Lords Sitting of 13 July 1982

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

Royal Assent
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Iron and Steel Act,

Food and Drugs (Amendment) Act,

Civil Jurisdiction and Judgments Act,

Taking of Hostages Act,

Supply of Goods and Services Act,

Local Government (Miscellaneous Provisions) Act,

Firearms Act,

Local Government Finance Act,

Cinematograph (Amendment) Act,

Forfeiture Act,

Copyright Act 1956 (Amendment) Act,

Feltham Station Area Redevelopment (Longford River) Act.

UN World Food Council: Mexico Conference
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached at the conference of the United Nations World Food Council in Mexico, and what contribution the United Kingdom representative made to the proposals.
Lord Skelmersdale: My Lords, as the conclusions are rather long, I have placed a copy in the Library of your Lordships' House. The council examined in turn the pursuit of national food policies and strategies in developing countries, direct national and international measures to help eradicate hunger, the African food problem and the role of international agencies, and issues of world food security and trade. Britain is not this year a member of the council, but our representative was present as an observer and took part in formulating the common Community position, both for general debate and for the preparation of the conclusions.
Lord Brockway: My Lords, I thank the Minister for that very full reply, and I assure him that I shall read with great interest the Statement in the Library. May I ask him whether, in view of the need, he thinks that the conclusions are adequate? Did he note the statement of the Secretary-General of the United
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Nations at the council meeting, that shortage of food is now more critical than it has been since 1970, and that in Africa the average person today eats 15 per cent. less than he did a decade ago? Will the noble Lord agree that there are two main problems? One is the maldistribution of food, as illustrated by the fact that America is reducing production because the poorer people cannot buy. The second problem concerns the absence of agricultural development in the rural countries, as illustrated by the fact that only nine of the 61 countries which signed the FAO Rome Agreement some years ago have increased production?
Lord Skelmersdale: My Lords, I am satisfied with the conclusions of the conference mentioned in the noble Lord's Question. However, I would point out that the object of the conference, which was set up in 1974, following the World Food Conference, was to provide a political forum where agriculture Ministers could, and should, meet annually to review the world food situation. Both of the points to which the noble Lord has drawn attention find expression in the communiqué concerning the conclusions and recommendations to which the Question refers. I most certainly agree with the noble Lord that these are the two most serious problems facing the world today.
The Earl of Lauderdale: My Lords, will not my noble friend agree that the rise of world hunger has followed startlingly the withdrawal of colonial power from a great part of the globe?
Lord Skelmersdale: My Lords, that may be a fact, but I do not think it is the reason here.
Lord Taylor of Gryfe: My Lords, will the noble Lord agree that the shortage referred to is a shortage not of food, but of credit, and that to make some impact in reducing interest rates might make it possible for the purchasing countries to buy food and to feed their people?
Lord Skelmersdale: Yes, of course, my Lords; I accept that there is currently a snarl-up in world interest rates, but I think that the most important thing is to give sufficient aid and instruction to enable the countries to grow their own food. This is probably the key to the whole problem.
The Earl of Lauderdale: My Lords, will not my noble friend agree that the aid should include encouragement to white colonials to remain and to help the oncoming countries?
Lord Skelmersdale: My Lords, that is a matter for the Governments and countries concerned.
Lord Oram: My Lords, is not the proposal on grain reserves one of the most important results of the conference, and will Her Majesty's Government seek to take an initiative in this matter? For instance, I gather from the noble Lord's original Answer that at the conference our delegate played a part within the Community's delegation. Will the Government continue to do that, since is it not the case that in terms of grain production the European Community

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is much better placed to take an initiative in the matter of grain reserves than we would be, as a single country, and as a considerable importer of food?
Lord Skelmersdale: Yes, my Lords; certainly the Government attach great importance to our multilateral forms of aid, whether they be of grain or anything else, through our membership of the Economic Community. Regarding the special grain reserves to which the noble Lord referred in the first part of his supplementary question, I would say that this idea was noted with appreciation, but many questions were then raised, and have since been raised, about its economic and technical feasibility. The conclusions of the conference asked the director to do more work on it with other agencies concerned, and to bear in mind the related questions involved. In fact, it was agreed that there was a case for building up grain reserves in developing countries as part of their own stocks and production policies, as well as for protection against market fluctuations. The United Kingdom Government's view is that another thing which should go hand in hand with this is the solving of transport difficulties, which tend to preclude regional stores.
Lord Brockway: My Lords, may I ask a rather different question, of which I gave belated notice? May I ask the noble Lord this question: Arising from the meeting of the World Food Council, is it not desirable that there should be some simplification and co-ordination of the United Nations bodies on this subject? At present there are five different bodies, often rivals. Would it not be a good idea if the economic department of the United Nations sought to find some co-ordination of their activities and the ending of the bureaucracy which is present in many of them?
Lord Skelmersdale: My Lords, I must note with some measure of approval what the noble Lord, Lord Brockway, has said, and point out that the World Food Council was set up to serve as a co-ordinating mechanism to provide overall, integrated and continuing attention for the successful co-ordination and follow-up of policies concerning food production, et cetera. Certainly one of the things with which it could well concern itself is the rationalisation of the bodies to which the noble Lord refers.
Lord Seebohm: My Lords, would the noble Lord agree that the developing countries constitute the world's greatest reservoir of food production, that each country therefore has an obligation to pursue a food strategy which has a realistic chance of meeting basic internal needs, and that international aid should be conditional upon its being used primarily for this purpose?
Lord Skelmersdale: My Lords, many of these countries about which we are talking this afternoon have enormous potential, but without help they are unable to realise this potential. That, I think, probably answers the noble Lord's question.

Government Forms
2.45 p.m.
Baroness Sharples: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the number of Government forms which businesses are required to fill in has decreased since publication of the White Paper Administrative Forms in Government published on 17th February 1982 (Cmnd. 8504).
The Lord Privy Seal (Baroness Young): My Lords, in the White Paper the Government announced changes based on looking at 93 types of forms which mean 5 million fewer forms and leaflets for the public and businesses each year. Departments are now working on arrangements for improving the control and design of all forms. I expect that we shall be able to drop some, and we intend to make those which cannot be dropped easier and quicker to complete. That will save business time.
Baroness Sharples: My Lords, I thank my noble friend for that encouraging reply, but I understand that there are 2,000 million forms in existence, and if we do them at the rate of 5 million a year I think it will take 100 years. Would my noble friend please assure me that the forms which are sent out are somewhat simpler than in the past, and easier to understand, and also that there is room on which to write the answers?
Baroness Young: My Lords, my noble friend has clearly read the White Paper well; it has indeed been identified that there are something like 2,000 million forms. This includes not only forms sent out to be filled in for particular information but, of course, follow-up letters as well. It is an enormous task, and departments are now making arrangements to review all their forms to see which ones can be dropped and to give priority to those forms which have the widest distribution and are the most important.
Lord Leatherland: My Lords, would the noble Baroness agree that the return for income tax purposes which many citizens have to make is one which might very well be dropped?
Baroness Young: My Lords, I fear it might be replaced by another, even if it was a simpler one.
Lord Bruce of Donington: My Lords, is the noble Baroness aware that part of the complication that arises on the drafting of certain of the forms comes from the complexity of the innumerable regulations that are issued by Government departments; and will she pay attention, please, to the necessity for simplifying a good number of the regulations with which the country is inflicted at the present time?
Baroness Young: My Lords, I would agree with the noble Lord, Lord Bruce, that it is the complexity of some legislation which makes the design of forms most difficult; but the House may like to know that the

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leaflet entitled Filling in your VAT Returns in fact won a Plain English award last December from the National Consumer Council and the Plain English Campaign. So it is possible.
Lord Elwyn-Jones: My Lords, would the noble Baroness the Minister say what the plain English was?
Baroness Young: My Lords, I should be happy to send the noble and learned Lord one of the forms.
Viscount St. Davids: My Lords, will the noble Baroness ensure that her most praiseworthy efforts do not result in a long and complicated form sent out to all firms asking them which forms they want abolished or altered?
Baroness Young: My Lords, in fact we are consulting businesses on the type of form; and, depending on the particular business and the particular form, we would of course consult appropriate representatives of that business in order to obtain their advice on the form in regard to both its intelligibility and its ease of completion.

British Rail and Productivity
2.49 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made in implementing the six productivity items agreed between the rail unions and the British Rail Board a year ago.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, on the six productivity measures agreed last year between the railway unions and the British Railways Board, little substantive progress has been made, even though the board paid for these in advance. The unions have accepted the concept of open stations, and some pilot schemes are now in operation. The National Union of Railwaymen and the Transport Salaried Staff Association have accepted and are working flexible rosters, and are thereby enjoying the financial and social benefits which they bring. The remaining measures have not been implemented. In particular, the ASLEF Executive remain stubbornly opposed to flexible rostering for train drivers, against the obvious best interests of their membership.
Lord Orr-Ewing: My Lords, while thanking my noble friend for that rather disappointing reply, may I ask whether he is aware that Mr. Buckton, on behalf of ASLEF, frequently asks that more investments should be made in the railways? There is no one in Parliament who does not wish to see an efficient railway system. Can my noble friend say how much money has been invested in British Rail since the May 1979 election? Is not it rather unfortunate that with the electrification of the line from Bedford to St. Pancras,
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all the new rolling stock which has been supplied, costing £150 million, cannot be used because ASLEF have refused to operate these modern methods?
Lord Bellwin: My Lords, of course on the latter point it is disappointing; and some might say it is more than disappointing. It has all sorts of implications. So far as the statistics are concerned, £1,500 million have been invested since 1979. Since 1976, that figure is £3 billion.
Lord Underhill: My Lords, would not the Minister agree that this type of Question, in the middle of what could be a disastrous industrial dispute, is hardly helpful to achieving settlement? Can the Minister not agree that over the last 10 years the trade unions in the railway industry have a great record of improved productivity? Can the Minister indicate how much has already been saved by the productivity measures, how much will be saved by flexible rostering on the locomotives only and how much has already been lost by this disastrous strike? Would it not be better if the Minister—not this Minister, but the Secretary of State—instead of making threatening speeches did something about trying to settle the strike which could have been done on an agreement which was reached on experimentation with alternative flexible rostering?
Lord Bellwin: My Lords, I think the noble Lord has put to me about ten supplementary questions in one. I am at pains always in answering Questions to be as factual as I can and not to exacerbate situations which are very sensitive. Nevertheless, I think that in the interest of giving a few facts to answer the points that the noble Lord raises, I should say that the board's figures show that productivity between 1974 and 1979 rose by 5 per cent. and between 1979 and 1981 fell by I per cent. The noble Lord asked whether the Secretary of State should not (if you like) step in. I think the answer to that must be that the Government have no intention of intervening in what is a matter for the Railways Board to settle with its workforce. I think the noble Lord was less than his usual evenhanded self when he suggested that it is in any way the responsibility of British Rail for not being willing to talk about this matter when, having made their offer to do precisely that, it was ASLEF who called a strike. In those circumstances, there can be no meaningful discussions and negotiations; so that it is not too helpful.
Lord Boyd-Carpenter: My Lords, whether my noble friend's reply be helpful or not, is it not at any rate more helpful than the recent intervention by the Leader of Her Majesty's Government's Opposition?
Lord Bellwin: My Lords, that certainly has not been helpful at all; I agree with my noble friend on that. It is not surprising that the leader of the National Union of Railwaymen has expressed his own dismay at that intervention.
Lord Avebury: My Lords, bearing in mind what was said about sensitivity in this issue, may I ask whether there is not some misunderstanding about what hours actually would be worked under the flexible

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rostering proposed by the Railways Board; and is there not some residual fear among many railwaymen that they will be asked to vary their starting and finishing time by such wide margins that it will destroy their social life? If this is incorrect, could not some statement of the British Railways Board be published to show what the effect will be on the average railwayman?
Lord Bellwin: My Lords, perhaps it would be helpful to say that the ASLEF membership feared the very point that the noble Lord makes; but I would have to go on to say that the report of the Railway Staff National Tribunal proposed a series of safeguards to protect the interests of the drivers and to allay their fears; and that the board accepted these safeguards in full. It is worth pointing out that over 80 per cent. of British Rail guards are now working flexible rostering and that with only one exception all other European railways are successfully and fully operating flexible rostering.
Lord Underhill: My Lords, I asked the noble Lord whether he could indicate how much would be saved per year by adopting flexible rostering for the locomotive men. If the Minister does not have the answer, perhaps he could write to me, because ASLEF have claimed that the saving would be only £2 million a year.
Lord Bellwin: My Lords, I am able to give an indication of that. It is that the benefits which would flow from the introduction of flexible rostering and associated items total over £35 million.
Baroness Burton of Coventry: My Lords, may I ask the Minister—although I think he has already answered it in commenting on the supplementary question put by the noble Lord, Lord Underhill—whether, on the question of alternative flexible rostering, I am not right in remembering that this proposal was put forward by British Rail, that it was totally ignored by ASLEF for a period of, I believe, six days and ASLEF then replied with a national strike? We are now told by Mr. Ray Buckton on television that ASLEF wished to undertake flexible rostering and that it is the Railways Board who are being obdurate. Would the Minister agree that if that is correct, we might have it underlined and got over to the general public?
Lord Bellwin: My Lords, so far as I am aware, what the noble Baroness has said is correct. I think the public are not being starved of comment and information about what is happening. I am sure they will come to their own conclusions, and they would probably be the ones the noble Baroness mentioned.
Lord Tanlaw: My Lords, could the noble Lord give an undertaking that once this dispute has been settled there will be no further delay in the investment programme of railway system modernisation in this country?
Lord Bellwin: My Lords, the noble Lord will know that I can make no such comment on that.
Lord Orr-Ewing: My Lords, is my noble friend aware that some of the information given us will be of interest to the electorate as a whole that many millions of people and businesses, too, are suffering grievous inconvenience as a result of what many people believe is an unnecessary strike, and that anything we can do to make the facts known to Parliament and the electorate must be helpful?
Lord Bellwin: My Lords, I accept what my noble friend has said as to that.
Lord Beswick: My Lords, will the noble Lord confirm one figure from the reply he made to my noble friend Lord Underhill? He said that £34 million would be saved if the flexible rostering scheme had been accepted. Does that apply to flexible rostering for locomotive men, which was the subject of the supplementary question?
Lord Bellwin: My Lords, the figure I gave is over £35 million. The figure I have is £35.4 million. As to what it refers, yes, it is to cover flexible rostering and associated items. If the noble Lord would like a breakdown, I will send it to him.

Civil Service Efficiency
2.59 p.m.
Lord Gridley: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action has been taken to improve the efficiency of the Civil Service.
Baroness Young: A very great deal, my Lords. From 1979 to 1981 there have been 108 departmental scrutinies and three large service-wide reviews. Last year we published a White Paper, Efficiency in the Civil Service, in which we set out our policies for improving management and efficiency. We have since pressed ahead with new and substantial work, including our programmes of lasting reforms, of action to improve financial management, and of scrutinies and other reviews.
I am arranging, with the leave of the House, for a list of the scrutinies and service-wide reviews being conducted in departments as part of our central efficiency strategy for 1982 to be published in the Official Report.
Following is the list referred to:

1982 SCRUTINY PROGRAMME AND SERVICE WIDE REVIEWS

Department

Scrutiny

Review

Home Office

Administration of the Criminal Injuries Compensation Scheme*

Resource control review of the prison service* Review of personnel work *

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Department

Scrutiny

Review

Lord Chancellor's Department

Administrative procedures for means assessment of those applying for civil legal aid (jointly with the Department of Health and Social Security)

Review of personnel work*

Foreign and Commonwealth Office (including Overseas Development Administration)

Use made of Diplomatic Service personnel overseas (postponed from 1981)* Review of the Passport Office*

Running Costs Review*

The work of the ODA's professional advisers (other than economists)*

HM Treasury

Civil Service Catering Organisation*

Resource Control review of Royal Mint*

Inland Revenue

PAYE End of Year Procedures* Visits made to the public by Inland Revenue staff District Memoranda and Instructions to tax and collection offices

Review of personnel work*

Customs and Excise

Processing of Customs Import Entries

Review of personnel work*

Department for National Savings

Improving the quality of the Post Office service paid for by the Department*

Department of Industry

Methods used to assess the cost-effectiveness of Selective Financial Assistance

Department of the Environment

The Cartographic service

Property Services Agency

Resource Control review of District Works Offices* Review of personnel work

Department of Education and Science

Running Costs Review*

Department of Health and Social Security

Payments of social security benefits to people in hospital

Review of personnel work*

Management and Personnel Office

Running Costs Review—Departmental review and central team* Resource control review—Central team* Review of personnel work—Central team*

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Department

Scrutiny

Review

Government Actuary's Department

Actuarial services needed by Ministers*

Paymaster General's Office

Declarations of Entitlement for public sector pensions (postponed from 1981)*

Department of Energy

Energy conservation effort*

Running Costs Review*

Department of Employment

Running Costs Review* Review of personnel work

Northern Ireland Departments

Acquisition, management and disposal of land by the NI Departments

MAFF

Generation and use of written documents*

Review of personnel work*

Ministry of Defence

Service and civilian pension administration* Service pay and records

Resource control reviews of:(1) RAF Support* (2) Meteorological Office*

Scottish Office

Resource control review of Prisons* Review of personnel work

Welsh Office

Administrative and grant procedures under the Land Drainage Act 1976*

Department of Trade

Practice relating to the supervision of insurance companies

Resource control review of Coastguard Service* Running Costs Review*

Department of Transport

Administration and enforcement of the Goods Vehicle Licensing System

Manpower Services Commission

Review of personnel work

Health and Safety Executive

Arrangements for the supply and use of information on industrial accidents and diseases*

Review of personnel work

*Already under way.

Lord Gridley: My Lords, I am most grateful to my noble friend the Lord Privy Seal and Leader of the House for that interesting and informative Answer. May I ask my noble friend whether she will be prepared to give further information to your Lordships on the benefits which it is hoped will accrue from this efficiency operation?
Baroness Young: My Lords, potential savings of around £300 million a year and £37 million once-and-

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for-all savings have been identified. Savings from decisions taken so far are around £150 million a year, and as much again is still for decisions. We believe that the scrutinies and reviews have resulted in greater value for money, more streamlining, better management and, above all, a better service to the public. I should like to place on record that all this work has been done by civil servants themselves.
Lord Derwent: My Lords, is my noble leader satisfied that all those who examine and select candidates, particularly for the senior grades of the Civil Service, are sufficiently qualified and lacking in prejudice to select the best candidates? If she is so satisfied, is she aware that my information is quite to the contrary?
Baroness Young: My Lords, if my noble friend in his question is referring to what we are doing on succession planning, I should like to say that the new arrangements that have been made should ensure that those who are going to the top of the Civil Service get experience of managing both people and money, and I believe that within the Civil Service we are fortunate in having very many very able people indeed.
Lord Derwent: My Lords, I am very sorry that my noble leader has misunderstood me; it is entirely my fault. I was referring to those candidates who are not yet in the Civil Service.
Baroness Young: My Lords, if my noble friend is referring to applicants for administrative trainees, this year, I think I am right in saying, we are taking in about 45 administrative trainees and indeed we may not be able to fill all the posts.
Lord Elwyn-Jones: My Lords, is the Lord Privy Seal able to give any indication at this point of time when the Government's response to the Megaw Report on the Civil Service is going to be discussed or the Government's reactions to it are going to be indicated?
Baroness Young: My Lords, as the noble and learned Lord will appreciate, the Government are still considering their response to this important report. It is another question, but I hope that at an appropriate moment the noble and learned Lord will put down a Question on that subject.
Lord Bruce of Donington: My Lords, is the noble Baroness aware that the recruitment of accountants into the Civil Service is proceeding far more slowly than the Government themselves envisage? Will she assure herself that there is no undue resistance on behalf of some of the administrative grades to the introduction of rather more accountants into the Civil Service, which process at the moment, as the noble Baroness is aware, is being conducted by Mr. Kenneth Sharp?
Baroness Young: My Lords, I should like to assure the noble Lord that it is the intention of the Government that the number of accountants in the Civil Service will be doubled over the next 10 years. We are
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introducing new training facilities to give much greater training in financial management to all those seeking top posts in the Civil Service. These are important matters which will underpin our drive for greater financial efficiency throughout the Civil Service.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that dinner will be available this evening at the usual time. The Committee stage of the Employment Bill will be adjourned at approximately 7 o'clock for approximately one hour and, during this adjournment, the two Town and Country Planning (Minerals) Regulations and the Agriculture Act 1970 Amendment Regulations will be taken.
It may also be for the convenience of your Lordships to know that the Grill Room will be open from this evening for the dispensing of refreshments, including breakfast, for so long as the House sits.

Falkland Islands (British Citizenship) (No. 2) Bill [H.L.]
Lord Bruce of Donington: My Lords, I beg to introduce a Bill to enable citizens of the Falkland Islands to acquire British citizenship. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.— (Lord Bruce of Donington.)
On Question, Bill read a first time, and to be printed.

Employment Bill
3.5 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Earl Ferrers.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
The Lord Advocate (Lord Mackay of Clashfern)The Lord Advocate (Lord Mackay of Clashfern) moved Amendment No. 99A:
After Clause 11, insert the following new clause:
("Prohibition on union recognition requirements.
.—(1) Any term or condition of a contract for the supply of goods or services is void in so far as it purports to require any party to the contract—

(a) to recognise one or more trade unions (whether or not named in the contract) for the purpose of negotiating on behalf of workers, or any class of worker, employed by him;

(b) to negotiate or consult with, or with any official of, one or more trade unions (whether or not so named).

(2) A person contravenes this subsection if, on the ground of union exclusion, he acts in a manner falling within paragraph (a), (b) or (c) of section 11(2) of this Act.
(3) For the purposes of subsection (2) above, a person acts on the ground of union exclusion if the ground or one of the grounds for his action is that the person against whom it is taken does not, or is not likely to, recognise, negotiate or consult as mentioned in subsection (1) above.
(4) Subsection (2) above does not create an offence but the obligation to comply with it is a duty owed to each of the following—

(a) the person against whom the action is taken; and

(b) any other person who may be adversely affected by the contravention,

and any breach of that duty shall be actionable accordingly (subject to the defences and other incidents applying to actions for breach of statutory duty).").
The noble and learned Lord said: I should like to take Amendment No. 99A in explanation with Amendments Nos. 99B, 99C, 103A, 103B, 104A, 104B, 104C and 151A. Before I move those amendments to Clause 12 I would point out that there are two very minor mistakes in them as they appear on the Marshalled List that I need to correct before moving the amendments in the corrected form. First, in Amendment No. 99B the phrase to be inserted should begin with the word "Section" so that the insertion reads:
"Section 11(1) or".
Secondly, in Amendment No. 104B, originally numbered as Amendment No. 104A, the phrase to be inserted should end with the figure (1) so that it closes with the phrase,
"as mentioned in Section (Prohibition on union recognition requirements) (1)".
Amendment No. 99A, which is the first one to which I shall speak and which I move now, is a Government new clause. The other amendments that I mentioned are so closely linked with the new clause that it seems sensible to speak about them together. The new clause and the amendments have all been tabled to deal with a specific problem which has recently come to our notice and which we believe is not at present covered by Clauses 11 and 12 as drafted. The problem is this: a number of local authorities have been insisting that contractors must recognise and negotiate with trade unions or have agreements with trade unions about procedures if they are to gain contracts. We know of at least one council which is insisting that even before they can be on the list of contractors from whom tenders are invited, contractors should undertake to recognise the appropriate trade union.
These requirements have caused great and understandable concern among non-union contractors. They are not covered by Clause 11, because they do not say that all the contractor's employees must be union members. But in many respects their effiect is the same: first, because they force trade unions and trade union recognition on to companies and employees who do not want it; and, secondly, because they exclude non-union firms from tender lists and contracts in the same way as union labour-only requirements. Let me emphasise that we are not against employees recognising trade unions for negotiation and collective bargaining purposes. All we are saying is that this should be an internal matter for an employer and his employees to decide—free from external pressure from another employer or a trade union. We do not understand what business it is of the local authority how the contractor chooses to conduct his relations with his employees. Why,
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my Lords, should a local authority refuse to do business with a company which does not negotiate with trade unions?
The purpose of the new clause and the amendments is therefore to make requirements about recognition and negotiation unlawful and to provide redress for those who suffer from them. The new Clause 99A is a mirror image of Clause 11. It provides, first, that any requirements about recognition and negotiation which appear in a contract will be void and unenforceable. Secondly, it makes it unlawful to exclude someone from a tender list or fail to award him a contract or to terminate a contract with him on the ground that he does not recognise, negotiate or consult with a trade union or a trade union official.
Amendments Nos. 99B and C, 103A and B and 104A to 104C referring to Clause 12 deal with the same problem from the trade union point of view. As I said earlier, in the Government's view it is unacceptable that a company should be forced to accept recognition of a trade union owing to pressure from outside, and that is so whether the pressure comes from a company or from a trade union. The effect of Amendments Nos. 99B and 99C is therefore to remove immunity from trade unions who take or threaten industrial action to put pressure on an employer to act in a way which is unlawful under the new clause.
The other amendments seek to remove immunity from industrial action to interfere with the supply of goods and services, taken on the ground that a supplier does not recognise, negotiate or consult with trade unions. We believe that the new clause and the amendments constitute an important addition to the present Bill. They will help to stop practices which most people would consider unacceptable and they will be widely welcomed by contractors in particular. For all these reasons, I commend them to your Lordships and beg to move Amendment No. 99A.
Lord McCarthy: When the noble Lord, Lord Mackay, said that there were certain mistakes in the amendment, I thought for one wondrous moment that the Government might have relented. I did not believe this amendment when I saw it and I hoped maybe they had thought better of it; and of course one should think better of it. But it was not the case. I do not say that this is the most important new clause; I do not say it is the most important clause. I say it is the most objectionable; I say it is the most immoral; I say it is the most unjustified. I say it represents a further incursion into trade unionism and the ordinary day-to-day practices and beliefs of those who believe in trade unions.
Those members of the Committee who were awake when we stopped yesterday may remember that it was necessary to withdraw the amendments which my noble friends and I had put down, dealing with the previous clause. That was a pity but it was necessary, and it was justified on our side because of the very much more objectionable nature of this clause—which is not to say that we found the previous clause in any way acceptable, but at least it could be said about the previous clause that it was to do with the closed shop.
It is perfectly true that it simply meant that no rank-and-file trade unionists, whether they were in a position of authority in local authorities, or the chairmen

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of Labour clubs, or branch secretaries in trade unions or whatever they might be, or whether they were rank-and-file journalists working with various types of casual journalists, were entitled to insist on the so-called "fair lists", because fair lists in one way or another include firms or are made up of firms who recognise trade unions and who in many cases operate a closed shop.
But this clause goes much further. It has similar widespread coverage to the previous clause—that is to say, it does not deal just with contracts but with all forms of commercial activity, such as tendering, cancelling, failing to enter into tender. All kinds of commercial activities are covered in the way that Clause 11 covers them, but this clause has nothing to do with the closed shop. No longer are we being told, "You must not make these requirements in cases of a closed shop", but, "you must not make these requirements if the only thing you are asking for is that people should recognise trade unions and carry out trade union rates".
I wonder what noble Lords opposite really believe to be the motivation of people who try to secure that contracts, undertakings and work go to firms who recognise trade unionism. As little while ago as the 1971 Industrial Relations Act, a previous Conservative Government—though it is embarrassing to the present Government to refer to it—understood this; and indeed, the 1971 Industrial Relations Act, for all its faults, contained a number of provisions to encourage the spread of collective bargaining. Even in 1971, men of good will on both sides of the Chamber believed in the encouragement and spread of collective bargaining. Noble Lords opposite have changed their minds. They want to discourage the spread of collective bargaining. They believe that anybody who seeks to use his position, and even his own money and his own work, to encourage the spread of collective bargaining is some kind of moral pariah who should be in some way penalised.
It is perfectly true that the noble and learned Lord told us that this Government is not against recognition and that they do not intend at this moment (although of course we must be careful, because we have not finished the passage of the Bill yet and we might get another clause on Report) but at this moment the Government are not against recognition—not yet—in the sense that they are not yet introducing a clause which actually makes the recognition of trade unions unlawful. But give them time. Step by step the seven league boots are still in place and we are promised another Bill and another Bill and another Bill. They may get round to it; and if they got up today and told me that they did not intend to get round to it, it would not mean much to me.
So we have to look at this clause. This clause is saying that people should not use their positions of authority to seek to encourage trade unionism—not the closed shop, not coercion, but trade unionism. So we have to tell noble Lords, since they have clearly forgotten, though they knew about it in 1971, why it is that people should want to do that. It is because they are old-fashioned enough to believe that recognising trade unions, negotiating with trade unions and paying trade union rates is a kind of shorthand for
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non-exploitation; because they believe that if you insist on this simple provision the chances are that the people whose business you put in their way will not be exploiting their workers, will not be paying "scab" rates, will be giving decent conditions and therefore you will not be negotiating practices which you consider to be unjustifiable. That is their belief, and that is the belief which this Government are now going to make an actionable belief.
I sought to argue late last night that one of the great weaknesses, one of the great emotional, cultural and moral weaknesses, of the party opposite is that they have forgotten—one wonders how far they ever knew it—the possibility that trade unionists can have morals, beliefs, convictions and conscientious objections to encouraging "scab" labour and low levels of pay and conditions of work which they consider to be a disgrace. And because they consider them to be a disgrace, they insist, whenever they can, on putting work in the way of trade union firms. This is a simple, ethical principle. We think this is an ethical clause, and we will certainly divide the Committee.
Lord Campbell of Alloway: I do not understand how the noble Lord, Lord McCarthy, can stigmatise this amendment as objectionable, immoral and unjust. We are not against recognition, but we are against abuse and we are against pressure to force recognition. Why are we against that? It is because we are committed to the concept of freedom of association and all that that entails, which is envisaged in this Bill. Indeed, the activities that gave rise to this amendment only highlight the problem that there is now, as I stated before, no recognition machinery to obviate poaching, or to deal with inter-union disputes, which adversely affect those with no interest in the dispute. By and large, the Bill does not purport to deal with the internal affairs of trades unions, and how it can be stated that this amendment is immoral and objectionable, when all that it seeks to do is to obviate abuse, wholly defeats me.
Lord Underhill: In supporting the objection to this new clause, I should also like to take into consideration some of the points which might have been made last night on Clause 11 stand part, if there had been time, because they are somewhat inter-related. I could hardly believe my ears when the reasons for this new clause were given by the noble and learned Lord the Lord Advocate. It may be that some of us are wrong, but it hits at the very principles and beliefs for which some of us have strived for over half a century, and have tried to do it with a sense of moderation, believing that our way was the right way to achieve them.
I asked yesterday what noble Lords on the Government side were doing to show their belief in trade unionism—not dealing with abuses—and nothing that has been said in favour of this clause can possibly be said to be in support of a belief in trade unionsim. I hope that all sides of the Committee will question this, because of where it will lead in future industrial relations. It was asked: what right have people to interfere?—I was going to say as a member of the working class, but that may be an out-of-date expression to use. But as somebody who believes in the advancement of the people of this country, as someone

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who believes that the trade union organisation is a step towards that, I have a right to interfere in order to see that other people get decent conditions of work, and that is why we are opposed to this clause. It is said that it is to protect contractors, particularly small firms. Has anything been said about the protection of workers who find that they are in competition with another contractor or sub-contractor who has no trade union agreement, does not observe trade union conditions of work and who undercuts?
The Minister referred to freedom of choice. What about my freedom of choice as a consumer? I do my very best to buy essential things that are British made. I also want to do my very best to ensure that the things I buy are produced by people whose firms give them decent wages and conditions. Clause 11 may prevent me from doing that. For years and years, the organisation with which I was associated would not give a piece of printing to firms that did not observe a fair list, not because we were saying that they had to be trade union members, but in order to ensure that the conditions of work were fair and that we were not having competition from jumped-up outfits which did not observe proper print conditions.
Under Clause 11, I cannot in future get a fair list. Will a firm still be able to put,
"Printed by Blank Blank Brothers (TU)".
to show that I am dealing with a decent firm and not one that is undercutting rates? I am concerned with trade union conditions of work, as well as with trade union membership, and why should I, as a ratepayer, not insist that my local authority does not give work out to firms that undercut union conditions?
I ask your Lordships to put trade union membership on one side for a moment. Let us talk about decent conditions of work. If I can avoid it, my local authority will not give any work out to a firm which undercuts, which does not have a trade union agreement and which will not observe trade union conditions of work. I believe that the whole attitude—not just the wording—shows that words which say, "We are not opposed to trade unionism" need to be reconsidered. We are talking about the right of people to ensure that other people have decent conditions of work.
I should like to take one final example—and I ask your Lordships to remember that we are not just talking about local authorities. There may be a firm or an authority with construction work. It has good agreements with its own workers, trade union agreements, and it observes all national conditions of wages and other matters. A contractor comes on the job and he has no trade union agreement and is undercutting conditions. What do you expect the workers in the first outfit to do? They will down tools immediately and say, "We are not going to put up with this." It is an obvious thing to do for people who want to preserve not only their own conditions, but the conditions of other people.
The noble and learned Lord the Lord Advocate referred to the right of interference with materials. I am a moderate person, but if I knew that a firm which undercut trade union conditions, which did not observe trade union membership and did not even recognise a trade union was bringing in equipment and materials, I would stop it from being used in my firm. That is the spirit which still exists in the trade
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union movement, and this new clause, and Clause 11, are leading the way to further industrial action. I ask the Government to reconsider, and I also ask noble Lords on all sides to refuse to let this amendment go through, because it will be fatal for future industrial relations.
3.27 p.m.
Lord Boyd-Carpenter: This debate, so far, has been immensely revealing in that it has shown that the normally moderate Lord Underhill and the normally immoderate Lord McCarthy are lined up together in quite vehement opposition to a proposal which appeals to most of us on this side as fair and reasonable. This indicates, regrettably, a very real gap in the thinking of noble Lords on the other side from that of noble Lords on this side.
The noble Lord, Lord McCarthy, was extraordinarily emotional and used highly emotional terms, such as "scab rates" and "scab labour". What do those expressions really mean? They mean labour paid at rates lower than those negotiated by trade unions. But it does not follow from that, particularly in the present economic situation of the country, that those rates are either unreasonable in payment to the people concerned, or contrary to the national interest. Indeed, those rates may well mean that people are employed who otherwise would not be employed at all, because it is, if you like, a platitude of economic discussion that the higher you force up wage rates, the higher you force up the level of unemployment and vice versa. Therefore, to try to obscure a calm consideration of this matter by use of distinctly old-fashioned expressions of this kind—I think that the expression "scab" goes back to Victorian times—high in emotional, but low in intellectual, content does not help.
If I understand it aright, what my noble and learned friend's amendment means is that those who put out business should remain neutral as between those firms that recognise, accept and negotiate with trade unions and those who do not. If trade unionism does all the good which noble Lords opposite sometimes suggest—and I believe that it does quite a lot of it, though perhaps not all—that should be a sufficient advantage to the firms which recognise unions in terms of good industrial relations, co-operation, working together, of which we hear a great deal, and a great deal of it is very good sense, and should reward them sufficiently. But why should the purchasing power of particular purchasers—we are concerned here with local authorities and other politically motivated bodies—be used to discriminate between those who as a matter of good sense and good policy recognise trade unions and those who, as a matter of their own judgment of what is good sense, do not? Why should they be able to use their political power to discriminate in this way?
Baroness Gaitskell: Why not?
Lord Boyd-Carpenter: The noble Baroness asks, why not? I am delighted that she asked that question. Let me take the case of a local authority. A local authority represents ratepayers of all political views, some of them no doubt loyal and determined trade unionists. Others have perhaps suffered from trade

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union action. Other people see—as many of us do—the harm which the excessive power of trade unions has done to the British economy in recent years. The ratepayers consist of people of all those different views. Why should a majority, perhaps a temporary majority, in political control of a local authority use that political power to discriminate in favour of trade unions and against those companies which do not recognise them? That seems to me to be a most dangerous thing to do.
If the noble Baroness will permit me, I shall follow this a little further. It is well known that the Labour Party owes most of its financial support and a great deal of its electoral support to the unions. There is to some of us something a little repulsive in a political majority, owing so much to the support of the unions, using its political power in the direct financial interests of its supporters. If this were done the other way round and one had a Conservative-controlled authority openly acting in the interests of employers, noble Lords opposite would be raising Cain and would be perfectly entitled and right to do so. But they must appreciate that what is sauce for the capitalist goose is sauce for the even larger and rather redder Labour gander. I think therefore that they must appreciate that there are a great many people in this country who, like myself, believe strongly in a fair and effective trade union movement but who very much dislike exercises of political power of this kind which are designed to benefit the supporters of the political majority concerned at the expense, maybe, of the ratepayers.
It does not seem to me that there is anything unreasonable in saying that those who place contracts of this kind should do so on the normal basis upon which a businessman places contracts: on the basis that the supplier is likely to supply the right sort of goods or services at a competitive price. Why they should get worked up and involve themselves in questions about alleged scab rates is quite a different matter. In the present situation in this country, it is a little unrealistic—as I say, it goes back to Victorian times—to talk about scab rates. In Victorian times there was such a thing and the union movement was a very strong and a very natural and proper reaction against them, but to go on talking about scab rates in the situation of 1982 is to suggest that one is not in the real or the contemporary world. There are rates below trade union rates. They may be perfectly good rates; and they are rates which people are prepared to work for. There is no divine dispensation about trade union rates which makes it, in the words of the noble Lord, Lord McCarthy, immoral to pay less. It may well be—it is, in fact, the case—that some rates negotiated by some trade unions in recent years have been excessive and contrary both to the competitive power of the industries in which the people concerned work and therefore to the employment prospects of their own members. This is undoubtedly the case. Therefore, to say that as a matter of morality, again to quote the noble Lord, Lord McCarthy, any firm which pays less than that is doing something immoral is not only, to most people's minds, an exaggeration but a blinding revelation of the mentality of some noble Lords opposite.
Baroness Gaitskell: The noble Lord has mentioned me, so may I just comment? I have heard him make
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very many reactionary speeches, but the one which he has just made is one of the most reactionary.
Lord Boyd-Carpenter: Will the noble Baroness allow me? Her intervention is based on a misunderstanding. I did not mention her.
Lord Rochester: At the beginning of this discussion I think I can say that I had a completely open mind on this point. Until now we have been discussing union membership agreements. This clause has to do with union recognition requirements. I must confess that I was a little concerned as to the reason why this new clause was being suggested. I felt that it might indicate some feeling on the Government's part that union membership should in some way be discouraged. However, as I understand it, an abuse has been uncovered in which certain local authorities, or a certain local authority, is seeking to exclude from lists of tenderers firms which do not recognise trade unions.
I believe in trade unions. I have said before in this House that if there were not trade unions somebody would have had to invent them in order to protect working people. I would go further and say that I believe in the positive encouragement of people to belong to trade unions. But I do not think that that belief in trade unions should extend to a position where certain firms which are not unionised are excluded from work, all the more when such firms may employ very few people. Having therefore listened to the arguments on both sides, it seems to me that the Government case has been made out. I shall therefore recommend to my noble friends that we should support the insertion of this clause.
Baroness Wootton of Abinger: The noble Lord, Lord Boyd-Carpenter, concluded his speech by choosing a particular example. There is no reference in the amendment to local authorities. Local authorities do employ persons and they have to pay certain rates of wages, but this is an amendment which refers to employers, and the typical employer is a business person. It is intended, and I think rightly intended, that business people, whether or not they be local authorities, should pay the wages which have been negotiated by trade unions for the particular occupations of those whom they employ. It is not a device by which local authorities can somehow betray ratepayers by giving preference to people who are members of the Labour Party, as the noble Lord, Lord Boyd-Carpenter, apparently implied.
Baroness Burton of Coventry: I never know how wise it is to appear to be ignorant, but I am completely ignorant on this matter. However, it may be that when I sit down, having exhibited my ignorance, I shall get an answer. In listening to—I was going to say to my noble friend Lord Underhill, whom I have always regarded as a moderate, I came to the conclusion that we were obviously not looking at the same amendment. I should be very grateful if somebody could explain it to me afterwards.
I should like to ask the noble Lord, Lord Underhill, whether what he was saying means that, when firms tender for a job, if, for example, one firm has better conditions, offers better pay and produces a good

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tender but does not recognise trade unionism among its member, then the job concerned will go to the firm which has none of those advantages but which does recognise trade unions? That seems to be the argument put forward, and I believe the noble Lord, Lord Underhill, is indicating that that is the case. Obviously my ignorance has been enlightened, and I totally disagree.
Perhaps I may move on from there. It seems to me most unfortunate that these days, when the trade unions have done so much and when there is considerable criticism about the wrong use of some of their powers, their friends should think they are in need of any recognition such as this. I would not have thought that any trade union of real standing—as most of them are—would feel that it needed to have written into the law that jobs were only to go to firms or to organisations which have a trade union membership. I believe that is completely wrong. The more I have listened to the vehemence on this side of the Committee, the more it seems to me that there is nothing unfair in suggesting that, while conditions should not be applied to the giving of contracts, we hope that they will go to the firm or tenderer offering the best tender and the best conditions for its workers.
Lord Jenkins of Putney: I wish that I had been able to get in before the noble Lord, Lord Rochester, and the noble Baroness, Lady Burton of Coventry, because I might conceivably have been able to explain one or two points in the clause which might have brought them to a rather different conclusion from that to which they have committed themselves. The reason why I would endeavour to do so—successfully or otherwise—is this. The new clause is titled Prohibition on union membership requirements. This clause and the previous clause, Clause 11, which has the title Prohibition on union membership requirements, and also the next clause, which is also the subject of amendments we are now discussing, entitled Pressure to impose union membership requirements, are all prohibitive.
It is within my knowledge that the British Actors Equity Association believing that these clauses—although not this new one—might inhibit the operation of their arrangements with theatrical employers, had a discussion with Mr. Tebbit and he gave them an assurance that it was not the intention of the Bill to intervene in any way in arrangements between employer and employee, and that the object of this series of clauses was to lay down conditions which would affect a contract of service in the sense which has been illustrated in a somewhat exaggerated form by the noble Lord, Lord Boyd-Carpenter, as being something which a Labour-controlled council might carry out in relation to contracts which it would engage.
How much reliance one puts on an undertaking given by Mr. Tebbit is a matter of opinion.
Earl Ferrers: No.
Lord Jenkins of Putney: It appears to have satisfied Equity. However, I believe that if Equity had seen the new clause which has been moved this afternoon,
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they might have had second thoughts. What the clause says is:
" (1) Any term or condition of a contract for the supply of goods or services is void in so far as it purports to require any party to the contract"—
and so on. The point might be made that a contract of employment between an employer and employee is a contract of service and is not a contract for the provision of services. This is generally true but it is not true so far as theatrical employment is concerned. An actor is not on a contract of service but is on a contract for the provision of services. He provides his services on income tax Schedule D in the same way as any small businessman might. Therefore, it is my belief that he is caught by this clause.
The West End contract I have here is the one on which every actor in the West End is employed, and it contains within it a clause stating:
"The Society agrees"—
that is, the Society of West End Theatre Managers—
"that its members in the normal course of events shall not offer engagements for any of the said productions to artistes who are not full members of Equity or"—
et cetera. It is my belief that the proposed new clause after Clause 11 prohibits that condition in the society's agreement. We believe that the new clause put forward this afternoon combined with the other clauses which have been put in effectively scuppers the London Theatre Council. In fact, I believe that every contract existing in the West End will, after these clauses have been brought into effect, be null and void.
If the noble and learned Lord who has moved Clause 11 can give us an absolutely firm assurance that this is not the case, then it may be that we shall be able to tell Equity that the assurance they received from Mr. Tebbit has been carried out publicly and has been carried out here. But if the noble and learned Lord is not able to give such an assurance—and, whatever he says, I myself doubt whether the wording will support him—then what he ought to do, if Mr. Tebbit meant what he said, is to agree to the insertion of a manuscript clause at Report stage which would make it quite clear that, when the relationship between the parties is that of employer and employee, irrespective of the fact that it may be a contract for services and thus caught by this clause, it will under these circumstances be inapplicable. Without that manuscript amendment in the Bill, or in the Act as it will become, the consequence will be completely to destroy the entire theatrical employment set-up and it would be entirely contrary to the assurances which I understand Mr. Tebbit gave to Equity.
3.47 p.m.
Earl De La Warr: I am rather surprised that up to now no noble Lord has mentioned the local authority called East Kilbride. I had a copy of that letter many weeks ago. I know that the noble Lord, Lord McCarthy, is very cross about this amendment, but I too was extremely indignant when I read the letter that went out to all local authorities on the East Kilbride list. It was clear to me—and although this is not evidence, it was clear to the Financial Times—that what East Kilbride were doing was deliberately trying, in advance of the passing of this Act, to get round its intentions. Noble Lords can have whatever

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views they like about the intentions behind Clause 11, but it seems to be monstrous when a local authority in advance of the passing of a Bill which will surely go through, makes provisions such as these which deliberately flout the law which is to come.
I am not going to say that this is what the Government had in mind, but I am sure that it was not very far from their minds. Perhaps the noble Lord, Lord McCarthy, would help us by giving us an assurance, if he can, that in his opinion it was not the intention of East Kilbride to get round the provisions of this Bill. If he really believes that, then we shall be a little bit wiser about why he is so upset.
Lord Wedderburn of Charlton: Will the noble Earl tell your Lordships whether he objects to the army of draftsmen who arrange the avoidance, quite lawfully, of Finance Bills and tax reviews which come before both Houses of Parliament? Is that to be stopped?
Earl De La Warr: I really do not feel disposed to widen the debate that far.
Lord Oram: My noble friend Lord McCarthy reminded us that we are under some threat that this Employment Bill will not be the last and that there are other measures contemplated by the Government in relation to trade unions. Reading this proposed new clause, I wonder whether one of those new steps will be a change of the House of Commons resolution concerning fair wages in Government contracts. In reading that and reading this new clause, I believe we are on the brink of passing a clause which runs contrary to that resolution of the House of Commons. I do not say it does; I do say it is a matter that we ought seriously to consider.
For that purpose I will read just two of the clauses in the House of Commons' Motion which concerns fair wages clauses in Government contracts. The House of Commons is of the opinion that such contracts should provide as follows:
The contractor shall pay rates of wages and observe hours and conditions of labour not less favourable than those established for the trade or industry in the district where the work is carried out by machinery of negotiation or arbitration to which the parties are organisations of employers and trade unions representative respectively of substantial proportions of the employers and workers engaged in the trade or industry in the district".
Further:
"The contractor shall recognise the freedom of his work-people to be members of trade unions".
I recognise that that is not directly contrary to this clause, but suggest that we are getting dangerously near to the point where, if the Government pursue the path they seem bent on pursuing, they will have to ask the House of Commons to change its own resolution, and if they do that I believe there will be trouble in store.
Lord McCarthy: I do not want to intervene twice in this debate, but I have been asked a number of specific questions and I would like to reply to those briefly. The noble Lord, Lord Boyd-Carpenter, was surprised at the degree of unanimity between myself and the noble Lord, Lord Underhill. So far as I can remember, we have never disagreed yet, so perhaps it
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is just the language we use. The noble Lord, Lord Boyd-Carpenter, also asked me why I used phrases like "scab rates". I use the phrase "scab rates" because those are the phrases which are still used by people who are seeking to defend trade union rates and trade union principles.
Of course, if the world were full of nothing but trade union rates and nothing but employers who observe trade union principles such words would be old-fashioned and out of use, but while there still are "scab rates", which are rates below trade union minimum rates which are paid in order to under-cut trade union minimum rates, then we have to have a word for them, and the word in conventional normal usage is "scab rates".
He also asks me why I think, why anybody would think, that local authorities have a right to insist that they do not employ contractors who pay scab rates. The answer is because they believe in trade unions and they believe in trade union standards. The only thing which can be asked of them—and if this is what he said I would accept it entirely, and I do not know the answer on this one in East Kilbride—is that they should make no secret about that. This may not be the kind of thing that you put in election addresses, but I do not see why not. I do not see why a party with a majority should not say in an election, "We do not propose to employ contractors who do not observe trade union rates". If the electorate do not want to elect them on that basis that is a matter for the electorate, but if the electorate do elect them then they are perfectly entitled to do so.
This brings me to a question raised in particular by the noble Lord, Lord Oram. I should have said this, and it is my answer to the question posed by the noble Lord, Lord Rochester. It is quite true that there is an almost exact parallel with the fair wages resolutions, the fair wages resolutions of the Commons, which go back a very long time. Whether they are exactly the same, the noble Lord, Lord Oram asks; I do not know whether what we are doing is formally in breach of them. But their objectives are exactly the same as the objectives of the East Kilbride Council. Parliament in its wisdom at that time wanted to prevent giving public money to support "scab rates". That is what the fair wages resolution is all about. We understand that the present Secretary of State, so he has told us, intends to introduce legislation which will repeal the fair wages clauses whether or not that puts us in breach of various ILO conventions. So that is the answer to the noble Lord, Lord Rochester. The abuse, which he says has to be corrected, is the abuse of seeking to do in local authorities and private authorities and, so far as one's own money is concerned, what Parliament has done at this moment in time on the fair wages clauses. That is what is involved with this Bill.
Finally, the noble Baroness, Lady Burton, says that she does not like it because we are asking for something to be written into law, that people shall recognise trade unions. We are not saying that. In the first place, it is a Government clause; it is not an amendment of ours. In the second place, we have not an amendment asking for it to be written into law that people must recognise trade unions. We are asking for it not be actionable at large if individuals or organisations want to support trade union standards in the way that Parliament at this

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moment of time, though God knows for how long, does through fair wages resolutions.
Baroness Burton of Coventry: The noble Lord, Lord McCarthy, has not translated my very simple question in the very simple terms in which I asked it. I said nothing about the public recognising trade unions. I did ask whether I had understood from what the noble Lord, Lord Underhill, had said—and he confirmed it—that what was suggested from the Opposition side of the Committee was that contracts should not be given to firms, whatever standards they offered, if they did not recognise trade unions in their establishment. That is quite different. Would the noble Lord care to correct that?
Lord McCarthy: I would only say let us see what Hansard says tomorrow. I think I have got what the noble Baroness said right.
Lord Underhill: May I say that what the noble Baroness has just said is what I want, because I do believe that public contracts should not go to firms which do not observe trade union conditions and which oppose trade union agreements. I am certain that the Social Democratic Party will find itself in very great trouble if that proves not to be the policy of the Social Democratic Party.
Baroness Burton of Coventry: I am sorry to be persistent and be a nuisance, but I am going to have this right because one gets tied with it for ever if one does not put it right. I did not say about recognising trade union practices; I said something quite different. I asked the noble Lord whether he would take it that firms which might offer better wages and better conditions than trade unions should not have a contract, and he agreed with me.
Lord Wilson of Langside: I wonder whether I could ask the noble and learned Lord a very simple short question, the answer to which I thought I knew when this debate started, but having listened to the debate I find myself in some doubt. The question is simply this: Is there anything in this amendment which would prevent an individual or a company, who wished to employ a contractor who observed certain conditions for his workpeople with regard to membership of trade unions, from doing so.
As I understand it, the amendment says that any condition to that effect shall be void. But does the clause go further than that? Is there any sanction to prevent an individual doing that? For example, if the TUC want to let out a printing contract, why should they not make it a condition of that contract that certain conditions shall be observed by the printer? Is there anything in the amendment which prevents that happening? I can understand the anxieties about the local authority abusing political power. I can understand the anxieties expressed by the noble Lord, Lord Boyd-Carpenter. I can understand Lord Boyd-Carpenter's scorn at the use of emotive expressions by those concerned with trade union liberties. But is there anything in the amendment which would seriously interfere with the right of people who quite
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legitimately want to ensure that any work done for them shall be done under certain conditions?
Lord Mackay of Clashfern: I venture to think that the noble Baroness, Lady Burton of Coventry, has underlined, as so often she does, if I may say so with respect, the confusion which has existed in a good deal of what has been said about this clause. The clause deals with provisions requiring a proposed party to a contract to recognise a union or to recognise its negotiating procedures. It does not deal with rates of pay, and as I understand the position the fair wages resolution of the House of Commons is not in breach of this clause—indeed, I think that the noble Lord, Lord Oram, who raised that matter accepted that to be so. He said that they were coming close, but this certainly is not in conflict with that resolution because of the distinction between conditions of work and recognition of a union.
It would be perfectly possible to have a situation at present in which a district council took the view that it should apply a clause such as this, requiring recognition of a union, to strike out from their list of contractors a contractor whose rates of pay were double those that the union required, but did not himself have union recognition in his business and where his employees were perfectly satisfied with that situation. Why should a person who has managed to arrange his affairs in such a way as not to require the intervention of a union between himself and his employees in a way with which the employees are perfectly satisfied, be prevented by conditions of this type from getting work from other employers?
The situation with which this clause is dealing is a situation in which there is a requirement about union recognition or union procedures in the contract and it outlaws such a requirement as part of the contract. It does not, of course, prevent a contracting party himself from employing union labour if he wishes to do so. The freedom of persons to join a union and, indeed, the protection of persons engaged in union activity, is not managed by this Bill at all. Indeed, the compensation provisions for people who are dismissed for trade union membership and activity are improved by the Bill. Accordingly, what the Bill does not affect is the right of an employer and employee to make arrangements between them about the union matters in that firm. What it does strike at is pressure from outside on these matters. In our view, it is that pressure which requires to be made unlawful and that is the purpose for which this clause is introduced.
Lord Wedderburn of Charlton: Before the noble and learned Lord sits down, may I ask one question which is very germane to this part of your Lordships' discussion? It is not about pay: it is about the lives and the security of people at work. Looking at the new clause—Amendment No. 99A—I should like to ask the noble and learned Lord how wide is the forbidden consultation in respect of which the four subsections extend? Would a requirement of one contracting party upon another, that the other party observe the requirements of Section 2 of the Health and Safety at Work Act 1974, and that that other party consult with safety representatives and with

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safety committees which have been established in the last few years and which have saved a large number of lives and maimings in industry, also be forbidden within this new and extraordinary clause?
Lord Mackay of Clashfern: Before I answer that question completely, I would need to look at the detailed provision that the noble Lord has in mind. On a proper reading of the clause, I certainly would not regard this clause as striking at the consultation provisions of the Health and Safety at Work Act.
Lord Beswick: I should like to ask the noble and learned Lord the Lord Advocate whether he would be good enough to answer the question put to him by the noble Lord, Lord Wilson of Langside. Would this amendment preclude or not preclude the Trade Union Congress from awarding a contract to a printer on the basis that that printer was a trade union house?
Lord Wilson of Langside: Before the noble and learned Lord answers that matter further—indeed, I thought that he did say something about it—I should like to focus his attention in particular on the provisions of subsection (4) of the amendment, which trouble me a little. I have not had much time to think about it, but it states:
"Subsection (2) … does not create an offence"—
so it is not a criminal offence—
"but the obligation to comply with it is a duty owed to each of the following".
and there then follows (a) and (b). It then goes on to say:
"and any breach of that duty shall be actionable accordingly (subject to the defences and other incidents applying to actions for breach of statutory duty)."
It was the implications of that which troubled me a little.
Lord Jenkins of Putney: Before the noble and learned Lord replies to that point, would he agree that a court would interpret this provision of services which is made void if it requires recognition of a trade union, to apply to the employer/employee relationship which exists between Equity and the West End theatre managers? In those circumstances, would he accept a manuscript amendment to make it clear that that kind of relationship is not caught by the clause?
Baroness Seear: I should like to raise another matter which is germane to the other questions which have been raised. Would I be right in thinking that, if the clause goes through, it would still be open to any local authority, for example, to use the fair wage regulation which does not require union membership but which requires conditions no less good than union membership, and that in that case—to use a rather extreme example—they would then be in the clear? They could then employ IBM because it certainly has no less good conditions whereas if there is a ban on contracts where there is not union membership, they would not be able to employ IBM. Am I right?
Lord Mackay of Clashfern: Yes, as I understand the position, the noble Baroness, Lady Seear, is perfectly right. Indeed, that is what I was trying to say,
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although not so plainly, when I took up the point that the noble Baroness, Lady Burton of Coventry, made earlier. This clause strikes at matters related to union recognition and union procedures. It does not deal with rates of pay and conditions. I gave the illustration of a company that perhaps paid double the amount but did not recognise a union being excluded by the clause. So far as the noble Lord, Lord Jenkins of Putney, is concerned, I shall not expressly deal with the point that he raised because I think it would be unwise for me to try to deal with it and to give a view on it without the full text of the document from which he was reading. But I shall be very happy to have from him the use of a copy and to consider it later on. However, as I say, I think that it would be unwise to venture a view at the moment.
I endeavoured to deal with the question asked by the noble and learned Lord, Lord Wilson of Langside, and I said that this clause would strike at a condition of that sort as part of the contract. It would not, of course, strike at the relationship between the employer and the employee if the employer decided that he wished the work to be done for him by members of a trade union.
4.11 p.m.
On Question, Whether the said amendment (No. 99A) shall be agreed to?
Their Lordships divided: Contents, 144; Not-Contents, 48.

DIVISION NO. 1

CONTENTS

Abercorn, D.

Ebbisham, L.

Adeane, L.

Eccles, V.

Airedale, L.

Ellenborough, L.

Alexander of Tunis, E.

Elliot of Harwood, B.

Allerton, L.

Elton, L.

Amherst, E.

Energlyn, L.

Ampthill, L.

Evans of Claughton, L.

Auckland, L.

Faithfull, B.

Avon, E.

Ferrers, E.

Aylestone, L.

Fortescue, E.

Baker, L.

Fraser of Kilmorack, L.

Beaumont of Whitley, L.

Gardner of Parkes, B.

Belhaven and Stenton, L.

Gladwyn, L.

Bellwin, L.

Glanusk, L.

Beloff, L.

Glenarthur, L.

Berkeley, B.

Glenkinglas, L.

Bessborough, E.

Gowrie, E.

Blake, L.

Granville of Eye, L.

Boyd-Carpenter, L.

Grey, E.

Burton of Coventry, B.

Gridley, L.

Byers, L.

Hailsham of Saint Marylebone, L.

Campbell of Alloway, L.

Campbell of Croy, L.

Halsbury, E.

Cathcart, E.

Hampton, L.

Chitnis, L.

Hankey, L.

Clifford of Chudleigh, L.

Harris of Greenwich, L.

Clitheroe, L.

Harris of High Cross, L.

Cromartie, E.

Henley, L.

Daventry, V.

Home of the Hirsel, L.

Davidson, V.

Hylton-Foster, B.

De Freyne, L.

Ilchester, E.

De La Warr, E.

Kennet, L.

Denham, L.—[Teller.]

Killearn, L.

Diamond, L.

Kilmany, L.

Dilhorne, V.

Kilmarnock, L.

Donaldson of Kingsbridge, L.

Kimberley, E.

Kinloss, Ly.

Drumalbyn, L.

Lane-Fox, B.

Duncan-Sandys, L.

Lauderdale, E.

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Listowel, E.

Sainsbury, L.

Long, V.

St. Aldwyn, E.

Lucas of Chilworth, L.

St. Davids, V.

Lyell, L.

St. John of Bletso, L.

McAlpine of Moffat, L.

Salisbury, M.

McFadzean, L.

Saltoun, Ly.

Mackay of Clashfern, L.

Sandys, L.—[Teller.]

Mackie of Benshie, L.

Seear, B.

Macleod of Borve, B.

Sharples, B.

Mancroft, L.

Skelmersdale, L.

Mansfield, E.

Soames, L.

Margadale, L.

Spens, L.

Marley, L.

Stradbroke, E.

Marsh, L.

Strathcarron, L.

Merrivale, L.

Strathcona and Mount Royal, L.

Monk Bretton, L.

Montgomery of Alamein, V.

Swinfen, L.

Tanlaw, L.

Mottistone, L.

Taylor of Gryfe, L.

Mowbray and Stourton, L.

Terrington, L.

Murton of Lindisfarne, L.

Trenchard, V.

Norfolk, D.

Trumpington, B.

Northchurch, B.

Vaux of Harrowden, L.

Nugent of Guildford, L.

Vernon, L.

Onslow, E.

Vivian, L.

Orkney, E.

Wakefield of Kendal, L.

Orr-Ewing, L.

Ward of Witley, V.

Penrhyn, L.

Weidenfeld, L.

Perth, E.

Westbury, L.

Plummer of St. Marylebone, L.

Whaddon, L.

Wigoder, L.

Porritt, L.

Wilson of Langside, L.

Portland, D.

Windlesham, L.

Rochdale, V.

Winstanley, L.

Rochester, L.

Young, B.

Romney, E.

NOT-CONTENTS

Ardwick, L.

John-Mackie, L.

Balogh, L.

Leatherland, L.

Beswick, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Bishopston, L.—[Teller.]

Longford, E.

Blease, L.

Lovell-Davis, L.

Blyton, L.

McCarthy, L.

Boston of Faversham, L.

Milford, L.

Brockway, L.

Oram, L.

Bruce of Donington, L.

Paget of Northampton, L.

Caradon, L.

Peart, L.

Collison, L.

Ponsonby of Shulbrede, L.—[Teller.]

David, B.

Davies of Leek, L.

Ross of Marnock, L.

Davies of Penrhys, L.

Stewart of Alvechurch, B.

Donnet of Balgay, L.

Stewart of Fulham, L.

Elwyn-Jones, L.

Stone, L.

Ewart-Biggs, B.

Strabolgi, L.

Fisher of Rednal, B.

Strauss, L.

Gaitskell, B.

Taylor of Mansfield, L.

Glenamara, L.

Underhill, L.

Hatch of Lusby, L.

Wedderburn of Charlton, L.

Houghton of Sowerby, L.

Wells-Pestell, L.

Jeger, B.

White, B.

Jenkins of Putney, L.

Wootton of Abinger, B.

Resolved in the affirmative, and amendment agreed to accordingly.
Clause 12 [Pressure to impose union membership requirements]:
4.19 p.m.
The Minister of State, Northern Ireland Office (The Earl of Gowrie)The Minister of State, Northern Ireland Office (The Earl of Gowrie) moved Amendment No. 99B:
Page 14, line 14, leave out ("subsection (1) of section 11") and insert ("section 11(1) or (Prohibition on union recognition requirements) (1)").
The noble Earl said: This amendment was spoken to earlier. I beg to move.
On Question, amendment agreed to.
The Earl of Gowrie The Earl of Gowrie moved Amendment No. 99C:
Page 14, line 16, leave out ("subsection (2) of section 11") and insert ("section 11(2) or (Prohibition on union recognition requirements)(2)").
On Question, amendment agreed to.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 100:
Page 14, line 18, at end insert ("and one of the facts relied upon for the purpose of establishing liability would satisfy subsection (2)(a) or (b) below").
The noble Lord said: This is the first of our amendments on Clause 12. As some of my noble friends have pointed out, Clause 12 now becomes even more important than it was before this new clause was introduced to your Lordships' Committee, over six months after the Bill was brought into the light of day, to remedy what it appears from previous speeches has been a long, well-known abuse. I noted that noble Lords speaking to the clause referred only to local authorities as the offenders. It puzzled me why it was not limited to them if they were right. But it is not; it includes all employers.
Clause 11, new Clause 99A, and Clause 12 now make up a trio that will cover a wide area of British commercial and industrial life. I stress commercial because Clause 11 and the new clause are about commercial practices, and Clause 11 underpins them by trying to prevent the activities of those who by industrial action or the like would try to cause a contravention either of Clause 11 or of the new clause in a variety of ways.
However, it is about far more than pressure in regard to work that is to be done. Clause 12(1) sets up to remove a defence from that which is being done. Clause 12 may be put into two parts: 12(1) appears to want to stop the inducements which it describes which lead to a contravention of Clause 11, or now the new clause. Clause 12 subsections (2) to (7) are the second half, to which we come later. When Parliament appears at least to be enacting a new liability, given the way some of your Lordships think this House should function, no doubt noble Lords opposite will think that this House is somewhere where attention should be paid to this matter, because if the clause does not clearly set out the liability, then in view of the serious nature of the problem as described by noble Lords opposite that is a grave matter for a revising Chamber, albeit that it has first go at the new clause. In Clause 12 doubly so because it is indeed a revising question.
Having set up the forbidden commercial practices which must not be done on the ground that the other employer is to insist on union membership, or the other employer is to be forced, or compelled, or persuaded to recognise, consult, or negotiate with trade unions, we now find in Clause 12(1) that nothing in the 1974 Act, in Section 13, is to prevent an act from being wrongful or actionable in tort where the person who does it induces the other person to do one of two things, and the act which is done incorporates, or constitutes, the inducement. The two things

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which are described as being induced are, first, to incorporate in a contract any of the terms previously described as being void. That is to say, the terms in Section 11(1) or subsection (1) of the new clause whereby the contractor is required to have union employees, or to recognise a trade union or even consult with it.
I hope that the noble and learned Lord the Lord Advocate will tell us what the position is on safety, because it is a most serious situation that the Government can introduce liabilities of this kind without even a flicker of interest in the statute of 1974 in respect of safety representatives and safety committees, to which people's lives and safety have been more closely related since that year.
First, then, we have an inducement to incorporate a void term in a contract. Nothing in Section 13 of the 1974 Act is to protect it. But Section 13 of the 1974 Act does not say anything about incorporating void terms in a contract. Section 13 of the 1974 Act is about interferences with a contract by a third party. If I had a contract with the noble Earl, Lord De La Warr, who I see looking with amusement at this point, and if someone else interrupted it then they would be liable for the tort of inducing a breach of contract. But if that were done in furtherence of a trade dispute subject to the Government's Act of 1980, which of course has more or less destroyed it, they would have had a defence under Section 13 of the 1974 Act in a trade dispute.
But that is not this. This is inducing someone to put a term into the contract which then the Government say is void. So that the defence is taken away against a liability which is irrelevant to the defence. Then one says, where is the liability? And you cannot find it. It is not set out in terms that an act which induces the incorporation of a void term in a contract is a tort. You will not find that anywhere in the clause. The same is true of the second except that it is rather more complex. I say to the noble Lord, Lord Boyd-Carpenter, that if he wants more intellectual content and less emotion then perhaps we can move carefully together across the face of the clause. He will not mind if it becomes complicated, because the matter is complicated and ought to be looked at. It is said by Clause 12(1) that the protection of Section 13 of the 1974 Act shall be taken away when anyone induces another person to contravene Section 11(2). Although we did not debate it yesterday, that is a vast range of commercial practices pressuring the contractor to enter into union labour only requirements.
But again Section 13 of the 1974 Act is not about inducing people to enter contracts based on union labour only requirements. I accept there could be a case where some interference with another contract was constituted by that same Act, but not by reference to the definition of Section 11(2). Once again the Bill will have the appearance, if enacted in this form, that 12(1) will take away a defence from a cause of action which is not clearly there, on the basis of which I suppose the courts will say, "Well, what shall we do?"
I am sorry that the noble and learned Lord the Lord Advocate has left us. I appreciate there are good
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reasons for this. I make no complaint. I think I heard him accurately when he said that what the Government were out to do was to ban pressure either by a union or by a company. Presumably then that would include any sort of pressure by means that were lawful or unlawful whereby the object is the unlawful purpose under paragraph (a) or paragraph (b). I hope that the noble Earl will not tell us that it is necessarily an unlawful and tortious act to do something inducing the breach of a paragraph in a section if all that the section sets out is that the contract shall be void—which is taking paragraph (a)—because of course that is not true.
If a statute says that a contract is void, or a term in a contract is void, as here, and I induce you to enter into such a contract, no liability in tort arises under the ordinary principles of English law. We shall come back to recognition in another context, because throughout Section 12 of the Act comes the influence of the new clause.
Under the influence of the new clause, Clause 12, which was a bit odd and should be looked at again, now becomes horrendous, because the courts might say—I think it unlikely, but who knows?—that as the provision is drafted the legislature must have meant all these things to be tort or civil wrongs.
If that happens, how will businessmen conduct their affairs? I am not talking only of trade unions. Indeed, I note that our amendments in this series, in a curious way, might be unfair to trade unions as against companies. Amendment No. 100 would, in effect, limit the liability which could arise under Clause 12(1) to the same area as subsection (2) and the provisions following it, which in layman's terms I can call "industrial action"; that is, inducing breaches of contracts of employment or interfering with them or threatening to do so. Therefore, by Amendment No. 100 we would create a liability usually for trade unionists as against the company so that our object when I tabled it would not be fulfilled. As against that, there is a later amendment, which I mention in passing but will deal with in detail later, No. 106, which deals with the second half of Clause 12. Again, that is an attempt to limit the area of liability.
With the permission of the Committee I will now speak to Amendment No. 102, which is another attempt to say to the Government, "Please spell out the area of tort liability", because No. 102 says that nothing in the subsection we have been discussing shall be a tortious liability, or actionable in tort, on any ground except one which would be protected by Section 13 of the 1974 Act. I am anxious to make that point strongly in closing my remarks on the clause, before coming to the social meaning of these—I am sure the noble Lord, Lord Boyd-Carpenter, agrees—complicated legal points. Amendment No. 102 would say, "Since you are protecting a liability in Clause 12(1) with Section 13, presumably you must be talking only of the torts in respect of which Section 13 applies, for you mention no other". There is no other area of independent liability in Clause 12(1) for inducement. As I say, it is not automatically an inducement to induce terms in a contract, nor indeed to induce statutory torts, although it may be said that the parties would be joint tortfeasors. If that is what the Government mean, they should spell it out. When Section 13

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is not to be a defence, it would seem sensible to spell out the liability.
There is one golden principle with which I suggest the Committee approach this and the other matters which the Government—the Government, not we—have introduced into the Bill. It is that every time one sees a protection from the immunities (usually in the 1974 Act as amended in 1976) the golden principle is: if an immunity is removed, a liability springs up. Most of the way through the Bill later we shall see that where immunities are removed, liabilities spring up for trade unions in respect usually of the common law. That is a good way through the verbiage of the clause. But it does not work here because, remove the protection and in Clause 12(1)(a) you do not have a liability, and in paragraph (b) if you have one it is very obscure; it is difficult to know exactly what it is or how wide it is.
As the Government put such enormous store on this basic freedom they are enacting, one would have thought that they would have got rather more clarity into the clause that begins to underpin the whole apparatus. I trust that the noble Earl will be able to tell us clearly and precisely—albeit with a complex structure, because it is a complex matter—what the liability is that the citizens of this country are supposed to be put under by subsection (1). I say, on the analysis that I make, that at the moment the first part of it is absurd and the second part is highly obscure. We await with interest to hear what the Minister has to tell us about the matter. I beg to move.
4.35 p.m.
The Earl of Gowrie: The noble Lord, Lord Wedderburn, was kind enough to remind the Committee that my noble and learned friend the Lord Advocate has had to be away, with good reason. I am here to take his place on this amendment. I must say that I am not fully happy at this substitution at this stage, but I will do my best. This is the first amendment to Clause 12 and therefore it may be helpful briefly to remind the Committee what the clause is about.
Clause 12 is really a mirror image of Clause 11. Whereas Clause 11 is mainly about employers who impose union labour only requirements on non-union firms, Clause 12 is about trade unions and trade union officials who seek to impose such requirements or to have them imposed. The clause operates by removing the immunity provided by Section 13 of the 1974 Act from those who threaten or organise industrial action to prevent work being done by non-union firms. Therefore, it is most important for the Committee to realise that all this clause does is to remove immunity from action to put pressure on an employer to discriminate against non-union firms. Removing immunity means that if a person, in putting pressure on an employer, induces a breach of contract, then he is liable; it is the interference with the contract which is actionable.
Subsection (1) removes immunity from those who threaten or call industrial action against an employer to pressurise him to put a void term in a contract or otherwise to contravene Clause 11. Subsections (2) to (4) are mainly concerned with industrial action taken or threatened after the contract has been awarded, to prevent a non-union firm from fulfilling the contract or to prevent goods provided under the contract from
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being delivered or used. This amendment focuses on subsection (1). That is the subsection which removes immunity from those who threaten or call industrial action against an employer to pressurise him to put a void term in a contract or otherwise to contravene Clause 11. The amendment seeks to limit the circumstances in which that immunity is removed by subsection (1) to cases where there has been interference or threatened interference with contracts of employment. In other words, to bring an action under subsection (1) it would be necessary to show that the trade union pressure on an employer to impose union labour only requirements had involved threatened or actual industrial action which had interfered with or threatened to interfere with contracts of employment.
I have to say that the Government do not believe that this would have much effect on the coverage or impact of subsection (1). In practice, the sort of pressure which is envisaged in the subsection is pressure which is exercised through threats of, or actual, industrial action. So in 99 per cent. of the cases which are liable to arise under subsection (1), there will have been the kind of interference with contracts of employment which are set out in subsection (2)(a) or (b).
There may, however, be the odd case where there is no clear interference with contracts of employment, but there is nevertheless clear pressure on employers to break commercial contracts. That will not arise very often in cases arising under subsection (1), but it might do so, particularly in cases involving pressure to terminate a contract with a non-union firm. It seems to us right that if such direct interference with contracts occurs, it should lose its immunity under this subsection. If the amendment were accepted, it would not do so. I emphasise again that there is not very much between the Government and the proposers of the amendment. All we are doing in subsection (1) is to remove the Section 13 immunity in certain circumstances from interference with contracts. The normal cases which arise under Clause 12(1) will be cases where there has been threatened or actual interference with contracts of employment.
The noble Lord asked me about a number of specific points. He asked me about the Health and Safety at Work Act 1974. That Act imposes duties on employers to consult safety representatives who are union nominated. The duties apply to employers in any case, and there is no need whatsoever for them to be imposed through commercial contracts by other employers. The noble Lord raised the question of liability for inducing a breach of statutory duty. As I said, the principal effect of Clause 12(1) is to disapply the Section 13 immunity, where there is trade union pressure to put union labour-only clauses in contracts, or otherwise to prevent non-union firms obtaining contracts or getting on to tender lists. That means that the principal cause of action will be for the well-known and well-established torts of inducing breach of, or otherwise interfering with, contract or threatening such, which is set out in Section 13 of the 1974 Act.
Therefore, despite there not being a very great deal between the noble Lord and myself on subsection (1), he will see that Clause 12 is critical to Clause 11, which we have just passed, and is the mirror image of it.

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Therefore I hope that he will not see fit to press the amendment.
Lord Wedderburn of Charlton: I found the noble Earl's reply at one and the same time disappointing and revealing. Since I think that we shall have this thread during the debate, I would say that safety is a very important matter. I do not wholly accept the noble Earl's reply, though I am grateful for it. He suggested that because there is a statutory duty on an employer under the 1974 Act to take steps to allow safety representatives to operate and to consult safety committees where requested—which is a separate step under the Act—no pressure of contractual form would be needed to cause the obligations to be observed. Of course we all know that in matters concerning equal pay, safety, and so on the better employers—I do not now speak of trade unions—veryfrequently put pressure, sometimes commercial pressure, upon other employers to observe standards of this kind; and it is the erosion of such standards which is objectionable. But the question of safety does not rest there. I hope that there will be further intervention on safety when the noble and learned Lord perhaps deals with it on the debate on clause stand part. I pose the question now so that it can be thought about.
Under Section 2 of the Health and Safety at Work Act 1974 there are various obligations; they are not all the same. There are regulations which enshrine some further provisions. There is then a code of conduct, which is not law, but guidance, and then there is a code of guidance, which is in fact further guidance, but is below the code. How far can either a union or another employer go in pressurising a "cowboy" employer to observe decent standards of safety for his workers in terms of consulting trade union safety representatives? Can he do only what the Act obliges the other man to do? Can he verge off into the regulations? Is he allowed to get into the code or the notes on guidance and the like? Without a specific provision in the schedule of the Bill this matter will be what I think would be called a "dog's breakfast".
As I said, the noble Earl's reply was revealing, and I should like to put the matter very quickly in the following way. He has confirmed that Clause 12(1) is really about industrial action. It is about threatened or actual industrial action. He has said that the practice of pressurising in the way that he has described would in 99 per cent. of cases involve threats of industrial action which would amount to inducing breach of employment contracts or the other tortious acts which are similarly described—by way of interference with contracts of employment. The noble Earl said that there might be 1 per cent. who break commercial contracts. Well, I do not agree with his batting averages, but that does not matter. That is the ground that he covers—interference with contract.
But where in subsection (1) is the provision that liability is restricted to that area? It would be quite improper of me in reply—and I am sure that the noble Earl would not so wish me—to try to go through the case law on breach of statutory duty in respect of civil liability. But there is much difficult case law in a certain chapter of a certain book to which I could
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refer the noble Earl, about the difficulty of knowing when the courts will construe a statute to impose a civil liability perhaps rather wider than Parliament had foreseen. That is why it is so important to get this matter right. I remember many occasions when in regard to other legislation the party opposite said, "Go and get it right". I do not believe that the noble Earl considers that on any ground subsection (1) is thoroughly satisfactory, but in view of the position that he has taken, we shall expect the Government to look at it again, and perhaps to debate it once more in a rather different way on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.46 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 101:
Page 14, line 18, at end insert ("and is, or (as the case may be) are, directed against the person by whom the action is brought").
The noble Lord said: This is perhaps a rather easier matter for me to understand. The basis of liability is always to be measured in part by the question, Who can sue? Who can bring an action? Indeed, the first thing that the lawyer asks, if he is told that there is a likely plaintiff, is, "Has he got a cause of action?" The point of the amendment is to question the extraordinary width of persons who might sue, if Clauses 11, the new clause contained in Amendment No. 99A, and Clause 12 are added together. I shall not try to do that by reference to the Bill. In speaking to Amendment No. 101 I should also like, if I may, to speak to Amendment No. 106, which parallels the amendment that I am now moving, in limiting Clause 11(7)—and I shall come to that in the right place.
If in looking at the Bill one asks the question, who can sue? the most important provision to which to refer is Clause 11(7). In doing that, one should bear in mind that it is all about people who can complain of others who have carried out the commercial practices that the Government find so terrible, including requiring consultation with trade unions. The situation is rather extraordinary. One would not have believed that your Lordships could possibly be considering a Bill that provided that one could not refuse to contract with someone on the grounds that he did not recognise or consult a union. But that is what it comes to. One's right to contract with whom one pleases is taken away. Under Clause 11 a remedy can be obtained against one if one refuses to contract with a person because he does not consult safety representatives—unless the statute gets one out of it, and one is lucky with the 1974 Act. We have been told that one can then sue the person who has done the inducing by means of industrial pressure, and indeed I accept that Clause 12(2) and what follows is about industrial pressure.
Who are the people with whom we are concerned? Subsection (7) on page 13 of the Bill states, first, that the person is the supplier who is being kept off the tenders list, and the like. Well, given the philosophy of the clause, which I deplore and abominate, I understand that that is logical. Paragraph (b) of the subsection states that the person is the other party to

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a contract which has been torn up, albeit lawfully on other grounds. One can lawfully terminate the contract in every other respect, but one can then be sued by the person concerned if one did it because one wanted him to consult the trade unions. So notice is given, and all the rest of it, but that is not good enough. Well, at least I understand that on the basis of the words used.
Thirdly, in paragraph (c) on page 14 there is a slightly wider area, which one can only describe as relating to other people, who have been referred to earlier as being involved, largely in subsection (3), in the commercial practices which are being struck at. I understand that a rather more general reference has to be made. But those people are fairly clearly identifiable. If it had stopped there, at least the employer, who has done this terrible thing of pursuing the policy of the fair wages resolution by parallel means, or the union, which has done this terrible thing of demanding that decent standards be maintained of rates and conditions at work, would know who they had to fear. But, no, there is an extra group—paragraph (d). I quote:
"in any case, any other person who may be adversely affected by its contravention"—
that is, the contravention of this section. Of course, it is such a group which, logically and understandably, would be the plaintiffs against the union for inducing the wrong.
I repeat: any other person adversely affected by the contravention of the section? I do not understand it. I hope the Government will not say that I ought to understand it because (as they said in another place) the same phrase is used in the Resale Prices Act 1976, Section 25(3) of which also talks about enforcement by, "any other person who may be adversely affected", because so far as I know, people who have looked at that Act are still trying to find out what it means there, so if they have taken a precedent from that they are not doing very well.
It is necessary now to depart from the law and to think about real life. If I may say so, although the first debate today was extraordinarily useful in setting the broad lines of where we are, we have had precious little detail of what this clause really could do—indeed, what these three clauses really can do. May I take an example? Let us take a supplier of goods. I have it in mind to take fish; I do not know why, but I suppose it is because he sends his fish by lorry to the docks, where they are taken across the estuary to the wholesaler across the way, who distributes to the retailers who, in turn, sell to the fish and chip shops who sell to the public.
Let us suppose this all goes wrong. Why does it go wrong? His normal lorry has broken down, and he has on offer three people who have lorries. One of them, Lorries Limited, employs only T and G members; or, if you like, Lorries Limited recognise the Transport and General Workers' Union and consult them. So he takes Lorries Limited because he thinks it is not a bad firm; and, as a matter of fact he rather likes to have a firm which negotiates and consults with the union because the dockers are in the union, too, and it is a fact of life, whether it is good or bad, that the drivers in the Transport and General Workers' Union get on rather better with the dockers. Noble Lords
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opposite will not like that, but it happens; and why should the employer not be free to consider such a matter in a competitive society?
So he deliberately rejects Carriages Limited, which has submitted a parallel tender, and one of his grounds—we will come to that in moment; it need only be one, but we will take it as the one for the moment—is that Carriages is a non-union firm. They may pay good rates, they may drive good fish in their lorries, but they do not seem to get the same co-operation with everybody else.
Then, Lorries Limited having been taken on, the unfortunate thing happens (that is, fortunate only to the lawyers) and that is that Lorries Limited's lorry breaks down—it has not got enough cash, perhaps, to service its vehicles—and the fish does not get through, or at least gets through very late. It gets to the wholesaler, who says he cannot distribute it, it is late at night; the retailers have not got any fish; there are fish and chip shops which have not got any fish and chips; and Bill the consumer is so enraged that he tells his wife some very nasty things when she tells him she cannot get any fish and chips for supper. This is a very serious question. The noble Earl looks amazed.
The Earl of Gowrie: Not amazed.
Lord Wedderburn of Charlton: Not amazed; dumbfounded, perhaps. Who are the people "adversely affected "by reason—indeed, not "by reason", because the Bill does not say "by reason", but "adversely affected by its contravention"? That is even looser than "by reason". It must be that Carriages Limited has an action, and from debates in another place that is what the Government were thinking about, although actually I think they would come under another head, given my example. The wholesaler? It is difficult to say that he should not have an action if he has lost his profit on the deal. The retailers? Did they not depend on this practice not being engaged in? What other reason is there for them having suffered loss or being affected adversely but that this man chose the union firm instead of the non-union firm? And what about Bill, the consumer? Why should he be excluded—the little man? And what about the lady consumer? Where does she come in if she has suffered either physical or mental torture from this unhappy event?
Of course, I put the point in a somewhat jocular tone to the noble Earl, but I say that it covers a most serious problem. Under normal principles of law there is no universal duty of care to all the citizens of the United Kingdom to avoid a breach of each and every statute that might affect them adversely beyond all contemplation of the person who contravenes it, or, indeed, in many cases, even within the contemplation of the person who fails to observe the statutory duties. It is not a question of contemplation; it is a question of what the legislation says, and this legislation says that anyone can sue who may be—not who is likely to be, not who can reasonably be foreseen to be, but who may be—adversely affected by its contravention.
Amendments to Clause 11 could, as it were, have taken this point then, but as my noble friend Lord McCarthy said, we (I think quite properly) decided to debate these three clauses together in substance on the new clause and Clause 12. But I say to the Govern-

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ment that two things arise out of that analysis and that illustration. Firstly, is it not the case that the words "may be adversely affected" cover an enormous range and should perhaps be rather limited in the two ways that my noble friends' two amendments suggest? The first way, in Amendment No. 101, is that the contravention must be directed against the plaintiff who says he was adversely affected. This is an ordinary principle of law. If we are talking about the tortious liability of unlawful interference with trade, it is clearly established in the case that the plaintiff, in order to sue, must show that he was deliberately and directly aimed at by the defendant. That is quite different from this. This is a vague liability and covers a wide range. I say, first, that it should be limited to the intentional or deliberate act aimed in the clear direction of the defendant.
Secondly—and this would be Amendment No. 106 —if the Government cannot go that far, then at any rate (and this is a subsidiary point; in order not to go further, I make this, as it were, a totally separate second heading to the noble Earl) Clause 12 does not even tell you that the people who can sue the union are limited to the people who can sue the employer. What Amendment No. 106 does is to say that, whatever range of plaintiffs can sue the men in the commercial deal which you dislike so much in order to have consultation with unions prohibited and done down by commercial dealing, which must not be allowed, if you insist on saying that anyone who may be adversely affected can sue if he suffers loss—I see that the noble and learned Lord is with us, and he may not have heard the beginning of my speech. Of course, I accept that there must be causation; clearly causation of the loss must be proved, and so on; but given that, it is the range of plaintiffs and who may be adversely affected which I have illustrated.
If the Government insist on keeping that, then I say that it will be noted by the courts that it is not repeated in Clause 12, on which I think the courts will place considerable significance. Because the courts believe—the courts have to believe, because there is no other way of administering the law and justice—that there is such a thing as the intention of Parliament. We in this Chamber tonight may think of it only as some abstract thing high up in the ceiling that will go forth without us noticing it when we send this Bill away. But there is such a thing as an intention of Parliament, expressed not in the ceiling but in the Bill. If the Bill is left in this form, a court will be bound to say: "What a funny thing that they put subsection 7(d) at the end of Clause 11 and nothing parallel in Clause 12 and, therefore, as a second string, Amendment No. 106 (to which I speak as well) would say that only those who could sue under Clause 11 could sue the union under Clause 12. I beg to move.
The Earl of Gowrie: The only thing which rather amazed me about most of the speech of the noble Lord, Lord Wedderburn, is that it seemed to be about Clause 11 and who can sue under Clause 11. Under Clause 11, a person can sue if he is adversely affected by the unlawful practices set out there, but under Clause 12, which we are supposed presently to be debating, a person can sue in tort if he is a party to a
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contract which is broken or threatened by industrial action against a non-union firm. It was that which caused my expression of puzzlement when this sad story of the failed fish was enunciated from the Benches opposite—and not through any culinary inexpertise, as I am the cook in my household.
Lord Wedderburn of Charlton: I am grateful to the noble Earl. Of course, I should have said the sentence expressly: if you accept this amendment, you will have to amend Clause 11. We did not have a debate on that. It was agreed that we should debate all the clauses together. I accept we will come to it on Report.
The Earl of Gowrie: I am glad that the noble Lord and I are on side about that. If I could deal with the point he made—I accept wholly that it is a serious point—in his interesting story about the fish and chips, there may be those who can show that they have been adversely affected by practices outlawed by Clause 11, and, if so, they, too, may have a course of action under subsection 7(d) of Clause 11. But this does not over-ride the normal principles of law. Anyone bringing an action will have to show that he has sufficient locus standi to bring a case; in other words, that he has suffered loss as a result of the imposition of union membership requirements. It will sometimes be difficult enough for a contractor himself to prove that he suffered because of those practices. The more remote a person is from the union membership requirement, the more difficult it will be for the person to bring a case. It would be a mistake, therefore, to think that subsection 7(d) of Clause 11 will cause widespread legal actions. But we believe that anyone who can show a sufficient cause of action should be able to bring legal proceedings; and subsection 7(d) will enable them to do so.
Returning to Amendment No. 101 and to Clause 12, this amendment would restrict the right to take legal proceedings in tort by virtue of Clause 12(1) to a person against whom the trade union pressure to impose the union labour-only requirement was directed. This presumably means that in most cases only the employer whose employees were taking, or threatening to take, industrial action to persuade him to discriminate against non-union firms, will have a right to sue in tort, The non-union firms themselves and anyone else whose contract was interfered with by unlawful action could be prevented from taking legal proceedings. We do not accept the limitations which that amendment imposes on the rights of plaintiffs to take legal action against those acting unlawfully and, for that reason, I would ask the Committee to reject the amendment.
Before I sit down, if I understood the noble Lord aright, the noble Lord also gave me notice that he was speaking to Amendment No. 106. As I have said in response to the previous amendment, Amendment No. 101, we do not see justification for restricting those who may be able to take legal action under Clause 12. The effect of Clause 12 is to remove in certain circumstances the immunity from actions in tort provided by Section 13 of the 1974 Act. This means that anyone who is damaged will be able to bring legal proceedings, if he can show under the normal rules of the law on the relevant tort, that he has sufficient cause for action. This may be the employer of the employees who are taking the industrial

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action or the customer or supplier of such an employer if they are damaged directly as a result of unlawful action. There, in a slightly different context, the noble Lord's story of the fish may be relevant; or the non-union firm which has been prevented from fulfilling a contract. In practice, it is unlikely to include anyone more remote from the action than that.
I cannot leave this debate without returning to a point which has been made. There is one simple way to avoid being liable under Clause 12 and that is simply to remain within the law. If trade unions and trade union officials abide by the provisions of Clause 12 then it will not matter who can sue because no unlawful act will have been committed and no damage caused.
Lord Wedderburn of Charlton: I must express disappointment that no other Members of your Lordships' Committee with legal knowledge is taking part in this debate, because the noble Earl has taken us into water which is very deep. I have brought forward some points which perhaps would have been made later but which now must be made here because they are germane to what he said. They fall under three headings. The first relates to his last remarks. I put it this way. It will not do for the Government to tell us when the Bill is obscure that the easy way to avoid problems is to stay within the law. That is a self-contradiction. What we are saying is that the law is not clear. "Tell us what the law is", we say, "and we will try to keep within it". But I do not know what it is, and the noble Earl has not told me; so that it is no good his getting up and saying that there is nothing wrong with the Bill, keep within the law and do not break it so as to effect a contravention. What I am saying is that the Bill is obscure.
May I take the two points that he put to me? I understand them. They engage with my argument but they do not answer it. The first was that the normal principles of law would apply and the ordinary law of the land—I have noted it—would be applicable. Of course, that is true. But the ordinary law of the land on this matter has become extremely complex. There was, for example, in 1981 an action taken to the Judicial Committee of your Lordships' House between Lonrho Corporation and Shell Petroleum based upon the issue of whether Lonrho could sue Shell because Shell, breaking the sanctions regulations, had put petrol and oil into Rhodesia for many years. Lonrho said: "Because you broke that criminal obligation in that case"— but that is not the only point of the judgment—" and the statute and regulations, we want damages because we suffered loss". As a matter of fact, they might well have been people who were adversely affected. They certainly were; and Shell could even foresee it, as was accepted.
The argument was whether or not the statute on its construction allowed for this plaintiff to sue in respect of that kind of loss. So the problem in the Lonrho case, albeit not parallel in every respect, is, nevertheless, precisely germane to the noble Earl's correct reminder that the normal principles of law apply. There, the Law Lords have recently clarified this area of the law. The noble and learned Lord, Lord Diplock, in a unanimous opinion put it forward in two propositions—and I will read only thoseparts which make it absolutely
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clear—in page 461 of 1981 2 All England Reports. He says:
"First, there is liability where on a true construction of the Act it is apparent that the obligational prohibition was imposed for the benefit or protection of a particular class of individuals".
—such as in the Factory Acts. I am saying that this Act does not make it clear where the class of individuals is to be delimited. And it could do better. On Lord Diplock's principle, there, how do you get much help on the basis of anyone who may be adversely affected, except to say that it is very wide indeed? It is certainly wider than the Factories Act.
Then there is a second principle that where a statute creates a public right then a particular citizen who suffers can sue if he suffers particular, direct and substantial private damage. I apprehend that no one would suggest that the second principle applied. So we are left with the first principle, the ordinary law of the land. I say that it leaves the matter obscure.
I say with no hesitation that the law officers of the Government should pay attention and say to the Cabinet that this is a very serious matter. It has been to the courts and the appellate courts many times, and only in the last few weeks have there been cases on other statutes—it happens to be statutes that people want to use to control those who pirate and bootleg video tapes and so on, a constant source of litigation—but it raises the same point because the Acts are obscure as to who can sue for what. There is no reason why there should be very much obscurity about that. Any decent plaintiff can always raise a bit of dust; but there is no reason to leave it as obscure as the Bill does.
The noble Earl's second point was this. He said if you limited it to a liability for acts done which are directed at a person, then only the other party to a contract or in a similar relationship would be able to sue, and third persons, the non-union firms—which were really the losers down the line—would not be able to sue. With great respect, that is a simple confusion.
You can of course limit the range of plaintiffs to the other parties to a relationship. That is what paragraphs (a), (b) and (c) of Clause 11(7) do and by reference presumably thereby to Clause 12, although we have not had much response to the idea that perhaps the unions could be put in the same position as the employers by taking Clause 11(7) into Clause 12 as well. I hope that the Government are thinking about that. But it does not follow from the fact that you have limited the liability to acts which are done when they are directed against another person that that only reaches the other party to the transaction. That reaches a much wider area.
All the cases on unlawful interference and unlawful damage in trade and business show clearly that the plaintiff need not be a party to a contract. He need not be a party to a relationship. He must be someone in respect of whom the deliberate act of the defendant in breaking a statute which caused the duty to be owed to him caused damage of the type envisaged by the statute and caused proximate loss within the normal principles of causation. I take the noble and learned Lord, Lord Diplock, to be saying that in slightly different words in the first principle in the Lonrho case.

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If the noble Earl does not like "directed", he can find something else; anyone who is deliberately done damage by the breach. I am not asking the noble Earl to take these words. I am saying—he said nothing about it at all—that Clause 11(7) is not in Clause 12, which means that the unions have no guidance at all. In so far as they would have guidance if it were put there, it would be poor guidance because his answer did nothing to clarify the meaning of "adversely affected". I cannot understand why the Government six months after they have put a Bill forward have the new clause which is what makes this such a big matter and imposes these areas of liability with hundreds of plaintiffs who may have to litigate and perhaps waste their money to see whether there is locus standi or not, and expect a revising Chamber to put it through. I expect that the Committee will put it through. With the greatest respect to the Committee, it shows the limitations of the House of Lords as a revising Chamber.
Lord Molloy: I should like to emphasise one point which occured to me when the noble Earl was speaking. One tried to follow the arguments as closely as possible. The point that I am trying to make is that the noble Earl referred to the fact that no one need worry if they keep within the law. Does he mean the law that might come if this Bill becomes an Act or the law at the moment extant?
It seems to my simple mind that if he means the existing law, there is no need for the Bill. If he means when the Bill becomes law then I am faced with the quandary that my very experienced noble friend Lord Wedderburn is in. This is not a political matter; no politics are involved in this. If it is a question of the law which ought to be reasonably easy for ordinary lay people to understand, I simply say that I found difficulty in following both the noble Earl's arguments and my noble friend's arguments. We shall not solve anything by having Divisions or political arguments—there are no politics involved in this is it therefore unreasonable, as my noble friend Lord Wedderburn has requested of the noble Earl, to ask that this particular aspect be taken back and that a fresh look be taken at it in the light of what my noble friend has said as an expert, and in the light of what I have said as an ordinary person who does not understand too much of the details of law?
5.16 p.m.
The Earl of Gowrie: I am extremely grateful for the intervention of the noble Lord, Lord Molloy, because he has brought us back to earth. The fact of the matter is that I meant that there would not be difficulties—or I would have thought few difficulties—for people once this Bill became an Act to decide on their liability or on whether or not they could sue. The territory we are in in the arena of Clause 11 and Clause 12 of the Bill is pretty simple. It does not involve a great deal of learned expertise or difficulty. Clause 11 is designed to deal with what are generally known as union labour only requirements. We have debated the reasons why the Government find this long standing practice in some industries distasteful, particularly in view of the increasing use by public authorities. We can argue the merits or demerits in political
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terms. Here I respectfully disagree with the noble Lord, Lord Molloy; there is a political argument here about these practices.
If we pass Clause 11—as so far, for the sake of argument, we have—Clause 12 is only a logical extension of it in that Clause 12 goes on to make it unlawful for employees and unions to put pressure on employers to violate the laws that we have, so to speak, just passed under Clause 11. To even an unlearned figure like myself this does not seem to be a very difficult point to grasp. The noble Lord, Lord Wedderburn—with I acknowledge a great deal of flair and all the expertise of one who spent a lifetime in the distinguished practice of labour legislation—has both widened and narrowed the debate. He has taken our eye a little off the ball as to what these clauses are designed to do. As he is a skilful professional person, I may be forgiven a little if I suspect him of going into these regions in order to take the mind of the Committee off the rather simple provisions which exist in these clauses.
Lord Wedderburn of Charlton: I know that the noble Earl will not think I am in any way being other than courteous and respectful. I want to remind the Government of an occasion—I have to admit that I do not remember which Bill it was, but I remember reading the Hansard account in 1974, 1975 or 1976—where the provisions of one of the trade union labour relations Acts or employment protection Acts caused the then Opposition to demand that the noble and learned Lord the Lord Chancellor come to the Chamber to explain them. I have made no such demand tonight, but we should all look at that occasion in Hansard. I suspect that provision was certainly not as obscure and strange as this one. Our eye was not off the ball. The noble Earl's eye was well on the ball when he diverted us to the simple point at the end. We shall not withdraw these amendments. Let them remain on the record.
On Question, amendment negatived.
[Amendment No. 102 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 103:
Page 14, line 35, leave out ("reason, or one of the reasons,") and insert ("principal reason").
The noble Lord said: If I may, I will move Amendment No. 103, speak to Amendment No. 104 and mention Amendment No. 105. Unless the noble Lord the Minister says something very extraordinary compared with what has been said throughout these three-and-a-half days of debate, my noble friends and I will ask leave to withdraw the amendments. The reason for moving them is so that they can be put on the record, and if I am brief I hope it will not be thought that the amendments are considered by us to have anything other than 100 per cent. convincing merits.
The point made by Amendments Nos. 103 and 104 is that this very wide new liability is based upon someone acting for a reason or "on a ground", as it is in Clause 11. Of course the things aimed at, as the noble Earl has made clear, are union labour requirements and now banning consultation with trade unions or anything to do with trade unions, as far as one can see, in

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terms of consultation and commercial practice. When one puts these clauses together, one can see that they cover a very wide area.
At the centre of the liability is the reason or the ground upon which somebody does an act. Normally, in a statute, if you think something is obnoxious you say, "You must not do it for that reason", and then somebody will say to you, "But most people in life are more complicated than that". It may be that noble Ministers act for only one reason, but most of us are rather more complex and it is normally enacted, in the format in which earlier, indeed, clauses in this Bill are enacted, that the particular provision applies when someone acts for a reason, or, where there is more than one reason, a principal reason, and then it is set out. On page 2 of the Bill in Clause 2 you will find—
"the reason (or, if more than one, the principal reason)"—
and then follows the rest of the clause. But that is not so here.
All the way through Clause 11, the new clause, and Clause 12 imposing commercial and industrial liabilities, constricting the freedom of people to contact and constricting the freedom of workers to take ordinary industrial action or indeed, as we have seen, possibly not industrial action, inducing breach of any contract, there at the centre is the one ground which, if it appears, vitiates the entire cobweb of transactions. So there might be a hundred reasons. According to this Bill, you can have a million reasons, and so long as one of them is what the Government do not like then the Bill automatically comes down with its civil liability for damages, the extent of which you cannot be sure of because you do not know.
In regard to injunctions, if we had had some debates on this in which the Government were prepared to consider the difficulties, perhaps we might have discussed the remedies of injunction, because the Government plainly mean to have injunctions available for plaintiffs here. I should like the noble and learned Lord to tell us what forms of injunction he thinks are likely to be awarded and what are not, and whether or not they would reach to the edge of a court, telling a defendant that he must enter into a contract or telling a union that it must help him to enter into a contract, or what form the injunctions would take under the new Clauses 11 and 12. The noble and learned Lord may say that they will take the ordinary form, but that will not do because this is not an ordinary trio of clauses. They raise entirely new problems and they do so because the liability tests where someone acts with a variety of reasons; but you have only to have one reason—to push someone, to force someone or to edge someone towards consultation with a union—and all your other reasons are out of the window.
I say that is totally unreasonable and I appeal to noble Lords—the Government cannot be serious in saying that only one reason, when there are dozens of others, is a liability every time. It is not sensible—I use a neutral word: it is silly. The public will think we are silly if we pass an Act which says that if you have a million reasons and one of them falls within the Bill you will be liable for the loss, sued by someone who is adversely affected. Surely the Government will look at this again; but I suspect they will not. And presumably they will not look at the kind of liability
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which might be reconstructed around the notion that an employer should be put with his associated employee, which we put forward in Amendment No. 105. I have some hope left that the noble and learned Lord will tell us something to the advantage of the Bill, apart from anything else; and so in that sense I move Amendment No. 103.
Lord Mackay of Clashfern: The purpose of subsections (2) and (3) of Clause 12 is to remove immunity from industrial action to interfere with the supply of goods or services from another employer on the grounds that the work in connection with these goods or services is to be or has been done by non-union or union employees. As with the imposition of union membership requirements by employers, it does not make much sense to consider in these cases, as these amendments would have us do, whether union membership was a major or a minor factor. If it was a factor at all in the union's action, then, in our view, it is right that the immunity should be removed. If the action is taken for other reasons altogether then the immunity is retained. That seems to us to be a reasonable criterion and to justify your Lordships in not accepting this amendment.
On Question, amendment negatived.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 103A:
Page 14, line 38, leave out from ("persons") to ("who") in line 39 and insert ("(other than persons employed by the relevant employer)").
The noble and learned Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 103B:
Page 14, line 40, leave out ("or").
The noble and learned Lord said: I have spoken to this amendment already, and I beg to move.
On Question, amendment agreed to.
Amendment No. 104 not moved.]
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 104B:
Page 14, line 44, at end insert ("or
(c) the supplier of the goods or services in question is not the relevant employer and the reason, or one of the reasons, for doing the act is that the supplier does not, or is not likely to, recognise, negotiate or consult as mentioned in section (Prohibition on union recognition requirements)(1)").
The noble and learned Lord said: I have already spoken to this amendment, and I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 104A:
Page 14, line 43, leave out (" (employed by another") and insert ("(other than persons employed by the relevant").
The noble and learned Lord said: I have already spoken to this amendment, and I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 104C:
Page 15, line 1, leave out from ("above") to first ("the") in line 2 and insert ("the "relevant employer" means").
The noble and learned Lord said: I have already spoken to this amendment, and I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 105 and 106 not moved.]
On Question, Whether Clause 12, as amended, shall stand part of the Bill?
5.29 p.m.
Lord Wedderburn of Charlton: It is, in the view of my noble friends and me, very important now to look at the clause as a whole and indeed, as I have said in regard to previous amendments, to look at Clause 12 as the final chance of the Committee to pass a judgment upon the trio of clauses. As I shall suggest later, they enact anti-union measures and indeed measures aimed at businessmen, who are happy with their relationships with their unions and merely want to see common standards and fair wages resolution standards applied in a decent way throughout a trade. It is not just unions who have things to fear from these clauses, and the message should go out to businessmen. As we have just seen over the last amendment, the Government do not care whether a businessman has 300 charitable reasons, 5,000 decent reasons and 600 justifiable reasons: so long as he has one reason that he wants someone else to recognise or consult with a union; that is enough for the Government. Then he is for the high jump and the whip or the hoop can be thrown by anyone who may be adversely affected.
There is a little recent history to this—the encouragement of employer—undercutting of basic rates; the problem of the—to use the Words of Alan Flanders—employer and union engaging in the joint regulation of the enterprise and, perhaps, of the trade, district or whatever is the relevant sphere; the whole concept of the extension of standards and decency in trades which many British employers are right to uphold. Many British employers do not like the cowboy outfits which do not observe safety regulations and which have standards that do not depend upon statute. Many British employers do not like people who cut rates, when they know that, somewhere in the background, there is not a payment of social security subscriptions or various other practices, to which I shall come later, in regard to self-employment.
This matter was discussed in 1980, and subjects of this kind were put to the then Secretary of State in regard to Section 18 of the Employment Act 1980. That was triggered by the report of Mr. Leggatt on SLADE, and its activities as a union to compel people into membership over a very wide area of activity. The Government then devised a clause which they said would stop the activities of SLADE and would not go very much further, because it was put to them "Wouldn't it be a very bad thing if, in this legislation, you stopped what in some industries are called fair lists?"
On 28th July, 1980, the then Secretary of State, Mr. Prior, said in Committee in another place:
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"I do not particularly care for the fair list system operated by TASS, but I accept that it is an industrial practice and one with which I am not seeking to deal in this clause or in any other clause of the Bill".
He went on later:
"We are not seeking to abolish fair lists. The way fair lists are entered into as a result of an agreement, as is the case with the TASS agreement with the employers here, is something with which we all ought to be able to live in good industrial relations". —[Official Report.]
My noble friends and I were critical of Section 18, but it did not seem to us that the Secretary of State at that time was anything other than sensible about fair lists and similar arrangements.
It may be that there is a line to be drawn, but why ban them all, when in some industries they are the only reason why those employers who would be the black sheep employ their workers on contracts of employment, instead of on self-employment or lump labour, and when they are much more effective in upholding jointly regulated standards—I stress jointly regulated—than legislation? They are employer-union arrangements which are not harmful to competition and they are not harmful to costs, because, in the long run, they give the employer an opportunity of working with his work force, of participating with them and of gaining productivity and efficiency through consensus, rather than conflict.
They are part of arrangements between some of the best unions and employers in the country. But they will be more than at risk, and 90 per cent. of them will very likely fall foul of this Bill. There must be many in Birmingham, Leeds, Glasgow, Manchester and Cardiff who, when they read the report of this debate, will wonder what on earth was going on in London when these provisions were passed.
My second point is about the extraordinary way in which these three very wide liabilities in the clauses, and these three very wide areas of possible plaintiffs, have been justified in effect, by one area alone—local authorities. I said yesterday that gradually coming out of the Bill was the attack upon what the noble Earl, Lord Gowrie, referred to as the politically motivated act by certain councils. I referred to the fact that the district auditor will be used in order to charge labour councillors for political convictions which the Government do not like, but on which they may well have been elected.
But this time the Government are not going to leave it to the courts, in case it goes wrong. They are going to say, "We do not care what your election programme was. You are not allowed by us, no matter what your local voters say, to make contracts on the basis of consultation with trade unions by the other contracting party". What a preposterous, outrageous proposition to put before the country! Indeed, was it ever put before the country? What was the consultation on this? Perhaps the Minister will tell us when he replies. What document was sent and to which union and to which employer? What are the views of the CBI? Does the EF agree, because they did not agree with many areas in the Bill? Can we know and, if we cannot, when will we be told?
The noble Lord, Lord Boyd-Carpenter, said earlier that these clauses are fair and reasonable and he could not understand why anyone should oppose them. The words that he used were almost exactly those

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used in a certain leader in The Times, which said that unhappy though it was to see this happening "we must preserve the rules of fair fighting". That was in 1872, when the gas strikers were convicted for the strike in the West End of London that was called a criminal conspiracy by Mr. Justice Brett. The terms of the speech of the noble Lord, Lord Boyd-Carpenter, were very similar to The Times on that occasion which I do not have with me, but which I have well in mind in speaking of it.
This whole debate has shown again that the Government have forgotten some of the wisdom of those from whom they would claim descent, because when, in 1909, the wages councils or the trade boards, as they were called, were being set up, the President of the Board of Trade said on 28th April, at col. 388 of Hansard:
"It is a serious national evil, that any class of His Majesty's subjects should receive less than a living wage in return for the utmost exertions. It was formerly supposed that the workings of the laws of supply and demand would naturally regulate or eliminate that evil. The first broad division we make on that question is between healthy and unhealthy conditions of bargaining".
That was the basis of the Trade Boards Act and the wages councils which, if they have their head, I have no doubt the Government will get rid of, in view of the response of the noble Earl, Lord Ferrers, in the debate initiated by the noble Lord, Lord Spens.
The President of the Board of Trade went on:
"Where in the great staple trades of the country you have powerful organisation on both sides, there you have a healthy bargaining which increases competitiveness in industry".
Later he said:
"But where you have what we call sweated trades you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad employer is undercut by the worst".
The Government have forgotten all that. The Government are now going to legislate against the kind of organisation that prevents that. The speaker on that occasion was far more wise those many years ago. It was the President of the Board of Trade, Winston Churchill. This Committee should not accept Clause 12, nor, indeed, should it have accepted the previous two clauses.
Lord Mackay of Clashfern: A good deal of the latter part of the noble Lord's speech in relation to Clause 12 suffers. I suggest, from the same sort of confusion as was pointed out by the noble Baroness, Lady Burton, in connection with an earlier debate. The fact that these clauses seek to preserve for employers and employees the right to manage their own affairs without outside interference, is in no way to promote cowboy outfits in relation to safety or to promote sweated labour or anything of that sort. The conditions in which trade unions are able to invite people to join today are surely very different from those which prevailed in the history to which the noble Lord has been kind enough to treat us this afternoon.
So far as the Government are concerned, Clause 12, like Clause 11 and the new clause, is concerned with the imposition of union labour only and other requirements on contractors, but whereas Clause 11 and the new clause deal with the imposition of such requirements by employers, Clause 12 is aimed at trade union
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pressure to impose and enforce such requirements. The Government take the view that pressure of this kind, which is dealt with by this clause, is not appropriate and ought no longer to be lawful.
The clause is in two distinct parts, as your Lordships have seen, which it is convenient to consider separately. Subsection (1) is a direct consequence of the two previous clauses. It removes immunity from a union or other person who organises or threatens industrial action in order to put pressure on an employer to do something which Clause 11 and the new clause declare to be unlawful. In other words, if trade union representatives in a company threaten to call out the employees in that company unless that employer sub-contracts only to a sub-contractor with a closed shop or recognition agreement, they or their trade unions may be liable to be sued for an injunction or damages.
I hope no one is in any doubt why we are taking such a step. The Government are opposed to requirements about union membership and recognition, whether they are enforced by employers or trade unions. It would be absurd to make it unlawful for an employer to impose such requirements while leaving trade union action to persuade the employer to impose such requirements completely untouched. It would put employers in an impossible position, caught between the provisions of the law on the one hand and pressure from their trade unions on the other.
Subsections (2) to (4) of Clause 12 deal with the related but wider question of industrial action which interferes with the supply of goods or services from non-union companies. Two typical examples of such action which may be affected by these subsections are, first, the refusal of employees to work with or allow on to a site an employee of another company who cannot produce the requisite union card and, secondly, the refusal of workers in a company to handle goods or materials because they have come from a non-union source. It does not at all follow that because they are coming from a company which is a non-union source, the terms upon which the workers work are any less favourable than those which would obtain in a union situation.
Lord Wedderburn of Charlton: They may be.
Lord Mackay of Clashfern: The noble Lord says they may be, but that shows that the mere fact of this sort of provision being put in has very little to do with conditions. It is a very different situation that the union wishes to achieve by pressure of this kind. It is to have the union recognised rather than specially to promote any particular conditions of employment. These practices are common in some industries, particularly where there is a long tradition of union membership or a high level of sub-contracting.
The noble Lord asked me about consultation and spoke of the practical difficulties of implementing these proposals which, in our view, are very justified in principle because of the practices which they are to outlaw. The possible consequences were considered. The Government consulted on these matters and set out the issues very plainly in the Green Paper on trade union immunities, and in a consultative paper on the Government's proposals we specifically sought further advice on this question before we made up our mind about the contents of the Bill.

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The response to both the Green Paper and the consultative paper left us in no doubt about the strong views of employers and employers' organisations that these practices should be dealt with in the Bill, first because they are objectionable in principle and if we miss this opportunity to put up barriers to them they may take an even firmer hold; and, secondly, because without subsections (2) to (4) it was widely felt that the Bill's measures to make unlawful union labour only requirements would be incomplete—and dramatically incomplete.
We were impressed by these arguments and by the strength with which they were expressed. In the light of these explanations, I hope your Lordships will agree that this clause should stand part of the Bill.
Lord McCarthy: Before the noble and learned Lord sits down, I think he referred to the trade union immunities Green Paper. May I ask the noble and learned Lord where in the trade union immunities Green Paper, to which I am sure he referred, there is anything at all on prohibition of union recognition requirements. I do not think it can be found anywhere. Indeed, I cannot find a direct reference in it to any of the previous clauses on union requirements. But specifically I think the noble and learned Lord will find that there is nothing at all on the prohibition of union recognition requirements. It is something which the Government have invented in this Committee at the last moment.
Lord Mackay of Clashfern: As the noble Lord will remember when I introduced the amendment with the new clause about union recognition, I explained that the matter concerning this particular aspect had been drawn to our attention since the Bill was published. But the principle upon which it rests is exactly the same and the reason that it is obnoxious is exactly the same as the reason in principle upon which Clause 11 itself rests.
Lord Wedderburn of Charlton: Before the noble and learned Lord finally resumes his seat, there is nothing in the document about that. May I ask him a second question? I asked, I think specifically, about fair lists. The Government specifically took a stand in 1980 and gave the reasons for their position on Section 18 of the 1980 Act. That position has now been overturned and these clauses do what the Government said they would not do in 1980. What specific points about fair lists have the Government taken into consultation and which parties on fair lists have they consulted?
Lord Mackay of Clashfern: If I correctly took the quotation which the noble Lord gave from my right honourable friend who was then the Secretary of State for Employment, he was making it clear that it was not the intention of the Government to deal with that particular matter in the 1980 Bill. The quotation does not suggest that it would not be appropriate to deal with it on a future occasion, once these matters had been consulted upon.
5.47 p.m.
On Question, Whether Clause 12, as amended, shall stand part of the Bill?
Their Lordships divided: Contents, 139; Not-Contents, 52.

DIVISION NO. 2

CONTENTS

Aberdeen and Temair, M.

Lane-Fox, B.

Airedale, L.

Lauderdale, E.

Airey of Abingdon, B.

Lloyd of Kilgerran, L.

Alexander of Tunis, E.

Long, V.

Allerton, L.

Lucas of Chilworth, L.

Auckland, L.

Lyell, L.

Avon, E.

McFadzean, L.

Aylestone, L.

Mackay of Clashfern, L.

Baker, L.

Mackie of Benshie, L.

Bellwin, L.

Macleod of Borve, L.

Beloff, L.

Margadale, L.

Bessborough, E.

Marley, L.

Blake, L.

Marsh, L.

Boardman, L.

Massereene and Ferrard, V.

Boyd-Carpenter, L.

Merrivale, L.

Brougham and Vaux, L.

Mills, V.

Burton of Coventry, B.

Montgomery of Alamein, V.

Campbell of Alloway, L.

Mottistone, L.

Campbell of Croy, L.

Mowbray and Stourton, L.

Cathcart, E.

Murton of Lindisfarne, L.

Chitnis, L.

Norfolk, D.

Clifford of Chudleigh, L.

Northchurch, B.

Cockfield, L.

Nugent of Guildford, L.

Craigavon, V.

O'Hagan, L.

Cromartie, E.

O'Neill of the Maine, L.

Daventry, V.

Onslow, E.

Davidson, V.

Orkney, E.

De Freyne, L.

Orr-Ewing, L.

De La Warr, E.

Pender, L.

Denham, L. [Teller.]

Penryhn, L.

Diamond, L.

Plummer of St. Marylebone, L.

Dilhorne, V.

Donaldson of Kingsbridge, L.

Portland, D.

Drumalbyn, L.

Rochdale, V.

Ebbisham, L.

Rochester, L.

Eccles, V.

Romney, E.

Ellenborough, L.

Sainsbury, L.

Elles, B.

St. Davids, V.

Elliot of Harwood, B.

St. John of Bletso, L.

Energlyn, L.

Salisbury, M.

Erroll, E.

Saltoun, Ly.

Faithfull, B.

Sandford, L.

Ferrers, E.

Sandys, L. [Teller]

Fortescue, E.

Seear, B.

Fraser of Kilmorack, L.

Sempill, Ly.

Gardner of Parkes, B.

Sharples, B.

Gladwyn, L.

Skelmersdale, L.

Glanusk, L.

Spens, L.

Glenarthur, L.

Stamp, L.

Glenkinglas, L.

Stodart of Leaston, L.

Gowrie, E.

Stradbroke, E.

Gridley, L.

Swinfen, L.

Hailsham of Saint Marylebone, L.

Tanlaw, L.

Terrington, L.

Halsbury, E.

Thomas of Swynnerton, L.

Hampton, L.

Trefgarne, L.

Hankey, L.

Trenchard, V.

Harris of Greenwich, L.

Trumpington, B.

Harris of High Cross, L.

Vaux of Harrowden, L.

Harvington, L.

Vernon, L.

Henley, L.

Vivian, L.

Home of the Hirsel, L.

Wakefield of Kendal, L.

Ilchester, E.

Walston, L.

Ironside, L.

Ward of Witley, V.

Kennet, L.

Westbury, L.

Killearn, L.

Whaddon, L.

Kilmany, L.

Wigoder, L.

Kilmarnock, L.

Wilson of Langside, L.

Kimberley, E.

Windlesham, L.

Kinloss, Ly.

Young, B.

Kinnaird, L.

NOT-CONTENTS

Ardwick, L.

Bernstein, L.

Balogh, L.

Beswick, L.

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Bishopston, L.

Llewelyn-Davies of Hastoe, B.

Blease, L.

Lovell-Davis, L.

Blyton, L.

McCarthy, L.

Boston of Faversham, L.

Milford, L.

Briginshaw, L.

Molloy, L.

Brockway, L.

Oram, L.

Brooks of Tremorfa, L.

Peart, L.

Bruce of Donington, L.

Phillips, B.

Collison, L.

Pitt of Hampstead, L.

David, B. [Teller.]

Ponsonby of Shulbrede, L. [Teller.]

Davies of Leek, L.

Davies of Penrhys, L.

Ross of Marnock, L.

Elwyn-Jones, L.

Sefton of Garston, L.

Ewart-Biggs, B.

Segal, L.

Fisher of Rednal, B.

Stewart of Alvechurch, B.

Gaitskell, B.

Stewart of Fulham, L.

Gregson, L.

Strabolgi, L.

Hatch of Lusby, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Underhill, L.

Jeger, B.

Wedderburn of Charlton, L.

Jenkins of Putney, L.

Wells-Pestell, L.

John-Mackie, L.

White, B.

Kirkhill, L.

Wootton of Abinger, B.

Lee of Newton, L.

Wynne-Jones, L.

Listowel, E.

Resolved in the affirmative, and Clause 12, as amended, agreed to.
5.56 p.m.
The Earl of Gowrie: I think that the noble Lord, Lord Marsh, and the noble Lord, Lord Harris of High Cross—who appear not to be present—would wish to move their amendments, although quite what to do about it I do not know. But now I see the noble Lord, Lord Harris of High Cross, approaching.
Lord Harris of High Cross Lord Harris of High Cross moved Amendment No. 107:
Before Clause 13, insert the following new clause:
("Lay off and industrial action by employees of the employer
.—(1) An employer whose customary course of business is disrupted by industrial action by his employees shall, subject to compliance with the requirements of subsection (2) and the provisions of subsection (3), be entitled to suspend without pay—

(a) employees participating in industrial action or financing or directly interested in the dispute which caused the industrial action;

(b) any other employees of the employer for so long as the dispute continues.

(2) The requirements of this subsection in respect of subsection (1)(b) are satisfied if the employer—

(a) causes to be displayed at the place of work of all employees intended to be suspended a written notice ("the warning notice") identifying such employees and stating the reason for such intended suspension;

(b) takes such steps as are reasonably practicable to ensure that the attention of all employees intended to be suspended is drawn to the warning notice on the day on which it is first displayed ("the date of notification"); and

(c) exercises the right to suspend not sooner than 48 hours after the date of notification as shall have been specified in the warning notice.

(3) A complaint may be presented to an Industrial Tribunal by any person whose pay has been suspended by the employer by virtue of the provisions of subsections (1) and (2) of this section on the grounds that such provisions were inapplicable; and unless the employer satisfies the Industrial Tribunal that in all the circumstances of the case the suspension and the period of suspension were justified having regard to the provisions of subsections (1) and (2) of this section, the Tribunal may declare the suspension to have been unfair and award compensation in accordance with the principles set out in
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section 74 of the Employment Protection (Consolidation) Act 1978.").
The noble Lord said: The full merits of Amendments Nos. 107 and 108 will be revealed to the Committee shortly by my noble friend Lord Marsh who has been working intensively for some days on the full legal complexities of the matter. I want to put a simpler argument before your Lordships. The Committee has listened patiently for some days to many amendments which have been advocated on a whole range of different grounds. Some have been posed on legal or constitutional grounds and others have been based on political, historical, social or even—when the noble Lord, Lord Molloy, was in full spate—on high emotional grounds. We have heard about individual or collective rights. We have heard about public opinion. We have heard about restoring the balance between the two sides. I want to put before the Committee the economic merits of this amendment.
Whatever the rights or wrongs of a strike, one of its primary aims and one of its invariable consequences is to impose a cost on the company through the interruption of production. In olden days, if the workforce went on strike, the company suffered some loss through the interruption of its business and through having to bear unavoidable overheads which persisted throughout the strike. But then at least the cost of maintaining the strikers and their families is shifted to the trades unions, if they offer strike pay, or to the workers themselves—or to the taxpayers, through supplementary benefits and related support.
However defective the economic understanding of some trades union leaders may be, they have recently increasingly "tumbled" to a way of inflicting a larger cost on employers at small expense to themselves. Thus, a selective strike by key workers is a far more onerous penalty to impose upon the employer with whom they are in conflict. They can immobilise production—sometimes completely—but leave the company with a contractual obligation to pay wages to the non-striking majority for whom there may be no work at all. In this way, a small minority of workers, at minimum sacrifice, may impose a maximum loss upon the company. This wholly disproportionate pressure may lead to an immediate "shot-gun settlement" on the strikers' terms, or it may lead to a protracted dispute, as we saw in the Civil Service dispute last year, or as we are seeing in the present National Health Service strike. Either way the company may suffer losses which impair its competitive position or its ability to raise or service new capital for investment. But when you come to a number of industries that have a very high proportion of their costs represented by labour costs, like the railways, or coal, or newspapers, the cost of continuing a selective strike by key workers is particularly severe and it must at some stage bring the company towards insolvency or indeed into bankruptcy.
I believe the Government may be inclined to offer some token resistance to this amendment as licensing a breach of contract. But if that is so, we have to ask who is responsible for the breach: is it the employer, who is running out of cash, or is it the union for bringing the company's survival into jeopardy? And if the company is finally bankrupted, what then? Not only will contracts be broken willy-nilly but

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future employment prospects may be destroyed. This is by no means an arcane economic speculation, if we remember how the print unions have helped over the years to destroy newspapers, going back to almost forgotten names like the News Chronicle, the Daily Herald, and more recently two of the three London evening newspapers with which most of us were brought up.
I want to put to the Committee very strongly that lay-off provisions of the kind incorporated in these two amendments, Nos. 107 and 108, are perfectly familiar in leading European countries. I cannot claim to have had time to conduct a possibly exhaustive survey, but in Germany, in France, in Denmark, in Belgium employees can be laid off if strikes in essential public services cause disruption or suspension of a company's production. This is regarded as force majeure, as arising from the interruption of supplies from outside of the company, for which the employer can have no possible responsibility. This is covered by our new clause in Amendment No. 108, the second of the two clauses. In most of these cases, even in Sweden, there is also provision for lay-off where a selective strike is by the company's own workers which causes the disruption of production, as incorporated in our Amendment No. 107 as we will discover from my noble friend Lord Marsh. Both these clauses provide the customary safeguards. They provide for an announcement of the intention to activate the suspension, they provide for a period of notice, and they provide for the right to appeal to an industrial tribunal.
We may hear that not all employees are agreed about the need for these clauses. Well, that is fine, they do not have to use them: there is no compulsion; there is no requirement. I can conceive of employers who would judge that to mobilise these powers might on balance be disadvantageous to the company. That is for their judgment. But in some circumstances they might find it a valuable way of preserving the solvency of their company as a future employing unit.
The Engineering Employer's Federation have strongly urged the merits of this amendment, as discouraging irresponsible militancy and diminishing the possibility of jobs being destroyed by selective strikes. Similar clauses to those before the Committee were tabled in the other place but were not discussed owing to the operation of the guillotine. It is my submission that, by incorporating these clauses in the Bill tonight, we shall be performing our constitutional duty in providing an opportunity for the elected House to consider, for the first time, these amendments, which have so much industrial and economic logic to commend them. I beg to move.
Lord Campbell of Alloway: I would urge upon your Lordships not to accept this amendment. Your Lordships have heard the economic case advanced, but will it work in practice, and ought we to license breaches of contracts of employment? We have heard about other countries. They are Napoleonic Code countries with a wholly different régime, where the lay-off clause in different ways is treated as a force majeure clause. Comparison with those countries, because the régime is so different, affords little assistance.
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But to take a common law country, consider Australia. There is at the moment a Bill before the Australian Parliament to amend their principal Act of 1904, and Clause 6 of that Bill contains a lay-off clause which bears a striking similarity to the form of the subject matter of this amendment. It may interest your Lordships to know that this Bill at the moment has been referred to the Select Committee of the Senate to consider inter alia—and here I quote, with your Lordships' leave:
"whether this right of lay-off without reference to the Conciliation and Arbitration Commission is consistent with modern industrial practice and will contribute to industrial peace".
I would oppose this clause as drafted mainly for the reason that it seeks to impose lay-off without the pre-requisite of conciliation. If there were some sort of mandatory conciliation, such perhaps as is envisaged by Amendment No. 143, that might—I underline "might"—be different. But there is not.
I am tired of hearing from noble Lords opposite that I am anti-union, hostile to unions, do not understand anything about it, and so on. I may not understand much about it, but I am not hostile to anyone, I regard this lay-off clause in its present form as unwise, unfair to trade unions, far too draconian and only for use in a form of national emergency, and this is not a Bill, fortunately, which envisages any such situation. I invite your Lordships for those reasons, if they commend themselves to your Lordships, to reject this proposed amendment.
Lord Marsh: I must apologise to the Committee for having been somewhat late on this occasion. I think it is a combination of my past with British Rail and experience of another place where things move at a more leisurely pace. I listened to the noble Lord, Lord Campbell, obviously with very great interest and consideration for the views which he puts forward. But, with the greatest respect, I suggest that he misses the entire point of the new clauses. This is not a question of a legal argument, it is a question of practicality. These two amendments are designed to assist an employer whose business is disrupted, either (in the case of Amendment No. 107) by some of his own employees or (in the case of Amendment No. 108) by employees of some other business on which he is dependent. This is intended to provide him with a third course of action. As things stand in the present situation, he has only two options open to him. In such a situation he can meet the claim, whatever its justification and however fair or unreasonable, or he can continue to pay the full costs of the labour until such time as he goes insolvent.
To the best of my knowledge, there is no other alternative open to him. That is a situation which is a practical problem. In these days, recession and cash flow problems can result, and do sometimes result, in the collapse of a company and the permanent loss of the employment opportunities for the workforce themselves. In fact, the clauses are designed not to attack trade unionists and their employment, but as the only practical proposition which I personally can see at the present of preserving their future job opportunities in those circumstances.
In the bad old days employers were able—and frequently did—dismiss their workers without notice,

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without compensation and frequently for no good reason. It still happens no doubt sometimes but it is not without notice and not without compensation but it is sometimes done without good reason. I suspect that there is nobody in this Committee who would wish to see those days return or would have any time for that sort of behaviour. That situation was indefensible and it has changed very much indeed, and quite properly so.
Anyone who is involved in day-to-day business will know that the dismissal of an employee today is frequently very difficult and it is almost always very expensive. It is not something which employers do lightly. Indeed, the situation has changed so much that voluntary redundancy is an extremely attractive proposition to many employees, particularly older staff with long service, and it is a traditional well known way in which to reduce labour forces. In periods when Governments of both parties decide to freeze salaries or to control them within certain norms, frequently the best way of helping a good executive is to fire him and let him get his tax-free redundancy payments.
Therefore, the situation has changed very much. Today the required notice for the dismissal of an employee varies, but in most cases it is quite substantial. Perhaps I may speak about one industry, the newspaper industry, in which I obviously declare a direct financial interest. The average period of notice there is 12 weeks. I would ask your Lordships to bear that in mind—12 weeks notice. Of course, despite the pockets of low paid wages in some industries, in others wages today are not at subsistence level. In national newspapers, for example, the average earnings of a semi-skilled worker today is £206.85 per week—£10,765 per year. That is the wage for the semiskilled and obviously one would not expect him to get as much as the skilled worker whose average earnings today are £341.25 per week—£18,000 per year. So we are talking about a commitment in the case of a stoppage for which the employer has no direct responsibility and, indeed, if it is caused by extraneous action in some other company, no control. There is nothing that he can do. The option he has is to pay out for a period of 13 weeks, wages at those levels. It is not a legal question; it is an economic impossibility in many companies.
Let us take, for example, an average national newspaper company. A stoppage will cost something around £4 million a week; something in excess of £½ million a day. It may well be that the contract reached says that the employer has to go on paying £½ million a day for 13 weeks. But I would submit to your Lordships that it is no great secret that there are many newpsapers in Fleet Street who could not go on doing that for a month or a fortnight—they are already in a loss-making situation. The danger is that it is possible for people to have in mind the long disputes that can be borne in the public sector. However, they cannot be borne in the private sector on this scale for long.
So what are the options? One option is that they can give 13 weeks notice to their employees, but of course they will be insolvent long before that time and the jobs will be gone for good. The second option is that they can pay up regardless of the merits of the claim. All Ministers—and many Members of this House have been Minister and have shared this view,
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including myself—have a touching and totally unjustified faith in the power of exhortation. I have heard industrialists—I have taken part in it myself—over and over again entreated to stand firm in the national interest. I have heard Prime Ministers of both parties and several Governments make the most scathing attacks—and frequently the irritation of Conservative Prime Ministers with industrialists is only matched by the irritation of Labour Prime Ministers with trade unionists—on the weakness of employers for not assisting them. The position is that very few companies in the private sector can afford not to accede to any union claim if it is pursued with skill and with determination.
These clauses are quite well known in British industry. I am sure that the noble Lord, Lord Wedderburn, would agree that they exist in a number of industries and have done for many years. I accept that they exist on a voluntary basis, but they are well known and the value of them has been known in the past. It could be said that to introduce them would involve a breach of faith with employees by their employers. I dispute that. As my noble friend Lord Harris has said, in these cases the employer is frequently not in dispute with his employees, particularly if it is extraneous action.
I keep coming back to the point, at the risk of being tedious, that the company has no alternative if it is to survive. Frequently, the temporary suspension of the guaranteed week is the only way in which to preserve the longer-term job opportunities of the employees within the company where the company is faced with a financial obligation which it simply cannot meet. We have talked a great deal about the rights of trade unions and the power which they have quite legitimately obtained over many years. If they have that power, then to suggest that they have an obligation to take into account the effect of the exercise of that power upon other workers is not unreasonable. That is something about which they can be asked.
The two clauses have differences. The first of course deals with the right to suspend after 48 hours. It concerns the case where there is a domestic dispute and where it is easy for the workers affected to consult with the management and, equally, to consult with each other. I suspect that in very few cases would the powers be used as early as that. But I come back to the point where one can give examples of industries where 48 hours may not sound very long, but it is £1 million in hard cash and there really is not a long time to philosophise about it.
The second involves a company suffering the effects of extraneous industrial action. Here the provisions of the clause become effective after five working days because the affected company, as in the case of the rail strike, will have some flexibility at least for a limited period. The rail disputes and mining disputes are good examples. As my noble friend has said, subsection (3) of both clauses provides a way whereby any employee who feels aggrieved can take his case to an industrial tribunal and the industrial tribunal can find against the employer if the industrial tribunal believes that it has been unfairly applied.
I understand the view of those who think that the clauses perhaps go too far; that, as the noble Lord said, they are draconian. But I believe it is a fact

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that must be faced, and the Government delude themselves if they believe that industrialists have any chance of standing firm when the scales are so unbalanced that the actions of, say, 5 per cent. or 10 per cent. of a labour force, or a labour force totally outside the company, can completely cut off the income to the company and leave it with an obligation to pay the whole of the wage bill.
Lord Boardman: The noble Lords, Lord Harris and Lord Marsh, have spoken of the problems of particular industries, and the noble Lord, Lord Marsh, referred specifically to the difficulties in the printing industry, which is an example of the problem which his clause seeks to remove. All of us who are involved in industry must know of countless similar cases where one or two people can stop a whole business and operation with thousands of other employees. The penalty that is imposed upon the employer and the pressure that it puts upon the employer, as the noble Lord, Lord Marsh, has said, is a menace.
There is the further point, that if a clause on the lines of that now proposed should become law, there would be increasing pressure upon the other employees to bring sense to bear on those who are out on strike. One would have the pressure of those who have been laid off because of the strikers, which I believe would be helpful in reaching a sensible solution. As the noble Lord, Lord Campbell said, there may be defects in the clause or other procedures which should be adopted, but I hope that, when the Government reply to this amendment they will indicate their acknowledgment and understanding of the problems around us, and perhaps make some proposals as to how this can he dealt with in order to relieve industry from the very heavy penalty that it suffers at the moment.
Lord Spens: I want to intervene for a very short moment because the noble Lord, Lord Campbell of Alloway, suggested that my amendment, No. 143, would be better than this one. I do not agree with that at all. I think that this Amendment, No. 107, and the next one, No. 108, will fit in extraordinarily well with my Amendment, No. 143, and I hope that the Government will accept all three of them.
6.32 p.m.
Lord Wedderburn of Charlton: We on these Benches have listened with great interest to the debate. We have been a little disappointed. The noble Lord, Lord Harris, said that his noble friend Lord Marsh would explain the full legal complexities to us. I do not think that he did that. I contest the law in Denmark, France and Germany as stated by the noble Lord, Lord Harris, with which no doubt he and I can join at another time. There are legal questions and, indeed, industrial and moral questions in these amendments. There is a sense in which the noble Lords, Lord Marsh and Lord Harris, solve the problem of lay off by the ultimate solution of putting the employer completely in the saddle, and indeed equating lay off to dismissal—at any rate, as near dismissal as any employee would like to get. The clauses, as the noble Lord, Lord Marsh, has taken your Lordships through them—give the employer as much power as it would be
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possible to imagine without using the word "dismissal".
Perhaps I may deal with the legal points which the noble Lord, Lord Marsh, mentioned. He said that dismissal was always expensive, to which one might respond that it is not more expensive than that which you have contracted to pay if you do it with notice, and fairly. It is, of course, true that by statute workers have a basic floor of notice rights in their contracts of employment, as their service goes up over the years. But I was not very sure whether the noble Lord, Lord Marsh, wanted to get rid of that, and whether that was his main statutory object and target, becaues if it was, it would be very easy simply to repeal those clauses and have done with it.
If notice depends—as he seemed to suggest—upon contract, and the reality in industrial life upon industrial relations conducted so far, at least, despite what so far has gone in this Bill, by collective bargaining, then, of course, it is a matter beyond that floor of negotiation. It may be that there are situations where the noble Lord, Lord Marsh, and I, would find ourselves in disagreement and others where we would find ourselves possibly in agreement as to the power, and desirable power, of the parties to the bargaining. But I suggest that the only thing the noble Lord, Lord Marsh, can do in that situation, if he thinks the union is too powerful, is to go away and keep away from the arrows and shots of the law. If the union is powerful enough to impose on the employers more notice than they would care to have given above the statutory floor, I do not know what he thinks the union's response to these clauses would be likely to be.
I do not claim expertise in having surveyed clauses of this sort in the way in which some of my noble friends, have, but I came across some in the Law Reports, because they have come to court, especially in Scotland—and I am sure that the noble and learned Lord, the Lord Advocate, would agree—where cases have been dealt with rather favourably to the employers in their interpretation of the standard guaranteed week and the suspension clauses in them. On this I should like to say a few words, because so far it seems to me that their position has been left rather obscure.
The one I came across in 1977 Reports said:
"All hourly-rated manual workers continuously employed for not less than four weeks will be guaranteed employment for five days in each normal pay week".
But it went on:
"In the event of dislocation of production in a federated establishment as a result of an industrial dispute, in that or any other federated establishment, the operation of the period of guarantee is automatically suspended."
That is a lay-off clause by way of a suspension. It sometimes begins for workers who are under discipline, but normally arises in these collective agreements where the disruption is due to a trade dispute. Sometimes it covers disputes within the federation or within associated employers, and, as the noble Lord, Lord Marsh, knows, sometimes it deals more widely. This is a matter for negotiation.
These clauses are saying that those who support them wish, by law, to impose the unilateral right of the employer, no matter what collective agreement he has negotiated, to tear it up and lay off the workforce

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without pay. What would the party opposite say if a Labour Government asked for a similar right on the other side of the coin to be negotiated or legislated: that unions could seek peace-obligations clauses, but if they found them inconvenient, contrary to custom and practice or harmful to the workers in some economic way they could, in giving suitable notice, say "We shall now tear up the agreement"? What would happen would be what will happen if clauses of this kind are enacted in Bills of this sort.
I say, "Bills of this sort", because I think it behoves my noble friends and myself to say this to the Government. We apprehend that the Government are likely to oppose this amendment—we may be wrong, but that is what we guess—just as we thought that the Government would oppose certain amendments in the Bill in 1980 that went through then. If we had said in 1980 that the 1980 Bill would incorporate in two years' time the sort of things before your Lordships' House in this Committee, most people would have laughed. They would not have believed us. Indeed, I suggested some of the things myself. In fact, I was quite wrong; I was too moderate. I had no idea that they would go as far as they have gone today.
Let us look at what the Government are now doing: getting ready to tear up the fair wage legislation—not in this Bill; getting ready to pounce on the Wages Councils—not in this Bill; dealing with supplementary benefit for those who will not have training places (in one way or another it is a tight-rope which way it will go)—and not in this Bill. A clause of this sort?— no not in this Bill. But what about the next one? The answer from the Government tonight will be looked at very carefully, not only by those who know what is going on in your Lordships' Committee, but by trade unions.
To return to the industrial reality, what happened the last time something of this sort was tried? The parallel is the attempt in 1971 to make collective agreements into contracts by law or, in effect, with very little way out. But a way out was left: presumed to be contracts unless they stated that they were not. What happened?—all the collective agreements had within them the TINALEA clause—this is not a legally enforceable agreement. Indeed, shop stewards—and I am told in one case a manager—had rubber stamps with the TINALEA formula ready to put on the end of the document, because what mattered was the agreement, not whether it was legally binding. They wanted to get away from the presumption which the Act created.
If these clauses were enacted now and came into effect in 1983, by 1984 we should have a rash of Son of TINALEA or IPNUMALL—I promise not to use the Marsh lay-off law. That would be the rubber stamp this time. The noble Lord, Lord Marsh, must know that that would happen unless—unless what? That would happen unless workers were driven further into the ground, rather than in the way they are being treated now, and if the policies being pursued in this Bill are any indication that is how they will be treated in future.
For the noble Lord, Lord Marsh, to come to your Lordships' Committee and complain about the fact that one-third of 35,000 applicants to industrial tribunals last year received compensation for being
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unfairly dismissed, when there are three million people without work, verges upon the irresponsible. Of course, most noble Lords know that is true, and also most noble Lords know that it is not the way to handle the problem. Most of your Lordships know what the Financial Times said (and since the noble Lord, Lord Marsh, is associated with the newspaper industry I know he will have read it and taken it in in the way that I did; I keep it close to me at all times) on 10th November last—and this was a leader and is relevant to this debate:
"Managements should not believe, however, that employees' more docile attitudes which have been bred mainly by fear of unemployment, automatically indicate a permanent acceptance of economic realities or a permanent willingness to co-operate with management decisions".
I quote this not because I agree with all the phraseology but because of the argument. It goes on:
"One is not arguing here for soft management, nor for creation of endless committees which can slow down decision making … The tide that swept the Bullock proposals on industrial democracy into a major issue has not receded forever".
I agree a bit more now. Then,
"Employees, whether they are shop-floor workers, or highly paid professional staff, are slowly demanding a greater say in the, affairs of their companies. Most of them do not want to usurp their managers' authority; but they do want their views to be heard and taken into account, sometimes by the boards of holding companies as well as by their nearest line managers. The challenge now is for companies to find ways of basing their newfound managerial authority on the involvement and support of their employees".
Although my programme would no doubt be different, my sentiment is very much the same. It is a sentiment which cannot be accepted by those who promote the policies of this clause and the economic policies that go with them, quite honestly because they believe that the way to deal with economic problems is to price workers in and out of work with as little collective organisation as possible. They believe that is the way—the Hayek, the market, way. The question for the Government now with this Bill, because it is a decisive Bill, is whether they are going to allow their industrial relations policy, albeit that they refuse this amendment, to go down that path, and leave behind the sensible sentiments and the ability and desire of consensus and collective industrial relations, which up to this time has been a beneficial feature for all of our citizens and our industries.
6.34 p.m.
The Earl of Gowrie: I, for one, am glad that the noble Lord, Lord Marsh, got to the church on time because the Government have considerable sympathy with the plight of employers whose business is disrupted by industrial action. It therefore must follow that the Government are sympathetic to these amendments which are concerned with the situation where an employer cannot provide work for his employees as a result of industrial action. Amendment No. 107, for instance, deals with the situation of selective industrial action in the employer's own organisation; Amendment No. 108 is concerned with extraneous industrial action which disrupts the supply or delivery of goods or services, and that can of course be as damaging to a business as the industrial action in the employer's own organisation. Both amendments therefore seek to give employers a statutory right to

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lay off without pay employees who have been rendered idle in these circumstances.
The Government therefore appreciate that selective industrial action can be disproportionately expensive for an employer, and we heard the noble Lord, Lord Harris of High Cross, talk about the infliction of huge costs to employers at small costs to unions. I think that was a point very well found. In these situations a few key workers can be called out on strike, and unless there is a voluntary lay-off agreement in force the employer must continue to foot the wage bill for the remainder of his workforce even though they cannot be provided with productive work.
Extraneous industrial action can be equally devastating, particularly if it occurs in a major service industry. How many employers are facing severe hardship at this moment, or even, as the noble Lord, Lord Marsh, sought to remind us, facing actual insolvency at this very moment, because of a national rail strike for which, of course, they are in no way to blame? How many employees are liable to lose their jobs as a result of this dispute, or of comparable disputes, in which they are in no way involved? It really depressed me that nothing in the words that the noble Lord, Lord Wedderburn, used a few moments ago paid even lip-service to the difficulties faced by industry of the kind outlined by my noble friend Lord Boardman.
I can assure the Committee that the Government have given careful consideration to these amendments. We do, however, have some difficulties in accepting them. To confer on employers the right to lay off without pay employees who may not be connected with the industrial action poses profound and difficult problems, both practical and legal, and some of these have been intimated by my noble friend Lord Campbell of Alloway. Given the state of trades unionism as we find it in Great Britain, it is difficult to make easy comparisons with other countries. In Denmark, Norway, and Sweden employers may lay off without pay employees who cannot be employed in the normal manner because of industrial action taken by others. In Norway and Sweden this right is embodied in law, and in Denmark it is a traditional feature of industrial relations, and all three Scandinavian countries seem to be very sensible in this regard.
However, the right to lay off in Scandinavia is very much part of the wider collective bargaining context. Collective agreements are legally binding, and strikes are unlawful during their period of validity. Then again collective bargaining units are very large and negotiations are highly centralised. They are conducted as it were, by the equivalent of the TUC and the CBI. Therefore, employees laid off normally belong to the same bargaining group as the strikers and have an interest in the outcome of the dispute. Consequently, the power to lay off can be regarded as a spur to strong internal trade union discipline. I cite those instances to show how a principle with which I personally am in broad agreement may need a somewhat different industrial relations context to be easily operable in practical and legal terms.
Some practical difficulties were recognised by a number of those who responded to the Green Paper on trade union immunities last year as well as those who responded to the Government's more recent
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consultative document; and had a considerable debate on the subject. It was pointed out that giving employers wide powers to override their employees' individual contracts of employment could have a damaging effect on their industrial relations. I can say in this context to the noble Lord, Lord Marsh, that employers do, of course, have a third option to the two he mentioned. They can negotiate, perhaps in return for improved terms of service, a right to lay off in the circumstances envisaged by the amendment, and many employers have already done so, but I accept of course that this option is not always available or possible for employers. The Government have therefore concluded that given the other major changes in industrial relations legislation which are being made in the Bill, we need to go into these legal and practical difficulties rather more deeply before embarking on any additional measures at this stage concerning lay-off.
It is also the case that the two amendments being discussed contain a number of technical deficiencies, though I hasten to say that this is not an insuperable objection. Nevertheless, these technical difficulties illustrate the difficulties of legislating in this area. There are problems of interpretation in the drafting of amendments. For instance, industrial tribunals would have considerable difficulty in deciding in any particular case whether the customary course of business had been disrupted or whether useful or valuable work could have been found for the employees laid off.
To what extent, for instance, would an employer be expected to apply measures of self-help? These uncertainties could leave art employer, exercising the right of lay-off, exposed to numerous challenges by the employees who were laid off by him and the employees could present complaints to industrial tribunals alone the lines that one or more of the requirements had not been satisfied by their employer. My noble friend Lord Campbell of Alloway, with his great experience, indicated some of the difficulties there. Furthermore, I find that the two amendments appear to give the employer no protection against statutory claims which employees might bring for unfair dismissal and redundancy pay. The words "be entitled to suspend without pay" also may not protect the employer from all common law rights such as the right to claim wrongful dismissal.
In sum, the Government have said that they will not hesitate to introduce further measures in the employment field as and when these are shown to be necessary and desirable. I want to make it clear that we have much sympathy with the thinking behind this series of amendments, but we do not believe that the time is yet right to introduce a far-reaching measure of the kind proposed, if only because of other shortcomings or deficiencies in industrial relations law and practice. We are, as your Lordships know, committed to the step-by-step approach. I have also tried to draw the Committee's attention to certain deficiencies in the drafting of the amendments. For those reasons, and because I have tried to indicate the Government's sympathy to the problem and our determination to wrestle with attempts to find a solution to it, I hope that at this stage noble Lords will not seek to press the amendment.
Lord Marsh: I thank the Minister for making those remarks and the context in which he made them. In the light of them and the assurance that he has given, it would be totally unreasonable, even unforgivable, to take any steps which would force him and the noble Lord, Lord Wedderburn, into the same Lobby.
The Deputy Chairman of Committees (Baroness Wootton of Abinger): Amendment No. 107 was moved by the noble Lord, Lord Harris.
Lord Harris of High Cross: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 108 not moved.]
Clause 13 [Actions in tort against trade unions and employers' associations]:
6.45 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendments No. 109 and 110:
Page 15, line 5, at beginning insert ("Subject to subsection (1A) below,").
Page 15, line 7, at end insert—
("(1A) Subsection (1) above shall not apply to proceedings arising from an application for an interlocutory injunction (or in Scotland interim interdict) made to a court pending the trial of an action.").
The noble Lord said: As the discussion on the Bill goes on, in the view of my noble friends and myself it becomes more and more serious and one would like to think that it would receive increasing attention. Clause 13, is of course, the provision which will reintroduce the Taff Vale principle which, as I said in debating an earlier amendment, is the principle that a trade union should be liable in tort as established in the Taff Vale judgment of 1901 by the Law Lords.
It is worth recalling, as we look at the clause and the amendments tabled to it, the context in which we debated the matter. In 1901 the decision of the House of Lords Judicial Committee, in the words of Citrate on Trade Union Law,
"reversed the unanimous decision of the Court of Appeal, who pointed out with unassailable logic that the provisions of the 1871 Act were inconsistent with an intention to incorporate registered unions or render their funds generally liable in the law of tort".
Lord Asquith in 1927, in a book he produced when he was still at the Bar, surveyed the law and concluded that it was,
"not surprising that public opinion was unprepared for any such decision".
The shock of the Taff Vale decision is still relevant today for a number of reasons. I preface them by saying that of course my noble friends and I understand what the Government have said and will say: that to re-enact the principle of Taff Vale is not necessarily to re-enact the liability of Taff Vale because the trade dispute defences, or such of those defences as are left after the ravages of the 1980 Act and of this Bill—which is a matter we will come to later—apply.
Nevertheless, it is worth recalling that, in the long and protracted debates that took place in another place, in your Lordships' House, in the Royal Commission and in many other places in the era of 1901 to 1906 and
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after, the debate really centred around two things. One was the juridical character of a trade union, on which various people held various views both in analysis and in policy, and I would share the view of anyone who said that that problem, from a lawyers' point of view at any rate, was never properly cleared up; indeed, it has caused much unnecessary litigation in the civil area other than the one we are discussing.
The second problem, however, is rather more germane to the Bill, although it is notable that this measure does not try to do what the Industrial Relations Act 1971 tried to do; namely, to settle that problem once and for all by having a registered set of trade unions which were incorporated. On the whole, trade unions do not respond kindly to that, either here or in other jurisdictions, especially in the Commonwealth, because they feel like corporate bodies; they are not what I called, in debating a previous amendment, command organisations in that they do not rest on a chain of command.
What was central also to the Taff Vale problem was the special difficulty in the English jurisdiction—I think the Scottish, too—more than perhaps some other similar countries, but not wholly dissimilar, that if you apply the old law of the common law to trade unions, you tended, because of the nature of the illegalities of industrial action, rapidly do to away with their funds, and when we come later to the substantive issues in the clause, my noble friends and I will wish to look further at that and to ask the extent to which the Government have understood that problem.
Perhaps I could put it in a phrase as a preliminary to our discussions on the clause. The problem which underlines the difficulty—and in respect of which the amendment, to which I now come, is moved maybe summarised by saying that since the 1850s, there have been at least six major new dimensions to the law of tort and tortious liability. If one rested merely as one was told to do at times, on a defence in trade disputes for certain headings of liability, one constantly found that the common law—the genius of which is to develop; the common law does develop, and therefore if you are dealing with a statutory defence, which is necessary static, or at least lagging behind, one finds that the common law has a genius to develop—always finds some new course of action in the end.
Lord Campbell of Alloway: I am terribly sorry, but I have become lost, even though I have been trying to follow the noble Lord. Are we on Amendments Nos. 109 and 110, relating to injunctions, or are we moving beyond the injunctive relief? I shall be most grateful to know the situation, since I am trying to follow, but I have become lost.
Lord Wedderburn of Charlton: I am grateful to the noble Lord for his efforts, and I shall make a bigger effort. I have said that the remarks that I am now making will save time in the end, because they are a necessary preface to the amendments that we are moving, and to which I am about to come. One is dealing with damages because the first amendment is about injunctions, not damages, and that is why I am explaining the basis of the damages difficulty. The basis of that difficulty is that with the six or seven major new developments in the law of tort in the last

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century, statutory protection, if it is based onnominated tort liability, is always out-of-date. There are other problems, too. But we shall leave the matter there for the moment, and return to it later.
The noble Lord, Lord Campbell of Alloway, has asked, what has the matter to which I am now referring to do with Amendment No. 109?—and at the same time I should like to speak also to Amendment No. 110. Well, it is everything to do with the amendment, which is a very modest one. The Government are about to revive liability in tort for trade unions, with all the dangers that that has, in the final orders upon a final trial. Let us take the two customary orders: the order for compensation by way of damages, and perhaps the order for a final injunction. We need do no more than take those two orders. The amendment is not about the final trial. That is why I have prefaced the amendment in the way that I have done, so that we can see it in its context. That does not mean that my noble friends and I are happy about the final trials position under Clause 13. We are certainly not, and we shall vote against the clause. But the labour injunctions, or the interlocutory injunctions—I think that at home the noble and learned Lord the Lord Advocate would call them interim interdicts—are in a category different from that of the final trial remedies.
We seem to be indulging in a little comparative law this evening, and so it is not uninteresting to mention that other comparable countries have got rid of, or have tried to get rid of, the labour interlocutory injunction. For example, in 1932 in federal labour law the United States tried to get rid of it. So what is so special about it? In the common law jurisdictions the interlocutory labour injunction exists so that one can go to a Chancery judge as quickly as possible and stop the noble and learned Lord the Lord Advocate from knocking down one's house—not of course that he would ever do so. But it is a very sensible remedy to have. It is peculiarly sensible procedure. One gets to the judge immediately, and says, "Don't knock the house down until we see that there is a right to knock it down".
That is the image which the lawyer carries over into labour relations and labour law. When it comes to an interlocutory injunction application the plaintiff has had some time to prepare his case, and then, on one day's or two days' notice, he takes the defendant to court. The case might, or might not, last a while, but all the evidence is on affidavit—and that is very important. If your Lordships' rights have to be decided, and the evidence is all on affidavit, and the witnesses cannot be cross-examined—or at least normally are not cross-examined—then the situation is very different. Your Lordships would not like your final rights to be decided on that basis.
After the rather speedy procedure that I have described the remedy is either denied or given; and of course for many years it was regularly given. The trade union had very little way of opposing even ex parte interlocutory injunctions; that is to say, interlocutory injunctions where the plaintiff came along and there was not time to get the defendant to court. In 1974 we tried to put a stop to that in trade dispute cases, under Section 17 of the Trade Union and Labour Relations Act. In 1975, in our administration, we
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added a section which also stated in effect that the courts should take special care in seeing whether at the interim stage, as it is supposed to be, the defendant trade unionists had in fact a likely defence. That was because the wording of the interlocutory proceedings is always concerned with likelihood.
But of course the reality of the matter—and this is why the amendment is so important—is that to a great extent the employer wants the interlocutory injunction as his final remedy, subject to going against the union for damages at a much later stage. He wants the interlocutory injunction quickly; and it does two things. If he gets the injunction, and it is obeyed, as it normally is, he stops the industrial action, and he also holds above the head of the union at any rate an interim verdict that the union is in the wrong. Cases go on for years. A leading case was decided in 1965 in your Lordships' Judicial Committee, where the injunction was granted. In 1969 (four years later) it went back to the Court of Appeal in a dispute about damages; and I am aware that the noble Lord, Lord Campbell, knows the case well. There are very serious matters for the trade union, because the procedure is unsatisfactory. The way that it is carried out, with much more notice for the plaintiff than for the defendant, is quite unjust. The examination of affidavit evidence is never satisfactory, in particular for the defendant, because he never has time to get his affidavit evidence into shape. There might be an adjournment, but sometimes the court is slow to grant one, because it has the image of the house being knocked down, which until very recently has been built into the common lawyer's mind.
I say "until recently" because of what the noble and learned Lord, Lord Diplock, said in 1979 in the case of NWL Ltd. v. Woods, which I think we shall be looking at later in the Bill, since I fear that it is necessary to look at some of the law that we are amending in order to understand what we are doing. In giving his judgment in the case, at page 1305 of the Weekly Law Reports, the noble and learned Lord, Lord Diplock, stated, in effect, that the interlocutory labour injunction is a special and indeed unique kind of procedure. At page 1308 he stated that the interlocutory injunctions are "unique". He prefaced that by explaining what he meant. There are some two or three pages of his judgment, but I shall read to the Committee only a few lines. He stated:
"… on the face of the proceedings in an action of this kind the balance of convenience as to the grant of an interlocutory injunction would appear to be heavily weighted in favour of the employer"—
This is Lord Diplock speaking, not me; and I draw attention to the phrase,
"heavily weighted in favour of the employer".
The noble and learned Lord went on to state:
"To take this view, however, would be to blind oneself to the practical realities"—
He then set out the four considerations that he thought go back upon the proposition, but if one takes them, one can see at least the realities. They are as follows:
"(1) that the real dispute is not between the employer and the nominal defendant but between the employer and the trade union that is threatening industrial action; (2) that the threat of blacking or other industrial action is being used as a bargaining counter in

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negotiations either existing or anticipated to obtain agreement by the employer to do whatever it is the union requires of him; (3) that it is the nature of industrial action that it can be promoted effectively only so long as it is possible to strike while the iron is still hot; once postponed it is unlikely that it can be revived; (4) that, in consequence of these three characteristics, the grant or refusal of an interlocutory injunction generally disposes finally of the action; in practice actions of this type seldom if ever come to actual trial".
Your Lordships will see that in the judgment there are some phrases with which, naturally, I disagree. But as a general analysis that is now accepted as being right—that the interlocutory injunction is unique and special; that there are certain features of it at least which lean against the defendant; and that most employers stop at that point once they have got the injunction. Perhaps I may add to the analysis of the noble and learned Lord, Lord Diplock, by saying it is true that employers regard it as the final remedy, at any rate for the time. They very frequently leave the interlocutory order on the file.
So what does the amendment state? It relates to when an employer goes in for the kind of procedure I have described; and my noble friends and I shall later be moving a new clause asking the Government yet again to modify this very unfair procedure for trade unions in interlocutory cases. I shall make a fuller case on that point when we come to it. However, having that in mind as the context in which we move the amendment, the effect of it would be as follow—and it seems to me perfectly reasonable that the Government should accept this. If this were the only amendment moved, the Government would have their way on two things. They would have their way that trade unions were liable in damages, and they would have their way that trade unions were liable to injunctions and orders on the final trial, where the evidence has been properly heard, cross-examined to and the rest, and no doubt appealed.
But in interlocutory proceedings, if they stay as they are, the employer will not be able to go against the union, though he can go against the officials. There is nothing in Amendment No. 110 (which goes, of course, with No. 109) which says that interlocutory proceedings cannot be pursued against officials and members of the union. The law would stay as it is now, subject to the dreadful alterations made in this Bill, but the individuals could be ordered by the court not to do whatever it was the court thought was contrary to their duties in the law of tort and the rest.
The one change which would be made would be that the issue of union liability would not be fought out on interlocutory proceedings; and that is why Acts like the Norris-La Guardia Act in 1932 in the federal jurisdiction of the United States got rid of the interlocutory injunction. That had a slightly different history, but it was a very parallel point in the United States; and in other jurisdictions, too, the problem has arisen. The problem is particularly acute. This amendment is (if you like) not dealing with the whole ill-patch of the Bill across Clause 13; it is taking out the worst spot of it.
This is the place where it will be most effective from the point of view of some who sponsor it, and most resented, because the interlocutory proceeding is resented, certainly in my experience, by every trade union official who has been part of it. As one said
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to me once, "If I am going to be done, I want to be done with a full trial and with him up there for a day or two in his red robes". I think most British trade unionists have great respect for the High Court, despite all the criticisms that sometimes flow to and fro in that connection. But they have little respect for the interlocutory proceeding, and although that would still go against the officials, though they would lose that as well, nevertheless if you make that interlocutory proceeding go against the union and fight out the issue of vicarious liability and statutory agency, as we have seen in previous debates, on an interlocutory basis, with affidavits, the resentment when it is understood what is happening will be very great indeed.
So Amendments Nos. 109 and 110 are together, in fact, I hope the noble Lord, Lord Campbell, will accept, a rather carefully thought-out small amendment to the clause which says that there is a special area, it is specially had and it will be made specially worse in the interlocutory proceeding by your Bill, so could we not take that out? Because at least that will do something to make the thing less harmful to trade unionists—and I make no bones about that. That is absolutely true. But let us at least give the trade union the right to have its action determined upon a full trial instead of the threat of a quick action for damages on the basis of interlocutory proceedings which must, while the order stays on the file, prejudice the position as the evidence gets stale. I beg to move Amendment No. 109, speaking also to No. 110.
The Deputy Chairman of Committees: Does the noble Lord wish to move Nos. 109 and 110 en bloc? They are very closely linked.
Lord Wedderburn of Charlton: Yes.
The Deputy of Chairman Committees: The Question is that Amendments Nos. 109 and 110 be agreed to?
Lord Campbell of Alloway: Could I, very briefly, in view of the hour and in view of my involvement in this—indeed, there have on occasions in the past been cases where the noble Lord, Lord Wedderburn, and I have been on opposite sides—say that I agree that he has drafted this provision, Amendment No. 110, with very great care. I also agree that the interlocutory injunction in a trade union case is within a special category. But where I do not agree—and this is where the rub lies—is that the main purpose of Clause 13 of the Bill is to be able to give the court jurisdiction to do this very thing rather than to award damages; in other words, to be able to move in quickly and regulate a problem, a trouble, as it does in other spheres, before the whole thing gets out of hand and vast damage is caused.
The concept is not to be legalistic, not to put legal shackles around trade unions, but merely to state what I am sure practically all your Lordships would agree: that the unions must be subject to the rule of law. If they are subject to the rule of law, and if they act outside the law, then the courts can move in (and why not here as in other cases?) to grant the interlocutory injunction if, in the discretion of the judge—subject, of course, to the Court of Appeal—it is considered appropriate to do so. So while I give the

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noble Lord, Lord Wedderburn, the first two points he has made, it is on the third point that we are in disagreement.
Lord Mackay of Clashfern: At first sight this might look a rather technical amendment, but as the noble Lord, Lord Wedderburn, has explained it (and I think that if one had thought about it even without the benefit of his help it would have appeared so) it goes to the very heart of Clause 13 in practical application. In a case where a trade union was responsible for unlawful industrial action it would prevent an employer seeking an immediate interlocutory injunction against that trade union, ordering it to call the action off. If he wanted to proceed against the trade union itself he would have to wait for a full hearing of the case—possibly weeks or months later.
In our view this is unacceptable. Experience has shown, as the noble Lord has said—indeed, it is part of his argument—that many cases on industrial action do not proceed beyond the interlocutory stage. Where an employer is suffering serious loss as a result of unlawful action, his main concern is to get that action stopped as quickly as possible. He cannot wait until the matter can he brought to a full hearing—often months later—before a decision is made. By then it may be too late. His business may be damaged beyond redemption, and along with it the jobs of his workers. That is an aspect of this matter which we ought not to leave out of account. It is sometimes very easy to forget the community of interest, at least the community of long-term interest, between an employer and his employees.
The noble Lord, Lord Wedderburn, has pointed out very fairly to us—indeed, he reminded me of it just this moment—that this amendment will not prevent an employer proceeding against a senior official of the union like the general secretary. That is certainly true. It is fair to say that in some cases it will not make much difference whether an interlocutory injunction or interdict is granted against the general secretary or the union itself. But in some cases it will make a difference. In some cases it will be an advantage that it is the trade union as an organisation which is held liable for an unlawful action and which has the responsibility for making sure that the injunction or interdict, the order of the court, is obeyed.
The noble Lord has also argued that the odds will be stacked against trade unions in interlocutory proceedings; that there will not be time for a court to establish at the interlocutory hearing whether or not the union is liable, and that, therefore, the courts will tend to award injunctions against them. I do not think I can accept that. The noble Lord has referred to Lord Diplock's speech in the NWL case. In the passage which the noble Lord has very fairly quoted—he did not stop off at the first sentence; he never does, as he points out: sometimes there might be an advantage from some points of view if he did, but not on this occasion—Lord Diplock very severely qualifies what he said first, and no doubt any judge dealing with this matter since the NWL case will give very careful attention to these factors in the other direction to which the noble and learned Lord, Lord Diplock, drew attention. In our view, Clause 13 sets out
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perfectly clear rules on when a union has to be held liable for the unlawful acts of its officials and members and in most cases it should be a relatively simple matter to decide whether the union is liable. The fact that the matter has to be decided in the context of an interlocutory proceeding fairly quickly, with limitations on the time that can be spent on it and so on, are factors which the court will have in mind in these matters; but, it certainly seems to us, as my noble friend Lord Campbell of Alloway has just remarked, that it would be extraordinary to allow this amendment to pass. It will be, in effect, to say that at the interlocutory stage the unions, for no particular reason, were to be above the law. I hope that your Lordships will not accede to this amendment and that the noble Lord may feel able to withdraw it.
Lord Wedderburn of Charlton: I shall ask leave to withdraw these two amendments, although on the basis of some puzzlement. The noble and learned Lord the Lord Advocate would well get his remedy if he went against all the officials. The only point against going against the union is to tie it up or half tie up to get halfway towards damages and by an unsatisfactory procedure; but to that we shall return on a subsequent amendment. I beg leave to withdraw the amendments.
Amendments, by leave, withdrawn.
Lord Sandys: I think it may be the wish of the Committee to take the dinner break at this point. During the dinner adjournment we will take other business and will return to consider the Committee stage at 8 o'clock. Meanwhile, I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Town and Country Planning (Minerals) Regulations 1982
7.12 p.m.
The Earl of Avon: My Lords, I beg to move that the Town and Country Planning (Minerals) Regulations 1982 be approved. At the same time I would speak to the Town and Country Planning (Minerals) (Scotland) Regulations 1982. Copies of both these regulations were laid before the House on 15th and 16th June respectively. The House may recall spending some time last year considering what was then the Town and Country Planning (Minerals) Bill. This was designed to encourage higher environmental standards at active and disused mineral working sites. That Bill formed the first part of the Government's implementation of the recommendations of the Report of the Stevens Committee on the Control of Mineral Working. The committee had been appointed in 1972 to study problems faced by the minerals industry and by the planning authorities in trying to work within a planning system which had been designed mainly to control urban development.

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The committee published its report in 1976 and made a large number of important recommendations intended to benefit both the industry and local planning authorities. The previous Government welcomed the report and issued circulars in 1978 setting out their reactions to the recommendations and, in particular, which of these it was intended to implement. This Government have pressed ahead with implementation. Now that those measures requiring primary legislation have been enacted, we are turning our attention to some of the other Stevens Committee recommendations which our predecessors accepted and the regulations which are before the House today represent the beginning of the next stage in our implementation of the Stevens package.
Turning now to the regulations themselves, noble Lords will see that they are designed to revoke Regulation 10 of the 1954 Town and Country Planning (Minerals) Regulations, together with related enactments and the parallel Scottish provisions. Regulation 10 is the direct successor to regulations made in 1948. It is mainly a legacy from wartime contingencies but partly a transitional arrangement following the introduction of the new controls enshrined in the Town and Country Planning Act 1947. A developer who was caught in the middle of a development by the combined effects of the war and the substantial controls introduced by the 1947 Act was recognised to have a right either to complete the development or, if he was refused planning permission, to be compensated for the abortive expenditure he had already incurred.
The only logical end to a minerals development might be said to be the exhaustion of the mineral deposit which is being worked. Any extension to a pre-1947-Act working can be seen as an attempt to complete that development—and therefore as something to which the operator had a right before the passing of the 1947 Act. This is the view which Regulation 10 takes.
In detail, what the regulation provides is that if an operator applies for planning permission to extend a pre-1947-Act working into adjacent land, and if permission is refused or granted subject to conditions, the operator is entitled to claim compensation for three different things. First, he may claim for expenditure incurred on work which is rendered abortive either by the refusal or by the conditions imposed as the case may be (including loss by way of depreciation of value in respect of building, plant or machinery). Secondly, he may claim in respect of any contract for work which has to be abandoned. And, finally, if either of the above claims is successful, he may claim for any other loss or damage directly attributable to the refusal or conditions, excluding depreciation in the value of the land.
The Stevens Committee argued convincingly that the need for Regulation 10 was now past and recommended that it should be revoked. The 1978 Circular announced the intention to pursue this. The reasons are simple. It is perfectly proper to recognise that a new piece of legislation may adversely and inequitably affect the rights of some people and to provide a means of compensating them for their loss. It is quite unjustifiable to suggest that the availability of compensation should continue indefinitely. There certainly exist other potential cases in which the refusal
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of an application for permission to extend a pre-1947-Act working could lead to claims for compensation under this regulation. But, as Stevens pointed out, there has been ample time over the last 30 years for anyone affected in this way to apply for planning permission to resume or extend their operations and to claim compensation if they were refused. A number of claims have been made, but, in relation to England, the Government know of no claims lodged during the last six years and of no more than 22 claims received during the period 1954 to 1976. Of those 22 claims, 16 were made between 1957 and 1971 but they have not been pursued over the last 10 years or so. Similarly, there are no claims outstanding in Scotland, so far as we are aware. I can assure the House that any existing claims which may have been made but not yet settled will be unaffected by the revocation of Regulation 10.
In short, the Government's view is that the justification for this regulation has diminished over the last 30 years and that it is now time for its revocation. The Stevens recommendation to that effect was accepted by both the industry and by the local authorities who, as planning authorities, are of course responsible for paying any claims for compensation.
I should like to emphasis that the revocation of Regulation 10 will not affect the compensation of the 1981 Minerals Act. These two separate pieces of legislation deal with compensation for completely different things. Regulation 10 deals with compensation for refusal to grant a new planning permission for an extension of mineral working in certain limited circumstances. The provisions of the 1981 Act concern modifications and orders relating to existing workings and permissions.
Finally, it might be helpful if I say a very brief word about the form of the two sets of regulations which are now before the House. Dealing first with those applicable to England and Wales, Regulation I provides merely that they shall be called the Town and Country Planning (Minerals) Regulations 1982 and shall come into effect the day after their approval by Parliament. Regulation 2, together with the schedule, provides for the revocation of Regulation 10 of the 1954 Regulations and for the revocation of two other regulations made in 1957 and 1971.
The Scottish Regulations have exactly the same effect as those applying to England and Wales. However, because of consolidation which took place in Scotland, the regulations which these new regulations revoke are both contained within the same statutory instrument. I beg to move.
Moved, That the regulations laid before the House on 15th June be approved.—(The Earl of Avon.)
Lord Ponsonby of Shulbrede: My Lords, may I thank the noble Earl for explaining the regulations. We do not oppose or wish to delay the implementation of these regulations. Indeed, I should state that it is the earnest desire of the three local authority associations that these regulations come into force as soon as possible, and the order states that they shall come into force on the day after they have been approved by both Houses of Parliament.
Since the publication of the Stevens Report in 1976 and the then Labour Government's acceptance of the recommendations in that report in 1978, the intention

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of Government has been clear, and in effect operators have had a sufficient warning period to make any appeal for compensation before these new regulations come into effect. The circular issued by the Department of the Environment in 1978 stated:
"We accept this recommendation. It has been suggested to us that we should allow a period for operators to apply for extensions to those workings covered by regulation 10. We consider that the time which has elapsed from the time of the publication of the committee's report has provided a sufficient warning period."
That was issued by the department some five years ago. The noble Earl has assured your Lordships that there are no outstanding applications, and one assumes therefore that there is no more compensation payable under these particular regulations. We support the orders.
On Question, Motion agreed to.

Town and Country Planning (Minerals) (Scotland) Regulations 1982
The Earl of Avon: My Lords, I have already spoken to this order. I beg to move that the Town and Country Planning (Minerals) (Scotland) Regulations 1982 laid before the House on 16th June be approved.
Moved, That the regulations laid before the House on 16th June be approved.—(The Earl of Avon.)
On Question, Motion agreed to.

Agriculture Act 1970 Amendment Regulations 1982
7.22 p.m.
Lord Sandys Lord Sandys rose to move, That the draft regulations laid before the House on 21st May be approved.
The noble Lord said: My Lords, these regulations constitute a necessary step in the process of giving effect to certain EC directives on the marketing of animal feeding stuffs. They will apply throughout the United Kingdom. They will be followed by detailed regulations made under Part IV of the Agriculture Act 1970 as amended by these regulations. These later regulations will be known as the Feeding Stuffs Regulations 1982.
The aim of these two sets of regulations will be to implement the requirements of two harmonisation directives concerned with the marketing of straight and compound feeding stuffs—Directives 77/101/EEC and 79/373/EEC respectively; and to help to complete the implementation of Directive 74/163—controlling undesirable substances in animal feeding stuffs which are not covered by regulations made under the Medicines Act 1968. Taken together with some amendments subsequently agreed to these directives, the regulations will be a consolidated implementation of our obligations under the Treaty of Rome in this sector.
Together with the Feeding Stuffs Regulations 1982, another set of regulations will have to be laid and come into operation at the same time, prescribing the agreed methods of sampling and analysis necessary for the proper enforcement of the feeding stuff regime. These will be known as the Feeding Stuffs (Sampling and Analysis) Regulations 1982.
To a large extent these regulations and the subsequent ones mirror existing United Kingdom legislation already on the statute book. Indeed, we in this country have been concerned to control the trade in animal feeding stuffs since the Fertiliser and Feeding Stuffs Act 1893. The basic principles of our legislation have been to ensure that the buyer is properly informed about his purchase and the philosophy of the European directives is not far removed from outs in that, to accord with Article 3 of the Compounds Directive (79/373/EEC) and with Article 3 of the Straights Directive (77/101/EEC):
"…feeding stuffs may be marketed only if they are wholesome, unadulterated and of merchantable quality … feeding stuffs may not represent a danger to animal or human health and may not be presented or marketed in a manner likely to mislead".
The instrument now before the House seeks to make minor adjustments to the philosophy contained in the Agriculture Act 1970 as are necessary to align it with that agreed within the Community. It will extend the regulation-making powers so that detailed provisions may be lawfully made in regulations to correspond with the detailed provisions of the directives. The instrument also extends the scope of the Act to embrace feeding stuffs intended for pet animals and to comply with EC requirements. I beg to move.
Moved, That the draft regulations laid before the House on 21st May be approved.—(Lord Sandys.)
Lord Bishopston: My Lords, I am sure that the House is grateful to the noble Lord for describing the regulations which I welcome and which have already had detailed scrutiny in another place. As the Minister said, the aim of these regulations is to implement the requirements of two harmonisation directives dealing with feeding stuffs. They also regulate and control substances and additives in certain feeding stuffs and details of sampling and the analysis for enforcement. This is very desirable.
I accept that these regulations harmonise the EEC with some of the current legislation and practices of the United Kingdom and are aimed at ensuring that the buyer is properly informed about his purchase and also assured about the quality. I note the statutory instrument also includes pet animal feeding stuffs required under Part IV of the 1970 Agriculture Act. I have one or two questions for the noble Lord if he would be prepared to answer them. I understand that the amending regulation to which he referred in respect of the feeding stuffs regulations needs to be laid before Parliament soon. Can we be told how soon this will be and whether this will be before the Summer Recess?
Certain particulars will be requited to be detailed about the make-up of feeding stuffs when marketed and while these added safeguards about the quality and contents of feeding stuffs are welcome—and I believe the trade has also welcomed them—will the Minister estimate the extra cost to the compounding industry and consequently of course to livestock producers of the carrying out of the regulations and allowing for the invariable changes which can be made in the individual composition of feeding stuffs. Can he say what consulations he has had on these changes and with what result about the cost, so far as those aspects are concerned?

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I understand, finally, that Article 3, to which the noble Lord referred of the Compounds Directive and the Straights Directive requires:
"…feeding stuffs may be marketed only if they are wholesome, unadulterated and of merchantable quality … feeding stuffs may not represent a danger to animal or human health and may not be presented or marketed in a manner likely to mislead."
That of course is good. For clarification, may I ask whether this means that humans can eat pet food and that tins can specify the contents as fit for animal or human consumption? I ask this particular question because the Explanatory Note, which of course is not part of the regulations, stipulates in paragraph 5:
"Regulation 6 extends Section 73(1) (which prohibits the sale, or possession for sale, of feeding stuffs deleterious to prescribed animals) so as to apply to ingredients deleterious to pet animals or human beings."
The next paragraph refers to Regulation 7 which adds a new Section 73A. I quote:
"This makes it an offence to sell or possess for sale a feeding stuff which is unwholesome for, or a danger to, prescribed animals or pet animals or a danger to human beings."
I think this could be misleading and it is of course important that those concerned in the trade and among the consuming public are not misled as to what is and what is not edible for human consumption. I feel that it would be too bad if human beings, wrongly eating pet food, went around making animal noises. It may even attract a few catcalls. Seriously, I welcome the measure and I hope that the Minister can clarify the several points I have raised.
Lord Mottistone: My Lords, I hope that the noble Lord, Lord Bishopston, did not think that my laugh was a catcall. I am advised in what I have to say by the United Kingdom Agricultural Supply Trade Association. I am going to talk only about Regulation 5 which, as my noble friend told us, will lead to further regulations. We are concerned that the further regulations should not demand any more of the compounders than at the moment they provide, and happily provide, by way of information to their customers. We are particularly concerned that the optional factor in the directive with regard to the declaration of ingredients should remain optional and that there should be no threat in these further regulations of any compulsion with regard to declaration of ingredients or indeed of compulsion with regard to how the ingredients might be presented on any labelling. The point about this, very briefly, is that too tight a control, which is not now required, can lead only to lack of flexibility which in turn can lead only to increased costs—and increased costs will be to the detriment of the livestock farmers, whom I understand are very satisfied with the present arrangements. We are not talking about petfoods and the regulations in relation to those; we are talking only about the supply of feeding stuffs to farmers, who are perfectly capable of making their own arrangements to see that they get the sort of feed which they want and for which the current practices are satisfactory.
There is another factor; that is, that if too much ingredient-marking is required, the value of the research and development on which the compounders spend large sums of money will be eroded and we might get a situation in which further recession development was
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not continuing or indeed that companies could not withstand pressures from their competitors. All in all, I would hope that any regulation that is yet to be put before your Lordships should have full consultation given to it, and I hope that my noble friend can reassure me on this. I also hope that the points I have made—and, I believe, were made in a similar manner in another place—will be given proper regard in any regulations that may come forward. I trust that my noble friend will be able to give me that reassurance.
Lord John-Mackie: My Lords, I must apologise for not being present at the beginning of this short debate. Does it take three pages of the most dreadful officialese that I have read to say that pet foods come under the Feeding Stuffs Act? The noble Lord, Lord Bishopston, quoted some of it, but when you read at the bottom of page 1:
"'pet animal' means any animal belonging to a species normally kept and nourished but not consumed by man,"—
am I right in thinking that a judge kept a tame pig in his chambers not so long ago? What are we to make of him?
"—not being an animal which has been or may be prescribed for the purpose of the definition of 'feeding stuff'."
I would quote one sentence from (2)(a) on page 3:
"In the case of proceedings for an offence of selling, or having for sale, material which is unwholesome for, or dangerous to, animals he shall not be convicted by reason of the fact that the material is found, or the sampled portion of it is shown, to be unwholesome only for or, as the case may be, dangerous only to animals of a kind different from that specified."
I ask your Lordships! If any layman, wanting to do something about selling pet foods is given this order, I should think he would be utterly confounded by reading any or all of it. I would suggest that something should be done to write things so that ordinary people can understand what on earth they are all about.
7.36 p.m.
Lord Sandys: My Lords, I am very much obliged to the noble Lord, Lord Bishopston, for giving me advance notice of a number of questions he wished to ask about this instrument. His first question concerned when the detailed regulations would be made. I can say that they will be made during August and the main provisions will come into force six months later, but not so far as the pet food labelling is concerned. That will operate some eight months later: that is, during July 1984. The regulations will be by Negative Resolution. Although laid during the recess, 40 sitting days are allowed for purposes against the regulation.
The noble Lord asked, as his second point, whether Ministers would estimate the cost of these regulations to the compounding interests and to the livestock producers. The compounders already provide a good deal of information to their customers. Some changes follow from the change in the law, but that is unlikely to give rise to significant cost increases. For the reasons given above, this is unlikely to suffer significant price increases. However, if mandatory ingredient-listing were to be required—and at this stage that is not yet certain—I am bound to say this would be more expensive both to the compounder and to the farmer. I am very glad that my noble friend Lord Mottistone

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referred to this. My honourable friend the Parliamentary Secretary, Mrs. Fenner, is examining this question and will be meeting representatives of the National Farmers' Union and compounders representatives later this month. I can assure noble Lords that this matter is under consideration at present.
The noble Lord asked what consultations with interested parties have taken place on changes in the law and what reaction there might be on the cost aspects. Section 84 of the Agriculture Act 1970 requires Ministers to consult with all interested parties before making any regulations. There have been expensive consultations. No particular reference has been made to costs, although the Government appreciate that any improvement in consumer information must involve some additional cost, however slight. The noble Lord particularly referred to ingredient-listing cost. My honourable friend is considering whether mandatory listing should be included in the detailed regulations, but no decision has yet been taken on this important matter.
The fourth point mentioned by the noble Lord referred to Article 3: did it mean that humans could eat pet food, and should it be marked as suitable for human consumption? The short answer is, no. The law is concerned that there should be no deleterious carry-over from animal food to the human food chain. Although many pet food manufacturers in this country will say that their product is safe for humans to eat, they do not recommend it. It is not practicable for the law to seek to control use in the home: otherwise rape seed manufacturers would need to put a health warning on all their products.
I should like to refer, once again, to the important matters raised by my noble friend Lord Mottistone. I am afraid that I cannot give him any definitive answer and assurance in the terms which he would hope to receive tonight, because, as I have already said, my honourable friend is discussing this matter at the present moment with the interested parties. I think it would prejudice negotiations if I gave an answer which might be read into the argument in one way or another.
I listened with interest to the words of the noble Lord, Lord John-Mackie, on the definitions of the terms in the order. As ever, as he rightly pointed out, that excellent book by Sir Ernest Gowers called Plain Wordy should constantly be beside us in our discussions, and also beside those who draft the regulations. In a sense, we are subject to so many decisions which have been taken in the drafting of previous regulations. While they are not always in the most elegant forms, we believe that they are as serviceable as they may be. We take the point that the noble Lord made and enjoyed his humorous reference to the judge in chambers. I hope that I have answered the questions put by noble Lords.
Lord Mottistone: My Lords, before my noble friend sits down, could he reassure me on two points? Can he reassure me that, when his honourable friend Mrs. Fenner has her meeting with the NFU, the NFU delegation will include representatives of livestock farmers? Secondly, can he reassure me that, at the same time, she will be meeting representatives of compounders?
Lord Sandys: My Lords, so far as representatives of the compounding industries are concerned, I can give that assurance. As to whether National Farmers' Union representatives will include livestock breeders, I think the answer is less certain, except in so far as the National Farmers' Union automatically represent those interests as part of their corporate body.
Lord Mottistone: My Lords, would it be possible for my noble friend to suggest to the NFU that in this case it is very important that the livestock farmers should be represented?
Lord Sandys: My Lords, I am quite certain that the NFU will take much interest in what my noble friend has said. But far be it for me, or indeed members of the Government, to suggest to the NFU how their delegation should be composed. However, I think that this matter will certainly receive their attention automatically.
On Question, Motion agreed to.
Lord Sandys: My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 7.43 until 8 p.m.]

Employment Bill
House again in Committee on Clause 13.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 111:
Page 15, leave out lines 10 to 16.
The noble Lord said: We are now on the clause which re-creates the liability in the law of tort for trade unions and which therefore faces the problem which your Lordships' Committee faced in another dimension in a previous sitting of the Committee; namely, the question of vicarious liability: for whom is a union to be liable in tort? The clause deals with this problem in a particular manner. The amendment would change that formulation in a very significant way. Clause 13(2) creates in effect for trade unions two codes of agency for vicarious liability in the law of tort. The union will be made liable, as we have seen, because of the refusal of our previous amendment, not only at final trial for damages and final injunctions but also at interlocutory injunctions in the rapid procedure of the interim proceedings which may lie on the record for many years as an interim judgment of the industrial as well as the legal case.
My noble friends and I asked ourselves why it was necessary for the Government to create two codes of agency. I would remind your Lordships of the manner of that creation. In regard to tort liability generally, the Bill would leave the question of vicarious liability to be judged by the principles of the common law. In each case the question would have to be asked whether the shop stewards or full-time officials—possibly, sometimes, even members and other officers of the union—were acting within their authority on behalf

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of the union. As I have said on a previous amendment, this problem and this concept is particularly difficult to apply to trade unions because the authority of trade union officers is not analogous to that of agents and servants of employers from which the legal principles sprang.
That can be well assessed by looking at the case law on the subject under the Industrial Relations Act, especially in the Heaton Transport v. Transport and General Workers' Union litigation, reported in 1973 Appeal cases, 15, as well as in a case which went the other way on very similar facts—General Aviation Services v. Transport and General Workers' Union, reported in the Industrial Relations Law Reports, 1976. That is one code of agency which applies generally in the law of tort, except where the second applies. The second applies to what one might call, in layman's language, the economic torts or the industrial torts and to what is, in lawyers' language—and therefore is in the Bill—specified as the area of liability which is covered by Section 13(1) of the 1974 Act, which we could conveniently call the interference with contract area of liability. To that is added the conspiracy liability for combining to effect such an interference.
When one looks at the features of the special code of agency which will apply in the industrial tort area one sees that it has three features. First, the Bill provides that those who have authority or who are empowered by the rules to authorise the acts in question hind the union. Subject to the definition of the rules, which we shall come to later, where the Government have introduced a most extraordinary requirement that the court should read the word "rules" as including not only the rule book but some other curious ill-defined area of documents which is dealt with in a subsequent amendment, this may be said to be the same, for all intents and purposes, as the common law principle. Most people read it as applying primarily to shop stewards. Either they have authority under the rules or they do not. The second group is at the other extreme of the spectrum. They comprise the general secretary, the president and the national executive committee. These people bind the union, whatever they do, so far as the law of tort is concerned—however extravagant and no matter what the rules say.
One wonders as a lawyer whether or not there would be some limitation upon some act done by them when they were not in command of their faculties perhaps not binding the union or not being the act of the union—which is here the more exact manner of stating the case, in my view. Other than that, they bind the union, whatever they do. In the phrase of the old case law of the 1830s, they bind a union where the servant goes on a frolic of his own. Why a president and a general secretary should always bind the union by authorising acts when they are on a frolic of their own is difficult to understand until one looks at the rest of the Bill.
The third category are the people left out. They are the other officials from national to local level—mainly the full-time officials, although not necessarily, and other committees, whether it be national, sectional, trade, regional, district or divisional. These groups bind the union by authorising acts, provided that the rules do not prevent them from having authority,
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which is a different formulation from the first group, and subject to the doctrine of repudiation.
We shall be coming to amendments on the doctrine of repudiation later, but it is necessary to set it out because it is, I submit, at the heart of the apparatus. The doctrine of repudiation has been invented by the Government, We are now a million miles away from any normal common law rules of agency, in view of the status of the president and general secretary in particular. The doctrine of repudiation says that whenever this third category of people authorise acts they can be repudiated, within certain conditions, as to time and manner by the executive committee, or the president. or the general secretary, subject to the extraordinary provision, which we shall come to in another amendment, or doctrine which one might call repudiation of repudiation. That is to say, as the Bill stands now, a repudiation is not effective not only if it is not in good time, and not in writing, and all the rest, but also if one of the people who can act as an alter ego of the trade union takes steps but behaves in a manner which is inconsistent with the purported repudiation.
These questions are the ones to which this amendment is directed. The amendment would cut out the statutory code of agency and leave it to the common law which, for all its defects, would fit the purpose. We say that there are defects and problems in the statutory code of agency which apply to the industrial torts and that if we have to choose between the two it would be better to leave it to the common law principles, for legal and industrial reasons. The legal reasons will come out in subsequent amendments relating to the absurd doctrine of repudiation, the manner in which it has to be done and the legal advice which would have to be obtained.
The industrial reason is this. It is quite clear that the structure which has been set up combines principles of vicarious liability with those of a different area of the law in which organisations may be liable for contempt of court, which was also involved in the Heaton case, if the top officials or the top group of directors in the case of a company do not renounce those transactions when they are meant to do so. The Government have muddled up principles of common law vicarious liability with penal doctrines of repudiation under contempt of court, which assumes that the union is liable already, in order to produce this repudiation doctrine. It would mean that the union was cut up into slices; the members wondering what on earth was going on while the stewards asked if they had authority, and the local, district and even national officials tried to act although they knew they could be repudiated—while above the whole thing, there are these three curious characters, who could apparently repudiate one another, would all act by committing the union to anything that they did.
The element which is important here is that the top group become the police force of the union. The doctrine of repudiation inevitably leads to what the Donovan Report and indeed Lord Devlin once said one could not ask unions to do—namely, be the policemen of industrial affairs. This doctrine is suited to that kind of approach and has the defects mentioned in the Donovan Report.
There is a final point, which is a legal point. There is an absurdity about this section. Take a case of

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picketing which manages to go off the rather badly-built rails of the 1980 Act; it is not difficult to do. You get to the wrong place and you are liable—but what are you liable for? There are two torts which come to the mind of the lawyer any minute. The first is interfering with contracts, because the 1980 Act says one has no protection against the tort of interference with contracts. So there, the statutory code of agency would apply. That would be something to which Section 13 of the 1974 Act would have been a defence, but it is not now.
However, as was confirmed in the recent case of Mersey Docks v. Verrinder in the High Court this year, it was confirmed that common law normally sees a picket as a nuisance; I do not mean that in the layman's sense but in the legal sense of committing the tort of nuisance by using the highway for a purpose other than of walking to and fro. In the same proceedings, damages are claimed and an injunction is claimed for inducing breach of contract and for nuisance, but it is claimed primarily against the union.
We see how this clause, as it goes on, means that plaintiffs want to get their remedies against the union. No matter what the arguments are that they can have the equivalent against the officials; no, as the noble and learned Lord, the Lord Advocate, made clear, they want the order against the union even if it does not add anything at all to getting it against the officials. So the court looks at it and says, "Well now, interfering with contract—that is the statutory code". It looks and sees that the president was on the picket line and that leads the court to its answer. On the other hand, with the law of nuisance it is left with common law, and it would have a fine old time deciding whether or not a particular group of pickets was a nuisance—although, as I have suggested, liability there is much stricter than most peple realise and was reaffirmed in the Verrinder case this year.
How can it possibly be right in an industrial relations situation—and I have taken only a simple example to abbreviate my argument. I hope that the noble and learned Lord will not suggest that this is an isolated example. If he does, I shall have to repeat the other examples, which are more complex. I know that he will not. My simple little example illustrates only the kernel of a principle question; namely, that time and time again different kinds of tort liability will be involved in a case. Is it right, and if so on what principle is it right—other than that of policing—to put a union into the position of having to make its lawyers argue two cases instead of one? I beg to move.
8.14 p.m.
Lord Mackay of Clashfern: I may have misheard the noble Lord, Lord Wedderburn of Charlton, but thought he said that the effect of his amendment would be to make the common law rules about agency apply to all torts, including interference with the contract type of case. If I did hear him correctly, then I believe that is not so. His amendment would have the effect of applying the new rules to all torts.
Lord Wedderburn of Charlton: The noble and learned Lord is absolutely right. I should have said that we would prefer the common law but that the Government
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seem to want the statutory code. Whichever way we put it, the Government are to explain their position.
Lord Mackay of Clashfern: Before I try to deal with the main matter, may I say that, in relation to the last point made by the noble Lord, the advice we have—and I must say, without being impertinent, that I agree with it—is that where (a) or (b) are involved in proceedings, then subsection (2) gives the rule for those proceedings, so that one does not have the kind of particular difficulty to which the noble Lord referred at the very end of his speech. It talks about proceedings and so long as material of the type of (a) or (b) is in those proceedings, that will be the rule.
This amendment brings us to the question of the guidance which Clause 13 provides when a trade union is to be held liable for the unlawful acts of its officials. That guidance is contained in subsection (3) and there will be an opportunity to discuss it in more detail on later amendments. But it may be helpful at this stage just to remind noble Lords why it is there at all. Clause 13 has the effect of making trade unions liable to be sued in their own name when they organise unlawful industrial action. This is the interference with contract area, including conspiracy, to which the noble Lord, Lord Wedderburn of Charlton, referred. The only other period since 1906 when trade unions have been liable in this way was between 1972 and 1974 when the Industrial Relations Act 1971 was in force. Under that Act the courts had considerable difficulty deciding when and whether a trade union could be held responsible for the unlawful acts of its officials and members. In order to reduce the chances of the same difficulties arising under this Bill, the Government believe it is essential to provide more detailed guidance about trade union liability than was provided in the 1971 Act.
Under subsection (2) of Clause 13 these rules on liability apply only to what are known as the "industrial torts"—that is to say, to the torts concerning interference with contract which are contained in Section 13 of the Trade Union and Labour Relations Act 1974. The amendment under discussion would remove subsection (2) altogether, so that the guidance on liability applies not just to the "industrial torts" but to all torts committed by or on behalf of trade unions. So, in short, the proposers of this amendment are saying: if it is necessary to have guidance on trade union liability, why should that guidance apply only to one set of torts and not to them all?
The basic reason for singling out the industrial torts for special treatment in Clause 13 is that they are the torts associated with the calling of industrial action; and it is in relation to the calling of industrial action that the main problems of union liability are likely to arise. This is because union rules are all too often unclear on who has authority to call industrial action, and because the union machinery for making such decisions (both formal and informal) is often complex with unclear lines of authority. In other areas there are unlikely to be special problems which warrant the use of special rules either because unions very rarely commit other torts, or, if they do, because there is usually no difficulty in deciding whether the union is liable. The torts not covered by subsection (2) fall into four broad categories. First, there are the torts specified in Section 14(2) of the 1974 Act, for which

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unions are already liable if committed outside a trade dispute. These are basically negligence, nuisance or breach of duty resulting in personal injury, and any breach of duty connected with the use or ownership of property. These cases are rare, but the unions have been liable for them for over 70 years and it would seem odd to start applying special rules of liability to them now. Certainly there has been no suggestion that one has seen of there being any particular difficulty in dealing with cases in that area where unions are concerned.
Secondly, there are other torts which are of a nature which make it very difficult to imagine how a union could be considered liable in the type of cases in which they could arise, such as battery or assault. Thirdly, there is a further group of torts which could be "committed" by a trade union, but where there seems no justification for treating trade unions differently from corporate bodies such as companies, charities or clubs. There seems, for example, no necessity to treat libel cases over an article in a union journal differently from similar caries arising from a newspaper article.
Finally, there are some torts other than those specified in subsection (2) which it is just possible could arise as a result of industrial action authorised by the union. The most obvious are nuisance and trespass, although false imprisonment is another, albeit remote, possibility. However, if these were committed during industrial action they would almost certainly arise in cases which also involve the "industrial torts", so that the "mixed proceedings" rule to which I have referred would apply.
To sum up, the courts will be required to apply the normal rules of vicarious liability in any cases of the sort I have just described. In general, this means that the law will hold the union liable for torts committed by persons acting on its behalf. Where the relationship of master and servant exists the master is liable if, but only if, the unlawful acts are committed in the course of the servant's employment. In the cases of industrial action the problem under the 1971 Act was in determining whether officials as servants of the union were authorised to call industrial action in the course of their employment. That is why it has been necessary, in our view, to devise in this clause special rules to cover this particular case. I hope in the light of that explanation the noble Lord will feel able to withdraw this particular amendment.
Lord Lloyd of Kilgerran: It is with some hesitation that I presume to enter into this argument. I have always been fascinated by the depth of knowledge of the noble Lord, Lord Wedderburn, in these matters. I hope it is not impertinent of me to say so. I was trying to follow his argument. It ranged from the more modern general aviation cases to the 1830s; we heard about the doctrine of repudiation and the doctrine of repudiation of repudiation. I do not wish to be impertinent, but I thought his speech was something of the order of a speech which would be more suitable for the Question that Clause 13 stand part rather than in relation to this particular amendment. I find it very difficult indeed to understand the basic reasons for his having put forward this amendment. It is entirely my fault, but I do not understand in any way how this deletion of lines 10 to 16 on page 15 assists
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his case in relation to the position of the trade unions at the present time.
Lord Wedderburn of Charlton: In view of what the noble Lord, Lord Lloyd, has just said, I must obviously try harder. But I will not start again. I will finish by saying this. The noble and learned Lord says that he does not follow the problem. The problem is this: that there are two different sets of principles in the Bill that govern the liability of trade unions for the acts of their agents or the like. We ask the Government by this amendment, why should there be two? We do it in the time honoured way of knocking out one and leaving the other one, and putting the Government to its proof. It is true—the noble and learned Lord was quite right—I got my argument the wrong way round; it would not have mattered which we chose to push out. The Government could then explain why there should be two. That is the essence of the matter.
The noble and learned Lord made a most important point, that where the statutory code applies because an industrial tort is in the proceedings, or to be more accurate is one of the grounds upon which the proceedings are brought, then it would, as it were, swamp the common law, and that would apply throughout the proceedings. So we get the situation where if you issued a writ with an industrial tort in it, no matter what other claims you had—false imprisonment, nuisance, Rylands and Fletcher liability, or whatever—they would all be governed by the statutory code because you have one ground of an industrial tort. On the other hand, if the defence knocked that out as disclosing no cause of action, suddenly halfway through the action the principles governing the liability of the union would change and you would go back to the common law, because you would not have an industrial tort.
I take the noble and learned Lord's point. I had not read the Bill in that form, because I took it that where it said,
"Where proceedings in tort are brought against a trade union on a ground specified in the 1974 Act, Section 13(1)"
it meant what it said. I suggest the Government take it away and look at it again, if this is really what they want to do. Having given that example, I rather doubt it; but if they really want to do that, then they should say, "Where proceedings in tort brought against a trade union include a ground", because then it would be clear that the inclusion of the ground was, as it were, enough to knock out the rest. I see the noble and learned Lord moves his head in an unfortunate direction, and so I must go on.
The clinching point is further down in the clause. It says,
"Where proceedings in tort are brought against a trade union on a ground specified in Section 13(1) … then for the purpose of determining in those proceedings whether the union is liable in respect of the act in question that act shall be taken to have been done by the union if but only if it was authorised or endorsed by a responsible person".
Acts may overlap; one set of proceedings will involve many acts. Are we to sort out in mixed proceedings the area where the industrial code applies, where the mixed proceedings rule applies and therefore the industrial code applies, and other acts which are left to the common law? The only people to make a

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profit out of this are the lawyers. I am sure the noble Lord on the Liberal Benches would agree with that. But then we are all three lawyers, and that does not do the case any good.
The only other point I would wish to make is that I genuinely believe the Government should look at this point again, because again it is creating litigation when it could make it so clear, whatever it wants to do. With respect to the noble Lord, Lord Lloyd, I do not think it is a clause-stand-part point; it is building to a clause-stand-part point, but then amendments do that to highlight the features. The feature which is highlighted here is in the very words of the noble Lord the Lord Advocate. He said that the basic reason for having this statutory code is to deal with the torts associated with the calling of industrial action; that is what the Bill is about. It is to isolate industrial action; not the other affairs of the trade union, not its internal affairs or its contractual arrangements. That is why the other torts are left out, although he is not very sure of it, because of course trespass may be involved in sit-ins, and up in Scotland they have had some trouble with that lately. They might consider whether they have got it right, even from their own point of view.
I hope the noble Lords on the Liberal Benches will look at this matter because, if I may say so, this is not a clause-stand-part-point; it is a Bill-not-stand-part point. In 1906 their party gave us the framework of our industrial relations law which is now being destroyed, and they should look at this very carefully in the light of the history and tradition of their party. This puts trade unions in a position of great complexity and doubt and uncertainty; they will not know what principles govern what. Secondly, in so far as the industrial code applies it applies to industrial action, and it singles out industrial action. This is another example of a Government that says it is being evenhanded—singling out industrial action for a special statutory code of responsibility. It is quite clear the unions will know what to do.
On Question, amendment negatived.
8.28 p.m.
Lord McCarthy Lord McCarthy moved Amendment No. 112:
Page 15, line 25, at end insert ("acting within its authority under the rules").
The noble Lord said: I should like to take this amendment with four others which run in sequence, Nos. 113, 114, 115 and 116, because they all have the same objective in view. My noble friend has just been arguing that we believe it would be easier if trade unions had one set of liabilities based on one set of grounds. We were saying in a sense that it does not really matter—although we prefer one ground rather than the other—whether it should be the common law ground or the formula in the Bill. The Government have said, no, they want two different sets of formula, one for industrial torts and the other for other forms of tortious liability. We say O.K., that is what you want; then let us look in more detail at the actual formula you propose should apply for liability in respect of the area of liability which you specify in the Bill; that is to say, liability in the areas of industrial torts.
We are saying that it is a very strange set of arrangements which you are seeking to introduce into the operation of trade union rule books, and we are saying that if you look at actual trade union rule books, at least the trade union rule books that are known to us, there is a very wide difference between the way that authority is actually distributed in trade unions—the people who actually take decisions in trade unions and who are in fact responsible persons and principal executive committees, presidents, general secretaries and employed officials and so on—all phrases used in the Bill. We are saying that there is a very different set of actual relationships—power and authority relationships which exist in actual trade unions—from the ones the Government appear to be assuming they would like to see exist inside trade unions for the purpose of deciding what responsibility is to lie on trade unions under the Bill.
We are saying that that will lead to very considerable problems and those problems will add to the problems, which my noble friend has laid before your Lordships, which will arise for trade unions because they do not know, or it will be difficult for them exactly to tell, whether they have one set of responsibilities laid down in the Bill as a result of industrial torts or another set of responsibilities which arise in other forms of tortious liability. In addition, when they come to the area of industrial torts they will find a whole set of imaginary relationships embodied in the Bill which sit very ill with the actual authority in the rule book.
Therefore, the purpose of the amendment is quite simple. Indeed, the purpose of all the amendments is quite simple. What we are trying to do—and if we have not done it perfectly I am sure that the noble and learned Lord could do it much better, if he would only take the point—is to say that on each occasion these responsible persons and principal executive committees, presidents, general secretaries and so on, should all act within the autonomy that they have under the rule book. That is centrally the aim of all these amendments. If our amendment were carried those people, those characters that have been conjured up, whatever you may think they ought to do, will all be operating under the authority of the rule book.
There are many reasons why that should be so. One of the reasons is that trade unions respect rule books. The rule book is for the trade union, the constitution. It is all that there is. I do not suggest that trade unions always observe their rule books; they do not always know what they say. But when there is a challenge as to whether A, B or C has any right to do what he has done, then at least the active trade unionist knows that he has to find something in the rule book somewhere to justify what has occurred. The rule book is the constitution. The rule book has the same role in the union as a written constitution has in the state. It is all there really is which governs the power relationships.
Of course, as political scientists will tell us, because the rules are what they are, the power relationships are what they are—the power relationships go back to the authority in the rule book In some unions the responsible person—the principle executive committee—has a great deal of power. The principal executive committee is a very important group of people because that is what the rule book says. In other unions, the

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principal executive committee is a relatively unimportant institution because there are other bodies such as the final appeal court or the annual conference which is not mentioned here. It might be some other body in the rule book which has the authority and the power, and it might even be the sovereign decision-making body. It is the same in states; it is the same in countries; it is the same in trade unions. You cannot come along and impose upon an organisation a set of your own norms, your own concepts and your own authority structures, and seek to create a whole set of responsible people and tell them that they have power, and that unless they exercise that power then you will hold their organisation liable. We are saying that whatever you want to do, make it act within the autonomy under the rules. That is our general point.
Nevertheless, one must say that when one comes to look at the way in which the Government at this point in the Bill actually set out the relationships between different bodies in the union, it is—and I choose my words with moderation—somewhat bizarre. We begin with a responsible person; the concept of the responsible person, not, of course, a concept known to trade unionists. So we have the concept of the responsible person and he turns out to be a number of things. He can be, according to Clause 13(3)(a), a principal executive committee; according to Clause 13(3)(c) he can be a president or a general secretary and, of course, the Bill assumes that all general secretaries are as powerful as all presidents. The Bill does not go into such fine points. Alternatively, the responsible person can be any employed official or any committee to whom such an official reports. So far these creations have nothing to do with the rules of the union.
We are not told so far, as regards these aspects of the Bill, that anybody has any authority deriving from the rule book. We could have presidents, general secretaries, or employed officials who in the rule book have no power at all. Indeed, I intend to go on to indicate that many employed officials have no power whatever for the kind of things which the Government assume they should have certain powers. But then all of a sudden we see that there is some reference to the rules of the union. We are told at Clause 13(3)(b) that in addition to these heretofore named responsible persons we shall have:
"any other person who is empowered by the rules to authorise … acts of the kind in question".
So the rules get a little look in at that stage.
But that is not the end of the bizarre approach. We are also told at Clause 13(4)(b) that officials cannot endorse if the rules tell them that they cannot do so, and that their acts can be repudiated—not repudiated by reference to the rules, as my noble friend said, but repudiated by reference to this special, special category of responsible person: the president or the general secretary. They have a kind of special, special position. The principal executive committee, the president and the general secretary have a special, special kind of role in respect of the doctrine of repudiation. Again, as I say, this has nothing to do with what the rules say.
We are suggesting that if you want to fasten upon trade unions this bizarre set of relationships with all the legal consequences, you might have the decency to follow their own rules. You might have the decency
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to say that presidents will be responsible, or general secretaries will be responsible in so far as they are responsible under the rules. For example, in the area of strike action, it might be the case that, under the rules, none of the individuals or groups actually has any responsibility for strike action at all. You might be inventive enough or perhaps even commonsensical enough to say: "Let that authority be responsible under the rules". For example, in some cases the annual conferences have the power to authorise industrial action.
Sometimes—I do not want to encourage noble Lords opposite or they will get very uptight about it—you actually have ballots. Some unions have ballots to see who is responsible. They say that the whole of the district has to ballot if the vote involves the whole of the district, and the national executive has no power over that at all. So we are saying: "Do not create all these totally ignorant constructs; try to fit your responsibilities within what actually happens". To do that—it is not complicated; it is extremely simple—you just have to accept this amendment. I beg to move.
Lord Rochester: I am just a little troubled about this matter, as I endeavoured to indicate in our Second Reading debate. I do not quarrel at all with what the Government, as I understand it, have in mind in seeking to alter the law in relation to trade disputes in principle. But I am a little concerned as to how far their proposals may work in practice. To that extent, therefore, I have, if not sympathy with what the noble Lord, Lord McCarthy, has just said, some understanding of the noble Lord's position. I wonder in particular, as he does, whether the proposed legislation takes sufficient account of trade union structure as it actually exists, and whether it takes sufficient account of how far union officials possess in reality, and are actually capable of using, the powers that they are assumed in this Bill to have. I wanted to say that at some point and it may be that this is the most appropriate point at which to say it.
I realise that the response from the noble and learned Lord the Lord Advocate may be that all that unions have to do in this connection is to stay within the law. But I hope that he may have a little more to say than that about these practical difficulties because, as I say, in principle I am inclined to support the Government, but I am looking for a little more reassurance than I have so far had any indication of as regards the practicality in terms of the point raised by the noble Lord, Lord McCarthy, as to where power actually resides. I am looking for a little more reassurance, if he can give it to me, on that issue.
Lord Mackay of Clashfern: As the noble Lord, Lord McCarthy, has explained, these amendments bring us to the provisions which set out when a union should be held liable for unlawful acts committed by its officials and members in the course of industrial action. Those provisions are set out in subsections (3) to (7) of the clause. I should like to address myself immediately to the point that the noble Lord, Lord Rochester, has raised. The purpose of these provisions is to try to make these ideas in relation to union liability fit in with practical reality. As I said earlier,

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we recognise the difficulties that the courts found in the 1971–1974 era in dealing with this matter against the background of the ordinary law when it came to a question of a union calling industrial action. It is in an attempt to deal with that in a practical way that these particular proposals have been made.
Perhaps it would be helpful, therefore, if I briefly explained the provisions as I understand them in relation to this amendment. Subsection (3) contains the basic rules on union liability on which the subsequent subsections depend. It says in effect that a trade union shall only be held liable for unlawful action if that action has been authorised by a "responsible person". It then goes on in paragraphs (a) to (e) to define who is a "responsible person" for the purposes of this clause. Therefore the use of the phrase "responsible person" is—as I think the noble Lord, Lord McCarthy, recognised—an apt phrase to use in the context as a drafting device to list the people who might be responsible.
Before I come to the detail of that, it is important to bear in mind the practical situation with which we are dealing. We are dealing with a situation in which industrial action has been called by someone, and the question is: is that industrial action for which the union can be held responsible? What the clause says is that the union will he held responsible only if the industrial action is called by a person who falls into this particular classification, subject, of course, to the later provisions.
In paragraphs (a) to (e) there are basically two types of "responsible person" who make the union liable. First, in paragraphs (a) to (c) there are those whose actions automatically and irrevocably commit the union: the principal executive committee; any person or committee empowered to call industrial action by the rules of the union; and the president or general secretary. The second group, in paragraphs (d) and (e), are those people and committees who make the union liable unless under subsection (4) they are prevented by the union's rules from authorising or endorsing industrial action or their action has been repudiated by the principal executive committee or the president or general secretary. These are, in paragraph (d), the middle-ranking and junior employed officials like the regional secretary or the district organiser; and, in paragraph (e), the committees to which such officials regularly report, such as the regional or district committees.
Against that background, perhaps I may turn to these amendments. These amendments seek to impose an overriding condition that none of the "responsible persons" listed in subsection (3) will make the union liable unless the union's own rules give them authority to call industrial action. This is unacceptable for two reasons. First, the Government believe that any authorisation by the union's executive committee, general secretary or president should automatically commit the union, regardless of what the union's own rules say. Such a policy may be unacceptable to the noble Lords opposite with their strong belief in the primacy of union rules, but to do otherwise would seem most odd to the vast majority of the general public, and indeed to most ordinary union members. The executive committee and the very top officials are regarded by most people as the "voice of the union",
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and we believe the whole clause would be brought into disrepute if, to take an all too current example, ASLEF was not to be held liable for any unlawful action authorised by the general secretary.
Secondly, these amendments are unacceptable because they reintroduce the element of uncertainty about the authority conferred by union rules which the clause is designed at least in part to overcome. If it were possible to look at trade union rules and see immediately who has and who has not authority to call industrial action, then we might be able to accept these amendments—indeed, we might be able to dispense with the guidance on liability altogether. However, the reality is—and I am sure that there are noble Lords here who know this better than I do—that the majority of union rule books are silent or unclear on who may and who may not authorise industrial action. That is what caused the courts problems with the 1971 Act, and it is why it is necessary to make special provisions on liability in this Bill.
Let us suppose that these amendments were accepted and that industrial action was called by a union and the union rules are unclear; that anyone has authority on behalf of the union to call industrial action. Who will be liable? It has also been argued that these provisions cut across union rules and interfere with their internal affairs. But this argument misunderstands the purpose of the clause. Our aim is simply to set out when someone damaged by unlawful action should be able to claim redress from the union concerned. It does not prevent unions from having their own different and separate rules about authority to call industrial action. Nor does it stop a union enforcing those rules against its members or officials who break them, or indeed a member or official enforcing the rules against the union in the High Court.
It is also important to emphasise that paragraph (a) of subsection (4) does go a long way to achieving the purpose for which these amendments are designed. Under paragraph (a) it will be possible for a union to avoid liability for the acts of its middle-ranking and junior officials and their committees if they act outside the union rules—as long as those rules are clear and they do not have the authority to call industrial action. In other words, if a junior official calls industrial action and it is clear from the union rules that he has no authority to do so, he will be responsible, but the union will not be liable. He will not be a "responsible person" in terms of the full provisions of the clause. The premium is on clarity. The clause allows the union rules to be paramount in deciding questions of liability if those rules are clear. The only exception to this, as I have explained, is in relation to the national executive of the union and its president or general secretary, who we believe should be regarded as automatically committing the union.
To sum up, in our view these provisions set out clear rules on when a union is to be held liable for the unlawful acts of its officials. They are firmly grounded in industrial reality, and are based as far as is practical on what the union's own rules say. But we cannot, as these amendments suggest, accept that the whole question of liability should be based on union rules. That was the essential difficulty faced between 1971 and 1974. The fact is that union rules do not always represent the reality of authority within the union.

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Nor are they always clear on the authority to call industrial action. For these reasons, I must invite your Lordships not to agree with these amendments.
Lord McCarthy: What the noble and learned Lord says does not come as a surprise, but as a disappointment. He used such phrases as, "fitting in with practical reality", but the practical reality is not the practical reality of union government; it is the practical reality that the Government are determined to get the unions one way or another. Even if they have to make up an imaginary system which has nothing to do with actual power relationships in the union, they are going to get someone because he says an action is called by someone and therefore of course someone has to be "got" for that action.
Of course, the logic of that position would not allow any sense of repudiation at all. But the Government are not prepared to be quite as silly as that, so they invent a whole new set of constructs which are going to be made responsible whether they like it or not, and they cannot get out of it whether they like it or not. The facts of industrial life are that in most circumstances for most major industrial disputes it is clear, at least it is clear enough, who is responsible in a union and who has authorised the action. But there are bound to be areas of inconclusiveness such as those which came out in the Heaton case and in the General Aviation Services case where, I am bound to say, the common law in those circumstances sensibly sought to interpret the power relationships and the authority structure by reference to the only reality there is, and that reality is the union rule book.
For many other reasons, quite apart from the decision that the Government have tried to impose liability wherever they can, even if responsibility is not really there, I would caution the Government seriously against trying to create within unions forces, reference points, and authority structures which have nothing to do with the rule book. That way you simply create uncertainty and insecurity. But then of course that may be exactly what the Government want to do, and that may be why they refuse to accept our amendment.
On Question, amendment negatived.
[Amendments Nos. 113 to 116 not moved.]
8.53 p.m.
Lord McCarthy Lord McCarthy moved Amendment No. 117:
Page 15, line 36, leave out ("prevented") and insert ("not empowered").
The noble Lord said: This is a small but significant amendment which deals with subsection (4), where the Bill spells out what happens in a situation where any other official or committee to whom an officer regularly reports authorises an act that he is not entitled to authorise under the rules. As the Bill now stands subsection (4)(a) says that such a person or committee shall not be taken to have authorised that act if the rule prevents them from doing so.
We think that that is a strange kind of phrase to use. Indeed, in the context of union rule books, we would argue that it is an odd bit of ignorance, because it would be our submission that unions do not prevent what otherwise members have a right to do, especially in the case of strikes. In the common law situation,
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a rule book is a contract between the members, and in practice it is the constitution of the union setting out the authority structure of the union.
On both grounds of the legal position of the rule book, and in practice in terms of what the rule book means to the members, we are suggesting in this amendment that better than "prevented" would be "not empowered". We suggest that that is really what the Government mean; that the rule book does not empower people to do these things. This suggests no residual residue of rights that need to be wiped out by the rules because that is not the situation. People have what rights and what authority they have under the rules, and if the rules do not empower them to do these things then they are not authorised to do these things, and therefore this tiny amendment "not empowered" is a better form of words than the word "prevented". I beg to move.
Lord Mackay of Clashfern: This amendment seeks to alter paragraph (a) of subsection (4). The purpose of this paragraph is to take account of union rules when determining liability. It specifies that the union may not be held liable for industrial action authorised by employed officials or their committees if the union rules prevent them from calling industrial action.
This amendment seeks to turn this concept on its head. It amends paragraph (a) of subsection (4) so that the union is liable only if the union rules give these officials and committees positive powers to authorise industrial action. If the rules are silent or unclear about whether they have authority, then presumably the union is not to be held liable if this amendment were to be inserted. In other words, the amendment removes the incentive which paragraph (a) provides to a union to make its rules absolutely clear on who has, and who has not, authority to call industrial action.
Once again this amendment belongs to the theoretical world where union rules on industrial action are perfectly clear. If this was also the reality there would, in fact, be no practical difference between the formula now in the clause and that proposed by the noble Lord, Lord McCarthy. But, as I have already said, the reality is far from the theory. The majority of union rules are unclear or silent on v. ho may, and may not, authorise industrial action. That was part of the problem the courts had in deciding when a trade union was liable under the 1971 Act. At present, the clause says to unions, "If you want to avoid liability, then make your rules clear not only about who has the authority to call industrial action but Also about who has not". What the amendment says is "if you want to avoid liability, keep quiet about authority or make your rules unclear". For these reasons we prefer the clause as it is, and I would invite your Lordships not to accept this amendment.
On Question, amendment negatived.
8.57 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 118:
Page 16, line 1, after ("has") insert ("by notification in writing from a person affected by the act").
The noble Lord said: This amendment covers a small but important point. Under the structure which

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is now being elaborately woven within and around the union by law, the acts of some of the responsible persons, most of the officials and most of the committees, but not those who are empowered under the rules in 13(3)(b), can be repudiated. The conditions of repudiation are set out and the formula is in subsection (5), where it is said:
"…an act shall not be treated as repudiated unless—
(a) it is repudiated as soon as is reasonably practicable after the purported authorisation or endorsement of the act has come to the knowledge of the principal executive committee or, as the case may be, the president or general secretary;".
These three top people, as I shall call them. I must say to the noble and learned Lord that it was difficult to know where to stop with amendments to this structure, so rickety is it.
We have not an amendment and it will not come on clause stand part, but perhaps someone should mention in a footnote that nowhere anywhere in the Bill does it say when the principal executive committee ceases to act on behalf of the union. It is defined in one of those definitions which do not mean much but which help the court a little, but nobody says what sort of quorum it has to have. You cannot go to the rules because it is not bound by the rules. You must not go there. Or should you go there? If you go there to look at the quorum, how do you go there and not look at its powers? These matters will be mixed up. We have not got an amendment on that, but I give the Government notice that they might like to think about that for Report.
This is a much more limited point. It becomes very important, if you are general secretary, to repudiate. The noble and learned Lord should put himself in the position of a general secretary. I appreciate my noble friend's point on the president, but most unions will be able to find, or the plaintiff will be able to find, who is the general secretary of most of them.
There he is in London; he has been out for the evening having settled things. He returns to find the television reporters on the doorstep—that, after all, is the way of life these days—and they say, "What are you going to do about this South Wales strike?" But he does not know about it because it has happened quickly; it is a small group. They have got going and all sorts of local officials are involved. The various stories are put to him and he is told, "You must repudiate this", and of course the unwise general secretary will phone this lawyers, who will ask, "How much is at stake"? and he may reply, "I hear it is several thousands of pounds", to which they will reply, "You had better repudiate it because we do not want any of that".
Of course, if he does that, he is highly likely to be a bad general secretary for the union. What he will say, and what the amendment says, is, "Give me time to know", whereas all the Bill says is that he must repudiate as soon as "reasonably practicable"—not simply "reasonable" but "reasonably practicable", a much more limited phrase—after the act has come to his knowledge. That is a very tight formula and if we are looking at industrial realities—and I am here dealing with one that I think does not involve any legal point as such—this is an amendment which says to the Government, even at this residual level, "Surely
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you will change your formula so as to take account not just of the need of the general secretary but the desirability of doing this with regard to the community as a whole", otherwise, if the procedure of repudiation is triggered into action too quickly, we shall have the president repudiating the general secretary, as he can do under the following subsection, and the whole thing will disintegrate into confusion We have a suspicion that it may do that, anyway.
It is not right and fair that the general secretary should be made to respond to anything other than what is in our amendment. We say that he should respond with reasonable despatch, after he has been notified in writing from a person affected by the act in question; that is, the industrial action. It must be in writing so that he can see what is said. It need not be by a member; it could be by the employer, even by way of a telegram. But let him have some documents to which he must respond. That seems to us common justice, whereas the clause as drafted is not. I beg to move.
Lord Mackay of Clashfern: As I understood the purpose of the amendment as explained by the noble Lord, Lord Wedderburn, it would have the effect of preventing a union from being held liable for unlawful acts authorised by employed officials and the committees to which they report until the union receives a written complaint from someone affected. Such a principle is unacceptable to the Government because it gives unions further special privileges in law, which runs counter to the basic aim of bringing their position into line with that of their officials and members. It may in practice often be wise for an employer to write to the union to put it on warning that unlawful industrial action is taking place in order to give it an opportunity to try to get the action stopped. But we do not agree that an employer should be under an obligation to inform the union in this way.
The crucial question is: did the union know of the unlawful action? If it did, then it should have taken every possible step to get it stopped. If it did not, then it will not be held liable if, when it does learn of the action, it takes steps to repudiate it. In our view, the question should be: did the union know? and not: has somebody written to tell it? I must add that the more we have thought about the amendment as proposed, the more it has seemed to us to have quite the opposite effect to that which I have described as the intended effect. Under subsection (3), paragraphs (d) and (e), the union is liable for any unlawful action authorised by its employed officials or the committees to which they report, unless and until the union repudiates the action. This repudiation must meet the requirements set out in subsection (5) if the union is to avoid liability.
If the amendment were accepted, there would be no way of meeting the amended requirements for repudiation unless a written complaint had been received from someone affected by the action. Then the unions could not escape liability unless a written complaint is made. There would be nothing preventing them from becoming liable before a written complaint was made. The amendment does not, it seems to me, meet the point which the noble Lord explained as its aim, but perhaps that is a matter more for him than for me. I could not advise the Committee to accept the amendment.
Lord Underhill: I hesitate to intervene on a matter in which the legal luminaries are involved, but I think it necessary for a plain person to look at the matter. I said to some of my colleagues that, although we would be up all night, we would be wasting our time because it seemed the Government were determined not to agree to change even a comma in the Bill. On this series of amendments, although my noble friends are strongly opposed to the whole clause, we are trying to make it sensible in relation to union rule books. Some of the points made by my noble friend Lord Wedderburn show conclusively that the Government are not helping to make matters clear in that context. Take the very point we are discussing. As an ordinary individual, "has come to the knowledge" does not seem, even to me, to be a well-defined phrase. The provision says:
"has come to the knowledge of the principal executive committee or, as the case may be, of the president or general secretary".
There are times when the president and general secretary are both abroad. In that event, of whom must it come to the knowledge?
Lord George-Brown: Their deputy.
Lord Underhill: The Bill does not refer to a deputy. I should have thought it would be sensible for the noble and learned Lord to say that at least a few of the points which we have made are worthy of consideration and that, while he may not accept them now, he will study them. It seems that the Government have dug their heels in and, no matter what may be said, not a dot or comma will be changed. We are not debating an enormous issue, but it is one the Government should re-examine to avoid possible legal cases becoming protracted in the courts simply because the matter is not clear in the Bill. Whatever else noble Lords opposite may think of my noble friends Lord McCarthy and Lord Wedderburn, I think it will be agreed that they know more about union rule books and have seen more of them for different unions than anybody in this Committee.
Lord George-Brown: I hope noble Lords will forgive me—I have not been in my place for the whole debate—but I too speak as a normal, ordinary person. However, unlike any others who have spoken, I spent a very long time as a trade union official, full-time for a long time and part-time for an even longer time than that. I might possibly be the only noble Lord carrying in my pocket a fully paid-up 50-year-old trade union card. Fully paid up means paid personally to the branch—
Lord Underhill: There are others.
Lord George-Brown: Now then, let us examine the matter; and if I may say so to my fellow "ordinary" person, he has not gone into it in depth. I can excuse the noble and learned Lord, Lord Mackay of Clashfern; there is no reason why he should do other than read out his brief. The noble Lord, Lord Wedderburn of Charlton—OK; he, too, learnt it from books. Shall we just look at what we are talking about? If, as the other "normal" person said, our purpose is to let the
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Bill pass, but with such amendments as we may make, let us look at what it states:
"For the purposes of subsection (4)(b) above, an act shall not be treated as repudiated unless—
…it is repudiated as soon as is reasonably practicable"—
which leaves a hell of a lot open—
"after the purported authorisation or endorsement of the act has come to the knowledge of the principal executive committee".
The other "normal" person who spoke to your Lordships' Committee addressed himself to the rest of the subsection as though the part which I have just read out did not exist.
If the president and the general secretary of the union are both abroad at the same moment, not only do they have deputies who are entrusted with their authority, but the principal executive committee is also there. I speak as a member of the Transport and General Workers' Union. Whether Mr. Mostyn Evans will be thrilled to hear that is another question. But I do so speak, and there is no way in which the president of the T and GWU and/or his general secretary go abroad without leaving executive authority behind them. Now I believe that on that basis the case of the other "normal" Member of your Lordships' Committee falls, because there would be somebody holding executive authority.
What are we asked to insert? The proposed words are:
"by notification in writing from a person affected by the act".
Let us be honest and clear with one another. The noble Lord, Lord Wedderburn, knows what we are about; the noble Lord, Lord McCarthy, knows what we are about. We are trying to make it as difficult as we can for the individual member of a union to be able to withdraw. This is another version of "contracting" meaning having to contract out. Trying to insert the amendment means that the individual ASLEF driver, the individual T and GWU member, are being asked subject to all the pressures that can be brought upon them, to take on the whole might of a trade unionism which, let us remember, has gone mad since the days when we were brought up in it. It is no longer democratic. It no longer allows people to explain their views.
I should like to say to my other "normal" friend in your Lordships' Committee that he knows exactly what will happen if we insert the amendment. Some-body will have to write a letter and so come under all the pressures, which can be very great, very offensive, very physical. If we push in the amendment, someone has to go through all of that in order to establish the position.
I do not like the Bill, because I think that it is much too weak. I would have had it much tougher than it is. But I would leave it as it is, with the responsible executive authority or the responsible executive officers—and there will always be such. I tell my other "normal" friend that there is no moment when a union does not have responsible authoritative executive officers. We are saying, if we adopt the Bill, that if they do not act within a "reasonably practicable" period after it comes to their knowledge—and, Heaven knows!, that cannot be wider—it becomes operative to write in. I assure your Lordships that Brother Jones in Swindon has actually got to write a letter.

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My trade union colleagues here know only too well that is not on. The noble Lord, the other "normal fellow", drew up a report on how the Trotskyists got power in the Labour Party, and was squashed for his pains. I am a trade unionist; I am not a Labour Party authority. I know how they get power in the trade unions: it is because they simply make it impossible for an individual, unless he is, like me, a natural rebel, even to run a train. The fellows who were willing to break a week ago are less willing to break now because of the pressures on them, and yet you ask them to put their name to a letter? You are asking the impossible. Some chaps will do it, but they will be very brave, foolhardy fellows.
The two college lecturers who are conducting the debate for the Labour Party have never had to face this situation. I have, as a lay official of the union, as a full-time official of the union and as an opponent, sometimes supporter, of every leader of my union from Bevin—well, let me go back, from Tillett to Moss Evans. Given this closed shop situation, given the situation where you can rob people of their jobs, if you ask them to write a letter and sign their name in order to get even this limited protection you are ensuring that only the bravest of the brave, the stupidest of the stupid, will do it.
My noble friend, the other "normal" person in this Committee, knows as well as I know that that is why the Trotskyists got control of the party. That is why individuals in the party did not object. That is why they got control of the unions. If you write this in, the Bill becomes a dead letter. I do not think it is a very powerful Bill as it is, but do not weaken it any further. Unlike my other "normal" friend, I hope the Committee will certainly reject this amendment. To the two college lecturers here I would say, if I may, that I was teaching at the same polytechnic before either of them was known, so I am also a Woolwich Polytechnic lecturer and I have as much a right to be called "from Charlton" as either of them. I was teaching industrial relations before they were, but I was also practising it. I knew it, and I know it now. I ask the Committee, please, not to adopt this amendment.
9.19 p.m.
Lord Campbell of Alloway: May I very briefly return to the serious matter of this amendment, and try to meet it with reason rather than polemics? In particular, may I try to meet the point raised by the noble Lord, Lord Underhill, in deference to the great regard that I hold for him? With respect, I think the problem is really this. I know it is not intended to, but this amendment will in fact only add confusion; because if Brother Jones from Swindon writes a letter to the executive committee, how does he prove that the executive committee have ever received it by way of notification?—and you are back where you started from. It does not really help—and I think that that is the problem. I know it was not intended as an obstructive amendment but, on an objective analysis, I hope that the Committee will agree it does not really matter.
Lord Mackay of Clashfern: I wanted to say, in answer to the noble Lord, Lord Underhill, that, on behalf of the Government I have endeavoured to understand the amendments proposed from his side of the Committee and I have endeavoured to set out as fully as I could, consistent with my responsibility to make progress, a reasonable answer to them. There is no question of riding roughshod over the amendments as if they had not been put down at all.
Lord Wedderburn of Charlton: The noble and learned Lord never does that. I will try to be brief and restrained, and claim the title to speak in your Lordships' House like everybody else, as a human being—and no more. This amendment has nothing to do with the members at Swindon as against the union, and, in a sense, that mistake is plain if one reads the amendment in the context of Clause 13, which is about liability in tort. I agree. I think that the noble Lord, Lord Campbell of Alloway, suggested that the amendment might be the plaintiff. That is possible, of course, but it has nothing to do with the internal relationships between unions and members and Trotskyists and all that sort of thing. It is, of course, about the issue, which could be very important for union liability in the union funds, as to the validity of a repudiation. As the Bill stands, it refers to the top people, the general secretary, the president and the executive—although one fancies that the executive would not act until it had been convened; therefore the problem is not quite so acute. But the problem is acute for the president and the general secretary, for the reasons adverted to in the last set of amendments by my noble friend. Therefore the issue does arise: upon what basis of evidence is the general secretary and president—although I say that it will be the general secretary in most unions—to act?
The Bill leaves it at large except that it has to be done very quickly and without delay (that is in the subsequent paragraph (b); and I understand that we do not always have to read out all the words, for your Lordships will have read the Bill) and, in paragraph (a) as soon as is reasonbly practicable after having reliable evidence of what is going on. So far, I believe that I take the noble and learned Lord with me. If there was not reliable evidence then it would be arguable that he should not be put to his option. All that this amendment does is to say that someone affected by the Act should present something in the nature of a written description of the Act on which the general secretary can rely. The noble Lord, Lord Campbell of Alloway, says that that it might be a forgery or it might not be reliable. That is true of all evidence. The noble Lord has destroyed more evidence as unreliable than I have eaten hot dinners. Of course, whatever we put in the Bill, that would be possible; but it does not alter the formula that one tries to invent.
The amendment does not fall under the particular lash of the noble and learned Lord the Lord Advocate when he says that only a document from a complainant, or by way of complaint, would fall within the amendment. That, surely, is not a reasonable view of the amendment. Many people may be affected by the Act. The first person I thought of was the official who is to be repudiated or not repudiated, or some other official within the union. That is the first person

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who may be affected by the Act if the union is to be liable to damages. My noble friend and I did not put in notification in writing from an official, for we thought we would then come under criticism and it would be said, "You are keeping it within the union". So we said, "All right; anybody affected by the Act on the basis of a document which no doubt the court would say looked all right at the time and he ought to take his bid and make a choice on such evidence as he can get after that, within a reasonable time."
It seems to us a perfectly reasonable amendment. If this is a revising Chamber of the Legislature it is quite extraordinary how a debate like this will read in Hansard. There will be many people who will read this debate with interest and those who have enjoyed it may not enjoy the reading of it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.25 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 119:
Page 16, line 10, leave out ("behaved in a manner") and insert ("taken a step on behalf of the union").
The noble Lord said: There are two points in this amendment which deals with the situation where repudiation has already been effected, but where under subsection (6) on page 16 an attempt is made to withdraw the amendment. I meant to say "withdraw the repudiation". I am so used to withdrawing amendments that it slipped in not by way of Freudian but by way of procedural lapse.
The question is: how is a repudiation to be overtaken or repudiated? How are we to repudiate the repudiation? When the Bill began life, it said half of what our amendment says; that is to say, only by way of amendment of the Government's extraordinary scheme. The subsection says:
"The principal executive committee or president or general secretary must take a step which is inconsistent with the purported repudiation".
That is how the last two lines of subsection (6) used to read.
In Committee in another place, the Government changed the wording of the subsection on grounds which the noble Earl who is to reply will describe better than I can. It struck me that the reason was that it would be too easy to repudiate a repudiation if it suited the union, while on the other hand it was too difficult to show whether or not it had happened; that is to say, "taken a step" as a phrase was too difficult a burden to put upon the plaintiff if he wanted to show that a repudiation had been repudiated, and therefore liability sprang up again.
So they changed the formula, saiyng that repudiation of repudiation occurred if the committee, president or general secretary has behaved in a manner which is inconsistent with the purported repudiation. This is quite a serious matter, as indeed was the last amendment. The phrase, "taken a step" is more concrete. You know where you are; you look for a step; you have to prove the step. "Behaved in a manner" is vague, and if it is not different, why did they change it? It is clear that they changed it, because it covered a broader area. It is another change to broaden the
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area of union liability. There is some behaviour which is very hard to designate and very difficult to describe.
It may be that it takes a long time in court, with different recollections, to describe the behaviour of the president. Let us take the case where my noble friend is right. He says that in many unions you may not have both these officers. At any rate, if you have a general secretary, the president, under the rules, may be a figurehead position. Indeed some people who come from the United States make the mistake in company law and believe that the chairman of a company here is like the president of a corporation in the United States. It is the type of mistake that the Government are making in their unitary view of trade union rules instead of understanding how much they differ. If the president is a figurehead and perhaps the oldest member of a union, then short of his behaviour going beyond the bounds of control and auto-control, everything he does is to be looked at in this context to see whether he has repudiated the general secretary.
The general secretary may well be someone who has considerable rules under the rule book, and not just a rule book but under the custom and practice of the union. The living union may indeed trust the general secretary to do many things. It happens in many unions. It happens in most organisations, be it the managing director or the go-getting head, whatever he is called, of the outfit. In that respect, organisations have common features.
However, the general secretary may have to tell the executive committee: "For goodness' sake, lock up the president and get him out of the chamber, because he may behave in a way that would be thought to be inconsistent with my repudiation", whatever that means. The noble Earl looks puzzled, so I shall give him an example. The general secretary gets knowledge of industrial action, apparently with the approval of certain officials, but he is not sure. He asks whether he repudiates it. He investigates it, and let us assume he does that. The president, however, has a different view from the general secretary, not one shared by many members of the union but perhaps some down where the industrial action occurred. He rolls across in an evening stroll, in and out of the head office, to some newspaper reporters. He says, "It is all nonsense, my union is not repudiating the strikers down in South Wales; I am with them."
I ask the noble Earl: what is the legal situation? It is very difficult. I ask to be treated as a human being. That is all: it is not a legal question in the sense of an examination question: it is an honest human situation in which a general secretary finds himself and, instead of repudiating the liability, he suddenly finds that the president has caused the union to be liable through his not watching out for him. That cannot be right, and that is why we put in the second half of our formula. I now understand that that is what the Government are objecting to. We say that repudiation of repudiation in this extraordinary scheme, if it is to exist at all, must consist of taking a clear step, which can be proved in evidence, and it must be a step on behalf of the union. Of course, that gives away the difference between the Government and ourselves on this.
I understand now much better than I did previously to what extraordinary lengths the Government are prepared to go so as not to have the life of the union governed by the rules construed in its custom and practices and of course the phrase "on behalf of the union" will not be accepted by the Government. Perhaps they would reiterate that that is so—in terms of repudiation of repudiation it has a special importance here. The union authority is to be for nought for these top officials and, "taking a step" instead of "behaving" which one would think they would want to have third thoughts on, having got it wrong the first time round. I beg to move.
The Earl of Gowrie: The noble Lord's amendment seeks to change paragraph (b) in subsection (4), and the purpose of the subsection is to ensure that a union can escape liability for unlawful action by repudiating the authorisations of junior employed officials and their committees, but only if their repudiation is genuine. Under paragraph (a) repudiation will not stand if it is merely a formal act designed to avoid liability while the union's national executive, president or general secretary, continue to support the unlawful action.
When the Bill was originally published, this paragraph provided that a repudiation would not stand if the executive or top officials had subsequently taken a step which was inconsistent with it. However, concern was expressed by the CBI and others that this wording was too restrictive. The Government accordingly accepted an amendment which replaced the words "taken a step" with the present words "behaved in a manner". Part of this amendment therefore seeks to reverse that decision. The Government accepted the amendment in another place because they accepted that "behaved in a manner" is a wider formulation than "taken a step". It clearly covers informal support by "nod and wink" techniques as well as positive acts like authorising strike pay. We accepted that amendment because we are keen to draw this provision as widely as possible. That is why we cannot accept the amendment which seeks to reverse the decision. In the example which the noble Lord, Lord Wedderburn, in his guise as an ordinary human being, put to me, if the president is just a figurehead, then surely he will not be involved in the authorisation or the endorsement or the repudiation of the unlawful action; and so the noble Lord's example falls down. I hope the amendment will as well.
Lord Howie of Troon: I am drawn really to the support of my noble friend Lord Wedderburn in this case because I happen to be just such a figurehead. I am the president of a small but relatively unimportant union—unimportant to the world as a whole, but of great importance to its members, who are professional engineers, mainly in the electrical business. I am their titular president and my duties are totally honorary. I appear to grace the occasion and add dignity to a number of functions, which I do to the best of my ability. I also give them lectures from time to time, when I give them what I consider to be wisdom, and they are kind enough to listen to me politely even to the end; but I am not in any way engaged in their deliberations.
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The general secretary and the executive committee run the union and they call upon me when they feel it necessary, expedient or even decent so to do. But what I wonder about is this. Let us suppose that, in the course of a dispute, my union, which is a very well behaved one, and my general secretary and executive repudiate some action. Meanwhile, I am, in all innocence in my honourary capacity, saying things—quite without desire to wound or confuse—which are inconsistent with that repudiation. Does that mean that the lack of repudiation on the part of the honorary president will be held in some way against the repudiation on the part of the active figures?
It is fairly clear from the comments of the noble Earl, Lord Gowrie, that it would not be, in his opinion; but his opinion, although it is interesting and almost always right and conclusive within these four walls, does not carry the same weight outside these walls as it does inside. That is possibly because people outside do not know him as well as we do. When he says that the figurehead would be regarded as nothing more than a sort of figment of the imagination, and that nobody would pay the slightest heed to him, that might be good sense, but it might not be how the lawyers would carry on outside this House.
I should like him to make sure that his law is watertight and really carries the weight that he means it to carry. But at the moment, so far as this debate has gone, I am fairly sure that the amendment proposed by my noble friend Lord Wedderburn puts the law of the noble Earl the Minister into a much better and sounder case.
The Earl of Gowrie: I do not think that the world outside, as well as inside this Chamber—and I am grateful to the noble Lord, Lord Howie, for his kind remarks—is indifferent to common sense or common interpretation. I believe that "behaved in a manner" is a wide-ish formulation which would cover most situations, and I do not think the noble Lord need have any fears that he would be implicated in a piece of behaviour which was quite clearly, and evidently, designed to take steps which he was not authorising. I think that he has nothing whatsoever to fear.
Lord Howie of Troon: It seems to be more a case of the union having something to fear, due to my ineptitude.
Lord Wedderburn of Charlton: Coming to the end of the string of amendments, we begin to see through each crack how rotten is the core of the timbers of the clause and on Clause Stand Part I think that it will be taken apart. There are two small points which the noble Earl raised. He said that this change is to deal with the nod and a wink problem. There is always a nod and a wink problem, whatever formula you have. If you say "take a step" or "behave in a manner" or "do an act", in order to give authority or to take away authority, there is always a problem that the other side will say "You seemed to do it. You overtly appeared to do it. But in some way you cancelled what you did". There is almost no formula, except a very long and legalistic one, that would avoid that, even in part.

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The noble Earl said that to take a step in order to repudiate repudiation is too restrictive. That is what we have been saying all evening. Every time they are faced with a choice, the Government say "That is too restrictive". Of what is it too restrictive? It is too restrictive of union liability, and the change is always made outwards in order to make liability wider. My noble friend Lord Howie has lived the kind of example that I tried to give to the noble Earl. The general secretary repudiates. The president, who is honorary, is giving a lecture. He hears about it and, no doubt from the depths of his soul, having spent his whole life in the union and being the oldest member, with a card more than 50 years old, feels very deeply on this matter and says, "I think that the general secretary is wrong. It is nonsense". My noble friend would do that, because that is what he is like. According to the Bill, the union would then be liable again. So in the course of an evening the general secretary would have repudiated the liability and, if I may read the Bill, the president would have behaved in a manner which was inconsistent with the purported repudiation. The purported repudiation is now the important second half of our amendment.
The noble Earl says we do not need to have that on behalf of the union; that it would not fit the bill. Because of the way the Government have treated all the previous amendments—it is necessary for noble Lords to relate this point to all previous amendments, especially those moved by my noble friend—we cannot rely in this area, other than under subsection (3)(b) and, for the purposes of preventing authority, under (d) and (e), upon the rules. Steps taken on behalf of a union relate primarily to the rules. So the Government cannot use that argument. Therefore they are in the difficulty that, having created these creatures of their own imagination who walk about as the union, they now find that there are two, if not three of them, if the executive is in session, and that they might act one contrary to the other. The Government do not like that and they have tried to find a way out of the clause. The way out is to accept our amendment, but that is not very convenient for the Government because it is not wholly consistent with what they want the rest of it to mean.
What this debate has done, especially on this amendment and my noble friend's amendment on the rules, is to bring out a small but important point. Various statements were made when the Government first produced the documents which preceded the Bill: that a union would be liable under the ordinary common law principles of vicarious liability. I merely register the fact that we have travelled a very long way since then and that the statutory code of agency is a long way from the principle of Joel v. Morrison, which I can now at last accurately identify in my notes as 1834, where it was said that if a servant were going on a frolic of his own without being on his master's business, the master would not be liable. That is as true today of the common law in an updated fashion as it was in 1834. But that would not be true of the noble Lord, Lord Howie of Troon. He can go on what frolics he likes and he will bind the union if he acts as its president. I take his point that he will not bind the union if he acts in any capacity other than president;
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but if he acts in his capacity as president, the Bill, especially in Clause 13(5) and (6), is clear.
The Earl of Gowrie: Is it not the case that if the noble Lord, Lord Howie of Troon, were too frolicsome or irresponsible, the union would be able to remove him?
Lord Wedderburn of Charlton: I quite understand that. The noble Earl and I are very rarely in disagreement. We both agree that it would be better if the problem did not arise. If the president were removed there would not be a problem. One would be left only with the acts which he had already committed. The noble Earl might like to ponder this. We are on to a much more important point than I had realised and I am very grateful to him. If he says that the way out for the union is to repudiate the president and to dismiss him—under the rules, I presume—they get rid of him. But the president has acted in his capacity as president, so the clause applies. Where in the clause does it say that if you kick the president out by proper, lawful means under the rules, the acts which he committed to repudiate the repudiation of the general secretary do not stand? What would you say if you were in court and you were asked where it is said that what he did was in his capacity as president? There may be a conflict of evidence as to whether he acted in a private capacity. The noble Lord, Lord Howie of Troon, would not do that. He would give his lecture as president on union policy to members to convince them about what to do. He would say that they should support South Wales but that the general secretary does not.
We have concentrated on this one example. I ask noble Ministers to bear this far with us: that it may be possible to say that a particular example is special in a variety of ways. But it does not take a great deal of imagination, when one is presented with two people and one body, each with independent commissions to rove about as a union, whatever the rules say, to think of many situations where difficulty will arise. We are saying and my noble friend is saying that this sort of amendment will in fact create less litigation than will the Government's Bill. So, at the lowest level, I ask the Government whether they will consider the point and come back and say something on this matter, at least at Report stage.
9.45 p.m.
Lord George-Brown: I find this explanation from the Front Bench of the party to which I have belonged for so long incredible. We are not talking about what a president may do and what a general secretary may disagree with. It is rather like talking as though Sir John Boyd was the general secretary of the AEU and the noble Lord, Lord Scanlon—I wish he were here—was the president of the AEU. What the noble Lord the polytechnic lecturer is presenting is a situation in which the noble Lord, Lord Scanlon, would be opposed by Sir John Boyd. As the Bill stands it says that the principal executive committee or the president—that is to say, Lord Scanlon or Sir John Boyd—must have behaved "in a manner which is inconsistent".
The noble Lord the polytechnic lecturer knows as well as I do that union rules vary and in only a very

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few cases does the president have executive authority—I would rather like to engage the attention of the noble Lord, Lord Wedderburn of Charlton, I gave him all mine. Only in a very few unions does the president have that authority. In only another few cases does the general secretary have that authority. In most unions, and certainly in the craft unions, the principal executive committee has that authority. We are dealing with different unions created at different times, but for the most part they have a principal executive committee. The noble Lord, who does not wish to listen to me, no doubt with deliberate intent, clearly does not understand this. For the most part, but not for the whole part, there is a principal executive committee which is always to be held responsible, even if Lord Scanlon and Sir John Boyd happen to disagree.
Now to the actual terms of the amendment to which the noble Lord, Lord Wedderburn of Charlton, did not address himself. The Bill as it stands refers to whoever holds the authority, be it the principal executive committee, the president or the general secretary. I repeat that there are very few cases where it would be the president and only a certain number of cases where it would be the general secretary. In most cases it would be the principal executive committee. Indeed, I think I would go a wee bit further, because it is difficult to think of any case where the president or the general secretary actually purports to use that authority except in the name of the principal executive committee. What are we asked to do? The Bill mentions repudiation if the principal executive committee, the general secretary or the president
"has behaved in a manner which is inconsistent with the purported repudiation."
to which the noble Lord wishes to insert "taking a step on behalf of the union". With very great respect, without either of us trying to be very erudite—and I am quite willing to pit my erudition in this against his—it must be as plain to him as it is to me that he is again trying to insinuate something quite different; he is trying to protect somebody in authority in the union who takes a step on behalf of the union, even though that step may be inconsistent with the law. Forget all the kerfuffle about who is taking it, the president or the general secretary or the executive committee, and I will meet him on that argument any day he likes in any way he wishes to choose; the real issue here is, if I as a general secretary or a president or, as I was for a long long time, the effective officer of the union, can claim, were this amendment to be moved, that I was taking a step which seemed to me to be on behalf of the union, I take myself out of this Act and I take my union out of this Act. That is the issue. The noble Lord knows it as well as I do. I hope other noble Lords understand it.
We are still arguing the same thing we were arguing on the last amendment. We are trying to take the unions—not the members of the unions, may I respectfully point out; not the membership of unions, not the fellows who pay the dues—we are trying to take out the officials, who in my day had to be representative, nowdays do not; nowadays we know only too well that they can be the creatures of cliques; we are trying to take them out of an Act of Parliament by just artfully inserting a few words which simply say "taking a
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step on behalf of the union". If you have got that right, you can drive a coach and four horses through the Act of Parliament.
As a trade unionist, trade union official, with a card as long as anybody in this House, I never claimed that right, nor did Mr. Bevin, nor did Mr. Dukes, nor did any of the great men who led our union movement forward. This is a protection for any Trotskyist group, any militant group that happens to get control of any union, and the Lord Howie of Troon knows as well as I do the Civil Service unions in which this has happened, and the opponents of Kate Losinska could claim protection under this. I would not give it house room. I am astonished that the noble Lords on the Front Bench can pretend to; and I simply say to the Committee, please do not. Each union has its own rules, its own authority. What we must not give to that authority is the right to say: "Because we declare that we were taking a step on behalf of our union, that entitles us to contract out of the law". I hope that the Committee will understand the real issue which is at stake here.
9.55 p.m.
Lord Molloy: I should like to make a comment which I think is rather vital and important. I am not prepared to comment on what the noble Lord, Lord George-Brown, has just said because I do not think it is worth it. I do not believe, for example, that British trade unionists today are ruled by a bunch of cliques. They still have the same sense of honour and dignity as they had in the noble Lord's day and my day, when we were both members of the same union, although I am bound to say that I think that there is much more democracy in that union now than when the noble Lord, Lord George-Brown, and I were members of it many years ago. I shall also not be tempted to comment on what I thought was the unnecessarily offensive way in which the noble Lord referred to my noble friend Lord Wedderburn on the Front Bench. I think that his comments were quite uncalled for and highly offensive. The noble Lord was taking advantage, and we all know what we call people who take advantage of other people who cannot immediately reply.
I want to put the following point to the noble Earl, Lord Gowrie. There is another situation and it might concern the Civil Service unions more than anyone else and some of the National Health Service unions, who very often have to work together in combinations of what is known as "the staff side". Let us take, for example, the national staff side of all Great Britain's civil servants. I find it highly offensive for the noble Lord, Lord George-Brown, to say that the leaders elected by Great Britain's civil servants, from ambassadors right down to the ladies who clean this Chamber, would allow themselves to be governed and ordered about by a couple of cliques. I am bound to say that that particular part of Lord George-Brown's speech indicated to me that he is rushing headlong for the 19th century.
However, the point I want to make is that sometimes a number of general secretaries under the Whitley system have to make decisions which later have to be confirmed by their unions, and sometimes they are confirmed. Where they are not confirmed, they have

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to oppose what is decided, and sometimes even before the national staff side meets to meet the official side. When they are meeting the official side the chair is usually taken by one of Her Majesty's Ministers. So the point that I am raising is extraordinarily important. Let us suppose that in some instance the president of a union or the general secretary of a union is a member of the staff side with three or four other general secretaries and maybe a president or two, according to the rules of the particular union. Would we not be in some difficulty if this particular clause is not amended as indicated by my noble friend Lord Wedderburn? I am not entirely satisfied with his amendment, but I seriously ask the noble Earl, Lord Gowrie, whether he would consider this particular point. It would be offensive of me to expect him to give an answer tonight. However, I think that I have raised a point that is worthy of any responsible Chamber's examination.
The Earl of Gowrie: I am grateful to the noble Lord for his request and I welcome the tone in which he made it. Again, I do not think that it is at all offensive of him in any way whatever to ask for a reply tonight and I will try to give it. The plain reality of the matter is—and again I try to refer the
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Committee back to the sort of common-sense intentions behind this provision—that when industrial action is going on, the executive will usually have taken a view about whether the union supports it or not. The president and general secretary will usually act in accordance with that decision. If either of them does not, if the general secretary goes on supporting and encouraging the action despite the executive, then of course the union would be liable.
In the instance that the noble Lord cited, if there are eight unions on the staff side and all eight general secretaries have authorised the unlawful industrial action, then of course all eight unions are liable. But we must remember that it has to be unlawful action.
To revert to Lord Molloy's noble friend Lord Howie of Troon, he, of course, would only be acting inconsistently if, with his executive's repudiation, he continued to go on encouraging the unlawful action after the general secretary or executive had repudiated it. Again, the common-sense interpretation of the provision is really the one to stick to. I am a little confused as to why we are making such heavy weather of this particular provision.
On Question, amendment negatived.
10 p.m.
Lord Spens Lord Spens moved Amendment No. 119A:
Page 16, line 11, at end insert—
("(6A) When, in the opinion of the Secretary of State, any action taken in a trade dispute is likely to cause widespread economic or personal damage or distress to persons not involved in the dispute, he may order the union or unions involved to hold a ballot of their members before any such action is taken.
(6B) Section 13 of the 1974 Act shall not apply to any action taken in the dispute after an order has been made under subsection (6A) above unless and until a majority of those entitled to vote have voted in favour of such action being taken.
(6C) A ballot under this section shall be conducted in accordance with the provisions of section 58A of the 1978 Act.").
The noble Lord said: This amendment is rather different from the bunch that the Committee have been discussing for the last two hours or more. It has nothing to do with presidents or general secretaries, or even principal executive committees of unions. It will give the Secretary of State the discretionary power to order a union or unions, which is or are about to engage in a trade dispute, which the Secretary of State considers is likely:
"to cause widespread economic or personal damage or distress to persons not involved in the dispute",
to hold a ballot before it goes or they go any further.
We have been regaled for some time with a very large number of quotations from noble Lords on the Opposition Front Bench, most of them legal ones. So I shall add my own quotation to theirs, although it is not a legal one—it is a political one. It starts like this:
"It is a matter for concern that at present it is possible for a major official strike to be called when the support of those involved may be in doubt. A number of unions already have provisions in their rules making a ballot of their members obligatory before a strike. In other cases the holding of a ballot is discretionary. In others there are no provisions about ballots in the rules.
"The Industrial Relations Bill will give the Secretary of State discretionary power to require the union or unions involved to hold a ballot on the question of strike action. The power will be used where the Secretary of State believes that the proposed strike would involve a serious threat to the economy or public interest and there is doubt whether it commands the support of those concerned".
I expect your Lordships all know where that comes from. It comes from a White Paper called In Place of Strife: A Policy for Industrial Relations, which was presented to Parliament by the First Secretary of State and the Secretary of State for Employment and Productivity in January 1969. I have an idea that we have that First Secretary of State sitting as my colleague on the Cross-Benches. I am not sure and I may be wrong.
Lord George-Brown: No; it was Lady Castle.
Lord Spens: I thought that Barbara Castle was the Secretary of State for Employment, not the First Secretary of State. Anyway, that is the quotation. It was a White Paper produced by the then Labour Government. Therefore, it was their policy until their paymasters, the unions, told them to drop it, and it has not been picked up since.
We have heard a lot about the 12 million members of trade unions but, so far as I know, no one has mentioned the 34 million other people in the United
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Kingdom who are over 14 years of age and who suffer from these serious strikes—such as the one we have at the moment—who have no possibility of doing anything about it and who have to accept even the ruin of their businesses because a handful of union leaders decide to call a serious strike. The time has come when power should be given to the Government in the form of the Secretary of State for him to call a compulsory ballot before any such action is entered into.
I drafted this amendment about a fortnight ago. It was just after the NUR strike but before the ASLEF strike had started. I offered it around to two or three people to get advice as to whether to table it or not and I got rather contrary advice. I was advised by one person that this was not the Bill to put it in, but that I ought to wait for the next Employment Bill. On the other hand, someone else said, "Go ahead and table it and let us hear what the Government have to say about it." Since then, not last weekend but the weekend before, most of the press were saying that it was not likely that the Government would be able to table another Employment Bill in this next Session and therefore we would have to wait for the last Session of this Parliament, if Parliament is going to run its full course, before we get the next Employment Bill. That would mean two possible further winters of discontent before someone is able to stop these drastic strikes from taking place. I came to the conclusion that I would table an amendment to see what views the Government have on it. I beg to move.
Lord Boardman: The noble Lord, Lord Spens, has clearly explained the amendment and I shall not detain your Lordships for many moments in supporting what he has said. The issue is simple. It has been widely debated outside this House and Parliament, but unfortunately it was not debated in another place in the passage of this Bill there, for reasons known to your Lordships. On an issue which attracts so much public attention we should know how the Government view this important point.
The public are intensely offended at the way in which they are held to blackmail by a comparatively few people in essential services. They, and I certainly, would wish to see measures introduced which prohibited strikes in essential services. I recognise that that is outside the ambit of this Bill and I recognise the problems involved, but they feel that Government have a responsibility for the freedom, liberty and convenience of the general public to introduce some measures to curtail the type of thing that is happening at the moment.
This proposal would go some way at any rate to removing the offence of a strike of the nature to which he referred being held when it is genuinely believed that it is not supported by a majority of those taking part in the strike. It would not weaken the trade union movement. It would strengthen the trade union movement in enabling those in the trade union movement who disagree with the action taken by the small militant minority, but who are powerless themselves to demand or call a strike, to have the opportunity of voting in such a ballot if the Secretary of State so proposed and so moved. For that reason I support the amendment

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and hope that the Government will be able to make some encouraging response to it.
Lady Saltoun: I am not a university lecturer. I am not a paid-up member even for one year of a trade union. I am just an ordinary woman, and as such I go about and talk to other ordinary people and listen to what they have to tell me. I entirely agree with the noble Lords, Lords Spens and Lord Boardman, that the public of this country are thoroughly fed up with endless strikes, many of which are not wanted even by the majority of union members who dare not say so openly for fear of intimidation. I therefore support the amendment, which seeks merely to curb the power of undemocratically elected tyrants, and not to be nasty to the poor dear trade unions, and I hope the Committee will support it.
Viscount Massereene and Ferrard: I wish briefly to add my support to the amendment. I have been campaigning for a step like this for a number of years—for ballots before major strikes—and many trade unions now have provision in their rules for ballots. The Government will probably say the amendment is not correctly drafted or is suggested for the wrong Bill; but, be that as it may, it would do the trade union movement a great deal of good if such an amendment were made law because, as everybody knows, the majority of trade union members are not militant. If there is no ballot—I am not sure whether, under the amendment, it is meant to be a secret ballot, which is not the law at present—but just a show of hands, then as we know, there is the question of intimidation, and while many union members may not approve of a strike, they are frightened not to put up their hands to vote for strike action. That is well known. I will not go on longer, because we want if possible to get home before breakfast time. I warmly support the amendment.
Lord Rochester: I wish to—
Lord Jenkins of Putney: I think—
Lord Sandys: I think the noble Lord, Lord Rochester rose first.
Lord Jenkins of Putney: I think it is about time somebody against the amendment spoke. So far, only those in favour have spoken.
Lord Rochester: If the noble Lord, Lord Jenkins, will be patient he may hear one now. I have a great deal of sympathy with the general expressions of view there have so far been, but I have some reservations, on grounds not of principle but of practicality, about the making of secret ballots, before major industrial action, mandatory, at least at this stage in our development.
The Donovan Commission rejected the idea—I appreciate that was a long time ago—that an affirmative secret ballot should be held if the organisers of industrial action were to have immunity. Ex-
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perience in North America seems to be that more often than not ballots of this kind favour strike action rather than the reverse. The only instance in this country of which I know, the vote on the 1972 British Rail pay offer, is not an exactly encouraging precedent or a good advertisement for the idea.
There are other difficulties, as last year's Green Paper on trade union immunities showed. Once a strike has been endorsed by a ballot, settlement might be delayed by restricting the freedom of action of union leaders. There is the problem of how the question on which the vote is to be held is to be framed. For example, if the vote is on whether the employer's latest pay offer should be accepted, what happens if he then makes an improved offer? There are all those points and my fear, putting it as simply and briefly as I can, is that any attempt to force ballots of this kind on unwilling unions might prove counter-productive and encourage even more unofficial action than there is at present, and goodness knows! there is enough of that now.
For all those reasons, though my heart is very much with what the noble Lords, Lord Spens, Lord Boardman, and others have said—and perhaps one day we shall get there—I fear that my head tells me that at this stage it would be unwise to adopt the amendment.
10.15 p.m.
Lord Jenkins of Putney: I am glad that Lord Rochester's head is in the right place, even if his heart is not. In my own case my heart goes with my head. I regard the amendment as wholly undesirable. The whole of the Bill seeks to move in a direction which to me is the opposite of freedom. After all, what is the difference between a free man and a slave? It is that the free man is free to withdraw his labour. The whole of the Bill seeks to put curbs around him, to make it more difficult for him to withdraw his labour; to make it more difficult for workers collectively to do that. The purpose is to move more in the direction of the slave state and away from the free state. Oh yes, that is the whole of the exercise—
Lord Harris of Greenwich: May I—
Lord Jenkins of Putney: No, I shall give way in a moment. The whole object of the exercise is to curb the freedom of the trade unionist to excerise his right and his power to withdraw his labour. That is what it is. It is an anti-freedom Bill—
Several noble Lords: Oh, oh!
Lord Jenkins of Putney: I know that noble Lords opposite regard themselves as apostles of freedom, but they are not. They are apostles of the unbridled licence of the capitalist to exploit the worker; that is what they are about. Anybody—
Lord Campbell of Alloway: Will the noble Lord give way?
Lord Jenkins of Putney: No, not at present. I shall give way in a moment, but not just yet. I want to finish mentioning the point that noble Lords dislike,

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before I get on to the points that they will like. The point that they do not like concerns what I regard as the whole emphasis of the Bill, and the amendment seeks to drive the Bill to its logical conclusion. This is where I feel that the noble Lord goes wrong. He is exposing what noble Lords opposite are up to. Now, he must not do that. Until this moment noble Lords opposite have been able to present a civilised face, and to say, "We want to protect the public at large who have been exploited".
Well, of course, if the worker withdraws his labour, it inconveniences somebody, and the factor that determines whether his labour is important is the number of people whom he inconveniences. So, the Bill seeks to give the Secretary of State the right to determine, "Your labour is important, and therefore you shall not exercise the freedom which other people, whose labour is unimportant, shall exercise". If all of us here went on strike, nobody would care a damn; nobody would be inconvenienced whatsoever. In fact, society would probably benefit. If we all packed up and did not return for a week, it would not inconvenience anybody at all. But when the public are upset and inconvenienced because certain people withdraw their labour, that is the mark of the fact that those workers are really beneficial to society. They are the people who really matter, who really count, who actually do the work, and not merely talk about it, as we do. They are the people who run our society. They are the people who really matter.
The amendment proposes that it must be decided whether the strike is important, and, if it is, the Secretary of State may say, "You must have a ballot". But here I would point out to the noble Lord, Lord Rochester, that in quite a number of cases a ballot produces a pair of handcuffs, from which the executive committee cannot escape. That has happened in the present case that we are worrying about. The ASLEF committee is in difficulty at the moment because it cannot escape the consequences of its own actions. Therefore, it is not the case, as the noble Lord, Lord Spens, seemed to imagine, that the consequences of a ballot would be to restrain a Left-Wing executive committee. The consequences of a ballot might be to place the executive committee in a position in which it cannot negotiate a peaceful retreat.
If any noble Lord now wants to intervene, by all means let him do so; I am about to sit down. If the noble Earl, Lord Gowrie, reacts as I think he will, he will say that what is proposed in the amendment is going altogether too far. It is something that the Government do not want. I sit down confidently expecting to hear him agree with me—possibly not with the way in which I have expressed the argument, but with my conculsion.
Lord Aylestone: The noble Lord, Lord Jenkins, will pardon me if I do not follow him. In fact, my colleagues on this Bench are here because he is on those Benches. We have looked very carefully at the amendment in the name of the noble Lord, Lord Spens, and my old political opponent, the noble Lord, Lord Boardman. May I say first that we are not in any way opposed to pre-strike ballots? In fact, we favour them. But we are not really happy with the way they
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are proposed to be dealt with under this amendment, and for this reason: we cannot accept that it is the duty of a Minister of the Crown, the Secretary of State, to decide whether, in his opinion,
"action taken in a trade dispute is likely to cause widespread economic or personal damage".
It is not his duty. It may be somebody's duty. It may be that of the chairman of a company; it may even be that of a trade union official; but it is not the duty of a Minister of the Crown.
In fact, if he were to call such a strike ballot before a potential industrial strike and the ballot went against him and the strike took place, what a position the Secretary of State would be in! What would then be the action that the Secretary of State would necessarily have to take to call the ballot off? No; we would favour, even perhaps at a later stage, a different sort of amendment which would give us pre-strike ballots, but we would hope that it would not involve a Minister of the Crown.
The Duke of Portland: I am at a loss to understand how any of your Lordships who desires to see truth prevail can oppose this amendment. If a ballot is taken before industrial action, the union leaders will then know for sure that they have the full and genuine support of their members, and will not run the risk of having to call the strike off through lack of support. Moreover, they will be in a position to show the management beyond a shadow of doubt that the industrial action is not merely being fermented by loudmouthed militants but is based on a deep feeling of grievance.
I would suggest that the question on the ballot paper should be as simple as possible: for instance, "Do you or do you not accept the employer's offer?" Thus the employer will know that he has to make the best offer he can afford, and the employee will know that he has got as much as he can hope for. There will then be no further bargaining, but, hopefully, back to work and higher productivity.
Lord Campbell of Alloway: I support the views taken by the noble Lord, Lord Rochester. I, too, would urge your Lordships not to support this amendment, really for these three reasons. The first is the one put forward by the noble Lord, Lord Aylestone; that is, that it sets up the Secretary of State as an arbiter as to whether or not a ballot should be held—a decision which is not subject to any control, any judicial review, and which, frankly, brings the Government into direct conflict with the trade union movement and, in my submission, is wholly inappropriate.
The second reason is that it is too wide, too drastic and too interventionist, and is for those reasons a dangerous innovation, especially if, as many of us do, we wish to encourage a strong and responsible trade union movement. But the third reason is perhaps the most important, your Lordships may think, and that is because the amendment is wholly unworkable. If you look at the drafting of this clause, your Lordships will see that the opinion of the Secretary of State is in relation to the future effect of action already taken, not the threat of future action. If such be the case, how can he order a ballot before such action is taken? The noble drafting, with the greatest respect, is a nonsense.
True, the Secretary of State could order a ballot

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before such action is continued, but if the majority vote is in favour of the continuance, then how is such industrial action to end? Does the Secretary of State carry on ordering ballots every week, every month, to see whether it is to be continued? No, this question wants far greater thought. I also have considerable sympathy for the sincerity of those who feel that something ought to be done; but that feeling that something ought to be done is perhaps the most dangerous feeling of all in the sphere of industrial relations. What is done must be right.
10.25 p.m.
Lord Molloy: Following what has just been said, I am bound to say that in my judgment it is probably the most sober contribution on this amendment that we have heard. I feel that the referendum was born out of an emotional spasm because of the present railway strike. What I should like to be clearly understood is that every noble Lord and noble Baroness should know in their minds precisely, under existing legislation—legislation which is congruous (and has to be so) to the trade union rule books—the manner in which ballots are held. Then, there are the responses in different parts of the country. I am quite sure that what the noble Baroness said, talking as an ordinary woman to ordinary people, probably in the southern part of our country—
Several noble Lords: No.
Lord Molloy: Then in the wealthier parts of our country. It was said that there is a great animosity to the strike which is going on at the moment. But when one looks at the great industrial areas—and I have some experience of this—and at the results of ballots (and this is what I hope your Lordships will understand) one sees that sometimes, according to some trade union rules, ballots have to be taken region by region. Therefore, you can get an "Aye" vote in Wales and Scotland and a "No" vote in, say, the Midlands and in the South of England. Then the numbers have to be collated together and the decision is made. There is also the awkward part (which I think was adumbrated by the noble Lord who has just sat down) of how you get them back—which really means that unless all our objectives have been achieved they will stay on strike. That cannot be; so there must be another ballot.
Then there is also the very difficult situation that, in so far as the amendment refers, I believe, to the possibility of a trade dispute likely to cause widespread economic and personal damage and distress to persons not involved in the dispute and so on and so forth, it could conceivably be argued that some other issues equally cause this sort of damage to our nation. For example, I should have thought no one would disagree that when anyone innocently, mischievously, by accident or through stupid economic policies, has created 3 million unemployed in this country, we ought to have a ballot immediately. We call that ballot a general election. That seems to me to be a very fair thing to have to do. I do not know whether the Government would agree with that; if so we could all go home and prepare for the next election. But if they are going to argue that they support this amendment and those who submitted it, the logic is pure.
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The other thing that I think is very important to understand is the structure of some of our large trade unions on a regional basis. They are scrupulous in the manner in which their ballots are held. For example, the National Union of Mineworkers, as I am sure most noble Lords know, employ a highly reputable City firm to organise a ballot, to check it, to check every vote, which is scrupulously examined so that its authenticity is checked and the numbers are checked. It has nothing to do with the union. That is done under the rules of the union. Whenever a ballot is taken nobody within the union has anything more to do with it until the announcement is made.
What we have to be careful about is that when sometimes a ballot is taken and the majority is narrow, it can cause disruption within the union. If this was to cause some disruption among barristers, lawyers or Members of this House or other professional people, the damage is likely to be negligible. But where it can cause a serious dispute within a great trade union, and they were fighting—if I may use the term—among themselves for the honour of what they call democracy, which we all laud and praise in this House, then that too could cause irreparable damage.
My final point is this: I beg Ministers opposite and indeed every Member of your Lordships' House, let us not be too hasty and too savage in what we might like to do as individuals at a moment of anger and annoyance. What I am frightened of is this: the accusation of this House, the other place and of the British Parliament that when Polish trade unions declare their massive solidarity we laud and praise them, and when British trade unions want to do the same we call them disrespectful, disruptive and abusive. Such terms are heaped on their heads because they too have the guts and the courage when they think they are right—and they are not always right in their thinking.
I beg the Committee, as I think the noble Lord, Lord Spens has, not to disregard the 20 millions or 30 millions who are not trade unionists; but equally do not disregard the 12 million who are, and who are just as fervent in their support for, and total opposition to what is happening to, their fellow trade unionists in Poland. I beg this Committee not to allow a situation to arise where we and Members of another place will be equated to the vile behaviour of those who rule Poland, and what they have done to the Polish trade union movement, Solidarity. I hope that anything we might do will not sow that type of seed in the minds of the ordinary decent British trade unionist.
10.32 p.m.
Lord Beloff: I think that it would be appropriate, since both the noble Lords, Lord Molloy and Lord Jenkins, have from the opposition Benches opposed these proposals, to say something about their arguments. It seems to me to fit very closely the arguments which on other amendments, and other clauses, have been advanced from the Front Bench.
I think the argument just put by the noble Lord, Lord Molloy, could be turned upside down. It is, after all, a fact that in 1983 or 1984 the electors of this country, through secret ballot, will be able to say whether or not they wish the present Administration to be kept in office. Suppose I were to advance a Bill

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in this House and say that we should go back; that we should abandon the idea of secret ballots for our legislature; that we should have them done openly in public meetings where people could observe for whom others voted. I would be regarded as even more reactionary than the present Government. Yet on matters which affect the ordinary person a great deal more than who sits for Loamshire, this is thought to be a proposition which should not be advanced.
The point made by the noble Lord, Lord Jenkins of Putney, is an upside down point again because what is suggested is the precise opposite of what he said. He said that this was a way of denying workers the enormously important right to say whether or not they wished to work on the terms that some employer is offering them. But if they have the right to say this through a ballot then this particular freedom is best sustained. It is not identical with saying that some group or some leader may decide for them whether they should have this, any more than we would accept this in our political life.
It seems to me that this comes very close to the points which have consistently been made by the noble Lords, Lord McCarthy and Lord Wedderburn of Charlton, which has been throughout this debate not to pay a great deal of attention to the effect of this Bill on the fortunes either of our economy or on those who work in it. No reply was made to the noble Lord, Lord Marsh, when he indicated the number of jobs that had been lost in the newspaper industry through strike action, and not only in this country. But their interest has been the preservation of the prerogatives and rights of the constituted authorities named by the rule books of the unions.
It takes me back a long way, and perhaps noble Lords will pardon me—the noble Lord, Lord Wedderburn, has investigated history over the last 150 years at some length. I should like to go back a little further, to a very important Act of Parliament passed in 1468 and known as the Act on Livery and Maintenance. Some people think it is the beginning of our rule of law.
What were livery and maintenance? At a time when barons—perhaps the ancestors of some noble Lords present—ruled the country in what was known as bastard feudalism, they exercised their influence in two ways. They employed individuals and made a mark of their employment by giving them their livery or badge, and insinuated them into positions of power and influence. They adopted the legal cases of individuals, from whom they hoped in turn to get support, by intimidating courts and juries and officers of the law. And that was known as maintenance.
It seems to me that when, over and over again, the noble Lord, Lord Wedderburn, has said, "I know the Government are not going to accept this: just you wait and you will see what will happen"—that is, that some other form of action will be taken to prevent the operation of this Act—then I say in all sincerity that I do not regard it as in any sense humorous that the noble Lords, Lord McCarthy and Lord Wedderburn, Lord Molloy and Lord Jenkins of Putney, are the livery and maintenance men of the modern industrial barons of the trade union movement.
If they are prepared to say that that is what they want
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—they want to preserve untouched the present structure: they do not want ballots or intervention, or the possibility of intervention by the ordinary union member—let them get up and say so. But even if they do not, it seems to me that by now, after listening to them for nigh on four days, we at least know where they stand.
Several noble Lords: Hear, hear!
Lord George-Brown: May I perhaps intervene again, because I think, if I may say so, that the noble Lord, Lord Beloff, has put his finger on the issue. I listened to the noble Lord, Lord Jenkins of Putney, making a speech which was not in favour of free men: it was in favour of the appointed, maybe self-appointed, maybe the oligarchically-appointed general secretary of Equity; it was exactly the speech that General Jaruzelski made against Solidarity. It was exactly the basis upon which Lech Walesa was taken out of circulation Lech Walesa and Solidarity were, rightly or wrongly, badly or well run, trying to establish the right of ordinary shipyard workers in Gdansk, ordinary colliers in Katowice, to take a different view from the Hugh Jenkins's of this world, from the Moss Evans's of this world, from the Scargills of this world. What General Jaruzelski said is, "You shall have a trade union movement of which I approve and you will obey the orders of those who lead it", and, with the greatest respect, that is exactly what Lord Jenkins of Putney put forward tonight.
If I may say so to my noble friend across the way, any barrack room lawyer can nit-pick the words. May I say to the noble Lord, Lord Rochester, that it is open to any Liberal to argue, but today is not the right time. Lloyd-George knew differently from that. We can revise the wording. I do not like the word "order". You do not order trade unions; you request or require. We can argue the terms of the amendment.
Let us discuss what we are trying to do. We are trying to establish that the ordinary fellow or lady who makes up a union shall, at the end of the day, determine its policy; shall determine what effect they impose upon themselves and upon their fellow men and women. They shall decide it, not the man or woman who, because of a clique organisation within an organisation, get themselves into power and order the rest, on pain of dismissal, on pain of all kinds of things, to follow them.
I was rather shocked at the speech of my noble friend—I should call him my noble leader, I suppose—Lord Aylestone. That we in the SDP should not be willing to stand up for this principle seems to be absolutely shocking. We are for the nation, and the nation is not just even the workers. It most certainly is not just those who run the trade unions, however they have got there; and it most certainly—if I may say so to the noble Lord, Lord Rochester, and my noble friend over here—is not a cosy arrangement between those who run the unions and those who run industrial enterprises, such as the CBI. At the end of the day, this has to be the right of individuals.
If I may now address myself again to the Labour Front Bench, although I doubt whether they will listen to me, when I was a full-time trade union official I had to carry my members with me. In those days I did

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not need secret ballots, but equally, neither did I ever have a mass meeting on a rubbish tip outside a large factory where you could not tell who was holding up two hands and who was holding up one. I had my meetings either in the canteen, if the employer was sufficiently wise in those days to let me, or I had them in the local hall, which I hired for the purpose.
Those were the days when fellows lived fairly near to their place of work. One could always consult one's people and be supported by them. The situation today, my noble friends, is quite different. People live a hell of a long way away from where they work. The buses are queueing up to take them off the moment they are finished. There is no way in which you can get them to the kind of trade union meeting we used to know, so, out of a labour force of 20,000, you get 100 or 1,500 on a rubbish tip at lunchtime. You have got yourself a result.
Alternatively, you have a craft union like ASLEF whose officials are fighting more for their economic life than they are fighting for the lives of their members. They have lost so many members already that when they lose another 3,000 or 4,000 they cease to be a viable union. The most terrifying thing for Arkwright House will be when they have to amalgamate with the NUR because there is nothing else they can do. That is what this row is about more than anything else. If you consult their members, their members are not concerned.
The whole situation of British trade unionism is different from what it was. Leaders now lead by their authority, their authority being backed by the closed shop and by employers who do not want cosy relationship disturbed. Men and women are ordered about. Tea ladies, for God's sake, the tea ladies on 30 hours a week are sacked because they do not accord with the views of the leaders of USDAW. It is a different world, and in a different world one must provide different remedies.
When I was an official, the idea of having a secret strike ballot never occurred. For 15 years I organised 26,000 people in most areas of this country. I had no more than one strike in the whole time. I had no need to have recourse to a secret ballot. All mine were open but were at places where all the people were there. We are not living in that world now. I urge the merits of the intention of the resolution, but, like Lord Spens, I shall not hang myself on the actual words. The spirit can be accepted and we can talk about the exact wording.
I am now what I used not to be, absolutely persuaded that if ordinary railwaymen, ordinary workers who pay their union dues—and to the noble Lord, Lord Rochester, I say, let us remember that even that has changed and few union members pay their dues—get a pay cheque at the end of the day, their union dues matter no more than their PAYE or their national insurance. They are just deducted. They no longer go to branch meetings. They are no longer contacted by branch secretaries. They are no longer contacted by branch collectors. It is all taken off the pay cheque. It has become such an ordinary thing.
What those of us who support this amendment and others like it are trying to do is to bring back some democracy, some membership responsibility. I know
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that clever men can laugh at me about this, but there is only one form of democracy. There is only one form of responsibility: where the individual has the power to exercise it in a situation in which he cannot be victimised for doing it. It is for this reason that I have come round to the view that for electing senior officials of a union, for having membership agreements—as we call them, oddly enough, in this Bill under 58A which we have already passed—for deciding to inflict economic and social consequences upon the nation and upon ourselves, we, the union members, should be allowed to say that that is what we want.
"Now then", says Lord Rochester, "Now then", says Lord Molloy," if you ask them whether they want to do it, what do you do if you want to ask them whether they want to end it? "I suppose the answer is, "You do the same". But in fact they will not do that. Lord Rochester quoted something that happened in 1972. Has he forgotten what happened in the Transport and General Workers' Union much later than 1972 when the leaders of the Transport and General Workers' Union, Mr. Moss Evans and the rest, were thrown right overboard? Has he forgotten what happened in the AEU with "Red Robbo"? He was thrown right overboard. Has he forgotten what happened in the Yorkshire coalfield when Mr. Scargill was thrown right overboard? Has he forgotten what happened in the NUM when Joe Gormley stood up and said, "I don't seek to tell you how to vote, but think twice". There are many examples.
I presume that at the end of the day my noble friend will withdraw the amendment for further consideration. Let us consider how we can better draft an amendment to achieve this purpose. But I say to my ex-Labour Party colleagues and I say to Lord Aylestone: do not let us kid ourselves. We have a union movement, the leadership of which has for the most part never been so unrepresentative as it is now. We are not dealing with a situation which he and I knew. We are dealing with a situation in which cliques get power by exercising the means to get power and then order their people into place.
Against that situation we need some protection, and the only protection that I can see is that in certain cases, for certain purposes, it is necessary to require of a trade union that it takes a secret ballot of its members. I hope that the Government will offer such a reply tonight, after we have heard the expertise of the Front Bench. I hope that the Government will offer such an answer as will enable the noble Lord, Lord Spens, to say that he accepts that this is not the right wording and that he may discuss between now and Report stage what is the right wording.
But we need some such thing in the unions as they are now organised if we are not to totally destroy, as we are now doing, the social fabric of this country. Who could believe that the First Division association of civil servants, the Secret Communications Branch, could be ordered about like this without anybody actually asking them. Is that what you want to do? Because the nature of the trade union movement has changed, we have to do something like this. The Tolpuddle Martyrs were martyred by the landlords; the trade union leadership is martyring the trade unionists today.
10.56 p.m.
Lord McCarthy: I want to say only a few words because the case from our side of the Committee has been put very well by my noble friends behind me. I merely want to say that we agree with what they have said and we agree with what the noble Lord, Lord Rochester, has said. We believe that this is something which has actually been tried. It has been tried, as he said, with the 1971 compulsory ballot and it failed. It has been tried in the United States. It has been tried in Canada. It has been tried in British Columbia. It has the effects that he said it has; the experience is that strike ballots are overwhelmingly likely to go in favour of strike action and that, as a result, they restrict the freedom of officials to settle. I am quite certain that whatever reasons the Front Bench give, they will give different reasons; but they will come to the same conclusion—that for those reasons or other reasons, the Government will decide, at this stage at least, not to support this amendment.
I am sorry to see that the noble Lord, Lord Beloff, has left the Chamber because I wanted to thank him. He gave me a clear idea (I said the other day I did not know what it was, but I know now) of what a Second Reading speech is on Committee; that is what he has given us. If he wants to read my works, such as they are, he will find that they are full of criticisms of the trades union movement. For example, he will find in The Closed Shop in Britain, which many Members of this House have quoted, that I was suggesting in 1964 that something should be done about existing employees when the present Government and subsequent Governments thought that it was perfectly all right to exclude them from closed shops and give them no compensation at all. Nevertheless, my noble friend Lord Wedderburn of Charlton and I, although we often criticise trades unions, do not criticise trades unions in the way which noble Lords opposite do; and in particular, we do not take our criticism to the point where we support this Bill. That is the difference between us. We believe that this Bill is a bad Bill and we seek to improve it by amendments.
I now come to this amendment in particular, and I want to ask just one question of the noble Lord, Lord Spens, because in this very long and interesting debate it is a question that has not been asked. I want to ask the noble Lord what he means in his Amendment No. 119A when he says,
"(6C) A ballot under this section shall be conducted in accordance with the provisions of Section 58A of the 1978 Act."
That puzzles me—in the first place, because that part of the 1978 Act deals with unfair dismissals and, of course, it deals with union membership agreements. Therefore it deals with whether or not dismissal is on grounds of trades union membership. I am not quite clear why that is there. I wonder whether what the noble Lord means by it—in which case he would be going far beyond anything which the previous Government would have done in 1971 and anything which I know anyone to have done who has introduced compulsory ballots—is that he would be insisting upon an affirmative vote of 80 per cent. of those entitled to vote or 85 per cent. of those voting. If that is what he means by the reference to Section 58A of the 1978 Act, that is an extra reason why we should vote against his amendment.
11 p.m.
The Earl of Gowrie: I think this has been almost an hour's debate and perhaps it might be for the convenience of the Committee if I now very rapidly gave the Government's view. I think this is what could be called a "Yes, but" amendment. I wholly agree with the noble Lady, Lady Saltoun, that if you asked 100 ordinary sensible people whether there should be ballots held in secret about the holding of major strikes, the overwhelming majority, perhaps over 90 per cent., would say yes. It is a certain and true instinct of people that this kind of opinion should be taken and should be taken away from harassment and in secret. The "buts" are when you try to start to work it on the ground, and they are rather more than a question of the wording of the amendment. A substantial "but", a substantial objection, in the particular amendment, rather than in the general sentiment which I am trying to express, is that the Secretary of State, the Government, here would be asked to intervene in a major dispute.
We have some experience of trying to deal with the issues surrounding mandatory strike ballots. The issues were rehearsed fairly and squarely in the Green Paper, Trade Union Immunities, and we sought views on measures of an emergency nature such as that proposed in this amendment, as well as on whether unions should be required to hold secret ballots of their members before any strike at all. We sought views from those on the ground, and many of those who replied to us were, of course, employers.
Numerous employers—indeed, the majority of employers—came out against legislation in this area. I stress the word "legislation", because I am not saying that employers were opposed to ballots or opposed to secrecy. A reason they frequently advanced was that they wanted to retain the initiative to ballot their employees themselves, where they thought it would be conducive to resolving a dispute. That seems to us to be a compelling argument. The present amendment—not because of any drafting or technical deficiences—takes no account of an employer's wishes. A ballot, it seems to me, is rather like the ultimate ballot—that is, it is rather like a general election. Once you get into a general election, it is hard to get out of one until the issue is resolved, even in the interests—which of course does not apply during a general election—of achieving a particular settlement of a particular dispute.
The other thing is that the amendment is geared to the big strike, the major strike which affects public attitudes and perhaps public services. Major strikes of this kind inevitably occur in highly emotive situations. I must say I do question whether Government intervention would have the effect of settling a dispute, whether it might not have the effect of hardening attitudes and prolonging the dispute, perhaps even into a comment before a general election on the Government concerned. I would also say that this particular Government have, in my view, been rather successful in keeping out of industrial disputes, in trying to restore the authority of managers to manage, and of unions to negotiate with their employers free from Government intervention. We are sometimes criticised and teased for this. It is said that there are not enough beer and sandwiches at No. 10 Downing Street. I am far from

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persuaded that beer and sandwiches at No. 10 Downing Street are the best way of settling disputes.
I must say also that I agreed with the noble Lord, Lord Rochester, when he reminded us that in British industrial relations the worst trouble tends to happen in unofficial disputes rather than official disputes. Again, this kind of amendment would make a little dent on unofficial action. The Government, however, are very sympathetic to those who wish to strengthen the democratic rights of trade union members as individuals, and much of what the noble Lord, Lord George-Brown, said was not only experienced, but very powerful in this respect.
I would remind the Committee that we have introduced a scheme whereby unions may apply for reimbursement of the costs incurred in holding secret postal ballots on certain issues, including the calling and ending of strike action. I must say that we are not convinced at this time that any further legislation on strike ballots would be, to use the word of my noble friend Lord Campbell of Alloway, "workable". I therefore hope that the noble Lords will not press the amendment, secure, however, in our conviction that we must look at this issue continually to see if there is some way in which we can resolve it.
Lord Hankey: I hope that, without unduly lengthening this debate, I may be allowed to say a few words. I do not share the view of the noble Earl about the action which the Government have taken, having been so successful in the industrial relations field. I must honestly say that I think that the Government were elected in order to protect the public interest from unreasonable action by sectional parts of our community. I really do think that the great majority of our people would go along with my view that the Government have not really taken the action that was expected of them.
I personally consider that this is a particularly well drafted amendment. The noble Lord, Lord Aylestone, and the noble Lord, Lord Campbell of Alloway, said, for instance, that they did not like the idea of the Secretary of State being involved. I ask the Government: who is going to protect the public interest if the Government do not stand up for it? The public interest is going by default and this country is still going downhill on that account. Honestly, somebody has to take this question under his arm and make the thing get going. I do not know who is to do it unless it is the Secretary of State.
I think that the Secretary of State is just the man who should do it. He is politically elected, democratically elected. He is in charge of an enormous Ministry—full of "wet" people, I am afraid—but I think that he is the right person to take the action. Who else will protect the public interest? At present we have no trains and members of the health service are deciding what supplies go into hospitals. The place is in chaos. It is the Government's business to see that this sort of thing does not disable our community in essential parts of the economy. I thought that my noble friend the Duke of Portland made an excellent speech on this subject.
I hope very much that the Government will consider this again. I can see that they are going to ask for assistance from their supporters, and that the Labour
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Party is going to ask its supporters to vote against it. I would like to ask them to consider this issue very seriously. It is not enough to look at it, as my noble friend Lord Gowrie has said: they really have to get on with it. I urge this on the Government. I think that the Secretary of State is the right person to do it. If a union decides for a strike in the ballot which he orders, I do not think that the Secretary of State loses a lot of face: it just proves that the situation which my noble friend Lord George-Brown mentioned has not occurred—and the great mass of the union support it. That is all right. We must have strikes if they are democratically supported in that way. In my opinion, the Secretary of State does not go down; he goes up because he has tried to protect the public interest.
Finally, subsection (6C) says that we do it in accordance with the new text of Section 58A, which we have recently approved, which provides for secret ballots. I think that it makes sense. Therefore, I ask the Government to do more than think again; let them act.
Lord Spens: We have had a very interesting debate. It has gone on for very nearly 70 minutes. I want to thank everyone who has taken part, whether or not they have been supporting my amendment, because it will be extremely useful to read everyone's views. I have no doubt that we shall come forward again with something else. I am disappointed in the Government's attitude because they seem to want to stay aside from these major situations where it is not just a question of employer versus employee; it is a question of the other three-quarters of the nation who have nothing to do with the industrial trouble and who are being affected.
We have heard a great deal from the noble Lord, Lord Molloy, about his 12 million trade unionists. His arithmetic was not very good. There are altogether 44 million people over the age of 14 in the United Kingdom, and if you take 12 million away from that number you are left with 32 million who are not, and that is very nearly three-quarters of the whole. So that his 12 million, even if they were all of one accord—and I am quite certain that they are not—would, between them, provide only one-quarter of our total adult population. It is what happens to the other three-quarters that worries me.
Lord Molloy: Where does the noble Lord get the impression that all British trade unionists are single and do not have wives, children, aunts, uncles, and so on? Would he explain to the Committee why he believes that?
Lord Spens: They may have wives and children, but it is not necessary in these enlightened days that those wives and children support them. In fact, I think in many cases they do not support them. In fact, it is very often the wives who bring their erring husbands back to reality by telling them to stop striking. That is by the way.
I support very much the words of my noble friend Lord Hankey. It is the problem of the public and the public interest which must be looked at now, and it is only the Government who can do it. You cannot stand back and let this chaos continue and simply say that we must not get ourselves involved

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in an industrial dispute. It is getting to the stage where the country is becoming bankrupt because of the difficulties and the impossibility of ordinary men and women carrying on with their jobs. I shall certainly ask leave to withdraw the amendment, but I reserve my right to bring it back in some other form on Report.
Amendment, by leave, withdrawn.
[Amendment No. 120 not moved.]
[Amendment No. 120 A had been withdrawn from the Marshalled List.]
On Question, Whether Clause 13 shall stand part of the Bill?
11.14 p.m.
Lord McCarthy: We do not wish to hold up the Committee at this time of night, but we feel at this stage that we must say why we believe that this clause is a bad clause and is opposed. Essentially, the clause is simple. It aims to repeal Section 14 of the 1974 Act and, therefore, it aims to open trade unions to tortious liability in the area of an industrial dispute. It is as well to ask—because until we got to clause stand part it was not logical to ask—why that is necessary today.
I think the answer, first, is that history has shown it to be necessary and that the contemporary situation reveals it to be more necessary than ever. The history of trade union law has been a history of false dawns, and at this time of night I do not intend to go through one false dawn from the time of R v. Bunn in 1872, right down to Rookes v. Barnard and beyond.
It has been a series of false dawns; of occasions when the trade union movement were led to believe that they had legislation enacted which gave them protection for their normal occasions and businesses within the context of a trade dispute. Then in the language that my noble friend Lord Wedderburn of Charlton used earlier today, because of what he called the genius of the creativity of the common law, judges found, invented, created or discovered ways in which things were otherwise. Unions found over and over again that areas of immunity which they thought were theirs were not theirs any more.
Therefore, they enacted, or their friends enacted for them, in 1906 and again in 1974 and 1976 what you might call the belt and braces clause—a clause which says in broad terms that there is a limit to liability, and that liability shall lie against individuals but it shall not lie against trade unions per se. That is the historical reason. When one looks at great historical figures in the past who have been mentioned in debates in another place—for example, Sidney Webb and the Donovan Commission—who did not think so, it was because they were optimistic. Sidney Webb thought in 1902 that he had a definition of what we would now call a trade dispute which would be perfect, which would be safe, and watertight. He thought he had such a first-class belt that he did not need any braces. But it turned out not to be so.
Similarly the Donovan Commission thought, for example, that if they could extend immunity in the context of a trade dispute to commercial contracts, which they thought at the time was the main area in which the creativity, or whatever you like to call
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it, of the common law had set aside the assumed effects of the 1906 Act, then trade unions would be all right. But it did not turn out to be like that. A series of cases was developed on a whole series of grounds which I do not want to go into tonight, which led us to a situation in which once again we felt in 1974 and 1976 that we needed this belt and braces clause. That is the historical reason.
The contemporary reason is the new liabilities under this Bill. These are the liabilities under the 1980 Act and the further liabilities under this Bill, which we shall be discussing when we discuss further clauses in this Bill. When you put alongside the historical conditions and the history and the extremely unsatisfactory nature of the immunities position of the trade unions arising out of the 1980 Act, the further liabilities on union membership agreements and liability for union labour only contracts, and the crucial redefinition of a trade dispute which we are going to hear about later, this represents a general area of liability which is serious enough for individuals but is potentially catastrophic for trade unions themselves.
We have tried to put forward a whole series of amendments to reduce the scope of this clause. We have met with no success whatever, and we are not all that surprised. Therefore, the Government have to rest their case either on their belief that they want to put unions in this position, or in a belief in one side, the weaker side, of the arguments put forward in their Green Paper. Never was there a section of the Green Paper in which the argument was so weak on one side and so strong on the other, though God knows they tried their best! They trotted out all the old argument that tortious liability would exert greater discipline over strikers; prevent strikers striking; help to avoid martyrs; enable employers to get total redress. Alongside them they set the much more persuasive arguments—they were even rather longer—about the nature of the power relationship inside trade unions, about the impossibility of expecting trade unions to act as policemen, about the encouragement of unofficial action which would follow from this policy and the fact that employers wanted stable relations rather than revenge. In the end—not in the Green Paper; that was almost over-fair—we have a Government who have introduced this clause in this Bill, and we oppose it tonight.
On Question, Whether Clause 13 shall stand part of the Bill?
11.22 p.m.
Their Lordships divided: Contents, 84; Not-Contents, 27.

DIVISION NO. 3

CONTENTS

Ampthill, L.

Craigavon, V.

Avon, E.

Craigmyle, L.

Aylestone, L.

Crathorne, L.

Bellwin, L.

Davidson, V.

Bessborough, E.

De Freyne, L.

Blake, L.

De La Warr, E.

Boardman, L.

Denham, L.—[Teller.]

Caldecote, V.

Drumalbyn, L.

Campbell of Alloway, L.

Eccles, V.

Cathcart, E.

Elliot of Harwood, B.

Coleraine, L.

Elton, L.

Colville of Culross, V.

Energlyn, L.

Cork and Orrery, E.

Faithfull, B.

253

Ferrers, E.

Mowbray and Stourton, L.

Forester, L.

Murton of Lindisfarne, L.

Fortescue, E.

Onslow, E.

Gainford, L.

Platt of Writtle, B.

George-Brown, L.

Redesdale, L.

Glenarthur, L.

Rochester, L.

Gowrie, E.

Romney, E.

Gridley, L.

Saltoun, Ly.

Hankey, L.

Sandford, L.

Harris of Greenwich, L.

Sandys, L.—[Teller.]

Harvington, L.

Seear, B.

Henley, L.

Sempill, Ly.

Home of the Hirsel, L.

Simon, V.

Kennet, L.

Skelmersdale, L.

Kilmarnock, L.

Spens, L.

Kinnaird, L.

Stodart of Leaston, L.

Long, V.

Tanlaw, L.

Lyell, L.

Taylor of Gryfe, L.

Mackay of Clashfern, L.

Teviot, L.

Mackie of Benshie, L.

Thomas of Swynnerton, L.

Macleod of Borve, B.

Tordoff, L.

Mansfield, L.

Trefgarne, L.

Margadale, L.

Trenchard, V.

Marsh, L.

Trumpington, B.

Massereene and Ferrard, V.

Vaux of Harrowden, L.

Whaddon, L.

Monk Bretton, L.

Wilson of Langside, L.

Montgomery of Alamein, V.

Winstanley, L.

Yarborough, E.

Mottistone, L.

Young, B.

NOT-CONTENTS

Ardwick, L.

Kirkhill, L.

Birk, B.

Llewelyn-Davies of Hastoe, B.—[Teller.]

Bishopston, L.

Blease, L.

McCarthy, L.

Brooks of Tremorfa, L.

Molloy, L.

Collison, L.

Oram, L.

David, B.

Peart, L.

Davies of Leek, L.

Pitt of Hampstead, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L.—[Teller.]

Ewart-Biggs, B.

Gosford, E.

Stone, L.

Hatch of Lusby, L.

Underhill, L.

Jeger, B.

Wedderburn of Charlton, L.

Jenkins of Putney, L.

Wynne-Jones, L.

John-Mackie, L.

Resolved in the affirmative, and Clause 13 agreed to accordingly.
Clause 14 [Limit on damage awarded against trade unions in actions in tort]:
11.29 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 121:
Page 16, line 42, leave out subsection (2).
The noble Lord said: We now come to a situation in which your Lordships' Committee has voted for the revival of the Taff Vale principle elaborated by my noble friend. Therefore it becomes important to trade unions—by which I mean especially to trade unions, in the sense that they are an aggregation of human beings, who are the membership, and who are the union—to know what provision the Government are prepared to make in respect of the funds of the union, having regard to actions for damages, which were touched upon in earlier amendments, the debates on which some noble Lords might have heard.
Of course one could do nothing at all. If one really believes that in the High Court the doctrines of the law of tort should be applied to the union in the
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same way as to any other organisation—putting aside for the moment the question of its status as an unincorporated body, and the difficulties of procedure; ignoring all difficulties of that kind—one might say, well, it is a body which has trustees and funds, and with suitable procedures we shall make it answerable; and that is that. The interesting thing is that the Government do not say that.
Clause 14 is a clause which indicates that the Government see that there is a problem. It is a problem which arose some 20 or 30 amendments ago—a little more than that in minutes; I am amazed at the way in which this Committee has dealt with some of the amendments tonight, but it has been interesting to watch. The limitation which Clause 14 puts down upon the ability of the plaintiffs to be awarded damages against a union is a very special privilege, I suppose. Some noble Lords who spoke in the previous long debate about the ballots that they wanted held, and who are no longer with us, would say, I apprehend, that perhaps it is quite improper that this special privilege should be placed upon the damages that may be awarded to a plaintiff against a trade union. Subsection (3), which provides a limit of £10,000 for the smaller union ranging upwards to a quarter of a million pounds in one set of proceedings for a union above 100,000 members, is obviously a very special provision. That is the context of the amendments which are now coming before your Lordships, and also the clause itself.
This amendment goes to a particular point in that regard. The limits go together with a system of protection in Clause 15, but there are exceptions. In Clause 14(2) the limitation of amount does not apply to the designated causes of action in paragraphs (a) and (b). They are, in paragraph (a), personal injury arising from,
"negligence, nuisance or breach of duty";
and in paragraph (b):
"without prejudice to paragraph (a) … for breach of duty in connection with the ownership, occupation, possession, control or use of property (whether real or personal or, in Scotland, heritable or moveable)".
That means all property.
If we take those two paragraphs and examine them with this in mind, we have, I think, a case for saying that the subsection as it stands should be removed from the Bill. I am not going to indulge in the fashion, which has rather invaded your Lordships' Committee in the last few hours, of suggesting that when people say one thing they mean another; I take it that the Government mean what they say in Clause 14 generally, and that they wish to limit the damages that may be awarded against a trade union. Exactly why they want to do that they will say, I hope, on the Question, Whether the clause shall stand part of the Bill?
But, then, to that they make an exception and say, "No, here the union must pay in full". So the logic of such a structure should be that these are rather special cases, or that they can be justified by some special considerations. These are torts, perhaps, which are not the industrial torts. The logic—to us the illogic, but the explanation—of the previous division between the statutory code of agency and the common law code of agency which will apply to different types of tort in actions from the date of the coming into effect of

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this Bill would then be matched by two different areas of tort liability, where the limit did apply and where it did not apply, hopefully in the Government's view reflecting the industrial and the non-industrial situation.
That is the logic of subsection (2) as I read it, and as I read it in the context of such debate as took place in another place. Because, of course, in another place, after Clause 4, the guillotine fell—and perhaps that is a factor which should have been considered during the course of the Bill through your Lordships' Committee rather more than it has been. If one looks at subsection (2) one should find narrow areas or easily definable areas of tort liability which are not industrial. At first glance it looks easy to do so. The first seems to relate to personal industries—and no one would suggest at first glance that that is a normal cause of action in an industrial or an economic tort case—and the second seems to relate to ownership or use of property. When we examine them a little more, we find that that is not the meaning of the clause.
I take with subsection (2) subsection (6) which defines "duty" to mean a duty imposed by any rule of law or any enactment; and "personal injury", which includes disease or any impairment of a person's physical or mental condition. If I may take physical injury first, that is any personal injury which includes any disease and any impairment to the person's physical or mental condition arising from any breach of duty—because the "breach of duty" as defined in subsection (6) applies to all rules of law, common law and enactments.
It is not very difficult to imagine a case where some impairment of a physical or mental kind, be it a breakdown or anything else, arises in an industrial case. So there is one area where the exception is not completely congruent with the industrial tort/non-industrial tort division. But much more important is when we come to paragraph (b), because there we have a phrase which has been taken, as I shall suggest in a moment, from another part of the statute for a different purpose and which has been put here and has a much wider effect than appears at first sight.
What does it mean to say that you will be liable for breaches of duty in connection with the use of property, including personal property as against real property—which to those of your Lordships who are not lawyers in real and ordinary language means land and all other types of property whatever, including rights in contract? You may take the use of property rights ignoring land, the use of a car during the course of flying picketing, the use of a printing press on which there is some judicial dicta; but the noble and learned Lord the Lord Advocate need not worry, I am not going to cite them, partly because the best ones are Irish and it would delay the Committee. But he would agree, I am sure, that the place from which these words came has been judicially discussed and not made very clear; and it is possible to give it a very wide meaning; the use of property, the use of the printing press, the use of union notepaper. Indeed, that was adverted to in the Heaton case in the course of discussion of implied authority of the unions to shop stewards when they were allowed to use the premises and allowed to use the notepaper.
So we find that, if during the course of an industrial
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action, there is tort liability around, it may well be that the cause of action is based upon interference with contract, but it may also involve—and I only take the words of the statute because those are all we have—"a breach of duty in connection with the use of union property". Indeed, it may not be union property in terms of ownership. It may be only in union control.
The examples that one could give are plainly legion and the exact place where courts would draw the line is uncertain; but there are situations where, even in paragraph (a) and, certainly, in paragraph (b) (and there are many situations in paragraph (b)) the limit disappears because you are within what is said to be the exception. The importance of that to the union and to its members is that liability in damages is then unlimited.
I repeat that I am not saying to the Government: "We do not think you mean what you say." I am saying to the Government: "We think you have made a mistake and we think you know why you have done it"—because what the Government have done; and the noble and learned Lord adverted to this in an earlier debate; and I did not stop then because it is appropriate now; the place where the Government found these words was, of course, in Section 14(2), by a curious chance of history the same number and Section (14(2)) of the Trade Unions and Labour Relations Act 1974 which was enacted as a modernised version of the second part of Section 4 of the 1906 Act.
What that said was that there should be an exception to the trade union immunity in tort; but it did not enact exactly what Clause 14(2) here says in that respect. What that said was, having established the trade union immunity against the Taff Vale principle, it should be restored as it has existed from 1906 to 1971. The 1974 Act then said that there will be an exception to the principle of trade union tort immunity where liability is not arising from an act done in contemplation or furtherance of a trade dispute—that is to say, any negligence, nuisance, breach of duty, and so on and, without prejudice, other breach of duties in connection with ownership and use of property. That is precisely the same formula which I have not read in full. What the Government have done is to take an exception to the immunity which related to acts done not in furtherance of a trade dispute, take the formula out when they were looking around for some way of finding a formula that seemed to suit them as an exception to the limitation on damages, knock out the point about trade dispute and say. "Let us put that in".
The effect of doing that, using old words for a new purpose, which is going to appear again and again in the Bill, is to create a very unsatisfactory situation because, now that noble Lords have expressed their wish to retain Clause 13, it will be very important indeed in particular cases to know whether the limit applies or not. It is a had enough limit if it applies in any set of proceedings, and one wonders whether £250,000 could not be claimed by two different writs which dealt with two related incidents; and if, in addition to that, the ambit of subsection (2) is uncertain and may be extraordinarily wide in relation to paragraph (b), then those to whom the limitation of liability in damages is presented will see it as some

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kind of false prospectus. It may be that cases show that it is not worth very much. I say, if the Government do not mean to give that impression, will they reconsider the very wide terms in subsection (2)? I beg to move.
Lord Mackay of Clashfern: This amendment seeks to delete subsection (2) of Clause 14, which sets out a number of circumstances in which the limits on damages shall not apply. These are, broadly, proceedings for negligence, nuisance or breach of duty which results in personal injury; or for breach of duty in connection with the ownership or use of property. The effect of this amendment would be to apply the limits to cases of this type.
The Bill does not apply the limits to cases involving these torts because trade unions are already liable for damages without any statutory limit in such cases if they are committed other than in contemplation or furtherance of a trade dispute. So the Government's thinking is that, where the liability is presently ousted by means of the immunity, where the immunity is withdrawn, the limit should be put in its place. But the situation would be rather difficult if arbitrary distinctions were made purely on the grounds of the trade disputes. The unions presently have this liability by virtue of Section 14(2) of the 1974 Act, which makes cases of this sort the only exception from the present almost "blanket" immunities given to trade unions. The unions have had this liability since 1906. It has caused no problems in the past and so it would be a retrograde step to impose a limit where none exists now. This is particularly so since these cases include personal injury resulting from, for example, union negligence, such as a person run down by a badly maintained union van. In the case of loss of life or serious injury, it really would be hard to justify limiting a claim for damages to, in the case of a small union, £10,000. Of course, it is perfectly possible that the claims in this area would be covered by insurance.
However, subsection (2) will also mean that no limits will apply if these torts are committed in contemplation or furtherance of a trade dispute, for which at present trade unions do have immunity under Section 14 of the 1974 Act. This has been because it is difficult to justify treating cases involving, for example, personal injury differently simply on the grounds that they do or do not occur in contemplation or furtherance of a trade dispute. In our view, it is right that, just as now there are no limits on the damages which can be awarded in these cases if they arise outside a trade dispute, there can be no justification for applying limits to the same cases if they occur inside a trade dispute in matters of this particular type. By treating these torts in the same way inside and outside the context of a trade dispute the Bill is correcting an anomaly in the present law, and using it as the basis for the definition, as the noble Lord, Lord Wedderburn, has explained: this is something which has been in the law for some considerable time. I hope, in the light of that explanation, that the noble Lord will feel able to withdraw his amendment.
11.46 p.m.
Lord Davies of Leek: May I ask the noble and learned Lord a question seriously? Under Section 14(2) of the
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1974 Act, as the Minister has already said, trade unions are already liable for such torts outside a trade dispute. I want to know here, having been interested in statutory instruments for many years, about all these amounts of £125,000, £250,000, large sums of money, that could be paid out under subsection (3). Under subsection (4) the Secretary of State is enabled to vary these limits by order. That kind of order, again, is in the negative form, is it not? Can the noble and learned Lord explain what exactly that means?
Lord Mackay of Clashfern: We will come to that particular matter in a moment. The point I have to explain is based on what the noble Lord, Lord Davies of Leek, said first. The justification for Section 14(2) is the present position, as he has correctly explained. So far as the power to amend by the Secretary of State is concerned, that is obviously to take account of possible changes in the value of money, and it would be normal for the Secretary of State to have power to vary such figures. It would also be normal for that to be subject to negative resolution. That is the way it is in this Bill.
Lord Davies of Leek: I am grateful. I have it now: it is a movable feast. These compensations or prices will move with the value of money, or with inflation. If they can be increased upwards, can they be increased or decreased downwards if we go into deflation?
Lord Mackay of Clashfern: There would be some difficulty in increasing downwards, but certainly it might be possible. The noble Lord envisages the possibility that if this Government continue it might be possible to envisage a situation where it would be appropriate to vary them downwards. But the idea is to provide flexibility in the numbers provided on limits of damages.
Baroness Seear: Does the noble and learned Lord see any distinction between the offences referred to under subsections (a) and (b)? One can see that,
"for any of the following resulting in personal injury to any person, that is to say negligence, nuisance, or breach of duty",
there is a case for saying that the sky is the limit for damages. But is there not a point of considerable substance when it refers to the ownership of property, the control or use of property and so on, where it is in furtherance of a trade dispute? As the noble Lord, Lord Wedderburn, has said, one can envisage a lot of actions in connection with a trade dispute in which it could be made out that questions affecting property have arisen. Is it really right that there should be no limit for damages in that case? Is that not more closely related to the following provisions concerning personal injury?
Lord Mackay of Clashfern: The basic position is that both paragraphs (a) and (b) are presently liabilities without limit and without immunity, so long as they are outside a trade dispute. But when they come inside the trade dispute, the view we have taken is that the nature of the torts in paragraphs (a) and (b) is such that it ought not to matter whether or not they are in pursuance of a trade dispute. I think it likely that the legislative history of this provision would be

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relevant in its construction. Therefore, it is of some importance that we use the same phraseology as was used in the previous Section 14(2). I acknowledge that the argument is more narrow within the trade dispute area, but it seems to us to be a reasonable argument, even in that area, to provide no limit where the tort is the same tort, by definition, as the one which presently is not subject to a limit outside a trade dispute.
Lord Wedderburn of Charlton: The noble and learned Lord causes me anxiety. I was going to press him, as the noble Baroness did, about his answer upon the use of property paragraph. I was also going to say to him that I knew that he understood very well that trade unions had never, to my knowledge, had any complaint made against them for not paying compensation for personal injury, in spite of the technical legal position. I see the case for saying that, if they are liable in tort, then, in personal injury cases, defined in a slightly better way than this, broadly speaking, yes. I quite see that and, in a sense, I half conceded that in opening. But it is the contrast between paragraphs (a) and (b) which struck me when you use the formula this way round.
The noble and learned Lord says that the courts will look at the legislative history. I have two points upon that, but I shall not read them. I assert that in the few discussions of what is the slightly different formula of subsection (2) of Section 4 of the 1906 Act—there are two Trish cases which may be of no great persuasive authority, but they are interesting—there are different views among various judges, who did not have to decide it, about the width of the phrase" use of property I agree with the noble Baroness that it is the use of any sort of property. A pen may be of no importance, but I am talking about any sort of substantial property which is used, where you can say that the breach of duty was in connection with its use.
That is open to argument, but it is much wider than the noble and learned Lord will allow, and an appeal to the legislative history would be an appeal to divided views among the judiciary, where some interpret it very widely in a context where the formula was being used for something else. It was being used to remove immunity from acts that were not in trade disputes in the law of tort. So, naturally, the legislative history will be extremely skewed from the point of view of the legislative purpose of this clause, which is different, is to limit damages and does not relate at all to the trade dispute point. So there is a serious matter here. There are those who say that trade union funds must be liable in tort, but that liability must be limited. If they are saying that it must be limited because of industrial relations factors, which I take to be the view of the majority in this Chamber, then they must tell the trade union movement when its funds are protected and when they are not.
Paragraph (b) may look as though it is a false prospectus, and when it is adjudicated upon in the courts it will not be the fault of the judges if this loose and wholly inappropriate terminology is left to the guidance of the courts because the limitation on trade union liability, even to £250,000, has been blown sky-
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high out of the water by some judgment which, for those who know the history of the matter, may not be a surprise. But it will burst upon the unions and employers as a great bubble of interest and extraordinary amazement, when the limit is shown to disappear every time there is the use of property connected with a breach of duty.
I shall withdraw this amendment. It was moved to get the Government to think again. I shall be very surprised if, in view of this debate, the noble and learned Lord does not give some intimation that the Government will at least consider the words in paragraph (b). I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.55 p.m.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 122:
Page 17, leave out lines 6 to 11 and insert—

(" (a) £5,000, if the union has less than 5,000 members;

(b) £25,000, if it has 5,000 or more members but less than 25,000 members;

(c) £75,000, if it has 25,000 or more members but less than 100,000 members;

(d) £150,000, if it has 100,000 or more members but less than 300,000 members; and

(e) £250,000, if it has 300,000 or more members.").

The noble Lord said: We seem to have come down from the heady peaks of an hour or so ago, when we were contemplating the new slave state, to the practicalities of this Bill. We on this Bench have accepted as reasonable, and have supported, the Government proposal to bring the legal immunities of trade unions into line with those of other organisations and individuals. We are a party of union reform, as will be clear from our Green Paper on the subject when it is published shortly, but we are not anti-union. It is no part of our policy to drive unions to the wall, nor to interfere with the right to strike. We accept the principle that trade union funds should be liable in cases where trade unions break the law, but the way the Bill is framed opens unions to massive claims for damages, and that is not acceptable to us.
While the Bill puts a limit of £250,000 on awards for a single action, it places no limit on liability where several cases can arise from a single dispute. Multiple prosecutions arising from one dispute could theoretically face unions with millions of pounds in damages. It would also be possible for unions to incur these liabilities by accident, and in another place we put down an amendment stipulating the injunction procedure. We also believe that not only are the limits of damages far too high, but the structure of damages should be made fairer for the medium and smaller unions. At present, Apex, with 130,000 members, would be potentially liable for the same amount of damages as the Transport and General Workers' Union with 1·9 million members.
This amendment addresses the levels of penalties to the size of unions to which they apply. We think it proper, as stated in the amendment, for a union with a membership of up to 5,000 members to have a limit of £5,000, half what is in the Bill; for unions with between 5,000 and 25,000 members to have a limit of £25,000, not £50,000 as it is in the Bill. Here we introduce a new category, an intermediary scale of 25,000 to 100,000 members with a top limit of £75,000. We

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have reduced to £150,000 from £250,000 the limit proposed for unions with a membership between 100,000 and 300,000 and above £300,000 we have left it untouched at £250,000.
I should like particularly to interest the noble Earl, if he is to reply, in the new category we have introduced, which spaces the rungs of the ladder much more evenly and, in our submission, much more fairly. If our figures prove not exactly right,—it is always hard to get it completely right—and if they prove too low or too high, the Secretary of State has the power under the Bill, as has already been pointed out in this debate, to alter them by negative order. That would have to be prayed against, and he does not need the approval of both Houses. My suggestion is: Why not start with the figures we propose. We regard them as just and fair. I beg to move.
Lord McCarthy: The noble Lord, Lord Kilmarnock, will know that I always try to agree with him, however difficult that may be; but it is not all that difficult this time, because although the figures in the amendment have been plucked out of the air they are slightly more acceptable and welcome than the Government figures, which are equally clutched out of the air. To adapt, once again, the noble Baroness, Lady Seear's principle, it is a small baby but we should not smother it. It is a good deed which shines like a candle in a naughty world. Although it is a very small candle and a very small good deed, and although it leaves most of the problems intact, we should like the Government to accept the amendment. But we know that they will not.
Baroness Seear: I should like to support the amendment. We want trade unions to be responsible, but it is no part of our policy to cripple them or to take away the reality of the right to strike. The level of damages here means that for a great many unions strike action will be so financially perilous that they will be prevented from taking it.
Earl Ferrers: It was interesting to see the noble Lord, Lord McCarthy, clutch what cherries he could see coming from his noble friend behind him. There is not a great deal of difference between the motives of the movers of the amendment and the Government. We both agree that there should be limits on the damages which can be awarded against trade unions. We both agree that these limits should be related to the numbers of members in trade unions. The only difference is that the movers of the amendment would like to divide the top category of unions with over 100,000 members into two categories and apply rather lower limits than those contained in the Bill to all but the very largest of unions.
The noble Baroness, Lady Seear, said that she did not want to see the unions crippled. Nor, I can assure her, do we. The question of where the limits on damages should be set is a matter of judgment. There is a need to set them at a level which is high enough to act as a deterrent against unlawful action, and to allow those who suffer loss as a result of unlawful industrial action to gain reasonable compensation. At the same time there is a conflicting need to avoid setting them at so high a level as to put unions at
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the risk of serious financial damage as a result of a small number of cases.
There is no obvious or right answer on this question. The noble Lord, Lord McCarthy, says that the figures of the noble Lord, Lord Kilmarnock, were plucked out of the air, and then said that ours were plucked out of the air, too. But that is not so. The figures contained in the Bill are the product of a careful analysis of past experience and the present level of trade union funds, and the four categories of unions which are contained in the clause are the same as those which were contained in the 1971 Act. So far as we know, during the operation of that Act they caused no particular difficulty.
The approach which we originally adopted in our proposals for legislation, which were published in November of last year, was to update the amounts used in the 1971 Act by increasing them in line with the growth in union funds. This produced limits which were significantly lower than would have been achieved by increasing the 1971 figures in line with inflation. During consultations on the proposal, the Conservative trade unionists and others expressed the view that the limits which were proposed for the smaller unions were too high. In response to those representations the limit on damages which may be awarded against unions with fewer than 5,000 members was reduced from £12,500 to £10,000, and that applying to unions with more than 5,000 but fewer than 25,000 members was reduced from £62,000 to £50,000.
The Government would prefer to stick with the proposals for setting limits on damages which are contained in the Bill. As the noble Lord, Lord Kilmarnock, realises, Clause 14 also contains a power for the Secretary of State to vary the the limits by order. If it should prove that our judgment is wrong and that the limits are not set at the right level, there will be scope for them to be adjusted as appropriate: increased upwards or, as the noble Lord, Lord Davies of Leek, would say, increased downwards as well.
Lord McCarthy: Before the noble Earl sits down, would it not be true to say that it is not quite true to say, as he said, that these figures caused no trouble in 1971? They applied to registered unions and there were no registered unions. But the other unions had unlimited damages and that caused a great deal of trouble.
Earl Ferrers: If the unions had registered, it would not have caused any trouble.
Lord McCarthy: But nobody did, so we do not know.
Earl Ferrers: That was their fault.
Lord Harris of Greenwich: I hope that the noble Earl will take the matter slightly more seriously. He made a point of substance when he said that in this connection there had in the past been no problems. The noble Lord, Lord McCarthy, made a perfectly valid point in answer, but the noble Earl regards a joke as being an appropriate way of dealing with the issue. He and I, and others, have spent an agreeable period this evening in the same Lobby on a number of issues in this Bill, and my noble friends and I do not

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disagree with the general thrust of the Bill, as we have made absolutely clear. Quite bluntly, however, sometimes it is reasonable for a Government to make some concession to the Committee.
On a matter of this kind, it does seem quite extraordinary that the noble Earl is giving no indication of movement of any kind; the Government know best. With great respect to the noble Earl, I do not believe that any Government necessarily know best. Sometimes it is possibly a good idea to listen to what is said in Committee and to make some concession of this kind. With great respect to the noble Earl, he has made a most unpersuasive defence. It does seem to me that, on a matter of this kind, where there is no great gulf of principle, it is reasonable to make some concession. May I suggest to him that it is also a way of making rather more speedy progress than might otherwise be the position?
Earl Ferrers: After that considerable riposte from the noble Lord, Lord Harris of Greenwich, may I say that I did not regard this in a frivolous way, and nor did I intend to regard this amendment as a joke. I did explain to the noble Lord, Lord Kilmarnock—and I said this perfectly clearly—that it was a matter of judgment. I merely gave the reasons why we thought that the figures we have in the Bill are reasonable. With the greatest respect to the noble Lord, Lord Harris of Greenwich, I do not see that that is a reason for jumping on me and assuming that I regarded this in a flippant way; I do not do so in the slightest way.
May I just say again to the noble Lord, Lord Harris of Greenwich, that this is a matter of judgment. I accept that some noble Lords may think that the figures are too high. I merely gave the reasons why we have set the figures at this height. If we take the 1971 figures as a basis, those unions which had less than 5,000 members would have had a limit of £5,000 in 1971; if that figure had increased according to inflation, it would now be £19,000, and the limit in this clause is £10,000. Those unions with over 100,000 members had a limit of £100,000 in 1971; according to inflation that figure would now be £381,000, and we have put the figure at £250,000. That is the basis on which we propose these figures. If the noble Lord takes a different view, I absolutely accept it. I merely say what I said earlier, that we hope the Committee will see that these figures are reasonable.
Lord Kilmarnock: Before I decide what to do, may I press the noble Earl on one point I made to him? Would he undertake to consider before Report stage looking at the question of the rungs on the ladder. There are only four rungs in the noble Earl's ladder and there are five rungs in our ladder, which we consider to be a little more flexible, and more sensitive to the varying types of unions and varying types of membership. Can the noble Earl give us a little encouragement on that?
Earl Ferrers: Of course I will be entirely happy to consider what the noble Lord, Lord Kilmarnock, has said. I will certainly look at it.
Lord Kilmarnock: I am grateful to the noble Earl for
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that. I must confess that I am rather disappointed with the rest of his response, but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.9 a.m.
Lord McCarthy Lord McCarthy moved Amendment No. 123:
Page 17, line 27, leave out from ("the") to end of line 29 and insert ("trade union shall be treated as having in membership only those persons whose acts its own officials are empowered to authorise or endorse under its rules.").
The noble Lord said: We regard this as a very important amendment. We are trying to clarify the position under the Bill, and in particular the position in relation to the Trades Union Congress. The way that we read the Bill at this point, the TUC could be—for the purposes of this Bill—regarded as a trade union, and therefore the purpose of the amendment is to make it clear that the TUC should not be regarded as a trade union because, as the amendment suggests, a trade union,
"shall be treated as having in membership only those persons whose acts its own officials are empowered to authorise or endorse under its rules."
That, if you like, would make the TUC a union, but a union consisting of the members of the Congress House staff, which would not be a problem because they would not carry the higher levels of liability.
On the other hand, of course, if the TUC were a union in the full sense of the liabilities then it would carry the very highest level of liability. I say the TUC, because it is the most obvious example, but there are others. There is the Confederation of Shipbuilding and Engineering Unions, which in some ways might be said to be even more of a union if it gets within the terms of this part of the Act, because the Confederation of Shipbuilding and Engineering Unions does become involved in the kind of objectives and aims which under the terms of the legislation constitute it a union.
Indeed, not only does the TUC do that, or could be said to do that—it would be for the courts to decide—but most people would say that it was a good thing that that was so. For example, one of the most hopeful developments in the trade union movement in the past 10 years or so has been the development of industrial committees by the TUC. They have brought together affiliated unions and sought, through its industrial committees, to get round some of the very serious industrial relations problems we have in this country which derive from our chaotic trade union structure.
Since it has turned out to be extraordinarily difficult to introduce any rational trade union structure, the industrial committees of the TUC are the best substitute for a rational trade union structure. In a number of ways, they have become involved in negotiation—in the iron and steel industry, for example; in the health services at the moment. If people want to negotiate with a group of unions in a particular industry, they tend increasingly to negotiate with the members of the industrial committees of the TUC. I regard that as a forward looking and progressive step that we should all wish to encourage.
Then, of course, there are the activities of the TUC which arise out of Rule 12 of the TUC, which deals with problems in relation to member unions, inter-union disputes and the possible discipline of unions in inter-union disputes, and their role in settling disputes

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—the kind of work which the TUC did, for example, in the Isle of Grain. Once again, I would say that these activities of Congress House are some of the more useful, progressive, helpful activities conducted by the TUC, the trade union centre in this country, at this time. But they certainly take the TUC into industrial relations.
There are all the conciliation and mediation activities which the general secretary is constantly engaged in, as at this moment. All these things could take the TUC into the field where someone could say that the purposes, aims, objectives and activities of this organisation constitute it a union, and if it is a union, and if its membership is calculated in the terms of this clause, the TUC, for the most part in its conciliation and mediation activities, would be liable to all these penalties.
Of course, if you want to punish trade unions and penalise trade unions, the bigger you can get them, and the larger the damages, the better. But the effect of that would be that the TUC would be forced in the end to wind up the activities of the industrial committees, to move out of the area of inter-union problems, and leave the unions to their own devices, in order to protect TUC funds. I cannot believe that even this Government want that, and therefore they should accept this amendment. I beg to move.
Lord Mackay of Clashfern: This amendment seeks to alter subsection (7), which sets out how to calculate the membership of federations of trade unions for the purposes of accessing limits on damages. Without this subsection the figure taken to determine the appropriate limit on damages in the case of federations would depend on how the federation itself defined its membership in its rules. Some federations, such as the National Union of Mineworkers, which is actually a federation of regional unions, make it clear that their members are the individual workers who belong to each of the federated trade unions. In such cases there would be no problems.
However, other federations (including the TUC and the International Transport Workers Federation) have a corporate membership made up of the affiliated unions. Thus, the Transport and General Workers Union and the 2 million workers it represents count as one 'member' of the International Transport Workers Federation. In practice, awards of damages against such federations would therefore always be subject to the lowest of the limits on damages. Any federations which have a mixed individual and corporate membership would present problems of interpretation without this subsection. Subsection (7) overcomes these problems by saying that the membership of a federation should be taken to be the sum of the memberships of the individual federated unions which are based in Britain. It seems to be a fairly simple and direct method of calculation.
The amendment seeks to replace this very simple approach with the more complicated one of counting up those persons whose acts the federation's officials are empowered to authorise or endorse under the federation's rules, which is not, I suggest, a particularly simple concept. But the approach is unacceptable for two reasons. First, it is too complex, and would pose very considerable practical problems for
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the courts. Secondly, the approach is once again based on the theory that union rules are clear on the authority of its officials. But as we have said before, the theory does not always fit the practice. Many union rules are either unclear or silent on the authority of their officials, and such cases would pose serious problems for the courts when determining the appropriate limit on damages. Indeed, it would appear that this amendment proposes that if a federation's rules do not give officials specific authority to authorise or endorse the acts of any of its members, then, so far as this clause and the limits on damages are concerned, the federation will be treated as if it had no members at all.
Finally, the situation to which this particular amendment would lead would, I suggest, be simply to add complexity to the Bill. The noble Lord, Lord McCarthy, in moving his amendment has particularly related it to the situation of the TUC. But there is nothing in the Bill that would prevent the TUC from getting involved in disputes to mediate or conciliate. It is only if they authorised unlawful industrial action that they would be liable. I do not myself see, from what the noble Lord has said, that the particular activities of the TUC, to which he has made reference and to which he has attached importance and to which I also would attach importance, are in any way damaged by the rejection of this amendment. I hope that the noble Lord on reconsideration will see his way to withdrawing this particular amendment.
Lord McCarthy: Let me try again. First, the noble and learned Lord says—at least I understand him to say—that the TUC is covered, and I am glad that we know that he says that it is covered. What we are saying is that it should not be covered. I want to know whether the Government think that it should be covered. Presumably they do. Therefore, we have to work out the consequences of that.
Let us not get into the question of the details of the words in our amendment. Maybe our amendment is the wrong way in which to do it. Maybe the words that we have used are ambiguous, complicated and difficult and give rise to all kinds of legal thickets, difficulties and ambiguities. Farewell to the words: let us have some other words. Let the Government go away and say that they like the principle, but they do not like the words. We do not stand upon our words. But, if it be the case, as it seems to be, that the Government accept that the words that are in the Bill cover the TUC, then I say that it is a very serious matter to face. It is not enough to say that, if the Congress gets involved in some of the activities that I have mentioned—the ones maybe that the Government like, such as when Mr. Murray intervenes and settles a strike—that is all right, because it must not get involved in any way in order to authorise a strike because that is not the way in which industrial relations work. If the TUC is to become involved and to take over disputes and to take over problems for unions, sometimes it must authorise things; sometimes it must take decisions on behalf of unions or unions must give it authority to take decisions. Our position all night has been that such is the nature of this Bill that it is not true and fair to say, "You must be lawful, you must stop within the confines of the law", because the

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law is uncertain. The law is uncertain on the extent of tortious liability; the law is uncertain as to how far you avoid that liability; in any case, as we shall go on to argue, the limits of a trade dispute are extremely doubtful now, and it is absolutely impossible for any lawyer to take the TUC's money and tell it, at this moment in time or when this Bill is passed, what it has to do to stay within the law.
Take, for example, a case which noble Lords may think is a little controversial, but let us take it at this time of night; take the TUC's involvement through the Health Committee of the TUC in the National Health Service dispute, where the leader of the trade union side, Mr. Albert Spanswick of COHSE, is, in fact, the leader of the trade union side because he is the chairman of the TUC's Health Committee. Sooner or later, there will be a negotiation and there will be a settlement. That settlement will be focused and processed through the TUC's Industrial Committee.
I am not suggesting at this moment in time that anything unlawful is being done in the health service strike, but it might be after this Bill and, if it were, after this Bill, Congress would have to be told by its lawyers that it must not get involved in things like that, that it must leave the unions to their own devices. Is that what this Government want?
Lord Mackay of Clashfern: I do not think that I need to add to what I have already said. The situation is that it would be only if the TUC were to become involved in calling unlawful industrial action that this matter would arise. I must say, I do not see it as at all likely that that would happen.
Lord Wedderburn of Charlton: Before the noble and learned Lord sits down, in order to make progress, on his answers depend the question whether or not we move the next amendment. We had hoped not to move it. I should like to get this clear not merely for the purpose of vicarious liability for unlawful acts but in terms of legal analysis. I heard, I thought, the noble and learned Lord say to your Lordships, as the Government's considered view, that the Trades Union Congress is now a trade union within the meaning of Section 28 of the Trade Union and Labour Relations Act 1974. I should just like to check that I understood that correctly.
Lord Mackay of Clashfern: I think that the technical position is that I assumed for the purposes of this argument that the TUC would be covered. I must say, I think it will be covered by this particular provision, but, for the purposes of the argument, I assumed that it was in order to deal with the matter which the noble Lord, Lord McCarthy, raised.
Lord McCarthy: In those circumstances, we shall not press this amendment to a Division, but we shall not withdraw it and we shall raise the issues which the noble and learned Lord raised in the course of our next amendment.
On Question, amendment negatived.
12.24 a.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 124:
Page 17, line 29, at end insert (" but no such trade union shall be liable for acts done, authorised or endorsed by members or
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officials of those organisations save to the extent to which its rules empower such persons to act on its behalf.").
The noble Lord said: The noble and learned Lord will understand why I was exercised about his response to the last amendment. If the Government had said that these clauses apply to trade unions, which are, of course, federations of trade unions, as it is sometimes put, within Section 28(2) of the 1974 Act, I would then not have moved this amendment. I move it partly to put it on the record and for this reason: the noble and learned Lord has said partly that he assumed that the Trades Union Congress was a trade union, but then he said that he thought it was right. So twice I heard him say, as his view, that the Trades Union Congress is a trade union.
I would say to the noble Lords who are not familiar with this statute and may think that we are having some kind of theological debate, that, indeed, we are not. There is nothing about angels on the tops of pins here. A trade union within the section is required to be two things: Either an organisation of workers—I will cite the statute if any noble Lord wishes, but I am trying to make progress and fairly compress it—or an organisation of affiliated organisations which are organisations of workers—that is, federations, the obvious example—and in each case where the principal purpose includes the regulation of relations between workers and employers or employers' associations.
It has always been said in the past, and said for decades after 1868 when it was formed, that the Trades Union Congress was not a trade union, not because it did not consist of organisations affiliated to it that were trade unions, because it did, but because it did not carry out the functions of relations between workers and employers as one of its principal purposes. It is that that has come under reconsideration—there is more than one view on the matter; that is why I am so interested in the Government's view—because of the factors my noble friend made clear; things like the industry committees, and so on.
If it is the view that the Trades Union Congress is even probably, or likely, to be a trade union within this legislation, then it is unjust legislation. If you go back to Clause 13, the general secretary makes the Trades Union Congress liable in respect of things which he has endorsed without reference to the rules. I am not going to repeat the debates on Clause 13 but I pray them in aid for all the problems that will arise. It will be absurd to ask the general secretary of the Trades Union Congress, who is now one of the major engines for conciliation and sense in industrial relations matters, to continue in his work when a Government of the day irresponsibly place on the statute book a subsection (7) which would mean that he could cause the Trades Union Congress to be made liable, on the basis that it is an organisation with organisations having a main or head office in Britain having 12 million members in membership, and that it should count as a trade union in that category. Who knows where the Secretary of State will put the upper limit before a few years are out?
I am not prepared to rest on some assurance that it will all be all right if nobody does any wrong, and the Secretary of State will not put the figures up too much. The second is unreliable and the first is fanciful. If

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every time we passed a statute we said that all you had to bother about was not to do anything unlawful, then we simply put down the basic rule of what you must not do and leave all the other problems out, because no one will ever transgress it. The problem about Clauses 13, 14 and 15 is that we are dealing with problems which are consequential, for the most part, upon the establishment of liability in a human being. Somewhere an official, or another person, has authorised something to be done which is a tort. Clause 13 says that the union responsible for him shall be responsible in tort. Taff Vale lives again. Clauses 14 and 15 place limits on that liability in terms first of the damages.
What the structure amounts to in subsection (7) in regard to federations, and now, it appears, the TUC, is that they are to be adjudged on the current level of damages that can be awarded according to the numbers of the organisations affiliated to them. It is absurd. If the Government are not prepared to reconsider that, then I must press upon them the spirit of Amendment No. 124, and I shall explain why I move it. I take this as the Government's view, or interim view, and I do not put it forward as my view. It may well be the case that some litigious person fights this hard as an interpretation. It is in dispute. But for the moment we must assume it.
So, says the amendment, no such trade union, federation or TUC, shall be liable for acts authorised by any members or officials, except to the extent to which its rules—the federation's or TUC's rules—empower that person to act on its behalf. Surely that is reasonable in the case of the TUC at least. The TUC at Congress House tries to help in the trade union movement of this country and to lead it, and to provide leadership in industrial relations generally.
It is surely not unreasonable to say that the officials and officers of the TUC, in the work they now do, shall be liable only in respect of those who have done acts in the constituent organisations which the TUC could have given them authority to do. Why should the TUC be responsible for the act of someone whom the Government assume will be acting irresponsibly, and then tortiously, in an industrial dispute? It may well happen, but why should the TUC be responsible for that, beyond its rules and the affiliated organisations' agreements to the extent of the TUC's very existence, which are in the rules of the TUC? Why should it be liable, on the basis that it is a trade union federation, for someone in an affiliated organisation, outside its own rules?
This is a most serious matter. I had not appreciated it when we wondered whether to table these amendments. Then it became clear to us that we must ask where they would apply. If the Minister had merely said federations, we could have understood that—although we would not have liked it—as being part of the Bill. Now that it has turned into a debate about the legal status of the TUC, the matter is more serious than perhaps the Government themselves realised. I ask the noble and learned Lord, in regard to Amendment No. 124, to say that at least he will return on Report with a further considered view as to the nature of the position of the TUC under the Bill. If he is prepared to do that, we would happily withdraw
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the amendment. If not, it is a matter of the utmost and profound importance that must be investigated at some length on Report.
Lord Teviot: The argument in relation to this and the previous amendment has involved the two Front Benches bouncing backwards and forwards, so to speak. I think my noble and learned friend the Lord Advocate said the TUC probably would be covered, though it has been difficult for one to grasp all the arguments because the debate has gone rather beyond the language of the layman. The noble Lord, Lord Wedderburn, is extremely clear in general, and I thought my noble and learned friend gave a clear-cut answer. If so, perhaps we might move to the next business quite quickly.
Lord Mackay of Clashfern: I am certainly anxious to move to the next business as quickly as I can. The situation so far as the TUC is concerned must depend on Section 28 of the 1974 Act, and of course if somebody wants to litigate about that, that is up to them. For the purposes of dealing with the amendment, I assumed that, and I must say there is a good deal to be said for it. If the TUC is not a trade union, I am not sure it would have any immunity anyway, so the problem would not arise. As for giving the noble Lord an assurance that I shall consider what he said, I hope it goes without saying that I will always consider what he says, and if that helps to speed matters forward, I shall be very glad.
On Question, amendment negatived.
Clause 14 agreed to.
Clause 15 [Recovery of sums awarded in proceedings involving trade unions and employers' associations]:
[Amendment No. 125 not moved.]
12.34 a.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 126:
Page 18, line 22, after ("work") insert ("or unemployed for any reason").
The noble Lord said: This relates to a specific point which is central to the clause, and it is sensible for the Committee to consider that point on this amendment, bearing in mind the structure of the clause and the effect of the amendment.
In speaking to Amendment No. 126, with the leave of the Committee, I should like to speak also to Amendments Nos. 127, 128, 129 and 129A. All the amendments relate to the basic definition, which is of importance to the clause. This is the clause which does not set a financial limit, but takes the other tack, as it were, and offers some protection to the trade union in court in an action in tort.
In passing, I say that neither on Second Reading, nor in Committee, nor at any other time have I heard from the Government any kind of explanation of why they have inserted the particular limitations. However, one must not be uncharitable in the face of offers of this kind, and one looks down the list to see what is protected. Apart from various rather technical problems that relate to the wording concerning

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trustees holding property, the most important areas are twofold. In subsection (2) on page 18, we find that the political fund of the union is protected from the enforcement of damages or costs, and, in paragraph (e) of the subsection, the provident benefits fund of the union is protected.
The provident benefits fund is a most important area of trade union property, which for many years has been protected in respect of the taxation provisions of the taxation statutes. The details of the taxation advantages may perhaps be left aside at this stage, in order to make progress. But, since 1893, provident benefits, as defined in the Bill, have been accorded considerable taxation advantages. It is quite clear that the provision relating to the meaning of provident benefits—which I must read, in order quickly to make sense of the argument—has been taken from taxation statutes. It is precisely the same as in the relevant tax statutes and reads:
"'provident benefits' includes any payment, expressly authorised by the rules of the union, which is made to a member during sickness or incapacity from personal injury or while out of work, or to an aged member by way of superannuation, or to a member who has met with an accident or has lost his tools by fire or theft, and includes a payment in discharge or aid of funeral expenses on the death of a member or the wife of a member, or as provision for the children of a deceased member".
That is the precise wording of the tax statutes.
Is it very satisfactory for the Government simply to adopt words which are contained in another statute for another purpose which is not necessarily related to this purpose? In their argument, the taxation advantages do not necessarily correlate with the argument for protection as contained in the Bill. Furthermore, the formula is a very old one; it is from the 1893 statute.
I do not quite understand why the worker who loses his tools by fire or theft can claim from a fund which is protected from liability in tort, whereas the member who loses his tools by way of earthquake or other natural hazard appears to fall outside it. Of course one could mock the definition, if that it be, because it is a very old one. There are various forms of impoverishment which Amendment No. 127 suggests should be imported into the definition, and Amendment No. 129A suggests that legal expenses in connection with accidents—in particular accidents at work, of course—ought to be included, for the very good reason that that aspect is especially related to the taxation concession of 1978, whereby it has been conceded by the Revenue that benefit funds of that kind are to be admitted to the taxation privilege.
Moreover, it is not a definition in the tax statute. It used to be a definition, because the 1893 Act stated that provident benefits "meant a number of things which followed—and then there was the same list. However, for many years the tax statutes have stated simply that provident benefits include a number of things which are listed.
In putting down a few suggestions as to payments that might well be incorporated, the Government have taken the easy course. They have taken a formula from another statute that is not necessarily relevant for this purpose. What they should have done was to draft a modern and relevant definition of provident benefits. I beg to move.
Earl Ferrers: The paragraphs on political funds and on provident benefits funds—and these are the paragraphs in subsection (3)—both state quite clearly that the term means something specific, and they are therefore definitions of the terms concerned. The paragraph on provident benefits in fact begins with the words" 'provident benefits' includes", and the list that follows is a list of examples of provident benefits. I understand the concern of the noble Lord, Lord Wedderburn, but, of course, it is clearly not an exhaustive list, nor is it an exclusive list. It is simply guidance to the courts as to the sorts of things which might constitute provident benefits.
As the noble Lord, Lord Wedderburn, said, there is a perfectly good reason why this has been included. It is, of course, taken straight from Section 338 of the Income and Corporation Taxes Act 1970, as amended by the Finance Act 1974, and that is the latest version of a tried and tested description of provident benefits which has been used for tax purposes, as the noble Lord said, since around the turn of the century. I do not believe it has given rise to any problems in those 80 or so years, and the Inland Revenue does not apply the passage as if it was an exhaustive list. I would have thought that the courts will adopt the same approach in any cases which may arise out of this legislation. That is the reason why the words are used as they are, and I would have thought that, being not exclusive or exhaustive, the words used are reasonable.
Lord Davies of Leek: May I ask one question? The words used are,
"lost his tools by fire or theft".
The loss of tools by the movement of earth or subsidence in the mining industry is of particular importance to that special group, and I should have thought that when this clause was drafted the mining industry would have been in mind. There is no need to develop the point any more at this hour, but if the Minister would be kind enough to comment on my little statement, I should be obliged.
Earl Ferrers: I think there is absolutely no reason why that should not be included. I would only draw the attention of the noble Lord, Lord Davies of Leek, to the fact that it says,
"'provident benefits' includes any payment",
and so on. It does not say that such payments as the noble Lord has in mind are excluded simply because they are not written in the Bill.
Lord Wedderburn of Charlton: Before the noble Earl sits down, may I say, with leave, that there is a total difference between having a general description which is not exclusive for the purposes of the tax law, where the Revenue has a discretion, and presenting the court with a description which is not exclusive of the provident benefit fund having defined the political fund above by saying what it means. Here, the Government are dealing with what is and what is not, not liable to taxation with a discretion but liable to be attacked by a plaintiff who has the right in the court to enforce against the fund except for that which is protected. That is why it is a slovenly piece of work.

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It is not only a slovenly piece of work; it is unfair to put it to the trade unions, because they sometimes do not know which of their funds will be protected and which will not. They do not know whether the Court of Appeal will exercise its discretion in the same way as the Inland Revenue, and they cannot be expected to know. The noble Earl says that it has never caused trouble, but, even in the case of the Revenue it has caused trouble. In the case of the National Union of Railwaymen in 1966, reported in Volume 43 of the Tax Cases, he will find a very complicated case even on the Revenue side, and what could happen on the other side of civil liability is much greater.
I beg leave to withdraw the amendment, but I hope the Government will consider very seriously whether they do not have an obligation to make matters of this sort clear in their legislation instead of, again, just leaving it to the discretion of the courts.
Amendment, by leave, withdrawn.
[Amendments Nos. 127, 128, 129 and 129A not moved.]
Clause 15 agreed to.
12.45 a.m.
Lord Spens Lord Spens moved Amendment No. 129B:
After Clause 15, insert the following new clause:
(" Increase of fines.
.The limits on fines which may be awarded for offences under section 12 of the 1974 Act shall be increased as follows—

(a) the limit under section 12(5)(a) shall be increased to £10,000;

(b) the limit under section 12(5)(b) shall be increased to £40,000.").

The noble Lord said: I shall not detain your Lordships very long over this amendment. It arises as a result of an oral Question which was asked by my noble friend Lord Orr-Ewing on 5th July last, when he asked Her Majesty's Government:
"how many of the 12 largest trades unions have now tiled their accounts for 1981; how many are in arrears; and which ones".
He was told that, of the 12, five had filed their accounts, one was waiting for one section to file and six had not filed their accounts by that date. Under the Employment Act 1974, annual accounts have to be filed by 1st June in each year; so that on 5th July these six trade unions had been more than a month late in filing their annual returns. The Question went on to elucidate the maximum fine that could be imposed by the certification officer for anyone who failed to carry out his obligations. The noble Earl the Minister replied that the maximum fine was £100.
When it was suggested to the noble Earl that a maximum fine of £100 at a time when union income is more than £270 millions a year and that 12 million trade unionists are affected was a bit of a nonsense, the noble Earl said:
"My Lords, there are in this life all sorts of things which are extraordinary. Perhaps this is one of them."
So my noble friend Lord Orr-Ewing and I decided to assist the noble Earl and we have put down this amendment which increases the maximum fines from £100 to £10,000 and, in more serious cases, from £400 to £40,000. We have multiplied everything by 1,000. I should like to suggest to the noble Earl that this
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gives him his opportunity of removing the extraordinary nature of the situation and putting it more into perspective. I beg to move.
Earl Ferrers: I am most grateful to the noble Lord, Lord Spens, for his help in saying that he wished to assist me to overcome the problem. I am bound to say that it is a curious form of assistance where he multiplies the fine 100-fold from £100 to £10,000. My noble friend Lord Orr-Ewing asked this Question the other day and he was concerned that trade unions had not presented their accounts at the appropriate time. But there is no evidence of serious non-compliance with the legislative requirements for trade unions, and since the certification officer was appointed in 1976 there have been no prosecutions under Section 12; and it is perfectly true in fact that both trade unions and employers' associations have encountered certain difficulties in complying with the statutory requirements.
I will give one example. It is where a trade union has a number of different branches and it is very difficult to get the accounts of all those sectors of such a union in a form such as can be presented to the auditors in an appropriate fashion for auditing within the correct time. The certification office has, in general, secured the co-operation of the organisations and of their auditors, so that compliance has been achieved; and the Government's view is that the existing provisions are working reasonably well. For those reasons, we would see no justification for raising the maximum fines one hundredfold when already there have been no prosecutions. The amounts of fines will in any case be increased by the Criminal Justice Bill which is at present in front of the House, to £200 and £1,000. It will thereafter be subject to further increase by an order of the Home Secretary.
The maximum penalties provided for under Section 12 of the 1974 Act are generally pretty well in line with those of similar offences in the Friendly Societies Act 1974 and in the Companies Act 1980. The Friendly Societies Act at present provides that a maximum fine of £50 can be incurred for a failure to submit returns, and a maximum fine of £400 for falsification of balance sheets. Under the Companies Act 1980, £200 is the common maximum for failure to submit accounts, returns and so forth, and offences for fraudulent behaviour are generally triable either summarily or on indictment with a statutory maximum of £1,000 available on summary conviction and an unlimited fine on conviction on indictment.
The regulatory offences covered by Section 12 of the Trade Union and Labour Relations Act 1974 are designed simply, like many other measures throughout Acts of Parliament, to ensure that records are properly kept and the information they contain is available to those concerned. Such offences are generally triable only in magistrates' courts, where the maximum fine available for any offence is of course normally only £1,000, which again will be subject to increase by order. To provide therefore as the noble Lord, Lord Spens, would have in his amendment, a maximum of £10,000 and £40,000 for the offences in question, would be quite out of line with the structure of fines for summary offences and give them undue prominence in comparison with many other offences of a similar nature through-

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out our legislation. I hope therefore that, in the light of these observations, the noble Lord, Lord Spens, will consider it appropriate to leave the fines as they are at the moment.
Lord Spens: I understand that the noble Earl wants to continue to keep these things extraordinary. He says that there have been no prosecutions, but why on earth should a certification officer want to prosecute when the maximum fine on a union is only £100? If it was much more, then there might be a case for him to prosecute. However, as the noble Lord, Lord Orr-Ewing, is not present, and as this was really his amendment, I beg leave to withdraw it at this time.
Amendment, by leave, withdrawn.
Clause 16 [Meaning of "trade dispute"]:
[Amendment No. 130 not moved.]
12.54 a.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 131:
Page 18, line 38, at end insert ("or between employees and employers who are parties to a trade dispute by virtue of section 19(1) of the Social Security Act 1975.").
The noble Lord said: May I speak also to Amendment No. 132 in moving Amendment No. 131? As we move into the early morning, we come to the other clause which is central to the structure of the Bill. Having revived Taff Vale, having told the trade union movement, "Yes, you are liable in tort and you have little protection of your funds, but of course you have the trade dispute defences", now we set about the process of dismantling the trade dispute defences. Clause 16 changes the definition of a trade dispute, the fundamental bedrock upon which protections in trade disputes exist, and therefore the fundamental law on which the right of workers to withdraw their labour is based in this country.
This amendment goes to the nature of the parties which are required to be parties to a dispute to qualify it as a trade dispute. Other amendments concern—if I may use the nearly neutral term—the content of the dispute. It may be important to noble Lords to observe the distinction between the problem of the parties to a dispute which have to qualify as a trade dispute, and the content which the dispute is about or makes reference to.
The present definition allows for the trade dispute to include disputes between employers and workers and workers and workers, That definition of the parties has been more or less the same since 1906, though the period of 1971 to 1974 is a very special one in all respects and excluded from that statement. There grew up very early on—1911, I think, is the right date to place upon the origin—a congruity between the law of trade disputes, the law of the right to withdraw labour and the law of social security. One finds it matched on the early statutes, on the second one, although it becomes clearer in the later ones in the 1920s.
If I read the definition of trade disputes, your Lordships may recognise it, but I pause for a moment to make clear the importance of the trade disputes aspects of social security law. It has long been the case that
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in a trade dispute the employee loses his employment benefit. It is also the case during the course of a trade dispute, that while the stoppage continues, to be accurate, he loses his supplementary benefit. Your Lordships have debated social security law on other occasions, and I pause merely to observe, as my noble friend did on an earlier amendment, that this Government have done nothing to improve the employee's position in that respect. Indeed, his social security position is very much worse, and though your Lordships do not sometimes like the result of surveys, except that on occasions they mention them as having surveyed the damages awarded, as in respect of a recent amendment, nevertheless it is quite clear from the work of the last decade that most people who stop work for any period live largely on credit and savings, and the Government have cut back in a most Scrooge-like manner on a supplement they managed to obtain from income tax rebates and the like.
But that congruity in the law still exists: that is to say, the area in which you have the right to stop work. In the last few hours I have been amazed at the way noble Lords have treated the right of a man to stop work, as though it were some kind of privilege which they had the right to mould and re-assess other than as a legislature, and in judging the legislation they had the right to say: "You should not go on strike; you should not stop work" People can withdraw their labour within the law and if, when they withdraw their labour, it is lawful, it has sometimes been asserted that it is logical to say," Then they must not get unemployment benefit."
There is a big debate among commentators on the issue of state neutrality, on which one side says it is logical to remove unemployment benefit in a trade dispute because that is state neutrality. The others dispute that proposition. The first, orthodox, proposition I will take as being one that the Government might well adopt, but it works only if the area of the trade dispute is roughly the same for the purposes of both areas of the law, because if you are a worker and wish to see a lawful area of the right to strike or to stop work, then you want a wide definition of "trade dispute" If you are a worker and you are on strike and want to get your unemployment benefit and not have it disqualified under the statutes of social security, then of course you want a narrow definition. The two, therefore, must be the same if the famous attitude of even-handedness is to be maintained by the Government; but this Bill breaks the link between the two.
Under the trade disputes statutes, the Social Security Act 1975, Section 19(2) defines "trade dispute" as,
"any dispute between employers and employees, or between employees and employees, which is connected with the employment or non-employment or the terms of employment or the conditions of employment of any persons, whether employees in the employment of the employer with whom the dispute arises, or not."
That is the definition, more or less, of the 1906 Trade Disputes Act, as I am sure the noble and learned Lord accepts. It was roughly parallel, although not exactly the same, in the 1974 Trade Union and Labour Relations Act, Section 29.
But now the trade dispute definition is to be retained in its 1906 form, in order to exclude the right to unemployment benefit and supplementary benefit. But the trade dispute formula for the purposes of the right

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to withdraw labour, and now the right of the trade union to defend itself in a court in respect of the liabilities in tort that fall upon it, is to be compressed in the way that the Bill suggests; that is, to get rid of the dispute between workers and workers, or, in the social security statute, employees and employees, which the Government accepted was more or less done already by Section 17 of their 1980 Employment Act; and, secondly, and much more important, to take out the general phrase "disputes between employers and workers" and to restrict the trade dispute as a dispute between workers and their employer.
On Clause 8, I suggested that, in relation to unfair dismissal, what the Government were doing was to put a limitation on the right to strike by allowing for lawful dismissals of the employees in small packages, in one establishment and another, to pick and to choose, and they are matching that here by saying: "You can only have a trade dispute in your own place of work with your own employer." That gives an enormous advantage to the employer. It is the employer who decides for the average man by whom he is employed, because the ordinary employer is not a man but a company, and the company will form a subsidiary. If it wants to organise its business in a conglomerate group it will do so, and each group of employees will be employed by a different company, which is a different employer. In consequence of that, it will be more and more difficult to assert a trade dispute.
What these two amendments are saying is that it is unjust to break the link of congruity between social security law and labour law. It is wholly immoral to say to workers: "The area in which you will lose your unemployment benefit and supplementary benefit, and now be subject to other disadvantages, is much wider than the area in which you can remove your labour and lawfully withdraw, partially or wholly, from work." That is a totally improper proposition in respect of morality, but is another aspect of the way in which this Government, in a cavalier manner and without even mentioning it, have thrown aside their obligations under Article 6 of the European Social Charter.
It will not surprise the Government that in seminars it is a matter of international interest, in an abstract way, that they have gone this far in the face of the European Social Charter, without, so far as I know, having addressed a word to the point. Perhaps this will be their opportunity. This breakage of the link, which has been there for a century, between the rights and the disadvantages of workers in both social security and labour legislation, is a break which is fundamental, and is fundamental to this clause, which is why we press the Government on these amendments. I beg to move.
The Earl of Gowrie: I think that we should re-address our minds to Clause 16 and not to the European Social Charter. The clause makes four main changes to the definition of what constitutes a lawful trade dispute. The first is the most important, and I shall concentrate on it. It is to restrict lawful trade disputes to disputes between workers and their own employer. The obvious and main purpose of this is to protect employers and employees from pressure from trade
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unions and workers outside the company to force them to do something which they do not want to do.
At present the definition is so wide that a trade union can be in dispute with an employer even though it represents none of that employer's workers; but we believe this to be absurd and unacceptable, and therefore we are establishing the principle in this Bill that in order for there to be a lawful dispute there must first be workers in dispute with their own employers. Of course, once that is established, a trade union will still be free to organise industrial action by its workers in furtherance of that dispute.
The noble Lord, Lord Wedderburn, referred to two amendments. I assume that he was referring to Amendment No. 130, which he did not move, or is he just referring to Amendment No. 131?
Lord Wedderburn of Charlton: Amendment No. 130 was not moved. I am moving Amendment No. 131 and speaking to Amendment No. 132, because obviously workers and workers should stay in the labour legislation as in the social security legislation. I said that I was speaking to No. 132, I think.
The Earl of Gowrie: I am grateful for the correction. The first thing I have to say about this amendment is that it would, by a circuitous route, completely nullify the effects of restricting trade disputes to disputes between workers and their own employer. As such it comes in a "nice try" category. It would do that by attaching to the definition of a trade dispute in Section 29 of the 1974 Act the much wider definition of a trade dispute which occurs in Section 19 of the Social Security Act, and that, of course, is unacceptable to us. For that reason alone, I would hope that the amendment would be rejected were it pressed to a Division.
The noble Lord, Lord Wedderburn, has also made great play of the fact that in future there will be two different definitions in legislation of a trade dispute. I have to say that I cannot quite understand what all the fuss is about. We are using different definitions of trade dispute because they are needed for quite different purposes. In the Social Security Act, the definition determines when a worker is entitled to receive state benefits when there is industrial action at his place of work. The definition in the Trade Union and Labour Relations Act, 1974, as amended by this Bill, defines the circumstances in which trade unions or their officials can lawfully organise industrial action.
There seems to me to be no reason why the same definition should be used. As I am sure the noble Lord has worked out, if the new definition of trade dispute were to be incorporated in the social security legislation, workers would be entitled to receive benefit if they were participating in a dispute which Parliament had declared unlawful because it was not a trade dispute as defined in the Act. That is to say, it would not be with an employer, but would be a political dispute or some such dispute.
From the noble Lord's remarks, the Committee might be forgiven for falling into the error of thinking that the use of two different definitions of trade dispute was new. The previous Government themselves defined trade dispute in the Social Security Act 1975 differently

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from the way they defined trade dispute in the Trade Union and Labour Relations Act 1974.
There is no reference in the 1975 Act to disputes over facilities for trade union officials or machinery for negotiation or consultation, both of which are included in the 1974 Act, which the Government are retaining. I am hopeful that that should convince the noble Lord that we are not doing anything out of the ordinary, and perhaps he will be pleased, therefore, to withdraw his amendment.
Lord Wedderburn of Charlton: My Lords, I am disappointed at the reply by the noble Earl, but not surprised. I cannot accept one of the points that he makes, both legal and other, although there is one at the end where we are at one, but for different reasons.
First of all he says, let us not look at the European Social Charter. The United Kingdom has acceded to the charter and unless, in some fit of distraction, the Government have today got rid of it, I wonder why the noble Earl says we should not look at the European Social Charter? It is relevant. It says that those states which accede to it accept that there should be the right to strike. I have quoted it before and answered the noble Lord, Lord Marsh, about it. I cannot quote it at the moment because I do not have it here, but I say that it says there must be a right to strike, subject to limitations placed, by way of peace obligations, in collective agreements which are adapted to local law. That seems to me to go out of the window, and it has not been denied.
Secondly, the noble Earl is right in saying that this amendment would require some amendment and adjustment in the social security legislation. I say to him that the reason I did not put down an amendment in that sense was because we understood that it would not be within the Long Title of the Bill and that it would have been improper to try to put it into the Marshalled List.
Thirdly, the noble Earl says that the 1974 Act was in different words from the Social Security Act 1975. No doubt he would include the Supplementary Benefit Act 1976. He is right. The words in the Social Security Act maintained more or less the equivalent of those in Section 5 of the Trades Disputes Act 1906. The 1974 Act spelled it all out at much greater length—perhaps too long. If the noble Earl looks at the case law on the 1906 Act, I would challenge him to find very much in the 1974 definition which did not fall clearly within the 1906 definition which is maintained in the social security statutes. I accept that one of those is facilities for trade union officials. That was always a debated point. It had not been litigated. I always held the view that it would have been included within the 1906 formula. Apart from that and two or three small matters, the vast majority are the same.
Now we come to the point where we are perhaps agreed. The noble Earl said that of course there must be two different definitions of trades disputes because they are wanted for two different purposes. To that, say two things. It is the same man on strike. It is the same man with a family who is not getting unemployment benefit, but who is now, illogically, being made into a law breaker. Of course there are different purposes for this Government. The purpose in one case—the
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trade dispute—is to make the strike unlawful. The purpose in the social security legislation is to stop him getting his social security benefit. This Government have double standards. If you have a definition in favour of the striker you must squeeze it until the pips squeak. You get your boots on and trample on it. When it comes to the other side, where he might get a benefit and the strike might be lawful, you must do the opposite and not allow him to have his social security benefit. We do not think this is a satisfactory approach to the problem, to put it at its lowest. We shall not withdraw the amendments. We shall simply see what happens to them as the Committee progresses.
On Question, amendment negatived.
[Amendment No. 133 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 133:
Page 18, line 41, leave out ("relates wholly or mainly to") and insert ("has a substantial connection with").
The noble Lord said: This is the central core of the clause, and I shall refer it to in clause stand part. I want to put to the noble Earl one major point. The content of the 1906 and the 1974 definition, which we may call loosely for the moment employment and industrial matters, had to be connected with the dispute or, as the statute had it, the dispute had to have a connection with the list of employment and industrial matters set out. The phrase "connected with" over the years went through a number of changing interpretations.
It is true that from 1909 the case law was such, especially after the case of Conway v. Wade in your Lordships' Judicial Committee, that it was thought that where the objects of industrial action were mixed, the courts should look for the predominant object. It was not very clear, but that is what most people thought the House of Lords probably said. Others said, No: "connected with" means "connected with" In 1974 that is what the Judicial Committee of the House of Lords decided it meant—in NWL v. Woods, a case to which I have already referred (and so has my noble friend) in your Lordships' Committee.
In that case, the noble and learned Lord, Lord Diplock, said in the course of his judgment—holding, as their Lordships did, that any dispute connected with employment terms, whatever the other objects of the dispute, must fall into this point of the category at least of trade dispute—as he said in a later case, perhaps somewhat unwisely,
"Even if the predominant object were to bring down the fabric of the present economic system by raising wages to unrealistic levels or to drive Asian seamen from the seas except where they serve in ships beneficially owned by nationals of their own countries, this would not … make it any less a dispute connected with terms and conditions of employment and thus a trade dispute, if the actual demand that is resisted by the employer is as to the terms … of employment [of] his workers".
That is on pages 1304 to 1305 of Volume I of the Weekly Law Reports for 1974.
The Government have seized upon this case and have said, "We must change this wide link in the definition of trade dispute, because it can be connected with employment matters and industrial matters and you might have millions of other objectives. It is very dangerous, because we want to stop political strikes."

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They know, and we know, that political strikes in the ordinary man's vocabulary have never been lawful within the trade dispute formula. They are not lawful now and they will not be when the Bill is enacted. The Government are seizing upon the occasion of that judgment—and in particular on that passage and associated passages in the judgment of the noble and learned Lord, Lord Diplock—to change the very basis of the trade dispute formula.
Instead of the requirement that the dispute be "connected with" employment matters, now the Bill requires that they should relate wholly or mainly to the matters set out in the definition clause of the 1974 Act on employment and industrial affairs. The change is very great. A dispute may be connected in a quite substantial way, but it may not relate wholly or mainly to it. Everybody knows that what is happening is that in the course of their drive towards privatisation, while on one flank they use labour law to get the district auditor to clout the Labour councillors who have been elected on a programme, for trying to put it into effect, on the other side the Government have opened up another attack on trade union rights by saying, "If you oppose our privatisation, you are not wholly or mainly opposing redundancies; you are mainly opposing the political programme of the elected Government of the day."
It is quite clear that what the Government are doing here, in the rhetoric which is used about this particular point, is to extend the meaning of political strikes as they would have it in the legal vocabulary of this country. They have done so on the basis of a judgment which, fortuitously and strangely, has now been shown to be a very special case and one where the language was not, perhaps, wholly correct.
In the recent case of Universe Tankships v. International Transport Workers' Federation, where the ITWF was sued by a flag of convenience company for money which the company had paid into the seafarers' welfare fund, the noble and learned Law Lords were divided three to two on an issue which came before them during the course of the case, as to whether there was a trade dispute. The difference between them centred on this very point. So the latest authority, on the basis of the opinions of the three Law Lords who said it was not a trade dispute, should have been looked at and considered as the Bill moved through. The Government have moved plenty of other things in and out of the Bill and should have looked at this since they rely on NWL so much, as they do.
Of the majority the noble and learned Lord, Lord Diplock, told his learned brethren that the phrase "connected with" was a wide expression. I must quote just a few of his words in view of the importance of the matter. But he said:
"In my view, it is not enough in order to create the necessary connection between a dispute relating to terms and conditions of employment of employees of a particular employer, and a demand made upon that employer by a trade union acting on its own behalf and not on behalf of the employees working for the employer, that the demand should be made at a time when the trade union is negotiating a collective agreement relating to terms and conditions of employment of those employees".
He is distinguishing between a trade union negotiating and demanding for the employees, and making other demands on the side. And the debate on that point
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involved a reconsideration of the phrase "connected with". Lord Diplock approved of Mr. Justice Parker's way of putting it, and said:
"The Court of Appeal would have taken the same view and upheld the judgment of Parker J on the duress point had they not felt that they were prevented from doing so by certain observations in the judgment of Lord Justice Roskill as he then was, in BBC v. Hearn, and of my own in my speech in NWL v. Woods".
He then says a word about Lord Justice Roskill, and I will go to the main point. He says that there is nothing in that case—and I take the quotation—
"or the reference to those judgments in Hadmor Productions v. Hamilton, that throws any doubt upon the correctness of the law of the passage I have quoted from the judgment of Parker J. I must, however, take the blame for expressing myself in NWL v. Woods in terms that could be understood as being inconsistent with that passage in Parker J's judgment in the instant case."
He then goes on to re-explain the NWL case in a long passage which no doubt your Lordships would wish me to read if you dispute it. The noble Earl does not dispute it, but he has not heard my assertion yet. I assert that it redefines "connected with" in a most fundamental way, because you have to look again at the NWL case, and it is no good relying on that for this amendment. What I am saying is that when we look at the development of the law, which has always been slightly unclear as to the precise meaning of "connected with", nevertheless, we have known roughly where the boundaries are and the NWL case did not change them. We now see that there was no major change in the NWL case in the light of Hadmor Productions, which I have not cited, but which the noble Earl will know about reaching the Judicial Committee, and especially the Universe Tankship case which I was quoting from the 1982 Industrial Relations Law Reports at page 206.
What I say is that, in that state of affairs, it is not right for the Government to redefine the fundamental phrase in the statute on this matter, and that what they are doing is putting into trade disputes a formula which will serve their other purposes, including of restricting ordinary strikes between an employer and his own workers. That is unjustifiable enough, and I do notice how, when the question of workers outside the particular company comes in, the noble Earl and his colleagues on the Front Bench have, more than once, assumed that the workers outside the company are coming in to pressurise the workers in the particular company involved. Noble Lords on this side of the Committee would, perhaps, suggest that workers outside a company are more likely to be coming in to give support.
The idea of worker solidarity is a real one. It is one which is laughed at in some quarters, although not throughout the world, and it is real in Britain. Workers across the limits fixed sometimes want to support one another. Similarly here, a matter may well be connected with a large number of matters and a large number of workers, and the phrase that we suggest as an amendment would wholly meet the Government's point, because, if they have any residual worries about the NWL case, we suggest that they put in a modification of the old formula, making it a dispute which has "a substantial connection". We cannot see why it is necessary to go beyond "a substantial connection" with the traditional matters of a trade dispute. I beg to move.
The Earl of Gowrie: The purpose of subsection (2)(a) of this clause—and that is the subsection that the amendment seeks to change—is to make unlawful disputes which have only a slight connection with the subjects of a trade dispute listed in Section 29(1) of the Trade Union and Labour Relations Act. We are, as the noble Lord, Lord Wedderburn, reminded us, on board what the shorthand of the industrial relations trade refers to as "the good ship 'Nawala' and related vessels". It is important to establish at the outset that the change to the "wholly or mainly" phrase in connection with a trade dispute will not affect the vast majority of normal industrial action which is taken by employees against their employer, whether that is in the public or private sector. What this subsection is seeking to do is to ensure that disputes become lawful trade disputes only where they are genuinely and primarily concerned with what most people would regard as the normal subjects of trade disputes between employers and workers.
The noble Lord, Lord Wedderburn, cited the Nawala case and NWL v. Nelson and Woods in 1979. He cited the judgment of Lord Scarman and he cited the judgment of Lord Diplock. Since he quoted the noble and learned Lord, Lord Diplock, I shall not need to weary the Committee by repeating the quotation. But the Government's view is that the effect of this judgment has been to extend the definition of a trade dispute so that trade union officials have virtually complete freedom to pursue disputes of a purely personal and political kind, and to call strikes which have only the slighest connection with the subject of a trade dispute. It is unlikely that this would frequently occur, but, if it does occur, it is, in our view, unacceptable, and the change to "wholly or mainly" is intended to correct the position.
Now the noble Lord opposite is suggesting that in place of "wholly or mainly", we require a dispute to have a substantial connection with the matters listed. That is at least an advance on the present position—I acknowledge that—but what sort of an advance?
Trade union leaders have complained that "wholly or mainly" is too vague. But surely greater uncertainty and vagueness would ensue if we were to accept the wording proposed by the noble Lord, Lord Wedderburn. It is not clear to me what the courts would consider to be substantial—almost half, more than half or 90 per cent. But I would suspect that it might be intended to be a less stringent requirement than "wholly or mainly". It is intended to give trade unions greater freedom to organise industrial action than is proposed by the Government's present clause and for that reason alone we would wish to resist the amendment.
On Question, amendment negatived.
1.27 a.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 134:
Page 19, line 4, after ("as") insert ("(a)").
The noble Lord said: I beg to move amendment No. 134 and I should like to speak at the same time to Amendment No. 135, because Amendment No. 135 is the substantive amendment. In 1974, it was thought a
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good idea to spell out the fact that a trade dispute could be connected with—or now I suppose I have to say "related to"—matters that were abroad. There has always been a dispute between the parties which has always seemed to me perhaps slightly unnecessary, but it reflects the same approach; namely, broadening or narrowing the scope of "trade dispute".
The dispute between the Government and these Benches has been the following. We have always said that multinational enterprise and transnational enterprise are so important today that one must treat the connection with matters abroad in the same way as trade disputes here. The Conservative Party has always said, "No, you must treat the matter as allowable within trade dispute only if it affects British workers".
I want to make it clear that the amendment is not an effort to resolve that dispute in our favour, but is an effort to make sense of the Bill, because the Bill at the moment just does not make any sense. The Bill at the moment says, as the previous amendment of the Opposition—as they then were in 1974—said, that the trade dispute can relate to matters occurring outside Great Britain:
"so long as the person or persons whose actions in Great Britain are said to be in contemplation or furtherance of a trade dispute relating to matters occurring outside the United Kingdom are likely to be affected in respect of one or more of the matters specified …"
The people who are acting in contemplation or furtherance of the trade dispute, on the assumption that there is a strike or industrial action, are the organisers; they are the defendants who are being sued as having acted and organised industrial action in contemplation or furtherance of a trade dispute. But the Bill says—as did the previous clause that the Opposition put in, that we removed—that it is their interests that have to be shown to be affected in respect of one or more of the matters specified.
Trade union officials may not be able to show that their interests are affected, and I do not believe that that is what the Government mean. I do not believe it is what the Conservative Party meant in 1974; I believe that they meant—and they would be very silly if they did not mean—to say what Amendment No. 135 says; namely, that the interests, either of the union officials who organise the action—if you want that in, although it is rather odd—or secondly, the interests of the workers who are induced to take the action, but who are not the people acting in contemplation or furtherance of the trade dispute within the meaning of this Bill and the 1974 legislation, which it amends, are likely to be affected, which the court must look at under the Government's intention.
This is not in any way a wrecking attempt; it is an attempt to make sense of the clause. At the moment—and I press the point—the clause requires that the interests of the organisers of the strike must be affected by the dispute and not the workers. Surely the Government should accept that the trade dispute which they are narrowing so much should at least make sense in respect of overseas disputes, which are indeed becoming rather more important. I beg to move.
Lord Campbell of Alloway: Is not the problem in practice the sympathetic strike with the seamen who strike in this country within the jurisdiction by

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way of sympathetic action with, for example, the longshoremen in the United States of America? Is it not right that it is considered that it does not make sense to extend the area of disruption in industrial relations in that sort of way, because it is contrary to the economic interests of this country and that, therefore, this Bill, as it stands, far from not making sense—if the premise that I am putting forward is right—makes total sense? It depends on which way you look at it. I quite understand that the noble Lord, Lord Wedderburn, looks at it from a different point of view, but from the point of view from which we look at it, it makes total sense. I would therefore suggest that the amendment is not well founded unless one wishes to extend the area of trade dispute, which is the one thing which this Government are committed to narrow.
Lord Mackay of Clashfern: I am obliged to my noble friend. I think the point of view from which you start to look at this clause is important. Perhaps just before plunging into the detail, I could say a few words about our general attitude to disputes which relate to matters occurring overseas. We are not seeking to outlaw such disputes altogether, but we do not think that it is satisfactory that, under the present definition of a trade dispute, workers in this country can undertake damaging industrial action in the United Kingdom in support of a dispute overseas when they have no involvement in the dispute and are not affected by its outcome.
So what we are doing in subsection (4) of this clause is to say that disputes about matters overseas are not lawful trade disputes unless the persons taking action in the United Kingdom are likely to be affected by the outcome of the dispute. This seems to us to be a fair and balanced approach to the problem.
Turning to the amendments, the noble Lord, Lord Wedderburn, has questioned what we mean by the use of the words "person or persons" in subsection (4)—does it mean the workers who are taking the supportive action or the union or individuals who are organising it?
The answer is that it is intended to include the workers who are taking the action, and we find it difficult to believe that it will be interpreted in any other way. This is because when the Bill is enacted Section 29(3) will refer to persons who are likely to be affected by the outcome of the dispute in relation to one or more of the matters listed in subsection (1). That reference back to the list in subsection (1) does, in our view, make it clear to the courts that the persons covered in subsection (3) are intended to encompass workers.
On a straight reading of subsection (4) which the noble Lord read to us, that would be my impression also. I hope that in the light of that the noble Lord will see fit not to press this amendment. I appreciate the sense in which he has moved it, that it is not a wrecking amendment but one seeking clarification, but we believe that the person or persons whose actions in the United Kingdom are said to be in contemplation or furtherance or a trade dispute must
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include the people actually engaging in the industrial action.
On Question, amendment negatived.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 135:
Page 19, line 7, after ("Kingdom") insert—
("; or
(b) any person or persons whose acts in the United Kingdom are induced, counselled or otherwise caused by such actions,").
The noble Lord said: I apprehend that it would be a correct reading of the sense of your Lordships' Committee if I were to say that Amendments 135A, 136 and 137, which are concerned with the important question of the International Transport Workers' Federation, would be a matter which I would wish to speak to in the course of my speech on clause stand part, and indeed that the other amendments, if my noble friend agrees with the suggestion, could be dealt with in clause stand part by way of, if your Lordships would agree, moving them formally so that they appear on the record and discussing the ship amendments in clause stand part. That is a suggestion which I may not have made in the correct manner or order, but no doubt the Government Bench will put me right if it is wrong. I beg to move.
On Question, amendment negatived.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendments Nos. 135A, 136, 137 and 138:
Page 19, line 9, at end insert ("or so long as one or more of those matters relates to persons employed within the United Kingdom or on a ship situated within the United Kingdom").
line 10, at beginning insert ("In").
line 13, leave out ("shall be omitted") and insert ("for the words" to which workers or as the case may be, employers are parties "there shall be substituted the words between workers and their employer where that dispute relates to persons employed on a ship situated within the United Kingdom"").
line 16, leave out ("in relation to a dispute with an employer") and insert ("for the purposes of determining whether a dispute is a dispute between workers and their employer within the opening words of subsection (1) above").
On Question, amendments negatived.
[Amendments Nos. 139 to 141 not moved.]
On Question, Whether Clause 16 shall stand part of the Bill?
1.38 a.m.
Lord Wedderburn of Charlton: I wish to assert strongly that a number of the matters we have not discussed in detail are nevertheless of great importance. What could be of greater importance than the definition of "trade dispute"? The Government's own Green Paper of 1981 accepted at paragraph 384:
"The immunities are not simply legal privileges which could be abolished outright. Without some legal protection, however circumscribed, it would be impossible for trade unions or individuals to organise industrial action without risk of civil proceedings, and the ultimate safeguard of collective withdrawal of labour would be effectively nullified."
Although that is a modest statement, nevertheless it puts the issue of the clause correctly; namely, that if you reduce the immunities sufficiently, and the best way to do it is to reduce the basic formula of that which

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defines a trade dispute, then you effectively nullify, to use the words of the Green Paper, the basic right of withdrawal of labour. It may be that some of your Lordships think we are taking a small step, but this Committee tonight is crossing two Rubicons at once.
First, the Taff Vale principle has been revived. Secondly, if the Committee passes the clause, it will reduce the concept of trade dispute to a point where the right to strike will be of a much narrower proportion than it was in our previous law and as it exists in other systems of law of comparable countries, and this country will begin to look like the pariah of the employment and trade union law system of Western Europe. It is not that there is any lack of difficulties in the definition of "trade dispute". Indeed, Professor Kahn Freund, who later, for 20 or 30 years, was the leading expert in the international world of democratic countries in labour law matters, said when he wrote his first major work in 1954 that the definition of trade dispute in the 1906 Act rested perhaps on a theory of society and politics which, even in 1906, was open to grave doubt, and which today is plainly untenable because, as he went on to suggest, it rested on a concept of a division between state and society which no longer fits the 20th century, if it fitted the 19th. That was his view. I discussed it with him, as many of us did, and it was an interesting proposition.
But at the end of the day, as a practical matter, he agreed, as we all did, that modern industrial legal systems must find a distinction because, as one noble Lord from the Liberal Benches said when debating an earlier amendment, if it did not exist, it would have to be invented. The division between trade dispute and beyond—political and other disputes—has to be found in a society, and, where it is found, should reflect a point on consensus, because if that is lacking, then the division will not be accepted. And since it is a manufactured thing and is not inherent in society by the law of nature, it is something for which those who make policy are responsible. It is not given to them; they manufacture it. But if they manufacture it in such a way as to make cramped the consensus they found when they came into office, their responsibility may be profound.
Thus, the enlargement of political disputes, as we have seen in this clause, is the first step the Government take, and therefore fewer strikes will be lawful, with the narrowing of the area of the parties to the dispute; only the employees of that employer, with the employer able to decide where the employment unit is to be found. I noticed that the noble Earl and the noble and learned Lord did not rely very strongly on the subsection; I think it was mentioned in one speech, but not very clearly. I refer of course to the subsection which says that this provision does not affect the question whether a party is acting in contemplation or furtherance of a dispute, whether or not he is a party to it. They know as well as I do that that is the last refuge in court, and it is very difficult to show that, as is shown by many cases from the 1960s onwards.
The parties are important and the connection is important, and one other matter is important, and that is the definition in subsection (6), which redefines "worker", not only in relation to the parties but also in relation to the content, so the dispute between the
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workers and their employer can now only be about their own employment positions. An amendment was moved in another place and the Government changed the formula to make quite sure that that was so. So they have narrowed the area to little pockets of workers. There are many illustrations of the way in which this is unreasonable, but I will give merely two to conclude our opposition to the clause.
The first is that there are groups of workers who are in need of support and to whom British workers have for many years, in an honourable tradition, given, without profit to themselves, industrial support which is matched only in some of the more advanced labour movements of Western Europe. The best example is the flag of convenience. I have in my hand a copy, of which I have seen many, of a letter written by a seaman from an East Asian country. The name and address must be whitened out because, if it should be found, he would be sent home and, what is more, none of the wages having been paid for three months, that would be deducted and he would not be paid anything at all. One member of crew whom I heard about in a case was flown to New York, where he was persuaded to take back what he had said to the International Transport Federation officer, who had managed to find him in port, in the few minutes that he was allowed to talk to him.
Flag of convenience ships are death traps, cause pollution, and in every way form an unsatisfactory world system of shipping. They are in fact a threat to British shipping. British seamen do not support flag of convenience vessels. British seamen who went to the Falklands do not support the idea that we must let off the flag of convenience shipowners, so that competition can improve our chances in international trade.
The flag of convenience ship has traditionally been permitted by the Government of this country to be aided by the trade union movement, and it has always done so by way of secondary action, because the crew is locked up in the ship and not allowed ashore, and the only way in which the International Transport Federation can be assisted in getting to the owners and negotiating for the crew is if the ship does not leave port. In the 1980 Act the Government have made that unlawful. The recent case in the Court of Appeal of Marina Shipping v. Lawton has shown that blacking of that kind is unlawful under the 1980 Act, with almost no gateway through which to slip to legality. Now under the Bill the restriction of trade dispute will be another nail in the coffin—and perhaps literally in the case of the people who, unhappily, are aboard the ship. How the Government at all positively justify the failure to include within the Bill an exception at least in respect of support for the crews of flag of convenience vessels I really fail to understand. The whole thrust of the Bill, and in particular the present clause—and this is the nub of our reason for opposing it—is that they do not permit groups of workers to support one another; the strong to aid the weak. That view is very different from one that was given in 1958.
In conclusion, I should like to read to the Committee a different view that was taken in 1958. It suggested that it was sometimes legitimate and sometimes

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illegitimate to allow for sympathetic action, as it was then called; we had not then heard of secondary action. It was stated:
"Further, the old conception of a separate industry, and certainly of one industry isolated from the rest of the economy, is outmoded. In truth, this, like the prior question of the justifiability of the strike generally, is one of expediency. The power to strike sympathetically is politically, socially and economically justified if without it employees will have insufficient bargaining power; but not otherwise. On this test, in conditions of full employment and a delicately balanced economy where the threat of the strike is a powerful and menacing one, it is almost certainly unnecessary".
That was stated in 1958 by the Conservative and Unionist Inns of Court Society, on page 26 of a document entitled, A Giant's Strength.
Of course on that premise the society concluded that with full employment sympathetic action was, in its eyes, not needed. Today, with three million unemployed, where are the same gentlemen, saying, "Let the workers support one another"? They are certainly not in this Chamber. I suspect that some of them are elsewhere in the building. But the same line is not propounded by Conservative lawyers today, because the line that is propounded is always the one that restricts the rights of workers, as it has been since 1927; indeed even since 1901. Only Disraeli gave the Conservative Party any kind of pedigree on the right to strike, and it lost it at the turn of the century. It will not recover it with the present Bill. If the Conservative Party passes the Bill in its present form, it will encounter very solid opposition to the ideas that are there put forward, as well as a firm proposal to repeal this monstrous clause, if it is ever enacted.
Lord Underhill: I rise to say just a few words in order to indicate quite clearly that everything my noble friend has said is, I think I can say, fully supported by all the Members on these Benches. Members opposite smile, but we are really serious on this issue. I should like the Minister who is to reply to justify why in this clause the Government are taking steps to remove the possibility of international solidarity. I should have thought that this was one thing upon which the whole Committee would be united, whether it be to avoid cheap labour, whether it be to avoid action possibly being taken on the blacking of supplies to dictator countries like El Salvador, where supplies may be used against progressive forces, or whether it be in order to prevent non-union activities in certain countries. It seems to me that this is international solidarity, where one ought to give support.
I should like to ask a question. We have (I presume it is a true report) a disgraceful report in today's press of the dismissal of certain men on the "Canberra" and their replacement by Indian seamen earning a quarter of the salary of the dismissed United Kingdom sailors. What would be the position if the rest of the ships in the P & O Line said, "We will strike in sympathy? I would have thought that this was a genuine dispute. I hope I am wrong, but presumably this would be outlawed by this clause. I think my noble friend has made quite a strong case about the position which is now obtaining whereby one can have a firm taking action against one section and whereby the rest of the workers in that concern say, "If this is not resisted then it will spread to us", so they feel that the only thing they can do
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is to strike, even though they are not directly involved at that stage.
As I have said previously, I want to see the number of disputes reduced to a minimum, even eradicated, by proper industrial relations, industrial democracy; but that does not mean that we have to give up the right that workers have to defend other workers who need assistance and to take action when they fear it may spread to themselves.
In an earlier debate I put one or two other points. Let me take a construction site, because this happens so often there. If workers take strong resentment because a contractor or a subcontractor is coming in who is anti-union, who everybody knows is anti-union and who has conditions of work which are well below the recognised standards, then these workers, who have a good agreement with their own employers, may say, "We will not have these people on the site". I would have thought that that was a legitimate stand to take. I believe it would be outlawed by this clause. Surely that is something we ought to resist.
The other case I mentioned is if one has very good relationships with one's own firm but one knows that supplies are coming in from, again, a firm which is completely anti-union, which will not recognise a union and which will not have agreements with a union, and which is undercutting recognised rates. The workers in the firm, which has very good relationships with its own employees, say, "We will not have those supplies; we will black them". That will be outlawed by this clause. I hope the Minister can say that I am wrong and that these cases that I have mentioned will not be outlawed, but if all these three cases are outlawed by this clause then it is one which ought to be resisted because it is taking away the normal rights of workers, not only to protect their possible interests later on but also to declare solidarity with fellow workers.
Lord Campbell of Alloway: May I assure noble Lords on the Benches opposite that I take the threats of opposition to this Bill and as to the repeal of this Bill quite seriously. So, indeed, no doubt, will the rank and file trade union membership, and so, indeed, no doubt, will the electorate when it comes to the next general election. But to deal with the point that is made about "trade dispute" and the narrowing of "trade dispute", it is right that noble Lords on the Benches opposite should accept that ever since the decision in Torquay v. Cousins, which was in 1969 and in which the noble Lord, Lord Wedderburn, appeared as junior counsel, the Labour Party has consistently sought to widen the definition of "trade dispute as a matter of policy. I do not criticise them for their policy. I just happen to think that their policy is misconceived and wrong. But this is what it is all about. Their policy has been consistently to widen it; we are now bringing it back to a more balanced state.
Finally, I should like to say a word about the ITWF which appears to give rise to some emotive considerations, if I detect these aright, as regards the noble Lord, Lord Wedderburn. There are two sides to this ITWF problem. I know that from the three cases that I have had in my own professional experience at the Bar, all of which are reported and all of which will be well known to the noble Lord, Lord Wedderburn. On the one side, as he speaks in his emotive way, there

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are these hulks and, on the other side, there is extortion by the trade unions, there are threats by the trade unions there is improper pressure to drive funds out of ship owners as fines in order to release the ship. There are two sides to most problems and there are assuredly two sides to that problem.
1.56 a.m.
Lord Hatch of Lusby: I have sat through most of the Committee stage of this Bill and have deliberately refrained from taking part in the detailed debate since Clause 1, the reason being that Clause 1 was important in the first half of the Bill, the part in which trade unionists were tempted by the offer of large sums of money to leave their unions. But this clause is the fourth clause of the real heart of the Bill, the Bill which is intended to open up trade union funds to confiscation. I think it would be right before we divide—and I hope that we shall divide on this—to put the Bill itself in its political context for one or two moments.
This Government's policies, as they themselves must agree, have been responsible for soaring unemployment, for falling living standards, for reduced social services and social security benefits, for a rundown in the public infrastructure and for handing back public industries to private ownership. The attack on the trade union movement that is contained in this Bill is an integral part of this policy. It is part of the strategy of the Government, and I think that everything that has been said in this Committee, as in the Second Reading debate, shows that this is a consistent strategy on the part of the present Conservative Government.
But do we really believe that, towards the end of the 20th century, the workers of this country are going to take this kind of policy without some form of revolt, without some form of opposition to what they find is being done to themselves and to their families? It is the only weapon that the working people of this country have: to withdraw their labour when the situation becomes intolerable, and this is a principle which has been increasingly recognised all over the world over the past 150 years. It is the only possession they have which they can put to any use against this kind of strategy. But as individuals they are virtually helpless, and that is the reason and that has been the reason throughout the 20th century at least since 1906—and I would remind Members of the Liberal Party that it was their Government that recognised this in 1906—why the protection of the law is needed so that the individuals can work together, can combine together, to overcome their weakness by collective action.
This Bill attacks that protection. It attacks it in a number of ways, and I am going to refer only to those that are dealt with in Clause 16. First, in 1980 there was the restriction of picketing and on secondary action. This Bill adds to that, as has been so lucidly pointed out by my noble friend Lord Wedderburn, the extension of the conception of the political strike and the restriction of the definition of industrial action.
I would point out that when Members of this House are talking about a strike being a political strike, they may well refer to the Green Paper that was quoted by my noble friend Lord Wedderburn, who referred to
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another section from that Green Paper, paragraph 192, quoting Lord Justice Roskill. I will only take one sentence from the quotation, because it is the relevant one:
"It is all too easy for someone to talk of a strike as being a political strike when what that person really means is that the object of the strike is something of which he as an individual subjectively disapproves".
The phrase in this clause of the Bill "wholly or mainly" is clearly designed to extend to the concept of industrial action as political action when that action is disliked by the Government. Secondly, this clause can only do untold damage to industrial relations in this country.
I mentioned the question of industrial relations when I spoke on Clause 1. This clause goes much further and has a much worse effect. It creates new flashpoints in industrial relations. It attacks the internal cohesion of the trade unions, and we saw an example of this when the noble Lord said, "You can always dismiss the honorary president of the union". It is that kind of internal wrangling, quarrelling and dispute within the unions which can sadly and dangerously damage the industrial relations of this country.
As I say, I hope we are going to divide on this, because I believe that it is expected of us by those who have built up the trade union movement in this country and also by those who have built up the trade union movement in the world. I well remember the international action that was organised by the International Miners' Federation when the new mining unions in Africa were under attack by colonial governments and were assisted by the trade union movement of this and other European countries as a matter of international solidarity. But, if we do divide, I should like to address one short word to the famous Alliance here, because, as on Clause 1, I am still very confused. In another place in a similar situation on Clause 16 of this Bill, the Liberal Party voted with the Government and the Social Democratic Party voted with the Opposition. I hope they have had time to get together tonight and discover that the instincts of the Social Democratic Party on this occasion are more in tune with the national and international interests than those of the Liberal Party. I also hope that the members of the Social Democratic Party have examined their own record in the Division Lobbies of 1980 before they decide which way they are going to vote on this point.
Lord Kilmarnock: Will the noble Lord give way? Before he presumes to lecture the Alliance, he may like to accept, as I think he will have to, that certainly in the perception of the general public in this country, the divisions currently existing inside the Labour Party are far and away of a larger order of magnitude than any minor cracks there may appear to be in the Alliance.
Lord Hatch of Lusby: I would not dream of trying to lecture the Social Democratic Party or indeed any member of it. What I would suggest, though, is that when you look at the Division lists you will not find the divisions within the Labour Party that have become quite apparent between the two sections of the Alliance during the passage of this Bill through both Houses of Parliament, and I was just hoping that this time they

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would get together and see sense and see, also, the important morality which some of them were very vociferous in expounding only two years ago. I hope that we shall divide and get the support of the Liberal Party with, at least, their recollection of 1906, and that the Social Democratic Party will join them.
2.10 a.m.
The Earl of Gowrie: We have had a good run on this clause and, in answering just one or two points, I shall be very brief. I should like to thank the noble Lord, Lord Wedderburn, for moving the previous amendments en bloc and saving us a bit of time, and, also, as we pass the two o'clock mark, to congratulate the noble Lord, Lord Wedderburn, on his stamina. He has taken the biggest burden of this debate and seems to be in fine fettle, fine voice and fine mind. I should like to commiserate with him on the habit of some of the Cross-Benchers of referring to him as a polytechnic lecturer, which is not how I would describe the London School of Economics, fine though most of our polytechnics are—
Lord Wedderburn of Charlton: If the noble Lord will allow me to say so, I am sure that the universities and the polytechnics stand in solidarity together.
The Earl of Gowrie: I am sure that the noble Lord will pass that on to the noble Lord, Lord George-Brown. The thing that really puzzles me, though, after 33 minutes of debate, is the way in which members of the Committee, such as the noble Lord, Lord Underhill, and the noble Lord, Lord Hatch, persist in treating workers or members of trade unions as if they were bears of very little brain. It is astonishing to find such patronising attitudes coming from the Labour Party towards what are, supposedly, their traditional supporters. The idea that there are no methods of showing international solidarity, or registering disapproval of actions by overseas employers or Governments, other than taking action winch affects jobs and prosperity here at home, seems to me to be quite extraordinary.
In this clause, we are simply seeking to restrict industrial action about matters which are external to a company, and which do not directly concern the employer or his own employees. It would seem to us that, to the vast majority of members of trade unions and to employers, industrial relations and industrial action are fundamentally about what goes on at the work place. There must be other methods of registering political assent or dissent, or political approval or disapproval. The fact, also, is that purely political strikes, as the noble Lord, Lord Wedderburn, will well know, have never had immunity. They are not connected with the normal subjects of a trade dispute listed in Section 29. So the accusation that the Government are, in some way, outlawing political strikes for the first time in this Bill is utter nonsense. All we are saying in the Bill is that, where a strike is mainly for a political motive and has only a slight connection with the subjects of a trade dispute, it will fall outside the definition in future.
The noble Lord, Lord Wedderburn, has sought to justify special treatment for the International Transport Workers' Federations, because of the special vulnerability of seamen on ships which sail under flags of convenience. This is not, perhaps, the place and is
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certainly not the hour to get into an argument on the relative merits of flags of convenience ships, but it is important to understand what the ITWF and those who support them are asking for when they seek exemption from this Bill. Not only do they want to be allowed to continue practices which, in a domestic context, most people regard as unacceptable, but also they are seeking to be allowed to use British ports to further an international campaign.
With respect to them, the problem is that Britain is one of the few places in the world where the campaign can still be conducted lawfully, but we are a trading nation and much of the wealth of our nation and the livelihood of so many of our people depends on the free flow of goods through our ports. If Britain is virtually the only place in the world where this kind of campaign can be conducted, trade and jobs depending on it will be put at risk because only high cost shipping will be prepared to come into British ports. The economic justification therefore for our changes in the Bill in this respect seems to me to be very great indeed.
On the issue of the "Canberra", there is nothing in the clause to stop workers in a dispute with P & O being laid off, nor is there anything to stop other P & O workers taking action to support such workers. All that is primary action unaffected by the Bill. The Bill takes measures against secondary action.
I refute altogether the charges that the changes we have made are anti-trade union. Trade union activity, to most people, means protection of the terms and conditions of employment. You have to have employment for its terms and conditions to be protected and so many of the suggestions made by noble Lords opposite would add to our already unacceptable levels of unemployment.
Baroness Seear: Before the noble Earl sits down, may I ask him to clear up one point? It may have been dealt with already and, because of the lateness, or should I say earliness of the hour, depending on one's point of view, I may have failed to appreciate it. If there is a dispute in one country, can the employees of that company in another country strike in support of the initial dispute in the foreign country? They have a common employer, but the dispute is outside the United Kingdom.
The Earl of Gowrie: I should have to take advice on that, but, as I understand it, they would not be covered by the immunity so long as they are unaffected by the outcome of the dispute.
2.18 a.m.
On Question, Whether Clause 16 shall stand part of the Bill?
Their Lordships divided: Contents, 53; Not-Contents, 20.

DIVISION NO. 4

CONTENTS

Airey of Abingdon, B.

Campbell of Alloway, L.

Avon, E.

Cathcart, E.

Aylestone, L.

Coleraine, L.

Blake, L.

Cork and Orrery, E.

Boardman, L.

Craigmyle, L.

Caldecote, V.

Davidson, V.

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De La Warr, E.

Montgomery of Alamein, V.

Denham, L. [Teller]

Mottistone, L.

Elton, L.

Murton of Lindisfarne, L.

Ferrers, E.

Pender, L.

Gainford, L.

Redesdale, L.

Glenarthur, L.

Rochester, L.

Gowrie, E.

Romney, E.

Gridley, L.

Saltoun Ly.

Harris of Greenwich, L.

Sandford, L.

Harvington, L.

Sandys, L. [Teller.]

Henley, L.

Seear, B.

Kennet, L.

Sempill, Ly.

Kilmarnock, L.

Skelmersdale, L.

Lindsey and Abingdon, E.

Spens, L.

Long, V.

Teviot, L.

Lyell, L.

Thomas of Swynnerton, I.

Mackay of Clashfern, L.

Trenchard, V.

Mansfield, E.

Vaux of Harrowden, L.

Margadale, L.

Yarborough, E.

Massereene and Ferrard, V.

Young, B.

Monk Bretton, L.

NOT-CONTENTS

Birk, B.

Kirkhill, L.

Bishopston, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Blease, L.

Boston of Faversham, L.

McCarthy, L.

Brooks of Tremorfa, L.

Oram, L.

Collison, L.

Pitt of Hampstead, L.

David, B. [Teller.]

Ponsonby of Shulbrede L.

Davies of Leek, L.

Underhill, L.

Ewart-Biggs, B.

Wedderburn of Charlton, L.

Hatch of Lusby, L.

White, B.

John-Mackie, L.

Resolved in the affirmative, and Clause 16 agreed to accordingly.
2.25 a.m.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 141A:
After Clause 16, insert the following new Clause:
("Amendment of sections 13 and 30 of 1974 Act.
.—(1) In section 13 of the 1974 Act (acts in contemplation or furtherance of trade disputes) subsection (2) shall cease to have effect.
(2) In section 30 of the 1974 Act (interpretation), in the translation of "tort" as respects Scotland, for the words from "any to "reparation" there shall be substituted the word "delict".")
The noble and learned Lord said: The first part of the new clause which constitutes this amendment seeks to repeal a provision which first appeared in trade disputes legislation as long ago as 1906. There had been a decision in a case called Allen v. Flood in 1898 that mere interference with business—that is, interference with business without use of other unlawful means—was not actionable as a tort in its own right. The Royal Commission recommended that this decision on mere interference with business should be given legislative effect to guard against any reversal of the Allen v. Flood judgment. This was considered necessary because the law in this area appeared to be unsettled at the turn of the century and there were some dicta which cast doubt on the Allen v. Flood judgment.
The predecessor of Section 13(2) was simply intended to guard against a reversal of the Allen v. Flood judgment, and the record of debates on the 1906 Act makes this perfectly clear. In between 1906 and the 1960s it became even clearer that the tort of mere interference did not exist—not least in the case of Rookes v. Barnard.
When the Donovan Commission's report in 1968 considered whether the immunity in Section 3 was still needed, it accepted that,
"strictly speaking … there would seem to be no need today for the second limb in Section 3",
of the 1906 Act. However it also pointed out that the provision did no harm, because,
"if illegal means are used to bring about the interference [with business] then the section gives no protection, and never has."
Donovan therefore concluded that there was no reason why the provision should not remain on the statute book. When the Labour Government re-enacted the 1906 immunities in Section 13 of the 1974 Act, they incorporated this provision as subsection (2). It was clear that this subsection was no more than a declaratory provision and did not give a substantive immunity, because it was prefaced with the words "for the avoidance of doubt".
Now, however, there are indications that the continued presence of subsection (2) on the statute book is actually creating doubt rather than avoiding it. In two recent cases—the case of Hadmor Productions v. Hamilton in this House and the case of Plessey Company PLC v. Wilson and Others in the Court of Session, it has been suggested that Section 13(2) might be providing an immunity against interference with business by unlawful means. That is a development which was not in the minds of those who first enacted this provision, nor was it in the minds of those who have re-enacted it over the years. It has been suggested that the judgment in the Plessey case might in every case protect workers who occupy a factory to protest about its closure As one can imagine, this has caused considerable concern in Scottish industry. Some people have suggested that it might provide an encouragement to workers to occupy factories in Scotland without fear of the legal consequences of doing so. It was greeted by the Scottish TUC as a "charter for sit-ins", I understand.
Until this decision, it had not been thought that factory occupations were protected by the immunities in the Trade Union and Labour Relations Act 1974. This is clearly shown by the fact that, after the passage of the Act, the TUC continued to press the Labour Government to make sit-ins lawful. At the TUC's 1975 conference, for example, it passed a motion calling for changes in the law which would enable such occupations to be treated as accepted forms of industrial action with immunity from legal proceedings. I do not know what became of that motion, but I do know that the Labour Government of the day did not change the law, and I can only conclude that they also saw dangers in legalising such occupations.
We are also taking the opportunity, in subsection (2) of this new clause, to amend the definition of "tort" as respects Scotland in Section 30 of the 1974 Act. The English word "tort" has always had to be translated for the benefit of Scottish practitioners, and the present translation says that tort means,
"any wrongful or negligent act giving rise to liability in reparation".
The phrase is somewhat cumbersome and does not fit well into many of the provisions of the 1974 Act. That was apparent in the Plessey case in the Court of Session. Further, there may be wrongful acts which

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in England would be torts but which in Scotland, depending on the circumstances, would not found an action of reparation. Since the intention is that a wrongful act should be treated in the same way on both sides of the border in this particular context, it is proposed to alter the translation so as to substitute the single word "delict" for the awkward phrase which I have quoted. The clause then is intended to produce a result which was widely believed to be the result before the judgments in the Hadmor and Plessey cases. I beg to move.
Lord Campbell of Alloway: I raised this matter at Second Reading. It is a technical matter. The object of this amendment is to ensure that the ambit of statutory immunity afforded by Section 13(1) of the Act of 1974 should not be extended by Section 13(2) in accordance with the interpretation of your Lordships' Appellate Committee in Stratford v. Lindley, and the Court of Appeal in Torquay v. Cousins, those being both more recent decisions. These decisions were on the Act of 1906, and the sister provisions of the Act of 1906 are reflected in Section 13 of the Act of 1974. These decisions held that the equivalent of Section 13(2) was declaratory only, and the object of this amendment is to give effect to that judicial interpretation.
The problem has arisen recently because of the case mentioned by my noble friend Lord Mackay of Clashfern, the Hadmor decision, Lord Diplock, and Mr. Justice Templeman (as he then was) in the case of the tanker "Camilla M". This has been exacerbated by the decision of the Inner House of the Court of Session in the Plessey sit-in case. This is a serious problem in practice, having cleared away the technicalities, because a sit-in involves the extraneous tort of nuisance or of trespass, and it was held that the sit-in was lawful, notwithstanding these extraneous torts. It is clearly, in submission, unacceptable that Section 13(2) should be construed as a licence to commit such extraneous torts. If it is declaratory, it is a useless appendix which has led to judicial confusion and should be removed.
Lord Wedderburn of Charlton: Both the noble Lord, Lord Campbell, and the noble Lord the Minister have addressed this repeal of a section which has been in our trade dispute law for many years, as the noble and learned Lord said, since 1906, in two ways: first, that the subsection does not matter and can therefore be removed; and, secondly, that it does matter and therefore it had better be removed. It is an interesting way that the Government have of approaching our trade union rights and trade dispute matters. Although broadly I accept the historical account that the noble and learned Lord provided, admirably condensed—what a tortuous route it really was—nevertheless, I must add a word because there is a question mark against it.
It is perfectly true that, when it was enacted in 1906, in the second half of Section 3 of the 1906 Act, that a mere interference with trade done in contemplation or furtherance of a trade dispute should not be actionable, it was widely thought by some lawyers that there was such a cause of action in tort by what was then
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usually called malicious interference with trade per se, a wrong which was thought to date from Sir William Earl and his memorandum of 1869. It is true that the majority view was that that cause of action with the genius of the common law for change died away. So when one came to Rookes v. Barnard in your Lordships' Judicial Committee in 1964 Appeal Cases, it is found that Lord Reid was saying the section was unnecessary, Lord Evershed, after a struggle trying to interpret it, said it was nugatory, and the noble and learned Lord, Lord Pearce, said with a little puzzlement that it appeared to be pointless. However, Lord Devlin did not express that view. If the noble and learned Lord would look at page 1215 of the report, he will see that Lord Devlin said:
"I do not think that it is necessary for the House to decide whether or not malicious interference by a single person with trade, business or employment, is or is not a tort known to the law: but I must at least say what I mean by such a tort—I mean, putting it shortly, Quinn v Leatham without the conspiracy".
That, of course has been its name in the trade ever since.
It is not finally decided whether there is a wrong of some kind which is Quinn v. Leatham without the conspiracy; it has never finally been decided that that is so. Although it is true that most people think that there is not, the Government choose a very odd moment when the matter is still in some doubt to take away yet another immunity. They got rid of Section 13(3) in 1980; they are getting rid of Section 13(2) now; they emasculated Section 13(1) in the Bills of 1980 and 1982; and they told the trade unions, "Do not worry about liability in tort; it is true you have it imposed on the Taff Vale principle, but it will be all right because you have trade dispute defences."
Then we come to Scotland. I noted that the noble and learned Lord was slightly more reticent perhaps about the Scottish position, but I plainly cannot challenge him on it, coming from south of the Border. Fortunately, there arrived only yesterday a note on the Plessey decisions, by which I mean the first decision and the second of the inner and outer house, I believe, of the Court of Session. The judges appeared to be saying, as the noble and learned Lord said, that a sit-in just by itself might be an interference with trade and, therefore, defensible under this section. Of course, if that were so, it would be important at any rate as far as these proceedings go. But it is very tentative. The noble and learned Lord may have read the judgment; I certainly have. It would not take long to read it out, but I shall not do so; it is of only one column. They are only saying that this may be the position, "we shall see".
In the 1982 June number of the Industrial Law Journal Mr. Miller of the University of Strathclyde has written a note on the case and the judgments at page 117 which, if I may, I shall summarise for your Lordships. First, he says that the "relevance and force of the judgments"—that is his phrase—are diminished by the nature of the interlocutory or interim proceedings, as he rightly calls them. Secondly, he stresses that the judges were at pains to point out:
"that if the case ever went to full trial on the merits Plessey might be able to lead evidence that would show conclusively that a sit-in is more than just an interference with a trade or business".

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Thirdly, he adverts to the point which I believe to be the case:
"that this has particular significance for England because of the differences in trespass laws between the two countries. In Scotland trespass is merely part of the general law of reparation and land ownership. A trespass per se gives no right to a proprietor to sue for damages".
I only have Mr. Miller's word for that, but if that is really Scottish law, then of course it is very different from English law.
So in the Plessey case—which has finally concluded the Government to get rid of this section which has been there for so many years—they first of all decided, contrary to the full evidence, that it was clearly unnecessary; that secondly, there was a whiff of possible life in the old section from Scotland where the judges tentatively in interim decisions decided that they might conceivably have a defence in an area where trespass is actionable without proof of damage. Then the Government come along at the Committee stage of this Bill in your Lordships' House and take away yet another of the basic immunities if there is a liability here to be defended.
I find this most extraordinary, and in the history books on the subject it will not look a very pretty picture if they manage to kill off Section 13(2) now, and it is found, and it may well be—and we come to this in a later new clause—that the courts find new areas of civil liability. If the noble and learned Lord could give me a guarantee that I now know or at least can find out—because I am sure that I do not know them—and if the noble Lord, Lord Campbell, can show me and we can go to the Library and say, "That is the law of tort; now you have a defence for this piece and this piece"—if you can assure me that there will be no more liabilities based on interference with trade, then at least I would feel a little happier. But I suggest that it would be a rash noble and learned Lord Advocate, possibly even a rash noble and learned Lord Chancellor, or a rash benchful of judges who could ever give that kind of guarantee with the legal system that we have. It is in that way that it is sad and really indefensible on the case that has been made to repeal Section 9.
Lord Mackay of Clashfern: Perhaps all I need say is that I have no intention of being rash.
On Question, amendment agreed to.
2.40 a.m.
Earl De La Warr Earl De La Warr moved Amendment No. 142:
After Clause 16, insert the following new clause:
("Election of President, General Secretary and principal executive committee of trade union.
.—(1) The rules of a trade union shall, subject to subsection (2) below, provide by 1st January 1985 that the President and the General Secretary, or the holders of equivalent offices, and the members of the principal executive committee of that trade union shall be elected not less often than every five years by a secret ballot of members of the trade union, which shall be conducted so as to secure that, as far as reasonably practicable, all those entitled to vote have an opportunity to do so.
(2) If, after 1st January 1985, the rules of any trade union do not provide for elections as set out in subsection (1) above, not less than one thousand members of that trade union or five per cent. of the membership of the trade union (whichever is the less) may require the Secretary of State to amend, in accordance
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with subsections (3) and (4) below, the rules of the trade union to give effect to subsection (1) above.
(3) The Secretary of State, having received a requisition in accordance with subsection (2) above and having consulted with officials of the trade union, shall prepare and lay before each House of Parliament the draft of an Order giving effect in the rules of the trade union to subsection (1) above.
(4) Where a draft order under this section is approved by resolution of each House of Parliament, the Secretary of State shall make an order in the form of the draft.")
The noble Earl said: Before I start to speak on this new clause, I think I should say that I understand that the noble Lord, Lord Aylestone, will also speak to his clause at the same time, and I very much welcome this because they both deal with the same thing. Your Lordships will know that this is a new clause which is the same as the one that was to have been moved in another place on Report by my honourable friend Mr. Renton. It was never moved, as the Report stage ran out of time, and so no indication was given of the Government's attitude. Briefly, this clause is designed to achieve that, by 1st January 1985—that is, two and a half years' time—each union's rule book shall provide that at least every five years the president and general secretary and the members of the principal executive shall be elected by the secret ballot of the members.
If, after the two and a half years are up, these changes have not taken place, then, at the petition of a relatively small percentage of the members, the Secretary of State must lay an order before Parliament requiring those changes to be made. We are now discussing the second lot of employment legislation in the lifetime of this Parliament. This second lot, if I may say so, is very much the 1980 Act Mark 2. It toughens up many aspects of the 1980 Act, particularly with regard to closed shops and related matters and, of course, it grasps the nettle of the liability of the unions themselves to legal action. But both Bills concentrate on who may take whom to the courts to right specific wrongs.
This new clause moves into a further, and I should say quite a different, aspect of industrial affairs. I want to suggest that your Lordships accept three propositions: first, that the danger of the unions getting into the hands of militants is greater now than it ever was before and that this is a terrifying prospect for our country; secondly, that the vast majority of trade unionists take this view themselves and would welcome the chance to gain more control over the affairs of their union; and, thirdly, that nothing could change the attitude of unions to their employers more than if their officials had to stand regularly for election in a normal democratic way.
I believe—and I believe strongly—that the Government have been very unwise in failing to deal with this aspect of the trade union movement in this Bill. Your Lordships will remember that Sections 1 and 2 of the 1980 Act made specific provisions for various aspects of balloting, including this one. But there is no follow-up to these provisions in the current Bill.
Something over a year ago, in April 1981, we debated the Green Paper, Trade Union Immunities. I had it in mind to read a section of the speech I made then, but I shall spare your Lordships on account of the time, and confine myself to saying that I begged the Government

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then to get on with dealing with the question of balloting for union officials, and I said that I thought that that was far more important than balloting over strikes, which is a quite separate matter. I begged them then and I beg them again this morning.
I well understand that outside interference with rule books is highly contentious, though I doubt whether it is any more contentious than the repeal of Section 14 of the Trade Union and Labour Relations Act 1974, much as I welcome that. But let us agree that it is a sensitive matter because it seeks to deal with the internal affairs of the union. But to try to achieve something as important as this without doing it through the medium of the rule book is impossible, and were we to do so we would quite rightly be accused of attempting to subvert the way that unions order their affairs.
Rule books are tremendously powerful. The noble Viscount, Lord Trenchard, gave us one good example from a rule book:
"The National Executive Committee shall have power to fine, and/or suspend all benefits, and/or exclude from office in the Association, and/or exclude from the Association any member who, in the opinion of the National Executive Committee, by his conduct acts against the interests of his Association."
I would only interpose that I have never heard anything like that since way back in 1939 when I first heard of Section 40 of the Army Act.
It will take many years before this sort of measure can have any chance of producing the change in attitudes for which we are all looking. This clause deliberately allows for a long time to elapse before the Secretary of State's back-up powers come into effect, for no union can be asked to make a major change in its constitition overnight. Perhaps more important, no union can be expected quickly to set up a central register of its members, which is surely the sine qua non of an effective voting system in any organisation.
This is one of the reasons why we are asking for legislative action now and not next year; not sometime, but now. It is most important that Parliament should for the first time during the passage of this Bill have the benefit of a full statement of the Government's views on the question of regular balloting for national officers. I hope that they will accept the essence of this proposed new clause, will tell the Committee that they intend to wait no longer and that they will be inserting their own clause at Report stage. I beg to move.
Lord Aylestone: I am grateful to the noble Earl for mentioning the new clause which stands in my name and that of my noble friends, which in principle is exactly the same as his amendment. I assure the Committee that, having made a brief comment on his amendment, it will be my intention to withdraw our Amendment No. 148 when, in an hour or so, we reach it. As I say, the principle of the two amendments is the same; we are of the opinion that trade unions should elect their chief officers, executive officers, executive committees and anyone of that rank who has the right to vote by secret ballot. In saying that, we accept at once that there are many unions to whom this already applies, in particular the National Union of Mineworkers, which has already been mentioned, who not only have a ballot but use a private company to see that the operation is correctly
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carried out. We should like to see all unions do the same. On the contrary, however; not only do many unions not engage in secret ballots, but some of them—we are clear about this from evidence that has been collected over the years—are somewhat suspect.
The difference between the noble Earl's proposal and ours is in the way in which we approach the problem. He uses the Secretary of State, whereas, as I said when debating a previous amendment, we feel that the Secretary of State should not be quite so involved. Accordingly, in our proposal we bring in the certification officer, who is appointed by the Secretary of State. The certification officer's main job is within the rule books of the trade union movement; he does not have to approve the rule books, but he does vet them. He also, for example, decides what is or what is not an independent trade union. Therefore, we feel he is the right individual to undertake the work of ensuring that the objective of the noble Earl's amendment and ours is correctly carried out. I hope we shall be able to reach some sort of agreement between us whereby on Report we have tabled a proposal that is to the heart's delight of both of us.
Lord Massereene and Ferrard: I intervene briefly because for several years I have been proposing in your Lordships' House exactly what is proposed in my noble friend's amendment. As many noble Lords will be aware, often for union annual general meetings they choose an extremely unsocial hour and some dark and dingy hall in an out of the way place, to make sure that very few members turn up, and the principal officers and executive are often elected by a handful of people. I do not want to mention names particularly, but I believe that when the noble Lord, Lord Scanlon, was head of his union he was elected by 7 or 8 per cent. of the members. That is really most undemocratic and, as I have often said, it is time the unions became more democratic. I agree that some unions have moved in this direction, but I should like to see the whole trade union movement electing their principal officers by secret ballot in a democratic way.
Lady Saltoun: I too support the amendment. It is long overdue and we need it now, not next Session or the one after in yet another Employment Bill. This Government have, by their courage over other matters, won greater support in the country than any other Government since 1945. Courage is a most attractive virtue, and if they now have the courage to do what most people in the country want, they will earn everyone's admiration. We have been at this cherry twice. Let us stop nibbling at it like mice, and finish it off like men.
2.55 a.m.
Viscount Caldecote: I should like to say a few words in support of my noble friend Lord De La Warr, who has moved the amendment. The issue here is very different from that of having ballots on strike action, and there is every reason to bring the practices of all trade unions up to the high standards of those that already adopt the practice of electing their officers. There is no doubt that noble Lords opposite will say

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that this is a disgraceful proposal because it interferes with the internal affairs of trade unions. But if trade unions wish to be regarded as responsible bodies, representing large numbers of people, handling big sums of money, and with special privileges granted by law, there is no reason for them to resent a reasonable measure of regulation of this kind, just as other public bodies—companies, professional institutions, and the like—have accepted.
An important point is that if such an arrangement exists, or is adopted, then ballots on other important issues in industrial disputes—strikes, and the like—become much less significant because the officers and the executive committee of the union are much more likely to represent the views of the membership. For those reasons, I strongly support the amendment, and I hope that, if the Government cannot accept it tonight, they will at least move a similar amendment at the Report stage.
Lord McCarthy: I think that the noble Earl, Lord De La Warr, would accept me if not as a friend, then as a well-wisher. I am not sure that it does him much good if I say that I have always found him by far the wettest Conservative in your Lordships' House. I think that he is so wet that he cannot even be wrung out, but I think that from me he will take that as a compliment.
I know that he wants to do well with the amendment. So I begin by asking for information. I want to know what the amendment means. Earlier in the Chamber tonight we had very long speeches from noble Lords who had read bits of amendments. I suspected that some noble Lords read bits of amendments when they got into the Chamber; in fact they read them first to us.
I am concerned with a bit of the amendment that I have read previously, but I am still not quite sure what it means. So, to begin with, I have to read it and ask the noble Earl to help me. This is the crux of his amendment:
"The rules of a trade union shall, subject to subsection (2) below"—
That does not concern us at the moment, because it has to do with when things go wrong—
"provide by 1st January 1985 that the President and the General Secretary, or the holders of equivalent offices, and the members of the principal executive committee"—
To my noble friends that will be the national executive committee—
"of that trade union"—
and here is the bit with which I am concerned—
"shall be elected not less often than every five years by a secret ballot of members"—
of members—
"of the trade union, which shall be conducted so as to secure that, as far as reasonably practicable, all those entitled to vote have an opportunity to do so".
Now, my problem concerns the phrase "members of the trade union". Does it mean all members, or some members, or those members specified under the rule book? Then there is the phrase, "entitled to vote". Who would be entitled to vote? Would it be all the members, or some members, or those members entitled under the rule book, or who? This
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is not a distinction that I make to be awkward. I make it because it goes to the heart of any attempt to regulate trade union election procedure. It goes back to a point which I fear I made somewhat earlier tonight, regarding the primacy of the union rule book, because, if the noble Earl says to me, "Of course, yes, what I mean is all those entitled to vote under the rules", then I say to him, with respect, that the trade union movement, for good or ill, could face subsection (1) of this clause by making virtually no changes at all in its existing methods of election.
The fact is, of course, that virtually all general secretaries and presidents, and virtually all national executives, are elected by someone. Sometimes, they are elected by all the members. No, let me stop. No national executive is ever elected by all the members, for the simple reason that national executives have constituencies. You might expect the House of Commons to be elected by the entire nation. They are in constituencies. But virtually all presidents and general secretaries are elected by someone, and very often they are elected by all the members, though not all that often every five years or less.
But, on the whole, national executives are elected in constituencies, so, if the noble Earl says to me that he does not mean all those entitled to vote under the rule (which, as I say, I think would be compatible with virtually all union rule books; even if people are elected by annual conference, it is some members) but means all members, and if he tells me that he wants to apply it not to general secretaries and to presidents but also to the principal executive committee—and I do not see how I can take it either one way or the other, for there are only two ways of taking this—then he really is revolutionising trade union elections because he is saying that all presidents, all general secretaries and all national executives will be elected by one great big constituency: they cannot have constituencies, they will all be elected by, as it were, one big constituency. For example, the executive council of the AEU would not have anybody representing Scotland, or anybody representing the Midlands; they would be elected by the million members of the AEU. The fact is, of course, that executives are sometimes elected on a trade or occupation basis; sometimes they are elected geographically; and sometimes they are elected by a mixture of the two—but not by all the members; by the members under the rule. So my first and major question to the noble Earl really is: what does he mean by the first part of his clause? The same problems, I may say, arise in the case of the clause which the noble Earl has taken away. He also does not say whether it is to be all the members under the rules or whether we are going back to the kind of approach which this Government had earlier tonight, when they were trying to imagine some set of principles which they would then read into the rule books.
The only other point I would make about this strange proposal is: why every five years? If we are talking about national executives, the fact is that most national executives are elected less than every five years. In the case of quite a large number of national executives, at least a proportion of the national executive comes out every year. So why is the noble

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Earl saying it should be every five years? If he is applying it, as of course he is, to general secretaries and presidents, then I have to say to him that there is a very good reason why general secretaries and presidents should not be elected every five years. It is because general secretaries and presidents in some unions are in fact officers of the organisation. They do not have the kind of authority that they have in other unions, when they are sometimes lay officials. They are officers of the organisation. They are in the same relationship to the membership as other officers—district officers, regional officers, officers in trade groups, for example.
If the noble Earl is saying, "All right, then; we will elect the lot; we will elect the officers" (I take it he will not elect all the officers in one great constituency) then I say to him that he is doing something very controversial indeed. One of the most complicated issues of trade union government is the case for and against the election of union officers. I am not talking about executives, I am not talking about lay officials; I am talking about union officers. Such is the myopia of British trade unionism, which is just as bad and just as prevalent as the myopia of British management, the myopia of the Civil Service, of the services and of every other aspect of British life, that each trade unionist believes that the way in which he appoints, elects or gets his officials is the only possible way of doing it. In fact, most of them do not know how the others do it. They think that their particular way of doing it is the only way.
But, in fact, it is a very complicated question. On the one hand, if you elect officers you do not have the division of functions between professional and lay members and you do not have officers who are, as it were, functionaries of a lay executive. On the other, hand, if you do, the chances are that you may get people who are in some way able to give more of a lead in certain circumstances. Furthermore, some people will say, "Of course, if you have appointed officials, you can promote good men. You can get a good district official and a good general secretary and take him up through the union hierarchy". It is a complicated business. I myself do not know the answer. Why anybody would wish to come along and seek at this time to fasten on to trade unions a single way, let alone in a single constituency, I fail to see.
Several noble Lords: May I—
Lord Mottistone: My name is on this amendment. Perhaps I might have a turn to speak. Perhaps, also, on behalf of my noble friend, I may say something by way of riposte (if that is the word) to the noble Lord, Lord McCarthy. I am surprised at Lord McCarthy's approach to this problem. Of course, it meant that he could make a much longer speech, and I could not understand that, either. But I am surprised that he professed not to understand at the beginning; whereas the basic principle of what it is all about is very clear indeed, In saying that he could not understand, he then gave us some very good hints as to how this amendment might be tidied up, to be rather better in practical terms, and I am grateful to him for that. As for saying that he did not understand subsection (1), well, this must be the clearest part of the whole thing. The whole thing, to my mind, is very clearly written.
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The most important supporting points about it were said just now by my noble friend Lord Caldecote, and I do not need to repeat them.
To come back to the noble Lord, Lord McCarthy, certainly I accept that any amendment of this sort cannot be expected to be perfect and we would look perhaps to the Government to express sympathy with the concept and perhaps, taking advantage of what the noble Lord, Lord McCarthy, has said, to come forward at a later stage with an amendment of their own which embodied it.
As to the question of the difficulties of dealing with the different unions and the different visions that they have of their presidents and general secretaries and so on, I think we have got to get to the first principles here. What we are saying is that the effective people in the unions, like the effective people in the companies, are, in this respect, similar in that they are in charge of large organisations which can have great effect on the country. In fact, the unions in a way can have an even greater effect than have large companies or the medium-sized companies.
Company directors are appointed in accordance with the Companies Acts and there is provision for them to be re-elected every so often. This is the point. The root of this is that the principal officials of these organisations that can have an effect on the country should be re-elected from time to time if the members can be encouraged to see the advantage of that. And there is within this amendment provision for the members to start the ball rolling themselves, so that the Secretary of State is not involved ab initio. This, I think, is one of the better points of the amendment as it stands. So I feel that what we must have is something on these lines and, as for the detail, f would hope that the Government would help us with it.
3.10 a.m.
Lord Kilmarnock: One of the great advantages that have emerged from the Committee stage is the noble Lord, Lord McCarthy, recommended his book, The Closed Shop, I think on the first day, and I took him up and read it. He was asking me to point to him a passage in it this morning which he could not find. Joking apart, in that distinguished work, the noble Lord on page 262 made some specific proposals for reform, and these extend to the rule book. He said, on page 267:
"The reformer of union rule books may be concerned with four types of union rule: procedural, substantive, admissive and electoral".
Electoral reform is the one that we are talking about this morning. I have to be fair to him: it is the one he attaches the least importance to, but he did not at that time want to leave things as they were.
On page 273, he said:
"It is not enough to review the procedural, substantive and admissive rules to protect the individual worker from the arbitrary and unnecessary use of closed shop sanctions. One should also try to ensure that the leaders who have to administer these rules emerge, at least in the most important instances, as a result of an elective process which is fair and not open to obvious abuse".
He goes on to say:
"It would probably be admitted that it is advisable for the

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more important national posts to be subject to election, and probably the supreme policy-making body of the union should be an elected one".
Having conceded that, he asks:
"why not leave such a task to the unions themselves? Why not propose that the TUC should draw up a model rule book on the lines outlined above?"
He then goes on to admit that:
"the chance of the TUC being able to push through such a comprehensive change in union rules is extremely slim".
And a little lower down, he tells us:
"I do not believe that the sort of uniformity and standardisation presupposed in the section above is obtainable without some kind of external sanction".
Finally, on almost the last page of the book—and I must say I enjoyed the book very much indeed; it is a good read and I recommend it—he says:
"To operate these reforms it might be advisable to create a public authority which could, if necessary, take over the existing functions of the Registrar of Friendly Societies in regard to trade unions. The authority would have the duty of administering what, in effect, would be another trade union Act. This would involve interpreting and applying the rule book standards".
I do not want to be unfair to the noble Lord—I also like to call him my friend because we sat together on a committee—I hope productively—for two and a half years. I do not want to do him an injustice, and I do know he is mainly talking about exclusion. The point I want to make is, he is not discounting or throwing out the possibility of some greater type of public intervention in the rule book. This is really the point that I want to make. He says it is very difficult to bring it about without some kind of external sanction.
He proposed the registrar of friendly societies. Of course, the registrar of friendly societies was succeeded by the certification officer, who appears in an amendment to which my noble friend Lord Aylestone referred. We have this difference at the moment with the noble Earl, Lord De La Warr, that we feel the certification officer is the right person to administer a balloting procedure of this sort. That is something positive that we can sort out between us. The point I want to make is that the noble Lord, Lord McCarthy, suggested the registrar of friendly societies, and we are suggesting his successor, who is the certification officer, who is already concerned in a very intimate way, a custodial way, with the union rule book.
The 1980 Act has been mentioned. It is true that a permissive ballot procedure was provided for in Section 1 I took the trouble to find out what has happened since that Act came into operation. Although a number of small unions have applied for funds and have been granted funds for the conduct of a number of ballots on internal union affairs, no single union affiliated to the TUC has so applied. So Section 1 has, to all intents and purposes, proved a dead letter on a voluntary basis and therefore it sems to me that in some clause—possibly somewhere between the Lord De La Warr's amendment and Lord Aylestone's amendment—we ought to come to some position in which this ballot procedure is made obligatory.
Lord Campbell of Alloway: May I make one very brief point. I have every sympathy with the spirit behind this amendment, whether it be one for two or one for eight, but the problems of the rule book to
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which the noble Lord, Lord McCarthy, has referred are real and not imaginary. Let no one pretend to the contrary. With respect, I would urge the Government not to rush into this without careful consideration.
Lord Oram: I rise merely to make the point that noble Lords who have spoken in favour of this amendment seem to be advocating the system of the National Union of Mineworkers, which has led to the overwhelming election of Mr. Arthur Scargill. I therefore suspect we are witnessing a Left-Wing infiltration into the Conservative and Social Democratic Parties.
Lord McCarthy: I did not intend to intervene again but the noble Lord kindly quoted me at great length and helped to prove the converse of what was asserted earlier tonight—namely, that I never criticise the trade unions. But would he not agree that I also say at 274:
"All that the body set up to authorise union rules should ensure would be that the electoral and appointment provisions contained in any rule book had no obviously unfair rules or provisions which would lay them open to abuse",
and that the reason for that is the very complexity of trade union rule books which I have put forward tonight?
3.17 a.m.
Earl Ferrers: The noble Lord, Lord McCarthy, must have been grateful to the noble Lord, Lord Kilmarnock, for quoting his book so generously. Indeed, so copious were his quotations that I thought there was no part of the book he had not quoted. I have a certain sympathy with the noble Lord, Lord McCarthy, in saying that when he read my noble friend's amendment he did not understand it and wanted to ask some questions. I know the feeling. When I read some of the amendments put down by the noble Lord, Lord McCarthy, I did not understand them and had to ask sonic questions—not, of course, of the noble Lord, but of some kind gentleman w ho illuminated me as to exactly what they meant. I found that I did not agree with them; so at least in that the noble Lord and I have a common conclusion.
I am glad we are taking these two amendments together. I have very considerable sympathy with the principles which underline them. My noble friend Lord De La Warr said he hoped for a very full statement of the Government's views over secret balloting. I thought that was rather a daunting prospect for the Committee at this hour of night, but I shall do my best not to disappoint my noble friend. There is certainly general agreement that trade unions ought to be more democratic, and that they have failed to adapt their institutions and practices to the economic and social pressures for change.
The two amendments before us, moved as they have been by noble Lords on both sides of the Committee, underline this widespread concern. It is still far too rare for unions to consult their members directly through the ballot box on major decisions which affect their members deeply, such as calling for strike action and the election and re-election of their leaders. But the Government have always taken the view that it is much better for unions to reform themselves voluntarily.

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In the Employment Act 1980 we removed the only credible argument against the more widespread use of secret ballots by enabling unions to apply for reimbursement of the costs which were incurred in the holding of secret ballots for a number of purposes, including union elections and decisions on industrial action. The high cost of postal ballots is therefore no longer a reason open to the unions for failing to undertake the necessary reforms. As we promised in our recent consultative document, we have brought before Parliament subordinate legislation, which your Lordships passed last week, to extend the present arrangements to cover ballots on wage offers. I am hound to say that it is regrettable—and, indeed, remarkable—that the TUC has chosen to boycott the scheme, particularly since they have not been inhibited in requesting, and, indeed, in taking, a grant directly from this Government towards the cost of shop stewards' training.
The question which we now have to ask ourselves, therefore, is: will the unions ever reform themselves of their own accord, or will they do so only under the pressure of legislation? It is now clear that many trade unions have not shown the will to take the necessary action themselves, and that the Government should look more seriously at what options are open to them, including legislation, to achieve what must be the common goal of making unions more representative and more democratic.
The Government therefore intend to conduct consultations, which will be both early and wide, on such questions as whether there should now be legislation to require unions to use secret ballots in their elections and, if so, as to the form that such legislation should take. The initiation of this consultation will not be unduly delayed and a document will be published as soon as possible. But it is important that we should consider very carefully exactly what matters it should cover, and that we should not hastily incorporate into legislation what may prove to be ineffective measures.
The amendments before us contain a number of technical defects which illustrate the difficulty of framing workable provisions. I highlight this not just to be pernickety, but to explain some of the difficulties which legislation in this area creates. For example, in Amendment No. 142, subsection (1), we find the phrase:
"… by a secret ballot of members of the trade union".
But this clause does not provide that all members must be entitled to vote. It may well be possible to meet the provisions of the clause by conducting a ballot in which only a few selected individuals were entitled to vote. This could, of course, be remedied by providing that all members must be entitled to vote, but even that is not as simple as it sounds.
Unions may have good reasons for excluding certain members; for example, those in arrears or those who have retired. They may have, or may wish to have, a voting system under which the individual members elect regional or trade group representatives and they, in turn, elect the executive committee. I am not sure that we would want to prevent unions from using such a system. This sort of problem illustrates the difficulty of legislating in this area.
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The difficulties are more than simply drafting. It is no simple task to say exactly what the clause might sensibly provide. That is not to say that it could not be done, or that it should not be done. But it means that time and careful consideration of the effect on existing arrangements will be required. I agree with my noble friend Lord Campbell of Alloway, who said that we have to move slowly and carefully in this area.
Perhaps I may give an example from Amendment No. 148 of the noble Lord, Lord Aylestone. Subsection (2) provides for rules for the conduct of the ballots to be approved by the certification officer, and for him to hear complaints about breaches of rules. However, it does not say what is to happen if a union ignores the subsection and does not adopt the necessary rules. The only remedy in such a case would be by way of a High Court action. A member might be able to obtain an injunction preventing his union from electing or appointing its executive under its old unapproved rules, or, perhaps, a mandatory injunction to compel the union to have rules approved and to hold a ballot as required. But the clause does not provide a time by which rules must be approved, or by which ballots must be held, and it is, therefore, difficult to know when these rights might arise, because the unions could always say that they were just about to comply with the requirements.
It is vital and important that we should follow the normal procedure of allowing discussion after the publication of a consultation document: first, out of fairness to the many interests which would, quite rightly, want to make known their views; and, secondly, because it is likely that legislation on these matters which is designed after consultation is likely to be better received, better implemented and, therefore, more effective than legislation which is designed without consultation.
The essence of the whole Bill, apart from Clause 1, which is special, is that virtually all the matters to which the Bill refers have been the result of discussion. It would run counter to the ethos of the Bill to incorporate matters even of such importance as these, without them first having been discussed with those most likely to be affected by them. It was a matter of regret to my right honourable friend the Secretary of State, that the matters which we have been able to discuss here were blocked from discussion in another place. The exchange of views in this debate has been most helpful, and what has been said will be taken very carefully into account. Indeed, I can tell your Lordships that the issues which have been raised will not be allowed to drop, and that it is the intention of the Government to start consultations as soon as possible.
There has been, as a result of recent events and the views of your Lordships and others, a significant change, not in Government thinking, which was outlined by my right honourable friend the Secretary of State in Blackpool last October, but in the pace at which that thinking will be translated into action. I hope that, in view of this explanation of the Government position, my noble friend and the noble Lord, Lord Aylestone, will see fit not to press their amendments to a Division.
Lord McCarthy: The noble Earl has made an amazing announcement at this time of night. Will he answer one

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question, or perhaps two? What is to be the scope and timing of this consultative document? Is it to include elections and strike ballots, and is it to be produced in the next month or sixth months, or what?
Earl Ferrers: If the noble Lord would, with his customary patience, be a little patient, he will see that a document will be issued depicting exactly what will be discussed.
Several noble Lords: When?
Earl Ferrers: Soon.
Lord Harris of Greenwich: Let me asure the noble Earl, Lord Ferrers, at once that I am delighted to hear what he said about this consultative document. I do not find it amazing. I find it a very understandable acceptance on the Government's part that there is overwhelming support for this view, both by the general public—of that there can be no serious doubt whatever—and, as all public opinion polls demonstrate, from individual trade union members. Why should that be so? It is so because, for a substantial period of time, there have been growing doubts, justified by evidence we have all read, of abuses of a very disturbing character in terms of trade union elections.
I remember many years ago sitting in the High Court and listening to a story of widespread corruption in the Electrical Trades Union, when Lord Gardiner was appearing on behalf of Mr. Frank Chapple and others in that case. That was undoubtedly one of the worst cases of union corruption we have seen in this country for many years, but there have been many other episodes which have raised serious doubts about the propriety of elections in the trade union movement.
I would accept, of course, what the noble Lords, Lord Campbell of Alloway and Lord McCarthy, said. There are real difficulties about trade union rule books, and I do not think those of us who strongly favour a move help our case by minimising the real difficulties which exist. Although I do not find anything amazing in what the noble Earl, Lord Ferrers, said this morning, I hope that he will be as helpful to us as possible on the matter on which he was pressed by Lord McCarthy. It has, after all, been a matter of public debate for a considerable period of time and must have been considered by the Government when formulating the present legislation. They then decided not to proceed with it. They have changed their minds, and that is wholly admirable, but it would be helpful were we to be given some indication of the time-scale which is involved.
As the noble Earl has indicated, the Government share the view that this is a serious matter. What is the time-scale that we are talking about? Will there be a fairly early publication of a consultative document? What we are most interested to discover—I know the noble Earl cannot meet me on this point, even if he is anxious to do so—is whether we are likely to get, first, consultation as early as possible and, secondly, some prospect of legislation in the present Parliament. The matters raised in these two amendments are serious questions which, I repeat, trouble public opinion over
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a very wide area and, again, individual trade unionists whose rights have been so seriously abused as a result of the misuse of power in a number of trade unions in this country.
Earl Ferrers: I shall do my best to help the noble Lord, Lord Harris of Greenwich. I am so glad that on this occasion he did not think I was joking. I should like to correct him on one point; namely, that the Government have changed their mind. The Government have not changed their mind. As I explained before, it is not a change in the Government's thinking but the pace at which that thinking will be translated into action which has been expedited. I cannot tell the noble Lord exactly when this consultation will start. I have already said that the Government intend to start consultations as soon as possible. The scope and the timing have not yet been decided, but union elections will be covered.
Earl De La Warr: I am most grateful to my noble friend Lord Ferrers for the excellent way in which he sought to comply with my inquiry, which he said was a bit tough—and rightly tough—at this time of the morning. He gave us a full explanation of how the Government are feeling. While I regret that they did not start this process earlier, I welcome very much what my noble friend said about the Government's intention to produce a consultative document. This is an enormous advance. I shall think very carefully about what has been said by all noble Lords, in particular by my noble friend, and take these matters away and consider them very carefully. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.33 a.m.
Lord Spens Lord Spens moved Amendment No. 143:
After Clause 16, insert the following new clause:
("Resolution procedure to be followed before dispute treated as trade dispute.
. After section 29 of the 1974 Act there shall be inserted—
"29A.—(1) Subject to subsections (2) and (3) below, a dispute shall not be treated as a trade dispute for the purposes of this Act unless—

(a) a procedure for resolution of disputes agreed between workers and their employer, and described in a document or documents the wording of which has been agreed between workers and their employer, has been undertaken and completed; or

(b) where a procedure as defined in subsection (1)(a) does not exist, the issues involved have been referred to the Advisory, Conciliation and Arbitration Service for conciliation to be undertaken and there has been a failure to agree.

(2) Any disagreement as to whether a procedure as defined in subsection (1)(a)—

(a) exists or does not exist, or

(b) applies or does not apply, or

(c) has or has not been undertaken or completed, shall be referred to the Central Arbitration Committee for resolution by declaration.

(3) Where in any case to which subsection (1)(a) refers the workers to whom the agreement applies claim that the employer has unreasonably dela ed or obstructed the procedure from being undertaken or completed, that claim shall he referred to the Central Arbitration Committee for decision.
(4) If, in a referral of a claim under subsection (3), the Central Arbitration Committee decides that the claim is well founded this section shall cease to have effect.
(5) This section shall not be taken into account in determining any question arising from an action of the kind referred to in section 17(2) of the 1980 Act.
(6) Notwithstanding section 29(1)(g) of this Act if a disagreement of the kind referred to in subsection (2) is one of the circumstances giving rise to the dispute, that dispute shall not be treated as a trade dispute.".").
The noble Lord said: This is another amendment which was tabled in another place but which was not called, so there has been no discussion upon it. It looks a bit complicated but I hope to be able to show your Lordships that it is not so complicated as it looks. What it means is that no dispute between employees and employers will be given the title of a trade dispute until either an agreed procedure for resolution of the dispute has been carried out between the employees and the employers or, if no such agreed procedure exists, that dispute has been put to ACAS. It is only after that that the immunities given to a trade dispute will come into effect.
There are various exceptions which I do not propose to go into. Subsection (5) makes it clear that this clause would not cover any secondary action taken which would be affected by Section 17 of the 1980 Act. Apart from that, I do not think that there are any other points I need to make at this stage. I beg to move.
Lord Rochester: I am sorry to say that, although I have a great deal of sympathy with the objective of this amendment, I have very little sympathy with the immediate mandatory means by which it is sought to achieve that objective. As the consultative document on trade union immunities, published last year, pointed out, the whole question of the removal of immunity from industrial action taken in breach of collective agreements is inextricably bound up with the further problem of whether it is feasible to make agreements legally enforceable contracts. For the reasons given in the Green Paper, I fear that there is a great deal of education needed before negotiators are sufficiently convinced of the desirability of such arrangements for them to become workable in this country.
Indeed, it was for that reason that in our debate in April last year I asked the noble Earl, Lord Gowrie, whether as a first step the Government would consider the possibility of introducing a further code of practice to deal with negotiating procedures. The suggestion was that consultations might be held with a view to drawing up a code of practice aimed at ensuring the establishment throughout British industry of negotiating procedures under which disputes concerning agreements already entered into, but not other disputes, should be settled by arbitration instead of industrial action. In that way I thought that we might gradually and with a sufficient degree of consent reach a position where organisers of industrial action taken in breach of collective agreements would no longer have legal immunity and could be sued for damages.
In replying to that debate, the noble Earl, Lord Gowrie, said that serious consideration would be given to the proposal. I have heard nothing since and I should be grateful for any information which the noble Earl, Lord Ferrers, may be able to give me as to what the Government think of that suggestion. I should apologise to the noble Earl, in that I have not given
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him notice that I was going to raise this point again. Nevertheless, I should be grateful for any information which may be forthcoming.
For the rest, I fear that any attempt to impose the enforceability of collective agreements by law will, as the Donovan Commission concluded, fail until such time as changes in our dual system of formal and informal bargaining have been effected and the incidence of unofficial industrial action has thus been greatly reduced.
Lord Campbell of Alloway: I wholly support the noble Lord, Lord Rochester, in this particular regard. It is a matter of very great importance in respect of predictability in industrial relations, economic recovery and the rest of it. There is a gap in the legislation and I was hoping that perhaps my noble friend the Minister might consider including this matter on his agenda for consultation. The approach in the drafting of this clause is not to be recommended, as, again, it is almost too draconian. But the approach advocated by the noble Lord, Lord Rochester, is a wholly constructive and useful approach and one that should be considered with care.
Lord McCarthy: I have an even shorter question to ask of the noble Lord, Lord Spens, and it relates to one word in subsection (1)(a) of his amendment, where it says that there shall be,
"a procedure for the resolution of disputes".
The whole thing is based upon the fact that there should be a procedure for the resolution of disputes, and, unless there is an agreed procedure for resolution of disputes, you lose your trade union immunities, and the thing goes to the Central Arbitration Committee and ACAS, who then attempt to provide you with a procedure for resolution of disputes.
Of course, over the greater part of British industry, at least where there are organised trade unions and they are recognised, there is a procedure for the resolution of disputes. There is the disputes procedure; everybody has a disputes procedure. The trouble is that when you get to the end of that procedure you get a failure to agree, or in the unique phraseology of the railway industry, you get a declinature. The trouble comes when you get a failure to agree: what does the noble Lord, Lord Spens, propose should happen next? If you only lost your immunities because you did not have a procedure, which ended up with a failure to agree, then we should not have any problem; this amendment would not make any change to anyone and it would not do any good and it would not do any harm, but I do not think that that is what he means.
So we must assume that it means something more than just a procedure for the resolution of disputes, that it means that something happens when you get a failure to agree. Is he suggesting, for example, that you lose your trade dispute defences if you do not have some form of compulsory conciliation? In 29A(1)(b), he starts to talk about the Advisory Conciliation and Arbitration Service. But suppose you bring in ACAS and ACAS gets a failure to agree, what happens then? Do we go to arbitration?
At this point, I have to declare an interest. A system of industrial relations where you had to go to

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arbitration or you would lose your trade dispute immunities would mean full employment for us all. But I am not sure whether that is what he is suggesting. What would happen if you did not accept the arbitration award?—something which is not unknown in the business. Would it mean that you lost your trade disputes defence? In other words, what does he mean by "a procedure for resolution of disputes"?
Lord Mackay of Clashfern: The Government have great sympathy with the aims of this amendment. There is no doubt that British industry has suffered over the years from too great a willingness on the part of workers and trade unions to go on strike or to take other industrial action before the agreed procedures for resolving disputes have been exhausted. The result has sometimes been needless and damaging disruption of production which might have been avoided if the agreed procedures had been followed. Achieving a greater observance of procedure agreements could bring a greater stability and predictability into industrial relations, which in the long run could only be of benefit to employers and employees alike.
There are, however, difficulties. May I just summarise these very briefly? First of all, most procedure agreements are unsuitable for legal incorporation and interpretation. They are of a sufficiently vague kind to make it very difficult effectively to incorporate them in a legal arrangement of the sort proposed in the amendment. Secondly, the effect of removing immunity from breach of procedure agreements might well be to make trade unions simply withdraw from existing procedure agreements. Thirdly, there is no agreement among employers at the present time about the desirability of such a proposal. Consultation on the matter has indicated a good deal of difference of opinion. The CBI, the EEF and the British Institute of Management in particular are opposed to the inclusion of this measure in the present Bill, on the basis that a good deal of further work has to be done.
So far as the Government are concerned, if I may answer the question asked by Lord Rochester, there is no plan at present to advance that particular matter further. The Government would, of course, welcome guidance provided by the CBI, ACAS and others. I hope that, in the light of that explanation, the noble Lord, Lord Spens, will feel able to withdraw this amendment.
Lord Spens: I do not think that I really have to interpret to the noble Lord, Lord McCarthy, what this amendment means. It seems to me to be very clearly written in English. If there is a procedure for resolution of disputes, it has got to be carried out before any immunity is given to the perpetrators of that dispute. If it does not exist, then they have to go to ACAS. If they fail to agree there, then at that stage the immunity comes into effect. It is quite clear.
I must say that this amendment has been put forward by the Institute of Directors and they are very keen about it. They may not be in the CBI, but they do cover a large number of people in responsible positions. I think that they will be very disappointed to hear that the Government do not intend to give this further consideration at the moment. I hope that we shall be
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able to persuade the Government to include it in their new consultation document. With that hope in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.46 a.m.
Lord Rochester Lord Rochester moved Amendment No. 144:
After Clause 16, insert the following new clause:
("Employee participation.
.—(1) In this section—
references to "the Act" of any particular year to the Companies Act of that year;

"directors' report" means a report by the directors of a company which by section 157(1) of the Act of 1948 is required to be attached to a balance sheet of the company prepared under section 1 of the Act of 1976 (or under that section taken with section 150 of the Act of 1948); and

"employment" means employment other than employment to work wholly or mainly outside the United Kingdom; and "employed" and "employee" shall be construed accordingly.

(2) This section applies to every directors' report of a company which relates to a financial year beginning on or after 1st September 1982 where the average number of persons employed by the company in each week during the financial year exceeded 100; and for the purposes of this subsection that number shall be the quotient derived by dividing by the number of weeks in the financial year the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company and adding up the numbers ascertained.
(3) In every directors' report of a company there shall be contained a statement describing the action that the company has taken during the financial year—

(a) to provide employees systematically through their managers or supervisors with relevant information about the establishments at which they are employed and to answer questions on all matters reasonably concerning them as employees;

(b) to consult employees and/or their representatives on a regular basis so that the views of employees can be taken into account before decisions are made which are likely to have a substantial effect on their interests;

(c) to encourage the involvement of employees in the company's performance through means such as employees' share schemes;

(d) to promote within the company a joint understanding by managers and employees of the relationship between pay, productivity, investment, prices and employment.").

The noble Lord said: I beg to move Amendment No. 144. At Second Reading I said that what most concerns the Liberal Party about the Bill is that it will do nothing positively—and I stress that word—to improve industrial relations. This amendment aims to go some way towards remedying that omission in the crucial field of employee participation. It stems in part from amendments which I sought unsuccessfully to make to the 1980 Industry Bill, aimed broadly to oblige the National Enterprise Board in undertakings for which it was responsible, first, to increase the involvement of employees before decisions affecting them were taken; and secondly, to promote the disclosure by management to employee representatives of information aimed at achieving a shared understanding of economic realities.
In resisting those amendments, the noble Viscount, Lord Trenchard—whom I am glad to see is still at his post—understandably said, among other things, that it did not make sense to include such statements in a statute without incorporating any specific powers to

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make them effective. In this amendment we have sought to remedy that defect by making it a statutory requirement that in every director's report of a UnitedKingdom company which relates to a financial year beginning on or after 1st September next, and where the number of people employed exceeds 100, a statement should be included describing the action that has been taken during the year to develop employee participation in the ways set out in subsections (3) (a) to (d), which I hope will speak for themselves.
The legislative background, by reference to which the Secretary of State would be given the power to deal with this matter by statutory instrument, is to be found in the Companies Act 1948. The wording used in the introductory paragraphs of this amendment is taken largely from a statutory instrument which in 1980 imposed an obligation on companies to include in their reports a statement about the employment of disabled people. So there is a precedent for the legislative procedure here proposed about which I feel sure the noble Lord who is to reply has been well briefed.
There are one or two possible criticisms of our amendment which might be made and which I would therefore like to anticipate. It can fairly be claimed that the medium and large-sized companies, to which the proposed new clause would apply, are mainly in the private sector of industry. Some of the more progressive of them already do voluntarily what would here be required of them all. Yet the need for more employee participation is less in the private sector than in the public sector. That I would concede.
However, it is difficult to see how all the various elements which make up the public sector could readily be brought within a single clause such as this. We should, therefore, start where we can. We should go with the grain—as the noble Earl, Lord Gowrie, would put it—in the companies which have the potential to create the bulk of the additional wealth on which our future competitiveness ultimately depends.
Next, it may be claimed that a clause of the kind that we are proposing should not form part of this particular Bill. Here I should tell the Committee that on 7th April last leave was given to a number of Conservative Members of another place to bring in a Bill of a somewhat similar kind. This has since been printed, but unfortunately I understand that it now has no chance of making progress in this Session of Parliament.
From this it should not be thought that I have stolen the clothes of the author of the Private Member's Bill; nor that he has taken mine. Rather, we have reached comparable conclusions at much the same time, thanks I believe partly to a common awareness that the Industrial Society, whose work in the field of employee involvement I am always glad to acknowledge, has for some time been aiming in the same general direction. I have dwelt on this point so as to be as open as possible with the Committee, but also as an indication that I do not care through what agency legislation on these lines finds its way on to the statute book as long as it gets there quickly. Indeed, I shall gladly withdraw this amendment if the Government are prepared to give a firm undertaking that as soon as possible in the next Session of Parliament they will introduce a Bill of the same kind.
Those noble Lords who, like me, took part in the
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discussions in Sub-Committee "C" of the European Communities Committee on the draft directive of the European Commission on Employee Consultation—and I see, in the person of the noble Lord, Lord Mottistone, one of them—will know very well of the mounting pressure there is upon the United Kingdom to do more in this field. The Liberal Party has for the last 50 years wished to go much further in the direction in which this amendment points, but in the present instance we are only asking for this very limited legislative action in place of the largely fruitless exhortation which is all there has been since the Bullock Report was published more than five years ago.
In conclusion, I would say that the most compelling reason for taking speedy action is surely that it is only by means such as that advocated in this amendment—and especially in its last sentence:
"to promote within the company a joint understanding by managers and employees of the relationship between pay, productivity, investment, prices and employment"—
that our basic economic and industrial problems will be solved. I beg to move.
Lord Aylestone: One of the reasons, if not the main reason, for industrial troubles these days is the complete lack of communication between the shop floor and the board, between the workers and the employers. This is not entirely met by earlier ideas, such as profit-sharing, which nevertheless helps. Nor is it met by the old idea of the statutory worker on the board. The statutory worker on the board, where it has been tried—and in not many cases has it been tried—has not really worked at all. I think in the terms of the amendment now before us we have the possibility of improving communications between the workers and the Board, in giving the workers as much information as possible about what is the board's policy. I do not mean that the board of directors should discuss the intimate details of the financial problems and loans and so on, but their main policy and the ends which they are pursuing could easily be communicated to the workers on the floor.
They could also consult with the workers about new decisions, probably new plants, and the directions in which they hope to expand their business, and take the workers completely into their confidence in this direction, with of course full details of their trading objectives. If this were done on some basis whereby the workers feel that they are part of the company and the whole machinery and not just someone who collects wages on a Friday or at the weekend, I am sure that many of the problems we get these days in the workshops could be met.
3.56 a.m.
Lord Mottistone: I sympathise with this, as the noble Lord, Lord Rochester, indicated, in that I sat with Sub-Committee C when they were tackling this sort of problem. It is a most ingenious way of injecting this thought into the minds of people by using the company report as one way of doing it. I am not sure on the other hand—and I do not want to disappoint the noble Lord, Lord Rochester—that we are quite ready for this. It is important that it should be in people's minds that we should work in this way, but we are in an area of attitude changing, where, if you put

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this into legislation in the form in which it is and then it has to be dealt with in every company, I have a feeling that the result in the reports will be sort of cosmetic and will not necessarily be real. What we want it to be is real.
The question is how to get this through to the companies that are backward in realising that their profitability can be improved by following the sorts of practices written into this. I have misgivings about whether this is the right time to put it into major legislation. That is my only thought, but I like the idea and I hope we shall keep on arguing it in this House, and I hope we shall one day put it into some suitable piece of legislation. By that time perhaps everybody will be doing it anyhow.
Lord Oram: I am mildly but not enthusiastically in favour of this amendment. During the course of discussion on several of the amendments that we have been dealing with, there has been a great deal of demand for more democracy on the labour side of industry, but I suspect that, if we were able to put it to the test, those who have been strongest in advocating more effective democracy among trade unions would not be in favour of more democracy on the capital side of industry. At least this amendment takes us some way towards an achievement of better democracy on the capital side of industry.
I would wish that it went a good deal further in this respect. The Bill in general seeks to deprive trade unions of much of their power. I believe that trade unions should be given more power in society; more participation in the factories and in their employment; more ability to be able to control the working practices and the outcome of the enterprise in which they work. That means—and this is where the amendment does not go far enough—that they should be involved much more in ownership. I recognise that there is a reference to share schemes, but it should go considerably further than that in providing ownership for the workers in industry, and particularly the principle of one man, one vote, in the control of economic enterprises should be incorporated. Therefore I am mildly in favour of the amendment, but I wish it were stronger.
Lord Campbell of Alloway: I share the enthusiasm of the noble Lord, Lord Rochester, and the misgivings of my noble friend Lord Mottistone. Voluntary worker participation must be the order of the day, but what positive initiative can the Government produce? I should be most interested to hear anything in that respect.
Lord Kilmarnock: As my name appears above the amendment, I wish to give it my warm support. Our party will produce a strong programme for industrial democracy, and may even set up an industrial democracy agency with statutory powers; but that is in the future, a gleam in our eye. In the meantime, as the noble Lord, Lord Mottistone, said, the amendment is an ingenious way of introducing a small but positive step forward in the practice of industrial democracy in companies. I support it because, while Lord Mottistone thought we might not be ready and it was perhaps
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cosmetic, one of its great advantages is that it would give us a great deal of information. If directors' reports across the board are coming in, with a large number of companies reporting, a most important element in industrial democracy will be the variety, and it is vital that there should be as much freedom as possible for workers and employers to devise the form of participation that suits them best. One of the great advantages of this suggestion is that as these reports come in over one or two years, we shall be able to see what people are doing, what is successful, what is less successful, and that will give us a much better idea of how we should go forward, possibly in a statutory form.
Lord Massereene and Ferrard: I have great sympathy for the amendment and I have tried what is proposed. I had a small works and I put one of the most popular men on the shop floor on the board and made him a director. Unfortunately, the moment he was on the board his workmates on the shop floor would have nothing to do with him. It is a nice idea, but we must be practical. I know of several works which issue a paper trying to explain to the employees how the factory is getting on and what is happening. Obviously, you cannot tell the employees everything; if you have a secret process and you tell 200 or 300 people exactly what it is, it will be secret no longer, and the works would probably close down. As I say, you have to be practical about these matters.
As for share schemes, they have been in operation for a long time. The trouble is that if you give shares to the employees, a great many of them, especially in public companies, sell them immediately. They cannot do that in a private company, and so such a scheme is then a little more successful. If shares are given to employees in a public company, they must be shares which they cannot instantly sell on the Stock Exchange.
However, this is quite a difficult matter. The more information that one's workpeople can have, the more one can take them into one's confidence. This is far easier in a private company. One knows most of the workers by name, and one probably knows their families. But it is a much different matter in a public company. I have great sympathy with the idea of the amendment, but I rather doubt whether it is suitable to include in the Bill.
Lord McCarthy: To adopt the language of the noble Lord, Lord Campbell of Alloway, I would say that I share the enthusiasm of the noble Lord, Lord Oram. I am mildly in favour of the amendment. It surely can do no harm to have in a directors' report a statement describing what the company did to inform, consult and involve the employees. What is really interesting is to find out what excuse the Government are to give for not accepting a single amendment to the Bill.
4.6 a.m.
Earl Ferrers: That is quite an interesting proposition, but of course it has nothing to do with this particular amendment. My noble friend Lord Mottistone said that he had misgivings about the amendment, but he liked the idea. Every noble Lord who has spoken on the amendment seems to have been mildly in favour

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of it. Even the noble Lord, Lord McCarthy, was mildly in favour. I am not quite certain whether that was to the amendment's credit, or whether it was a drawback.
I think we are all agreed that for the benefit of the economy there should be greater advances in British industry on the employee involvement front. There are those who maintain that the only way to make progress in this direction is through legislation. This Government are firmly committed to the principle of managements informing and consulting their employees about matters which affect them, but we are doubtful about the idea of imposing a rigid legal system on all employers, irrespective of their particular needs and circumstances. We believe that such legislation could disrupt established arrangements and could harm, rather than improve, industrial relations.
The amendment represents a "half-way house" between the statutory and voluntary approaches. It seeks to stimulate the growth of employee involvement by ensuring that it receives top-level attention in companies, and from that point of view it has its attractions. It would require directors of companies which are over a certain size to include in the annual report that is required of them under companies legislation, a statement of the action that has been taken by the company during the financial year to promote employee involvement and economic understanding.
The noble Lord, Lord Rochester, referred to the proposal which was introduced last April in another place in a Private Member's Bill. The Government were impressed with that idea, but we feel that it would be unwise to rush into legislation of this kind. It could be argued that the burdens that it would impose on companies would outweigh the benefits that it brought. Directors' reports are costly to produce, and clearly the longer the report, the more expense is incurred. Paradoxically, the amendment would impose the greatest burden on those employers who already have well-developed employee involvement policies.
The proposal might be acceptable if the legislation also stimulated progress where it was most needed, but we cannot be sure that it would. I should mention that a comparable requirement was introduced in the Companies (Directors' Report) (Employment of Disabled Persons) Regulations 1980, which require directors to include in their report a statement describing the company's policy towards the employment of disabled persons. There has not yet been time to assess the impact of the regulations, and until we have established that they are working well, it would be unwise to introduce another, similar measure. We must also remember that the directors' report under the Companies Acts is designed to give shareholders information to supplement the financial details that are provided in the annual accounts. It must be doubtful whether this is the most appropriate vehicle for promoting industrial relations reform.
I think I could sum up the position of the Government by saying that we like the idea but we have misgivings about it. We are sympathetic to the amendment, and we have not ruled out a legislative step of this kind in the future, if industry makes insufficient progress on a voluntary basis. But I think
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it would be risky to take this step without further and careful consideration. I therefore hope that the Committee would not see fit to press the amendment.
Lord McCarthy: Before the noble Earl sits down, I am trying to follow him, and perhaps he can help me. How does he reconcile his desire not to rush into a mild, inoffensive statement about a directors' report, waiting to see whether the voluntary system works well and so on, with his desire to rush pell-mell into ballots and further legislation against the rights of union members?
Earl Ferrers: I was taking the advice of my noble friend Lord Campbell of Alloway on the earlier amendment, when he said—and I think the noble Lord, Lord McCarthy, would agree with him—that it would be unwise to rush into legislation of a certain nature without first making quite certain that what we do is going to be an improvement. We have no intention of rushing pell-mell into anything, and I do not think this Bill makes the Government be seen to be rushing pell-mell into union affairs at all. It is just a gentle, modest progress.
Lord Rochester: I am very grateful to all the noble Lords who have contributed to this interesting and, I think, useful discussion, and for the general, if somewhat limited, welcome it has received. I do not really think there is very much danger of rushing into legislation. As I sought to say, it is now more than five years since the Bullock Report on this subject was published, and there is pressure from Europe upon us to do something. At Second Reading I said that really I was not fussy about the wording of this, and we could perhaps work it out together. For example, there is nothing sacrosanct about the date of 1st September 1982, to which I referred. I had hoped that it would be seen that there was nothing rigid in this system, but rather that one of its aims was to be as flexible as possible while requiring some progress to be made. The intention is certainly to build on the best practice that there is in this field.
Perhaps I may clear up just one or two factual points as quickly as lean, and address myself particularly to the noble Lord, Lord Oram. I am very grateful for what he had to say, and I should like to consider with my noble friends and allies, if I may, the additional emphasis which he gave to the concept of ownership and that of one man one vote. It is just the sort of thing that we should be likely to take into account, I think, in looking at this amendment again.
To the noble Viscount, Lord Massereene and Ferrard, I might perhaps be allowed to say that there is no question here of workers being placed on boards. As a matter of fact, I am not a believer in workers being placed on boards, certainly not at this stage. To my way of thinking, this whole concept of employee participation should be a matter of organic growth which starts at the bottom and works upwards. So let me relieve him of any fears on that score.
For the rest, at this time of night or early morning I think it would be quite inappropriate for me to say more than that I should certainly wish, as I say, to

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think more and consult more about this, but I shall also certainly wish to return to the subject at Report stage.
Amendment, by leave, withdrawn.
[Amendment No. 145 had been withdrawn from the Marshalled List.]
4.15 a.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 145A:
After Clause 16, insert the following new clause:
("Information for collective bargaining.
. In section 17(2) of the Employment Protection Act 1975 the words "about matters, and" shall be deleted.").
The noble Lord said: I will speak briefly, if I may, in moving this amendment. Here is a little amendment that the Government could consider. We are coming near the end of our deliberations and they might like this one because this is an amendment which amends the legislation of the Labour Government which preceded them in office; and, in offering an amendment which amends the Employment Protection Act 1975, we finally demonstrate towards the end of your Lordships' Committee that it is not the Government Benches but these Benches which are even-handed in these matters. We are prepared to amend any Act if we think it needs amending.
To take out three little words from the Employment Protection Act, in my submission, would have—and I do not put it too high—as great an impact, perhaps, on the communication of information as that aspect of industrial democracy of which noble Lords on the Liberal and other Benches were speaking when dealing with the last amendment. After all, it does no more, as was said in the discussion, than demand that in the directors' report there be a report describing what has been done. Presumably, if nothing has been done, nothing appears. This amendment relates to Section 17 of the 1975 Act, which, if I may summarise it, I hope not unfairly, demands that the employer must disclose information for the purpose of collective bargaining to trade union representatives of recognised unions which would to a material extent impede the carrying on of collective bargaining if it were not disclosed and the disclosure of which would be in accordance with good industrial relations practice.
Section 17 was undoubtedly meant to be a serious contribution to industrial democracy and it is only a curious quirk of interpretation—and, perhaps, miswording, as this amendment suggests—which has caused it to "black" a particular power. I have always believed that this is the level at which legislation can help in promoting the extension of disclosure of information, and thereby collective bargaining from the shop floor upwards.
I held that view as a member of the Bullock Committee. It has always puzzled me that people who know that think that those of us who favoured the majority report of the Bullock Committee did not think about collective bargaining. We could, indeed, have produced a bigger report one year later than the year-long Bullock Report—Son of Bullock—which would have been almost entirely about collective bargaining.
This amendment shows the way in which legislation must be so carefully phrased. I know what my noble friend Lord McCarthy pointed out: that the Government, in being careful on this matter, will no doubt be as careful on some others, which they have not been on this Bill in regard to the introduction of new clauses. The problem arises from the fact that the section demanded that the information which it was claimed should be disclosed should relate to the matters and to the description of workers in respect of which the trade union is recognised by the employer. That was a mistake of a major kind because it has allowed the clause to say, as they have now said clearly, that disclosure can only be demanded in respect of matters which already fall within the area of collective bargaining between employer and trade union.
The Government, having repealed the legal obligation to recognise in the 1980 Act, therefore leave the employer totally in control of the area over which obligatory disclosure is demanded. That this was not the intention of the statute, and certainly not the intention of ACAS, can be seen very well if one looks at the code of practice for the disclosure of information to trade unions for collective bargaining purposes from ACAS which was produced shortly after the 1975 Act.
If one looks at paragraph 11 of that code, one finds that the examples of information relating to compulsory collective bargaining disclosure in some situations which are not specified, which are obviously meant to be descriptive of the kind of thing that would happen under the section, include not merely all the issues of pay, benefits, conditions of service, manpower, labour turnover, investment plans, productivity, efficiency data, return on capital invested, state of the order book, cost structures, gross and net profits, allocation of profits, loans to parent or subsidiary companies, but also a large number of other items as well.
There can be very few unions which bargain today over all those areas that the ACAS code sets out. It is quite clear that ACAS is directing itself in the code to a different situation from the one that we now see the statute creating. With the wisdom of the courts applied to it, we see that these three little words which are mentioned in the amendment, the words "about matters, and", are the obstacle to compulsory disclosure of information being used to promote the purposes about which the noble Lord, Lord Rochester, and the noble Lords who associated themselves with the previous amendment, spoke.
This small amendment would not be in any way revolutionary because the employer today faces no legal sanction if he does not recognise it; nevertheless, he would be forced where he is in a state of collective bargaining with trade unions, as most good employers are, to disclose information under the same conditions with one amendment; and it would need to be information in accordance with good industrial practice which would impede collective bargaining if it were not disclosed and which was about the workers in respect of whom collective bargaining was taking place. Those seem to me to be three perfectly reasonable conditions and I have some apprehension that the Government might at this very late hour possibly consider accepting this minor improvement.
Lord Genarthur: The noble Lord has described the effect of the amendment, which is to extend trade unions' statutory rights to information. I do not think I need to go into any more detail on the description; but the amendment has clearly been moved with the aim of extending a union's information rights to subjects beyond those in respect of which it is recognised by the employer for collective bargaining purposes.
Although the noble Lord did not mention it, I think that to some extent his amendment has been promoted by a recent High Court ruling which quashed the Central Arbitration Committee's decision in the case of ASTMS and BTP Tioxide Limited. The CAC had decided that the union was entitled to information on matters in respect of which it had representational rights as well as on matters in respect of which it was recognised for collective bargaining purposes. The High Court held that the CAC had misdirected itself in law.
This amendment therefore appears to be designed to overcome the High Court ruling in this case. But the Government believe the court interpreted the Employment Protection Act in the way it was intended to be read. I should add that we are not averse to employees being given more information about their jobs and the organisation they work for. On the contrary, the Government have consistently encouraged employers to adopt an open management style and inform employees about matters which affect them. But they believe that progress is best made on a voluntary basis, and that further statutory information rights of this kind would not improve industrial relations. I therefore ask the Committee to reject the amendment.
Lord Wedderburn of Charlton: Of course, I was aware of the Tioxide case; I referred to a recent judicial decision. I accept what the noble Lord has said. The court was constrained because of the presence of these three little words to adopt a quite dotty approach to the industrial situation. They had to distinguish between negotiations which were collective bargaining within the definition in the Acts, making representations of one kind, making representations of another kind, and to apply all that to negotiations about a job evaluation scheme. Of course, I make no criticism whatever of the judgment of Mr. Justice Forbes because I can see that, being led into the matter through the section as it is, he came to that conclusion quite understandably. Remove the three little words and you remove part of the Tioxide case—not all of it, but I will not go into that—and you make a modest contribution to industrial democracy.
On Question, amendment negatived.
4.30 a.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton had given notice of his intention to move Amendment No. 146:
After Clause 16, insert the following new clause:
("Restriction on interlocutory injunctions in trade disputes.
.For subsections (2) and (3) of section 17 of the 1974 Act there shall be substituted—
"(2) Where an application is made to a court, pending trial of an action, for an interlocutory injunction (or in Scotland interim interdict) and the party against whom the injunction (or interdict) is sought claims that he acted in contemplation or furtherance of a trade dispute, the court
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shall not grant the injunction (or interdict) unless it is proved that that party is not likely to establish the matter or matters which would under sections 13 or 15 above afford at the trial a defence to the action.".").
The noble Lord said: My noble friends and I would ask your Lordships' leave to say one thing before we ask leave to withdraw this amendment. It is a serious matter because we feel very strongly, as the Government Benches know very well from debates in 1980 and from our debates on this Bill tonight, about the matter of interim interlocutary injunctions. We also feel that the issue of the emergence of new causes of actions in industrial relations law and trade disputes is so well exemplified by the recent emergence of the doctrine of economic duress, which is so exotic as to be not even a tort, into the labour relations field that it must be taken account of in this part of the Bill.
However, the Government have introduced first the new clause between Clause 11 and Clause 12 on which we had some debate and which is an area of liability contiguous to this because it is an area of statutory tortious liability. Secondly, they have now at a very late stage of the amendments seen fit to repeal Section 13 (2) of the Trade Union and Labour Relations Act 1974. We therefore think it would be proper to ask your Lordships' leave to withdraw these amendments on the basis that we want to look at the rather changed Bill we are now considering, with a view to considering the relationship of these matters to the new Bill on Report.
[Amendment No. 146 not moved.]
[Amendments Nos. 147 and 148 not moved.]
Clause 17 agreed to.
Schedule 2 [Change of basis of computation of period of continuous employment.]
Earl Ferrers Earl Ferrers moved Amendment No. 148A:
Page 30, line 21, leave out (""three months"") and insert (""thirteen weeks"").
The noble Earl said: This particular amendment is virtually drafting. I beg to move.
On Question, Amendment agreed to.
Schedule 2 as amended agreed to.
[Amendments Nos. 149 and 150 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 151:
Before Clause 18, insert the following new clause:
(" Employee's rights on insolvency of employer.
.In subsection (2) of section 122 of the 1978 Act, the words "whichever is the later" shall cease to have effect, and there shall be substituted the words "or, in a case where the debt is one referred to in section 121(2) or section 122(3)(d), the date on which the award of the industrial tribunal which gives rise to the debt is notified to the parties, whichever is the latest".").
The noble Lord said: I beg to move this amendment because it seems that in these debates, surely, one day there will be a Last Trumpet sounded; a line will be drawn and those who did not stand up for individuals will be on one side of it, and the rest of your Lordships will be on the other—I am going to be on this side of the line, which is the right side, because this involves individuals—not a lot—who are getting a raw deal. I am advised on this matter,

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by those who have far more knowledge of it than I have, that Section 122 of the 1978 Act was enacted to protect employees in the event of their employer's insolvency. They are unable to be paid the whole or part of a debt to which the section applies and to claim the amount owing upon their employer's insolvency from the Secretary of State. The Secretary of State takes over the rights and remedies of the employees. The debts to which the section applies are in Section 122(3) and include certain awards made by industrial tribunals. It is in relation to these debts arising by virtue of industrial tribunal awards that the difficulties have come about. The problem is, partly, the definition of the "relevant date" of the debt in Section 122(2). To qualify for payment from the Secretary of State, the employee must have been—and this is the main point—entitled to be paid the debt on the relevant date. The relevant date is defined as the date on which the employer became insolvent, or the date of termination of the employee's employment, whichever is the later. In practice, what has arisen is that in a number of cases the sequence of events has been: first, dismissal; secondly, insolvency and, thirdly, the industrial tribunal award and, as I understand it, that gives rise to a situation where the employee loses his rights. There are other technical difficulties in Section 122 and the relationship of the problem of the ceiling of eight weeks' pay in relation to Section 121. Those two are touched upon, as the noble and learned Lord will recognise, in the amendment. But it is the main problem of the loss of the right in insolvency which this amendment seeks to cure. I beg to move.
Lord Mackay of Clashfern: The present wording of the 1978 Act, literally interpreted, leaves some room for doubt as to whether claims for tribunal awards of this kind, made after the event, so to speak, should be met from the Redundancy Fund. As far as the Department of Employment who manage the fund were concerned, however, these doubts were resolved in employees' favour by the unreported industrial tribunal decision of Scott v. Secretary of State for Employment in 1977. The then President of the Industrial Tribunals noted that, in the case of protective awards in particular, it was common for tribunal decisions to be made some time after the employee's dismissal or the employer's insolvency. He concluded that the legislation's purpose would be defeated if the debt the employer owed as a result of such awards could not be related back to the date of the events which gave rise to the application to the tribunal, which would have been on or before the relevant date. Ever since, the Department of Employment has taken that tribunal decision as a precedent. To the Government's knowledge, no employee has lost his claim for payment from the Redundancy Fund of money which a tribunal awarded him under Sections 121(2) or 122(3)(d) of the 1978 Act.
In other words, in practice, the proposed amendment is followed, but it would obviously be an improvement to clarify the law in this area. Perhaps the noble Lord has waited a little time for an amendment to be accepted, and this is the occasion. So it gives me very great pleasure, indeed, to accept this amendment.
On Question, amendment agreed to.
Clause 18 [Interpretation, minor and consequential amendments and repeals]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 151A:
Page 20, line 38, leave out ("and "trade union"") and insert (""trade union" and "worker"").
The noble Lord said: This amendment to Clause 18 is consequential on the clause to define "worker" as meaning the same as in Section 30 of the 1974 Act. I beg to move.
On Question, amendment agreed to.
Clause 18, as amended, agreed to.
Schedule 3 [Minor and consequential amendments]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 151B:
Page 31, line 6, leave out paragraph 1 and insert—
("1. In section 55 of the 1978 Act (meaning of "dismissal") for subsection (5) there shall be substituted the following—
"(5) Where the contract of employment is terminated by the employer and the notice required by section 49 to be given by an employer would, if duly given on the material date, expire on a date later than the effective date of termination (as defined by subsection (4)) then, for the purposes of sections 53(2), 64(1)(a), 64A and 73(3) and paragraph 8(3) of Schedule 14, the later date shall he treated as the effective date of termination in relation to the dismissal.
(6) Where the contract of employment is terminated by the employee and—

(a) the material date does not fall during a period of notice given by the employer to terminate that contract;

(b) had the contract been terminated not by the employee but by notice given on the material date by the employer, that notice would have been required by section 49 to expire on a date later than the effective date of termination (as defined by subsection (4)),

then, for the purposes of sections 64(1)(a), 64A and 73(3) and paragraph 8(3) of Schedule 14, the later date shall be treated as the effective date of termination in relation to the dismissal.
(7) "Material date" means—

(a)on subsection (5), the date when notice of termination was given by the employer or (where no notice was given) the date when the contract of employment was terminated by the employer; and

(b) in subsection (6), the date when notice of termination was given by the employee or (where no notice was given) the date when the contract of employment was terminated by the employee".").

The noble Lord said: It might be convenient for the Committee if I were to speak also to Amendments 152A and 152B. The purpose of this amendment is to clarify the drafting of this provision and of the section in the 1978 Act to which it relates. The provision is concerned with cases of constructive dismissal; that is where an employee has resigned because his employer has broken, or shown his intention to break, a fundamental term of the employment contract.
It provides in these circumstances for the extension of the employee's period of service by a period equal to his minimum notice entitlement under the 1978 Act, in the same way as if the employer had terminated the contract but had failed to give the due statutory notice. Its primary purpose is to benefit the constructively dismissed employee, who would have had sufficient service to make an unfair dismissal complaint had his contract been terminated by his employer, but who currently does not because the provision for extension of service by the statutory notice entitlement does not apply.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 152:
Page 34, line 45, at end insert—
("14A. In section 23 of the 1978 Act (action short of dismissal taken against employee in respect of trade union membership or activities), in subsection (2A)(b), after the words "subsection (1)(c)" there shall be inserted the words "or (1A),".").
The noble Lord said: This amendment is purely consequential on the earlier amendment, Amendment No. 80, to Clause 9, which we have already debated. The Committee may remember that, provided that where, under Clause 2, an employee cannot be fairly dismissed for failing to make a payment in lieu of union membership, he also has the right, under Clause 9, not to have action short of dismissal taken to force him to make such a payment. This amendment merely provides that this right does not apply if, under Clause 2, the employee could be fairly dismissed for failing to make payment in lieu of union membership.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 152A:
Page 35, line 38, at end insert—
("23A. In section 153(1) of the 1978 Act (interpretation) in the definition of "effective date of termination" for the words "and (5)" there shall be substituted the words "to (6)".").
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 152B:
Page 35, line 50, at end insert—
(" 24A. In Schedule 12 to the 1978 Act (death of employee or employer) for paragraph 9 there shall be substituted—
"9. Where—

(a) the employee's contract of employment has been terminated; and

(b) by virtue of subsection (5) or (6) of section 55 a date later than the effective date of termination as defined in subsection (4) of that section is to be treated as the effective date of termination for the purposes of certain of the unfair dismissal provisions; and

(c) before that later date the employer or the employee dies;

subsection (5) or, as the case may be, (6) shall have effect as if the notice referred to in that section as required by section 49 would have expired on the date of the death.
24B. In paragraph 11(1) of Schedule 13 to the 1978 Act (deemed continuity of employment where a later date is treated as the effective date of termination) after the words "55(5)" there shall be inserted the words "or, as the case may be, (6)".
24C.—(1) Schedule 14 to the 1978 Act (calculation of normal working hours and a week's pay) shall be amended as follows.
(2) In paragraph 7(1) (the calculation date)—

(a) in paragraph (h), after the words "55(5)" there shall be inserted the words "or, as the case may be, (6)"; and

(b) in paragraph (i), for the words "section 55(5) does not apply" there shall be substituted the words "neither subsection (5) nor subsection (6) of section 55 applies".

(3) In paragraph 8(3) (maximum amount of week's pay for certain purposes) after the words "55(5)" there shall be inserted the words "or, as the case may be, (6)".").
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
Schedule 4 [Repeals.]
Lord Glenarthur Lord Glenarthur moved Amendment No. 152C:
Page 37, line 7, column 3, at end insert—
("Section 13(2).").
The noble Lord said: This is purely a technical amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 153 not moved.]
Schedule 4, as amended, agreed to.
Clause 19 [Short title, commencement and extent]:
4.39 a.m.
Lord Mottistone Lord Mottistone moved Amendment No. 154:
Page 21, line 16, leave out ("and").
The noble Lord said: With permission, I will speak also to Amendment No. 155. I am advised on these amendments by the General Council of British Shipping and, in that connection, it gives me great pleasure to address your Lordships at the beginning of the morning watch, just as dawn is coming through.
When speaking on Amendment No. 17 my noble friend Lord Trenchard said that the Government was still considering whether the transitional period before application of the ballot should be one year or two years. He went on to refer to a later amendment which was later passed, which gave authority for holding ballots on more than one day. He hoped, at that time, that the concern being caused to the General Council of British Shipping might, to a certain extent, be satisfied by these offers. I am afraid that they are not. I hope to be fairly speedy in explaining to your Lordships in general, and to the Government in particular, why they are not, in the hope that they may listen more carefully to what the general council are trying to say to them.
Because of very serious practical problems in the shipping industry of meeting the levels of support proposed in the Bill for a ballot on a closed shop agreement, linked with the high level of compensation obtainable for unfair dismissal on the grounds of union membership—those were points to which an earlier amendment of mine referred—the General Council of British Shipping has asked the Secretary of State to delay the implementation of Clause 2 of the Bill for the shipping industry for a period of five years, in the event that the Government cannot agree to separate arrangements for the industry. The purpose of these amendments is to give to the Government powers to agree to separate arrangements for the industry.
The reason why the general council is looking to five years rather than one or, more hopefully, two is that the shipping industry's union membership agreements are at present industry-wide agreements which form part of the large number of industry-wide agreements on pay and conditions and form an integral part of the central system of supply of ratings jointly controlled by the General Council of British Shipping and the National Union of Seamen for employment by individual shipping companies.
At present, 60 per cent. of ratings are employed by shipping companies on a voyage-by-voyage basis and frequently transfer from company to company. The industry has decided that there would be advantage in moving away from the central supply system and institutions to permanent company employment and company negotiations on employment conditions. However, only a small minority of companies employ-

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ing about 20 per cent. of seafarers consider that they are in a position to move to full company employment and company bargaining in the immediate future against the background of the current international slump in world shipping, and a sharply reduced United Kingdom flag fleet. Consequently, a move to company bargaining will take a number of years to achieve. It certainly will not be achieved within the next two years and would be severely jeopardised if attempts were made to rush it.
The General Council of British Shipping believes that, while there will continue to be considerable practical problems for shipping companies even when the move to permanent company employment has been reached, because of the difficulty for even an individual shipping company to carry out a ballot on the lines proposed in the Bill, these will be less severe than under the present centralised system; but they are likely to require five years to reach this situation.
Turning now to the ballot over an extended period, the shipping industry's problems are not solved by allowing a ballot to be held over an extended period. While it would obviously be impossible for most shipping companies to hold a secret ballot of all their employees other than over an extended period, this could be said to provide a complication to their difficulties because of the great mobility of the rating workforce. Even in companies which maintain a largely permanent workforce, an average of over 10 per cent. of the workforce will move from ship to shore, from shore to ship and from ship to ship each week. However, for most companies the great majority of ratings are employed for the duration of the voyage only. Consequently, over any extended period there will be a considerable flow of employees into and out of a company.
Apart from the difficulty of monitoring the ballot in such circumstances, the interchange of personnel between companies is at present such that a significant number of those who are employed by one company when a ballot is held are likely to be employed by other companies within a matter of months, and perhaps before the result of the ballot is announced. Voters in a company ballot may therefore not be bound by its result and may be determining the status of those subsequently employed who did not participate in the ballot. It is complicated.
The solution could rest in the Government giving shipping time—the five years they have asked for—to make a really major change in their whole system of engaging about 60 per cent. of their ratings. I hope that the Government might be able to give a fair wind to my amendment. If not, I hope they will appreciate that the problems are probably greater than has hitherto been thought by my noble friend's department, and that further discussion will go on in order to satisfy this very real and practical problem, so that the shipping industry will not be hampered by the Bill before us when it comes into force. I beg to move.
Lord McCarthy: We would urge once again that the Government look favourably upon this amendment. In fact, inspired by the success of my noble friend Lord Wedderburn of Charlton in gaining an amendment, I believe that this must be the only amendment
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which the Government have accepted from this side of the Committee, both in this Bill and in the previous Bill. There you are. We hope that the Government will consider favourably the amendment of the noble Lord, Lord Mottistone. It is perfectly true, as the noble Earl, Lord Gowrie, said, when we last debated this issue and persuaded the noble Lord, Lord Mottistone, to remit his previous amendment, that there was going to be another amendment about extending the date of the ballot.
As the noble Lord says, when one considers what has been proposed, it does not actually assist the shipbuilding industry at all and, indeed, having looked closely at that amendment, I do think that it was necessary. I do not believe there is anything in this Bill which would have prevented employers from having a ballot over more than a day, and so the Government have made no real move so far towards the noble Lord's position. Now is the time to do it.
Lord Rochester: I, too, would like to encourage the Government to respond as positively as possible to the amendment put forward by the noble Lord, Lord Mottistone.
Earl Ferrers: I always like to respond as positively as I can. I am grateful to my noble friend Lord Mottistone for explaining the difficulties which the shipping industry envisage they would have on balloting. We must remember that all employers with closed shops will have at least one year, and possibly two years, after the Bill is enacted to organise their ballots. They have already had more than six months while the Bill has been going through Parliament in which to consider any problems that may arise. I would think that this is an entirely adequate and indeed fairly generous period of time in which employers could prepare themselves for ballots. I find it remarkable that the shipping industry requires five years.
It is only the shipping and the entertainment industries which have made representations to us on this point. I would not have thought their position was such as to justify special treatment. But I am very grateful to my noble friend for explaining what is, as he rightly said, a complicated amendment. I hope that he will not press this—in fact, I am quite certain that he will not do so tonight. On the face of it, I cannot see that it is justifiable to extend this for five years and so remove the basic question of principle—the right of employers to have their say—from the shipping industry for that length of time. However, I will certainly look at the point my noble friend has raised and, if I may, I will get in touch with him again between this and the next stage of development.
Lord Mottistone: I am most grateful to my noble friend Lord Ferrers for that small crumb of hope. I shall look forward to hearing from him. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 155 not moved.]
Clause 19 agreed too.
House resumed: Bill reported with amendments.
Lord Denham: My Lords, I think at this comparatively early hour it would not come amiss for me

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to thank the House for the despatch with which they have considered this Bill, and I think, on behalf of the whole House, we would like to thank all those members of the staff who have backed us up so marvellously during this period.
I beg to move than the House do now adjourn.
Moved accordingly, and, on Question, Motion agreed to.

SOUTHERN WATER AUTHORITY BILL
Reported from the Select Committee with amendments and recommitted to an Unopposed Bill Committee.