried, which I understand is quite unique in our law. As for the argument that a small firm should have to pay exactly the same compensation as a huge company, that is complete and utter nonsense. I have run small firms. If you employ, say 25 people and trade goes against you, and if, unfortunately, you have to get rid of one employee, that would account for perhaps 4 per cent. of your labour force, which might make all the difference to your being viable or not. I could go on like this for a long time. I do not think that noble Lords opposite are being practical. They are speaking theoretically and not practically.


Can we bring the debate back to the actual point of the clause? Despite what the Minister has said, I should like to ask what is the point of including this at all, unless it is to try to influence a tribunal? It is almost the same as the argument I had on the Transport Bill. When the Government want to give a little tip to the traffic commissioners they put something in; when we try to stop it, they will not have it in. The only point of this surely is to remind the tribunal to take something into consideration because they believe that it is something that ought to be done for the business. But what about the employee? He is the one we are worried about.

The Earl of GOWRIE

The rights of the employee are still there.


The noble Earl will understand that my concern is solely with these words: (including the size and administrative resources of the employer's undertaking)". In support of what the noble Lord, Lord Underhill, has said, the Minister will also appreciate that the words suggested for inclusion in this clause are in substitution for Section 57(3) of the 1978 Act.

If one reads that subsection, the relevant parts read as follows: In determining whether the dismissal … was fair or unfair, having regard to the reason shown by the employer, shall depend on whether the employer can satisfy the tribunal that in the circumstances (having regard to equity and the substantial merits of the case) he acted reasonably in treating it as a sufficient reason for dismissing the employee". If the Government are really seeking to be fair in this matter, why is it that those words in Section 57(3) of the 1978 Act need to be altered simply to take into account one factor; namely, the size of administrative resources of the employers' undertaking? I am seeking information. I am unclear, as is the noble Lord, Lord Underhill, why it is that there is need for inclusion of these particular words in this clause.

The Earl of GOWRIE

I just make two quick points, the first to the noble Lord, Lord Underhill, and the second to the noble Lord, Lord Rochester. To the noble Lord, Lord Underhill, of course we regard employment protection rights as important. It was after all a Conservative Government which introduced such a concept. But we felt that the balance should be restored between the need for statutory protection for employees and the burden it imposes on employers.

I have already said to the noble Lord, Lord McCarthy, that obviously the degree to which there may be statutory underpinning of existing good practice, or potential good practice, is a matter of differences of judgment between the Opposition and ourselves. That is really the answer to the noble Lord, Lord Rochester: we think that the provisions in the present legislation were insufficiently neutral and insufficiently clear, and we feel that we have improved them.

On Question, amendment negatived.

The Earl of GOWRIE

If I may make a suggestion, if it was felt that Amendment No. 38 could be reasonably taken, I would be enthusiastic that it should be taken before we adjourn. If the noble Lord feels that it is going to be a very substantial debate I suppose that I shall have to yield, but I must remind the Committee that we are not proceeding at the pace we should be.


I am happy to adjourn now. I misunderstood the noble Earl.

The Earl of GOWRIE

What we are trying to establish is whether we should or should not now adjourn for dinner. I am enthusiastic to proceed to take Amendment No. 38. However, if the noble Lord, Lord Wedderburn, feels that 38 is going to be a very substantial debate, involving, let us say, more than a quarter of an hour's discussion, then perhaps, rather reluctantly, we must adjourn now. But it would be much more satisfactory if we came to the substantive closed shop debate immediately after dinner.


I misunderstood the noble Earl before. It is the view of my noble friends as well as myself—I was discussing it when he made the point, which was why I misheard him—that there is a need to discuss the next amendment very fully because it is one of the most fundamental points in the Bill.

The Earl of GOWRIE

In that case, I beg to move that the House do now resume.

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

House resumed.