HL Deb 02 August 1982 vol 434 cc525-32

3.7 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)

My Lords, I thought it might be appropriate and convenient to your Lordships if I were to indicate at this stage, which is the earliest available opportunity, the reaction of the Government to your Lordships' decision last Wednesday to agree to the new clause on employee participation, which was Amendment No. 1 and which was moved by the noble Lord, Lord Rochester. I am aware that, procedurally, this is not the best way to make the announcement; but as it is the last day on which the House sits before the Summer Recess and as the most appropriate amendment upon which to make the Government's reaction known may be the penultimate amendment, which is No. 61A in the name of the noble Lord, Lord Rochester, when the House may not be quite so full as it is at the moment, I thought it might be best if I were to indicate the Government's reaction now.

The Government accept your Lordships' decision in principle on this matter since, as I indicated on the last occasion, we are in sympathy with the objectives of the new clause. However, there are difficulties in that industry has not been consulted and there may be problems of a practical nature involved in leaving the clause in the Bill in its present form. The Government's immediate consideration in the short space of time available has brought us to the conclusion that there is the possibility that it may prove to be more suitable for the wishes which your Lordships have expressed and which the Government accept, to be incorporated in orders made in connection with the Companies Act 1948 rather than in the present Bill. If that were to be the case—though it may not necessarily be so—it would be the expectation of the Government that details of the appropriate order would be available before the Third Reading of the Bill so that your Lordships could see in advance what it contained.

My right honourable friend the Secretary of State believes that it is important to give industry the opportunity of commenting on the form of the provision before it becomes effective, as they are the ones who have to operate it. It is therefore the intention of my right honourable friend to hold consultations with all interested parties forthwith.

Lord Rochester

My Lords, I am sure that the whole House will be grateful to the noble Earl, Lord Ferrers, for having made that statement. We are glad that the Government have accepted the principle underlying the amendment which I moved last week, and which the House accepted as being appropriate for inclusion as the first clause in the Bill. However, I do not at first sight see why the Government say that they consider it might be more appropriate to incorporate the wishes of the House in an order made under the 1948 Companies Act, rather than in the present Bill. That is, first, because, as your Lordships will recall, under my amendment the power which the Secretary of State would be given to deal with the matter would similarly be by statutory instrument under the Companies Act, so that the point already appears to be covered in the new clause.

Secondly, and more significantly, the House will recall that, speaking on behalf of my noble friends, I have consistently made it plain at Second Reading, in Committee and on Report that what most concerns the Liberal Party is that the Bill in its present form will do absolutely nothing positively to improve industrial relations in this country. Indeed, the main purpose of my amendment, which has now been approved by the House, was to ensure that where so many of the Bill's provisions are necessarily negative and controversial, there should be at least one that is constructive and generally acceptable, so that the Bill would thus become more balanced. It is of some comfort to learn that the Government have not finally made up their minds on this point, as I understood the noble Earl to be saying. We have also noted that, even if they eventually conclude that the matter should be dealt with by statutory order outside the Employment Bill, it is their expectation that the appropriate order would be laid before the House before the Third Reading of the Bill.

Finally, we of course welcome the fact that industry is to be given an opportunity to comment on the precise form which the provision should take, and that consultations to that end are to begin forthwith. Our concern in this regard has been solely that consultation should be undertaken with the urgency that the need to develop employee participation deserves.

Lord Wedderburn of Charlton

My Lords, we have some reason to suspect that we understand the Government's dislike of having even this small whiff of industrial democracy in this Bill, although I should like to ask the noble Earl the Minister for further details about the orders under the Companies Act. I share the bewilderment of the noble Lord, Lord Rochester, about their character in being different from what would be done under his clause. But my specific question to the Minister is: in saying that the Government will consult with industry, is he saying that there will be consultation over a reasonable period on this very important matter with all relevant parties? Will that include the Trades Union Congress and the relevant trade unions who have made representations to all Governments on these issues?

Earl Ferrers

My Lords, I appreciate the view which the noble Lord, Lord Rochester, expressed and I would just tell him that the Government have not yet made up their minds as to the precise form in which your Lordships' wishes could best be implemented. The statement which I made was an initial reaction, in order to indicate the way that the Government felt. The way that the Government felt was to see that those wishes are implemented. I merely indicated that it could be that, in the Government's view—and here one takes legal advice and all sorts of other advice—the best and most appropriate way might be under those orders. If that were so, they would come directly under the Companies Act, as opposed to coming under the Employment Act. But I repeat what I said in the statement, that that is not certain; it is merely an indication. What we wish to do is to see that your Lordships' wishes are put into action as best as is possible, and even if they were kept in the Bill, which they may be, I think it might be necessary to tidy up some of the drafting of the clause which was put in.

The noble Lord, Lord Wedderburn, asked whether there would be plenty of time for consultation and whether everyone would be consulted. In a way, that is rather like putting the Government on Morton's fork. On the one hand, it is obviously necessary to consult the appropriate bodies; on the other hand, the consultation has to be done in sufficient time for your Lordships to know what is the position by Third Reading. My right honourable friend's department will be sending out a consultative letter this week inviting comments by mid-September, and I can confirm that the trade unions will be included in such consultation.

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Earl Ferrers.)

On Question, Motion agreed to.

Clause 12 [Prohibition on union recognition requirements]:

3.16 p.m.

Earl Ferrers moved Amendment No. 36A: Page 16, line 2, at end insert ("or").

The noble Earl said: My Lords, this is not an amendment of great moment. It is basically a drafting amendment. My Lords, I beg to move.

Lord Wedderburn of Charlton

My Lords, I have given the noble Earl the Minister notice, albeit brief, for which I apologise, of a view which my noble friends and I wish to put to the House about this amendment. It is, perhaps, a little unusual to say anything about the addition of the word "or" in a clause, but one word can mean a great deal if it is anything like "not". It is a somewhat complex matter, but we do not take the view that it is necessarily a drafting matter. At least, we would ask the Government to look at it again in the light of the points which I would put briefly to your Lordships on the clause. This is, after all, a clause which was introduced in Committee at a late stage and which introduces a very new principle into our law. It is the central words of the principle which, in my view and in the view of some of my noble friends, may be affected by this amendment. The new principle revolves around the prohibition of commercial, or, if it is taken in connection with Clause 13, industrial, pressure, designed, however slightly, to require that someone should recognise, negotiate or consult with a trade union.

As the Bill stands, Clause 12 makes terms in a contract void if they aim to do that, and makes commercial dealings into statutory torts in subsections (2) and (3) if they do that. In subsection (3), the requirement that is part of the prohibited action is set out as being that the person against whom the action is taken, does not, or is not likely to, recognise, negotiate or consult as mentioned in subsection (1) above". When one looks at subsection (1), one finds that the central core of the newly wicked act is set out in two paragraphs, (a) to recognise one or more trade unions … for the purpose of negotiating on behalf of workers … employed by that person, and, (b) to negotiate or consult with … one or more trade unions". I am taking the essential words.

There is no word either joining or disjoining those two parts of the subsection. Recognition, which is the first concept, is a term of art, and, indeed, the Government have been careful to retain the definition of recognition in this Bill for general purposes in our employment law. The recognition is somewhat complex, coming out of four statutes: the Employment Act 1980 in the first schedule, Section 126 of the Employment Protection Act 1975 and Section 29 of the Trade Union and Labour Relations Act 1974, which is preserved for this purpose in this Bill in paragraph 11 of Schedule 3. If one adds up those references, one finds that recognition after this Bill will, as it has for many years, mean recognition for collective bargaining; that is to say, negotiation relating to or connected with one or more of the industrial matters which can be the subject of a trade dispute under law as it is before this Bill.

This Bill does not adopt that definition of "recognition". One must start therefore with the very strange and important novelty that recognising a union in this Bill and in this clause appears to be wider than the concept normally employed in employment law. Nowhere in the Bill is there a definition of "recognition" attached to the word "recognise". It seems to be deliberately set out as including any kind of negotiation with a trade union, whether or not it be about trade dispute matters. Therefore it becomes even more important to ask what is meant not only by "recognition" but also by the words "negotiation" and "consult".

To put it briefly, the case law decided by the judiciary has recognised that within the normal statutory meaning of recognition of a union there is an element of bargaining, or "negotiating with a view to striking a bargain", as it was put in one judgment. I apprehend that the judiciary would take a similar view of the concept of "recognise" in paragraph (a) of this clause. I doubt whether there is much between the noble Earl the Minister and myself on that point. But if it be right that "recognition" in this clause means "negotiating with a view to a bargain", and if one then asks what is meant by the words "negotiate"or"consult", one sees that in subsection (3) they are joined together in what appears to be a category, or a genus, or a species within some kind of similar boundary. If one then uses the quite normal and proper statutory interpretation principles, which unhappily are always expressed by lawyers in Latin as noscitur a soclis, this only means that if one sees a group of words which seem to go together, one had better keep the link between them as a matter of common sense. If one does that, then some limit begins to appear to the concept of negotiation and consultation.

I would not wish to give a firm view—nor, I am sure, would the Minister—as to exactly what line the judiciary would draw, but one can see the path down which the limits of the meaning of negotiation and consultation would properly be sought in a court. If that be even arguable—and in my submission it plainly is arguable—the insertion of the word "or" completely changes the clause, because that disjunctive insertion clearly cuts the link between recognition on the one hand with a view to negotiation and the negotiation and consultation in paragraph (b). Paragraphs (a) and (b) of subsection (1) are then plainly disjoined. The mere fact that the three words run together in subsection (3) can then be explained as a matter of drafting.

I hope that the noble Earl will not say that this is a legalistic argument. These are laws which we would not ourselves have put forward. When one puts forward laws of this sort somebody has to construe them and that is a legalistic matter. It is surely right that the Government should say whether or not they accept that there is a possibility that the meaning of the clause is being changed. If the Government say the meaning of the clause is not being changed—and I apprehend that the noble Earl the Minister has already taken that position—we are entitled, either here or at Third Reading, to have an explanation, which we have never had, of the limits of the concept of "negotiation or consultation"—and especially the last in relation to safety matters which are dealt with in the next amendment.

It was partly with a view to getting clear from the Government what they see to be the possible boundaries of this clause that we thought it right to put this view to your Lordships' House, so that the argument and discussion on the next amendment can go forward on the basis of what we know to be the Government's view as to the meaning of those essential three words.

Lord Jenkins of Putney

My Lords, the discussion that we had last week on the amendment which I put forward, No. 39, is relevant to the present proposal. As I understand this amendment, its effect is to provide that a contract is voided by one of two things. It may be voided by a recognition requirement or, with the word "or" added, it may be voided by a requirement to negotiate or to consult. Either of these two things becomes a cause for voidance of the contract, and the contract is invalidated thereby.

It seems to me that the model which the Government have in mind is a three-party model. What they see is a local authority making an agreement with a contractor, and making it a condition of that agreement that a trade union requirement shall he inserted by the second party—the contractor—upon anybody he engages. That is the model in the Government's mind. In other words, it will be a three-party position in which, for example, a local authority sets as part of a contract with the contractor that there shall be a trade union requirement of trade union recognition. That is what the clause seeks to void.

Although I disagree with that proposal, I can understand it. However, it seems to me that, as at present worded, the contract could apply equally to a two-party situation—in other words, to a situation in which the contract is between somebody who is offering services and the main party to the contract. If I am right in thinking this, then its consequence would be to invalidate, for example, a contract between an individual offering his services and the main contractor. In other words, it would invalidate a contract for services, if one existed, between an actor, or a variety artiste, and a theatrical employer. It seems to me that the two clauses as at present worded would void such a contract. I do not believe that it was the Government's intention to void such a contract.

I wonder, therefore, whether the noble Earl in reply to this point will be able to give us an assurance that a two-party contract such as I have described is not voided by this contract or, alternatively, whether he will accept an amendment on the Marshalled List, which will be moved later, introducing a definition which would have the effect of making this point. It would, however, be more satisfactory if the noble Earl felt able to give the assurance for which I have asked in reply to this debate.

Earl Ferrers

My Lords, I can see that what I thought was a perfectly modest amendment has evidently got its own aura of complexity. The noble Lord, Lord Wedderburn of Charlton, is totally right when he says that a small word can make a big difference, particularly if it is a word like "not". But this is not a world like "not"; it is a word like "or". That can, I agree, make some difference, but I assure the noble Lord that there is no intention of altering the intention or the phraseology of the Bill as it is drawn up.

There are two points to make. Clause 12 is a mirror image of Clause 11 which outlaws requirements which say that a contractor must use only union labour or that he must not use union labour. This clause outlaws requirements which say that a contractor must recognise a trade union or that he must negotiate with a trade union or a trade union official. Those two things are totally separate. Either of those things would be regarded as an offence if they were to be undertaken. If somebody already uses his own negotiating procedure to negotiate with unions, that is fine. He is not conflicting against the law as it would then be. It is only where the contract stipulates that he must negotiate with trade unions or officials that he would be in breach.

The purpose of Clause 12, therefore, is to void a term in a contract which requires a contractor to recognise a trade union for the purposes of negotiation or consultation. As the noble Lord, Lord Wedderburn of Charlton, said, it was introduced at the Committee stage following complaints about such requirements being imposed by a number of local authorities. Section 1 sets out the two kinds of terms and conditions that are made void. The first is in paragraph (a), which mentions a term or condition requiring a contractor, to recognise one or more trade unions … for the purpose of negotiating on behalf of workers. The second term or conditions, in paragraph (b), required the contractor to negotiate or consult with any trade union official. I do not think that those are in any way different to what was intended, expected or anticipated. I assure the noble Lord, Lord Wedderburn of Charlton, that there is no change of heart here.

The noble Lord, Lord Jenkins, is technically correct in saying that it could apply to what he calls a two-party situation. However, it will not affect collective agreements about recognition—for example, between Equity and the theatre managers. The noble Lord, Lord Wedderburn, was kind enough to say that he hoped that I would say that this was not a legalistic argument. I do not consider it to be so, and I hope that I have managed to persuade him that there is here nothing sinister but merely a method of clarification by which the word "or" is inserted into the Bill at this stage.

Lord Davies of Leek

My Lords, this is an opportunity for me to draw the attention of your Lordships' House to the fact that, despite the little word "or", a completely new situation will arise in September, towards the end of the Recess. The Government are to rescind the International Labour Office fair wages clause which was built up under Convention 94 of the International Labour Organisation.

The CBI is divided over the Government's intention. The Government have been very quiet in so far as they pretended to me recently not to know the answer when I put forward the suggestion that it was their intention to rescind the fair wages clause in September, when the House was in Recess. A planted Question for Written Answer was tabled in the other place. It was allegedly answered and I was amazed to see from a headline on page 2 in The Times next morning, that the Government are rescinding the fair wages clause.

The fair wages clause is involved in this area, too. I do not mean this in any way venomously. There is a growing realisation of an authoritarian movement by the Government so far as international law in trade unionism is concerned. A contract with a foreign Government under the ILO is entitled to keep in the fair wages clause. That would disappear. The right to recognise that clause would disappear under this amendment. I shall seek an opportunity on another occasion to raise this matter, rather than delay the House when it is in a kindly mood on the eve of the Recess. However, I have given that warning.

Lord Howie of Troon

My Lords, I do not want to delay the House, either. I was in some doubt as to whether this amendment was the right place, but since the fair wages clause has been raised by my noble friend, I think that we should perhaps deal with it now.

Lord Denham


Lord Howie of Troon

My Lords, it might be irrelevant to the noble Lord, but it is not in fact.

Lord Denham

My Lords, there is a Standing Order of the House that speeches must be relevant to the matter that is being discussed. I think that the noble Lord, Lord Howie of Troon, is possibly following the noble Lord, Lord Davies of Leek, in stretching the rules. This matter has been brought to our attention, but it would be against the orders of the House if it was proceeded with further, after my noble friend has already sat down.

Lord Howie of Troon

My Lords, I take the Chief Whip's point. I said in opening my speech that I was in some doubt. My doubt was related to the relevance of the issue. I took the naive view that since my noble friend had been heard that gave some relevance to the subject. Clearly my naivity went beyond that of other noble Lords.

I had hoped that it might be proper to raise this point on the next amendment and I shall certainly seek to do so. It is a matter of extreme importance. However, I shall take the guidance of the Chief Whip and wait until then.

On Question, amendment agreed to.