Employment Bill

HL Deb 12 July 1982 vol 433 cc22-71

House again in Committee.

3.56 p.m.

The Earl of Gowrie

I did not want to detain or indeed bore the Committee by rehearsing the arguments I made in trying to answer the noble Lord, Lord McCarthy, on Amendment No. 48, because these are very substantially the same arguments. The noble Lord, Lord Wedderburn of Charlton, said that he wanted to test the Government on this same issue of why there should be greater levels of compensation for unfair dismissal in a closed shop situation than in connection with unfair dismissal generally. In fact, the noble Lord, Lord McCarthy, divided on the last amendment—and I congratulate him on his exposition, and I am not complaining about that—before I was able to get up and say that I had, in my view, tried to answer the central issue of what the difference is. The difference, in our judgment, is that in the cases we have mentioned—Sandwell and Walsall particularly—the dismissals were in open defiance of rights provided from Parliament and involved particularly severe consequences for individuals, because if one is sacked as a result of a closed shop dismissal one may have difficulty in getting a job later. That seemed to us to be an absolutely clear instance of why unfair dismissal in this sort of case should be compensated at a higher rate, apart from the issue of deterrents which I also mentioned.

The noble Lord, Lord Wedderburn of Charlton, was quite exercised that in some way this position by the Government downgraded dismissals because of sex or race discrimination. Until I was translated to Northern Ireland, I was the Minister at the Department of Employment concerned with discrimination in employment on sexual grounds or on grounds of race. I share very strongly the noble Lord's distaste. Perhaps "distaste" is too weak a word—I share the noble Lord's condemnation of any such unfair dismissals, but there is no evidence of recent dismissals of this sort carried out in blatant defiance of employees' statutory rights. The noble Lord, Lord Wedderburn, going back to that famous report which has caused us quite a lot of interest in this Committee, said: "Well, the cases of Walsall and Sandwell are atypical". So indeed they are, and we are quite determined to see that they remain atypical. That is exactly why there has been rather special attention paid to them, not least in Clauses 3 and 4 of this Bill.

We have not in the sex and race fields had the unsavoury sight of public sector employers engaging in politically motivated defiance of statutory rights provided by Parliament. If we found some notionally extreme Right-wing council sacking somebody as a result of the colour of their skin, and if we did not feel that the compensation was adequate to deter other such notional councils in this regard, no doubt we would bring in legislation accordingly. But one cannot legislate for every notional case; and there is no evidence that this has been done. It seems to us, therefore, that there is no obvious need to increase the current deterrent against these sorts of dismissal. There seems to us also to be a clear distinction between attempting to protect employees from the ordinary run of unfair dismissals, and unfair dismissal legislation is now part of the industrial landscape—and these very unique and, I am glad to say, rare cases of employers openly defying Parliament.

The last point I would make is that, though we have now disposed of Clause 3 for the purposes of this Committee stage, I would refer the noble Lord back to the fact that Clause 3 affects not only closed shop unfair dismissals but unfair dismissals of people who are union members or who want to become union members. Therefore, the rogue employer, or the employer who is seeking to deter people from becoming union members, is actually covered by the Bill as well. With that reassurance of evenhandedness, and with that reiteration of the extreme circumstances with which we found ourselves having to deal, I hope the noble Lord will have the good sense not to press this amendment.

Baroness Seear; I think the noble Earl will not be surprised if I say that I find his reason for not including the other statutory obligations, the obligations in relation to race and sex, on the same terms as those for closed shop dismissals, very unconvincing. If the argument is that when the Bill is passed there is a special statutory obligation in relation to the closed shop, there is already a statutory obligation in connection with both race and sex. If the noble Earl were prepared to say that wherever there is a special statutory obligation the higher rate should apply, I for my part would be a great deal happier with this Bill.

Lord Renton

I venture to suggest that both the noble Baroness and the noble Lord, Lord Wedderburn, have overlooked one very important fundamental matter, which is that the ordinary case of unfair dismissal is that of a dispute merely between the employer and the employee. But here the Government are attempting to deal with the special situation where a third party, that is to say, a trade union, is involved. For reasons which have already been deployed, it has been found necessary to strengthen the law in those cases where there is the third party. For that simple reason of, to my mind, principle, I feel that the Government are right in this matter.

Lord Harris of Greenwich

; The noble Earl, Lord Gowrie, will remember that he and I participated in a debate on precisely this issue some time ago when he was Minister of State at the Department of Employment, when I raised the question of the dismissal of Miss Joanna Harris by the local authority in Sandwell, and subsequently in the course of that debate referred to the wholly outrageous behaviour of the Walsall Labour-controlled local authority which was persecuting part-time dinner ladies who were earning £9 and £10 a week. I find what the Government are doing here right. I think it would have been wholly wrong for the Government to ignore the deliberate defiance of the law by two local authorities who knew precisely their legal obligations and decided, quite coldly and deliberately, to defy and ignore those obligations. It seems to me that Parliament has an absolute obligation to defend the interests of people who were treated in this shameful fashion. I very much agree, therefore, with the general thrust of the Government's argument.

Earl De La Warr

I would like to add one point. I think we sometimes mislead ourselves by counting up the number of people who have been dismissed. That is only half of it, is it not? There are also the countless number of people who live in fear of dismissal lest they do something which offends what one must in many cases describe as their lawful masters. So it is not a quantifiable thing by any manner of means.

Lord Oram

I was a little puzzled by what the noble Earl said when he was dealing with the question of why we are now dealing with unfair dismissal in respect of union membership, but not in respect of sex discrimination and race discrimination. He said, if I recall his words correctly, that it is not possible to deal with everything at once.

The Earl of Gowrie

I am most grateful to the noble Lord for allowing me to intervene. The point I was making is that dismissal under racial or sexual grounds is already covered by unfair dismissal procedures. The point we are making is: why should the new maximum level of deterrent only apply in the case of closed shop unfair dismissals? It was the special cases which the noble Lord, Lord Harris, has just outlined; the need for the Government to make a response to a deliberate act of defiance in the case of employees whose rights had been sought to be protected by the 1980 Act, and the special difficulties of re-employment should one's membershop card be withdrawn. Those were the reasons I was giving for this differential in the levels of compensation. It does not mean that unfair dismissal oil grounds of sex or race does not still obtain; and should there be evidence of employers defying legislation in respect of race or sex, I would, of course, be wholly prepared to look at this issue, but I have no such evidence and I am responding to a particular set of circumstances in the industrial economy.

4.9 p.m.

Lord Wedderburn

I feel that many of your Lordships will feel rather disturbed by the Government's response. May I take a small point to begin with. The noble Earl tried to deal with my illustration of the difficulty of trade union members proving that their activity or membership of the union was the cause of their dismissal by reference to the Beyer case, by pointing out the words of the section, including the words "to be or to become" a member of the union; and in that of course he is absolutely right. But I point out to him that it did absolutely no good for the plaintiff in that case, nor indeed in many other cases like it. The second and more grave area is that the Minister is pursuing the point that non-unionists are in a special position in that they cannot get work again because they are discriminated against in a special way as against and above all others. I say in general terms that there are many, many workers who are dismissed unfairly who are in an equal position in terms of finding other employment. Especially today it ill lies in the mouth of this Government to take up that particular point.

However, there is a matter that is even more important than that. Before I make the point I wish to say that I for one was very sad to see that the noble Earl left or was moved from his place in the Department of Employment where he had a special interest and some of us thought a very effective interest in matters relating to racial problems in employment and problems of sexual discrimination. Indeed, I pondered as he spoke whether the Bill would be in quite this form if he had been there to fight an earlier corner.

Although I do not attribute it to the noble Earl, I do say that this Bill as it stands says that the dismissal of a non-unionist is worth £10,000 more than the dismissal of someone by racial or sexual discrimination. That is what the Bill says and there is no way round it. All that the Government can do to justify that is constantly to pray in aid the Sandwell and Walsall dinner ladies.

However, the noble Earl will forgive me if I repeat what I said on Second Reading. The Walsall dinner ladies may well have been very unfairly treated and no doubt compensation should be paid to them. But in looking at that one should look at the compensation paid for unfair dismissal generally—that is what we say—and see what types of case should be looked at. To place, on the basis of three or four isolated cases, this £10,000 difference—or £12,000 difference if we take it with the basic minimum—really will not do. I am not surprised that the noble Baroness, Lady Seear, was extremely disturbed by this, although I must admit that I was extraordinarily surprised, perhaps I should not have been, that the Social Democratic Party, through the noble Lord, Lord Harris of Greenwich, appeared to think that the Government were absolutely right in the position that they had taken up.

The noble Earl, Lord De La Warr, said that the number of people dismissed should not simply be counted but must be weighed. I appreciate that point. But let us think about that for a moment. In weighing the position of a young black worker who is dismissed on racial grounds in certain areas of the country, one could hardly say automatically and obviously that he is worth £10,000 less than a non-unionist, of whom so few can be produced anyway, but whose case, let us assume, is as unjust as one can imagine.

Finally, there was another very disturbing point in the noble Earl's reply. Defiance of the law is a matter that we might debate. There are ways of defying the law and if the law is defied there is a ground for putting an extra penalty. Of course, if the Government come forward and say, "Those who defy the unfair dismissal law deliberately must pay another £5,000, and that is a bonus to the claimant", then that would be a matter that we could debate. However, that is not what the clause says: You have to pay it to non-unionists whether you defy the law or not. The noble Earl said—and I hope I do not misquote him—that it is politically motivated defiance of the law. I find that extremely disturbing. It is a matter that we should look at in the context of the clause as a whole and not in the context of this amendment. I wish to think about the matter until we come to the clause as a whole.

But the main point here is of course the inability of the Government as a whole to understand that the words on the paper, by making the amendments they make, downgrade as a matter of fact, in terms of cash. There is £10,000 difference if you are black compared to if you are a black non-unionist and are lucky. If that is meant to get the confidence of the racial ethnic minorities of this country, I fail to see where the Government think they are going with their policy.

4.15 p.m.

The Earl of Gowrie

I should like to take up that last argument because the noble Lord is a very experienced and persuasive advocate and I know that he would not wish to mislead the Committee. I think that the noble Lord was kind enough to throw me a bouquet. I am perhaps a little suspicious of Greeks throwing me bouquets but he was kind enough—and I accept it in good part—to throw me a bouquet for my time at the Department of Employment. I must also refer the Committee to the work of the noble Lord who has played an important and distinguished part in the formulation of the previous Government's labour legislation. It is really disingenuous of the noble Lord to pretend that those people who were dismissed because of union membership or because of union activity, were not given a special position and a special privilege under the 1974 and 1978 Acts. I have a note about the many instances of this kind of privilege. It is not a question of racial or sexual discrimination being in any degree better—in many ways I think that it is worse. What we are trying to do is to approach a position where a feature of the industrial history and industrial landscape of this country—which we regret but which we recognise has gone very deep into the texture of our industrial life—can create unique and extraordinary abuses for individuals who are caught up in it. The whole thrust of our legislation is to try to protect individuals who are unfairly treated as a result of a practice which is very difficult to defend in principle but which men of goodwill and men of reasonability have to recognise exists as part of our industrial landscape and where, I should have thought, we could gain support from the supposed party of the underdog opposite, in trying to help us ensure protections.

It does not mean that protections for other kinds of abuse do not exist or should not exist or are not important; they are. But the noble Lord has got to show us the kind of wilful abuse in the race or sex fields that we have seen in the closed shop field, in order for the same kind of deterrence to be necessary. There is no evidence whatever of such abuse, and all credit to, I think it was, originally a Labour Government and it was reinforced by Conservative Governments, who brought in the necessary legislation to protect people in the race and sex fields. I am very much in favour of such legislation and all credit to those who brought it on to the statute book. But it really is a red herring, or certainly a pale pink herring on the part of the noble Lord, Lord Wedderburn, to try and confuse this closed shop issue with the race or sex issue.

Lord Wedderburn of Charlton

The noble Earl, Lord Gowrie, is much too experienced a Minister to know that if he distrusts my gifts or bouquets then I do not take easily to his pink herring. What he says is true. I hope that I did not mislead the Committee and if I did so I apologise. I shall put the following point in two or three sentences because what the noble Earl is now saying leads my noble friends and Ito even greater concern.

Briefly, it is true that the previous Administration provided for what was called additional awards of compensation of a fairly modest amount—52 weeks' pay being the absolute maximum—in, broadly, three cases: trade union membership and activity, sex discrimination and race discrimination. Look at it as simply as you may, what the Government are doing is bringing in a fourth category: dismissal for non-unionism, which as the Minister rightly says, is not just confined to the closed shop. The noble Earl's intervention just now was rather a Second Reading intervention on the closed shop which I would like to debate with him on another occasion. Of course it is not just in the closed shop. So there are four categories sex, race, trade union membership and activity and non-unionism. Then you say that the last two will be worth £12,000 more, without any proof of anything else. Of course there is the reduction in the individual case and we are coming to that and I am trying to stay clear of that ground for the moment. But if the noble Earl tempts me on this amendment, then I will deal with it. However, we shall be dealing with it later in the clause. I do not understand how the Government can say that they are doing anything other than saying to the community that the deterrent required, which will be an effective deterrent for a non-unionist and trade union dismissal, is £12,000 more than for race and sex discrimination. I do not agree with the noble Earl that there is little evidence of racial discrimination in employment practices, and if we both looked at the reports of recent years we would see that there is certainly some evidence of that.

The Earl of Gowrie

I did not say that; I said evidence of unfair dismissals. I very much regret that some discrimination still exists, and I hope that it is rapidly disappearing. However, my point was about unfair dismissals.

Lord Wedderburn of Charlton

The noble Earl will know very well that one of the matters that most disturbs some workers in ethnic groups is the question of constructive dismissal, where the worker is treated so badly at work that he feels he has to leave, and whether he can prove a constructive dismissal in those circumstances. That may sound rather an arcane and mystifying point, but I am sure that the noble Earl knows very well what I mean. If one takes account of that, there is a very worrying area of unfair possible dismissal.

Given that, and given the fact that we all know perfectly well that women workers are treated rather badly at work and dismissed from time to time—there are figures to show that—and as there are no figures at all on this case (except two: the five Walsall workers; the Government cannot include the railwaymen because that was in 1976), the Government are matching up such evidence as there is of racial discrimination and sex discrimination to the case of a handful of workers, and saying that this must be dealt with by £12,000 more. I do not think that that is satisfactory. I think that the debate has shown that it is not satisfying. My noble friends and I will press this amendment.

Lord Harris of Greenwich

Before the noble Lord sits down, perhaps I could make a few remarks in view of his brief but gracious remarks addressed to me at an earlier stage. Of course one objects deeply to racial discrimination in employment and to sexual discrimination in employment. Both are offensive. Of course, discrimination exists in both respects; the noble Baroness, Lady Seear, is entirely right. It may be that at some stage it will be right to look at the levels of compensation. But the question that we are looking at here is a different matter altogether. The issue that we are looking at is a deliberate defiance of the law by public authorities.

I am not impressed by the argument put forward by the noble Lord, Lord Wedderburn, that there have been only a handful of such cases. The fact that two large local authorities publicly indicated that they had no intention whatever of abiding by the law of this country seems to me to be a serious matter, and it is one to which Parliament should direct its attention. That is what we are being invited to do as regards this particular matter, and, with great respect to the noble Lord, Lord Wedderburn—and I say this as a former Minister responsible for putting both the sex and the racial discrimination Bills through this House—it does not lie in his mouth to imply, delicately, that those of us who take the view that we do, do not have as strong feelings in these particular areas as he does.

Lord Wedderburn of Charlton

I did not wish to imply anything. I would say two things to the noble Lord, Lord Harris of Greenwich. When he says that the question is different from the one to which I addressed myself—namely, that the question is of public authorities who dismiss workers—I say that that is not so. The noble Lord must allow my noble friends and me to pick our own amendments and draft them for ourselves. If we wanted to put down an amendment about dismissals by public authorities we would have tabled one, and we have not done so. I quite understand that the noble Lord, Lord Harris, would wish to vote for that. On the other hand, he is being asked whether he will or whether he will not vote for an amendment which would end the distinction of £12,000 between race and sex discrimination in dismissal and unionism and non-unionism dismissals. That is what he has to decide. No doubt his name will appear somewhere in the list. I beg to move.

4.25 p.m.

On Question, Whether the said amendment (No. 50) shall be agreed to?

Their Lordships divided: Contents, 42; Not-Contents, 97.

DIVISION NO. 3
CONTENTS
Airedale, L.	Kennet, L.
Allen of Fallowfield, L.	Kilmarnock, L.—[Teller.]
Ardwick, L.	Leatherland, L.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Balogh, L.
Banks, L.	Longford, E.
Bernstein, L.	Lovell-Davis, L.
Birk, B.	McCarthy, L.
Bishopston, L.	Mishcon, L.
Blyton, L.	Molloy, L.
Boston of Faversham, L.	Northfield, L.
Briginshaw, L.	Oram, L.
Brockway, L.	Peart, L.
Brooks of Tremorfa, L.	Phillips, B.
Bruce of Donington, L.	Ponsonby of Shulbrede, L.
Burton of Coventry, B.	Rathcreedan, L.
Byers, L.	Rochester, L.
Chitnis, L.	Ross of Marnock, L.
Collison, L.	Seear, B.
David, B.	Sefton of Garston, L.
Davies of Penrhys, L.	Segal, L.
Elwyn-Jones, L.	Shackleton, L.
Fisher of Rednal, B.	Stewart of Alvechurch, B.
Gaitskell, B.	Stewart of Fulham, L.
Harris of Greenwich, L.	Strabolgi, L.
Hatch of Lusby, L.	Tanlaw, L.
Irving of Dartford, L.	Taylor of Gryfe, L.
Jeger, B.	Taylor of Mansfield, L.
Jenkins of Putney, L.	Tordoff, L.
John-Mackie, L.	Underhill, L.

Wedderburn of Charlton, L.	Wilson of Langside, L.
Wells-Pestell, L.	Winterbottom, L.
White, B.	Wootton of Abinger, B.
Wigoder, L.—[Teller.]

NOT-CONTENTS
Abercorn, D.	Lane-Fox, B.
Ailesbury, M.	Lauderdale, E.
Airey of Abingdon, B.	Long, V.
Alexander of Tunis, E.	Lyell, L.
Ampthill, L.	McAlpine of Moffat, L.
Annan, L.	Mackay of Clashfern, L.
Auckland, L.	Macleod of Borve, B.
Avon, E.	Marley, L.
Belhaven and Stenton, L.	Marsh, L.
Bellwin, L.	Merrivale, L.
Beloff, L.	Mersey, V.
Belstead, L.	Monk Bretton, L.
Bessborough, E.	Montgomery of Alamein, V.
Boardman, L.
Boyd-Carpenter, L.	Morris, L.
Campbell of Alloway, L.	Mottistone, L.
Chelwood, L.	Mowbray and Stourton, L.
Clifford of Chudleigh, L.	Norfolk, D.
Constantine of Stanmore, L.	Northchurch, B.
Craigavon, V.	Nugent of Guildford, L.
Cullen of Ashbourne, L.	Orkney, E.
Daventry, V.	Orr-Ewing, L.
Davidson, V.	Pender, L.
De Freyne, L.	Plummer of St. Marylebone, L.
De La Warr, E.
Denham, L.—[Teller.]	Renton, L.
Dilhorne, V.	St. Davids, V.
Drumalbyn, L.	St. John of Bletso, L.
Eccles, V.	Saltoun, Ly.
Ellenborough, L.	Sandford, L.
Elliot of Harwood, B.	Sandys, L.—[Teller.]
Ferrers, E.	Sharples, B.
Forester, L.	Skelmersdale, L.
Fraser of Kilmorack, L.	Spens, L.
Gainford, L.	Stamp, L.
Glanusk, L.	Strathspey, L.
Glenarthur, L.	Sudeley, L.
Gowrie, E.	Swinfen, L.
Gridley, L.	Thomas of Swynnerton, L.
Grimston of Westbury, L.	Trefgarne, L.
Hailsham of Saint Marylebone, L.	Trenchard, V.
	Trumpington, B.
Harris of High Cross, L.	Vaizey, L.
Harvington, L.	Vaux of Harrowden, L.
Henley, L.	Vivian, L.
Home of the Hirsel, L.	Wakefield of Kendal, L.
Hornsby-Smith, B.	Ward of Witley, V.
Hylton-Foster, B.	Windlesham, L.
Killearn, L.	Young, B.
Kinnaird, L.

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

Resolved in the negative and amendment disagreed to accordingly.

[Amendments Nos. 51 and 52 not moved.]

4.32 p.m.

Lord Wedderburn of Charlton moved Amendment No. 53: Page 6, line 40, after ("make") insert (", and the tribunal made,").

The noble Lord said: With your Lordships leave, I shall move Amendment No. 53 and speak to Amendment No. 54, since there is a sense in which they involve the same central area of discussion and it may make for progress if I do that. Under the 1978 legislation which this Bill seeks to amend, the additional award of a modest kind of which I spoke in the last debate, required that the order for reinstatement be made and flouted. In this Bill the only threshold, as it were, which triggers the special award of much greater size is that the claimant should request the tribunal to order reinstatement and then they can make an award of special compensation of this £10,000, £2,000 basic on top.

The request must, on the Government's own logic, be a charade because it is the Government's position that workers of this kind are in an intolerable position. They must not be dismissed but on the other hand the intimidation factor of which the noble Lord, Lord Mottistone, spoke last week in Committee is so great, it is said—and frequently said—that such workers find it an intolerable position. Unless the request for reinstatement is to be no more than an indication to the tribunal that special award is required—in which case it would be perhaps more straightforward to make it a request for special award on the grounds stated in Section 58—then it really seems inconsistent of the Bill to make the request for reinstatement into the threshold in such a case.

Indeed, one wonders why it would not be better for the Bill, as Amendment No. 53 suggests, to allow special award after an order for reinstatement has been either made, as the amendment suggests, or at any rate recommended at some lower level of a prima facie case. The Government might perhaps consider as an alternative to our amendment that a prima facie case of justifiability for reinstatement has been made.

Amendment No. 54 suggests another way in which it could be done. Should it not be a requirement that the employer should express his willingness to comply with an order of reinstatement, or re-engagement, under Section 69 of the 1978 Act if it is made? Amendment No. 54 deals with a practical point which shows the unreal nature of the mere request for an order of reinstatement. Suppose an employer has dismissed a man for many reasons. To fall within the provisions of Section 58, the reason for the dismissal—that is, non-unionism, or trade unionism—will have to be a principal reason. But suppose the employers had long experience of a man who has not been pulling his weight. The workers on the shop floor are fed up with him; so is the foreman; so is the works manager. He gets suspended, as tends to happen in such a case, and ultimately he is dismissed.

A lot of reasons have gone into that and the tribunal finds that the primary, or principal, reason, perhaps to the surprise of the employer—that happens, too—is that he is dismissed for non-unionism. The man then claims, or requests, reinstatement, and the employer says, "It really just is not possible to do it". In that case it seems sensible that either the position of the employer, as Amendment No. 54 suggests, or the view of the tribunal, as Amendment No. 53 suggests, should be interposed between the mere request and the right to the special award on the basis of the minimal evidence of the principal reason. The linkage between request for reinstatement and the bare evidence of principal reason does not seem strong enough.

It may be that the noble Earl takes the view that there is another way, a different way, of making the link between the two which would make sense of the Bill. It could be, for example, that in such a case the special award should come into a rather more graduated form of compensation. That goes back to the argument that my noble friend put to the noble Earl earlier that various types of unfair dismissal should be looked at in relation to the unfairness to the particular worker and not so much in categories. But I say to the Government that this is not something which is just a drafting point, a lawyer's point, it is a severely practical point. For example, the Institute of Personnel Management has expressed great concern over the unscrupulous individual who exists in almost every large organisation and who would be attracted by the money. That is the money of the special award. It seems sensible for the Government to look again at the last part of Clause 4(2) in the spirit at least of the two amendments. I beg to move.

The Earl of Gowrie

The Committee may find it helpful if I first explain why the Government have introduced the special award in the form that they have. Currently, in a case where an employee who has been unfairly dismissed asks a tribunal to order his reinstatement or re-engagement but the tribunal declines to do so, his compensation for unfair dismissal will consist only of a basic award and a compensatory award. In practice, that usually amounts in total to a relatively low sum. In 1980, it was in terms of a median of under £600. The compensation in such a case is exactly the same as the employee would have obtained had he not sought reinstatement or re-engatement.

The additional award payable when an order for reinstatement or re-engagement is not complied with can be a larger amount (26 to 52 weeks' pay in the case of dismissals relating to trade union membership and activities or non-membership); but as orders for reinstatement or re-engagement are rarely made—the Walsall case was an exception—the existing ad-existing additional award is rarely payable, and in 1980—to use that year again; it is the latest one for which I have information—reinstatement or re-engagement was ordered in only 3 per cent. of cases where dismissal was found unfair.

Our introduction of the special award in cases relating to union membership or activities or non-memberhsip in Clause 4 means that employers will not in future be able to avoid liability for a large amount of compensation if an order for reinstatement or re-engagement is not made. The special award will be payable in these cases where the employee requests reinstatement or re-engagement but where this does not occur, whether or not a tribunal finds it practicable to make such an order. All employers will therefore think long and hard about carrying out such unfair dismissals in the future, and in the Government's view very few such dismissals will ever take place should the Bill become law.

If an employer nevertheless unfairly dismisses employees for non-membership and a tribunal, as in the Walsall case, weighs all the pros and cons of reinstatement and then makes a reinstatement order, there will also be a considerable greater incentive to comply with the order. This is because non-compliance will result in a minimum special award of £15,000 being made. Thus, Walsall Council, instead of being faced with a "trivial" bill for the dismissals of all four dinner ladies of just under £10,000, would have faced a bill of just over £70,000 if the Bill's provisions had been in effect. That might make even a council like Walsall, as it then was, think twice before it defied an industrial tribunal order. I am glad to be able to say as the council "then was" because Labour lost control of Walsall at the recent local elections and the council is now controlled by what is described as an "anti-Socialist coalition".

That, in short, is why the special award is constructed in the way it is, and this goes back to our previous debate. We have sought to have draconian levels of deterrence for a public authority which abused its position in that way. The amendment would restore the position broadly to what it is at present; that is, a special award would be payable only where a reinstatement or re-engagement order was not complied with. Employers would not in practice, therefore, be deterred from carrying out unfair dismissals in these cases because they would know that the chances of their having to pay a special award would be minimal since, as said, reinstatement or re-engagement is very rarely ordered. The amendment undermines the principle of the caluse and I therefore ask the Committee to reject Amendment No. 53.

Amendment No. 54 is, if anything, even more unacceptable to us. It would make the special award dependent not only on the tribunal making a reinstatement or re-engagement order, but on the employer agreeing to comply with it. A moment's thought will show the absurdity of that proposition. To avoid liability for a special award, an employer would simply have to say that he was not willing to comply with a reinstatement or re-engagement order. Such a provision would drive a coach and horses through this clause and I ask noble Lords to reject it.

The last anxiety outlined by the noble Lord, Lord Wedderburn, I think referred to the avaricious or rogue employee who might request a reinstatement or re-engagement order in order to receive compensation. There would be nothing to enable such an avaricious employee to get compensation so long as the employer did not sack him, and therefore I do not think the noble Lord's point is well-founded.

Lord Wedderburn of Charlton

The noble Earl made a number of points, and I shall refer to only a few of them. He said reinstatement was ordered in only a very small percentage of cases, and that is so; it seems still to be running at about 3 per cent. Why not go to the root of the trouble and make reinstatement an effective remedy? Reinstatement and re-employment at the moment are generally called among those who look at the situation, in the words of a recent article, "the lost remedy". It can be done because in Italy, under the Workers' Statute 1970, reinstatement is effective for unfair dismissal.

The Minister then said that the new draconian remedies would make all employers think long and hard about such dismissals, although he later picked out public authorities, a point to which we shall have to return on later amendments. He said there would be an incentive to comply with the law. If that is thought to be the case, and it may be true, then it reflects on our whole debate so far—that is, if the Government are serious about unfair dismissal—because if the result is that you do not dismiss because you will have to pay us a possible £12,000, then let us all have £12,000 and none of us will be dismissed unfairly. The noble Earl cannot have it both ways. If it will be an effective deterrent and will stop the dismissals, and if you can show that to be the case, then the deterrent will be so big as to be that effective that nobody would be happier than I to see such a law, one which nobody would ever have to use.

So far as unscrupulous individuals are concerned, in the words of the Institute of Personnel Management, or the similar people discussed with the Government by the CBI and the Engineering Employers' Federation (referred to often as "the bounty hunter" in Committee in another place) or, to use the phrase of the British Council of Shipping—a phrase I should never have thought of—"the rapacious seafarer", as they wrote to the Government, who might take undue advantage, the point is that with these sums of money around—not for everyone, but for those in a special category—why should the Government be surprised at the argument that some people may try improperly to get themselves into that category, when that is likely to be the case?

The tribunals will try to stop that happening, as will the defendants and their lawyers—and the Bill will result in even greater formality and legalism in the industrial tribunals. So everyone will try to stop it happening except the claimant, and occasionally he may get away with it. The question is whether the deterrent is likely to be such as to balance against that the sort of problems for the tribunals and everything that goes with the procedure. This is an important and difficult matter. The linkage point, made primarily by Amendment No. 53, is an issue to which we shall return on Report, or perhaps the Government will think about it in the interim. We still think that the mere request makes it too easy for someone to get the tribunal into that area where you have to argue a great deal in regard to a much higher sum, so there should be a different kind of threshold. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 54 not moved.]

4.48 p.m.

Lord Aylestone moved Amendment No. 55: Page 7, line 5, leave out ("104") and insert ("52").

The noble Lord said: I will, with permission, speak at the same time to Amendments Nos. 56, 57, 58, 59 and 60. We are, as will be appreciated, in favour of the new special award in this provision, although our view about it changes when we begin to look at the scale of compensation payable. In this case, where an employee has been unfairly dismissed, he has the right to go to a tribunal and ask for reinstatement. If he succeeds, his employer has the right to reinstate him, if he so wishes, but in fact, and in most cases, will be unable to do so because it would completely upset the arrangements between both parties to the management agreement, being the trades unions and the closed shop. In the event of his failing at the tribunal to get an order for reinstatement, under the provision he still is entitled to compensation—and we agree with that. Where we disagree, as I have said, is in regard to the scale of the compensation.

In the first case—that is, where an employee who has been wrongly dismissed has applied to the tribunal and his application has been rejected by it—the proposal under the Bill is that he should be compensated with two years' pay, or £10,000, whichever is the greater, with the maximum not to exceed £20,000. If your Lordships look at our six amendments together, you will note that what is proposed is that the compensation should be reduced to one year's pay—not two years' pay—and that £5,000 shall be paid, if it is the greater figure, and if it is not, one year's pay shall be paid, neither to exceed a total of £10,000.

In the second case—that is, where the complainant has been successful before the tribunal and is not reinstated—in our view he should be compensated and to a greater extent, though not to the extent that the Bill would compensate him. We feel that in his case, instead of being compensated with three years' pay, he should be compensated with one and a half years' pay (that is 18 months' pay), that the figure of £15,000 should be reduced to £7,500—that is to say, £7,500 or 18 months' pay, whichever is the greater—and neither should exceed a total in this case of £20,000.

So we are proposing that all the figures be cut exactly in half. There are numerous reasons for suggesting that. One reason is that we regard the scale of compensation as too high. Secondly, should a small company be faced with two or three cases at the same time involving this kind of compensation, it could be so unbearable as to lead to bankruptcy. I can see the argument as to what effect even our figures could have in some cases, but that would not be to the same extent as would arise from the figures now proposed in the Bill.

Another point relates to the joinder provisions, which come later in the Bill. The joinder arrangements might involve an employer or an individual, and there could be a heavy burden for some small unions. The larger unions could probably bear it. So, in brief, without delaying the Committee any further, I would say that what we wish to do is to reduce all the proposed awards in this clause of the Bill by 50 per cent. If the Government are prepared to say that they will meet us in terms of 55 or 60 per cent. we would not wish to press the matter to a Division. I beg to move.

The Earl of Gowrie

Notwithstanding the succinct and modest way in which the amendment was moved by the noble Lord, Lord Aylestone, I find it a very extraordinary one. Those of us interested in political life at the moment are of course all SDP-watchers to some extent. We are trying to tease out policy from the noble Lords on the SDP Benches. The amendment moved by the noble Lord, and the way in which he moved it, seemed to me to be wholly at variance with the quite trenchant support given to the Government on a previous amendment by the noble Lord, Lord Harris of Greenwich.

I have already argued that in the light of continuing public concern over the operation of the closed shop, and its abuses—and we share this view with the Social Democrats—higher compensation is obviously necessary. Therefore, it seems to me to be very curious that the noble Lord is trying to diffuse it and reduce it by half. I do not think that the idea of coming to the rescue of the small business man in this respect holds up, because all that the small business employer has to do is not unfairly to dismiss his employee—and that should not be too difficult to avoid.

I recognise that the amendments go a certain way with the Government, in that they do not remove the special awards in closed shop dismissal cases; nevertheless they reduce their value by half. Of course, we could argue about what should be the exact size of the special awards. I must point out that the Government had fairly extensive consultations on this matter before we published the Bill, and as my right honourable friend the Secretary of State pointed out in a debate on similar amendments during the Committee stage in another place, the higher the amount of the special award, the greater its deterrent value and the greater the incentive to reinstate. We are at one with the Social Democratic Party, and at one, I understand, with the Liberal Party, in believing that there should be deterrence, but equally in believing that there should be incentives to reinstate.

I want to repeat something that I said to the noble Lord, Lord Wedderburn of Charlton, on a previous amendment. The higher compensation is also available for unfair dismissal for trade union membership and activities because the Government believe that dismissal for non-membership of a union is equally wrong. The right to join a union must be protected, just as must be the right not to join. Throughout the Bill there is an evenhanded approach. The enhanced compensation in Clause 3 and the present Clause 4 applies equally to people who are unfairly sacked for being union members and to people who are unfairly sacked for not being union members.

Since the noble Lords—how can I put it?—not immediately opposite, but behind the noble Lords immediately opposite, of the new party, have agreed with us on the principles of deterrence and of incentives for reinstatement, it seems to me most extraordinary that they are seeking to undermine their own good sense by this amendment. I can only conclude that the Social Democratic Party has not yet dotted every "i" and crossed every "t" of its industrial relations policy, and no doubt when it has done so it will return to the debate.

4.59 p.m.

Lord Kilmarnock

I should like to take up the noble Earl's point about the earlier intervention of my noble friend Lord Harris of Greenwich. I do not think that there is here any inconsistency at all. I came to your Lordships Chamber this afternoon thinking that there might be something in the comparative levels of award proposed under the Bill and those awards usually made in regard to racial or sexual discrimination. I had that in my mind. However, during the course of the debate I was convinced by both the noble Earl opposite and by my noble friend Lord Harris that these issues were not strictly related; and in that debate the noble Earl and my noble friend Lord Harris carried me against the arguments advanced by the noble Lord, Lord Wedderburn of Charlton.

Therefore, I think it worth stating for the record that the reasons why my noble friend Lord Aylestone has moved the amendment are strictly those that he has given. There is no inconsistency at all here. My noble friend talked about the possible plight of the small business man and the possible implications for the small union in regard to the awards of damages, which we shall come to later in the Bill. Those are the reasons why we on this Bench set down this series of amendments, and I do not think that the noble Earl can succeed in striving to drive a wedge between ourselves and our noble friends on that count.

Lord Campbell of Alloway

I hope that the noble Lord, Lord Aylestone, will forgive me for not having been present as soon as he opened the debate on the amendment. I should like to say, very briefly, that the award proposed in the Bill reflects a very special situation, in which a man may lose his livelihood in a closed shop situation—and in these days of unemployment it may take a considerable time before he finds a suitable livelihood again. There are also problems with the union which, although it is not strictly within a disciplinary procedure, may nonetheless persist and affect the man's right. At the Bar, I know of several cases during the last five years in which a man who has been dismissed in a closed shop situation has not been able to find employment for years and years. Therefore, this is a rather special situation. I would for these reasons support the Front Bench in resisting this amendment, and I hope I have given a reasoned objection in support of doing so.

Lord Oram

if I venture to speak briefly in favour of these amendments, I hope the noble Earl, Lord Gowrie (diligent SDP-watcher and Alliance-watcher that he is) will not suspect that here is the appearance of an extension of the Alliance. I speak merely to the merits of the amendment on the Marshalled List, as is my habit, and I will leave the finesse of political bargaining to the noble Earl.

I thought it appropriate earlier in our proceedings not to move Amendment No. 51 but, instead, to support this current series of amendments, so as to avoid two debates on amendments which have a certain amount in common. What the noble Lord, Lord Aylestone, and I have in common is our dislike of the over-generous terms of compensation which a man, unfairly dismissed because of his refusal to join a union, can claim. It is a matter of judgment, of course, as to where the line should be drawn; the intermediate point between what the Government propose in the Bill and the total elimination of the special award.

The noble Lord, Lord Aylestone, says he is in favour of the special award in principle. I am not. Therefore, in coming together as we do on this particular series of amendments, we seem to be literally meeting one another half way in that respect. I merely wish to give one illustration of how, as I see it, this proposed compensation is excessive; and I wish to make the point that such excessive compensation makes an employer vulnerable to dishonest practices by dishonest employees.

The example that I will briefly give is hypothetical, but I believe it to be realistic—and my noble friend Lord Jacques and I have had it checked by an expert in these matters. I would take a man of 45 years of age with 10 years' service in his job, earning, shall we say, the average wage of £120 a week in a job where he is not getting on very well with his workmates. He is perhaps unhappy in his work, not through any fault of his employer but because of his personality and the way in which he fails to get on with his work- mates. Suppose, then, that the business in which he is employed is declining, and he thinks, perhaps with justification, that redundancies are in the offing and that he may well be one who is vulnerable in that respect. That is not, I suggest, a very unrealistic scenario.

If such a man waits for redundancy in the ordinary way, he will get £1,440; but if he engineers his dismissal by giving up membership of his trade union he can get considerably more, even under the present law, in respect of the basic and the compensatory awards. The figures that I have total £5,000 if reinstatement is applied for and not ordered. Under the Bill, he has only to say that he wants reinstatement and he can qualify for as much as £17,500 if reinstatement is not ordered; and, of course, the figures are still higher if reinstatement is ordered and defied by the employer.

My main point in this. What a temptation those figures represent for a man to aviod normal redundancy and to seek, by spurious but perhaps not easily detectable means, to arrange to be dismissed on grounds of non-unionism! That I believe to be a real danger, and it is because these amendments moved by Lord Aylestone go a considerable way towards mitigating this danger which I have tried to describe that I am speaking in suport of them.

The Earl of Gowrie

While it is fresh in the Committee's mind, I wonder whether I could answer the points made by the noble Lord, Lord Oram. I have already tried to show that it is simply not really necessary for employers to dismiss people unfairly. If employers can show that pressure has been put on them—disruption of their business, its continued decline or whatever—to dismiss a man, the tribunal would of course take that into account and that might not be considered to be unfair dismissal. Or there are the joinder provisions, to join the union and for pressurising the employer. We are talking a little as if these large sums of money could gratuitously be imposed on small businesses which could ill-afford them. All the small businesses have to do is to avoid unfair dismissal of the people concerned.

The other point would seem to me to be that the whole habits of mind of industrial relations tribunals would take into account any deliberate disruption by the employee of his or her employers' industrial relations. It is relatively easy to spot a rogue employee. In fact, most of these provisions are designed against the the rogue employer, as I said earlier; and I therefore hope that the noble Lord can be slightly more confident in the existing work of industrial tribunals—which, after all, the Government of which he was a distinguished member did a lot to set up.

Lord McCarthy

The Minister explains himself further and further, and I am bound to say makes his case weaker and weaker. It is perfectly true, as he says, that this is in some ways an extraordinary amendment. But, then, this is an extraordinary Bill. It is somewhat strange to see these figures coming out of the air—and, of course, they do come out of the air, and the noble Lord, Lord Aylestone, cannot really suggest that they do not come out of the air. But, then, the figures in the Bill come out of the air. These figures are arbitrary, but they are no more arbitrary than the figures in the Bill. In the phrase that I think the noble Baroness, Lady Seear, used the other day, this is a small baby, but at least it is a small mercy. This amendment slightly cuts the compensation, and for that reason it is welcome. At least, it is welcome to us, even if we do not necessarily agree with and follow the arguments which are being put forward in respect of it.

But when the noble Earl seeks to argue that there is no problem with this because you do not have to dismiss people and, therefore, small employers cannot go bankrupt because they do not have to dismiss people, he must face the fact that there are, in effect, four choices open to an employer as a result of this Bill. There would still be the same set of choices open to an employer as a result of these amendments, but at least the consequences would be less. Faced with one of the bounty hunters, he can dismiss him and pay the costs. That could be as much as £31,000 or, under the amendment, half that sum—and that could be serious for the small employer. Or he could decide to join the union in the action and perhaps halve the loss or more than halve the loss, but at the consequence, very likely, of deteriorating industrial relations and worse relations with his union than he has had in the past. Not a nice choice for the small employer. Or he could refuse to do anything: not dismiss—in which case he might get strike action, disruption of services against him as the workers in the firm are not prepared to put up with the fact that this man has dropped out of the union. Each one of these three options is not nice for the employer.

But the noble Earl says that he could fail to dismiss the man and nothing could happen, and that if only the employer would stand up to it, then nothing untoward would occur at all. This is not the way we see it, because in that eventuality—and I am bound to say that probably is the most common eventuality at this stage of the economic situation—the union membership agreement will be a dead letter, a dead loss. Once again, we shall see that the Government are legislating to break up union membership agreements.

Lord Rochester

It is significant, I suggest, that two of the most respected organisations in the country dealing with industrial relations, namely, the Institute of Personnel Management and the Industrial Society, both have expressed disquiet about the effects of these high levels of compensation available through the special award. The Institute of Personnel Management feels that they will offer too much scope for exploitation by unscrupulous individuals who may be attracted by the money; the Industrial Society has expressed similar views, and the same point was exposed very clearly in the discussion initiated by the noble Lord, Lord Mottistone, last week when he referred to the special difficulties that could arise within the shipping industry in that connection.

My fear is that in circumstances where so many British companies are having to reduce their work force in order to remain internationally competitive—an objective with which we all agree—individuals whose jobs are at risk may be tempted to engineer their own dismissal in order to gain financial benefits in excess of those to which they would be entitled on grounds of redundancy, and claims may arise which are vexatious. I know it can be claimed (and it just has been claimed) by the noble Earl that amounts can be reduced, for example, if the complainant has contributed by his own behaviour to his dismissal. I acknowledge that, but still feel that the amounts at present set are too high.

Last week, the noble Earl made it plain—and, I think, again it was in discussion of the amendment put forward by the noble Lord, Lord Mottistone, concerning the shipping industry, that the intention of the Government here was not to undermine the closed shop. The noble Earl is, among other things, an honourable man and I can only accept the assurance that he then gave. But for my part I cannot escape the feeling that the effect of these awards, if not their intention, is not so much to give fair recompense to employees who are unfairly dismissed as excessively to penalise employers and trade unions who continue to operate the closed shop.

On these Benches we have made plain on one or two occasions already on discussions on this Bill at this stage that we are in principle opposed to the closed shop: but here we are concerned with the practical effect of the Government's proposals. I am troubled about their consequences for industrial relations and I hope that even now the Government, on those grounds, will be prepared to reconsider this point.

I acknowledge one more point to which the noble Earl has already drawn our attention: the grounds on which acceptance of this amendment are being argued are different, as the noble Lord, Lord Kilmarnock, has already said, from those on which his noble friends argued against an earlier amendment. But the effect, I think it must be conceded, of accepting this amendment would not be markedly different from acceptance of the amendment earlier put forward by the noble Lord, Lord Wedderburn. I noted, however, that the noble Earl made the point that there was room for argument about the extent or the precise amount of these awards—and it is with the principle that I am concerned.

If the noble Earl were to say, for instance, that the amount by which we are here seeking to reduce these sums of compensation is rather too great, and that he would be willing to have another look at it to see if some figure between that now in the Bill and that suggested in the amendment might be more appropriate, then that is one thing. But to argue against the principle that we are here seeking to enunciate would not be acceptable to us. It is for that reason, in principle, that we have put down and wish for our part to pursue—I cannot speak for the noble Lord, Lord Aylestone—this amendment.

5.18 p.m.

The Earl of Gowrie

May I answer the points of the noble Lord, Lord Rochester? As he knows from many occasions, I always like to carry him along with me. Certainly, again—and I do not want to repeat the little tease that I made about the Social Democrats—what he said seemed to be somewhat at variance with some of the positions taken by the I iberal Party in another place on closed shop issues. The very fact that these levels of special awards compensations are being set high seems to me to act as a deterrent not only to the employer not unfairly to dismiss the employee but also for the union as well; because the employer can join the union should the union misbehave, and the high levels of deterrence would surely stop the employer and the union from perhaps colluding against the individual. That seems to me to be a clear issue where the threat of being joined in an action would, in itself, deter the unions from putting pressure on the employer to dismiss the employee.

I go back to the point that we are not trying to load additional costs on to employers. Employers—rather than myself, who was accused of this earlier—must not have it both ways. They have asked for some protection against unfair pressures from trade unions and the Government, but, equally, they must not give way to unfair pressures from unions. Those employers who are showing signs of not so giving way are doing well in this field.

Another point made by the noble Lord, Lord Rochester, was that this is rather high in absolute terms. Whatever the arguments about any given Administration's economic policy, we all know that unemployment is at exceptionally high levels over all the Western world. We are in a different, changed and unpleasant situation where the levels of employment are concerned. That covers countries like France, where President Mitterand is still wrestling with more traditional demands for management manipulation and the rest of it. All of us are suffering from very high levels of unemployment. It seems to me that it is really fearsome to lose a job these days. If you do, you need as much compensation as you can conceivably get particularly if you lose it through no fault of your own but because you have been unfairly dismissed by your employer. Therefore, it seems to me rather strange in the light of that situation for the noble Lord to pursue the line which he has.

The best way of avoiding the special awards, which are designed to deal with the kind of exceptional cases that we have been debating earlier, is to hold a ballot. That is if it results in the closed shop being proved. The greater the compensation levels, the greater the incentive to hold ballots. Surely the Liberals and the Social Democratic Party want ballots. These amendments would reduce very substantially the likelihood of ballots being held. Therefore, I find it a deeply inconsistent point of view and I hope that rather than the Government thinking again, the Alliance will think again.

Lord Harris of Greenwich

May I say a few friendly words to the noble Earl, Lord Gowrie. I do not in any way mind the teasing of the SDP or the Alliance. I am quite sure that the Liberal Party approach it in an equally robust fashion.

However, I found the closing remarks that he made remarkable. We are all looking forward to coming to a discussion on secret ballots at a later stage in the Bill. He will then find our enthusiasm for what we understand to be the policy of the right honourable lady the Prime Minister to be undimmed on these Benches and we are looking forward with a high degree of expectation to finding out whether the Government are prepared to adopt what we now understand to be the Prime Minister's position in ballots or whether they are clinging to the policy—the rather outmoded policy—of the Secretary of State for Employment who has taken a rather more cautious approach to the understanding of these questions.

On the actual substance of what the noble Earl, Lord Gowrie, has said in the past few moments, I put to him that he underestimates the problem facing many businessmen in small companies. There is no doubt so far as we are concerned about the need for the new special award. The only difference between us is on the question of what should be the level of compensation. Of course, the noble Earl is quite right, in a number of cases it is right that there should be a deterrent level so far as compensation is concerned. In my view, speaking as I did on a previous amendment, I certainly think that compensation of around the level set out in Lord Aylestone's amendment is just about right. My noble friend indicated—as did the noble Lord, Lord Rochester—that we are perfectly prepared to listen to any other proposal with which the Government may come forward. If the Government were to indicate that they were prepared to reconsider this matter, speaking for ourselves and our colleagues in the Liberal Party, I am quite sure that we would be more than happy to withdraw this amendment. But the noble Earl cannot, with great respect, underestimate the problem that faces the small businessman. Of course, a small businessman can behave in an arbitrary, intolerant and sometimes capricious manner. No doubt sometimes he could behave unfairly against an individual employee. Certainly, it would be wrong to say that the employee in such a situation should not be adequately safeguarded.

The problem facing many small businessmen—and this, with great respect, the noble Earl did not appear to appreciate—is that he does not have this amount of expert advice available to large-scale employers to avoid getting into exactly the situation which we are now discussing. That is why it seems to me not at all unreasonable for the Government to consider seriously what has been said. After all, most of those who have spoken in this debate, other than those from the Labour Party, have agreed with this special award. What we are concerned about is the level of compensation. It seems to me not unreasonable in the light of what has been said for the noble Earl simply to indicate that he is prepared to look at the matter before Report stage. We are asking for no more than that. I cannot see why he is being so inflexible.

Baroness Seear

Following what the noble Lord, Lord Harris, has said, would the noble Earl look at his approach again? There are a number of issues. There is the question of the deterrent. There has to be a degree of deterrence. We accept that. There is the question of the absolute amount to be paid. This is in relation to the small business, in particular, as the noble Lord, Lord Harris, has said. There is the question of the level in so far as it encourages people to suddenly discover a conscience. I do not suppose that there will be a lot of them but I am sure there will be some. With a large sum of money, if one is Just wavering on the brink, it encourages one to discover suddenly that one has never thought much of being in a trade union.

Then there is the difference, coming back to previous amendments, in the levels that can be obtained for the different reasons for dismissal. Will the noble Earl, when he has his computer to do the sums, see whether there is any way of narrowing this difference by raising at least somewhat what is payable to people who are unfairly dismissed for other reasons? My computer is not working completely fully but it has a fairly useful indication. When the maximum award was first introduced by the Conservative Government in 1971, the figure was £4,160. In the period 1974 to 1978—a period which I just happen to have in my head—prices doubled. That would bring the figure to at least £8,320. The present maximum is £7,000.

Then there are the other years which would bring it up higher still if it was to be in line with what the Conservative Government originally thought to be appropriate. If there could be some raising, it would go quite a way to get rid of some of the feelings that have been aroused in the discussions that we have had today. It would seem to me entirely logical that one should look to what one thought was the appropriate compensation originally and see why it should now be so different, for different it most certainly is.

5.28 p.m.

The Earl of Gowrie

I tried to deal with the point of why we sought a differential compensation at an earlier stage of the debate. I shall of course bring to the attention of my right honourable friend the fact that it is the view of the noble Baroness that levels of compensation for ordinary cases of unfair dismissal are insufficiently indexed. The noble Baroness is well aware of the Government's position on that, that the way to get them fairer is to reduce the inflation that is going on. This is what we are trying to achieve. I shall bring that point to his attention. With respect, it is a slightly different point. Various people in the Committee have been, as it were, appealing to me to think again, hoping that they will not have to divide and hoping that in some way the Government may be able to meet them or that an amendment of this kind will have better treatment from the Government at Report stage.

I am afraid that I think that would be misleading. Here we are dealing with questions of unfair dismissal. I do not agree that small employers need expert advice here. All they need to do is not unfairly sack individuals. If they do not sack unfairly, they will not have to pay compensation. If they are subject to unfair pressures from unions or other employees, then the employer can join them in any action which the individual takes.

I must say to the notional employers being represented by the Social Democrats and the Liberals on this occasion, though not the Labour Party on this occasion, that it is wrong to ask the Government to stick up for the rights of individuals and to try and ameliorate the effects of too much in the way of employee protection if they are not also prepared to do their bit in resisting the bullying of unions and in resisting any temptations to treat employees unfairly. I have no evidence whatsoever that employers, of large or small businesses, are doing anything other than resisting this kind of bullying and pressure. I think they should continue to do so. I honestly do not think that there is any reason to reduce these levels of special award, which can so easily be avoided by avoiding the unfair treatment of employees. All parties in this House—perhaps the parties opposite particularly have made a thing of this—are in favour of trying to protect the rights of employees. The Government are doing so in this Bill, and in this part of the Bill, and I must say it surprises me that we are being criticised for doing so.

Lord Aylestone

In his earlier remarks, the noble Earl mentioned—he has done so subsequently—that the figures are set at this scale because they are a deterrent. One could argue that if they were set at double the figures they would represent a much greater deterrent. The noble Earl also mentioned the fact that there is no great interest in industry in the scale of the compensation awards. May I remind him that the British Institute of Management, the Confederation of British Industry, the Institute of Directors and the Institute of Personnel Management are all of the opinion that these compensation awards under the special award are much too high. If he really feels that he cannot accept our amendment, may I remind him that if he does accept it and we are proved to be wrong, then under the terms of the Bill the Secretary of State could restore some other figure with the approval of both Houses? That would be an absolutely democratic way of doing it. If he cannot accept the amendment, I am afraid I must divide the House.

5.32 p.m.

On Question, Whether the said amendment (No. 55) shall be agreed to?

Their Lordships divided: Contents, 66; Not-Con-tents, 96.

[Amendments Nos. 56 to 60 not moved.]

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

5.39 p.m.

Lord Wedderburn of Charlton

We have now investigated at any rate most of the extraordinary areas of an extraordinary clause. It is said, as the noble Earl has mentioned more than once, that there are those who ask for protection; but the examples are few. Indeed they can be matched by far more examples of other types of discrimination that might be thought to be as bad. The figures have been discussed and while I, and indeed the party for which I speak, do not think this is the primary issue, nevertheless the Govern- ment's intransigence in the face of unknown calculations in regard to the figures seems to be very odd.

The clause itself where what is required is a mere request, will amount, if one looks back over the clause as a whole, to what was called, "the bounty-hunting charter", in another place or, as I would prefer to call it, "the non-unionist's charter "—because of course it has been clear from our debates that it is primarily a question of non-unionists and indeed it is as a remedy to help them that it is being added to the Bill. The reason it is a charter is that you can create your own situation—a situation which the Government's answer will be inadequate to relieve. The situation is one where you can create your own prize and your own rules, and can afford yourself a free kick at the goal by sending off the goalkeeper before you take it. You can do that by throwing in your union card. There is no equivalent for the trade unionist to throwing in your union card.

The noble Earl is quite right; this extends over a far wider area than the closed shop. In any situation where there is tension, where someone throws in his union card, and then there is pressure or discussion and the employer dismisses him by reference to his position as a non-unionist, there is a risk of a special award arising for the employer—but not just for the employer. I refrain from speaking about the joinder procedure under Clause 6, because we shall be coming to that. But before we leave this clause, one must keep in mind that the defendant against the £10,000, £12,000, £30,000 or £40,000 may be the union or, much more seriously, the shop steward or another group of workers. That is the scenario which the Government are presenting via the industrial tribunals.

Often in another place—and it becomes relevant to put the point now, in view of what has been said on this clause—the Government's response has been that not very much of any evil kind will happen, because the tribunals are sensible and will reduce the compensation under the section. The new Section 75A allows the tribunal, where it considers that the conduct of the complainant before the dismissal makes it just and equitable to reduce his compensation, so to do. But the question arises: What do the Government suggest should be the attitude of the tribunals to someone throwing in his union card? On what basis is that to be regarded, in what is now known in employment law, as contributory industrial fault? When is getting out of a union contributory industrial fault?

I suspect that there will be noble Lords who would say, very sincerely "Never", because you should always be able to do so. There would be others who say "sometimes, perhaps". But if that were so, the Government would have measured this clause by reference to some conscientious or other deeply held conviction. It cannot, surely, be a conviction that you are worth £10,000 more than the next man, just because you want to throw in your card.

So the reductionism philosophy, which the Government adhere to so often in debates, and did in the other place, is merely to shift the buck of the problem from the legislator to the tribunal. But it is never good legislation which says "Yes, there is a problem. But leave it to the courts, because we cannot think of anything better to do." There are other features of the clause which have arisen and which are most unsatisfactory; not only the unrealities of the so-called even-handedness between unionists and non-unionists. This is a non-union measure. Noble Lords who support it felt passionately. In terms of non-unionism, none of them is going to get up and make the same sort of speech about trade unionists, although the noble Earl put it in an even-handed way.

But he also made reference to another feature, which should be squarely, and quite sensibly, faced. Walsall council has been mentioned; public authorities have been mentioned; in particular, Labour-controlled public authorities. Why beat about the bush? That is what it is about. The noble Earl talks of politically motivated action and, at one point, said something to the effect that only a small sum—I believe, something like £10,000—was awarded in total to the Walsall dinner ladies. But under the present proposals it would be something like £70,000, which would be enough to get this council to think again or not to do the act.

Of course, the matter goes further, because what happens to this large sum when it is awarded against a Labour council? It is something which the district auditor will have a look at and the Government know very well that that is so; it is what they want. Time and time again in another place, and it is beginning to be mentioned here—so let us get it out—it was said that the district auditor would not surcharge the Labour councillors on £2,000, but, if we are lucky—think the Government—might do so on £10,000, £20,000 or £30,000. The district auditor is being used, in the arguments for this clause, as a political instrument against Labour councils effecting policies upon which they were elected.

It is no good noble Lords looking surprised, because if they look at the reports of the debates in another place they will find that the Minister of State once, and the Under-Secretary four or five times, referred to the need to stop these politically motivated councils, like Walsall, from carrying on in the way that they do. I know that the noble Earl does not want to misrepresent me and I must make sure that he does not misunderstand me. It is not a case of justifying anyone who breaks the law. That is not the issue. The issue is whether legislation, which is ostensibly labour law legislation, is ostensibly employment law legislation, has behind it the ambition to catch with a different penalty individuals who serve on local authorities and similar bodies.

That is a most unfortunate aim in using labour law legislation of this kind, because it will all come back on the shop floor—let us get back to the industrial relations context—and will come back to the relationship between the employer and his workers. If the Government think that, by making Labour councillors bankrupt by £30,000 appearing in the annual audit of the council, they will contribute anything to politics or to industrial relations, they are very mistaken indeed. That is also why some of these bodies that have been mentioned are not happy about the proposal.

The CBI is not unaware of the local authority context and dimensions of the problem, because the Government have made it plain, again and again, in debates in another place that that is the basic reason in that area where, to quote the Under-Secretary, speaking on 1st April at col. 900 of the Official Report: The district auditor will step in and say 'Enough is enough. You knew what you were doing, Councillor So-and-so, and you were trampling on this woman's rights. You made up your mind from the beginning not to reinstate her, and you will pay and not the ratepayer'."—

A Noble Lord

Hear, hear!

Lord Wedderburn of Charlton

The Social Democratic Party give loud cheers. Of course, because that is what they want. They cannot see a way of solving the industrial relations problem, which is a very real problem of workers who feel very strongly that they want to work with trade unionists. Workers are few who have to be heard with justice, and who want not to be in the position of being pushed out. The SDP has no answer to many things and it has no answer to this. They say, "Let us support the Government's legislation", which means punishing the people they do not like. And those people are Labour councillors. All parties, other than my own in your Lordships' Committee, will unite around that. That is why they will unite around this clause.

This clause is based upon ambitions which should not enter into labour law. There is muddle and lack of reason in terms of the division of categories of workers. I refer again to the categories of race and sex as against the categories of unionism and non-unionism. Their policy rests, as it does in the whole of this part of the Bill, on total ignorance of the position of employment law in this country. Time and again the right honourable gentleman the Secretary of State has justified this clause, along with Clauses 2 and 3 which go with it, on the basis that from time immemorial there were rights for British workers, of which they were deprived in 1974; that the legislation from 1974 to 1976 robbed British employees of their right not to be dismissed unfairly. There was no such right before 1971. The case which the Government themselves put to the Court of Human Rights in 1981 in its memorial said: Prior to 1971, the termination of the contract of employment of an employee on grounds of refusal to join a union was subject to no special rules. Provided that due period of notice was given to the employee concerned, the termination of his contract of employment on the ground of his refusal to join a union was lawful and gave him no rights of any kind". That is an accurate statement of the law at that period. Why do the Government have to pretend that some rights, from time immemorial, were lost in 1974?

The 1971 Act introduced unfair dismissal. A problem arose in respect of any kind of union security arrangement and unfair dismissal. That was a problem which the Government faced in 1971. It was a problem which the Labour Government faced in 1974. It is a problem which all Governments will have to face unless they abolish the law of unfair dismissal. That is why Clause 4 sums up the philosophy of the first part of the Bill so much. Clause 4 is objectionable because it tries to divert attention from the real problem. The real problem is that of the employer, the workers and the union on the shop floor reaching an accommodation. Research, both published and unpublished, shows this. Article after article shows that 99 per cent. of union membership arrangements provide for existing employees and for a wide range of people who are exempted. That has been so for many years, whatever the law says. There lies the real nub of the problem. To play with figures of special awards for non-unionists, especially when they are not given to those who are dismissed because they are black, smacks of not being able to face the real problems of our industrial society.

Lord Boyd-Carpenter

The noble Lord, Lord Wedderburn of Charlton, spent a certain amount of his extremely vigorous speech upon referring to the difficulties which this clause might involve for local authorities in certain circumstances. The noble Lord can reassure himself. No local authority need put itself in this position. No local authority need use its position as employer to dismiss people because they will not join a union or will not join a particular union. Any local authority can protect itself from the dangers to which the noble Lord referred by refraining from that kind of conduct. The noble Lord did not seem to appreciate the particular indelicacy of Labour-controlled authorities doing just that. It is one of the well known facts of political life that the trade union movement is the major support of the Labour Party. It provides the greater part of the funds, the greater part of the support. For Labour in control of a local authority to use its power to further the interests of the unions who support it at the expense of those people who do not want to join a union is, in my view, an outrageous abuse of power. If a local authority does that, it deserves what it gets, because it has brought it upon itself.

The only other aspect of the noble Lord's speech to which I would invite your Lordships' attention is the complete lack of any indication of sympathy whatever for a worker who, for one reason or another, does not wish to join a trade union. The noble Lord simply brushed these people aside as being insignificant and of no account. But whether the noble Lord likes it or not, there are quite a number of people who do not want to join. Does the noble Lord wish to intervene?

Lord Wedderburn of Charlton

If I may.

Lord Boyd-Carpenter

Of course.

Lord Wedderburn of Charlton

I am sure that the noble Lord will remember that I said that those who are non-unionists may well be unjustly treated and that each case must be looked at on its merits.

Lord Boyd-Carpenter

That is a somewhat chilling reference. It is not an indication of a realisation of what it means to somebody, particularly—as the noble Lord said on an earlier amendment—in the present employment situation in this country, to be dismissed and what an enormously serious thing it is. Therefore when it is done in circumstances which the noble Lord now says may be unjustifiable, the award that he should receive should be very substantial indeed. And the substantiality of that award is the very gravamen of the noble Lord's attack.

The noble Lord went on—very pointedly, he may recall—to brush aside the position of a man who, as he put it, throws in his union card. I believe that trade unionism is a major and very valuable part of our national organisation but that members, workers, individuals, should join it and remain in it or not as they please. The person who turns in his union card is just as much entitled to protection as the person who did not have it when a closed shop was introduced. There are people in this country who have joined a union and been a member of it for years but who have turned in their union card because they are disgusted about the way in which their union is being conducted and do not wish to remain members of a body so doing.

It may well be—I hope and believe that there are—people who feel that about the way in which NUPE are treating the hospitals and the sick. Surely it is at least comprehensible to the noble Lord that there may be members of the unions concerned who feel, however, strongly they may wish to increase their remuneration this year, that they are not prepared to take part in putting pressure on the sick for the purpose of getting more money. That seems to be a perfectly reasonable, human, perhaps even an admirable attitude. Therefore, people who feel like that may well wish to turn in their union cards. They should be entitled so to do if they want, otherwise the union is proceeding on the basis, which could be contrary to all that trade unionism used to stand for, of industrial conscription, compulsion. In order to keep your job you must retain your membership of the union.

Your Lordships should not underrate the difficulty and the unpleasantness for the individual who decides that he has to do this. If somebody decides, because he cannot bear to be associated with what his union is doing at the moment, that he is going to leave that union, it will be difficult enough. There will no doubt be personal unpleasantness. Surely such an individual who loses his job as a result should be very fully and adequately compensated, either by the employer or, anticipating Clause 6, by the union, or by both of them.

So I am bound to say that I found the noble Lord's speech—passionate, quick-fired, well-informed as it was—immensely depressing, particularly for two reasons. First he seeks to justify and to protect the position of local authorities which abuse their political power in order to impose conditions not desired by some trade unions which support them, with the consequence that other people find themselves losing their jobs. Secondly, because of his manifest lack of sympathy with those people who decide that, even though they may have been at one time trade unionists, they do not wish to continue. I say this to the noble Lord: that no one could be a worse threat to trade unionism in this country than one who seeks to build it up on the basis of conscription.

6 p.m.

Lord Underhill

When one hears some of the speeches in your Lordships' Committee, one feels that one has been here before, because the same arguments seem to occur on almost every clause of the Bill: the rights and wrongs of trade unionism. I was not going to speak to this clause, but when one listens to speeches, one wants to hear sympathy for the trade unionst. I want to see sympathy for well-organised trade unions with large memberships; but when one reads the Committee stage in another place, one has a feeling that what some persons on the Government side want is to see trade unionism weakened. What I should like to hear are some speeches of sympathy for strong, virile trade unionism.

One has to remember the point made by my noble friend Lord Wedderburn of Charlton—a point that some of us made in our Second Reading speeches: where does all this fit in with sound, effective industrial relations? One has to speak not only to noble Lords in this House but also to men and women on the shop floor, as to where this will land us at the end of the day. We may not like it, and some noble Lords may not like it; but if one has a person who continually vilifies trade unionism and who goes out of his way to loudly attack trade unions, and then the men say, "We will not work with this man unless he joins", it is a matter of industrial relations. We do have such individuals. Some are very genuine people and others, frankly, are anti-social in their outlook; "I am all right, Jack." The men on the shop floor resent this and want to do something about it.

To conduct this debate as if it is going to deal only with local authorities is just nonsense. It does not deal only with local authorities, it deals with everybody. I have not heard anyone talk about Foyle's dismissals. Perhaps we could have a few words about Foyle's dismissals and about what compensation those people may get and ought to get, where a firm is even saying that it would be better to close down rather than have trade unionism coming into the firm.

I hope that noble Lords opposite will realise that passion can be on both sides and that conscience can be on both sides. I do not want to see honest individuals badly treated, but at the same time I want to think of the great mass of organised workers who believe in their trade union and who do not want to see it weakened. A few speeches by noble Lords opposite in that respect might be helpful. In this instance one must recognise that there will be genuine cases, but that there will also be individuals who will seek, if they can, to get £20,000 compensation. It will be absolutely foolish if noble Lords believe that can never happen. If there is a chance of £20,000 compensation, there will be some people with an anti-social outlook—and that is what some people who do not want to join a trade union have—who do anything do try to achieve it.

Lord Campbell of Alloway

I would agree with the noble Lord, Lord Underhill, as one who longs to see established—I believe one would say re-establish—a strong, virile trade union movement, which was responsible and had effective control. But perhaps I would part company with him on this aspect: I would submit that the liberty for non-trade unionists which we are seeking to provide in this Bill will strengthen the trades union movement rather than weaken it. One cannot be dogmatic because, who can tell? All one can do is to have regard to the problem without passion and in a constructive way—the approach which the noble Lord, Lord Underhill, always adopts.

I agree again with the noble Lord, Lord Underhill, when he says that the emphasis on local authorities is nonsense. Indeed it is. And how, I ask the noble Lord, Lord Wedderburn of Charlton, can he indulge in this fantastic conceit that there is some trap to ensnare district auditors or Labour councillors? This is, as stated by the noble Lord, Lord Underhill, a nonsense.

Lord Underhill

If the noble Lord, Lord Campbell of Alloway, will allow me to intervene, I was saying that it is nonsense to suggest that the whole purpose of this clause is to deal with the position of local authorities. One has to consider speeches made in the other place, by Ministers in particular, dealing with district auditors.

Lord Campbell of Alloway

I am obliged to the noble Lord. I am not pretending that there is not an aspect of this—the spin-off—which could affect district auditors and Labour councillors in certain circumstances. But that is to distort the whole concept and turn it on its head. So many of the propositions of the noble Lord, Lord Wedderburn of Charlton—and I say this with respect—have just been turned on their head. It is a fantastic conceit, and a fantastic conception, that this clause is some kind of trap to ensnare district auditors or to disadvantage Labour councillors. It is a ridiculous concept because the issue is plainly a simple political issue. It is much broader than district auditors or Labour councillors. The issue is simply, are we to adopt the concept of individual freedom that recognises the rights of a non-trades unionist, or are we not? This Government, I believe with the support of the vast majority of the electorate, intend to recognise it. That is the point. If the process those who would oppose the will, if it be the will, of the Government and Parliament, find themselves in difficulties, I for one shall not grieve for them.

Lord Harris of Greenwich

I believe that this debate has been of great value to the Committee. The more we go on, the clearer it becomes that there is a fundamental gulf which lies between those who are in favour of this clause, as we are on these Benches, and those in the Labour Party who are most passionately opposed to it.

The noble Lord, Lord Wedderburn of Charlton, who, as the noble Lord, Lord Boyd-Carpenter, said, made a most vigorous speech, will presumably be dividing the Committee on this clause. Therefore, I believe that we should address ourselves to the substantial issues which he raised in his speech and which have been raised in a number of speeches subsequently.

First, there is the position of local authorities, to which the noble Lord, Lord Campbell of Alloway, has just referred. There is no problem whatever for local authorities, so far as this clause is concerned. A local authority only has to do one thing; it has to obey the law of this country. That is what the local authority has to do and nothing else. The problem, unfortunately, is that a number of Labour-controlled local authorities believe that they can defy the law of England and can get away with it. We had the example some years ago of the Clay Cross local authority. The Government, of which I was a Member, and so therefore I must accept some measure of responsibility, when they were returned to office, took certain action in relation to the members of that particular local authority which was profoundly mistaken.

But we have subsequently had the cases of the local authorities in Sandwell and Walsall, and I make no apology for returning to these two cases because they are in my view fundamental to this clause and fundamental to this Bill. In both cases, I have not the slightest doubt, the local authority was advised by its legal advisers that the course of action they were adopting was unlawful. I have no doubt whatever that every member who then decided, notwithstanding that advice, to take that course of action knew precisely what he was doing.

The noble Lord, Lord Wedderburn of Charlton says that one of the most disgraceful features of this whole clause is that apparently in discussion in another place there were references to the district auditor. I very much hope there will be references to the district auditor if local authorities choose quite deliberately to flout the law of this country. That is why we have district auditors. They have an obligation to protect the ratepayers of that local authority from the consequences of the acts of members of those authorities who deliberately decide to break the law.

One of the difficulties we have in this country is that in the last few years it has become fashionable to break laws which people do not like; there is a view that if a law is disliked, what more reasonable course of action should be adopted than deliberately to ignore it? I do not happen to share that view. I believe that laws passed by both Houses of Parliament should be observed by all our fellow citizens, and particularly by public authorities, who have an even clearer responsibility so far as this is concerned.

The noble Lord, Lord Underhill, said that he very much hoped that in the course of this debate there would be some speeches in favour of the individual rights of trade unionists. I do not see any difficulty about that at all. I am surprised that the noble Lord necessarily believes that to be in favour of this particular clause means that one is passionately opposed to the existence of a free trade union movement. Quite the reverse. What we are trying to do is to safeguard the individual citizen from the oppressive behaviour of some employers, both in the public and, conceivably in certain circumstances, the private sector. There is nothing deeply antipathetic to a free trade union movement in this clause. I have been a member of a trade union since the age of 17 and I am still, I am glad to say, in good standing. I see no conceivable conflict between that position and support for the general purposes of this Bill.

The problem about the whole range of issues we have been discussing in this Bill and discussing in this country in the last 18 months to two years is that the Labour Party has become increasingly incapable of ever taking an independent position against pressure from the trade union movement. That is in fact reality, and we all know it to be reality. We have seen this conduct—and the noble Lord, Lord Boyd-Carpenter, reminded us a moment ago—from NUPE shop stewards in recent weeks. I speak as someone who is strongly in favour of a more generous settlement as far as the nurses are concerned, but I see no case for this intolerable abuse of power by individual members of trade unions. The trouble is, I repeat, that the Labour Party is now quite incapable and quite unprepared ever to take an independent position against pressure from the trade union movement. That is why we are having this debate, and I very much hope that when the Committee divides this clause will be carried by a substantial majority.

Baroness Gaitskell

May I say one sentence? I have not taken part in this debate. I simply want to say that to speak about individual freedom in that wild way is simply not realistic in a country where there is as much inequality as there is now.

Lord Molloy

I wanted to follow the extremely important statement the noble Lord, Lord Harris of Greenwich, made when he said that it behoves every trade unionist to obey the law of this country. I think it behoves every Briton to obey and support the law of this country. What I find despicable and disdainful is when people like Lord Harris pick just on one sector. That is the failure of this debate both in the other place and here. We take a number of our British citizens, and in one aspect they are trade unionists. I hope Lord Harris with his tiny knowledge of trade unions will listen, because his knowledge will be increased by what I have to say. They are not only trade unionists.

I was in Wales when I started my life in the mines, and I discovered that when a branch of the NUM in Wales commences its business everything is preceded by prayers, as in this House. I do not believe, therefore, that it is right for us to look at these 12 million of our fellow citizens as in a special category. There are bad characters among them. When the noble Lord, Lord Harris, talks about people who break the law of this country, I will tell him, and ask him to deny that what I am saying is true, that there are people who are much more venomous to the prosperity of Great Britain than all the trade unionists, and those are the crooks and the cheats that thieve us of £9 billion a year on the black market. If Lord Harris wants to deny that, I will give him 10 seconds to get up and say Yes or No.

Lord Harris of Greenwich

A number of my noble friends are trying to encourage me not to reply to the noble Lord, because I might take marginally more than 10 seconds to do so.

Lord Molloy

There is an exhibition of courage the Committee will note. Let me go on to say further that what the Government ought to be aware of is this: that people who are coalminers, who are steelworkers, working in shops, who serve behind counters, people who drive lorries, people who make a massive contribution to the wealth of our nation—I do not think anyone would deny that; the point was made very ably earlier in the debate—in addition belong to their voluntary organisations, to their churches and chapels and synagogues; they belong to all the voluntary endeavour and sporting endeavour of this nation. Therefore, to put them in a tight little category because they are trade unionists I find entirely despicable, which is about the correct description of the speech we have heard from Lord Harris. I do not know which way he voted in 1980 on this particular issue; perhaps he will tell us. He used to be a Minister and he would not have been one of Her Majesty's Ministers if it were not for the endeavours and the money of the British trade union movement. When people behave like that we have a special name for them.

The Earl of Gowrie

I should be most grateful to the noble Lord if I may intervene to say that we are straying rather far from the amendment, which is incidentally not mainly about trade unions but about employers.

Lord Molloy

What amendment are we on?

The Earl of Gowrie

I stand corrected. We are straying rather far from the clause. Nevertheless, in spite of my mistake, for which I apologise to the noble Lord and the Committee, we are straying very far from Clause 4, which is not about trade unionism generally but about unfair dismissal by employers.

Lord Molloy

I accept the noble Earl's apology to me, but I am not prepared to accept his advice as to how to proceed. He should have been listening and he should listen very carefully in the future. What I was going on to say was that the noble Lord, Lord Boyd-Carpenter, in my judgment, made a very strone point in his speech. If it is wrong for me to comment on what Lord Boyd-Carpenter said a moment ago, it must be wrong for him to say what I am now going to comment on. I think that is very sensible, and with half an hour's thought I think it will sink into the noble Minister's mind. What Lord Boyd-Carpenter says often attracts me. He was not making a speech which was pathologically anti-trade union. Indeed, both he and the noble Lord, Lord Campbell, said that at times they would like to see a strong British trade union movement. I find it most encouraging to hear that remark from the Benches opposite.

But what I want to point out and ask your Lordships to consider is that this Bill was born out of a period of despicable trade union activity. It was born out of the winter of discontent in 1979, when the general unofficial activity was described by Mr. Michael Foot as a form of trade unionism that he could never recognise or he could never support, and I said similar words in another place. Out of that has come this Bill which is venomous. Out of that has come a completely irresponsible and heinous piece of legislation. Less than 1 per cent. of the entire British trade union movement was involved in that despicable behaviour in the winter of 1979. Is it the normal procedure of the Parliament of this country to make very certain that if 1 per cent. of a specific part of our community misbehaves, irrespective of how despicably, we punish the other 99 per cent. as well?

Lord Campbell of Alloway

I hope that the noble Lord will forgive me if I raise a matter of correction. This Bill was not so much as a twinkle in its father's eye during the winter of discontent. It is relatively modern in its inception.

Lord Molloy

All that I can reply to that is that statements were made. I admit that the noble Lord Lord has a very strong point. In the other place, on 14th December 1979, a debate was held which involved Mrs. Thatcher and the then Secretary of State for Employment, and a motion was put before the other place, and was won, which roughly called for the following. It demanded that trade unions should have the freedom to apply for any wage increases they thought fit; to indulge in any form of activity they saw fit, including strike action; but that they should not be hedged in by measures which had not gone through Parliament, like the social contract, which limited their wage demands to 10 per cent. That was moved by the Conservative Opposition and I ask noble Lords to consider that very carefully and to read the report of that debate in December. It was won by a tiny majority in the other place. The argument went like this—

Lord Mottistone

I wonder whether the noble Lord would just let me speak before he starts?

Lord Molloy

I will, indeed, let the noble Lord speak, but let me finish this first. The argument went like this. The social contract limited and placed a degree of inhibition on the free trade union movement of this country. It is perfectly true that it had nothing to do with Parliament, but it was just as much an agreement between the political wing of the Labour Party and its industrial wing as are many aspects of the Conservative Party and the Conservative Government with the CBI and the many people allied to them. The social contract helped our nation and there was a response from the trade union movement. Indeed, its membership increased and it helped the country to get back on its feet. I ask noble Lords to consider that when debating these measures. I give way to the noble Lord.

Lord Mottistone

I think it would have been more relevant if I had spoken before the noble Lord gave us his pattern of history, because I was going to ask him how that was relevant to Clause 4 of the Bill.

Lord Molloy

It is relevant to Clause 4 of the Bill, because if what was proposed in that Motion earlier on had then been put into legislation, the Clause 4 that we are now debating would have been a massive turn face: it would have been absolutely inappropriate to put in the Bill. The noble Lord is tempting me to say that people should beware of the fact that what the Conservative Party does in Opposition to cajole and get people to think how liberally minded they are, they do not mean to follow when they get into Government.

I sit down with one appeal. If we are going to place trade unionists in a special situation where it is not recognised that they are fellow countrymen and women and that they have lots of other other pursuits in which we all indulge, then all that can happen is that we shall create grave bitterness. I believe that the submissions made by my noble friends on the Front Bench on this particular clause, as indeed on others, ought to receive the full consideration of your Lordships' Committee.

The Earl of Gowrie

We have had a pretty stimulating debate. I do not know at what point the debate on a somewhat technical issue in this clause, not an entirely uncontroversial one but I should not have thought a very controversial one, about the levels of an award paid in compensation, became a debate on trade unions generally. It certainly was not my intention to stimulate such a debate, but, since we have had it, I want to make it very clear that the legislation being proposed in this clause is entirely even-handed and fair.

The noble Lord, Lord Underhill, raised a point about why we did not hear about Foyles. If the Bill had been passed a few months previously, and if the tribunal had found, as it did, that the employees of Foyles were unfairly dismissed because of their being trade union members, and if the book shop had not sensibly decided to offer them reinstatement, then of course these enhanced levels of compensation would have applied. There has also been the charge that this has been a union-bashing provision. If anything it is an employer—although a rogue employer—bashing provision. That was the point made very effectively by my noble friend Lord Boyd-Carpenter and I do not think I need repeat it. He was backed up by my noble friend Lord Campbell.

I am aware of a different kind of concern that was expressed a little earlier; namely, the concern about the employee who might seek to engineer his own dismissal in order to get the enhanced compensation which Clauses 3 and 4 provide. He has been called a bounty hunter. I think it was the noble Lord, Lord Wedderburn, who started using football analogies. This putative bounty hunter would need the skills of Signor Rossi in order to get away with what is being claimed for him, but, even so, I think the tribunal would declare him off-side without much difficulty, should he go down that road.

In response to Lord Wedderburn's anxiety about what happens to the person—another bounty hunter—who tears up his card, the simple fact of the matter is that a resignation from a union in a closed shop would attract no compensation whatever if the employer does not dismiss the employee concerned. So if employers and unions are prepared sensibly to remain relaxed about the odd non-member, then simply there will be no problem. It is sometimes said that Conservatives do not understand the solidarity nature of unions, which of course is nonsense. In that connection, the noble Lord, Lord Wedderburn, said that 99 per cent. of UMAs provide for or can cope with the odd employee. There is no reason why employers should dismiss unjustly and expect to get away with it.

The last point I would make is that some of the debate has, I think, misunderstood our position on individual freedoms. We very passionately believe that individuals can, and indeed should, join unions. We have often argued that one of the reasons for the depressed competitive position of Britain in relation to some of the people with whom we have to compete in the industrial world at large has been the proliferation of unions, the fact that unions are not getting together, and the rest of it. But, just as we believe that an individual should not be compelled into union membership against his will, we therefore believe that he should be free to join a trade union if he wishes, and to take part in its activities. This particular clause has been dealing with abuses. Most of the Bill deals with abuses. Abuses, by their definition, are rare. By these provisions, we hope to make them rarer still.

Lord Wedderburn of Charlton

Before the noble Earl sits down, and with the leave of your Lordships, as the noble Lord, Lord Harris, asked me a direct question about the position of the Labour Party on this clause, perhaps I could answer him. The noble Lord, Lord Harris, need have no fear. There have already been three Divisions on this clause, two of them on amendments proposed by us, which went to principle as against detail. Fundamentally, we oppose this clause, but we do not think that that position would be made any clearer by making everyone tramp through the Lobbies for a fourth time.

Clause 4 agreed to.

Clause 5 [Reduction of compensation: matters to be disregarded]:

6.32 p.m.

The Earl of Gowrie moved Amendment No. 61: Page 8, line 22, leave out from ("constitutes") to the end of line 24 and insert ("—

1. (a) a breach, or proposed breach, of any requirement falling within subsection (3);
2. (b) a refusal, or proposed refusal, to comply with a requirement of a kind mentioned in section 58(10A)(a); or
3. (c) an objection, or proposed objection, (however expressed) to the operation of a provision of a kind mentioned in section 58(10A)(b).").

The noble Earl said: This amendment is consequential on an earlier Government amendment to Clause 2; that is, Amendment No. 27. I beg to move.

Lord Wedderburn of Charlton

This amendment was introduced at a fairly late stage in another place and, in our submission, it is a part of the philosophy of the Bill which, it has been made quite clear, is not shared by members of the party opposite, or, indeed, the members of the Social Democratic Party. But the position that Clause 5 requires is, I suppose, a quite logical development—although one may question whether it is absolutely necessary as a practical matter—in terms of that philosophy. The industrial tribunal is being asked, in regard to dismissals that come before it on grounds which are principally those of unionism or non-unionism, to disregard action in so far as it constitutes any of the things set out in the clause; that is to say, a requirement that someone becomes a member of a union, or ceases to be or refrains from becoming a member, or not to take part in the activities of it.

It is, I think, wrong to allow a clause of this kind to pass through your Lordships' Committee without asking what, in practice, that could mean. I fully appreciate that there might well be many cases which would fall within the clause where its imposition would be logical in respect of the clauses which your Lordships have now seen fit to pass over. But it also takes in other cases and, as the Government introduced it at rather a second-thought stage, it is perhaps right that at the Committee stage in this House—and I imagine that this is what this House is for—we ask them to look again so that on Report they could perhaps consider this kind of case.

In my capacity as chairman of the Independent Review Committee of the TUC, I know of a case that was something like this but, to my knowledge and memory, not precisely so. But a man certainly belonged to a union which he knew was affiliated to the TUC; he knew vaguely that there were TUC disputes committees, and that they did something about disputes between inter-affiliated unions. I doubt very much whether he had read the Disputes Principles and Procedures of the TUC. The union which he joined, which we may say is union A, had a somewhat unhappy history with union B, which organised workers at similar places of work at contiguous points in the workplace. Both unions were affiliated to the TUC.

Indeed, the Government have been—and I imagine that they would stay in this posture—in a position where they say that unions should support the TUC Disputes, Principles and Procedures—not in any way in a differential sense because there may well be things in the TUC's procedures which could be looked at, and the TUC regularly tries to revise them. But, the Government, in their Code of Conduct on Closed Shops in 1980, said about trade unions: If affiliated to the TUC, the union should have regard to the relevant TUC guidance". It goes on to say: When determining whom they might accept into membership, the factors to which unions may have regard include the following"— and the third is whether the TUC principles and procedures governing relations between unions or any findings a TUC disputes committee are relevant.

Elsewhere in the code the Disputes Principles and Procedures are commended. If the Government still take that position—and I have no reason to believe that they do not in theory—they should consider whether their clause, as a part of the machinery which they are introducing, will do damage. Let us suppose that in this case a dispute breaks out between the two unions and it goes to a TUC disputes committee. As there is so much misunderstanding about this, let me say that TUC disputes committees are not some bureaucratic machinery imposed on unions; as I know the noble Earl knows, they are composed of experienced officers of unions not involved in the dispute between union A and union B. They come, as it were, as a trade union jury and try to see the merits of the case according to the principles.

Let us say that in this case they decide against union A. Everyone tries to persuade the worker to leave union A and join union B, as happens every day across the face of industry where there is multi-unionism, where there is perhaps some difficulty at the edges. Although we often say that it is a special problem for us, let us not think that it is the only trade union system in the world that has this problem. The "no-raiding" agreement in the United States of the AFL-CIO during various periods of its history has tried to solve great difficulties. Other trade union movements have this problem, although in different forms.

But the man refuses. He is one of the people who the noble Lord, Lord Boyd-Carpenter, would understand best. I hope that the noble Lord will not misunderstand me if I say that I sometimes have the feeling that he has less understanding of my position than I have of his. I am not trying to be arrogant, but I am sure that we both make extraordinray efforts to achieve this, and this is a case where he might well get there an inch or two ahead of me. But I wonder whether he would stay there, because management complains that things are getting pretty bad down there in the workplace, because feelings are high and men get fed up and cross about this issue.

There is always a long history. Very often at the beginning of the history it is something quite small, but it builds into an issue. It is the flash point of which industrial strife is composed. Perhaps management was to blame and should have done something about it, but that is old hat now. What will you do about it? The TUC disputes committee says, "You have broken the principles; he must go and join union B", or, if it is not a closed shop, "At least he must resign from union A". The worker says that he will do it. He has the right to resign, but he will not do it. There might be a rule in the union rule book saying that union A can dismiss him, expel him or exclude him, just on notice, in order to put this into effect. That, in fact, is the model rule of the TUC, which was held by the Court of Appeal 20 days ago to be contrary to public policy. As it is still, I hope, sub judice on appeal to your Lordships' Judicial Committee, let us hope that at least it is not illegal, because if the Bridlington agreement is illegal, the Government should hastily introduce into this Bill a new clause on first, second, third and fourth thoughts, to make it lawful.

Let us suppose that that at least can be put aside. He then gets into a position where he is eventually dismissed. The history would be long; he would, of course, be suspended, but eventually he might be dismissed. He might be dismissed as a non-unionist, or, at any rate, for refusing to join the particular union, and so on, and he would easily fall within Section 58. He would then come before the tribunal. The tribunal is told that this is a Section 58 dismissal. Therefore he must have the special award, subject to any reduction that you may think he should have. He says: "No. In my case you can't make a reduction because all the objections that I made were objections to Clause 5(3) requirements: that I be, or become, a member of a particular union, or cease to be, or refrain from becoming, a member of a trade union. That is all I was doing."

What this clause says is that there is not ever any case when that kind of objection should allow for reduction. That is not reasonable. If there is one such case in the hunting for the tiny last grain of the enemy's strength against non-unionism, the Government have set out in this curious barque of Clause 5 on some voyage of the Hunting of the Snark, and suddenly found that something more like a Boojum has popped up in their face because they did not mean it. I am sure they cannot have meant it in its present form.

I should like to make it clear that I am taking a case which would be unusual, but, I can assure the noble Earl, not impossible, where the man says, "My only objection is as to the union, or unions, that I shall leave, or join", and that that shall be disregarded in the kind of case I have put to him. The Government should give us some kind of intimation as to whether they share that view. I imagine they would not. Certainly, if I am wrong in it, why am I wrong?

6.42 p.m.

The Earl of Gowrie

I confess that I am in some difficulty because the noble Lord has defeated me. I simply do not quite know what the Snark or Boojum that he chasing is. My understanding of Clause 5, and certainly of the purposes of this amendment, is quite different. I have a perfectly respectable speaking note about the amendment and why the Government have it down. I do not wish to detain the Committee on this because it is consequential on a previous amendment, but it may be that we have overlooked the point that the noble Lord is anxious about. I am happy, without any commitment, to have a look at the point when I am able to take it in on reading the Official Report. Either the noble Lord has clean bowled me or his ball has passed so far over my head that I am not able to strike at it. I beg to move.

Lord Jenkins of Putney

Are we not in a rather unsatisfactory position here? Apparently the Government do not know what their own clause means and have been unable to elucidate what my noble friend's questions are. How can we decide on a matter on which the Government are unable to elucidate?

The Earl of Gowrie

The Government understand perfectly well what their own clause and amendment are about. It is Lord Wedderburn's objection to it that they do not understand.

Lord Wedderburn of Charlton

I apologise to the noble Earl. May I try in a sentence? My objection, and my party's objection, to Clause 5 as a whole is made worse by this amendment. I thought it was worth speaking to it now rather than twice. If this amendment is passed it will make worse the central feature of Clause 5; namely, that in no case whatever will anyone in the Section 58 position be able to have used against him the reduction procedure which the Government are so keen on, because anything that can be put against him will be rebutted

The Earl of Gowrie

That is now clearer to me. The noble Lord did not, I think, make it quite clear to the Committee that his argument in objection was to Clause 5 as a whole, and not to this particular amendment of the Government.

Lord Wedderburn of Charlton

As amended.

Clause 5, as amended, agreed to.

Clause 6 [Awards against third parties]:

6.45 p.m.

Lord Wedderburn of Charlton moved Amendment No. 62: Page 9, line 1, leave out ("either the employer or the complainant") and insert ("the employer").

The noble Lord said: We now come to one of the most important clauses in the Bill. The point of Clause 6 is to build upon the procedure introduced by the Employment Act 1980 into industrial tribunal proceedings for unfair dismissal whereby the employer who previously had been the only possible occupant of a seat on the defendant's side of the case could call in the trade union, in certain types of situation, to demand compensation contribution or indemnity from it or its officials. I apologise to your Lordships in failing to say at the outset—may I do it now—that in moving Amendment No. 62 I link with it the consequential Amendment No. 66 to leave out "or the complainant" in line 12.

This clause builds upon the section in the Employment Act 1980 by extending the provisions for what have come to be called joinder; that is, the joining of the union, or its officials, or members. From the beginning we have been opposed to this procedure. We have been opposed to it because it jeopardises the position of the industrial tribunals themselves. We also think that in terms of industrial relations practice the Donovan Commission got it right when at paragraph 564 it said: It might be argued that it is unjust"— for the union not to be a defendant— since it is the union not the employer, which stands to gain from an insistence on an employee's being in the union. But the decision to dismiss is the employer's, taken ultimately because he considers it to be to the advantage of his business. On that basis the Donovan Commission ended with a conclusion that the tribunal should be kept for disputes between employees individually and employers, and not range too far wide.

It is true that we have moved a long way since then. I am criticising no particular Administration's legislation when I say that we should look at it carefully again with that prescription of the Donovan Commission in mind. But there was one area where the Donovan Commission has suggested it would never be right—on experience especially abroad, not least in France with their labour courts—for the tribunal to be invited to go, and that was in the judgment of the justice of industrial action. There are hundreds of reasons for that and they are given in the report, but of course the simple point is that strikes, lock-outs, and industrial action are not justiciable issues. The justice of a strike is a profound value judgment. That is why if we, in this Bill, defend the right to strike we do not necessarily defend, or attack, a particular piece of industrial action.

The industrial tribunals were kept out of the area of industrial conflict both by saying that industrial pressure on an employer should be ignored in judging the case, and, secondly, by allowing—this was a kind of quid pro quo for that provision—the employer to sack all strikers so long as he sacked them all and did not victimise among them. Then the tribunal had no jurisdiction, and has none now. That we come to in Clause 8.

This amendment goes to the question of the third party procedure. I have said what I have said because we want to make it clear that the whole joinder procedure is misconceived and indeed harmful, because it brings before the industrial tribunal the justice and equity of the strike, or industrial action. It does it by saying, "Yes, this was an unfair dismissal. Now we have to decide what percentage of the compensation should be paid by the union, and we can do that only on the basis of what the Act tells us, on the basis of what we consider to be just and equitable in the circumstances", and obviously the justice and equity of the industrial action must be before the court.

Fortunately, we have had, so far as research can tell, or at any rate certainly so far as reported cases show, almost no joinder actions of any consequence. Why has that been the case? It is because the Government themselves made the case for this amendment in 1980 when they heroically stood up to pressure from the Liberal Party. In the form it took in the other place it was heroic because they resisted an amendment moved on 11th March to the effect that it was not fair, and one can see the case for it if it is put in simple terms. It is, "Here is an unfairly dismissed employee. Why should he not be able to join the union? Why should the power to join the union rest only with the employer? "The big change made by this Bill—in Clause 6, to which the amendment applies to leave out the complainant—is that now the complainant is to be allowed to join the union.

It is necessary—because it appears not to be widely known—to put to your Lordships the case that was put in the other place on 11th March 1980 at cols. 1062 to 1072. I shall read only some sentences from those columns, but they must be read because the Government must answer this case. For example: It is the employer who is ultimately responsible for the dismissal and who is in the best position to know what considerations led him to dismiss the worker. It is right, therefore, that he should make the primary claim of unfair dismissal, rather than a third party. If he believes, and wishes to contend, that his arm was twisted, the law should provide him with an opportunity to claim contribution. But so far as the employee himself is concerned, it matters not who provides the compensation. All that he is concerned with, I suggest, is that he has been unfairly dismissed. The tribunal has found that he should be compensated according to law in consequence. A little later: There are considerations that bear upon industrial relations. A joinder claim can, in certain circumstances, give rise, or be thought to give rise, to disruption, and an employer may, in the totality of his interest, think that it is better not to proceed in an application for joinder. I think he might appear to be prejudiced if the employee, without reference to the employer, was entitled to go against the union himself. Since he can get the whole of his compensation from his former employer, there appears to be no real reason why he should be given the right to proceed against the union, with possible consequential disruptive effects for the employer's industrial relations".

Mr. Mayhew, the Under-Secretary of State—it was he who was speaking—pointed out that the 1971 Act did not give the employee dismissed a right of joinder. Indeed, it did not; even the Industrial Relations Act did not do what this Bill wants to do. In concluding on the matter—your Lordships will note that it was a long debate on the point in another place—Mr. Mayhew said, speaking as Under-Secretary of State for the present Administration two years ago: I have to concede there could be circumstances in which a union would be less ready to take this kind of pressurising action if it knew that it was at risk of being proceeded against by the individual worker. Against that, we have to balance the potential disruptive effect of this type of action. I say 'potential' because I do not believe it would necessarily follow. But there is a potential here for considerable industrial disruption to the disadvantage of the firm and its workers as a whole, to say nothing of the employer himself. It would be open to the individual, for example, not to sue the union as to sue individual workers. One might then have a kind of running sore that could lead to great disruption and bring harm to the firm itself". I think that case is convincing. The Government have been asked more than once what has changed in the last two years, and I hope they will not give the answer tonight to your Lordships that they gave consistently in another place—namely, that there was growing concern over the closed shop—because that is an attack of the vapours, not an answer. We need material; we need to know what has changed and why Mr. Mayhew's convincing case is now so unconvincing that it is 100 per cent. reversed. It is not just that the complainant can join the union, the shop steward or the members—and remember, this is £30,000 which may be enforced against the member or shop steward; it is not that he can do that under certain circumstances or with the employer's collaboration—but that when he falls within Section 58 he can do it at any time he likes.

If the last Act was thought to be likely in that situation to cause a kind of running sore in industrial relations, then this Bill will attack certain enterprises with positive paraplegia. There really cannot be a justification for this and a last word to those of your Lordships who are, or are associated with—I suppose we are all associated with—employers; there is nothing the employer can do about it. Perhaps he did not want to dismiss the man—maybe some manager did it by mistake, and I shall return to that on a later amendment—but he sees that he is before a tribunal and it is an unfair dismissal. He replies, "I am very sorry". If the reply is, "I'm not satisfied with that", he may reply, "I will pay you. Take the money". But the reply could come back, "No. I have the right to have the union. What is more, I have the right to have the shop steward in". I can understand that because such things happen; people feel strongly about such things, like, for example, the noble Lord, Lord Boyd-Carpenter. Although he would not be vindictive in that way, I am sure he can understand other people being so. As an employer, he is not going to feel happy to see his industrial relations being smashed to pieces, as Mr. Mayhew, the Under-Secretary of State, suggested might well happen.

It is true, no doubt—sometimes at any rate—that consitsency is the logic of small minds. But there is no excuse for being so big-headed that you cannot see what you saw two years ago, and so far the Government have shown no reason at all, except an ideological proposition for a complete change of course on this matter. This is a most important issue in terms of what happens on the factory floor. This could be one of the most important areas for flashpoints of conflict in industry created by a change of course, a U-turn, on the part of the Government.

Lord Glenarthur

The noble Lord, Lord Wedderburn, has described the amendment and the purpose of the clause and, as he said, the main purpose of the provision is to allow an employee to join as a party in unfair dismissal proceedings a union or other person who he alleges forced his employer by threat of industrial action to dismiss him because he was not a union member. It may help the Committee if I explain that under Section 10 of the Employment Act 1980, an employer already has this right of joinder. The extension of this right to the dismissed employee is intended to increase the likelihood of unions being joined in unfair dismissal proceedings and, therefore, of becoming liable to pay compensation where they force an employer to dismiss unfairly. I believe that this extension will act as a considerable deterrent against unions pressing the employer to dismiss in the first place.

It is not difficult to see why this should be the case. We know that employers, for their own industrial relations reasons, will often be reluctant to join unions in unfair dismissal proceedings. They may, for example, fear the industrial relations consequences of doing so. However, the result is that unions at the moment know that they have a pretty good chance of getting away with it if they force an employer to dismiss unfairly. But, of course, a dismissed employee is unlikely to be swayed by the same considerations as his former employer. He may well choose to use his right of joinder where his ex-employer declines to do so. As a result, trade unions are more likely to find themselves joined in proceedings and having, as a result, to pay the price for their actions.

The noble Lord argued that employee joinder will cause industrial relations problems. He pointed out that the principle of employee joinder was not accepted by the Government during consideration of the Employment Act 1980. But we all know that situations alter cases, and despite what the noble Lord said, changing circumstances have now made the case for employee joinder much stronger. The Government are not inflexible. They have changed with the times, and views have changed. In particular, the mounting public concern over the closed shop, and over the dismissals that have been carried out in open defiance of the 1980 Act, clearly requires that liability for closed shop dismissals should more often be laid, where it is right to do so, at the door of trade unions.

Moreover, in the Government's view it is not the case that employee joinder will cause industrial relations difficulties. If any employer does not "join" a union in unfair dismissal proceedings, but his dismissed employee does, how can the employer be held responsible for that by the union concerned? The employer would be able to make clear to the unions that he had nothing whatever to do with his ex-employee's decision; that the employee was no longer on his premises, and was thus out of his sphere of influence. If the amendments were accepted, there would be no employee joinder and little prospect of unions being made to pay where they force an employer to dismiss someone unfairly for not being a union member.

The noble Lord might like me to go a little further with regard to points concerning the change since 1980. I have mentioned the fact that the 1980 Act has already been defied in many cases. There is also the question of the judgment in the European Court case, as well as the question of evidence in regard to the opinion polls. The case is a strong one. If the unions are worried about being joined in unfair dismissal proceedings following a closed shop sacking, there is one very simple answer. It is not to exert any pressure on the employer to dismiss unfairly in the first place. I really cannot accept all that the noble Lord has said in his decrial of the whole of the clause and the entire business of joinder, and for that reason I must ask that the amendment be rejected.

Lord Jenkins of Putney

I find myself very worried indeed about this proposal. It seems to me that the question of whether a person has been dismissed fairly or unfairly might be extremely difficult to determine in any particular case. Indeed it is the whole basis of the Bill that this question is one which must be very carefully decided. For any person in an employer-employee situation it might be very difficult to know in advance whether the dismissal has taken place fairly or unfairly; it is not a matter that is immediately obvious in every case. Complex situations arise from time to time.

What worries me here is that if the dismissed person, who is obviously the aggrieved person, has the right to put the finger (as it were) on the person whom he holds responsible for his dismissal, there will be a position in which no person in the organisation is likely to get himself into the situation of being held so responsible. Therefore it seems to me that in any situation of that kind a person would be mad to become a shop steward, because the consequence of it would be that all the time he would be holding himself out to the possibility of being dismissed.

I know from personal experience the difficulty that can be experienced over years in persuading people to become what are called Equity deputies. It is an arduous task. One has to go around the place, pressing people to keep up their subscriptions. Nobody really wants to do it. They want to get on with their acting, to get on with their profession. But, fortunately, a number of people can be persuaded to be sufficiently public-spirited to hold the whole organisation together and to go on to do the arduous job of Equity deputy, who is in fact the representative of the organisation in the particular company concerned.

An Equity deputy has from time to time the rather arduous and unpopular duty of badgering people for money. Sometimes, in representing the collective to the employer, he has to say to the employer, "You are not behaving as you should according to the contract", and thereby he runs the risk of being prejudiced regarding casting of future productions. It seems to me that in addition to all that disadvantage which he at present suffers, under the clause he might hold himself out to be sued personally for large sums of money as a result of an unfair dismissal, and at the time he might not have been aware that it was unfair.

So there is a situation in which perhaps the deputy says to another person, "You must join the union", and he replies, "No." Eventually the deputy goes to the employer and says, "Look, this chap is refusing to join, and we can't work with him—otherwise the whole situation will break down". At that time the deputy might believe himself to be acting entirely within the law. He might say, "What I am doing here is what I have always done, since this is a situation in which the contractual obligation between employer and employee must be upheld". He holds a meeting with the company, and somewhat reluctantly it agrees that the Equity shop must be maintained, and a decision is taken accordingly.

The employer then dismisses; and let us suppose that there has been some defect in the whole procedure. For some reason or other, possible entirely unknown to him at the time, the deputy has created a situation in which it is possible for the dismissed person to show that he has been dismissed unfairly. In those circumstances this entirely innocent individual will be severly prejudiced and might have to find substantial sums of money. I would suggest that in all the circumstances my noble friend has made his case here, and it did not seem to me that it was answered by the noble Lord who replied. I hope that the Committee will again look very carefully at this question, to see whether, possibly unwittingly, the trade union movement could be undermined to the extent of making it extremely difficult to persuade people to undertake the arduous and unpopular duty of deputy or shop steward.

7.7 p.m.

Lord Boyd-Carpenter

Surely the answer to the worry of the noble Lord, Lord Jenkins of Putney, is that no decent, honourably conducted trade union would allow a shop steward, involved in payment of compensation in the circumstances that we are discussing, to pay the compensation out of his own pocket. Any honourably conducted union would stand behind him, just as any other good organisation would. I am perfectly certain that the union with which the noble Lord, Lord Jenkins of Putney, was very much concerned—perhaps he is still concerned with it—would undoubtedly behave in that way. I do not know any union that would leave the shop steward high and dry.

I think that my noble friend Lord Glenarthur did a most effective demolition job on the amendment. I hope that the noble Lord, Lord Wedderburn of Charlton, will not regard it as vindictive if I say that my noble friend really demolished his speech. There is only one further consideration that I would put before the Committee on this matter, and it relates to the point, which is crucial in regard to this amendment, concerning the right of the complainant to join the union. Given the very large sums that can be awarded to complainants in these cases (as has been frequently pointed out), in the case of a very small employer it is possible that the complainant himself might feel that his employer would be unable to meet the kind of figure that would be likely under the Bill to be awarded; or even if he could meet it, he would have to go into liquidation and so endanger the employment of other people, in order to find the money. Therefore, where there is involved a union with the kind of funds that most major unions in this country have available, it might he extremely sensible for the complainant to make sure that the union, which can certainly meet any payment that might be awarded, should be joined. That would be a thoroughly sensible and prudent step to take.

On the general issue, I have always thought that it was really extremely unfair to an employer who, by union pressure and by the threat that if he does not yield to it there will be disruption of his business, has been compelled to dismiss someone, perhaps unwillingly, that there should be added to the insult of having to do that the injury of having to find the whole of the compensation awarded. If the effect of this clause as it stands, without the amendment, is, as my noble friend Lord Glenarthur I think rightly said, that unions are going to be more involved in the payment of compensation, this must be a good thing from two points of view: first of all, because it is plainly in these circumstances more equitable, and, secondly, because it could be quite an effective discouragement to unions from doing what most people think they ought not to do—namely, use their power to drive out of his job someone with whom they have a quarrel or disagreement, or who will not join them. Therefore, as a deterrent to union action of that kind—action which can only impose, if successful, hardship on individuals—it seems to me that this clause is quite a valuable improvement to our law, and I hope the Committee will reject the amendment.

Lord Underhill

I was disappointed with the argument put forward by the noble Lord, Lord Glenarthur, but in another way I was pleased that he put it forward in such a stark way because it showed the real position that the Government wish to adopt on this matter. I am wondering where the Government have got their advice. Why is it that very few employers have used this discretion, which is there already, to join a trade union or other person? Why have they not used that discretion? I wonder where the Government have got their advice now to allow this joinder to be made by an employee. Surely there is going to be a lot of diflerence in the exercise of this discretion between an employer, who has all the responsibilities, and a dismissed employee, who will not have the same sense of responsibility or sense of discretion when it comes to deciding what to do.

The noble Lord, Lord Glenarthur (I wish I could take my shorthand better than I can), used the words "a deterrent against the union", "be laid at the door of unions", "the union must be made to pay", or words to this effect. But when one looks at the clause one sees that the words are …pressure which a trade union or other person exercised on the employer by calling organising procuring or financing a strike or other industrial action or by threatening to do so". Therefore, one could have an attitude adopted by a person on the shop floor who says, "We are not going to stand for this any longer; this person has been acting in such a way in making the shop floor unhappy that we really have got to do something about it".

It may not be the trade union, or even the shop steward, but an individual. It may be personal feeling between the dismissed individual and another person; but he is now going to have a discretion. It is a discretion which an employer would never dream of taking if he has a sense of responsibility, but the individual may do so. I therefore say again: I wonder from where the Government got their advice to proceed with this important change.

Lord Boardman

I must confess to having been a convert from the view which was expressed in another place in 1980 to the view which is now in the Bill before us. I then believed that it was right that the employer, who actually discharges the man, makes the man unemployed, should carry the responsibility for it, no matter what pressure he came under. That was my view at that time. I have become convinced by the experience of the last two years of the fact that the employers feel, and understandably feel, great difficulty in provoking further industrial troubles by joining a union, that that course is not effective and that it has been necessary, as my noble friend Lord Glenarthur said, to bring in a more effective measure so that the complaint can go directly to those who are responsible for his dismissal, the union which applied the pressure. I therefore very much support the clause and the change of attitude that has come about during those two years.

Lord Wedderburn of Charlton

I hesitated before getting up (as, with leave, I wish to do just for a moment) because I did not know whether the noble Lords who sit on the Social Democratic Benches were going to say a word about the justice of this position. However, they are not, and so may I say three things. First, to the noble Lord, Lord Boyd-Carpenter, I would say that I have had cases demolished and I am sure the noble Lord has, too, but if the noble Lord says that, tonight, the noble Lord the Minister demolished the case for this amendment, then the noble Lord the Minister demolished the case put by the Government on 11th March 1980. I shall look up the records with interest to see whether the noble Lord, Lord Boyd-Carpenter, voted with the Liberal Party, spoke with the Liberal Party, marched with the Liberal Party against the Bill as it was then, which is completely contrary to what it is going to be after this Bill is passed. I doubt very much whether I will find that. Secondly, I have heard no evidence—

Lord Boyd-Carpenter

Would the noble Lord allow me to interrupt him? Is the noble Lord such a conservative that he can never change his mind in the light of changing facts?

Lord Wedderburn of Charlton

Indeed, no; but I am sufficiently sensibly radical always to want reasons for the change, and none has been produced tonight—none at all. "Changing circumstances", "mounting coercion"—good phrases, but not a good case. Indeed, the words "employee joinder" have been used. But, of course (the next amendment will show, but let me put it now) this is not employee joinder; this is non-unionist joinder, because it does not apply to trade unionists who are dismissed. The case was that of the Government in 1980, and it really has not been answered tonight.

I hope the noble Lord the Minister will forgive me because I forgot to pursue the Hunting of the Snark with the noble Earl, Lord Gowrie, when he was here. I will do so now as a final point before your Lordships part with this amendment: It is a pitiful pail', said the Bellman, whose face Had grown longer at every word, But now that you have stated the whole of your case, More debate would be simply absurd".

Lord Glenarthur

Not for the first time, I am a little alarmed at following the noble Lord, Lord Wedderburn, but I think that perhaps I can start with the point made by the noble Lord, Lord Jenkins. If in doubt the employer, of course, should not dismiss an employee. If an individual shop steward is in doubt as to whether he is likely to be joined in unfair dismissal proceedings, he should not put any pressure on the employer to dismiss him. It is perfectly true in all our lives that if we have any doubt as to whether or not some action we take might break the law, then of course we play safe and do not take it—and that, I think, applies just as much in this case as it does to the normal way of our lives. The noble Lord wishes to interrupt?

Lord Jenkins of Putney

I wish to clarify this point. Has the noble Lord never been in the position when he was absolutely convinced he was entirely right and had no doubt at all, and then subsequently found he was wrong?

Lord Glenarthur

Yes, of course, that is true, but it is also true to say that it can be perfectly reasonable for someone to have very strong grounds for not wanting to take particular industrial action, for example, which he may feel might be politically motivated. He might feel very strongly about it, but I think that comes within exactly the same description as the noble Lord seeks to give.

The noble Lord, Lord Underhill, asked for amplification of the term "other person". This could of course be a shop steward, who could apply pressure individually. Even a fellow worker might apply pressure. Indeed, it could be someone from another union who applies pressure. Literally anybody who applies pressure on an employer to dismiss an employee is the point which is being made here.

It was asked by, I think, the noble Lord, Lord Wedderburn: why have not employers used the power of joinder? Employers may well have been swayed by industrial relations considerations. On the other hand, the employee will not be swayed by the same considerations. If the employee joins a union, there is no reason why this should lead to industrial relations disadvantages. I am grateful for the support of my noble friend Lord Boyd-Carpenter. He says things so much more neatly than I can possibly try to emulate. I am grateful for what he said. I get the impression from the Opposition Benches—it seems to represent to some extent their view of someone who resigns from a trade union, although I am expressing myself not very well—that greedy troublemakers could perhaps be the sort of people envisaged in this case.

The noble Lord, Lord Howie of Troon, who unfortunately is not here today, said in our debate last week that not everything a trade union does is defensible. Noble Lords opposite must recognise that, as I have said, many people leave trade unions on genuine grounds of principle because they do not want to take industrial action which may be politically motivated or which is harming the general public. If they are "hounded out" (as my noble friend, Lord Boyd-Carpenter described it) of their jobs by the trade union, it is only natural and right that the trade union should be held responsible at law. It is not a question of greed or spite; it is a matter of principle. That, as the noble Lord, Lord Wedderburn, has said, is what we are debating. It is not enough that justice should be done but that justice should be seen to be done. That is why this Bill provides that someone who has been unfairly dismissed because of trade union pressure will have a right of joinder against the trade union. That is why I ask the Committee to reject this amendment.

On Question, amendment negatived.

7.22 p.m.

Lord Denham

This is probably a convenient moment for the House to be resumed for the dinner break. Before I move that Motion, it might be helpful if I were to make a short announcement about the remainder of this Bill. As your Lordships will be aware, there is still a large number of amendments and clauses to be considered. I must tell your Lordships that if we are to sit no later than 11 o'clock tonight, as I believe to be the general wish of the Committee, unless considerably better progress is made during the rest of tonight and tomorrow, then tomorrow's sitting, which already must inevitably be very late indeed may literally have to be all night.

Baroness Llewelyn-Davies

We have heard the Government Chief Whip with some trepidation threaten us with an all-night Sitting. We on these Benches always do our duty. We rather regret that the Government are so inefficient that they bring forward a Bill of this order, of this controversial kind, at the very end of the Session. Noble Lords who have a lot to do—and some of us are not as young as we were—may have to sit all night because of the inefficiency of the Government.

Lord Denham

I will not be drawn by the noble Baroness, tempted though I might be at other times to be so. I must tell her that it is with even greater trepidation that I, myself, am awaiting the outcome of my forecast. I wanted to say what I believe to be a fair representation of the facts at the minute, because I do not want to spring anything on your Lordships tomorrow without due warning.

As regards the dinner adjournment for this particular Bill, I think it would probably be right to resume the Committee stage no earlier than ten minutes past eight o'clock; and, therefore, I beg to move that the House do now resume.

House resumed.