Trade Union Bill

HL Deb 25 June 1984 vol 453 cc692-774

House again in Committee.

Clause 4 [Exemption for certain trade unions]:

Lord Howie of Troon moved Amendment No. 44:

Page 6, line 1, leave out subsection (1) and insert— ("(1) This Part does not apply to any trade union which either is itself a constituent part of another trade union whose name appears on the list of trade unions maintained by the Certification Officer under the 1974 Act or—

1. (a) falls within section 28(1) (b) of the 1974 Act (unions which consist wholly or mainly of. or of representatives of, constituent or affiliated organisations); and
2. (b) has not members (other than such representatives) who are individuals.").

The noble Lord said: I do not expect the amendment to take terribly long, partly because we touched upon this area of the Bill on an earlier amendment moved by my noble friend Lord Wedderburn, in reply to which the noble Lord, Lord Gray of Contin, spoke about the incitement of unions and so on. He did so unsatisfactorily, I thought; otherwise I should not be moving this amendment. This is another amendment that has been suggested to me by the Engineers and Managers Association, to which I referred last week in an earlier debate, as the noble Lord may remember.

The amendment tries to extend the categories of exemption for certain trade unions that are set out in the Bill. The intention of the amendment is that unions which have devolved structures and which have devolved sufficient authority to each of the constituent parts for the constituent parts themselves to be covered by the definition of trade unions, should not apply the provisions of the Bill to their constituent parts so long as the trade union itself, as the parent body, is a registered trade union under the 1974 Act and so long as the registered trade union elects its principal executive committee in accordance with the provisions of this Bill.

We are really concerned here with devolution and with registered trade unions. The Engineers and Managers Association and similar trade unions for which I speak have a structure that has evolved to suit the requirements of their own members. It is a structure that devolves considerable power from the association itself to the constituent groups. These constituent groups represent specific interests of managers and professional staff in a variety of industries such as electricity supply, shipbuilding, and aerospace.

The problems of the Engineers and Managers Association—these might apply to other trade unions could be dealt with if in the Bill it was made clear that a trade union meant a registered trade union and nothing else. In discussions the Government have made clear that although that might solve the problem of the EMA, they would not limit the operation of Part I of the Bill to registered trade unions as a whole because it might be possible for unions to evade the provisions of the Bill simply by deregistering. That is not what we want in this amendment. The unions concerned have thought further about it, and the amendment is designed to meet both the fear of the Government—the fear that unions might try to evade the consequences of the Bill by deregistration—and the needs of the unions themselves.

For this amendment to apply, the trade union would have to be a registered trade union subject to the provisions of this Bill, and only under these circumstances would its constituent parts be exempt. There is no question in this amendment of a registered trade union seeking to evade whatever obligations may be demanded of it by this legislation with regard to the election of the union's principal executive committee. However, if in that trade union sufficient autonomy has been devolved downwards to its constituents for all or any of these constituents to meet the definition of a trade union under the 1974 Act, then that constituent would be exempt from the proceedings of this Bill.

For instance, in the case of the EMA, one of its constituents, of its own free volition, has opted for a system very similar to that provided for in this Bill; the others have not. The EMA members themselves, in devising their own rules, did not see a need to prescribe identical methods of election for each of the constituents because they believed it was right to allow the constituent groups to choose the system which best suited the needs of their particular members. I know that this is ground we have touched upon earlier. For that reason, I do not wish to extend the argument any further than that. I beg to move.

Lord Gray of Contin

I am grateful to the noble Lord, Lord Howie of Troon, for moving his amendment so succinctly. The whole Committee knows of his particular interest in this subject. I shall try to respond as constructively as I can to what he has said, although I have little doubt that it will not be exactly in the terms he would wish to hear.

This amendment raises the question of which bodies are covered by Part I. The Government's position on this has always been quite clear. In the same way as Clause 1 covers all those union leaders with a vote on their union executives—because it is those people who take decisions on behalf of their members—Part I of the Bill as a whole covers all those organisations which meet the statutory definition of a trade union, save for certain trade union federations. The reason for that is quite clear. If one looks at the statutory definition of a trade union in the Trade Union and Labour Relations Act 1974, one finds that it embraces, broadly, organisations whose principal purposes include the regulation of relations between workers and employers. Quite clearly any organisation—be it mighty or be it small—which meets this definition should act in the democratic interests of those it represents, and that is why the Bill applies, saving one exception which I shall now describe, to all trade unions.

The exception concerns trade union federations which fulfil two conditions. The first is that they consist wholly or mainly of, or of representatives of, constituent or affiliated organisations. The second is that they have no individual members, other than representatives of such organisations. These are flexible and sensible provisions which ensure that federations which do not exercise direct influence over individual members of their affiliated organisations are exempt from the requirements of the Bill.

Amendment 44 would have the effect of extending very subtantially the exemption provided by Clause 4. It would provide that in certain circumstances not only would a federation be exempt, but so would its constituent parts. Where a federation of trade unions was listed as a trade union by the certification officer, then any constituent parts of the union which were themselves trade unions would also be exempt from the requirements of Part I.

I understand, of course, why the noble Lord has moved this amendment. But I wonder whether he appreciates its full implications. I would ask him to consider, for example, the Council of Civil Service Unions. This is an umbrella organisation of all the main civil service trade unions, and because it is both a federation and has no individual members it will be exempted by Clause 4(1) of the Bill. But it is at the same time listed as a trade union by the certification officer. The result is that, if the noble Lord's amendment were to be accepted, it could well be held that the individual civil service unions, as constituent parts of COCSU, were exempt from the requirements on elections. As a result, most civil servants would have no guarantee that their union leaders would be elected democratically.

A point of equal significance concerns the National Union of Mineworkers. The NUM is in fact a federation, consisting of its constituent areas, all of which are also independent unions in their own right. Under the noble Lord's amendment, they would all be exempted from the requirements of Part I of the Bill. We need look no further than the current dispute in the mining industry to see that the various NUM areas can have a considerable influence on the lives and livelihoods of their members. I cannot accept that it would be right, simply because they are constituent parts of other unions, to exempt unions such as these from the requirements of Part I.

By definition, all trade unions, even if they are part of larger unions, are in the business of negotiating with employers. It is the Government's firm belief that those who take decisions on behalf of the members of those trade unions should be elected properly. The fact that a union is a constituent part of a federation of unions is to that extent irrelevant. If it negotiates on behalf of its members, it should be run democratically. Both for this reason, and because of the practical implications of the noble Lord's amendment, to which I have pointed, I would hope that, on reflection, he might be prepared to withdraw that amendment.

Lord Wedderburn of Charlton

The Minister's answer has confirmed to me that my noble friend has raised a very important point. The Minister's answer was to be expected when it ran: all the organisations are within the Bill which are organisations within the definition of trade union under Section 28 of the Trade Union and Labour Relations Act 1974, except federations, which perhaps one might say include, on the one hand, true federations, and, on the other, federations which have no individual members or few individual members, like the International Transport Workers' Federation. The Government are to be complimented on having made sensible provision for these in the Bill.

That would leave one saying that the amendment cannot be accepted because, if we accepted it, we would accept that the NUM was the only national body to be covered by the Bill—not the area organisations, which are separate trade unions. I am not sure that my noble friend really would wish each of the areas of the National Union of Mineworkers—Yorkshire, South Yorkshire and all the rest—to escape. As I understood him, his argument was aimed at a rather different level, which I am not sure the Minister answered. Accepting that that makes a quite rational case, how do we then go about groups inside what, loosely, would be called a trade union which are themselves trade unions?

The Government's own Bill accepts that there are such groups because the definition of "section", with which noble Lords may remember I had such difficulty on a previous amendment, accepts that a section of a union may be itself a separate trade union. I know that my noble friend Lord McCarthy will not be pleased if I mention again the case of Cope v. Crossingham in 1909, because he does not like that case. But it is an illustration of the way in which in law a section or a branch—I see the noble Lord, Lord Harris of Greenwich, shaking his head; I do not know whether he disagrees with this proposition—can be a separate trade union. I shall tell your Lordships what will happen if something like the amendment of my noble friend Lord Howie is not put into the Bill, and I shall try to say it shortly and simply. For any section of the union, and in some cases even for any branch of the union which is in law a separate trade union—and that is a possibility—the elections to its principal executive committee must conform to the Bill. We can take as an example a body like the No. 1 Manchester branch of one of the print unions. That is sometimes said by some people to be a separate trade union because it negotiates separately and so fits the Bill. You can have a union within a union; that is in all the books. If a branch is a separate trade union or is found to be so by the courts, then its branch committee would have to be elected under the provisions of Clauses 1, and 2. The Government do not seem to have thought of this and I am not sure that it was canvassed in another place. I shall give way to the Minister if he says that it was canvassed; but I do not think that it was canvassed in quite these terms.

My noble friend Lord Howie has raised a most important point but not in regard to the sections of what one might call federal of quasi-federal unions like the AUEW or the NUM. I can understand the Government saying that we must have each of those unions within the Bill. That is understandable because they are national organisations. But where the trade union at which one is looking is a section, possibly even a branch like the No. 1 Manchester branch of one of the print unions, and it is able to say that it is a separate union, do the Government intend that at section and branch level the elections to those principal executive committees are to be dealt with by Clauses 1 and 2 of the Bill? If they are to be so dealt with, then the Bill is a much deeper penetration of legal imposition within the body of trade unions, or of some trade unions, than had previously been thought. I do not think that my noble friend has received an answer on that aspect of the question.

Lord Gray of Contin

I can perhaps clarify the position, because it really is quite clear. If a group inside a trade union meets the statutory definition of a trade union under the 1974 Act, then Part I of the Bill applies. If it does not meet the definition, then Part I does not apply. That to me seems to be a perfectly clear and simple proposition. It is as straightforward as that.

Lord Howie of Troon

I am sure that the noble Lord, Lord Gray, is right. He and I normally meet here on Scottish business which is somewhat different from the arcane measures with which we are dealing tonight. Let me say first of all that I have no thoughts of any kind regarding the National Union of Mineworkers in this House or out of it, and I do not wish it to be brought into these discussions. Nor, incidentally, am I deeply moved by the civil service unions, important though they may be. I am, by no means for the first time, trying to be helpful to the Government Front Bench. The kind of legislation which the Government are trying to put through here is the kind of legislation which almost more than any other legislation depends upon its acceptability to the people upon whom it bears. We can pass laws until we are blue in the face about secondary picketing but it seems to happen nonetheless and regardless of these laws; whereas if the laws were acceptable the consequences might not be the same.

Here is a situation in which we have a law which is being discussed and which will presumably eventually be passed, and it will be imposed upon people, some of whom possibly deserve it and some of whom do not. Here is a situation where people, who do not need this kind of legislation to make them behave democratically, sensibly, moderately and in all proper ways, are being irritated and made unamenable. Is that really a sensible way for the Government to proceed? If the Government wish their legislation to work, they should try to get as many people on their side as possible and especially those upon whom their legislation impinges.

I have tried to help the Government and they are as yet unwilling to listen. However, there is the Report stage. They will go back and philosophise about the matter for a while and perhaps have a rethink and give something to those of us who are trying to help them as best we can. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.5 p.m.

Lord Howie of Troon had given notice of his intention to move Amendment No. 45:

Page 6, line 25, at end insert— ("( ) This Part shall not apply to any trade union which—

1. (a) within twelve months of the commencement of this part holds a secret postal ballot to which the provisions of section 697 2 of this Act apply in which the question is whether the members wish the provisions of this Part to apply or the union's existing procedures for the election of the principal executive committee to apply; and
2. (b) whose members vote in that secret ballot by a majority of those voting to retain their existing method of electing the members of the principal executive committee of the trade union.").

The noble Lord said: The ground which Amendment No. 45 covers was gone into pretty thoroughly in the discussions on Clause 1. Therefore, as an act of clemency, I shall not move this amendment although I must say that after the last debate I am not so sure about it. Anyway, I shall not move it.

[Amendment No. 45 not moved.]

Clause 4 agreed to.

Clause 5 agreed to.

Clause 6 [Interpretation of Part I and transitional provision]:

[Amendments Nos. 46 to 48 not moved.]

Clause 6 agreed to.

Clause 7 [Industrial action authorised or endorsed by trade union without reference to a ballot]:

Lord Wedderburn of Charlton moved Amendment No. 49: Page 9, line 6, leave out ("13") and insert ("13(1)").

The noble Lord said: We now come to Part II of the Bill and the provisions relating to compulsory ballots in respect of strikes and other industrial action. Part II opens by telling us what it is that trade unions, their members and their officials will lose if they do not do what is required, in regard to such ballots. The Government have over the past three of four years adopted the formula (which they use again and again) that trade unions shall lose their immunities if they do not do what is required. In a previous debate today the noble Earl referred to the tremendous privileges which he said our trade unions had.

In respect of actions taken in contemplation or furtherance of a trade dispute, the protections or immunities have been whittled away over the past few years to a very major extent. The protections or immunities are the way in which English law expresses industrial rights which in most other systems would be expressed as rights—those rights in the form of the protections against common law regulation that made industrial action unlawful. The Government take pride in saying that those who act in contemplation or furtherance of a trade dispute can now be sued in the courts in a very large number of cases, whereas they might not even have been open to action in 1906.

The way of achieving that is to take away all or part of Section 13 of the 1974 Act which, as the noble and learned Lord, Lord Scarman, put it in one of his judgments, was the way in which we enacted in 1974, and later with amendment in 1976, the 1906 formula, clarified and brought up to date. The Government have already got rid of two parts of Section 13, which protect those acting—and I insist that it is all of those acting, not just the union, though the Government are interested here in the union and its officials—in furtherance of a trade dispute from various types of civil liability based very largely on interference with contract or interference with trade. As I say, the Government got rid of the interference-with-trade protection in Section 13(2), which was repealed in 1982, and they got rid of subsection (3), which had another necessary protection, by repealing it in 1980. They restricted Section 13(1)—which is the section which protects against interference with contractual obligations or inducing breach of contract—in respect of secondary action and in many other ways in 1980 and 1982.

The point of this amendment is to ask the Government right from the outset what they are about in Part II. Part II appears to deal with the need for a ballot where something is wrong with the industrial action which is taken, or to be taken. It deals with the case of an inducement of a breach of contract of employment or an inducement of interference with its performance. Perhaps I may very briefly put it in the following way. Those are Section 13(1) matters; they are within the exemption of Section 13(1), and therefore it is understandable if the Government say, "If you do not have a ballot, you lose that protection".

However, the Bill does not say that. It says that the protections of Section 13 shall be lost; that is to say, both Section 13(1) and Section 13(4). The subsection begins in Clause 7: Nothing in section 13 of the 1974 Act shall prevent an act … being actionable". Section 13(4) is about something completely different from the matters with which Part II appears to deal. It deals with the situation where persons are liable at common law for what I might call a simple conspiracy; that is to say, civil liability for a combination that causes damage if the judges decide that the object of the combination is not legitimate, even though all the specific acts and means are themselves lawful.

This was recently referred to in the same case as I earlier mentioned to your Lordships, Lonrho v. Shell Petroleum 1981, in which the noble and learned Lord, Lord Diplock, admitted or, indeed, asserted that: conspiracy is a highly anomalous cause of action". He gave reasons for that because, of course, today a combination by itself is not necessarily stronger than a unit when, as he put it, great businesses and multinational businesses are regarded as one entity, as one company". But the House of Lords—and the noble and learned Lord, Lord Diplock, gave the judgment—said that it was too late to get rid of this anomaly, and we still have this liability in our law.

But I ask the Government this question. Is it not a manifest illustration of overkill or, as some would say, of getting at the unions in a way that the logic of the Bill does not demand, to get rid of all the remaining civil liability protection which rests in Section 13; that is to say, both protection against inducing breach of contract, which Part II is about, and protection against civil liability? The latter arises quite irrespective of breach of contracts of employment. It is nothing to do with that; it is simply a conspiracy which arises from an objective which the courts say is not legitimate and which, of course, the courts earlier in this century decided included such things as strikes for a closed shop. Later the judges have come to feel that that probably is a legitimate objective at common law, but it is a very sensitive and tender area.

The case of Quinn v. Leathem in 1901 has not been wholly excluded by later decisions, such as that in the Crofters' case of 1942, and it seems quite unnecessary for the Government to antagonise and to introduce the element of liability for civil conspiracy merely because there has not been a strike ballot. We shall resist the rest of Part II as we go through and therefore this is by way of being a preliminary point. But although we shall resist it, I can see the logic of taking away protection against liability for inducing breach of contract if you do not have the ballot, because that is what Part II is about. But I cannot see, nor can my noble friends see, any logic at all in taking away the protection in a trade dispute against the old style civil conspiracy to injure, and on that basis I beg to move the amendment.

The Earl of Gowrie

I have to confess that I am in a bit of a quandary. I do not want to be needlessly obstructive to the noble Lord, and it may be that I am being obtuse rather than obstructive, but I cannot see that the noble Lord's amendments would have any practical effect, because Clause 7 of the Bill removes the immunity provided by Section 13 of the Trade Union and Labour Relations Act 1974, as amended, in the absence of a ballot, but only in respect of the torts described in subsections (1) and (2) of the clause. As these torts are all contained within Section 13(1), the practical effect of the amendments would therefore be nil. Simply on grounds of ordinary good management, I would suggest that your Lordships resist them.

Lord Wedderburn of Charlton

That is a somewhat extraordinary reply, and I congratulate the noble Earl on giving it. Of course it would make a difference. But in order to illustrate the difference one would have to enter into a discussion on the part of the liability in Clause 7(1) which relates to interfering with the performance of a contract of employment. It is perfectly possible for a situation to arise where, the protection of the whole of Section 13 having been taken away, liability for civil conspiracy is an alternative ground of liability and even a further ground of liability to any which is there in subsections (1) and (2).

Indeed, the further point which should go on the record is this. If the noble Earl is right and the amendment to insert Section 13(1) would make no difference, why did not the Government do it? If the Government do not need to get rid of protection in Section 13(4) of the 1974 Act, why do they take away that protection? Of course it makes a difference. The Government know that very well and it is a bit of a sleight of hand for the Government to take away protection against conspiracy on the basis that it does not make any difference because it is dealing only with inducing breach of contract. That is a quite extraordinary argument. But we need to get on, and on that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.18 p.m.

The Earl of Gowrie moved Amendment No. 50: Page 9, line 7, leave out ("reference to") and insert ("the support of").

The noble Earl said: With the permission of the Committee, I should like at the same time to speak to Amendments Nos. 57, 59, 63, 71 and 83 together.

Amendment No. 57: Page 9, line 25, leave out ("reference to") and insert ("the support of").

Amendment No. 59: Page 9, line 30, at end insert— (" (aa) the majority of those voting in the ballot have answered "yes" to the appropriate question;").

Amendment No. 63: Page 9, line 37, at end insert— (" (3A) In subsection (3)(aa) above "appropriate question" means—

1. (a) where the industrial action mentioned in subsection (3)(a) above is, or includes, a strike, the question referred to in subsection (4)(a) of section 8; and
2. (b) in any other case, that referred to in subsection (4)(b) of that section.").

Amendment No. 71: Page 10, line 25, leave out subsection (5).

Amendment No. 83: Clause 8, page 11, line 18, leave out subsection (5).

These amendments will make immunity for calling industrial action dependent on a trade union achieving the support of a majority of those voting in a ballot. As the Bill is presently drafted, a trade union need hold a properly conducted ballot only in order to retain immunity. When the provisions of this Bill were originally framed, it seemed scarcely credible that any trade union leader would call a strike after a ballot in which a majority of those voting had voted against such action. But, sadly, events have shown us that, in this fallen world, the scarcely credible can sometimes happen.

The requirement represented by these amendments does, I hope your Lordships will agree, do the absolute minimum which is necessary to guard against the possibility that trade unions can call their members out on strike against their wishes and still retain immunity. On that basis, I recommend these amendments to the Committee I beg to move.

Lord McCarthy

I must congratulate the noble Earl on what I would say was possibly the most laconic address that he has given to this Committee on a matter of great importance in the area of trade union and labour relations. This is a very important amendment. We oppose this amendment not just because of what it contains, but because of what it symbolises. This is the first opportunity that we have to discuss Clause 7 of the Bill and, together with Clause 7, of course the provisions in Clause 8, which run together and constitute the heart of Part II of the Bill.

We oppose this late amendment, not simply because of what it says, but also because of the part which it plays in the general framework of the Bill. So what is wrong with the amendment is to some extent what is wrong with Clause 7. What is wrong with Clause 7 is that it seeks to introduce in the area of industrial action, together with Clause 8, the same highly detailed form of statutory regulation of trade union behaviour as we spent so much time discussing earlier this evening in this Committee.

Almost the same words are introduced in Part II of the Bill as are in Part I—the same restrictions, the same conditions. In some ways there are, as we shall show as the Bill proceeds, more conditions, more restrictions, in respect of industrial action than there are in the case of trade union balloting. Worst of all, whereas in the case of balloting for union executives the Government at least had the decency to realise that trade unions will need a bit of time to get their rule books in conformity with Part I of the Bill, in Part II of the Bill—and we have an amendment dealing with this which we shall move subsequently in Committee—they give them no time at all. By summary jurisdiction, Part II of the Bill is to come into force in two months.

It is in that general context that we come to this amendment. This amendment is wrong because this part of the Bill is wrong. We are not suggesting that trade unions—and I shall turn to the case of the National Union of Mineworkers in a moment—have ballots, and that when they have ballots and those ballots go against industrial action they take industrial action anyway. I do not know—noble Lords opposite may know; I do not say that I know all these things of a trade union which has had a ballot, where the ballot has gone against industrial action and where the union has had industrial action anyway. The complaint that the Minister has against the NUM—and I shall come to the NUM—is that they have not had a ballot. It is not that they have had a ballot, the ballot has gone against a strike and they have struck anyway. I do not believe that it is politically possible for a union to hold a ballot, for that ballot to go against industrial action and for the executive, or whoever is charged under the union rule book, to call industrial action in defiance of the membership's expression of opinion.

I do not believe, in that limited sense, that this is a particularly important amendment, because what is wrong is Clause 7 of the Bill. This is the cherry on top. What is wrong with Clause 7 (apart from the particularly narrow provisions, which are almost exactly the same as the provisions in Part I and which extend not simply to Clause 7 but to Clause 8) is that it seeks to impose upon trade unions one way of dealing with the question whether or not there should be industrial action. A ballot is the answer. This is another example of what on a previous occasion we called "the Government's ballotomania".

Of course, there are circumstances in which the sensible way to consult members is through a ballot; and, of course, if you consult members through a ballot you will expect to get an affirmative response. Where the questions involved are relatively simple, where it is not essential to pose alternative courses of action, where there are large numbers of trade unionists involved, where many of them are difficult to contact, where there are multi-union procedures involved—in all these circumstances the answer is to have a ballot. But in other circumstances there is nothing wrong—and this is the difference between us—in trade unions deciding to use the instruments of representative democracy; to decide to have special conferences of delegates, or even shop floor meetings. We do not take the view that there is something inherently disgusting, unrepresentative and low about working men having a shop floor meeting.

I apologise if the noble Earl has heard this from me before, but I warned him the other day that he would hear it again because I never get an answer. But the strange thing is that noble Lords opposite see nothing funny, or comic, or low, about the professional associations meeting in branches and sticking up their hands and taking decisions, or companies doing these things, or boards of directors. This is the way we take decisions in Parliament. We get together and walk through Lobbies. It is not disgusting or low for us: only for working men. When working men do it, then noble Lords opposite say, "It is impossible. It is terrible. It is being depraved. We must have a ballot". Our position is that working men are entitled to use direct democracy, and indirect elections, and they are entitled to put up their hands just like their middle-class equivalents. That is why we are against this part of the Bill, and that is why we oppose this amendment.

I come to the case of the National Union of Mineworkers. The noble Earl has made a great deal of the National Union of Mineworkers. We are told that the justification for the introduction of this amendment at this late stage is related to the miners' dispute. There are several points which could be made about the dispute with the National Union of Mineworkers and the National Coal Board. The first point I make—and I make it without being asked, though I would have thought by this time I would have been—is that in my opinion the National Executive Committee of the NUM would have been well advised before now to have held a ballot, because I think they would have won. Most of the indications, most of the surveys—most notably the one done for London Weekend—show that if the NUM had held a ballot at the right time they would have won that ballot, and that at least would have shut the Government up. I am sorry that the National Executive Committee of the NUM, did not hold a ballot. Whether or not it went in their favour, I believe that it has put them in an invidious position.

The second point I would make is that whether or not the NUM held a ballot has nothing to do with this part of the Bill. It has nothing to do with the amendment. If you think carefully, the complaints which the Government have and the complaints which opponents of the NUM have against what is happening in this dispute are not that there was not a ballot, or that there should have been a ballot: they really relate to what is happening in the circumstance in which there was not a ballot. What they really say is that the attempts of those who are on strike to picket out those who are not prepared to strike are wrong, and in particular are being carried out in unlawful ways. That is their argument; that is the dispute. It has nothing to do with whether or not you hold ballots.

The third point I would make is that in law, in particular in this law or any other law—and there is plenty of law about—if there is a law which noble Lords opposite know which would help to settle the dispute with the National Coal Board, then they had better say what it is. The significant thing about this dispute is that there is a great deal of action going on which everybody admits in unlawful, and the existing law is only to a very limited extent being used in order to affect the conduct of this dispute.

I am not standing at this Dispatch Box and saying that the law should be used. So far as the criminal law is concerned, that is a matter for the police. So far as the civil law is concerned, and as the Government have said over and over again—even if I do not believe it, it is convenient to believe it at this moment—that is a matter for the National Coal Board. But there is plenty of law about.

In a situation in which the dispute continues and is not brought to an end nor, as far as one can see, very much assisted by the criminal law or by at all, the civil law, then it ill behoves the Government to come to us and say that they want more laws—and in particular that they want this law, because of what is going on between the National Union of Mineworkers and the National Coal Board.

That will not do. It will not fit. This is an attempt to introduce an additional provision into a Bill that is already unjustifiable, illiberal and anti-union. I do not suggest that the provision itself is particularly significant, because I do not believe that trade unions have ballots, find that they do not have majorities and then go on strike anyway. To believe that is to have no notion of what trade unions do. There is no reason why we should increase the number of ways in which trade unions will be regulated by the Bill, and we oppose this amendment.

8.31 p.m.

Lord Rochester

On the Second Reading of this Bill, I said that my noble friends and I endorsed the principle underlying Part II of this Bill. By that, I meant that, wherever feasible, ballots should precede strikes. But we were seriously concerned that the effect of Clause 7 would in practice be to encourage more unofficial industrial action in the form of walk-outs, working to rule, going slow, and so on.

In the various debates there have been in this House during the past few years on the subject of mandatory, pre-strike ballots, we have constantly maintained that they are likely to prove counter-productive. This view has powerful backing, starting with the report of the Donovan Commission which pointed out, among other things—and I quote from paragraph 427 of the report—that: A law forbidding strike action before the holding of a secret ballot could not be enforced in the case of small-scale unofficial stoppages which make up the overwhelming majority of the total number of strikes". Yet that, in my view, is precisely the position to which we may well be brought by this clause.

If noble Lords will read the response to the Government's legislative proposals made, for example, by the Institute of Personnel Management, whose members have to grapple with these problems from day to day, in the front line, the Committee will see what I mean.

The institute fear that the effect of the Bill will be to divert open strike action into underground tactics of non co-operation—which in their view are much harder to deal with and more destructive of relationships with employees. There is also the danger that, if in every case there is a requirement that ballots should be held before strikes can with immunity begin, then there may be a corresponding insistence on the part of trade unions that ballots must be held also before strikes are called off.

As to the particular amendment before us, we have been told that it has been introduced by the Government as a result of what has happened in the current miners' dispute. In this Committee, I am entitled to say that I have been as outspoken as anyone in condemning the way in which the rules of the National Union of Mineworkers were manipulated in order to avoid a country-wide ballot before strike action was taken. But whether the words to be used in Clause 7 are, without reference to a ballot", or, without the support of a ballot", they are, in my view, unnecessary for the Government's purpose. Legal sanctions are already available, under the 1980 and 1982 Employment Acts, to deal with the secondary picketing that has occurred in the current dispute. They have not yet been used but they are there—ready if needed.

However, the problem does not concern only major national strikes or industrial action in essential services. In my view, the Government are here barking up the wrong tree. The fundamental flaw in Clause 7 is that the harder it is made to conduct official strikes, the greater will be the inducement to engage in unofficial action. Under this amendment, there will have to be a ballot in which a trade union will need the support of a majority of those voting before it can with immunity authorise or endorse industrial action involving breaking a contract of employment or interference with the performance of that contract.

But a great many strikes start in the heat of the moment—and when that moment comes, my fear is that union members will not hang about waiting for a ballot—they will vote with their feet, and they will walk out. The irony of it is is that, by doing so, they themselves will be immune from legal action. Even if that does not happen, ballots will take time to organise, so many disputes will take longer to resolve. It follows that Clause 7 is likely to have the effect of both encouraging and prolonging unofficial action.

Certainly I am not legal luminary. All I can do is to make available to the Committee such first-hand industrial experience of these matters as I have. My fear is that in the nitty-gritty handling of these disputes on the shop floor. Clause 7—and Amendment No. 50 as part of it—will prove damaging to industrial relations in this country. Therefore, in this instance I cannot support the Government.

Lord Mottistone

The interesting point about the speeches of the noble Lords, Lord McCarthy and Lord Rochester, is that neither of them tackled the problem of intimidation of the ordinary person who is a trade unionist. I believe this is an important factor—and one that has grown rather than decreased in importance in recent years. It is probably fair to say that the difficult task which the Govenment have in trying to strike the right balance is entirely in order to protect the person who does not want to become involved in whatever action is proposed, for whatever reason.

I do not feel that it was right of the noble Lord, Lord McCarthy, to compare the unions and their ballots with your Lordships' voting in this House. We are all volunteers. Sometimes, we are intimidated by our Chief Whips. But if we really do not like the Chief Whip, we can go away. However, if I am working in a closed shop, I do not have that option. So it is a different situation. There are all kinds of other examples. From working in industry for the past 15 or 16 years—not just recently—I have known people who just want to get on and work and who are not particularly keen to become involved in a strike that may well have not commercial but political overtones. One has to bear that in mind.

As the noble Lord, Lord Rochester, knows, I have great sympathy with a lot of what he has to say. But if I may be so bold, part of what he had to say might have been based on his experience of a few years ago. I have noticed how things have changed and how the attitudes of people in industry have changed over the past few years. One has to balance this situation so that the ordinary person is not open to intimidation.

Lord McCarthy

Before the noble Lord sits down—and he is a fair and reasonable man—I wonder whether he would care to give me an example of the kind of intimidation that he has talked about.

Lord Mottistone

Yes, I can give an early one. That was when there was a strike in Swindon in the late 1960s at one of the subsidiaries of British Leyland (or whatever it was called at that stage) which produced bodies for motor cars. I had a couple of friends in my village who were employed in this company. They were totally against what they had been ordered to do but they were equally totally terrified of standing up against this at all. They were quite ordinary chaps, they were very sensible; they knew very well that if they were on strike for x weeks, they would lose so much money that that would more than sweep away what they were being asked to strike for. To me it was really rather dreadful that these simple people who knew the facts of life, had not the courage, if you like, to stand up. You only have to deal with lots of people to find that. I could go on.

There are many examples that I could quote your Lordships from over the past 15 years, but you would not want me to do that. You would not want to be here all night. But it does happen, and it is not right to say that it does not happen. In recent months and weeks, after all, we have seen an enormous amount of intimidation by the National Union of Mineworkers. Do not get it wrong—it is intimidation; it is as simple as that.

Lord McCarthy

I am not talking about the National Union of Mineworkers. The example that the noble Lord gives seems to me to consist of people cavilling at a majority decision.

The Earl of Gowrie

I think the Committee knows that I have a high regard and respect for the noble Lord, Lord McCarthy, and I enjoy in general debating with him. But when two people are debating they must start from some sense of common actuality or some generally agreed premise. To use what is in my case a rather unnatural sporting metaphor, the noble Lord, Lord McCarthy, and I can either go hunting for pigeons for game and for the pot or we can go clay-pigeon shooting to see which of us is the better shot. We cannot go out together, with the noble Lord, Lord McCarthy, thinking that he is going to bring down the clay pigeons and me thinking I am going to obtain dinner. This, I think, is what has happened in respect of the debate that we have had so far.

I am not against representative democracy. I am, if you like, a curious exemplar of it, as are many of your Lordships. But what we are dealing with here, as my noble friend Lord Mottistone has reminded us, is representations to the Government over many years both to the Government as a government and to the Government as the executive representatives of a political party, that working men and women in this country do not like their form of representative democracy. They make this quite clear to nearly all parties. They made it clear to the Labour Party and when the Labour Party ignored them they made it clear by deserting the Labour Party in droves. They have made it clear to the Social Democratic and Liberal Alliance, and it will not have escaped your Lordships that there has been considerable bidding for this vote on behalf of the noble Lord, Lord Rochester, and his friends.

They have made it clear that they do not like all the decisions that are taken in their name, not because they have theories about representative democracy or because they are that interested in some of internal politics of unions or because they are that interested in some of the political arguments that unions have with governments, whichever Government is in power. They do not like it because, as my noble friend Lord Mottistone reminded us, it can precisely affect their lives. It can affect what they earn, how much employment there is and also whether or not they are able to work. Therefore it seems to me that we are talking about something a lot more serious than a somewhat notional debate about representative versus direct democracy.

The aim of this Bill is partially to correct some very plain and very widely agreed abuses in the field of representative democracy of the kind whereby officials of ASTMS are elected by fewer than 2 per cent. of the vote; and the sort of instances we itemised when we went into Part I. In the case of the miners in dispute with the NUM, this dispute and the lessons learned from it helped persuade the Government to bring through these amendments. The Nottinghamshire miners voted 3 to 1 against strike action. At least five other areas voted the same way. Yet the leaders of those areas, which are constitutionally trade unions in their own right, instructed the members not to cross picket lines; that is, they instructed them to act in breach of their contracts of employment. That I think says it all in the case of the miners—or all, except from one thing. This is not—and we have sought to argue throughout that it is not—a punitive measure. The Bill is not retrospective. The Part II provisions cover industrial actions organised after they come into effect—that is, two months after Royal Assent—but not actions organised before that date.

The noble Lord, Lord McCarthy, has attempted to play down the pressures on trade union members to take industrial action against their wishes. Again, this was a point which was very well raised by my noble friend. The noble Lord, Lord McCarthy, called for examples. Let me give him one. During the so-called TUC day of action in September 1982, the National Graphical Association instructed all its members to strike for one day in support of health service workers. No ballot was held and no other form of membership consultation took place. Some 30,000 NGA members defied the strike call but many others did go on strike after threats of expulsion and dismissal if they did not do so. As a result, as the NGA Journal recorded in November 1982, letters poured into it on the issue. One member wrote: For the first time in 35 years' membership I came face to face with union bully-boy tactics ordering me to throw aside my conscience, walk away from my job, dishonour my contract of employment, break the law, all in the cause of confronting a democratically-elected government". Another wrote: I would like the National Council to explain to the ordinary members what gives them the right to call us out on strike without a ballot or even consultation of the rank-and-file members". When it is losing pay, losing employment, risking the livelihood of oneself and one's neighbour, I think we are involved in a far more serious arena than we are when we are debating the pros and cons of different forms of representation.

The noble Lord, Lord Rochester, seemed to take the view that the Bill would encourage unofficial action. I find this argument rather difficult to swallow. I have had many dealings with the Institute of Personnel Management and I have a very high regard for them. In my other job, I am at present personnel manager, so to say, of 630,000 people through the Civil Service. I do not think that these Government amendments which make immunity for calling industrial action dependent upon a trade union achieving the support of a majority of those voting in a ballot anything which would give a personnel manager worth his or her salt much to be anxious about.

The argument of the noble Lord would seem to suggest that trade union leaders would be quite content to let control of events slip from their hands. Surely this is unreasonable. As the Engineering Employers Federation, in its response to our Green Paper, said: With increasing union appreciation that their primary responsibilities lie in the industrial rather than the political field, unions will be increasingly forced to address themselves to becoming regarded by employers as serious, competent and reliable bargaining partners. They will not be so regarded if they acquiesce in an extension of unofficial industrial action". I should not wish to underestimate the damage that unofficial strikes can cause, but I would venture to suggest that the noble Lord, Lord Rochester, may be living a little too much in the past. Unofficial strikes are no longer the predominant form of industrial action which they were considered to be at the time of the Donovan report. Days lost reportedly due to unofficial action which averaged around two-thirds of the total in the period 1973 to 1978 had declined to only about one-quarter in the period 1979 to 1982. As the noble Lord, Lord McCarthy, himself said, very fairly, during the debates on the 1980 Act: Unofficial, unconstitutional strikes have"— this was the inference— been replaced by official mass industrial actions—above all mass industrial actions in parts of the public sector. These are the kinds of confrontations which we have had since 1970—large numbers of working days lost and a few important strikes, particularly in the public sector". One does not have to be a very astute political analyst to be able to make a distinction between the general industrial landscape at the moment—its relative calm, its increased productivity and its real and well founded anxieties about international competitiveness and the degree to which one now has to be competitive at home and abroad to maintain employment—and the "battle", (though I would prefer if this "battle" were not happening) between the public sector industries and ultimately the Government as paymasters and as representatives of a somewhat different, from their point of view, political set of priorities.

The fact is that it would simply have been impracticable to have attempted to cover unofficial action in the Bill. As the Green Paper on trade union democracy pointed out, no country has legislated for ballots for all strikes. It would surely be impossible to impose effective statutory requirements on the unofficial strike organisers or leaders themselves, since they would often be unidentifiable, or could easily be made so. It would be highly unreasonable to impose such a requirement on the union. Unofficial action is often so short lived that there would be no time for the union to organise a ballot, even assuming it knew of the existence of the unofficial action. It would, moreover, be extremely illogical to require a union to seek a demonstration of support for industrial action which it had refused to support or indeed had publicly disowned. The fact that it would have been impracticable to bring unofficial action within the scope of the Bill in no sense diminishes the crucial importance of ensuring that official action does not take place before members are consulted.

We understand the real world. Of course we know that tempers can flare, or that people can walk out, but it is not people walking out as a result of flared tempers that brings whole industries to a standstill or threatens jobs in other sectors not connected with the official dispute. From the point of view also of the union member, there is a major difference between official and unofficial action. An official strike call is backed up with the threat of disciplinary action against anyone who disobeys. In a closed shop, the threat of expulsion from a union can carry with it the threat of a loss of a job. So the Government believe that it is intolerable that union members should be exposed to the threat of disciplinary action when they have been denied the right to say in a ballot whether or not they think a strike is justified.

As I said in my original speech, the requirement represented by these amendments does, in my view, the absolute minimum which is necessary to guard against the possibility that trade unions can call their members out on strike against their wishes and still retain immunity. The criticism to which the Government are vulnerable is surely that they are proceding as cautiously as they are. On that sensible and cautious basis, I recommend the amendments to your Lordships.

8.55 p.m.

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

Their Lordships divided: Contents, 80; Not-Contents, 42.

DIVISION NO. 4
CONTENTS
Airey of Abingdon, B.	Hatherton, L.
Avon, E.	Home of the Hirsel, L.
Bauer, L.	Hornsby-Smith, B.
Belhaven and Stenton, L.	Kaberry of Adel, L.
Bellwin, L.	Kilmany, L.
Beloff, L.	Kinloss, Ly.
Belstead, L.	Kinnaird, L.
Brabazon of Tara, L.	Kitchener, E.
Bridgeman, V.	Lindsey and Abingdon, E.
Brookes, L.	Long, V.
Brougham and Vaux, L.	Lucas of Chilworth, L.
Broxbourne, L.	McFadzean, L.
Buckinghamshire, E.	Massereene and Ferrard, V.
Buxton of Alsa, L.	Maude of Stratford-upon-Avon, L.
Caccia, L.
Cameron of Lochbroom, L.	Merrivale, L.
Campbell of Alloway, L.	Mersey, V.
Cockfield, L.	Montgomery of Alamein, V.
Coleraine, L.	Mottistone, L.
Cork and Orrery, E.	Mowbray and Stourton, L.
Craigavon, V.	Murton of Lindisfarne, L.
Crathorne, L.	Norfolk, D.
De La Warr, E.	Pender, L.
Denham, L. [Teller.]	Rankeillour, L.
Denning, L.	Reay, L.
Drumalbyn, L.	Renton, L.
Eccles, V.	Romney, E.
Elles, B.	Savile, L.
Elton, L.	Sharples, B.
Faithfull, B.	Shaughnessy, L.
Forbes, L.	Skelmersdale, L.
Fortescue, E.	Stamp, L.
Gainford, L.	Swinton, E. [Teller.]
Gardner of Parkes, B.	Tranmire, L.
Glenarthur, L.	Trefgarne, L.
Gowrie, E.	Trumpington, B.
Gray of Contin, L.	Vaux of Harrowden, L.
Greenway, L.	Vickers, B.
Hailsham of Saint Marylebone, L.	Ward of Witley, V.
	Wynford, L.
Halsbury, E.	Young, B.

NOT-CONTENTS
Attlee, E.	Kilmarnock, L.
Aylestone, L.	Lloyd of Kilgerran, L.
Birk, B.	Lockwood, B.
Bottomley, L.	Longford, E.
Brockway, L.	McCarthy, L.
Cledwyn of Penrhos, L.	McIntosh of Haringey, L.
Collison, L.	Mayhew, L.
David, B. [Teller.]	Phillips, B.
Dean of Beswick, L.	Pitt of Hampstead, L.
Elwyn-Jones, L.	Rochester, L.
Elystan-Morgan, L.	Ross of Marnock, L.
Gladwyn, L.	Seear, B.
Graham of Edmonton, L. [Teller.]	Stedman, B.
	Stewart of Alvechurch, B.
Hampton, L.	Stewart of Fulham, L.
Hanworth, V.	Stoddart of Swindon, L.
Hatch of Lusby, L.	Stone, L.
Hooson, L.	Underhill, L.
Houghton of Sowerby, L.	Wedderburn of Charlton, L.
Irving of Dartford, L.	Wigoder, L.
Jeger, B.	Winstanley, L.
John-Mackie, L.

Resolved in the affirmative, and amendment agreed to accordingly.

9.3 p.m.

Lord Dean of Beswick moved Amendment No. 51: Page 9, line 8, leave out ("whether or not")

The noble Lord said: With the leave of the Committee, with Amendment No. 51 may we take Amendment No. 54, which pretty well deals with the same issue?

Amendment No. 54: Page 9, line 12, leave out ("whether or not")

During the debates we have had on previous amendments the noble Lord, Lord Rochester, referred to unofficial strikes and to the fact that he thought that this legislation would act as an incentive to those taking place. The noble Earl, I thought quite mistakenly, drew the other conclusion. In my opinion, these two amendments are necessary, not only to give protection to trade union officials involved in official strikes but, if the Act is interpreted in certain ways, to give them protection if they are involved in unofficial strikes. We do not accept that the Bill as it stands is a sensible way to proceed, and we suggest that the linked amendments are a more fair and equitable way of proceeding in this matter.

The Government having gone so far in this Bill, with the exception of the amendment they lost to their own Back-Benchers, some Cross-Benchers and some Members of the minority parties, will probably have their way. But I would ask the noble Minister: does he really believe that, as the Bill stands, a trade union official at local or national level, or, for that matter, a shop steward, should be liable if he believes he has acted in accordance with the law as it then stands and is found wanting through mistakes not of his own making?

We are asking, in the event of a person being in that position, that their immunity should be retained because a lot of these trade union members, at the most important point of the ballot being cast, are not full-time trade union officials. A lot of them work in the factories and are paid collectors or paid shop stewards; and I know from my experience that the lower echelons of trade union officers, and certainly in the factories where shop stewards do an unpaid job, are invaluable both to management and to their own members.

It always follows that where you have a good structure in a factory with a good works committee manned by good shop stewards—and I am not talking about militant shop stewards who go over the top—it leads to a diminution in unofficial strikes, because that, in the main, is where unofficial strikes start. I would hope that the Government would look kindly on these two amendments. I do not know whether, throughout his lifetime, any other noble Lord—and I know that some, like myself, have had very humble beginnings—has been involved in unofficial strikes. I had my first one when I was, I think, 15. If your Lordships were to ask me now what it was about, I would not know, but it was an apprentices strike in the engineering industry.

There was such an engineering strike by the apprentices during the last war. The engineers had a 3s. a week increased settlement and the apprentices received nothing. At the time, I was serving my apprenticeship in an armaments factory, and there was a national strike called by the apprentices. It was spontaneous, it lasted about a week and it ended very quickly because we were all sent our calling-up papers. That was a type of action that was very effective.

But if any members of the Government or any of their supporters think that they will reduce industrial action, they are barking up the wrong tree. I have been involved in a few strikes, but I can recall being involved in only one strike which could be termed "official" under the provisions of this Bill. As I have said, my union, the AUEW, is among the most democratic in the trade union movement; but I can recall only one or two occasions when they balloted. However, I had recourse to unofficial action when speed was of the essence in determining whether or not we won or lost a very important issue.

The last time that I had recourse to go out on unofficial action, I was not a shop steward. Over 20,000 people worked in that factory and they thought that the shop steward, who had represented them for a number of years and who was a good shop steward, had been dismissed quite arbitrarily and unfairly by the management. Strangely enough, the chairman of the works committee, who was a very distinguished trade unionist, was not greatly in sympathy with those who took the other view. But the end result was that over 50 per cent. of the factory went on strike against the advice of the works committee and I was not a member.

I put this to the Minister: what is now the position of someone in the position of that convenor? If this Bill becomes law to the letter, as it is written, we shall have the situation where a person who advises members not to take part in unofficial action may well—and perhaps the Minister will tell me whether this is so—be liable. I explained in commencing these few remarks on these two very important amendments that there is no question at all that the Government, even with their obvious lack of enthusiasm—I hate to use the word "dislike"—for the trade union movement, want to see trade unions organised and run at the top and lower down, as well as in the middle strata, by men of character, men of ability and men of sincerity. However, if this Bill is left as it is, with immunity stripped from them on occasions because of something which happens and to which they may be directly opposed, it will be a disincentive for people to go for those positions. I repeat that if the Government think that this Bill is a recipe for ending or reducing unofficial strikes, I believe it will act as a catalyst the other way. I beg to move.

Lord Rochester

Before the noble Lord sits down, he talked of speaking to two amendments. I may have missed his first words, but was he speaking to Amendments Nos. 51 and 54?

Lord Dean of Beswick

Yes.

Lord Rochester

I, too, am concerned about this point in subsection (1). It is plain from the wording that loss of immunity can apply not only to the action of a trade union but also to that of a local union official. Section 15 of the 1982 Employment Act describes the circumstances in which authorisation or endorsement of the relevant action takes place and my fear is that the union representative, instead of responding readily to calls for help in trying to solve problems, will in future do so reluctantly or even not at all.

Under this Bill, if he makes some mistake in conducting a ballot—for example, by failing to send somebody a ballot paper—the matter can be taken to court. The union's funds will be at risk and the union official will take the can. He will therefore have to watch his step pretty closely. Moreover, the members of his union who are involved in the dispute may themselves discourage his help, lest he is inculpated and their union is thus disadvantaged. This provision in the Bill does not seem to me to be the best recipe for retaining that flexible, sensible, informal handling of relationships on the shop floor which has hitherto enabled many disputes to be settled within a few days. I fear that they will now last longer and, because attitudes will then harden, they may become more difficult to resolve. For that reason, I support the noble Lord, Lord Dean of Beswick, in the amendment which he has just moved.

Viscount Long

One fact which has emerged clearly from the amendment moved by the noble Lord, Lord Dean of Beswick, is that he and I are too old to get our call-up papers, so we can settle down to the Trade Union Bill. I noted the noble Lord's worries, and those of the noble Lord, Lord Rochester.

Clause 7 removes the immunity provided by Section 13 of the Trade Union and Labour Relations Act 1974, as amended, where in effect a trade union authorises or endorses a call for industrial action without first holding a ballot of the members concerned.

Your Lordships will know that, in practice, the courts do not normally take enforcement proceedings only against individual officials where it is possible to proceed against the union itself. There is normally a more effective remedy against the union in the form of fines and, if necessary, sequestration of assets, than against individual officials who may be men of straw. But general secretaries and other officials may be added as defendants to proceedings and named in injunctions alongside their unions, and the principle stands that officials are personally liable for unlawful acts committed on behalf of their union and may be proceeded against for contempt of court for disobedience of its orders. The Government can see no reason to lessen the burden of personal responsibility which these officials should be prepared to shoulder.

In conclusion, the Government see no reason to depart from the rules governing liability previously laid down in the 1982 Act. The phrase "whether or not against the trade union" in Clause 7(1) and (2) is required simply to provide certainty for the courts, and the Government believe that it should be retained. I hope the noble Lord will be satisfied with that answer and will withdraw his amendment.

On Question, amendment negatived.

9.17 p.m.

Lord Wedderburn of Charlton moved Amendment No. 52: Page 9, line 10, leave out ("or to interfere with its performance").

The noble Lord said: I beg to move Amendment No. 52, in connection with which, with the Committee's leave, I shall speak also to Amendments Nos. 55, 56, 58, 67, 68, 69, 74 and 77.

Amendment No. 55: Page 9, line 14, leave out ("or to interfere with its performance").

Amendment No. 56: Page 9, line 18, leave out ("or to interfere with its performance").

Amendment No. 58: Page 9, line 29, leave out ("or interference").

Amendment No. 67: Page 10, line 15, leave out ("or to interfere with its performance").

Amendment No. 68: Page 10, line 20, leave out ("or interference").

Amendment No. 69: Page 10, line 22, leave out ("or interference").

Amendment No. 74: Page 10, line 32, leave out (", or to interfere with the performance of,").

Amendment No. 77: Page 10, line 42, leave out ("or to interfere with its performance").

It can therefore be seen that these amendments deal with a central thread in Part II of the Bill. Some of the amendments relate to Clause 8, though most relate to Clause 7. The industrial action to which Part II is directed is always described as that which involves inducing a breach of the contracts of employment of the workers concerned, or inducing interference with the performance of those contracts. This is a fundamental matter. The amendments would leave the Bill with what we believe is the area which, on the Government's premise, is the proper area; namely, where workers break their contracts of employment. They would take out the part which says "interference with performance", which, by definition, is an interference with performance and is not a breach.

It is necessary to place on record the position of the law on this matter. I shall do so as quickly as possible and, if I may, by way of an example which we could use for the rest of this part of the Bill when these matters arise. I shall take the example of my employing the noble Earl under a contract of employment. Just to be impartial about it, I shall also take the example of my noble friend Lord McCarthy intervening and doing something to upset that employment.

There are two basic ways in which my noble friend would be liable at common law. Liability number one would be where he knowingly and intentionally induces a breach of the contract of employment; for example, where he persuaded the noble Earl to go with him for a drink and, therefore, miss his working hours. Liability number two would be where my noble friend Lord McCarthy intervened and interfered with its performance by unlawful means. Some of the cases give the example of where my noble friend Lord McCarthy kidnaps the noble Earl; and that would be unlawful means. Perhaps a more realistic example is where the noble Earl required special tools to do a job and my noble friend Lord McCarthy unlawfully stole the tools. Again, that would be unlawful means. In the Bill, interference with performance is neither of those liabilities. It is an interference with a performance where there are no unlawful means as such; otherwise, the Bill would say so. Indeed, from previous debates it is clear that the Government agree.

In recent decades a third possible liability in common law has been suggested. Indeed, I must put it higher than that. In the case of Torquay Hotel Co. Ltd. v. Cousins in 1969, reported in the second volume of Chancery Division reports, in the Court of Appeal the then Master of the Rolls, the noble Lord, Lord Denning, said this: The time has come when the principle should be further extended to cover a deliberate and direct interference with the execution of a contract without that causing any breach".

He went on to make it clear that this interference, which would not be by any unlawful means such as stealing the tools, could be one which prevented or hindered performance, but must be deliberate and direct.

That liability has since been a matter of much debate. With respect, it is an extension. Indeed, if I may say so with no disrespect, the noble and learned Lord, Lord Denning, differed from some of his judicial brethren in that when he was extending the liabilities of the common law he said so. Some of them did not, but he always did. He said in Torquay Hotel Co. Ltd. v. Cousins: It is time that the principle should be extended and liability extended".

That is very different from the liabilities as understood before and, by some, since. For example, in the case of Allen v. Flood, Lord Herschell said, on page 121 of 1891 Appeal Cases: A study of the case of Lumley v. Gye in 1853 the case where inducing breach of contract was confirmed as a liability— has satisfied me that in that case the majority of the court regarded the circumstance that what the defendant procured was a breach of contract as the essence of the cause of action".

Had the noble and learned Lord the Lord Chancellor been here I would have dared to quote the chapter in Clerk and Lindsell, on Torts, of which I am myself the editor, because the noble and learned Lord the Lord Chancellor said in 1980 that it was a very good chapter. I can perhaps say, even in his absence, that the conclusion reached there has not encountered total disfavour when it said, at page 710: It must remain questionable whether the new extended tort exists.

It is therefore a matter of dispute.

There are two matters to be cleared out of the way immediately. Sometimes it is said that the noble and learned Lord, Lord Diplock, recently gave approbation to this extended liability—the third liability—in the case of Merkur Island Corporation v. Laughton, in the second volume of 1983 Appeal Cases, where he cited Lord Denning with approval in the Torquay Hotel case. But without citing them—although I will if need be—at pages 607, 608 and 609 of that report it is clear (indeed, it is stated) that the liability in that case was a liability for interference with the contracts involved by unlawful means. I merely state what Lord Diplock says at page 607: The contract the performance of which was interfered with was the charter; the form the interference took was immobilising the ship in Liverpool".

He then says: The unlawful means by which the interference was effected was by procuring the tugmen and the lockmen to break their contracts of employment".

So that was liability number two; interference by unlawful means.

Then it is said by the Government that they are entitled to insert what I might call mere interference, liability number three—the questionable one—into this Bill because interference appeared in the formulation of the immunities in 1974, and, like most Governments, they therefore claim the protection of the arguments of Governments of another colour, by saying, "You did it, so we're doing it". What happened in 1974 was that, it being uncertain that the third liability would ultimately be approved by the noble and learned Lords' Judicial Committee of this House, the legality of strikes and industrial action was preserved both against inducing breach of contracts and against interference with contracts in case the latter liability should be confirmed by the judges. That is a normal thing to do, and has been normal since 1906, in granting immunities.

Indeed, Lord Reid said in the case of Rookes v. Barnard, at page 1177 of 1964 Appeal Cases—and this is a very important proposition for this debate— Parliament had to provide for the possibility that mere interference if no legal justification were proved would be held to be a tort and I think that what Parliament did in enacting the second part of Section 3"— which was somewhat the equivalent of parts of Section 13(1) and (2)— was to put in a provision which would be necessary to achieve their object if the law should go one way but unnecessary if it went the other way". That is the law as held by the judges.

This Bill does not do only that. By using interference all the way through, by using interference as the basis of what is said to be wrongful industrial action, this Bill not only reshapes and moulds the immunity (it does that of course) but it also confirms by parliamentary implication the common law liability. It is therefore a most important piece of legislation in terms of liability in the civil law. We say that it is quite wrong, first of all, to do it in this way, and, secondly, that it is quite wrong in industrial terms to put it in, because this is a fiercely practical matter.

I have said a word about the law, and I shall say a word now about the practice, and leave it at that. It is a practical matter. Think what we are discussing. We are talking about someone who organises a stoppage of work, and we are saying to the Government, "All right, if that is in breach of the workers' contracts of employment, we don't agree with your ballot arrangements, but we see that's what you're after. But if it's not in breach, then what kind of interference are you aiming at?" Let us suppose that you have workers who are there and who normally work overtime. Indeed, let us take an example: the noble Earl, employed by me, is one of a group of workers on the Front Bench opposite, who normally work overtime, as I am sure they would and they do. The noble Lord, Lord McCarthy, comes along and says, "Come along, you are none of you obliged by your contracts, you know, to work overtime. You normally do on a Saturday. The noble Lord, Lord Wedderburn, because he is a trusting employer, thinks you are going to work overtime this Saturday, but there's no need to. Tell him you're not going to and come to the Cup Final or the Gold Cup at Ascot with me".

We say that if workers are not obliged to work overtime, then not to work it is not wrongful. For someone to come along, without unlawful means of course—if they are kidnapped, it is a different matter—and say, "Don't do what you're not obliged to do under your contracts", is not wrongful. This Bill, if it goes on the statute book in its present form, will clearly be used by those judges who wish to confirm the third doubtful and questionable liability as a confirmation of that liability, which is not an argument that can be properly used in terms of a mere immunity, as in the 1974 or 1906 Acts, as Lord Reid made clear.

In another place the Government sometimes, but rarely, seemed to say that the interference was different from a breach of contract. I have seven or eight citations from the Minister of State, Mr. Gummer, where he clearly says that we are dealing only with breach of contract of employment. Indeed—and this is the last point, which is perhaps the most worrying for the Government—when it came to Report in another place, so worried were they that interference was either meaningless or something that they could not grasp, the Minister of State, who, on 16th February had given an undertaking that he would reconsider the issue of interference in the Bill, took the issue of interference out of the questions, so that workers do not have to be asked under the Bill whether they will go on strike by way of interference with their contracts of employment. They have to be asked whether they will go on strike in breach of their contracts of employment. Your Lordships will find that when you come to Clause 8(4)(a) and (b). Now, having dropped interference from the questions, the logical thing for the Government to do is to drop interference from this part of the Bill, especially since they do not seem to be able to tell us precisely what it is that interference covers.

There was one attempt—and I must deal with it because it is very important—by the Minister of State when he gave this example on 7th of February. He said that a road haulage company might include in its drivers' employment contracts a force majeure clause absolving them from complying with its general terms where to do so involved crossing picket lines. Failure to cross a picket line in those circumstances would not therefore be likely to involve a breach of contract by the drivers, but it is reasonable to suppose that the courts might hold that they acted unlawfully in inducing the lorry drivers to interfere with the performance of their employment contracts.

With respect, the Minister of State did not take account of the judgment of the noble and learned Lord, Lord Diplock, in the Merkur case of 1983 where, at page 608, he spoke of just such a case in these terms: All prevention"—

that is, prevention by unlawful means— of due performance of a primary obligation under a contract was intended to be included even though no secondary obligation to make monetary compensation"— that is, to pay damages— came into existence, because that second obligation was excluded by some force majeure clause". In other words, it is still a breach but you do not have to pay damages for it. So first in law it is not a proper or sensible thing for the Government to do. Secondly, in industrial practice if it means anything it means extending the obligations of workers by impliedly saying they must do things which they are not contractually bound to do.

Lastly, just simply as a matter of consistency in the Bill, having dropped interference from the questions, if I can cite the speeches of the Minister of State on that question of the questions, it gives the game away: it shows that the Government must surely drop interference from the rest of this Bill. It is therefore both a legal and a practical matter and a matter of logic in the Bill itself. It is a most important question in the way in which the Bill will be appreciated to work by those on the ground in industry. I beg to move.

9.32 p.m.

Viscount Massereene and Ferrard

Regarding "or to interference with performance" reminds me of what killed the Clyde. I went on television in a discussion about this with a character called Jimmy Reid, who was a Communist. That is beside the point, but may I ask the noble Lord, Lord Wedderburn, whether he does include in "interfering with performance", the go slow we had in the Clyde so many years ago? We had these go-slows the whole time, which killed the Clyde. That interference with performance is not legal. Surely, if you have shop stewards and agitators, who make the workers, through intimidation, go slow, that is a breach of the law. If it is not, it certainly should be. I can understand the noble Lord's point about overtime. I quite agree that, if a worker does not want to perform his overtime, that is up to him. But if, in his working hours, he goes slow, is that not a breach of performance? I should have thought it was.

Lord Denning

May I say a word about this? I know that for 100 years it has been actionable to induce a breach of a contract of employment. It was in 1967 or 1968 that we had a case of Torquay Hotels v. Cousins. In that case, it had not been a breach of contract of employment but it had been prevented or hindered by stopping supplies to a hotel in Torquay. I ventured to suggest then in the Court of Appeal that it was actionable to interfere or to induce interference resulting in a breach of a contract—not only to make the breach but to interfere with the contract's performance, to prevent or hinder its performance. My noble friend rather suggested that I was alone on that. Afterwards, in Stratford v. Lindley, Lord Reid presiding in the House of Lords agreed with me, and, in a recent case, the Merkur case, the noble and learned Lord, Lord Diplock, agreed with me. I should like to say that it is now established in our law that not only is it actionable to induce a breach of contract, but it is also actionable to interfere with its performance or to prevent or hinder its performance. If this Bill supplies some confirmation of that view, I am only too glad to find it in the Bill.

I know that the noble Lord, Lord Wedderburn, in his text book, Clerk and Lindsell on Torts, has thrown a little doubt among us. I hope that your Lordships will not take any notice of doubts so expressed. This is a very valuable book. The words relating to interference go back to the 1906 Act, appear again in 1974 and are now here once more. It is a very good thing that, in Parliament, this House should recognise that there is such a wrong as interfering with the performance of a contract. I hope that the Committee will reject all the amendments.

The Earl of Gowrie

The noble Lord, Lord Wedderburn, wishes to employ me and the noble Lord, Lord McCarthy, wishes to kidnap me. I had no idea that I was such a desirable property to the Benches opposite. The fact is that this group of amendments would remove from among the grounds on which a union would be liable in tort, in the absence of a ballot, acts of inducing someone to interfere with the performance of a contract. The tort of inducing a person to interfere with the performance of a contract is established in case law. Immunity is provided by the Trade Union and Labour Relations Act, as amended. The essence of the Government's case is that we can see no reason for preserving that immunity where a union is not prepared to hold a ballot.

Dealing with one or two specific points made by the noble Lord, Lord Wedderburn, and having outlined the general Government case, I think that the judicial position has moved on somewhat from what was stated by Lord Reid in the case of Rookes v. Barnard. In the recent House of Lords decision in Merkur Island Shipping v. Laughton, reported in 1983, the noble and learned Lord, Lord Diplock, confirmed—this was echoed just now by the noble and learned Lord, Lord Denning—that, All prevention of due performance of a primary obligation under a contract was intended to be included even though no secondary obligation to make monetary compensation thereupon came into existence, because the secondary obligation was excluded by some force majeure clause. Lord Denning stated the principle thus, 'there must be interference in the execution of a contract. The interference is not confined to the procurement of a breach of contract. It extends to a case where a third person prevents or hinders one party from performing his contract, even though it be not a breach' ". Lord Diplock continued: Parliamentary recognition that the tort of actionable interference with contractual rights is as broad as Lord Denning stated [in that passage] is, in my view, to be found in section 13(1) of the 1974 Act itself, which refers to inducement not only 'to break a contract' but also 'to interference with its performance'". The noble Lord, Lord Wedderburn, also mentioned the removal of interference with the performance of contracts from the ballot question. It was following suggestions from the Opposition themselves that reference to interference with the performance of contracts was unnecessarily technical that the Government agreed to remove it from the formulation in Clause 8(4). There was no technical need for it to be there and the Government therefore acceded to the Opposition's suggestion. However, this has no bearing on the trade unions' liability for committing the tort itself. It is in respect of that tort being committed without a ballot that the Government's case rests. The Government believe that all forms of industrial action should be preceded by a ballot: hence the purpose of this Bill. We make no apology for hoping that this will become so progressively, and therefore I cannot recommend to the Committee to accept any amendment which would lessen the chances of that hope being fulfilled.

Lord Wedderburn of Charlton

If I may say so, the noble Earl has just committed—I almost said the sin—the fact of reading a passage from the middle of a judgment without explaining its context. I should like to take just three points to reply to what has been said. The noble Lord, Lord Orr-Ewing, gave the example of a go slow. Of course, he is right in saying that if workers are going slower than they should under their contracts, then that is a breach of contract.

The Earl of Gowrie

It was the noble Viscount, Lord Massereene.

Lord Wedderburn of Charlton

I beg the noble Lord's pardon. It is the need to cover these things with speed that sometimes makes one go too slowly. Going slow may be a breach of contract, and often is. For example, as I always tell students, it is very difficult to know whether that most sophisticated form of industrial action—working without enthusiasm—is a breach of a contract of employment. It depends on how much enthusiasm one is contractually obliged to show.

When the noble and learned Lord, Lord Denning, says that the new tort is clearly established, with the greatest respect for the noble and learned Lord, I cannot agree; nor do the cases that he cites, for a very simple reason—that Stratford v. Lindley in 1965 involved unlawful means causing the interference, and Lord Reid's judgment relates to that; and, up to the House of Lords, the Merkur case was pleaded as, was argued as, and was judged as a case where there was unlawful means. One has to read, not what the noble Earl read—the passage in the middle of page 608, as I am sure he knows—but the whole of pages 607 to 609. I will read only the last two words on page 609, where Lord Diplock says that the evidence establishes a prima facie case of the common law tort of interfering with the trade or business of another person by doing "unlawful acts".

The essence of the new tort is that it is inducing interference with the performance of a contract without any unlawful acts ab extra—by acts which are themselves lawful. Noble Lords on the other side really should consider this, because the danger of it is this. Suppose I alter the case and I am employing the noble Earl to do something under a contract of employment. He requires certain tools to do the job, and another noble Lord, in this case the noble Lord, Lord Cockfield—because we will change the side—as a matter of direct competition buys up all those specialist tools. Competing with me in a most spiteful manner, he buys up all the tools so that the noble Earl cannot do the job for me. Is that a wrong in English law? That is a direct and deliberate interference with the performance of the contract. It does not induce a breach, because it is impossible. It does not interfere with it by unlawful means, because competition is lawful, especially when exercised by the noble Lord, Lord Cockfield. But it is an interference which is deliberate, and it is direct. It seems to us that it would be very dangerous to have such a liability in English law, and to have it confirmed by a side wind in a Bill of this kind.

When the noble Earl says that they deleted the question from the ballot because it had become technical, then one really has to take issue with him. That is what was said on Report in another place, but that was not the nature of the debates about it; of course, it was not. If noble Lords look at Clause 8(4)(b), they will find that it begins by saying that where there is a strike one has to ask the workers, "Will you strike in breach of your contract of employment or in interference of its performance?"

Of course, that was quite logical because that is what the Bill says; that is what the Bill is about; that is what it says in every other clause. But because they could not give an example of something which sounded justifiable, which would be wrong even though it was not a breach of contract of employment, they dropped interference from the question. They dropped it because the workers would ask, "What do you mean, breach of contract or interference?" No one would be able to tell them what it meant, certainly not the Minister of State and certainly not, it seems, the noble Earl, because the noble Earl has not given us one example of an interference with employment which is wrongful but which is not a breach of the contract of employment. He has not dared to say that workers who are not obliged to work overtime are now, in the Government's eyes, obliged to work overtime without there being a wrongful interference with the contract. Of course they dropped interference from Clause 8 (4) (b) because they did not know what it meant. If they do not know what it means, they should not leave it in the Bill.

Therefore, even if I was wrong about the nature of the common law position—even if that argument were wrong—I appeal to noble Lords to consider this matter very seriously on Report. I am sure this is a matter to which the Government will return, and I am sure that we shall come back to it via the question in Clause 8(4)(b) which is dealt with in one of the amendments to which I am speaking. We shall come back to it when we have to look again at the questions which are bound to arise in relation to this part. Therefore, in relation to this string of amendments raising interference, the course of action which my noble friends and I propose to take is to have them negatived and to leave them on the Marshalled List in the hope that the Government will look at them again.

On Question, amendment negatived.

[Amendments Nos. 53 to 56 not moved.]

9.47 p.m.

The Earl of Gowrie moved Amendment No. 57:

[Printed earlier: col. 700.]

The noble Earl said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 58 not moved.]

The Earl of Gowrie moved Amendment No. 59:

[Printed earlier: col. 700.]

The noble Earl said: I have already spoken to this amendment as well. I beg to move.

On Question, amendment agreed to.

Lord McCarthy moved Amendment No. 60: Page 9, line 34, leave out ("four") and insert ("sixteen")

The noble Lord said: I do not think that we have spoken to this amendment before. This amendment refers to the period which is given to a trade union after it has carried out all the provisions relating to secret ballots in Clauses 7 and 8 of the Bill. The Government say that after the trade unions have carried out a properly authorised lawful secret ballot—and now, as a result of the amendments moved by the noble Earl, they have got an affirmative decision—the immunity for which they, therefore, qualify under Section 13 of the 1974 Act shall last for four weeks. If, after four weeks, they have not started their strike, that immunity lasts no longer and they have to go through the whole grisly process again.

I should like at the same time to speak to Amendment No. 84 because that amendment is required to bring Amendment No. 60 into effect.

Amendment No. 84: Clause 8, page 11, line 22, at end insert— ("( ) A voting paper may contain one or more questions concerning the latest date on which a relevant act may take place so that votes may be cast for or against a particular date or dates, and in such a case the latest date for the purposes of section (7)(3)(c) of this Act shall be the date which receives the largest number of favourable votes.")

The point of Amendment No. 60 is to say, "Well, let us not make it four weeks; let us make it 16 weeks". We put forward this amendment because we believe that four weeks is a very short period when a union has gone through the extremely complex provisions of Clauses 7 and 8, and also partly because when an amendment of a similar nature was put down in another place, the answer of the Minister of State, Mr. Gummer, at that time (7th February) as reported in the Official Report at column 1013, left a great deal to be desired.

To some extent I am moving this amendment in order to ask whether the noble Earl the Minister can perhaps improve on the reply of the Minister of State. At column 1013 of Hansard the Minister of State said: The Government's intention is that the ballot and the strike, if there is one, should be closely connected. We do not intend that a strike unconnected with a ballot, held in different circumstances and long afterwards, could be held to be covered by that ballot. That would not be sensible, so we start from the assumption that the period between the ballot and the strike, if it is to be held, should be short". Subsequently, he said: we tried to find a number"— it was almost as though the Minister shook a dice— that would ensure both that the union would have time to arrange the ballot, collect the papers, add up the votes and so on, then take any action necessary, but that would not be so long as to enable the union to hold a pistol to the head of management throughout the negotiations I think that the right hon. and learned Gentleman would agree".

I suggest that that indicates how little the Minister knows about industrial relations. Where is this industrial relations situation where trade unions hold ballots and then weeks, months and years go by before those ballots are translated into action? In any case, the number which the Minister came up with was not months or years—it was four weeks. He considered all these circumstances—all these factors with which he juggled—and came up with four weeks. I should have thought that he might at least have come up with five or six months. Where is the industrial relations situation where a union, having five, six, eight, or, we would say, 16 weeks of ballot immunity, is using this, in the terms of the Minister of State, to hold a pistol to the head of management"?

The fact is that it will be extremely difficult and complicated for unions to carry out the provisions of Part II of this Bill. As we intend to argue subsequently, and as we have already mentioned to the Committee, the unions have to compile a special register. It will be much more difficult for unions to compile an accurate register, very often in the case of industrial disputes, than the register which they will have to compile in the case of elections, because it will not always be simple to say which members of the union will actually be involved in the dispute. It may be members from different unions. Four or five unions may be involved in the dispute. The members may come from different branches. There may be some members in one branch and other members in other branches; and other branches may be divided with some of their members involved in the dispute and some not.

As we have tried to argue, the unions will be dependent upon the employer to provide them with an accurate register of those who are involved in the dispute. It might be suggested that perhaps employers will not want to give unions accurate registers. Indeed, some employers might want unions to have inaccurate registers so that the ballots will be inaccurate, and thus the immunity will not apply. But I shall not go into that because we must wait and see. But the fact is that even with co-operation from employers, it will be difficult for unions to compile an accurate register.

How are they to pay for this ballot which the Government propose to impose upon them? If they are to have ballots in elections—and they are to have postal ballots—and if they are also to have ballots in strikes, then the Government must mean that the unions and the Trades Union Congress must change their policy of not applying to the Government under the provisions of the Employment Act 1980 for money through the certification officer scheme. They must apply for this. We know from the work of Undy and Martin that it takes those unions which apply to the certification officer under the scheme a long time to get the money; that roughly 50 per cent. of those who apply do not get the money; and that roughly two-thirds of the cost of the ballot is paid for by the certification officer. All this has to be done in order to observe the provisions of the Government's Bill. The whole thing is to last for only four weeks. We say that it is unreasonable, that it is provocative and that no employer would want it to be so.

No employer would want to minimise the period of what negotiators call "sanction-based negotiation", when the unions have a sanction, as the employer has a sanction of a lock-out, and when the two sides are seeking to reach an agreement. No employer would want a union to get into a situation in which if it does not call a strike tonight, or tomorrow, it runs out of its four-week period of immunity. This is foolish and provocative. What we suggest, a modest increase of from 4 to 16 weeks, fully falls within the provisions put forward by the Minister of State and should therefore be accepted by the Government. I beg to move.

Lord Rochester

I think I can see what the Government are after in this subsection in providing that if industrial action takes place more than four weeks after a ballot is held then immunity will be lost. But I fear that things may not work out quite as the Government seem to think. Pay negotiations often take place not between people representing large organisations, or many employers, on the one hand, and large numbers of employees, on the other; they take place in smaller units, too.

Is not what may actually happen something rather more like this: that the trade union will put in a pay claim; it will be offered something less than it has asked for; and instead of the union official simply being told, as he would be now by his members, that he had better go back with a bigger claim, he will be urged to hold a ballot prematurely to impress on the management that his members mean business. People will then feel committed by their votes to back their negotiator in a later strike, which at present would not take place at all. Alternatively, there may have to be a further ballot, and negotiations will drag on.

My difficulty about this particular amendment is that I think, as I have made plain, that we would be much better off without these ballots altogether, but if we must have them then one would like to see that they work as well as possible. But I really do not know what the least undesirable period between the ballot and industrial action should be. With all respect to the noble Lord, Lord McCarthy, I cannot readily see why 16 weeks is necessarily better than four weeks. At least the interval proposed in the next amendment, which I suppose we are not strictly discussing now, is more variable. But that, too, may pose problems. In this situation, so far as I can see, given that we have these ballots we shall just have to "lump" this difficulty about the question of the interval of time.

Lord Gray of Contin

The effect of the amendment tabled by the noble Lord, Lord McCarthy, and his noble friends, which is similar to an amendment considered and rejected at Committee stage in another place, would be to allow unions to provide themselves with immunity far in advance of the likely climax of negotiations by holding a ballot at a time when the prospect of industrial action was so far off as to be unreal to the members being asked to vote.

The Government believe that for a ballot to offer union members a real and informed choice it must take place only when negotiations are clearly at or near their end. Noble Lords opposite cannot seriously suggest that a real choice is possible as much as four months before the end of negotiations; possibly before those negotiations have even started; certainly before any serious assessment can be made of the employer's final offer; and long before the union can reasonably know whom it is going to call on to strike.

Nor is it any good noble Lords opposite suggesting that the union will normally make clear in advance the circumstances in which it will proceed with a strike. The fact is that a real choice can only be made when the employers' final or near final offer is known and when the question, "Are you prepared to go on strike?" has some real meaning. A strike should be a weapon of last resort—something to which a union turns only when negotiations have broken down. What business does a union have to threaten a strike months in advance? The Government have no intention of allowing the unions to write themselves a blank cheque—no doubt obtained on the basis that a vote in favour is a vote against the Government's legislation but that, of course, no industrial action is actually likely.

Indeed, would it be responsible for the Government to encourage the practice of holding ballots on strike action early in negotiations? The object of the Bill is not to provide guns to be aimed at employers' heads. The Government are aware that threats of industrial action are part of the ritual negotiations. That is why threats to induce breaches of contract have been consciously excluded from the grounds on which unions would be liable to actions in tort in the absence of a ballot. But the Government are not going to hand things to the unions on a plate by allowing them to hold ballots to back up those threats, and then to use those ballots to give them immunity for strike calls up to four months later.

The Government of course accept that the counting and announcement of ballot results cannot be done in a day, and clearly it would be undesirable to precipitate union strikes because immunity was going to "run out". Some time may be needed for further negotiations—but not so much time that unions whose main aim is to frustrate the intentions of the Bill can get away with doing so. The timing of the ballot is in the unions' hands. If they hold the ballot too early because they think their members are more likely to vote "Yes" than when a strike is imminent, then they may be hoist with their own petard and find that they have lost immunity. They would then need to hold another ballot.

The noble Lord, Lord McCarthy, has again referred to registers. By doing so, he has compounded the confusion which constantly reappears in the Opposition's arguments in respect of entitlement and the opportunity to vote. There is nothing in the Bill that requires a trade union to define entitlement by reference to a register of names. As to the provision of opportunities, there is a test of reasonable practicability. There really is no substance in the noble Lord's argument on this occasion.

I respect the noble Lord, as we all do on this side of the Committee, for his great knowledge and experience—but in his interpretations of some parts of this Bill I believe he is showing unnecessary concern. As so many academics and learned people frequently do, the noble Lord is reading into the Bill things which scarcely exist. Indeed, he is creating fears where such fears are unfounded. I know that the noble Lord feels strongly about these matters and I respect the sincerity with which he puts forward his views. But on this occasion I cannot accept his amendment and I hope that he will be prepared to withdraw it.

Baroness Seear

The noble Lord has demonstrated the folly of having strike ballots at all. By imposing a time limit—whether it is four weeks or six weeks—and having a strike ballot, the noble Lord has shown that it will be much more difficult to bring the process of proper negotiation to a satisfactory solution. I do not support this amendment, in that I think that the whole process of using a ballot to negotiate is folly, because, as the negotiation goes on, it is possible to modify the decision in the negotiating process. If you say you have to reach a final point and then put it up for a ballot which will last four weeks or will last 16 weeks, you have then closed the options to negotiate at the very time that they ought to be kept open and fluid. It is nonsense to have ballots for strike purposes for this reason. If you must have strike ballots, to have any time limit at all seems to be folly because what you are doing is saying to the unions, "Your time is running out, boys! You've either got to settle now and have your strike or you have no chance of doing it all over again". This is bringing in a new dimension which will make industrial relations far more difficult to operate and will not improve them.

Lord McCarthy

The noble Baroness is absolutely right. It only goes to show how moderate we are. I moved Amendment No. 60, which raises the time period from four to 16 but we had Amendment No. 61, which I do not intend to move because we have got to get through the business, but, which, in some ways was more flexible because it said that you could put a date on the ballot paper. I could have moved an amendment which said no date at all. The noble Baroness was perfectly right. That would be even more sensible; because the whole idea was silly in the first place. But we are trying to be modest. I come back to what the Minister has said. It is not me who is afraid; it is not me who has suspicions; it is negotiators, it is trade unionists. They are being told that they will have to go, as the noble Baroness has said, through this complicated procedure—and it is very complex. It is even more complex in respect of Clause 7 than it was in respect of Part I of the Bill because, also, as a result of Clause 8, which is referred to at the end of Clause 7, they have to muck about with having returns and sending the results of those returns with all the spoilt papers away to their members.

And all this extremely complex operation has to be done in order to buy four weeks of immunity. As the noble Baroness has asked: what negotiator is going to sit there with four weeks' immunity and let it run out so that he has to go through this whole grisly process again? The Government are making it absolutely inevitable that negotiators will have to think very hard about whether, after four weeks, they are not going to have some form of industrial action, if only to protect their position of immunity. The Minister has said, "We do not want four months". He said that it was an exaggeration.

The Minister might have come to the Dispatch Box and made some kind of offer, might have said "I don't like your 60, I will take your 61". He might have said, "Not four weeks but six or make it eight weeks". But no, he wants a roulette system. This is what it amounts to. He says that he feels that the union should be under some degree of uncertainty as to whether they should take the ballot now and use their four weeks now or take the ballot later and use their four weeks later. If they get it wrong and they have the wrong four weeks, he says, "So much the worse for them". This is not compatible with a Government which is trying to improve industrial relations. It is not compatible with a Government which says every now and again that it wants to help trade unions. I am afraid that, as a result of the attitude which the Minister has taken, we shall have to divide the Committee.

10.9 p.m.

On Question, Whether the said Amendment (No. 60) shall be agreed to?

Their Lordships divided: Contents, 26; Not-Contents, 66.

DIVISION NO. 5
CONTENTS
Birk, B.	John-Mackie, L.
Brockway, L.	Lockwood, B.
Carmichael of Kelvingrove, L.	McCarthy, L.
	Mulley, L.
Cledwyn of Penrhos, L.	Pitt of Hampstead, L.
Collison, L.	Ponsonby of Shulbrede, L. [Teller]
David, B.
Dean of Beswick, L.	Stewart of Alvechurch, B.
Elwyn-Jones, L.
Elystan-Morgan, L.	Stewart of Fulham, L.
Graham of Edmonton, L. [Teller]	Stoddart of Swindon, L.
	Taylor of Blackburn, L.
Hatch of Lusby, L.	Underhill, L.
Houghton of Sowerby, L.	Wedderburn of Charlton, L.
Jeger, B.	White, B.

NOT-CONTENTS
Airey of Abingdon, B.	Halsbury, E.
Avon, E.	Hatherton, L.
Bauer, L.	Henley, L.
Belhaven and Stenton, L.	Hornsby-Smith, B.
Bellwin, L.	Kinnaird, L.
Beloff, L.	Kinnoull, E.
Belstead, L.	Lindsey and Abingdon, E.
Brabazon of Tara, L.	Long, V.
Bridgeman, V.	Lucas, of Chilworth, L.
Broxbourne, L.	Lyell, L.
Caccia, L.	Marshall of Leeds, L.
Cameron of Lochbroom, L.	Masham of Ilton, B.
Campbell of Alloway, L.	Massereene and Ferrard, V.
Cathcart, E.
Cockfield, L.	Merrivale, L.
Coleraine, L.	Mersey, V.
Cork and Orrery, E.	Montgomery of Alamein, V.
Crathorne, L.
De La Wan, E.	Mottistone, L.
Denham, L. [Teller]	Mowbray and Stourton, L.
Drumalbyn, L.	Onslow, E.
Eccles, V.	Orkney, E.
Elles, B.	On-Ewing, L.
Faithfull, B.	Pender, L.
Forbes, L.	Rankeillour, L.
Fortescue, E.	Romney, E.
Gardner of Parkes, B.	Saint Oswald, L.
Gibson-Watt, L.	Savile, L.
Glenarthur, L.	Skelmersdale, L.
Gowrie, E.	Swinton, E. [Teller]
Gray of Contin, L.	Terrington, L.
Hailsham of Saint Marylebone, L.	Trefgarne, L.
	Trumpington, B.

Vaizey, L.	Ward of Witley, V.
Vickers, B.	Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 61 and 62 not moved.]

10.16 p.m.

The Earl of Gowrie moved Amendment No. 63:

[Printed earlier: col. 700.]

On Question, amendment agreed to.

Lord McCarthy moved Amendment No. 64:

Page 9, line 37, at end insert— (" ( ) For the purposes of this Part, an act done by an employee does not break his contract of employment or interfere with the performance of that contract, where—

1. (a) it is done in the course of a strike or other industrial action; and
2. (b) notice of the strike or other industrial action is given to the employer under that contract; and
3. (c) the notice is equivalent in duration to the notice which the employee is required by law to give to terminate the contract or one month, whichever is the shorter period.")

The noble Lord said: The purpose of this amendment is quite simple. It is to resurrect the right to strike. There is clearly now no right to strike in this country. Unlike most European countries and unlike the United States, in this country if someone goes on strike he breaks his contract of employment, and if he breaks his contract of employment then what he does is actionable; and if it is a fundamental breach of his contract of employment then he is subject to summary dismissal. In any event, there is no right to strike. There used to be a time when we used to be told by the lawyers who said that they knew about these things that there was a right to strike so far as the individual worker was concerned. For example, if you read the fundamental text in those days Chapter 2 of The System of Industrial Relations in Great Britain, which was written by Professor Otto Kahn-Freund and Professor Clegg—you would have been told in 1952 that if you gave due notice of strike action then it had been assumed that you did not intend to break your contract of employment and therefore that you did not break your contract of employment; and therefore there was a lawful right to strike in this country.

It was never quite clear how you gave due notice, whether you could give due notice collectively, what period of notice it was, or how that period related to the period of notice that you would have to give for termination. None of these things was clear. But when I came into the academic study of industrial relations, I was told and I believed that there was a right to strike and that one gave due notice.

By the time the Royal Commission on Trade Unions, the Donovan Commission, sat in 1967, things were not that simple. If your Lordships look at paragraph 939 of the Donovan Commission report, you will see that it is extraordinarily complex. What the Donovan Commission did at that time was to list all the pros and all the cons, all the circumstances, all the "ifs" and all the "buts" and, in the end, they said that the question whether or not there was a right to strike, in the sense that one could use industrial action without breaching one's contract, was so complex and almost impossible to decide that the matter should be referred to what I suppose they meant was the Law Commission—they said that it should be referred to some committee or commission to decide—because they had other things to do.

But, unfortunately, it was not referred to the Law Commission. It was not decided in that way. It was in the end decided in the courts. The courts had to decide, in effect, whether they were prepared to accept the vague continental doctrine of suspension whereby if, when people went on strike they were clearly not desiring to separate and bring to an end their contractual relationships, they could be thought, as it were, to be putting them up on the shelf so that they were all in one piece and could be taken down after the strike, and if they did that there was not a breach of contract. In the end the courts decided that unfortunately that is not possible in this country; that there is no doctrine of suspension and that therefore if you go on strike you break your contract of employment.

What we are trying to do in simple terms is to remedy that situation. If you look at our amendment, you will see that we are doing it only in respect of this Bill. We have no desire to do it in general. We are saying that for the purposes of this Bill, an act done by an employee does not break his contract of employment or interfere with the performance of that contract, where— (a) it is done in the course of a strike or other industrial action; and"— that is necessary; and here is the cut of our amendment (b) notice of the strike or other industrial action is given to the employer under that contract". So that notice has to be given. We deal with the question of the period of notice, because we say, (c) the notice is equivalent in duration to the notice which the employee is required by law to give to terminate the contract or one month, whichever is the shorter period. In other words, if people have contracts of employment where they have to give a period of notice longer than one month, then they will have to give it, but the minimum that they will have to give is one month's notice. That does not take us back to the position as it was imagined to be in 1952, because the general drift of the doctrine then was that if you were an hourly paid worker you gave an hour's notice, and if you were a weekly paid worker you gave a week's notice. We say that you give a month's notice.

But this is very important in the context of this Bill. It is important, first, because we believe that there should be a right to strike, even if that right to strike is to be curtailed in the way that this Bill insists it shall be curtailed, so that there has to be a ballot. If you pass our amendment, you will not affect that. You will still need to have a ballot. But also what we are saying is that if you have our amendment you will not be breaking your contract for the purposes of this part of the Bill. Therefore, the Government will not have to introduce, as they are introducing into this Bill, the provision in Clause 8, whereby the Government say that employees and unions have to put upon their ballot paper an undertaking that people are striking in breach of contract.

When this question was raised in another place—we have an amendment on this issue—and when we were asking the Government in another place why they felt that they had to put into the Bill what we call an intimidation clause, the Government said, "But that is the legal position". In other words, the Government said, "There is no right to strike. Nowadays, any industrial action which involves a breach of contract (other than an action which does not involve a breach of contract, such as a work to rule) is involved in a strike and therefore is actionable. Therefore we have to put it into the Bill". We are saying that if this amendment is passed, the Government will not have to put it into the Bill and that they will restore the right to strike in this country. I beg to move.

Lord Gray of Contin

The noble Lord, Lord McCarthy, has described to your Lordships' Committee the meaning of his amendment. He has described it as something which is fairly innocuous and which merely gives to the unions a right to retain their immunity. But it would give to unions a right to retain their immunity, irrespective of whether they ballot their members. As such, it is clearly designed to enable unions to frustrate the intentions of this part of the Bill in the simplest way imaginable. Unions should always give proper strike notice. What the amendment says, in effect, is that so long as they do so, it is quite all right for them to ignore the views of their members.

As your Lordships are perfectly well aware, the way in which industrial action is regulated in this country depends on the fact that strikes are usually judged to involve breaches of contract. Inducement to break a contract is unlawful unless it is protected by immunity. Strike notice is usually interpreted as notice that employment contracts will be broken, unless it specifically states otherwise. Of course notice to terminate contracts can be given, in which case the inducement would not be unlawful, but this very seldom happens in practice in the context of a strike.

The noble Lord referred to notice to strike. It is now generally accepted that, where notice to strike is given, the notice is likely to be construed as a notice to strike in breach of the contract of employment, unless (exceptionally) the relevant contract provides that the effect of the strike or other industrial action is to suspend the contract. Where express notice is given to terminate the contract, and the period of notice is observed, then the contract no longer exists and there can be no question that someone striking or taking another form of industrial action is acting in breach of it. The existence of rights depending on continuity of employment—statutory employment rights, pension rights and so on—means that in practice employees are reluctant to sever their employment relationships. Strikes therefore rarely, if ever, involve termination of contracts. Whatever the form of notice given, if the period of notice is not observed, then there is no question that the strike or other action is in breach of contract.

So what the noble Lord is suggesting, purely for the purposes of this part of the Bill—or, rather, for the purposes of allowing unions to evade the provisions of this part of the Bill—is that unions should be deemed not to have induced a breach of contract where they are good enough to give the employer strike notice. Part II is designed to give unions a strong incentive to consult their members, who might otherwise find themselves forced out on strike against their will. Welcome as the giving of proper strike notice might be to employers, it would hardly compensate the members for the lack of consultation.

For those reasons, I hope that the noble Lord and his friend will be prepared to withdraw their amendment.

Lord McCarthy

I do not feel like withdrawing the amendment. I am sorry that the noble Lord cannot find it in his heart to come any way towards us, and yet he does not really deny what I am saying. It is no real argument to say that notice of termination does not involve breach of contract when the noble Lord goes on to say—and he is quite right to say it—that virtually no strikes involve termination. The fact is that when workers go on strike they do not want to terminate their contract. What they want is to suspend it; they want to put it on the shelf. The trouble is that common law will not recognise the ordinary continental notion of suspension, and, therefore, there is no right to strike in this country.

On Question, amendment negatived.

10.30 p.m.

Lord Wedderburn of Charlton moved Amendment No. 65:

Page 10, line 5, at end insert— (" "breach" in relation to a contract means any act or omission by virtue of which one party to the contract has an action against the other whether for damages or otherwise and cognate expressions shall be interpreted accordingly;")

The noble Lord said: I move Amendment No. 65, and, when we come to it, I wish to move formally Amendment No. 66.

Amendment No. 66: Page 10, line 12, at end insert— (" "interference" in relation to a contract means any act or omission by virtue of which one party is in default in regard to any other party to the contract;")

I do so because we wish them to be printed and to be seen. They are complementary to the arguments about interference, and I move them on that basis. I beg to move.

On Question, amendment negatived.

Lord Wedderburn of Charlton moved Amendment No. 66:

[Printed above.]

The noble Lord said: I move this amendment formally.

On Question, amendment negatived.

[Amendment Nos. 67, 68 and 69 not moved.]

Lord Wedderburn of Charlton moved Amendment No. 70:

Page 10, line 24, at end insert— (" () An act does not induce a person to interfere with the performance of a contract by virtue only that it—

1. (a) induces a party lawfully to terminate the contract whether by notice or otherwise;
2. (b) impedes or hinders the performance of the contract by means which are in themselves lawful;
3. (c) renders performance of the contract impossible for a party to it by means which are in themselves lawful and which do not cause that party to be in default under the contract.")

The noble Lord said: I can speak briefly to this amendment because it is in the same line of business, as it were, as the amendments which we have just moved formally. It sets out three simple illustrations of situations where, in effect, we ask: are these interferences? The amendment says that they are not interferences with performance within the terms of the Bill. Going from the bottom to the top, they involve rendering the performance of the contract impossible without fault on anybody's part and without anything unlawful being done; hindering the performance of the contract without anything unlawful being done; and inducing a party lawfully to terminate the contract whether by notice or otherwise.

I draw attention to (a) because, on what has been said so far here and in another place, this curious doctrine of interference would appear to include, in a ludicrous manner, the act of inducing a party to terminate his contract lawfully. That clearly interferes with the performance of it and does not induce a breach, but appears to be within the notion of interference.

I move the amendment on that basis. It is, I hope and submit, part of the corpus, as it were, which your Lordships and, in particular, the Government should consider in looking at Part II in the light of these debates with a view to Report. I beg to move.

Viscount Long

If we examine the amendment in detail, limb (a) is, in fact, otiose since no judicial authority has suggested that inducing someone lawfully to terminate their contracts is contained within the tort of interference with performance. Limb (b), however, would amount to a complete reversal of current judicial opinion that direct interference with contracts is unlawful in itself. And limb (c) would directly reverse the judgment of the noble and learned Lord, Lord Denning in the case of Torquay Hotel Co. Ltd. v. Cousins, whereby inducement to a party to interfere with his contract in a way which does not make him personally liable—for example, because of a force majeure clause—is unlawful interference.

The Government are not prepared to support any amendment which would reduce to any degree the potential liability of trade unions to legal action if they fail to hold ballots before calling for industrial action. If any union is unclear how to respond to this legislation, the answer is simple. Industrial action of any sort should not be contemplated unless the members concerned have been properly consulted beforehand. I hope the noble Lord will withdraw the amendment.

On Question, amendment negatived.

The Earl of Gowrie moved Amendment No. 71:

[Printed earlier: col. 700.]

The noble Earl said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Orr-Ewing moved Amendment No. 72: Leave out Clause 7 and insert the following new Clause— ("7.—(1) A trade union contravenes this section where it has authorised or endorsed a strike or other industrial action without reference to a ballot. (2) For the purposes of subsection (1) above, a strike or other industrial action shall be taken as having been done with reference to a ballot if, but only if—

1. (a) the trade union has held a ballot in respect of the strike or other industrial action;
2. (b) the first authorisation or endorsement took place after the date of the ballot and before the expiry of the period of 4 weeks beginning with that date; and
3. (c) section 8 of this Act has been satisfied in relation to the ballot.

(3) Subsection (1) does not create an offence but the obligation to comply with it is a duty owed to each of the following

1. (a) the person against whom the action is taken; and
2. (b) any other person who may be adversely affected by the contravention,

and, subject to subsection (4) below, any breach of that duty shall be actionable accordingly (subject to the defences and other incidents applying to actions for breach of statutory duty). (4) Notwithstanding the provisions of subsection (3) above, the amount which may be awarded against the union by way of damages in any proceedings brought under this section shall not exceed the appropriate limit within the meaning of section 16 of the 1982 Act. (5) In this Part—

• "the 1982 Act" means the Employment Act 1982;
• "authorisation or endorsement" means an authorisation or endorsement of an act which, by virtue of section 15 of the Employment Act 1982, causes the act to be taken to have been done by the trade union;
• "the date of the ballot" means, in the case of a ballot in which votes may be cast on more than one day, the last of those days; and
• "other industrial action" means any concerted course of conduct (other than a strike) which is carried on by a group of workers (whether carried on in breach of their contracts of employment or not), with the intention of preventing, reducing or otherwise interfering with the production of goods or the provision of services.

(6) An act shall not be taken to have been done without reference to a ballot solely on the ground that it is inconsistent with the result of the ballot.")

The noble Lord said: With this amendment it might be convenient to take Amendments Nos. 73, 76, 79 and 81.

Amendment No. 73, Clause 8, page 10, line 31, leave out from ("upon") to ("and") in line 35 and insert ("to strike or take other industrial action")

Amendment No. 76, Clause 8, page 10, line 39, leave out from ("ballot") to end of line 44.

Amendment No. 79, Clause 8, page 11, line 10, leave out from ("strike") to end of line 11.

Amendment No. 81, Clause 8, page 11, line 16, leave out from ("strike") to end of line 17.

The purpose of these amendments is to extend the secret ballot provisions to cover all industrial action which is authorised or endorsed by a trades union, whether or not that industrial action is technically in breach of contracts of employment. As presently drafted, as I see it, however, the effect of Clauses 7 and 8 is that a secret ballot to test employee support for industrial action has to be held only where that industrial action involves a breach of contracts of employment. This would obviously fully cover all-out strikes or go-slows.

It would not, however, cover a ban on voluntary overtime or a work-to-rule, because that form of industrial action does not constitute a breach of contract, and therefore no immunity is necessary; yet in practical terms—and many noble Lords with industrial experience will bear this out—a ban on overtime or a work-to-rule can be as disruptive and damaging to the future of a company, and can pose as serious a threat to jobs, as an all-out strike. As the Bill stands, a trades union which resorts to these latter forms of industrial action, without consulting its members, can do so with impunity and thus undermine the underlying philosophy of this Bill.

I take advice from the CBI, and it believes that it would be appropriate to adopt the same approach as that taken by the Court of Appeal in Faust v Power Packing Casemakers Limited. The Court of Appeal rejected the breach of contract test for determining whether an individual took part in the industrial action and instead adopted an approach which seems practical and recognises the reality of industrial disputes. The Court of Appeal looked to the natural and ordinary meaning of the words, "other industrial action", and accordingly held that an employee's refusal to do something which he is not contractually bound to do would constitute industrial action in the common sense of the words if the refusal is used as a bargaining weapon to bring pressure to bear on the employer.

The common sense approach, I submit, should apply with equal force to the balloting provisions of the Bill. A trades union should be under a duty to consult its members before authorising or endorsing any form of industrial action which is intended to apply pressure on the employer or to disrupt his business, and that is what these amendments are intended to achieve. The creation of such a duty is justified in view of the serious economic loss and disruption that industrial action not in breach of employment contracts can have on an employer's business and should, I think, equally be preceded by a secret ballot. I therefore beg to move.

Lord Mottistone

I should like to support my noble friend in his amendment, and perhaps enlarge on why we have Amendment No. 72, which seeks to replace Clause 7 of the Bill. I, too, am advised by the CBI. It says that it is uncertain whether there is liability under the common law where a trades union induces its members to take industrial action not in breach of their contracts of employment. For that reason, Amendment No. 72 takes the form of the creation of a new statutory duty on trades unions, rather than a curtailing of their legal immunities.

It is a duty on the union to consult in a secret ballot those of its members who will be called upon to strike or to take other industrial action (whether or not in breach of the contract of employment). If no ballot is held, then the person against whom the industrial action is taken, as well as any other person who may be adversely affected by it, will have a remedy in damages and/or an injunction against the trades union.

The other amendments, Nos. 73, 76, 79 and 81, are not strictly consequential but complementary to Amendment No. 72, in making appropriate amendments to Clause 8.

Lord Campbell of Alloway

Surely this amendment means that Clause 7, as it stands, might require some modification in the light of the postal ballots amendment. The effect of Clause 7, as it stands, is to oust the incidence of Section 13 of the Act of 1974, if industrial action is endorsed by a trade union without a ballot, where the industrial action induces breach of or actionable interference with subsisting contracts of employment, which includes any person so adversely affected, and, secondly, in the result of a breach of or actionable interference with a subsisting commercial contract so induced, which also includes any person so adversely affected.

The limits as to damages recoverable by such persons against trade unions are as stated in Section 16 of the Act of 1982. The problem is, though—is it not?—that the proposed provisions of subsection 3(a) of this amendment afford a new substantive right of action based upon the fact of contravention, at the suit of a person against whom the action is taken, without reference to breach of or actionable interference with any contractual relationship.

The proposed provisions of subsection 3(b) of this amendment extend this right to any other person who may be affected by this contravention. This is a very substantial departure from the accepted process of subtraction from the common law, for the rights under subsection 3(a) and (b) of the proposed amendments are simply not as yet known to the common law. It involves the creation of a new statutory right of action available only against a trade union in these particular circumstances. Such a departure could constitute an unacceptable precedent, for it conflicts with the whole structure of the existing legislation.

It is of course worthy of serious consideration, but I respectfully suggest that it is not appropriate that it should be introduced as a sanction in Part II of a Bill concerned with the regulation of the internal management of trade union affairs. If we are to abandon the traditional process of subtraction from the common law and seek to create a new industrial code of rights, duties and sanctions, then so be it, but I suggest it should not be done piecemeal, by such an amendment as this.

Lord Wedderburn of Charlton

This is the amendment that might come to be known as "the statute of labourers and combination acts together" amendment. It is the road down which the Government head if they do not take careful note of the problems in respect of interference with employment as a liability. Why did the CBI come to the view—at least according to the reports that I have seen in the newspapers? It appeared to come to the view that it needed a new type of liability which, as the noble Lord, Lord Campbell of Alloway, has just said, is way outside the normal common law tradition. It decided it because all these difficulties of breach of contract and immunities were too much for it: it could not get at people who stopped work when it did not want them to stop work. That is what it is all about.

What this liability would amount to is a determination that illegality should rest upon the shoulders of working men whenever they stopped work, whether or not it was in breach of their contract, or indeed whether or not they had a contract. If one looks at the definition clause, it is quite clear that it applies to any group of workers. There are those who believe that this should be done and noble Lords should take them seriously. This is the first spear point of the call that will be heard again. Professor Hutt, who is a well-known exponent of this kind of tendency, wrote in 1975: Ideally, what is needed for the emancipation of labour is the enactment of the principle underlying the British Combination Acts of 1799 and 1880… adapted to the 1970s". That was not a joke. It was a quite serious working out of a position based upon doctrines which we have recently heard in this House, that market forces must operate and that no combination must be allowed on the part of labour to stop it. Indeed, those who dare to refuse their labour and those who dare to interfere with production of goods or provision of services must, as a legal doctrine, be regarded as wrongdoers, willy-nilly, breach of contract or no, interference or no; there must be no immunities, let us not bother with them, let us create a statutory tort.

When, in moving the amendment, the noble Lord spoke of a recent decision of the Court of Appeal as a basis for his legal position, he was, with respect, under a misapprehension. I have no doubt that the case to which he referred was that of Power Packing Ltd. v. Faust in the Courtof Appeal, which concerned the issue of when workers lose their protection under the unfair dismissal legislation. Ever since the beginning of that legislation there have been situations in which they lose that protection if they engage in industrial action. The legislation has always made clear that industrial action in that context means any kind of industrial action, be it in breach of contract or not. One can argue whether that is right as a proper and sensible legal structure, but it is a quite different issue from that with which we are concerned. The decision there was that industrial action in that context included any action, be it in breach of contract or not. With respect, I think that the decision of the Court of Appeal was plainly right. It could hardly have been otherwise, in view of those sections. But that has nothing to do with the general doctrine of the right to strike or not as my noble friend Lord McCarthy was speaking of it.

The amendment resurrects the thinking of the common law before the immunities, so called, came about. If one wants to find the language of this kind of clause in the previous law, one goes back to the judge who told the jury, in connection with those who organised a strike of gas workers who supplied the West End of London and who were convicted of criminal conspiracy, I tell you that if there is improper molestation, if there is anything done with an improper intent which you shall think is annoyance or unjustifiable interference, and which in your judgment would have the effect of annoying or interfering with the minds of persons carrying on such a business as this Gas Company was conducting, that is a conspiracy. The learned judge said: If there was an agreement among the defendants by improper molestation to control the will of the employers, I tell you that would be an illegal conspiracy at common law". That is the nineteenth century language in Regina v. Bunnin 1872 by Mr. Justice Brett. It is precisely the same language in terms of the civil law with which this amendment is concerned. The point here is that any combination, which noble Lords dislike so much, that does not satisfy the ballot requirements‖sabsolutely every combination to take industrial action—is to be illegal and to be open to suit by plaintiffs who may be a party concerned in the matter, or by any other person who is adversely affected.

It is perfectly plain that noble Lords moving this amendment know as well as I do that the ballots that have to be taken have so many difficulties about them—we have seen some already, not least in terms of the time limits that my noble friend Lord McCarthy spoke of—that in many cases they will not be properly conducted under the clauses we are discussing. Therefore, putting in this clause as an alternative to Clause 7, but having no alternative to Clause 8, means that a very large amount of industrial action—by which I mean the simple fact of the liberty of withdrawing one's labour from the place of work, recognised in every constitution of every democratic country that there has ever been as a fundamental right of man—would rest, except for the requirement of a ballot, upon the sand in the eyes of the noble Lord who moved the amendment.

It is a very serious amendment. It is one which has only one merit, because, as I understand it, it does require that the ballot be taken without interference on the part of anyone. Apart from that merit, we say that it is a very retrograde step. It is one that the Government should look at very carefully, because it is the Government's flirtation with the seductive notions of interference—which they cannot explain, which they cannot illustrate, and which they have even had to take off their ballot paper because it is such a nonsense—that opens the door to this kind of autocratic approach to industrial relations. Therefore, the Government have some responsibility for this amendment. One hopes they will oppose it, but in opposing it let them look at the mote in their own eye as well.

10.51 p.m.

The Earl of Gowrie

I am not sure about motes in the Government's eye. I fear that the noble Lord, Lord Wedderburn, has put up another clay pigeon in order to shoot it down. My noble friends are not assaulting the principle of the right of withdrawal of labour: they are, I think, trying to test whether this attribute in our law might be defined in a rather different way. However, I see problems in the forms in which the amendment has been moved, and I should like, therefore, to explain why the Government do not feel able to support this new clause.

I understand the concern which has led my noble friend Lord Orr-Ewing to bring forward the amendment. On the face of it, it would seem very reasonable to most people that unions should be required to hold ballots before calling on their members to take any industrial action, whatever its precise legal status. Nevertheless, I believe there is considerable doubt about the practical need to apply the provisions of Part II of the Bill to industrial action which does not bring those concerned into conflict with their contractual obligations, as I shall seek to demonstrate in just a moment. In the absence of clearly established need there are, I believe, some strong arguments against adopting the new clause.

There is another difficulty. As my noble friend Lord Campbell of Alloway pointed out, the clause would mark a major departure from the system by which the law regulates the organisation of industrial action. As we have heard so frequently, that system is based on the provision of statutory immunities from actions in tort to which trade unions and their officials would otherwise be liable when organising industrial action involving breaches of contracts of employment.

That system of protection from the operation of the normal common law has long been recognised as necessary if the freedom to organise industrial action is to be preserved, although there is, of course, very considerable disagreement between the Government and noble Lords opposite, such as the noble Lord, Lord Wedderburn, as to how far the protection should reasonably extend. Noble Lords opposite believe it should be virtually unlimited. We believe it must be limited sufficiently to protect society from the irresponsible and reckless use of industrial muscle. That is a very far cry from flirting, if that was the word that the noble Lord, Lord Wedderburn, used, with the idea of changing the entire basis of the present law.

The essential feature of the present system is that it is, and always has been, based on existing common law liabilities. It does not impose special statutory duties or prohibitions on trade unions in relation to industrial action. It does, moreover, rest on an assumption that trade unions, generally speaking, act unlawfully in the context of industrial action only if they induce or threaten to induce someone to take action which in itself is unlawful. The new clause, on the other hand, would make it unlawful for unions to induce their members to do something which might of itself be perfectly legal. That would be a serious as well as a highly novel step to take—as my noble friend Lord Campbell of Alloway has said, a substantial departure.

For instance, this new clause could be taken to mean that trade unions were to be liable for inducing people concertedly not to enter into contracts of employment, or to terminate them after giving due notice of their intention to do so, by virtue of the definition of "other industrial action". Put another way, employers might be thought to have a cause of action against a union if it persuaded its members not to take certain jobs, or that they should actually resign from their jobs.

The new clause would, moreover, suggest that employers were entitled to expect their employees to do anything which the employer might require of them, whether or not that was actually a condition of their contract of employment. It is of course a settled principle of our civil law that people should not be obliged to enter into contracts against their will or be subject to civil penalty for failing to do things outside the terms of their contract.

The justification for a step of that nature would, therefore, need to be considered against the existence of a clear need. I have to say that the Government are not convinced that such a need has been established. The Bill does of course cover not just strikes, but all industrial action which brings trade union members into conflict with their contractual obligations. Indeed it is clear from Amendment No. 52 and the other amendments relating to interference with contract that we debated with it, which were put down by the noble Lords, Lord Wedderburn, Lord Dean of Beswick, and Lord McCarthy, that noble Lords opposite think that the Bill goes far too wide. It would be quite wrong to underestimate the extent of contractual obligations or the circumstances in which an employee can be held to be in breach of his contract. There is no doubt that in many cases action such as working to rule, go slows and overtime bans would be held to be in total breach of contract.

My noble friend Lord Orr-Ewing suggested that the new clause follows the approach of the Court of Appeal in the case of Faust v. Power Packing Casemakers Limited (1983) in rejecting the breach of contract approach for determining whether an individual had taken part in industrial action in favour of a more common-sense approach. The Faust case was, however, concerned with the quite different issue of whether or not an employee could be fairly dismissed for taking part in industrial action—a ban on voluntary overtime—which did not involve him in a breach of his contract of employment. The case concerned the interpretation of a reference to "industrial action" in Section 62 of the Employment Protection (Consolidation) Act 1978. The expression is undefined in that statute for the purposes of Section 62; and thus a wider view could be taken of the range of activities that might constitute industrial action. The decision of the tribunal in that case does not in any way detract from the cumulative force of the other judgments which could be mentioned in this context.

The Government do of course share the view of my noble friend that the holding of ballots should be the normal prerequisite of any industrial action of whatever kind—that is integral to the Bill. I believe that the effect of the Bill will be that any prudent trade union will organise a ballot rather than risk the possibility that the industrial action which it proposes to organise could make it liable to legal proceedings. On that basis, I therefore hope that my noble friend will rest somewhat assured and will agree to withdraw his new clause.

Lord Orr-Ewing

In those circumstances, I shall not press the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.59 p.m.

On Question, Whether Clause 7, as amended, shall stand part of the Bill?

Lord Wedderburn of Charlton

My noble friends and I have given notice that we oppose the Question, That this clause stand part of the Bill? In the light of our debates, I ask what contribution this clause makes to industrial problems and to industrial disputes. I think that it was the noble Baroness, Lady Seear, who said in the course of a debate on an amendment that the whole notion of strike ballots is industrial nonsense. That, of course, was the message of the Donovan Report. The Government seem to have very little to advance as an argument to oppose the general thrust of what has been a well-known argument about strike ballots before, during and since the Donovan Commission's deliberations.

I had thought that it was established public policy in this country that if there were to be a distinction between official and unofficial action, the law would lean towards official action. But this clause and this part of the Bill lean towards the unofficial action, because it is the unofficial action which retains the immunity—so-called—for the organisers when the official action may well lose it.

As the Government's own Green Paper said, if a statutory requirement were confined to official strikes it might serve as an encouragement to unofficial strikes. No doubt the Government wish that they had not said that, but they did say it. In the debates in another place, as here, the Government have tried to suggest that it will have no effect on unofficial strikes. Indeed, I think it was the noble Earl (I apologise if it was not him, but at any rate it was one of the Government Ministers) who suggested in response to the noble Lord, Lord Rochester, when he cited the Green Paper on this point, that of course things have changed since the Donovan Report, and strikes today are more official than unofficial, whereas in those days the problem was thought to be the unofficial strike rather than the official strike.

However, the noble Earl will know as well as I do that things may change. There is no guarantee that because more strikes are official today, in at any rate a particular industry or two, they may not be more unofficial tomorrow; and it may be that his Bill will contribute to that. One cannot see any advantage in that.

We have been over the legal aspects of the clause, and we have not had any explanation about what "interference" with contracts means, what illustrations there are, and why it is there. We just know that it has been dropped from the ballot. On this side we say that the clause is unfair, and it is particularly unfair in the light of the matter raised by my noble friend Lord Dean of Beswick. Let us restate this clearly. If the ballot goes wrong, if some aspect of Clauses 7 and 8 is unsatisfied, not only is the union exposed to the raw liabilities of the common law, but so are all the officials who engaged in the organisation of the action, whether or not they had anything to do with the failure to satisfy the procedural requirements of the ballot.

That seems to be a little vindictive. When will this come up? It will not come up as it does under Part I. Noble Lords have been speaking about this clause as though it was parallel to Clause 1. It is, of course, in certain respects; it is all about ballots. But in other ways it is totally different. This will not come up on the application of a member against a union. This will all come up weeks, months or probably years later in an action brought by, say, an employer or by some third party against the union and its officials.

Then the argument will be, and the union defendants will say, "We have so-called immunity; we have protection; we have acted lawfully". The plaintiff will say, "No, you have not". It is then that the whole matter will have to be trawled through the High Court, without the court having a discretion. Noble Lords will notice that what is particularly evil about this part of the Bill is that, whereas under Part I the Government could say, "Oh well, if something small goes wrong, if there is some irregularity, if something is not quite right, the court has a discretion; it can say that it is not appropriate to make an enforcement order", the court cannot say that here. The High Court is bound to say that all the officials and all the union defendants have lost their immunity because there were some members who received ballot papers when they were not entitled to receive them, or vice versa; they cannot argue about the size or nature of what went wrong.

Therefore, coming back to industrial reality, I want to refer to what the noble Lord, Lord Rochester, said when he spoke of Donovan and strike ballots. What will be the effect of that? Will that contribute to industrial disputes being solved? On 19th June, in our previous Committee debate, the noble Earl said that the legislation of the Government had already confounded the expectations of the so-called voluntarists who glibly argue that the law has no place in industrial relations except to reinforce the power of trade union leaders.

I do not know who those so-called voluntarists are. I have not heard my noble friends argue that the law has no place: that there should be no Factories Acts or no Employment Protection Acts; that it has nothing to do with trade union leaders; that there should not be the vast corpus of industrial legislation which has been there for many years. We say that the common law should not be reintroduced. Noble Lords must understand that every time an immunity is cut back the flood of common law 19th century liability comes back into industrial affairs. It is not just 19th century: it is often 19th century as extended in 20th century cases. It is common law regulation that the Government are reimposing by cutting back on immunities.

If the noble Earl says, as he said in our previous debate, that these injunctions (which he now hopes will increase if the ballot requirements are not properly and fully fulfilled), as in the NGAcase, the Stockport Messenger case, thePOEU case, the Mercury case the NUJ case and the Dimbleby case, are put forward as a contribution to industrial relations, then I say to him that it may be a little premature. Furthermore, it would be a brave man who could honestly predict that the consequences of the bitter litigation in those cases would necessarily in the medium term contribute to better industrial relations in printing, telecommunications, and newpapers.

I say no more than this about the current dispute: those who contribute to the settlement—if there be a settlement; and one day there must be—of the tragic division in our nation at the moment are not necessarily those who would wish to rely on injunctions to do it. But at a more mundane level any manager knows, any trade union official knows, any Minister knows, that when a problem arises on the shop floor, what the manager must have is some cooperation from the trade union official; and the one thing that this clause will do is to make that less likely.

Therefore, to return to the level of an everyday, ordinary occurrence for people who actually keep the wheels turning, not just in factories, but also in offices, in white collar employment, where today they need a union official often more so than in the factory, I would say that they will not get that co-operation all the time, and as readily, if the union official is constantly having to think about the problems of liability incorporated by this part of the Bill. This will make no contribution to the improvement of real industrial relations, and it is on that ground that we would object to the clause standing part of the Bill.

Lord Graham of Edmonton

Most of us who take an interest in these matters have sat here for more than three hours while this clause has been debated. There have been 25 amendments, and that is a clear indication that Clauses 7 and 8 are seen by many of us to be central to the philosophy and raison d'êetre of the Government in respect of industrial relations. I share the disappointment, in fact the detestation, felt by my noble friend Lord Wedderburn over the intention of the Government in Clause 7. They are saying that the way to avoid disputes of a damaging nature in the future is not to reduce the amount of law, but to increase it. It is said that the Minister and others in the Government are being prevailed upon by their equals in another place to turn themselves into the listening Government, to listen more and more to what people halve to say, rather than to lay down the law for them. On this issue, as on others in this piece of legislation, the Government have no intention of listening to what is being said on this issue from these Benches.

I join with my noble friend Lord Wedderburn in complimenting the seriousness and reasonableness of the views of the noble Lord, Lord Rochester. He has brought his experience to these matters—and it is not inconsiderable—and he has prayed in aid the views of the Institute of Personnel Management. I believe he put his finger firmly on the nub of what is wrong with this clause by pointing out that its effect—it may not be its intention—would be to divert a great deal of action from the official to the unofficial. I quickly scribbled a note that it would result in "underground action".

The question that has been raised by many in the debate tonight has been the relevance of the remedy which the Government believe they attach to this clause. As I have indicated more than once before, I have an association with the Union of Shop, Distributive and Allied Workers. That union, which is the sixth or seventh largest in the country, with a membership of 400,000, is not known for being other than a reasonable, moderate and responsible trade union. It has an industrial relations record which most people, if they are fair-minded (and I believe that most Members of this Committee here tonight are), would say is a credit to the relationships which it has built up with its members and with the employers with whom it has to negotiate. I should simply like to point out what that union—which will be affected, like all other unions, by this legislation—has to say. Bill Whatley, the general secretary, and a person highly respected in the trade union movement, states this: The tradition of voting at branch meetings suits the members of a general union like USDAW but postal ballots would be quite impracticable, and while workplace ballots are already held for members to have their say in pay settlements covering particular firms, this method of voting would create real problems where members are scattered among a variety of shops, offices and depots, working for a variety of employers. Simply because USDAW has a good record of industrial harmony and rarely finds it necessary to call a strike, the union is not prepared to see unnecessary restrictions on the right to strike. The compulsory ballot proposals could so easily, place the union in a straitjacket, when the members wanted to take immediate industrial action at the end of a long and frustrating failure to reach an agreement with an employer". He goes on to say: To be forced to replace the tradition of branch voting with a system of postal or workplace ballots would create serious and costly administrative problems for a union like USDAW. It could result in cutting down the resources available to maintain services for its members". The Government ought to heed very carefully the suggestion that it is building up in unions such as USDAW a resentment that ought not to be there if the Government really do want to achieve better relationships.

The word "intimidation" has been used more than once in respect of allegations. I do not deny that some intimidation must take place, if we are to believe what we read in the newspapers in respect of certain trade union situations. But the Government ought to reflect very carefully on the fact that what they are doing in Clause 7 will be seen by many responsible trade unionists as intimidation of the unions themselves. As my noble friend Lord Wedderburn has said, the unions will have to reflect carefully before taking any action.

There is a change in the attitude of trade unions and trade unionists in respect of their responsibilities in these matters. These days, trade unions and their branches are articulate—and certainly they are not uniform in their reactions. It is a tragedy that the Government should believe that the present difficulties in trade unions will be resolved by recourse to further legislation. So far as I am concerned, Clause 7 should not stand part of the Bill.

Lord Campbell of Alloway

The noble Lord, Lord Wedderburn, asked what contribution this clause will make to industrial relations. It will make a very substantial contribution. It affords a democratic right to trade union members, which the majority of the rank and file wish to have, to have a voice heard and a will heeded in the taking of industrial action. The noble Lord, Lord Wedderburn, says that this has nothing to do with the solution of industrial disputes. That, surely, cannot be so—because the result of a ballot (as so often seems to be forgotten) can be used to negotiate a settlement, at the discretion of the trade union official, rather than to call for industrial action. Broadly speaking, this clause serves a useful, constructive and valid purpose.

As I am on my feet, perhaps I may thank the noble Lord, Lord Dean of Beswick, who I see is in his place, for the apology which he gave in my absence earlier today.

11.15p.m.

The Earl of Gowrie

Not for the first time my noble friend Lord Campbell of Alloway has brought us back to earth with some precision and common sense. Listening to the remarks of the noble Lord, Lord Wedderburn, about there being something evil abroad in this part of the Bill, and to the comment of the noble Lord, Lord Graham, that he shared the detestation felt by others towards the intention of Clause 7, it would be very easy to take our eyes off what Clause 7 actually does. Clause 7 says something which I think most people would endorse as eminently reasonable and certainly in no sense an attack on the trade unions or on the unique privileges in law which allow them to function. The clause simply makes it a condition of these privileges that union members are not called out on strike without first being consulted. I cannot for the life of me see anything at all unreasonable about that proposition. And, as will be demonstrated to your Lordships in the debates on the following clause, trade unions should have no practical difficulty in carrying out what is expected of them.

The noble Lord, Lord Rochester, also thought that this would all be very difficult and impossible. I must say that that is not my understanding of the position of the Alliance as a whole. I should be very surprised if his noble friend Lord Aylestone endorsed that view. However, that is not a matter for me. Recent events have served only to reinforce our conviction, the conviction of the general public and the conviction, I should have thought, of the overwhelming majority of ordinary trade union members, that, whatever else this Bill does, it is essential to tackle the issue of official strike calls issued without proper consultation of the members. It is nothing short of incredible to me that the Opposition have been prepared in debates on the Bill to defend the proposition that union leaders should be allowed to play on the fears and loyalties of their members rather than directly consulting them about a decision which has a major impact not only on their own lives but on the lives of their immediate communities and on that of the nation as a whole. This seems to me to be self-evidently one of the major concerns of the whole of our political economy and it seems to me no less incredible that it is being opposed.

Lord McCarthy

The noble Earl is being less than his normal fair self. We have never argued from this side of the Committee that members should not be consulted. I, myself, said earlier that what we are arguing is that they do not necessarily have to be balloted and, in particular, they do not have to be balloted according to the provisions of this Bill. We do not say that they do not have to be consulted and we do not say that they are not consulted. We say they are.

The Earl of Gowrie

I did use the phrase "consulted by ballot" earlier and when I repeated "consulted" that was the context in which I did it. I know that the noble Lord, Lord McCarthy, calls me a "ballotomane"—a different province from my other job, where I suppose I am a "balletomane". But, be that as it may, I think the central point stands. Most people want to be able to vote on issues which crucially affect their lives. This is all that this part of the Bill seeks to do. I urge your Lordships to support the clause and to reject any amendment which suggests that it does not stand part of the Bill.

Clause 7, as amended, agreed to.

The Deputy Chairman of Committees (Earl Cathcart)

In calling Amendment No. 73, I should tell your Lordships that, if it is agreed, I cannot call Amendment No. 74.

[Amendments Nos. 73, 74, 75, 76 and 77 not moved.]

Lord McCarthy moved Amendment No. 78: Page 11 line 10, leave out from ("part") to end of line 11 and insert ("in the strike")

The noble Lord said: In this amendment we attempt to take out what we call the intimidation provision. Under the terms of Clause 8 of the Bill, the Government are saying that there must be a clear and precise form of words on the voting paper. Clause 8(4) states that, the voting paper must contain at least one of the following questions— (a) a question (however framed) which requires the voter to say, by answering "Yes" or "No", whether he is prepared to take part, or as the case may be to continue to take part, in a strike involving him in a breach of contract of employment".

The noble Lord, Lord Wedderburn, has said that the Government for reasons which they have not been able to explain, have taken away reference to interference in this part of the Bill. Nevertheless, the union is told that, if it is to qualify for immunity under the provisions of this part of the Bill, there must be these words, and in effect no other words, to discover whether the employee, is prepared to take part, or as the case may be to continue to take part, in a strike involving him in a breach of his contract of employment".

We say that that is done to intimidate. We say that this is a continuation of a line of policy which, as the noble Lord, Lord Wedderburn, has said, is most unusual and in a way is without precedent in this country, going back to the time of the first Royal Commission on labour. It is a development of policy in which the Government are deliberately—we have bji now to say "deliberately"—encouraging unofficial action and are discouraging official action. It had been thought that successive Governments were there in industrial relations to hold up and to assist the established system and to discourage unofficial action and breach of agreements of all kinds outside the existing system, whether on the part of employers or on the part of trade unionists. That always was the doctrine of the old Ministry of Labour.

Here we have, almost for the first time—except that one can see signs of it in previous employment legislation by this Government; but certainly most overtly—a provision which can make sense only if it is there to discourage workers from participating in official strike action and to make it easier and more lawful for them to participate in unofficial strike action and to put trade union officials in a position where they are bound to say that the chances of obtaining assent from their members for strike action through the provisions of Clause 8 of the Bill are extremely limited.

One has only to think of the effect which a provision of this kind would have upon an individual worker who is asked to say not simply whether he wants to strike or not, but whether he wants to strike in breach of his contract of employment. Some people will say that he will not worry about looking at words; some people will say that trade unions can get around it by printing them in very small print at the bottom of the ballot paper—again, no doubt, that would turn out to be unlawful—people will say that the trade unions must be in a perfectly reasonable position since this is lawful anyway, and all they would have to do is explain to their members that that is the legal position; that when they strike they will be striking in breach of their contract of employment. If a worker says, "And what of the consequences of striking in breach of a contract of employment?" then the honest trade union official has to say that the possibility is that the consequences include dismissal and dismissal in a context in which the unfair dismissal legislation will not apply.

This is the kind of provision that the Government insist on putting into the Bill. We call this an intimidation provision and we ask the Government in equity to remove it from the Bill at this late stage.

Lord Gray of Contin

In view of the variety of circumstances which may apply in different industrial disputes, the Bill quite deliberately does not include a universal ballot question which must be asked in every situation. Clause 7(4), however, requires the ballot paper to include a question (however framed) asking members whether or not they are prepared to take strike or other industrial action which would involve them in breaches of their contracts of employment.

The amendments tabled by the noble Lords, Lord McCarthy, Lord Dean and Lord Wedderburn (which are similar to amendments tabled by the opposition at Committee stage in another place), seek to remove any requirement to refer in the ballot paper to the fact that union members might be in breach of their contracts of employment. They have sought to engage your Lordships' support for the amendments by suggesting that the Government are attempting to intimidate trade union members into voting against a strike by referring to breaches of contract.

It will not surprise your Lordships to hear that I totally reject the imputations of the noble Lords opposite. The Government believe that Clause 7(4) contains the minimum specifications essential for ensuring that union members make an informed choice before voting on strike or other industrial action which is likely to bring them in breach of their contracts of employment. This, in the Government's view, is something which union members themselves are entitled to expect. Moreover, if trade unions are to provide themselves with immunity by the means contained in this Bill, it is surely the least that society should be entitled to expect that the implications of what they are doing are put fairly and squarely before their members. "Do you support your executive in any action which it deems necessary to take to overcome the unreasonable intransigence of your employer?" —would this sort of question be acceptable to your Lordships? The Bill does not prescribe the words actually to be used; nor does it preclude unions from asking additional questions or explaining the leadership's policies. It does however require the ballot paper to say quite clearly what the member is actually voting about; and the Government believe that this minimum requirement for precision is the least which should be imposed.

Let me also pose this question to your Lordships. If the Bill had not contained some reasonably precise formula which unions must reflect in their ballot papers, on what basis would it have been possible to judge whether the conditions for retaining immunity had been satisfied? Would any question, however woolly or tangential, have sufficed? I would therefore urge your Lordships not to heed the imputations of the noble Lords opposite on this occasion and I would ask noble Lords to withdraw their amendment.

Lord McCarthy

I do not think we can withdraw this amendment. The Minister has not given us much of an argument. His argument, as I understand it, is that this is the position and the Government want to face trade unionists with the position as it is. But of course, as we have said repeatedly, they only go so far. They do not face trade unionists with the consequences of interference: that is not there—only breach of contract. They have struck that out of the Bill because they do not know what it means. So they present trade unionists with that part which they know the meaning of; and we say that part is intimidatory.

On Question, amendment negatived.

[Amendments Nos. 79–81 not moved.]

11.30 p.m.

Lord Wedderburn of Charlton moved Amendment No. 82:

Page 11, line 17, at end insert— ("(c) a question (however framed) which requires the voter to say, by answering "yes" or "no", whether he is prepared to take part, or as the case may be to continue to take part, in industrial action which does not involve, or is not likely to involve, him in a breach of his contract of employment.")

The noble Lord said: I move this amendment formally in order as we have explained before that it forms part of the record of the proceedings of your Lordships' Committee when the question of interference be reconsidered. I beg to move.

On Question, amendment negatived.

Lord Gray of Contin moved Amendment No. 83:

[Printed earlier: col. 700.]

On Question, Amendment agreed to.

[Amendment No. 84 not moved.]

The Deputy Chairman of Committees

In calling Amendment No. 85, I should say that if it is agreed to I cannot call Amendments Nos. 86 and 87.

Lord Gray of Contin moved Amendment No. 85: Page 11, line 23, leave out from ("ballot") to end of line 31 and insert ("must—

1. (a) be allowed to vote without interference from, or constraint imposed by, the union or any of its members, officials or employees; and
2. (b) so far as is reasonably practicable, have a voting paper made available to him—
   1. (i) immediately before, immediately after, or during his working hours; and
   2. (ii) at a place convenient to him;
   or be supplied with a voting paper.

(6A) The arrangements which are made for the casting of votes in the ballot must be fair and designed to secure that—

1. (a) every person who is entitled to vote in the ballot is, so far as is reasonably practicable, given—
1. (i) only the opportunity mentioned in paragraph (a) of subsection (6B) below;
2. (ii) only that mentioned in paragraph (b) of that subsection; or
3. (iii) as alternatives, both of those opportunities (but no other); and
2. (b) every person voting in the ballot is, so far as is reasonably practicable, enabled to do so without incurring any direct cost to himself.

(6B) The opportunities are—

1. (a) a convenient opportunity to vote by post;
2. (b) an opportunity to vote—
1. (i) immediately before, immediately after, or during, his working hours; and
2. (ii) at a place which is convenient to him.")

The noble Lord said: With the permission of the Committee, I should like to speak to Amendments Nos. 85, 88 and 89 together. Amendment No. 88: Page 11, line 36, at end insert ("(any inaccuracy in counting being disregarded for the purposes of this paragraph if it is accidental and on a scale which could not affect the result of the ballot).") Amendment No. 89: Page 12, line 13, after ("Act;") insert— post" means a postal service which—

1. (a) is provided by the Post Office or under a licence granted under section 68 of the British Telecommunications Act 1981; or
2. (b) does not infringe the exclusive privilege conferred on the Post Office by section 66(1) of that Act only by virtue of an order made under section 69 of that Act; and

working hours", in relation to an employee, means any time when, in accordance with his contract of employment, he is required to be at work;").

Despite their length, these are not substantial amendments to the Bill as originally drafted. For the most part, they seek merely to clarify the meaning of certain of the Bill's original provisions so as to remove any possibilities of doubt or misinterpretation. At the same time, we have taken the opportunity to make some marginal improvements to which I shall refer in a moment.

All of these amendments relate to those subsections in Clause 8 of the Bill—subsections (6) and (7)—which set out the basic principles governing the conduct of ballots before calling a strike or other industrial action; namely, that voting should be without interference or constraint; that those entitled to vote should be supplied with a ballot paper or have one made available to them at a convenient time and place; that there should be a fair and convenient opportunity to vote without cost: that the ballot should be secret; that votes should be fairly and accurately counted. The Government's amendments do not alter the substance of any of those principles, though in a number of cases the language used to convey them has been modified. It may be helpful if I explain what the main changes are in this respect.

First, we have looked again at the concept of a convenient opportunity to vote. As your Lordships know, Part II of the Bill is designed to enable two systems of voting to satisfy its requirements. The first is the postal ballot; the second is the workplace ballot. However, since the Bill was introduced into your Lordships' House, some doubts have been cast on whether the Bill as originally drafted achieved this intention and there have been suggestions that branch ballots away from the workplace might not have been automatically ruled out in every circumstance. We have therefore sought to remove any possible room for doubt by making clear on the face of the Bill that voting must take place either by post or at a convenient time immediately before, after or during working hours; that is, at the workplace. A parallel change has been made in relation to the making available of ballot papers.

At the same time as making these drafting changes, we did look again at whether some of the absolute requirements in the Bill as originally drafted might have been too onerous on trade unions. In particular, the Bill as originally drafted made it an absolute requirement on the union to allow members to vote without interference or constraint. However, as has been pointed out to the Government, it is possible that a voter might suffer interference or constraint on the part of some third party who had nothing whatsoever to do with the union. Clearly that is not something for which the unions should be liable. Thus we have taken the opportunity to make clear that the only interference or constraint which will make the union liable is that imposed by the union, its members, officials or employees.

Similarly, the Bill as originally drafted, makes it an absolute requirement on the part of the union to count votes accurately. The reality of course is that if some trivial inaccuracy had been complained of to the courts they would almost certainly have dismissed it as de minimis. Nevertheless, to avoid any scope for unnecessary legal actions, we have now made explicit in the Bill that any inaccuracy in counting is to be disregarded if it was both accidental and on a scale which could not affect the result of the ballot. To the extent that these are drafting amendments, they do no more than restate more clearly what have always been the intended effects of the Bill. To the extent that they make changes at the margins, they are amendments which I feel sure the Committee will agree are sensible. Accordingly, I recommend that the amendments be made. I beg to move.

Lord McCarthy

I suppose, according to the way the Bill is proceeding, we should be thanking the Members on the other side of the Committee (because this is our old friend Amendment No. 22 put in as Amendment No. 85) for the fact that in the case of strikes they are getting rid of workplace ballots altogether and making them 100 per cent. postal ballots, not just for union elections but also for strikes. But unless we take that extreme view I do not think that we can welcome this series of amendments.

There is a sense in which it might very well be the case that, looking at the provisions of Clause 8 of the Bill, a court might say that those provisions could not be carried out through a branch-based ballot, anyway. Therefore, one could argue that the provisions of this amendment are necessary in order to make clear what is inherent in the clause as it stands. But at least in the clause as it stands, if a trade union wished to say that it was going to consult its members in one particular way it could consult them in that particular way. If it decided that it wanted to do it by a branch ballot, it could do it in that particular way, although it might not stand up in court.

But what the Government are proposing in this amendment is that if. in addition to the problem, which we discussed earlier in Committee, of trying to obtain an up-to-date register from the employer (and being liable under the Act if the employer does not provide an up-to-date register) they tried to get facilities to have a ballot, in so far as they wished to operate a workshop-based ballot, at any time during the course of such a workplace ballot any member of the union could demand a postal vote in addition to the arrangements which had been made for a workplace ballot on their behalf. Any group of members at any time, in the middle of a ballot of any sort, other than a full 100 per cent. postal ballot, could demand that they should have a postal ballot.

We have said tonight on several occasions, and, as far as I can remember, no Minister from the other side of the Committee has picked it up, that inherent in what the Government wish to do in spreading the necessity for postal ballots must be a belief that trade unions will be forced, as a result of the amendment, to apply for money under the certification scheme arising out of the 1980 legislation. The consequences of compulsory ballots for trade union elections, plus the consequences of trade union ballots in industrial disputes for all official strikes, make it absolutely essential for trade unions, if they are not to be bankrupted and if they are to conform to the law, to consider very seriously the need to change the existing policy of the TUC and to go to the certificating officer in order to try to find a way to get money under the scheme. Therefore, it is reasonable for us to say—we have said it repeatedly, but we have had no answer from the other side—that it turns out to be rather difficult to get money out of the certificating officer.

The certificating officer—I am talking now of applications, for the most part, for elections, not for strike ballots, of which he has not got much experience—has had 31 applications and has given 22 subsidies to 14 unions. And sometimes it takes up to two years for the certificating officer to agree on the details of a claim. I make no criticism of the officer. He has to answer to parliamentary scrutiny. But the fact is that if all these expensive additional ballots are necessary, and if individual employees, under the terms of this amendment, can at any time demand a postal ballot, the administrative problems placed upon trade unions and, indeed, on the administrative officer boggle description.

Finally—and we shall be coming back to this on a subsequent amendment—the Government are demanding that this whole system should be put in place in two months: everything is to be operating, including this new amendment allowing a trade union member to demand a postal ballot. We say that this must be intentionally designed to make it virtually impossible for unions to conduct official strike action. In that sense we must oppose it.

On Question, amendment agreed to.

[Amendments Nos. 86 and 87 not moved.]

Lord Gray of Contin moved Amendment No. 88:

[Printed earlier: col. 747.]

On Question, amendment agreed to.

Lord Gray of Contin moved Amendment No. 89:

[Printed earlier: col. 747.]

On Question, amendment agreed to.

Clause 8, as amended, agreed to.

11.42 p.m.

Lord Aylestone moved Amendment No. 90: Before Clause 9, insert the following new clause:

("Amendment of 1913 Act, s.3.

.—(1) For sections 5 and 6 of the 1913 Act there shall be substituted the following section— 5.—(1) A member of a trade union may at any time give notice that he wishes to contribute to the political fund of the union and, on the adoption of a resolution of the union approving the furtherance of political objects as an object of the union, notice shall be given to the members of the union acquainting them of the procedures for contributing to the political fund of the union, and that an appropriate contribution form can be obtained by or on behalf of a member either by application or by post from the head office or any branch office of the union or from the office of the Certification Officer. (2) Any notice under subsection (1) above to members of the union shall be in a form, and shall be given, in accordance with the rules of the union approved for the purpose by the Certification Officer, having regard in each case to the existing practice and to the character of the union. 6. Effect shall be given to the wish of members to contribute to the political fund of a union by a separate levy of contributions to that fund from the members of the union who have completed the contribution form referred to in subsection (1) of section 5 above, and the rules shall provide that no moneys of the union other than the amount raised by such separate levy shall be carried to that fund. (2) For the purposes of section 5 of the 1913 Act (as substituted by the preceding subsection) any trade union which has adopted such a resolution as is therein specified shall be deemed to have adopted the same on the day when this Part of this Act comes into force.")

The noble Lord said: At this hour of the night I shall be as brief as possible. Before I start I assure the Committee that I have no intention of pressing the amendment to a Division, but depending upon the debate itself, I shall consider what is to happen when we reach Report stage. We are now entering Part III, which deals with political funds. As we start on it I should like to state a personal opinion. In my view all political parties should be funded, to some extent, from public funds. I appreciate that has nothing to do with the Bill, but it is an idea which I have held, with others, for many years and which was, in fact, recommended some time ago by the Houghton Committee. However, let us deal with the position as it is in the Bill, rather than the situation concerning the Houghton Committee and the funding of political parties.

As I see it, the present position is that the Conservative Party is financed from personal subscription, private donations, and considerable gifts from companies which are obviously approved by those companies. The Labour Party is funded in part by personal subscriptions and private donations, but mainly—and I do not think this is questioned—from political funds of the trade unions. The Alliance is funded again by personal subscriptions and by private donations.

I very much doubt whether every trade unionist who pays through what is known as the political levy into the political fund of his trade union in fact votes Labour.

Figures have been quoted during the discussions that we have had on this Bill concerning the number of people who are members of trade unions and who voted, or did not vote, Labour. I do not know how those figures are arrived at. I should think that they are probably all questionable. But what is certain is that every individual who pays into the political fund of a trade union did not vote Labour. On the other hand, I am prepared to concede that probably the majority did. The position therefore is that, although the political funds of trade unions, which are considerable, are contributed to mainly by trade unionists who support the Labour Party, there is a considerable number who do not, and it is the contributions of those people that we ought to take into consideration.

I am equally sure that there are very many shareholders who have shares in companies which make contributions to the Conservative Party and who do not all vote Conservative or wish that their contributions should be made to the Conservative Party. I hope that we shall come to that side of the question later, on an amendment that my noble friend Lord Rochester and I have down, Amendment No. 118—although I hope that we do not come to it this evening!

This new clause deals only with the political funds of trade unions. Under the 1913 Act (70 years ago) a person joining a trade union would obviously be invited—pressurised, if you like—to make a contribution to the political fund. He wanted a trade union card, he wanted a job and he unquestionably would agree to sign on the dotted line for his union card and membership, to pay the subscription to the union and to pay into the political levy. But there was a provision in the 1913 Act that, if he so wished, he could contract out. That sounds all very good and fair but not very easy. It would not be very easy in the trade union branch, wherever it may meet, in a packed meeting, or at the end of a meeting, for him to go to one of his trade union officers and ask for a form to contract out of the levy that he was paying into the political fund, most, if not all, of which went to the Labour Party.

The amendment now before the Committee takes the actual section of the 1913 Act, and, if the noble Lords have read it through and made the comparison, they will see that all it does is substitute for the words, "contracting out", "contracting in", so that trade unionists who wish to join the union and pay into the political levy can do so by contracting in rather than going through the drill of contracting out. It is not an anti-trade union clause: it is not an anti-Labour Party clause. It is a "pro" clause for those individuals who pay money into a political fund which they would prefer went in some other direction.

We have considered something which most people have talked about—whether or not the political fund of a trade union could be split to the extent that it is divided up in the same way as the members who make a contribution to it vote, but, on balance, we are of the opinion that this is an almost impossible thing to do. It would be bureaucratic in practice and would involve considerable problems and probably a great deal of money. It would be a very difficult procedure. We are of the opinion that it is a very difficult thing for a trade unionist who has agreed to contribute to the political levy to contract out.

All we seek to do in this amendment is to substitute "contracting in" for "contracting out". There is nothing new in it. It is an idea that has been discussed before and, as I said at the beginning, I have no intention of pressing it tonight. However, I hope that on reflection noble Lords will think about it. We shall probably have more information when we reach Report stage and can then come to a decision on it. I beg to move.

Lord Underhill

As the noble Lord, Lord Aylestone, has done, I do not propose to go into the whole question of the financing of political parties except to say, in passing, that from these Benches we also should like to see the financing of political parties on a public basis. I say that also as a member of the Houghton Committee, which made recommendations a few years ago.

The only other point of a general character that I want to make is that while, frankly, we recognise and admit that substantial funds are contributed to the central Labour Party organisation from the trade unions, the amount of money subscribed in the constituencies by ordinary individual members reaches a very substantial figure, as was proved in the evidence placed before the Houghton Committee.

However, I will deal with the amendment. It will be a travesty to link this amendment with any arguments for democracy. As has been pointed out, the 1913 Act provided the trade unions with legal authority to engage in political activities, provided they conformed with arrangements for a political fund which are laid down in that Act. We all know that this arose from a House of Lords judgment, the Osborne judgment. Among other things, it provided for contracting out.

I think it is generally known that that continued until 1927, when even moderate trade unionists—and practically all trade unionists were moderate in 1927—thought that this was a punitive action of the Government following the general strike. We then had contracting in, which lasted until 1946, when it was repealed and we went back to contracting out.

No other bodies except the trade unions have this type of constraint on their political activities. No other bodies except the trade unions have to have the requirement to go through the procedure which is laid down. Companies in their annual report have to declare donations to political causes in excess of £200; that is all.

Let us take a quick look at the procedures which must be gone through now. It is mandatory that a trade union must have a ballot of its members to decide whether or not it shall have a political fund. If approved, then it must make arrangements for political fund rules, with separate contributions from which payments can only be made for political activities. The rules then have to be approved by the certification officer.

Then, as Lord Aylestone pointed out, there has to be a provision for contracting out. I emphasise that only the trade unions have this stringent control on expenditure for political activities, so the certification officer, as laid down in the rules, will approve the rules if he is satisfied that every member has had a fair and equal opportunity to vote and that the secrecy of the ballot is properly secured. That is laid down in the 1913 Act. The 1913 Act also provides that, if any member is aggrieved by a breach of any rule, then he may complain to the certification officer.

Looking through the recent reports of a certification officer, what do I find? In 1978 there were 12 complaints. In 1979 there were 105 complaints, but 76 of those were from one workplace only. In 1980 there were 20 complaints. In 1981 there were 12 complaints. In 1982 there were 21 complaints. So there is no staggering objection from individuals making complaints to a certification officer.

If the union members decide, by ballot, to have a political fund, why on earth should anyone in the majority have to say, "Please may I join?" The union members have decided by ballot to have a political fund. Surely it must be left to those who dissent to have the right not to join or, in other words, to contract out. We are saying clearly that there must be the right to contract out, and the right to contract out is there. It would be turning democracy completely on its head, as I have stated on a number of occasions, to make the majority the ones who have to say, "Please may I join?", instead of the minority saying, "Please, I do not want to join, and I am not going to".

The decision to have a political fund is what we are debating. We are not debating affiliation to the Labour Party. When a union member ballots on whether or not to start a political fund, he is not deciding to join the Labour Party. After the political fund has been approved by the certification officer, a decision can be taken to affiliate to the Labour Party or to any other party. So far, trade unions have decided to affiliate only to the Labour Party. On a previous occasion, I challenged Ministers to give me one example of any union where the rules do not provide an opportunity for members to change the rules. In other words, if they wanted to withdraw from the political fund and to cease to have a political fund, they could do so.

As a matter of fact, I see in the report of the certification officer for 1983 that while 13 unions had amendments to the political fund rules approved by the certification officer, one union decided to cease having a political fund. There is this facility to change the rules if they wish. Members have the sole right to ballot on whether they want a political fund. There is a constitutional right for the minority to contract out, and, therefore, no need for the amendment. We believe that it turns democracy completely on its head.

11.57 p.m.

The Earl of Gowrie

We are now debating what has undoubtedly proved to be the most controversial feature of the trade union political funding system established by Parliament in 1983. The respective merits of contracting in and contracting out have exercised the minds of politicians of all parties on many occasions since then. As noble Lords will know, the arguments were rehearsed most recently only two months ago in another place. There are many points I could make about the Government's approach to this question. I shall, however, try to keep to the fundamentals in view of the lateness of the hour and in view of the fact that only certain aspects of the whole issue have been put to us at this stage. I should like to make it clear that we are in no doubt that the way in which the existing system of contracting out has been operated in the past has often failed to safeguard the right of union members not to pay the political levy if they do not want to.

It was the Government's awareness of the deficiencies of the contracting out system, and our determination to do something about them, that led to much of what was said in chapter 4 of last year's Green Paper, which analysed the problems in considerable detail. It was that same awareness that led us to undertake in our general election manifesto: to invite the TUC to discuss the steps which the trade unions themselves could take to ensure that individual members are freely and effectively able to decide for themselves whether or not to pay the political levy". We made it clear in that manifesto that if the trade unions were not willing to take such steps the Government would be prepared to introduce measures to guarantee the free and effective right of choice.

In the discussions which followed, the TUC indicated that they were willing to take remedial action and they put before the Government a draft statement which was subsequently endorsed by the General Council. My right honourable friend the Secretary of State for Employment told the TUC that, provided this statement was endorsed and issued to member unions with their committed support, then the Government would not make changes in this Bill to the law on contracting out. But he also made it very clear to the TUC that this undertaking was given only on the understanding that the TUC guidance proves to be effective. If it does not, then the Government reserve the right to introduce legislation to guarantee the free and effective right of choice. As the Secretary of State has also observed, the case for legislation in the event that the TUC's guidance proves ineffective will be immeasurably strengthened by the fact that they have first been offered a voluntary arrangement.

The TUC's statement of guidance is designed to ensure three things: that trade union members are aware of their rights; that no difficulties are placed in the way of those who want to exercise those rights; and that more information is available to union members about how political contributions are spent. I do not think that we should try to debate tonight what are the best legislative means of safeguarding the right not to pay the political levy. We undertook in our manifesto to consult the TUC, and we have done so. We should now give the TUC's guidance a chance to operate, and we must all hope that it will be effective. But if it is not, then, as my right honourable friend has made clear, we reserve the right to bring forward further legislation, and if we do so then, it will be on the basis of proven need.

That is the approach the Government have adopted consistently since we came to office in 1979. I am sure that it is the right approach and that we should not depart from it now. This is an issue which has been debated thoroughly in another place and rejected by an overwhelming majority of votes. Therefore, I am glad that the noble Lord, Lord Aylestone, has indicated that it is not his intention to press it to a Division tonight.

Lord Houghton of Sowerby

I will not take more than a couple of minutes of the Committee's time. I feel that, for the time being at any rate, the Government have taken a wise decision, and I think we should leave it there. There is nothing more to be done about it without breaking understandings that have been reached.

On the general question, I cannot emphasise too strongly that it would be a profound mistake to consider this solely as a trade union matter. Really, we are dealing with the consequences of action taken on the political levy in the unions. Those consequences could be very serious indeed for one of our major political parties. History has brought us to where we are in that regard. The Labour Party has become overwhelmingly dependent upon the political levy. The political levy, started 70 years ago, can scarcely be relevant to modern conditions. There is a good deal of thinking still to be done about how political parties should be funded.

We are the only country in Western Europe which is not subsidising, if that is the word—supporting —political activities in democratic societies. The committee of which I had the honour to be chairman examined the various systems that they had in these other countries. It is nothing to be ashamed of; other people are doing it, and many of the misgivings about it have proved unfounded where practical experience has been gained of it.

I hope that in this Parliament at any rate we shall not get mixed up further with this question of political levy—certainly not without considering afresh and fundamentally the funding of our political parties. That is the issue we will have to deal with eventually, and it would be a mistake to approach it from any other single aspect. It is comprehensive in its significance and comprehensive in its consequences. I should be very sorry indeed to see anything done to disturb the present arrangement while we are uncertain as to what we are going to put in its place.

Lord Aylestone

This very short debate has made it absolutely clear that there is a great deal more to be said, and more to be thought about, with regard to this matter. I do not propose to do anything further tonight; we will have an opportunity on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Political fund resolutions: periodical ballots]:

Lord McCarthy had given notice of his intention to move Amendment No. 91: Page 12, line 21, at end insert ("and to a resolution under section (Restriction on application of company funds for certain political purposes) of this Act.")

The noble Lord said: We wish to withdraw this amendment, together with Amendments Nos. 92 and 93, and, subsequently, Nos. 94, 95 and 96. The aim of the amendment was to draw a parallel, as we see it, between the position of trade unions and their levy, and companies and their absence of a levy. We are to return to this, because we have been allowed another amendment—Amendment No. 117A—which we shall move, probably tomorrow.

[Amendment No. 91 not moved.]

[Amendments Nos. 92 and 93 not moved.]

On Question, Whether Clause 9 shall stand part of the Bill?

Lord McCarthy

I want to delay the Committee just a few moments on the Question, That the clause shall stand part of the Bill. Much of the argument against the clause has been made by my noble friend Lord Underhill in speaking against the previous amendment. But it is necessary very briefly to point out to the Committee that, quite apart from the restrictions on trade unions and the operation of the political levy as it exists at the moment, the Government propose two major changes in Part III of the Bill. As regards Clause 9 of the Bill, we are about to consider our attitude towards one of those changes—that is to say that the ballot in future will have to be run every 10 years.

The arguments about the ballot—the extent to which the ballot is a singular and indeed a unique restriction upon institutions—have been made with great eloquence and brevity by my noble friend Lord Underhill. I therefore merely wish to address my attention to the narrow line of arguments which have been put forward by the Government, and to some extent put forward in the Green Paper, as to why they have to change the ballot to make it a 10-year one.

When we come to consider tomorrow—or perhaps tonight to some extent—Clause 15 of the Bill, we shall be arguing that indeed Clause 15 is in some ways much worse than Clause 9, because it narrows the area within which trade unions can operate. Nevertheless, arguments have been put forward about Clause 9 and I want to say a word or two about them this evening.

It has been said frequently that there are great variations in the proportion of trade union members who actually pay the political levy. This has been said to be some evidence that pressure by trade union officials is placed upon workers to force them to pay the political levy and that therefore there is a case for asking the entire trade union every 10 years whether it wishes to agree to the general principle of having such a levy. Anybody who wanted to do so could explain quite easily the variations that can be found in the proportions of workers who are paying the political levy. In some unions it is the case that the bulk of the members of those unions are not members of the Labour Party. It may be that in some cases they are actually Conservatives. Some unions include in the calculation of their returns to the certification officer superannuated out-of-trade members. Some unions are especially assiduous in the collection of the levy. Some unions have a particularly large number of low-paid workers, and some unions have particularly large numbers of workers on the check-off.

There is no need to look to pressure or to any kind of coercion to explain in general terms the variations between one union and another or the variations inside one union as compared with another as regards the proportions paying the levy. In any case, as my noble friend Lord Underhill rightly said, we have at hand the machinery of the certification officer. All the efforts of all the organisations who are have tried to prove that there are individuals who are having compulsion put upon them to pay the political levy have not uncovered any significant evidence at all.

The fact is that under the terms of the existing legislation any individual who does not wish to pay the levy can contract out. There is no evidence whatever of any pressure being placed upon him not to contract out. In those circumstances, we would argue that the present clause cannot be justified.

The Earl of Gowrie

The noble Lord, Lord McCarthy, was admirably brief and succinct. I have a long and splendid speech on this subject, but I am not sure whether the Committee would be particularly entranced if I delivered it at this stage. I think that very wise words were said by the noble Lord, Lord Houghton of Sowerby, in connection with the whole issue of political funding and contracting in and out. As I said earlier, the Government have had consultations with the TUC, and the TUC has met the Government's wishes, at least at this preliminary moment in time. So I think that perhaps it would be best to see how things run. I am sure that this is not an issue which will rapidly disappear from the political economy.

Clause 9 agreed to.

[Amendments Nos. 94, 95 and 96 not moved.]

Clause 10 [Ballots: supplementary provisions]:

12.10 a.m.

The Earl of Gowrie moved Amendment No. 97: Page 13, line 9, after ("(1)"), where it first occurs, insert—("In section 4(1) of the 1913 Act (ballots to be in accordance with rules approved by the Certification Officer) for the words from "every member" to the end there shall be substituted "the requirements of subsections (1A) to (1G) below would be satisfied in relation to a ballot taken by the union in accordance with those rules. (1A) Entitlement to vote in the ballot must be accorded equally to all members of the trade union. (1B) The method of voting must be by the marking of a voting paper by the person voting. (1C) Every person who is entitled to vote in the ballot must—

1. (a) be allowed to vote without interference from, or constraint imposed by, the union or any of its members, officials or employees; and
2. (b) so far as is reasonably practicable, have a voting paper made available to him—
1. (i) immediately before, immediately after, or during, his working hours; and
2. (ii) at a place convenient to him;

or be supplied with a voting paper. (1D) The arrangements which are made for the casting of votes in the ballot must be fair and designed to secure that

1. (a) every person who is entitled to vote in the ballot is, so far as is reasonably practicable, given—
1. (i) only the opportunity mentioned in paragraph (a) of subsection (1E) below;
2. (ii) only that mentioned in paragraph (b) of that subsection; or
3. (iii) as alternatives, both of those opportunities (but no other); and
2. (b) every person voting in the ballot is, so far as is reasonably practicable, enabled to do so without incurring any direct cost to himself.

(1E) The opportunities are—

1. (a) a convenient opportunity to vote by post;
2. (b) an opportunity to vote—
1. (i) immediately before, immediately after, or during, his working hours; and
2. (ii) at a place which is convenient to him.

(1F) The ballot must be conducted so as to secure that—

1. (a) so far as is reasonably practicable, those voting do so in secret; and
2. (b) the votes given in the ballot are fairly and accurately counted (any inaccuracy in counting being disregarded for the purposes of this paragraph if it is accidental and on a scale which could not affect the result of the ballot).

(1G) In this section— post" means a postal service which—

1. (a) is provided by the Post Office or under a licence granted under section 68 of the British Telecommunications Act 1981; or
2. (b) does not infringe the exclusive privilege conferred on the Post Office by section 66(1) of that Act only by virtue of an order made under section 69 of that Act; and

working hours", in relation to an employee, means any time when, in accordance with his contract of employment, he is required to be at work. (2) ")

The noble Earl said: With the permission of the Committee, I should like to move Amendment No. 97 and at the same time speak also to Amendment No. 98. Amendment No. 98: Page 13, line 10, leave out from ("Act") to ("shall") in line 11.

The purpose of these amendments is to bring the balloting conditions laid down for political funds by the Trade Union Act 1913 into line with the conditions applying under Part II of the Bill. Although the conditions currently laid down by the 1913 Act require union members to be given an equal right and a fair opportunity of voting, and make provision for secrecy to be properly secured, they do not come up to the standards set by the Bill in one crucial respect. They make no explicit provision for trade union members to be given a convenient opportunity to vote. Put simply, the aim of this amendment is to ensure that trade unions are not able to evade their duty to ballot their members on the continuance of political funds by arranging for the matter to be considered only at branch meetings.

Noble Lords will be aware from earlier debates that it is the Government's firm view that, where postal ballots are not held, the only alternative must be ballots at the workplace. It is simply not sufficient to rely on the broad principles of providing an "equal right" and a "fair opportunity" to vote, contained in the 1913 Act, to rule out the possibility of voting taking place by means of inconvenient branch ballots held away from the workplace. The Government therefore believe it essential to bring the arrangements laid down by the 1913 Act into line for this purpose with current thinking on the conduct of trade union ballots. There is no reason why ballots on trade union political funds should be any less convenient to the members, or less well run in any other respect, than any other ballots dealt with in this Bill. On this basis I commend the amendments to the Committee.

Lord Wedderburn of Charlton

With this amendment to their own Bill, brought forward nine months after its first introduction, the Government reach the high point of their dogma in their approach to these matters. These are changes for dogmatic change's sake and this can be seen if one looks a little more closely than did the noble Earl at the experience with the present law.

In order to have a ballot under the 1913 Act, Section 4 required that the ballot be taken in accordance with rules approved by—it used to be the registrar—the certification officer. It then went on to state that the certification officer: shall not approve any such rules unless he is satisfied that every member has an equal right, and, if reasonably possible, a fair opportunity of voting, and that the secrecy of the ballot is properly secured". The noble Earl tells us that that has to be replaced by provisions which are precisely in line with Part II, first of all because they do not include the words "convenient opportunity". How does that square with the experience of the Act?

A recent work by Dr. Ewing of Edinburgh University, entitled Trade Unions: the Labour Party and the Law, examined this whole area in detail. On page 98, in relation to Section 4 of the 1913 Act, Dr. Ewing reports on his researches (and I know of none that in any way controverts him) as follows: There have been no reported complaints of any breaches of the ballot rules. However, there were two incidents which demonstrate that the Chief Registrar imposed strict conditions on the holding of ballots". He then describes the only two known incidents of difficulty under the existing law. One was in 1938, when a union was required to send ballot papers to superannuated members and to apprentices in order that every member should have an opportunity to vote—and that was strictly applied. The other was in 1949, when a Civil Service union balloted its members on a political fund proposal and the ballot was declared void by the Chief Registrar because the ballot papers did not contain the branch stamp which was required by the rules. You cannot get much more strict than that kind of supervision, and yet since 1913 those, apparently, are the only two complaints known under the existing law.

Why is it, then, that the Government have to replace this law, which appears to have worked strictly but well? First, everything must be the same. We must have the same clauses here as under Part II. It might have occurred to the Government that that which is appropriate for the election of officers of a union might not be appropriate precisely for strike ballots, and might not be appropriate equally precisely for voting on these matters. If one looks at the amendment more closely, one wonders whether it is better on a fair view than the 1913 Act.

It is clear that the 1913 Act was administered by the registrar, and now by the certification officer, in a way which would not allow interference of any kind. Yet when we look at the new subsection (1C) we find: Every person who is entitled to vote in the ballot must— (a) be allowed to vote without interference from, or constraint imposed by, the union or any of its members, officials or employees". From a speech made earlier tonight by the noble Lord, Lord Gray, we were told on a previous parallel clause that that provision was put in so that the union should not be liable for interference caused by a third party; that the words, interference … by, the union or any of its members, officials or employees". are restricted to the union's interference, in order to protect the union. But the old form of the Bill, where we met this in its first printing, just talked about interference and constraint, and we thought that the Government were always concerned about the individual at least as much, if not more, than the union. So why does it not include a protection for the individual member against interference by a third party—by an employer, by a newspaper? Why should not people be told by legislation that these members have a right to vote without interference or constraint?

I am sure the union must not impose it, but what about these other people who, under the old jurisdiction, if the issue had arisen, would have been looked at carefully by the registrar so far as he could? It is true that the word "interference" was not in the statute and we put it in now, but if we put it in now why do we restrict this protection of the individual member here and in this place only to interference from the union?

Under the old jurisdiction, under which there were no complaints from 1913, it is true that union premises could be used in the course of the ballot on this matter according to the union rules, which must be strictly applied. Why on this matter, whatever the arguments on strike ballots or on the election of officers, should union premises not be included among those where all or part of the procedures of a ballot are proper? What would happen if Parliament demanded that shareholders of a limited company who were to vote on the setting up of a particular fund, whatever it was about, must do so either by post or at the Stock Exchange, or at a stockbroker's office? They might say, "On this domestic matter it seems to us reasonable that we can take a vote at a general meeting held at the company's offices, or at a suitable hall that the company hires".

This is another example of trade unions being different. But they are only different here because of the Osborne judgment—one of the worst decisions ever in the history of English law. They are only different here because the law has picked out trade unions and political funds and has victimised them in a way in which it has not adopted with any other association in our law. When there had been no complaints over this long period, when the law had worked fairly and properly, one would have thought that the Government would not need to come forward with an amendment which, first, has been motivated merely by parallelism—the wish to make everything the same in all parts of the Bill whatever the considerations or the purpose; secondly, motivated by parallelism which is not even superior to the present law and does not even protect the individual member in his vote against interference by third parties—which appears to be the Government's determination in their first printing of the Bill, in matters of this kind.

This is surely not an amendment that the Government are wise in pressing; an amendment for which no real case has been made in the speech of the noble Earl.

The Earl of Gowrie

On the subject of parallelism, I am sure that the noble Lord would be one of the first to tease or challenge the Government if one part of the Bill were inconsistent with another. In providing for ballots under Part III of the Bill, we were faced with a different situation than in Parts I and II, as I am sure the noble Lord is aware. In Parts I and II of the Bill, we were in what might be described as a green field situation; there was nothing on which we could build. But the position with Part III was quite different, because there already existed arrangements under the 1913 Act for political fund ballots.

We knew that we might wish to change those arrangements to ensure that unacceptable forms of balloting arrangements were ruled out, but it seemed best to see what arrangements were arrived at for the other parts of the Bill before deciding exactly what changes were necessary. In the event, we could see no good reason for not bringing the 1913 Act conditions into line with what might be described as the standards of today.

On the subject of companies, the noble Lord should not seek too widely to make the equation of the two sides of industry. The fact of the matter is that companies are covered by a network of law in matters that pertain to them; in matters that do not pertain to them, they have a wholly different function from trade unions. They do not have powers in the same way over the lives of ordinary people, and the tendency to monopoly under competitive capitalism—which can lead to companies having an imbalance of power in a political economy—is covered in our system, and in the American system as well, by anti-trust or antimonopoly legislation. That equation really will not easily do.

Lord Rochester

I rise only to confirm what the noble Earl has said to some degree; that the arrangements for ballots under Part III are, as I understand it, very far from being the same as those in the earlier parts of the Bill. When we come to consider this matter at a later stage, I suppose it would not be inappropriate to consider even stricter interpretations or arrangements for the holding of ballots.

In Part I of the Bill, members of the principal executive committee of a trade union have to submit themselves for re-election not every 10 years but every five years. There was that very significant vote last Tuesday night, I remind the Committee, when we agreed to secret postal ballots for that purpose. I am not at this moment suggesting that that is what should be done in this case. But it is reasonable to point out that there are differences and that a case could be made—and maybe there should be a debate on this at a later stage—for even stricter arrangements than those now included in Part III of the Bill, for ballots under that part.

Lord Wedderburn of Charlton

Before the noble Lord sits down, would he care to say whether he would join us in wishing that union members were protected against interference from whatever quarter when they came to vote?

Lord Rochester

I was not seeking to make any points at this late stage, save to add to what the noble Earl had said in relation to the point made by the noble Lord, Lord Wedderburn, that the arrangements for ballot in Part III were the same as in earlier parts of the Bill. They are very far from being that.

Lord Bauer

May I rise in support of the noble Earl, Lord Gowrie, to point out that the analogy between companies and trade unions fails partly for the reason which he instanced but also for the further reason that if a shareholder is dissatisfied with, say, the political contribution of his company, he is in a position to sell his shares and leave the company. Members of trade unions are not in that position.

On Question, amendment agreed to.

12.27 a.m.

The Earl of Gowrie moved Amendment No. 98:

[Printed earlier: col. 758.]

On Question, amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Assets and liabilities of political fund.]:

Lord McCarthy moved Amendment No. 99: Page 14, line 27, after ("contributions") insert ("or loans")

The noble Lord said: This, you might say, is our amendment in minimus. We simply want to add two words to Clause 11. Clause 11 is the clause which sets out the provisions governing assets and liabilities of the political fund. It says: At any time when there is a resolution in force with respect to a trade union, no property shall be added to the union's political fund other than …sums representing contributions made to the fund by members of the union or by any person other than the union itself. We want to add sums representing contributions or loans.

As we understand it, the situation at the moment is that loans can be made to unions. A union can have a loan from its bank or from someone else and that loan can be paid into the political fund. But, as we fear under the proposed legislation, sums simply representing contributions—a phrase not found in the 1913 Act—can be paid into a political fund and loans cannot be paid. The 1913 Act, on the other hand, in Section 3(1)(a), says payments made from a separate fund. This, as we understand it, does not prevent members, if they wish, assisting the union politically in the form of loans, although those loans have to be repaid. What we are saying is that this helps from time to time when political funds become overdrawn. We do not see any reason why the Government should not allow this to be in this Bill.

The Earl of Gowrie

I have to say that the Government can see no justification for loans for political funds whose only purpose would be to enable the union to maintain their party political expenditure at levels above those for which their members have made provision. Subsection (1) of the Bill specifies three different categories of payments which may be made into political funds. The first is sums representing contributions made to the fund by members of the union; the second is sums representing contributions made to the fund by any person other than the union itself; and the third category is property which accrues to the fund in the course of administering its assets—interests, dividends and rents, for example.

Loans fall, it seems to us, into a very different category from those. A union which negotiates a loan for its political fund, whether from a bank, a financial institution or even, as some unions are reported to have done, from another union, would surely not simply be tiding itself over an immediate cash-flow shortage. It would rather be artificially propping up political expenditure which its own members are, or might be, unwilling to finance. Put in its most practical terms, it would be enabling people to buy a bigger say in the deliberations of a political party—nine times out of ten the Labour Party—through the purchase of block votes than the wishes of its members would justify. It seems to me very difficult to place any other interpretation on political fund loans. Unions whose members support their political activities need no loans. They should be able to increase the amount of their political levy. The only unions that would need to resort to political fund loans would be those which doubt their members' support and fear that increasing the amount of their levy would have the effect of triggering off a surge in the number of contracting-out applications.

I believe that the provisions in Clause 11 are fair and provide an altogether helpful degree of clarity. Although this is not a matter which the Government regard as being of enormous significance, I can see no higher grounds for recommending to the Committee that it should accept the amendment.

Lord Underhill

Before the noble Earl sits down, does he recognise that there are occasions such as in 1974 when there were two general elections within six months? Therefore it is not a question of propping up extra expenditure but of paying money which will be repaid from the loan in order to run the election fairly, which did not occur to the Conservative Party.

The Earl of Gowrie

There is no objection from the Government or from the Conservative Party, whose views on the state funding of political parties are well known, to unions making contributions to the Labour Party. The objection is that there should be devices by which larger sums of money are contributed to the Labour Party or any political party than the members of the union wish.

Lord McCarthy

The generosity that the noble Earl shows to his opponents makes Mr Gradgrind look like Father Christmas. It has been explained to him quite clearly why and how this is done but he does not want to know.

On Question, amendment negatived.

Clause 11 agreed to.

Clause 12 [Position where resolution has ceased to have effect]:

The Earl of Gowrie moved Amendment No. 100: Page 15, line 16, leave out from beginning to ("before") in line 17.

The noble Earl said: With this it will be convenient to take also Amendments Nos. 101, 102 and 103:

Page 15, line 23, at end insert ("or would increase any deficit in the fund")

Page 16, line 21, leave out ("a") and insert ("the")

Page 16, line 28, at end insert— ("(8A) Where, at any time after a resolution has ceased to have effect—

1. (a) the trade union holds a ballot; and
2. (b) the result of the ballot is that a new resolution is passed; no property which immediately before the date of the ballot was held by or on the behalf of the union otherwise than in its political fund, and no sums representing any such property, shall be added to that fund.

(8B) Where a resolution ceases to have effect but immediately afterwards there is a new resolution in force with respect to the trade union, the cessation of the old resolution shall be disregarded for the purposes of this section.")

These amendments need not detain us for long. All are intended to make technical improvements to the Bill, either in terms of its operation or purely in terms of drafting.

Clause 14 appeared to be the subject of a certain amount of confusion to some honourable Members in the party opposite when it arose during the Committee stage in another place. The clause applies to a situation where a trade union passes a political fund resolution having lost one on some previous occasion. There is nothing in the Bill to prevent a trade union from choosing to maintain its political fund—without adding to it from outside sources during what I might call this "dormant" period. But that is what some honourable Members in the party opposite appeared to think was meant by Clause 14—notwithstanding the fact that it refers to sums which might be "added" to the political fund. The new subsection (8A) is designed to make this clearer.

I hope that your Lordships will agree that this series of amendments do represent desirable small improvements to the construction of the Bill and that the Committee will give them its support.

On Question, Amendments Nos. 100 to 103 agreed to.

Clause 12, as amended, agreed to.

Clause 13 agreed to.

Clause 14 [Restriction on transfers into political fund after passing of new resolution]:

[Amendment No. 104 not moved.]

On Question, Whether Clause 14 shall stand part of the Bill?

Lord McCarthy

As I understand it, the noble Earl wishes to take back the clause. That is why I did not move Amendment No. 104.

The Earl of Gowrie

I apologise to your Lordships' Committee. I am feeling a little punch-drunk at this stage. As I have already advised the Committee in proposing Amendment No. 103, the provisions of Clause 14, like most of the provisions in Clause 12, come into operation where a resolution has ceased to have effect. That phrase needs to be clarified to ensure that both the Clause 12 and the Clause 14 provisions do not come into effect when an old resolution is replaced by a new one, following a successful ballot. The problem could be dealt with most succinctly by moving Clause 14 into Clause 12, thereby avoiding the necessity of repeating the new subsection (8)(b) in Clause 14. I beg to move.

On Question, Clause 14 negatived.

Clause 15 [Political objects]:

Lord Wedderburn of Charlton moved Amendment No. 105: Page 17, line 32, at end insert (" (without prejudice to the furtherance of any other political objects) ")

The noble Lord said: We now come to Clause 15, and if I have already said to your Lordships that many clauses in this Bill are objectionable, then I say that this clause is even more objectionable. It is more objectionable on a very curious basis. It deals with the definition of what is meant by "political objects". Your Lordships will appreciate that that is highly important when the law constricts trade unions alone in the manner and operation of their expenditure on political objects.

From the very beginning the Government's case has been that all they are doing is to update the definition. I shall give just one quotation which could be paralleled in speech after speech by Government Ministers. On 28th February in another place the Under-Secretary of State for Employment, Mr. Clark, said at col. 1289: It is the Government's purpose to update and not to tighten existing controls".

The old definition set out the political objects, but in the same section of the 1913 Act (Section 3) it was stated that the political objects controlled by the section, and therefore by the Act, were without prejudice to the furtherance of any other political object. That meant that a union could (and many did) include in their objects in the rule book the furtherance of wider political objects. For example, the objects of the Transport and General Workers' Union, to take one of very many, included, the furtherance of political objects of any kind". That meant that there were political objects in the layman's sense which could be funded from the general fund and did not have to be funded from the political fund. The political fund was confined to the definition of political objects in Section 3(3) of the 1913 Act which, broadly speaking, covered the following matters: (a) the payment of expenses of parliamentary or local government candidates; (b) the holding of meetings or distributing literature for such candidates; (c) the maintenance of those candidates if they were elected as members of those bodies; (d) the registering of electors or selection of candidates; and (e) the holding of political meetings or the distribution of political literature, unless the main purpose was the statutory objects of trade unions, to which we come later.

I have summarised the provision, but I think that is a fair description. Point (e) was interpreted as including political expenditure which would support such party candidates. Therefore there was a considerable area of what the laymen might call "political activity" which could be funded out of the general fund, especially after the decision of the registrar in Forster's case in 1925, of which I spoke to your Lordships on Second Reading. The registrar said that the right construction of "political" in the definition of 1913 was, not the adjectival form of 'polity' but the adjectival form of 'party politics'.

That interpretation of the sections concerned largely with candidates, elections and so on, left areas such as a general campaign against cuts, which in a decision of 1980 was allowed to be funded from the general fund, and indeed a number of other areas where unions could engage in the operation of social controversy without having a political fund or without funding it from the political fund. This is a very important matter to unions which do not have political funds at all, of which there are very many. Government Ministers sometimes speak as though all unions have political funds, which is far from the case.

The issue for the Government is this. If the new version of the definition is only an up-date, would they like to give us some example—or, preferably, examples—of activity of that kind that would not fall within it? We can give them many examples of activities of that kind which I might call, for want of a better term, engaging in social controversy and which the ordinary man would call political. Also—dare I mention it?—the ILO would call it political, because, in the 1983 report on freedom of association, the ILO points out in paragraph 195 that political activity in the very widest sense—they say "in the broadest sense of the word"—is a necessary part of a trade union's activity in modern society and part of freedom of association.

So would the Government like to give us, before we get on, some illustrations of the areas which would be included in these other political objects, which we are sure they wish to see preserved if the definition is not being tightened? The main thrust of the points which will be put by my noble friends and myself on Clause 15 is that the Government have not stood by their word on Clause 15, that Clause 15 is a rigorous tightening of the definition, and that it is very difficult to see any areas which would stand in those areas of other political objects if it is passed into law.

The Government have pretended from the beginning that all that is intended is to up-date—for example, including the European Parliament, which of course is an up-date and one would accept that; there are many ways in which there are up-dates in the clause and we do not reject that—but the new definition as a whole does not leave in those areas of social controversy which could be paid for from ordinary funds and which could be engaged in by unions which do not have political funds.

This amendment is an attempt to allow the Government at an early stage, before we get to the particular parts which we say constrict, to give us an example of where those words would apply. If the Government suggest that the words are not necessary because they are in Section 3(1) of the 1913 Act, the response to that is that that is true, but the Government have not deleted them from Section 3(1) of the 1913 Act and this is the only way in which we can ask the Government what their meaning is in the context of the new definition. That is the question posed by this amendment. I beg to move.

Viscount Long

At this late hour, I should not like to get the noble Lord more excitable about this Bill, but I have been very interested in listening to him. When I first examined these amendments, I was at a complete loss to see why noble Lords opposite had chosen to table them and I must admit that some of my apprehension remains. Noble Lords opposite are perfectly well aware that precisely the words used in these amendments already are, and will remain, in Section 3(1) of the 1913 Act, which the noble Lord has mentioned.

This makes perfectly clear that the Act's control applies only to the political objects specified in Section 3(3), without prejudice to the furtherance of any other political objects. The existing version of Section 3(3) which Clause 15 of the Bill seeks to replace, and which contains exactly the same introductory phrase as in the new version, does not repeat this qualification—and rightly so. There is no need to do so.

We ought to get one thing clear at the start of these debates on Clause 15. The 1913 Act imposed controls on what may broadly be described as party political and electoral expenditure, as the noble Lord has described it in his amendment. Section 3(1) makes it clear that this is the case. This was quite intentional on the part of the authors of the 1913 Act. The Government have repeatedly made it clear that they have no intention of going beyond the principles established by the 1913 Act by extending the controls beyond the kind of political objects which it has always covered. Some noble Lords may think we should do so, but that is not our intention. Noble Lords opposite will no doubt argue that we have done so, but we shall counter their arguments when we come to debate later amendments to the clause.

I hope the noble Lord understands that it is better that I should go no further than I have already gone and that he will withdraw the amendment and listen to what we are going to say in relation to the following amendments to Clause 15.

Lord Wedderburn of Charlton

It is far too late at night to withdraw amendments. The Minister has told us that Section 3(1) already includes these words. It does. I said so myself. The question is whether the new definition makes the words meaningless. Nothing that the Minister has said has suggested to me that that is not so. The Government are adopting in this clause a Humpty-Dumpty control of words—more so than they have done previously in the Bill.

I noted what the Minister said and I shall read very carefully what he said in Hansard, because I apprehend that his formulation about what the Government intend is not exactly that which was put forward in another place. I believe the Minister said that the Government do not intend to go beyond the principles of the definition contained in the 1913 Act. That is very different from an update of the definition contained in the 1913 Act. That would let them off the hook. Anybody who depends upon a principle can then define as he likes. That is what the Government are doing.

We shall let the amendment rest where it is. The Minister will gradually see the point of the amendments. He has already begun to do so. As my noble friends move the rest of the amendments, we shall see that they are challenging an extension of the meaning of political objects and therefore are narrowing the area of the permissible activity by trade unions. The Minister did not give one illustration of what these words, in whatever clause they are, could mean, and that was very notable.

On Question, amendment negatived.

12.48 a.m.

Lord Dean of Beswick moved Amendment No. 106: Page 18, line 4, leave out from ("party") to end of line 6.

The noble Lord said: I beg to move Amendment No. 106. My noble friend Lord Wedderburn referred to the 1913 Act. In reply, the Minister also referred to the 1913 Act. This amendment deals with what we consider to be an extension of that Act. That is why we have asked for the deletion of the words: any other meeting at which business of a political party is transacted.

There is a whole host of meetings at which political business is transacted. Meetings may be held not just for specific political purposes. For instance, anybody who attends a branch meeting of the union of which I have been privileged to be a member all my life knows that a normal branch meeting held once a fortnight (although the meetings are now held once a month because of the reduction in the number of members and in an attempt to save expense) could call for nominations to a parliamentary panel. It does not necessarily follow that if a person in my union is nominated for the parliamentary panel he will be placed upon it. That kind of meeting takes place once every Parliament, just after a general election.

The meeting could be held to discuss an annual request, in about August of each year, for nominations to the municipal panel. They would not be special, political items, but just part of normal branch life. It could be a branch meeting to discuss the election of the leader of the Labour Party, if the Labour Party was having an election for a new leader or a new deputy leader. It could be that a particular branch was being asked to support certain nominations for a whole host of positions throughout the Labour Party.

I have to tell your Lordships that, in the main, trade union branches do not call meetings of a specific nature just to discuss politics. I have never come across that in my own union. That is why I believe that the subsection which inserts this extension is totally unworkable. I do not know how one can draw a distinction between the two. That is why we have tabled the amendment. There is probably a whole host of other types of difficulty which could be met in other trade unions. The amendment is worthy of consideration because of the difficulty it will cause unions in trying even to analyse what the subsection means.

Lord Gray of Contin

On a simple logical basis, I can see absolutely no reason why trade unions should be able to finance meetings of this sort—in effect, political caucus meetings, because that is what they are. There is no case for them being able to fund such meetings out of their own general funds.

But that is not the only ground on which I oppose the amendment. I oppose it also because it has been established by decisions of the certification officer and the person who previously held his responsibilities —the Chief Registrar of Friendly Societies—that meetings of this kind are covered by the existing definition. In the case of Forster v. National Amalgamated Union of Shop Assistants, Warehousemen and Clerks in 1925, the Chief Registrar held: Meetings of the purest trade union kind, without any admixture of Labour or other politics, must be paid out of the political fund if they are held or issued in support of a candidate or prospective candidate. This ruling related to paragraph (b) of the existing definition.

In relation to paragraph (e) of the existing definition, the certification officer has recently confirmed in the case of Richards v. National Union of Mineworkers in 1981 that the definition covers expenditure on political meetings whether held by the trade union itself or by some other body, and, in the latter case, that the purpose of the meeting should be determined according to the intention of the holders of the meeting, not of the union contributing the money.

In the case of Parkin v. ASTMS last year the Employment Appeal Tribunal, considering an appeal from a decision of the certification officer, confirmed in rejecting a submission from the union that the existing paragraph (e) covers expenditure on internal meetings held in private as well as those held in public.

Lord McCarthy

Surely the noble Lord can see the difference between a meeting which is held by a trade union, yes, to support a given candidate—that was covered—as against a general meeting during which some of the time of the meeting is spent discussing Labour Party business. That, we suggest, is going to be covered by the Bill. There is a difference.

Lord Gray of Contin

I am afraid I do not see the difference. I do not agree the argument put forward by noble Lords. I do not think, therefore, that noble Lords opposite can argue that paragraph (e) of the new definition goes further than the existing definition in encompassing meetings at which the business of a political party is transacted. For that reason I am afraid I am not convinced by Amendment No. 106, and I suggest that the noble Lord withdraws it.

Lord Dean of Beswick

I think that the reply of the noble Lord the Minister to both myself and my colleague Lord McCarthy is totally unsatisfactory. I can only assume that he does not understand what is being said. I am a member of the second biggest union in this country. It relies totally on the branch meeting. No nomination from any other body is valid, other than from our executive council, unless it starts life in the branch. From the branch it has to go to the district committee to see whether it is in order at district level, and from there it is forwarded to the executive council of the AEU. I can tell the noble Lord that this union, which is one of the biggest unions, with over 1 million members, so far as I am aware does not call special meetings on the basis of discussing political nominations and support for political candidates.

If the AEU in London, Manchester, or any other area were to call a meeting specifically to promote or support a candidate—one Mr. Benn—for the deputy leadership, I would not argue one iota that the sole basis for that meeting was not totally political. The case would be unanswerable. But a branch meeting in Leeds, with perhaps 18 men, may be going through the normal monthly business. On its agenda may be a circular from Leeds City Labour Party saying, "We are now open for nominations for the panel to fight the 1985 election". They may say, "Joe there, he's been in the party three or four years. Do you want to go on the panel, Joe?" He says, "Yes", and so they nominate him. Would that immediately become a political meeting? From what the Minister has said, it would. That is absolute nonsense. Such things are dealt with mostly in correspondence. Most often it is not even a special item on the agenda. For instance, as I said, after a general election my union is charged, because of the rules, with drawing up a new parliamentary panel, and every branch in the country is circulated from the executive councils as to whether they would like to nominate for the AEU parliamentary panel, which they do. As I said, that goes to the district committee. If it is approved by the district committee, it is then forwarded on, and then a series of examinations takes place, and the best are supposed to get through. That does not always happen. There is something of the 11-plus about it.

The point that I am trying to make is that nowhere in the AEU rules of branch life are meetings called specifically, or even 50 per cent., to discuss politics as the, or even a, main item on the agenda. If a district committee, a divisional committee, or even perhaps a works committee, called a meeting for the specific purpose of supporting a candidate on a political platform, there would be a basis for the provision. But I am completely dissatisfied with the Minister's answer. I do not think that he has met the point whatsoever, and I believe that he will run into trouble with this.

Lord Gray of Contin

The effect of the amendment which the noble Lord has moved would be to take all meetings at which party business is conducted out of the definition. That I am not prepared to accept. But, in view of what he has said, I shall agree to consider this matter further, though I must make it clear that I cannot accept the amendment in its present form. I am prepared to have another look at this.

Lord Dean of Beswick

I am grateful to the Minister for his answer. On the basis of his response, and because of the time, I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Underhill moved Amendment No. 107: Page 18, line 9, leave out from ("advertisement") to ("to") in line 11 and insert ("of which the principal purpose is to seek")

The noble Lord said: It may be convenient if I also deal with Amendment No. 108. Amendment No. 108: Page 18, line I I, leave out ("seeks to persuade") and insert ("is made with the intention of persuading")

These amendments cover somewhat the same principles as my noble friends have already explained. At this hour of the morning I do not want to issue challenges, but in the light of references made to the words of the 1913 Act being the same as those in the present Act, I ask the Minister to look at Section 3(3)(e) of the 1913 Act and to look at paragraph (f), which is now the subject of the amendment which I am proposing. The Government have said that they are not changing the principles of the 1913 Act; they are just updating them. The words to which I am referring show quite clearly that the whole position is being changed. They are putting in items which must be the subject of expenses on the political fund. By substituting the words set out in Amendment No. 107 it would be the principal purpose of the literature, advertisements, and other items to seek to persuade, which would then determine whether they are political expenditure items.

The same principle is involved in Amendment No. 108. That proposes to leave out the words "seeks to persuade" and to replace them with, is made with the intention of persuading. I would put forward the case that it is the principle purpose and/or the intention that really matters.

As drafted, the present provision in the Bill is very wide and could cover a considerable amount of activity. I hope that noble Lords have read the debates during the Committee stage in the other place. If they have, they will have seen put forward to Ministers numerous examples of items which could be covered by the wording of paragraph (f).

Just briefly, if a union wants to conduct a campaign against Government cuts in local government which affect their members' employment, does that come within the Act or does it not? It could be argued that this indirectly is an attempt to persuade people not to support the Government but to support another political party. Tenders which the National Health Service is compelled to send out to the private sector may mean members of a union being under-cut by reduced wages and they conduct a campaign drawing attention to this. It could be held that this activity is endeavouring to persuade persons not to support the Government but to support another political party.

When Mr. Clarke, the Minister, was challenged on this on 1st March, at column 1368, he said that if the main purpose is to change policy, that can be legitimately funded from the general fund, but where the subsidiary purpose is to change the Government, or to persuade people to vote against the Government, all expenses directly attributable to that will be illegitimate unless paid for out of the political fund. From that, therefore, it would seem that the Minister saw that there was a difference. Yet earlier he said that it was a matter of degree.

It is because it is a matter of degree that we are putting these particular amendments forward. The position must be made clear, and we should not leave it merely as another item to be settled by the courts, or we shall have practically all trade union activity settled by the courts. I must ask why the Government are changing the wording of the 1913 Act in this respect. What is the purpose of it?

All sorts of bodies campaign before or during an election to draw public attention to issues without necessarily directly calling for votes or calling for support for a particular party. That is held not to transgress the law. Yet under this new wording, a union could find itself in some difficulty unless the items are paid for from the political fund. Trade union journals produced from the general fund will be carrying on campaigns on particular items. What is the position with regard to those campaigns?

I am going to advance a case because there is a case to be put forward. We want to understand what is the Government's case so that we can come back on Report.

The Earl of Gowrie

I am anxious to meet the noble Lord's case.

1.4 a.m.

Lord Underhill

Unless we can argue the case, there is no case to look at when we come back at Report stage. I ask him: where a trade union journal is carrying out a campaign in furtherance of the trade union's principles on a particular item, is that persuading persons to support a particular party or a candidate? If so, does that come from the political fund or from the general fund?

We have to mention this. Some of us remember the campaign carried out by the building construction industry. Some of us remember the Mr. Cube campaign against sugar nationalisation—within the law. Some of us remember the great case of the Tronoh mines, where a newspaper carrying out propaganda to vote Conservative during an election was held to be within the law because it was not appealing for support for any particular candidate or dealing with a particular constituency.

If the Government want to update the law, I suggest that they look at Section 63 of the Representation of the People Act dealing with expenses from outside bodies. That would be proper and legitimate updating. What we have to decide here, mentioned also by my noble friend, relates to the users of our political fund. Those users could find themselves almost forced to conduct ballots to start the political fund or to be very wary of carrying out certain activity. I have read carefully all the Committee stage proceedings in the other place. No clear answers have been given to the questions that I have raised, which could be multiplied time and again. When does a union campaign become legitimate from a general fund? When does it come within the political fund? The words in the amendment make the position clear. The Government should accept it in order to make the position clear.

The Earl of Gowrie

The Government's view is that the insertion of Amendment No. 107 suggested by the noble Lord would upset the delicate balance which has been achieved in the present definition and which, in our view, brings it as near as possible to the meaning of the current definition. In our view, it could push the definition too far in the other direction and could enable trade unions to finance communications which were overtly party political out of their general funds. But it is clear that this is an issue which continues to give noble Lords opposite particular concern. We, in turn, are genuinely concerned not to go further than the 1913 Act definition by restricting trade unions' ability to function properly on behalf of their members. We shall therefore consider what the noble Lord has had to say most carefully, and if we can detect any better way of expressing what is intended, then we shall seek to do so. That is the best I can do for the moment.

Amendment No. 108 can be dealt with more briefly. It would remove the present provision for an objective assessment of what a particular communication seeks to achieve and replace it with an assessment based entirely on the intentions of those who produced the communication. That is designed to create a lot of wrangling before the certification officer and in the courts on the question of motivation. I do not think that that is more satisfactory than the current formulation. I have tried to meet noble Lords opposite to some degree and I hope that with those assurances they will not seek to press the amendment.

Lord Underhill

I am grateful to the noble Earl for agreeing to have a look at the wording of the clause, particularly in the light of Amendment No. 107. We shall look forward to a change coming forward, I hope, at Report stage. The noble Earl referred to upsetting a delicate balance. The certification officer now can consider any complaint made by any person that payments are wrongly made from the general fund. In fact, Ministers have stated clearly a number of occasions when the certification officer has considered matters of this kind. We are concerned that legitimate trade union activity, attacking what a local council or what a government may be doing, will not be made to come within the political fund when it is genuine trade union activity of a compaigning kind.

I am grateful for the reference that the noble Earl has made to Amendment No. 107. I wish that he could have looked at Amendment No. 108 as well, because it is the intention behind the Bill that is the important matter. I shall not however be pressing the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 108 and 109 not moved.]

Lord Wedderburn of Charlton moved Amendment No. 110:

Page 18, leave out lines 14 and 15 and insert— (" (3A) Where a person attends a conference or meeting,

1. (a) which is held by or on behalf of a political party, as a participator in the proceedings whether as a delegate or otherwise; or
2. (b) at which business of a political party is transacted, as a participator in the transaction of that business whether as a delegate or otherwise,")

The noble Lord said: We seem to be approaching, perhaps at the end of the evening, a point where we can get the Government to look again at one or two things. In a brief sentence or two, may I appeal to them to look at this, a minor matter but a genuine drafting problem? It arises in this way. Paragraph (e) of the new definition deals with two things: the holding of meetings or conferences on behalf of a political party—that is the first half—and then other meetings at which the business of a political party is transacted. Quite clearly, those are two different things. In another place the Government inserted their own new subsection, which is now (3A), which I think I would not misdescribe if I said it tries to deal with the problem of observers at a meeting and draws the line at a participator at a meeting. It says that where someone attends a meeting as a delegate, or otherwise as a participator, then the expenditure for him has to come from the political fund. I see that structure, which the Government have now got after one or two amendments in another place; but this amendment suggests that they have not really followed through the logic of their own amendments. It suggests that if participation of a union participant is to be the test at a meeting, then it should surely be split into the two halves of paragraph (e).

If he participates at a meeting held on behalf of a political party, then that should come from the political fund. If he participates at another meeting, it should surely be only if he participates in the political business that the matter should arise. There was the example of the United Kingdom Cane Sugar Refinery Committee lobbyists, which was much discussed in another place. They are a good example of the problem, and I hope the Minister will have a look at this matter in the light of my amendment. I beg to move.

The Earl of Gowrie

The noble Lords, Lord Wedderburn and Lord McCarthy, deserve something for stamina, if nothing else. I congratulate both noble Lords on a splendid effort throughout this long and often quite arduous Committee stage.

I appreciate that the Opposition are concerned that our explanatory subsection is not sufficiently precise. They wish, through this amendment, Amendment No. 110, to spell out, in the case of meetings at which the business of a political party is transacted, that the expenses of participators in those meetings need be paid for out of political funds only if the participation relates to the transaction of that political party business. If the participators are concerned solely with some other business, their expenses should be able to come out of general funds.

I have to say that I am not wholly convinced of the real need for this further degree of precision, but I have listened with interest to the noble Lord's further comments and I would be prepared, without any commitment, to take them away for consideration. I hope that, on that basis, the noble Lord would agree to withdraw this amendment on the present occasion.

Lord Wedderburn of Charlton

In the confident belief that commitment will grow in the noble Earl, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denham

I think we have now reached the point where it is generally agreed that we should break for the evening. I beg to move that the House do now resume.

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

House resumed.

House adjourned at fourteen minutes past one o'clock.