§ 8.37 p.m.
§ Lord McCarthy rose to ask Her Majesty's Government whether the proposals in the draft code of practice on industrial balloting are likely to improve industrial relations, given the failure to separate legal summaries from good practice.
§ The noble Lord said: My Lords, this is clearly the night of the codes. We have had codes on goats, deer and sheep. Now we have a code on trade unionists. One noble Lord mentioned earlier unsuitable additives in these codes. We have some unsuitable additives that we are going to argue about tonight in the draft statutory code of practice on trade union industrial action and balloting. In fact this code treats trade unionists as a kind of combination of goats, deer and sheep. They are as awkward as goats, as simple as sheep and as vulnerable as deer.
§ The Question I ask is whether the proposals are likely to improve industrial relations given their failure to separate law and summaries of law and good practice. I shall be arguing that this code has three main defects. First, it is true that it is a mixture of law and opinion. The summaries of the 1984 and 1987 Acts are alongside advice that is said to be good practice. If you examine it, this advice is contentious and biased; it is a series of alleged good practice that most responsible people in industrial relations such as the Institute of Personnel Management, the Confederation of British Industry and the ACAS Council believe is not helpful at all. They believe that it is far more restrictive than the law and almost impossible to separate from it. For that reason it is more likely to make industrial relations confused than to clarify the situation.
§ Secondly, it creates a position that lawyers call double jeopardy. It is double jeopardy because, if something is in the code, that does not mean that the judges will decide that if you observe the legal parts of the code you are necessarily free from liability. They can decide that, though you have obeyed the legal summaries in the code, you are outside the law because only they will decide whether the law has been observed. The judges will not quote the code if they feel that you are outside the law. You are also liable because this code, unlike codes on goats, sheep, deer and so on, is highly contentious. It extends restrictions on trade union freedom far beyond those in the law itself.
§ The code, like all codes, is something which the courts can take into account. They can take it into account, and if the trade unions are not within the non-legal parts of the code it is possible that they may argue that in some senses the trade unions are outside the law. Can a court take into account those parts of 831 the code, which I intend to specify, which impose restrictions far more severe than the law itself? Can they take them into account and grant an injunctive remedy against the trade union which may not have broken the law but has broken the code? If it has broken the code, has it in some sense, as it has been taken into account, broken the law? We do not know, but we hope that the Minister will tell us.
§ Thirdly, the proposals are counterproductive in terms of good industrial relations because they do not derive from general agreement. Everyone who spoke in the debate on goats, deer and sheep seemed to think that the codes arose out of general agreement on the provisions of this code. In order to establish this I must go through the code. I must reconstruct the code, and in particular the non-legal parts of it, in a series of logical steps. Those logical steps will not be found in the code. Nevertheless, we could begin, first, with contemplating a ballot; secondly, deciding the date for a ballot; thirdly, undertaking a ballot; fourthly, acting on an affirmative result in a ballot; and fifthly, action during a strike.
§ On contemplating a ballot, dozens of recommendations splutter the code. I wish to concentrate on four of the silliest. First, when an established procedure has been exhausted, before taking a ballot invent another procedure. That is what is suggested in paragraph 11. It says that consideration should be given to any other practical means to avoid a failure to agree. Secondly, before having a real ballot, have a phantom ballot. That is what is suggested in paragraph 14. See whether there is sufficient demand among the members to justify a ballot. Do that before you have a ballot. That has been done only once in my experience. It was done by the EEPTU. The answer it received on the phantom ballot was different from the one it received on the ballot. Nevertheless, that is what is recommended.
§ Thirdly, ask the employer whether he thinks a ballot is a good idea. That is what is suggested in paragraph 16. Before a union holds a ballot it should get in contact with all employers likely to be affected by the ballot, give them sufficient time to respond and give their opinions due consideration. Before a union decides to ballot its members on a strike, it must go to the employer and ask, "Do you think it is a good time for us to have a ballot?" Presumably, if the employer says no, the union does not have a ballot at all.
§ Fourthly, do not ballot if you are likely to get the wrong result. That is the clear implication of paragraph 42. It says: do not ballot if the result will be harmful to good industrial relations. As good industrial relations are described throughout the code as avoiding strikes, and as good industrial relations are broken whenever there is a strike, one comes to the inevitable conclusion, "Do not ballot unless you are likely to get a result for peace". If you are likely to get a vote for war, then it is a harmful time to have a ballot so you should not have a ballot at all.
§ This nonsense is criticised not only by the TUC and the opposition. It is criticised in the CBI's submissions to the Government. What is the Government's reply likely to be? The CBI dislikes the 832 notion of the strategic ballot. It believes that the strategic timing of the ballot, in order to get the right answer to a ballot, is the wrong way forward. ACAS agrees. It specifically frowns on the notion of the phantom ballot. It thinks that often the only way to dispel minority demands for a ballot and minority demands for a strike is to allow a union freedom to have a quick, authoritative, formal ballot. It believes that any pre-consultation process, as specified in paragraph 7, is counterproductive. The Institute of Personnel Management says that all this is "gratuitous advice" based on industrial ignorance. That is what these authoritative—centre of the road, one might say—organisations say about the ballot.
§
I should like to pass on to the second step: deciding the date for the ballot. Three particularly foolish proposals are advanced at this point. First, do not ballot until you have a perfect roll—a perfect roll which exactly fits the constituency you are going to ballot. That is what is suggested in paragraph 73. It says that one should allow time for any membership roll to be brought up to date. It should be remembered that the code does not allow, as the 1984 Act allows, for a union to have a roll which is,
so far as is reasonably practical, accurate".
It does not mention that. Does that mean that unless there were a perfect ballot is would not be a lawful ballot? That is what is suggested.
§ I come to the second foolish proposal. In deciding when to have a ballot, wait until you can agree with management—this is probably the single most fantastic suggestion in the document—on a joint statement of the background to the dispute and the reasons for the dispute. Paragraph 59 says that the union should formulate with the employers joint statements on the dispute. If that is not possible management should be allowed to use the union facilities to express its own case in the union's own ballot communications, as though management had no ability to communicate to its own workers its point of view. In their communications on ballots we are putting on unions a general duty to tell the workers what the employers' case is.
§
The third proposal is that the union should wait for the formalities of a full postal ballot in almost all circumstances. Not in all circumstances, because it is particularly important and consistent with the promotion of good industrial relations,
to obtain views sooner than this if this method would not allow it".
§ In other words, if it is good for good industrial relations to get a quick answer because one will get the answer "Do not strike", do not bother with the full postal ballot but have a workplace ballot. Damn the democracy, feel the output. So long as one can get a quick answer for peace, one can ditch the formal postal ballot because to do so is in the interests of good industrial relations.
§ Once again the CBI is sceptical. It does not like the idea of abandoning the postal ballot to get the right result. ACAS ridicules the idea that one should ask employers for agreed statements. It suggests that employers will not want to get involved with questions of this kind. The Institute of Personnel Management says that considerable problems will be involved. It doubts whether one can have a perfect 833 electoral roll. It points to the fact that some unions experience a turnover in membership of one-third to 40 per cent. each year. How could they possibly have perfect ballot rolls? It believes that this is an impractical provision to place on unions. All three of these organisations want to see not just injunctions placed on unions but responsibilities placed on employers as well. One can read this code through from cover to cover and not find a single important responsibility in terms of ballot facilities placed upon employers. All the responsibilities in this ballot are placed upon trade unions.
§
We move on to the actual conduct of a ballot. Here the mixture of law and opinion is at its most marked. This mixture of law and opinion at this stage in the code is what most bothers the serious and considered employer. I make three points at random. First, the injection of a race of outsiders into the calculation of to ballot. Paragraphs 67 to 69 say that we must have independent scrutineers to help count the ballots. A person known to be neutral has to be available at every point in the count. There must also be designated returning officers at every point in the count. ACAS, in its submission to the Government on the code, said:
The Council is not persuaded that trade unions do not themselves usually conduct and supervise ballots in ways which provide for full confidence. It follows that the Council knows of no reason which would justify the requirements for trade, unions invariably to have arrangements for independent scrutiny at every location at which voting in a workplace ballot might take place
§
It doubts whether this would be practical
Paragraph 67 states that the issue of ballot papers in workplace ballots should be entrusted to someone known to be neutral. The Council is very uncertain that this can reasonably be held to be necessary. As framed it is not easy to see what is envisaged as a test for neutrality—someone who is known beyond doubt to have no view whatsoever on the issue. It is also unclear whether employers would need to be satisfied on this point and also perhaps doubtful that they would readily accept people of this description on their premises and afford them such facilities".
§ The fact is that this is a lunatic notion; that trade unions in their balloting processes should be allied with independent scrutineers or persons known to be neutral and designated returning officers. Such people are not available in parliamentary elections. No one insists that the dear old town mayor who participates as the chief returning officer is a neutral; he is simply carrying out his normal duties. However, unions must have neutrals. They must have independent scrutineers and people who apparently have no vote whatsoever.
§ I turn now to the second lunatic idea. The role for these outsiders is not just to supervise the ballot and it is not just to avoid fiddles on the part of the union; it is to ensure an absence of constraint upon voters. You can read the code through from cover to cover, but you will not find the point at which the Government believe that it is appropriate and right for the union executive to campaign in favour of a strike. I ask the Minister: when is that executive allowed to campaign either for a strike or against the strike, or even for an overtime ban or some selective form of industrial action? All we are told is that the independents, the neutrals and the designated reporting officers, and everyone else, will ensure, so far as I can see, that at no stage in the ballot process 834 will the members be constrained by being influenced by the executive in which way they are to vote. That is a negation of trade union leadership. Once the ballot is in being, and once it starts to roll, the executive must be silent, because if it is not it is constraining the members and influencing the outcome. In other words, there is to be no role at all for trade union leadership. Of course that is absolute nonsense.
§ Thirdly, the standards throughout the ballot process are much more severe and much more restricted than anything required in company law, in local elections, in parliamentary elections or indeed in any elections known to me. I have already said that the neutrals must be disfranchised and the returning and counting officers must have no interest in the outcome of the election. Further, there must be sealable envelopes. However, there are no sealable envelopes in parliamentay elections. But in trade union ballots there have to be sealable envelopes which then go into secure locked ballot boxes. They do not use that procedure in Finchley in the general election, so why must trade unions do so in a vote about a strike? There is no reason at all. Moreover, similar complaints about such matters are made by the CBI, by ACAS, by the IPM and by all the other authoritative employers' organisations which have given evidence to the Government.
§ I turn now to the last two areas that I wish to mention; namely, further action if for some reason there is a vote in favour of a strike and what we are to do in the middle of a strike. You will not be surprised to learn that if you get a pro-strike vote under the terms of the code, you invent another procedure. You go to ACAS, you go to the employer and you try anything rather than carry out the mandate of your members.
§ Secondly, if you actually get into the strike if the strike begins—you keep an eye on the size of the majority throughout the strike; that is the size of the majority which you achieved for the strike in the first place. If you have any reason to suppose that that majority has declined, you have another ballot and even if you do not have another ballot you settle anyway. Those two provisions are not surprising.
§ However, what is surprising, what is most critical and what has been most commented upon by the authorities which I have quoted so far is the suggestion which comes at the end of the code. Indeed, it is significant that it should come at the end of the code. The suggestion is this. If you achieve an absolute majority in favour of a strike, you raise the requirements for affirmative action. That is the clear implication of that part of the code. In other words, if you find that you have a majority in favour of a strike, you sit down and think of the kind of majority you require. You then say, "Maybe we don't just need 51 per cent.", and two suggestions are put forward at the end of the code. First, you might say to yourself, "What about requiring a substantial majority, or a very much more substantial majority, rather than the 50 per cent., 55 per cent., or 60 per cent. which we have got." No figure is put on that requirement; the assumption is that it will be a larger majority than the majority you have actually achieved.
835§ Secondly, you say. "What about the size of the turnout?". Let us suppose that the turnout was 30 per cent., 40 per cent. or 45 per cent. You say. "Should we not have a 70 per cent. turnout?" Therefore at that stage, when you have an affirmative majority in favour of a strike, when you have tried to invent another procedure and whenever every other alternative has failed, you change the rules of the game. You say. "What we really need is a substantial majority for action a 70 per cent. turnout".
§
Finally, I quote from the ACAS evidence to the Department of Employment. The council said:
As for paragraphs 97-98, in the Council's experience industrial action is rarely if ever taken when a ballot shows the membership very closely divided, particularly on a low vote
these are not just trade unionists; they are employers on the ACAS council
'it is reasonable to assume that trade unions will always consider carefully the strength or otherwise of support for action before authorising or endorsing it. The Council believes that it would be wholly unreasonable and without useful effect to seek to prescribe in the Code any detail for the tests which a trade union might apply. Consequently, it does not favour the reference to 'a very much more substantial majority' (paragraph 97); very much opposes the arithmetical formulation proposed (paragraph 98); and sees as unnecessary the footnote to paragraph 97".
§ That seems to me to be a pretty serious criticism of the code and a serious criticism not made by myself or by the TUC; it was made by ACAS.
§ I should like to finish by asking the Minister a number of questions. The first is: why do we have such a contentious set of recommendations? In all the other codes of which I am aware—apart from the Government's picketing and closed shop codes, which may be exceptions the aim is to produce a series of recommendations of good practices which good men and women on both sides of industry will agree are the appropriate things to do. Here we have employers, as well as trade unionists, telling the Government that they believe that their recommendations are not good practice but are highly controversial, contentious and counterproductive. Why must we have this kind of recommendation, above all in this code?
§ Secondly, will the Government listen to the advice which they have been receiving and revise the code, basing it on genuine agreement?—for example, on the specific proposals of the Institute of Personnel Management, or those of ACAS for improving the code and taking the contentious parts out of it.
§
Thirdly—a general point—why are the recommendations in the code so much more prescriptive than the law? How can the Government justify the present state of the law and the present state of the code in the light of the answer of that the noble Lord, Lord Skelmersdale, gave to the supplementaty question asked by the noble Lord, Lord Rochester, to a Question asked by my noble friend Lady Turner? He asked about the prescriptive nature of the code, and the noble Lord, Lord Skelmersdale, said:
My Lords, the answer to the second supplementary question put by the noble Lord is: yes, he may certainly take it that the contents of the code will be no more prescriptive than the Act".
§ Does that mean that the Government will take away the code and change it? Was that a 836 commitment, so that nothing in the code will be more prescriptive than the Act; so that, for example, we will see the end of the 70 per cent. rule, because that is more prescriptive than the Act; so that we see them getting rid of the phantom ballot, or does it mean nothing? If it does, why did the noble Lord, Lord Skelmersdale, say what he did?
§ Will the Government—whatever they do with the code—agree with the unanimous opinion, I would say of every employers' association that I know, that the two parts of the code should be separated? That is something different from everything else. The Institute of Personnel Management—and I cannot remember whether it is the CBI or ACAS suggested that the Government should model the code on the health and safety code, where different colours are used so that the law is in one colour and the non-law is in another. Another suggestion was that the Government should put all the law on the left and all the non-law on the right. Even if the Government are not prepared to change the recommendations and practices why should not they separate the practice from the law?
§ 9.2 p.m.
§ Lord RochesterMy Lords, the noble Lord, Lord McCarthy, has so convincingly questioned whether the code of practice in its present form, by failing adequately to distinguish legal requirements from good practice, will improve industrial relations, that I am in danger of being repetitious. It is surely significant however that the four bodies which are best qualified to express an opinion; namely, ACAS, the CBI, the TUC and the Institute of Personnel Management, are unanimously critical of draft code on that point.
In debate in your Lordships' House on legislation affecting employee relations during the past 10 years, and over the lifetime of the previous Labour Government, I have on a number of occasions advocated the use of codes of practice. I accept in principle the desirability of having one on ballots concerning industrial action. I suggest that the draft code should be judged by the standard set by the noble Lord, Lord Young, in 1987 when, as Secretary of State for Employment, he sensibly told ACAS that codes should be brief, written in what he called accessible language and should distinguish clearly beween statutory obligations and the encouragement of good practice.
The code, as the IPM would put it, is too long, with too much gratuitous advice and general guidance mixed with a restatement of the law. ACAS considers, and I am sure that it is right, that the essential distinction between statutory requirements and other matters would be clearer and more certain if the former were set out, as in the 1983 code on the closed shop, in a distinct section at the beginning of the code. In that way, the confusion and inconsistency which arise, for example, in Section D of the code on holding a ballot, where a description of the law is followed by guidance arbitrarily offered about what trade unions should do, could be avoided.
As one who has strongly supported the use of postal ballots in elections for the principal executive 837 committees of trade unions, I believe that in dealing with ballots on industrial action the draft code goes much too far in seeking to restrict the discretion given to unions by statute to choose between workplace and postal ballots in determining the voting method.
That failing seems to stem from concentrating excessively on situations where there is a possibility of a national strike involving all union members, whereas in reality most strike ballots are likely to be of a much smaller scale, demanding a more flexible approach. The great danger here of course is that unions might he discouraged from conducting lawful ballots by the additional burdens and uncertainty imposed upon them by the code.
It is significant that that view is shared by the Engineering Employers' Federation, which must have more experience of local unofficial action than almost any other body. Paragraphs 10 and 11 of the draft code properly advocate that disputes should, wherever possible, be avoided through negotiations and the observance of agreed procedures. I have before now gone so far as to express the hope to your Lordships that there might one day be a code of practice which would provide for model negotiating agreements and lead eventually to a situation where action taken in breach of such agreements, whether by employers or trade unions, would no longer enjoy legal immunity. But that time has not yet come, and along with ACAS I fear that as the paragraphs are now drafted they could provide a basis for tribunals and the courts to determine whether procedure agreements had been followed and exhausted or whether, for some reason, they were unavailable.
In the absence of procedure agreements that are legally binding on employers and trade unions, it would surely be an extraordinary development if a code were now to provide a basis for judicial decisions on their observance.
There are other areas where in my view the code is weighted much too heavily against trade unions. I speak here as one who for a good many years negotiated on behalf of a large employer. These burdens on unions even extend to what appear to be drafting devices in the code involving the use of words in inverted commas. For example, do words like "neutral" and "official", when placed within inverted commas, mean in the one case "less than truly neutral" and in the other "not quite official"? Are the asterisks which appear before certain subheadings intended to emphasise their importance in the subjective judgment of the Government alone? Otherwise, what is the point of them?
I reaffirm my strong belief that any legislation designed to improve industrial relations must strike a fair balance between the interests of employers and those of employees and their representatives. If there is not that balance, then the legislation will simply become inoperable.
Paragraphs 39 to 41 of the draft code call for adequate arrangements for the independent scrutiny of ballots. Given that the law says nothing about the need for such scrutiny these paragraphs as they stand appear contrary to the assurance I was given in the Answer to a Question which I asked in the House on 838 30th January last, as the noble Lord, Lord McCarthy, has already said. The Question was to the effect that the code would not be more prescriptive than the law itself.
The noble Lord, Lord McCarthy, also mentioned that ACAS clearly considers that since unions usually conduct and supervise ballots satisfactorily, there is no justification for the pronouncement in paragraph 66 of the code that arrangements for independent scrutiny should be made at every location where a workplace ballot might be held. In any case ACAS doubts whether that would be practicable. Similarly, the advice at the end of paragraph 48, that it would be good practice to present the boxes for the recording of votes in the same horizontal line on the ballot paper and subsequently that the "no" box should precede the "yes" box, is both unjustified and contrary to normal speech and practice, which provide for assent to take precedence over dissent.
However, perhaps the most flagrant instance of standards being set in the draft code which are in no way derived from the law on which they are based occurs in paragraphs 97 and 98. It is suggested there that a majority in favour of industrial action of at least 70 per cent. of those voting, rather than a simple majority, constitutes good practice. As the noble Lord, Lord McCarthy, has said in quoting the view of ACAS, the fact is that industrial action is rarely if ever taken when a ballot shows that union members are closely divided on a question, particularly where there is a low vote. These paragraphs are therefore both lacking in legal validity and pointless in themselves.
There is much more that can be said in the same vein. In the last 10 years of Conservative government I cannot recall another instance where the views of industrial relations practitioners have been so much at variance with the proposals of the Government. The procedural position—and the noble Lord, Lord Northfield, had something to say about this when we were discussing an earlier draft code—is that when eventually the draft code is formally placed before Parliament, it must be accepted or rejected as a whole. It will not then be open to us to approve certain parts and to reject others. In the interests of building on the now widespread practice of trade unions properly balloting their members on questions concerning industrial action, I therefore urge the Government to have the good sense to withdraw the present draft code altogether so that in due course they can bring before us another which takes adequate account of the adverse response to this one which they have received from all quarters.
§ 9.12 p.m.
§ Baroness Turner of CamdenMy Lords, I welcome the opportunity even at this late hour to debate in your Lordships' House the draft code on industrial action balloting introduced by the Unstarred Question put down by my noble friend Lord McCarthy. As has already been said, on 30th January I myself put down a Question. The Minister said, in response to the noble Lord, Lord Rochester, that it was not intended that the contents of the code should be more prescriptive than the legislation itself. 839 However, as we have heard this evening, that is not how a number of other bodies with specialist knowledge see it.
It is not the view of the TUC nor that of ACAS, which clearly thinks that the Government have gone too far. The views of ACAS have been very fully explained to your Lordships by my noble friend Lord McCarthy. The TUC has identified about 26 steps which a union would have to take under the code to be sure of retaining its immunity from legal action, should it call a dispute. I understand it has been claimed that the code is necessary because—I quote from the press handout issued at the time
British trade unions have all too often seen industrial action as a weapon of first resort.That is a wildly inaccurate statement, as I can attest from my own experience. In the code unions are advised to exhaust all procedures first. However, it is customary to do that any way. In my union, if I wanted authority from my executive to run a dispute, the first question I asked was whether all procedures had been exhausted. The second question concerned the likely level of support among the members. Those steps are a normal part of industrial relations practice. I question why it is necessary to write this into a lengthy and confusing code.On the other hand, I have known employers break procedures, but there is nothing about that in the code. There is no obligation upon employers to play by the rules, but the rules are written into the code for unions. Then we are told that a ballot should not be organised on industrial action if its real purpose is something different; for example, to obtain members' views about their union's negotiating position, or about an offer made by an employer. I fail to understand what that is about. That again is extremely confusing. It is quite normal to ballot members, indicating what the latest offer is and what the union's negotiating stance has been, and to state that, as no further progress can be made, members are being balloted on industrial action. Again, that is normal.
Furthermore, it is stated that where a ballot is contemplated the union should inform any employer whose employees may be given an entitlement to vote, of its intention to hold the ballot. Sufficient time is to be allowed for any response which the employer may wish to make. Again, this normally happens anyway. The employer would be well aware of the intention to ballot, following a breakdown in negotiations.
Then procedures are set out as regards preparing for a ballot. These have been referred to already by the noble Lord, Lord McCarthy. It is stated that entitlement to vote must be given to all members who are required by law to be given that entitlement. The balloting constituency is to be reviewed to decide whether and to what extent separate places of work ballots are needed. An appropriate voting method is to be adopted and voting papers produced in a prescribed form.
Furthermore, as we have already heard, a union is expected to take into account good industrial relations practice in the timing of the ballot and make appropriate arrangements for independent scrutiny 840 of the ballot. Again an employer is not advised to take account of good industrial relations practice or good industrial relations feelings in his negotiations with the union. Surely the timing of the ballot is a matter for the union. As for independent scrutineers, that is simply adding to the expense. It has already been said that there is little evidence that elected scrutineers within unions have failed in their duties in the past. There really is no reason to believe that they cannot be relied upon.
Moreover, if there is no real feeling for dispute action, it would be a very foolish official who attempted to fake the result. The dispute would in all probability soon collapse, with much graver problems for the union than if it had carried out the ballot properly in the first place and abided by the result. A Government who are so keen on deregulation in other spheres seem very keen indeed to deny that right to unions on very little evidence.
Then there are the provisions about those who must have a vote and those who should not. It is perfectly proper to say that democratic principles must be followed in balloting. No one would disagree with that; indeed, the rules of most unions would insist upon that anyway. But it is also as well to remember that union memberships often consist of shifting populations. A new member may not yet be on the register. Others may have left the employer concerned and thus the balloting constituency.
Moreover, a number of unions organised around workplaces have had great difficulty in obtaining home addresses from some members. Surely in such circumstances all that a union can be expected to do is its honest best to ensure that those entitled to ballot get the opportunity to do so. As written, the code would appear to give individuals a basis for challenging the ballot, even though all reasonable steps have been taken.
Then there is the provision about balloting members at different places of work. The main point apparently concerns whether or not the employees concerned have a "common distinguishing factor". Section 17 of the Act is difficult and complex. We said that when that legislation was before your Lordships' House last year. Presumably the code is an attempt at clarification. However, all it seems to be saying is that unions and employers should consult about it. But although it is suggested that employers might consider providing facilities for a ballot, that is simply a suggestion. There is to be no compulsion upon employers to do anything of the kind. Then, of course, there is the clear government preference for postal voting, although a much bigger degree of participation is found, in my experience, where workplace balloting occurs. That also produces a much speedier result.
Reference has already been made to the very strange stricture than unions should not commence a ballot at a time when the ballot itself could be harmful to industrial relations. What on earth is all that about? The union is expected to be sensitive to the chance of resolving the issue through negotiation again the whole onus is put on the union. The code appears to have been written on the assumption that unions do not really want negotiated 841 settlements; but as I indicated earlier, that is what union officials are normally employed to obtain.
Do the Government envisage situations in which employers may act unreasonably? That provision in the code will give employers a chance to prevaricate, to indicate that there may be a possibility of a settlement when there is none. There is also the requirement in the Act that members must be told that taking part in a strike or other industrial action could breach contracts of employment.
During the passage of the Bill through your Lordships' House we on this side of the House constantly told the Government that this did not have to be an immutable law; it could be changed.
The contract would simply be regarded as suspended during the period of an official dispute. However, we did not succeed in persuading the Government to change their mind, and so this requirement is contained in the code. It is of course intended to put off people who might otherwise be keen to join a collective fight for their rights.
It is further suggested that the union might agree a description of the reasons for the ballot—to be issued to members—with the relevant employer, or if a description cannot be agreed, give the employer an opportunity to supply employees entitled to vote with his own description of the background along with any such information issued by the union. Like the noble Lord, Lord McCarthy, I find that quite extraordinary.
Is it really believed that an employer would not have had access to his own employees and made full use of that access during the events leading up to the ballot? That has not been my experience. In my experience, during the course of negotiations it was quite common for employees to find pieces of paper on their desks every other day, and perhaps more frequently, from the employer setting out the management's point of view. It is now suggested that the employer should have a union channel as well. That strikes me as ludicrous. Why not give the union facilities to circularise the shareholders, such facilities to be provided by the management?
Then there is the proviso that the union should ensure that all its members, officials, and others who might even by accident interfere with or constrain those entitled to vote in an industrial action ballot are aware of the potential consequences of their behaviour. However, for many years it has been customary for unions to hold meetings of members to discuss the progress of negotiations, including offers by employers and the like. Officials may attend and say that in their opinion, procedures having been exhausted, there is no alternative but to take industrial action. Such meetings will often precede a ballot. Is that putting a constraint upon members?
Again, members must be able to vote at no cost to themselves. If there is a workplace ballot, arrangements must be made for voters to pick up their ballot papers and vote outside working hours so that they do not risk losing pay. Why should the employer not make facilities available, at no cost to the employee?
842 After the ballot the union is expected again to consider the situation. All options must be considered, as if they had not been considered before. Changes in circumstances, the possibility of consulting ACAS again, the possible consequences for members and so on, must be considered. All that does is to build in further delays, and generally that will assist employers rather than the union and its members.
While the code states that statutory requirements will be satisfied if a simple majority of those voting are in favour, it is felt that that may not be fully representative. Unions must consider whether they would be justified in authorising action unless the number of those voting represented at least 70 per cent. of those entitled to vote. Both the noble Lord, Lord McCarthy, and the noble Lord, Lord Rochester, have poured scorn on that provision. In my opinion it is absurd.
Compare that with the rules for opting-out ballots under the Housing Act under which those not voting are deemed to support the proposal and housing estates can be transferred to private landlords on the basis of the support of a minority. Clearly unions are wise to take account of the turnout in a ballot. That was one of the questions which my national executive council would consider in advance of authorising dispute action when I was an official. But why should there be different standards for unions set out in a code—a code, moreover, of which courts can take account? It is noticeable that the code refers to ACAS and conciliation, but the Government do not appear to like arbitration very much. The role of the Central Arbitration Committee has been constantly eroded. It has been written out of successive pieces of legislation. Perhaps that is because unions can sometimes win before a panel of independent assessors and basically the Government would prefer that employers were able to exploit employees without let or hindrance except that provided by the market.
I believe that the real intention of this code is to erect so many hurdles in the way of unions that it will become increasingly difficult for unions to retain immunity when calling industrial action. One result is bound to be that there may be more unofficial disputes than we have had of late. If there are grievances and dissatisfactions and if employees are unhappy about salaries and conditions, it is not possible to keep the lid screwed down for an indefinite period. The code attempts to do that and it will not succeed. The Government should heed the advice of ACAS and their other specialist advisers and think again. I agree with the noble Lords, Lord McCarthy and Lord Rochester, that the Government should take away this code, rethink it and then present something entirely different.
§ 9.26 p.m.
§ Lord TrefgarneMy Lords, I have listened with great interest to what has been said tonight by the noble Lords and the noble Baroness.
We should now refer to the published draft code in the past tense. The three-month period of consultation on the draft code ended earlier this 843 month. My right honourable friend is now considering whether to seek approval of a further draft. Such a draft may very possibly be revised in the light of representations made on the published version.
I should emphasise the Government have been engaged in a very genuine consultation exercise. Some 50 representations on the published draft code have been received. I know that my right honourable friend welcomes the constructive criticisms and helpful suggestions for its revision that have been made.
The Question of the noble Lord, Lord McCarthy, refers to
the proposals in the draft code of practiceand asks whether theyare likely to improve industrial relations".The Government accept completely that ballots on industrial action can have profound implications for industrial relations. That is one reason employers have a proper interest in both the relevant primary legislation and the terms of any statutory code.Nonetheless, it is ultimately up to a union to decide whether to hold such ballot. It is, accordingly, up to a union to see that any such ballot is properly conducted and satisfies the relevant statutory requirements. I venture to suggest to your Lordships, therefore, that it is at least equally important, and perhaps even more important, to ask whether the content of the draft code—or any particular part of it would or would not tend to promote desirable practices in relation to the conduct of the ballots with which it is concerned.
It seems to me that there are relevant questions to ask about any particular recommendations about good practice in such a code. First, would this principle or procedure be a good practice which, if followed, would tend to ensure that union members could be better assured of their right to a proper ballot? Secondly, would this principle or procedure be helpful to good industrial relations, which I take to be the avoidance so far as practicable of the breakdown in those relations which a strike or industrial action represents? By these tests I am not wholly convinced that the noble Lord, Lord McCarthy, has shown that the draft code was fundamentally on the wrong lines.
It has been argued that the aim of the draft code was to encourage legal proceedings against trade unions. I am not sure whether the noble Lord, Lord McCarthy, put it in exactly those terms, but I have a feeling that that was in the back of his mind. I can assure your Lordships that it was not the intention of the draft code to produce a greater volume of legal action against trade unions than might otherwise occur.
I want to emphasis e that the draft code would not—and such a statutory code could not add a single ground for legal action to what the law already contains. No one is or will be able to bring legal proceedings against a union solely on the basis that it has failed to observe good practice as recommended in such a code.
844 The Government have confidence that the courts would see off any attempt to seek an injunction against a union if that was sought without a sufficient basis in terms of a perceived failure to meet one or more of the requirements already in primary legislation.
§ Lord McCarthyMy Lords, if that is the case, will the noble Lord tell me the point of saying that the code will "be taken into account by the courts"? If it cannot give rise to liability, why take it into account?
§ Lord TrefgarneMy Lords, I have made it clear that quite a lot of the code represents the statute. The noble Lord has criticised the fact that the code contains a mixture of statute and recommendations that are not derived directly from the statute. Clearly in those terms the document is of interest to the courts.
The judges will continue, as they do at present, to weigh the balance of convenience carefully before granting any application for an injunction on an ex parte basis.
Some of your Lordships have suggested and I have certainly heard it said elsewhere that the aim of the draft code was to prevent votes in favour of industrial action. However, industrial action, or even the threat of industrial action, can cause great damage to business and employment. It should always be the last resort, and avoided wherever possible.
I was reassured by what the noble Baroness, Lady Turner, had to say about that. I am sure that that was the case with regard to the trade union with which she was concerned. However, I am afraid that it has not always been the case in the history of industrial relations in the past.
That said, I reject entirely the claim that the purpose of the draft code was to prevent votes in favour of industrial action. If industrial action is in prospect, however, it is much better for union members to have the opportunity to vote on the matter in a properly conducted secret ballot. The aim of such a code is therefore to help ensure that balloting is carried out properly and meets sufficient democratic standards.
It has been argued that the draft code would increase unofficial or unballoted industrial action. That argument is, however, an unfounded presumption, I would suggest. The same criticism was directed at various legislative steps the Government have previously taken. It certainly has not been the case as the result of them.
A union which is not prepared to follow the requirements of the law will put itself at risk of legal proceedings being brought against it by an employer or a member. It is right and proper that it should be at risk in those circumstances.
Unofficial action is not a significant problem at the moment. Nor do I believe that the recommendations on good practice in the draft code would have provoked it.
Again it has been said that the main effect of the draft code would be to add significantly to what has been called "the burdens" on trade unions. 845 "Burdens" is not a term I myself would choose to describe statutory requirements ensuring that proper democratic procedures are followed. But there are no new requirements in the draft code. A statutory code of practice cannot, as I have already said, add a single ground for legal action to what the law already contains. No one will be able to bring proceedings against a union solely on the basis that it has failed to observe good practice as recommended in a code.
It is misleading to imply that to follow the relevant recommendations on good practice in the draft code a union would have had to take account of all those recommendations in every ballot. Those applicable to workplace balloting, for example, would clearly be irrelevant if postal balloting was chosen.
Nor would many unions in practice have to do something different from what they would otherwise do. Descriptions of good practice in the draft code are usually little more than the application of common sense. Often—and this could often he very helpful to unions they remove doubt about what practices and procedures will help ensure that the requirements of the law are satisfied.
The noble Lord, Lord McCarthy, criticises the lack of distinction in the draft code between what he calls "legal summonses" and good practice and suggests that the code should make clear exactly which passages relate to which aspect.
The essential purpose of the draft code, as I have already said, is to promote good practice. The published draft attempted to make a distinction between its passages restating the current law and others by expressing the former in terms of what a union must or must not do. I accept, however, that there may be scope for making the distinction rather clearer and I noted the suggestions that the noble Lord made to achieve that.
I am sure that my right honourable friend will note what the noble Lord and others have said about this. It will remain important, however, that presentational changes which might be made to the published draft code cannot be taken to imply that some of its recommendations on good practice are more significant or important than others. This would, I believe, be a false distinction in this instance. Again, it has been argued that the draft code should 846 not be expressed in terms of what a union should or should not do and it has been suggested that the language used in the draft code was too prescriptive when it was describing good practice.
Passages in the draft code expressed in terms of what a union should or should not provide guidance on steps to be taken if the union wants to be sure that it stays within the law where there might otherwise be doubt or describe what is for other reasons desirable good practice. Bearing in mind that the aim of the code is to "promote desirable practices" an element of prescription in suggesting what such practices might be is, I believe, entirely consistent with that aim.
Your Lordships will recall that at various points the draft code recommended that a union "should consider" certain procedures or aspects of the balloting process. The Government did not consider that recommendations expressed in such terms are unduly prescriptive. Again, it has been argued that the code should construct its recommendations on good practice to make clear that different procedures could amount to such practice in different circumstances. The draft code recognised this fact. I am sure, however, that my right honourable friend will be giving careful consideration to suggestions for improving the draft code in this respect in so far as this can be done in a way which is consistent with its aim and intention.
The points about the draft code which your Lordships have made have been very helpful, and I am sure that my right honourable friend will want to take account of them in deciding what further steps he may take. While I cannot of course make any firm prediction, I would be surprised if there is not some revision of the published draft before any re-issued version is put to your Lordships.
I am conscious that I have only touched on many of the points that have been raised during the course of the discussion this evening. I promise faithfully to study the lines in Hansard very carefully and to write to any noble Lord or to the noble Baroness with any clarification I can give on the points they have raised this evening.
§ House adjourned at twenty-two minutes before ten o'clock.