Redundancy Payments (Local Government) (Modification) Order 1983 (Hansard, 27 July 1983)

§ The Minister of State, Scottish Office (Lord Gray of Contin)
My Lords, I beg to move that the draft Redundancy Payments (Local Government) (Modification) Order 1983 be approved. This order, which is being made under Section 149 of the Employment Protection (Consolidation) Act 1978, will modify the method of calculating redundancy payments for employees of local government and associated employers.
The order is in the nature of a tidying-up measure, since it places on a statutory footing the current practice of local authorities, which is to base redundancy payments on total aggregated local government service. This practice is at present authorised by the ministerial sanction of the Secretary of State for the Environment. The provision of statutory cover for the present arrangements is supported by all the employers' associations and the trade unions, together with the Government departments concerned and with the local authority sector. Indeed, it has been in contemplation for some years.
I should explain that, under the provisions of Part VI of the Employment Protection (Consolidation) Act 1978, an employee who is discharged as redundant after at least two years' service is entitled to be paid a redundancy payment. This is calculated, inter alia, according to his period of continuous service with his last employer. The employer is responsible for making the payment, but may then recover 41 per cent, of the cost from the redundancy fund by way of rebate. Local authorities and related institutions are legally distinct employers, so that, whenever an employee is made redundant, there is an entitlement to a statutory payment, and hence to the employer's rebate, even though the employee intends to move on to a post elsewhere in local government.
1551 The financial effect of the order on the redundancy fund in the long term is expected to be neutral. This is because the higher level of redundancy payments which will be payable out of the fund is likely to be compensated by the lower number of claims for rebate being made. It is estimated by one large local authority that higer rebates may have to be paid in about 10 per cent, of redundancies on account of aggregation, but redundancies will be fewer. This takes account of the fact that it is unlikely to relate to manual workers, who tend to stay with a single authority; and that older non-manual staff tend to spend most of the latter years of their career with one authority. The effect of the order will be to reduce the number of cases where redundancy payments are payable because they will no longer be paid where there is movement within the "common pool". I commend the order to the House.

§ Lord McCarthy
My Lords, I should like to thank the noble Lord for the clear way in which he has presented this order. We welcome the order. I found his explanations were in marked contrast to some of the explanations which have been put forward in another place on orders of this kind. While welcoming and supporting the general intentions of the order, I want simply to ask a number of questions, some about detail, some about form and some about scope.
My questions about detail and form really relate to the relationship between Schedule 1 and the Appendix, because noble Lords will be aware that the defined purpose of that schedule is, Employment to which this Order applies"; that is to say, Employers immediately before the Relevant Event", or the employer of the individual before the redundancy. But, in addition to the schedule, we have an Appendix, and the purposes of the Appendix, I understand, are: Employers with which Employment may constitute Relevant Local Government Service". My first question is: what is the difference? Why do we have Schedule 1, with a long list of employments to which the order applies—that is to say, employment immediately before the relevant event—and the Appendix, with another list of employers and a slightly different definition? Why do we have these two different lists, a schedule and an appendix, and what is the relationship between them?
I ask that question because my second question arises out of it. Some of the people contained in the schedule are also in the Appendix. Indeed, the Appendix begins by listing, substantially, those who are in the schedule. The first time in the Appendix is: Any employer described in Schedule 1 whether or not in existence at the time of the relevant event". Therefore, we have the schedule and we have the Appendix, which repeats all the people in the schedule and then makes another list. My question is: why do we have these two lists, and what is the relationship between them?
1552 This brings me to my third question, which is: why do we need both lists? They are both long lists. They contain all the county councils, all district councils, employees of magistrates' courts and employees of sports councils. We have the Tay Road Bridge Joint Board, which gets in there somehow. We have the managers of schools, we have local valuation panels and so on. My question therefore is: why have these particular people been put on the list? Why are they the relevant people to go on the list? Is it because it is a comprehensive list of all forms of local government service?
If it be the case (I suppose it probably is, but I must make this point clear) that the schedule plus the Appendix represents all forms of local government service, why do we not just say so? If, on the other hand, one runs through the Appendix and the schedule, there are one or two forms of local government service which are not on either list. Some have been left out. Why have they been left out? Why do we have these two long lists? Between them, are they comprehensive? If they are not comprehensive, who has been left out? If they are comprehensive, why can we not have a general statement such as, "All persons employed in local government"?
Those are my questions on details and forms, but that is not the most important issue. The most important issue is that of scope. The order deals in a narrow sense with a narrow set of people, though they are quite considerable in number; that is to say, those employed in local government. But there are other people in rather similar circumstances. In particular, I think of those employees who, as a result of reorganisation—and, in particular, as a result of the reorganisation of 1974 when a lot of employees were taken from local government and put into the National Health Service; for example, ambulance men; for example, local authority administrators running school clinics or staff of medical officers of health; all of which was in the interests of the Government of the day—were taken from local government and put into the National Health Service. Are they covered by this order for their period when they worked in local government? And, if they are not covered, then why are they not covered?
This, I emphasise, is not an academic question because the Secretary of State for Social Services in another place said recently that he intends to remove 0.75 of the total staff of the National Health Service and that he does not intend that these redundancies shall, on the whole, come from those who had a direct relationship with the patient, for example, doctors or nurses; but they will come from just these kinds of people who were drafted from local government into the National Health Service, ambulance men, local authority administrators operating school clinics and so on. Will these people be covered by this order? And should they not be covered by it, since they are going to have the whole of their service taken into account in questions of redundancy payments? That is right and that is proper. Why should it not cover those people, as well?
This brings me to my next question. If we are talking about those who are to be covered in local authorities, what about the health service generally? Surely the health service could be said to be a series of individual 1553 employers, separate employers, as the noble Lord has said. If they are employed in the National Health Service, as they were employed previously by area health authorities, and if, as a result of the reorganisation by the present Government, they are now employed by district health authorities, for the most part, why should they not be covered by provisions of this kind? They will move about from job to job; they may be declared redundant; they may wish to calculate and take into account all their service in the health service in exactly the same way as they might do so if they were in local government, whether they had ever been in local government or not.
So my next question is, if this is the principle as laid down by the Minister in another place and by the Minister today, why should this not cover the National Health Service as well as local government? But why stop there? We have other people in the public service sector (for example, in the water industry) who are in much the same position. Why should not similar provisions cover them as well?
This brings me to my final question dealing with the scope and principles behind this Bill. Is it the case—as I think it is—that we are trying here to do something about one group of workers in the public service sector who have been subjected to almost constant reorganisation in the interests of greater efficiency, who often were encouraged to move from what were formerly different employers within a common service to make possible reorganisation to facilitate the shedding of staff over a wider area and to make more effective use of labour? If that is the principle and if we are saying that, for redundancy purposes, we should assume that they have in effect a common employer, much as is the case in private industry—and it is not enough that this should be done by custom and practice or by ministerial permission or even by collective agreement—why are we not to see—indeed, are we to see?—a set of similar provisions which cover other parts of the public service sector?
Those are my questions. I am not asking for the answers to all of them today, but I would like the answers to some of these questions. To make clear what I am asking, I should like once again before I sit down to repeat them. The questions are these. What is the relationship between Schedule 1 and the appendix? Why does the appendix include organisations in Schedule 1? Are the two lists in the appendix and in Schedule 1 comprehensive? Do they cover all local government employees? If they do, why do not we have a general statement? If they do not, who has been excluded? Does the order cover periods of service in local government even if subsequently one has been transferred to another area such as the National Health Service, and if the object of the order is what I think it is, why do not the Government come forward with an order which covers similar groups in other parts of the public service sector?

§ Lord Gray of Contin
My Lords, I am grateful to the noble Lord for the welcome he has given this order, and I am also appreciative of the fact that he indicated to me that he would not expect answers to the questions which he has posed at very short notice to the Dispatch Box. I shall study the record very carefully and I shall ensure that the noble Lord is given 1554 a very full answer to the points which he raised. I would say that I think that, to some extent, some of the questions that he raised are already explained in the schedule. For example, I think that the list of those to whom this order refers is set out in considerable detail in Schedule 1.
So far as the purpose of the order is concerned, he will appreciate that during a career in local government it is frequently necessary for employees to move around to a considerable extent from one authority to another and from one form of local government to another. His request as to why this order is not extended to the National Health Service and similar bodies is purely because it is simply a local government employment order. I can assure him that the several years which it took to carry on the various consultations with local authorities and those involved in local authority work make it quite obvious that if we had tried to extend this on a wider scale the period of consultation would have been very much greater and we might not have been able to consider this order today. I would say to the noble Lord that I welcome his acceptance of the order. I shall study very carefully what he said and ensure that he receives a very full answer to the points which he has raised.

§ Lord Rochester
My Lords, I have not spoken to this order, but if the noble Lord is to make a written response to the noble Lord, Lord McCarthy, would he be kind enough also to send me a copy of any reply he makes so that we on these Benches may be aware of the answers?

§ Lord Gray of Contin
My Lords, I am grateful to the noble Lord. I can assure him that I will make sure that he, too, receives a copy.