Employment Bill

HL Deb 23 July 1990 vol 521 cc1223-55

5.10 p.m.

Report received.

Baroness Turner moved Amendment No. 1: After Clause 1, insert the following new clause: ("Access to individual records .—Where a person or an organisation provides information to an employer which relates to the activities or the past or prospective activities, of another person on behalf of an independent trade union within the meaning of section 23 of the Employment Protection (Consolidation) Act 1978 (in this section known as a "blacklist") that person or organisation must provide access to the individual records of such activities (whether manual or computerised) held on that person. Should access be denied, the individual may make application to the Industrial Tribunal for an order enforcing the right of access.").

The noble Baroness said: My Lords, in Committee I moved an amendment which unfortunately did not commend itself to the Chamber. I sought to render illegal activities involved in preparing secret blacklists from which information is supplied to employers. Often the result is that people are debarred from employment for which they would otherwise be qualified, on the basis of secret information to which they have had no access. I now return with another and more modest amendment.

In Committee I referred to the activities of the Economic League which I described as a sinister organisation. I still hold to that view. We know the league keeps records of individuals. It admitted as much through its representatives when they met the Employment Select Committee in another place. In Committee I referred at col. 163 of Hansard of 10th July to the exchange which then took place. The records in question are manual and are therefore not covered by the Data Protection Act. Furthermore, it is clear from the information contained in the "World in Action" programme on the league that much of the information is inaccurate. Some of it comes from the tabloid press and some probably from informers.

The league has a network of informers. According to research into the league which was undertaken by the producers of the "World in Action" programme, such an informer existed for a number of years in my own union, ASTMS. He apparently told a number of organisations that he was a full-time official of my union. However, he was nothing of the kind, but he was elected as minute secretary to a divisional council—that is a lay office—and in that position he was able to make a record of all who attended meetings and what they had to say. He also had access to all correspondence read at the meetings. One wonders what kind of information he fed to the league.

The league has never denied that it infiltrates unions in this way, and indeed other organisations such as the anti-apartheid movement, as apparently hostility to apartheid constitutes enough of a reason to be included on the league's files. A former director of the league has said that the registers and lists are unreliable and inaccurate. According to that former director, a league list which was in use in the North-West contained over 6,000 names and entries that went back more than 40 years. It would appear that some people get listed simply for writing to a local newspaper. One personnel director who was interviewed and who had had dealings with the league said: The trouble is that individuals never know whether they are on a blacklist or not … once a person is on one of their lists it may be very difficult for him to get another job. My complaint is that they're often inefficient and inaccurate".

The league has of course argued that individuals can take appropriate action if it is felt that the information on them is inaccurate. However, the individual may not know that he is on such a record. Even if he does, the only remedy, if the information is libellous and inaccurate, is in the courts. That is an expensive remedy, and one which is beyond the reach of most working people.

I still believe that the activities of bodies such as the league should be rendered illegal. It is surely immoral to debar people from earning a living through the use of secret information which may well be inaccurate and malicious. It is commendable that a number of leading companies and organisations have decided that they want nothing further to do with the league. The league would appear to be losing support. The publi[...]ity to which it has recently been exposed may well have had the effect of reducing the number of contributors. I sincerely hope that that is the case. However, there are still numbers of firms that are using the league and it is unlikely that they employ people who are regarded by the league as subversive, however inaccurate that opinion may be. If they took no notice of the information supplied, there would be little point in subscribing to the league.

As I said in Committee, neither the CBI nor the Institute of Personnel Management favour the league. It should however at least be possible for people who believe they are on the league's records to have access to that information. After all, we are becoming a much more open society. The Access to Health Records Bill has just appeared before the House where it won support from all sides. It might be possible to achieve what I propose by amending the Data Protection Act so that it included manual records. I believe, however, that what is proposed in this amendment is really the better way, as we are not concerned with manual records in general but simply with those that are kept on individuals for the purpose of supplying information to employers in job appointment situations. If there is access, individuals will have some means of putting things right. There has to be a means of enforcing access if it is denied. Hence the reference in the amendment to an industrial tribunal should enforcement become necessary. Finally, this matter has nothing to do with ordinary job references. That is not what we are concerned with here. I hope the wording of the amendment makes that absolutely clear. I beg to move.

5.15 p.m.

Lord Campbell of Alloway

My Lords, as the noble Baroness has said, the problem of blacklisting arose in Committee. I sought then to point out that a piecemeal approach in this Bill would hardly be appropriate. As the noble Baroness said, we may have to amend the Data Protection Act. I accept that we may well have to amend that Act. However, I respectfully suggest that we should not amend it by a piecemeal approach in this Bill.

There are also specific objections to the amendment. First, the proposed new clause would extend the Data Protection Act beyond computerised data, to indude manual data without any provision for the statutory regulatory structure which would be requited, and which would not be the same as the kind of structure which is required for computerised records.

Secondly, as the noble Baroness has said, access has been extended to manual records in certain types of case, such as medical records, school records and local authority housing records. However, those matters are not analogous. They are not concerned with blacklisting of the type with which this amendment purports to deal. This amendment purports to deal with records held by employers on their past, present, and as I understand it, prospective employees.

It is understood that the activities of the Economic League are under serious investigation at this moment by a House of Commons Select Committee. If that is correct, I suggest with respect that it would be premature to seek to deal with this matter in this Bill today for those reasons.

Lord Renton

My Lords, I must apologise to the noble Baroness as I missed her speech. However, I have a query on the way in which this amendment is drafted. It states in the penultimate line of its first paragraph: that person or organisation must provide access to the individual records of such activities". It does not state that access must be provided to an individual. The question arises: to whom must access be provided? As the amendment reads at the moment, it could mean that access to individual records must be provided to anyone. I am sure that that is not the intention of the noble Baroness. I should have thought that the application of this amendment would in any event have to be restricted by writing something into it to show exactly to whom access was to be provided.

Lord Rochester

My Lords, as the noble Baroness said, the amendment aims to bring into the open the covert activities of the Economic League, an organisation for which, from earlier experience, I have precious little respect. Particularly suspect is the way in which the records of the organisation are compiled manually and thus escape the scrutiny to which, if they were computerised, they would be subject under the Data Protection Act.

The amendment seeks to expose only those individual records which relate to union activities and thus come within the scope of the Bill. It is clearly designed also to leave untouched confidential references which a prospective employer may receive from a past employer giving factual information of a more general kind about a potential recruit. In that respect it meets the criticism which the noble Lord, Lord Strathclyde, understandably directed at an earlier amendment on the same subject in Committee.

Independent researchers and former members of the staff of the Economic League alike have found its records of people categorised as political activists to be chaotic and inaccurate. The Employment Committee of another place considered that legislation might be needed to deal with the matter. The amendment provides a means of doing just that.

Perhaps there is room for improvement in the drafting of the amendment. It must be acknowledged, as the noble Lord, Lord Campbell of Alloway, pointed out, that it lacks a statutory regulatory structure. The noble Lord, Lord Renton, made a somewhat similar criticism. If those were the only defects I am sure that they are matters that could easily be put right at Third Reading of the Bill later this week. The underlying principle is clear enough and I support it.

Lord Strathclyde

My Lords, it is clear from the debate that this new clause represents another attempt by the Opposition to deal with what they refer to as the abuses of Economic League blacklists. I make no apology for repeating what I said in Committee. The Government believe that an employer should be free, if he chooses to do so, to use the services of organisations which compile information that may be helpful to him in selecting suitable persons for employment. I take no view either way on the Economic League when I say that. It is a simple, basic principle.

However, when such information is put to use, Clauses 1 to 3 of the present Bill ensure that an employer will in future be acting unlawfully if he refuses any person employment for reasons of union membership or non-membership. However, I must also repeat that, subject to those provisions, we believe that an employer should be entirely free to refuse to take on a job applicant whose previous activities, whether or not in a trade union context, he considers unacceptable.

I accept that the new clause is concerned with access to records and would not prevent an employer from obtaining information about a job applicant's activities. Nor would it prevent him from refusing to employ an individual who had undertaken activities of which he disapproved.

I do not wish to make too much of the drafting of the new clause, but I hope that the noble Baroness will accept that I had some difficulty deciding before this debate exactly what she intended. For example, as my noble friend Lord Renton pointed out it is not made clear what is meant by "access", and whether or not it is necessary that there should be a request for such access. Nor is it clear whether access to the individual records is to be provided to the employer, to the job applicant or to the public at large. Indeed, there is no suggestion that the new clause is concerned solely with job applicants.

Leaving aside any question of detailed wording, it is apparent that the noble Baroness is seeking to give individuals who have had information provided about their trade union activities by organisations such as the Economic League the right to see the records of such activities which those organisations hold on them. I am not here to defend the Economic League—indeed, at present I hold no view either way—but I understand that it has on numerous occasions stated that it is quite happy to provide individuals, on request, with copies of any information relating to their trade union membership or activities and to put right any inaccurate information which it may hold.

I am also aware of the concern shared by some on both sides of your Lordships' House, and in another place, about the secrecy of operation and the level of accuracy of information held and supplied by organisations such as the Economic League. Indeed, I am aware that, as my noble friend Lord Campbell of Alloway correctly pointed out, the Select Committee on Employment in another place is currently investigating and considering the activities of the Economic League. I can assure the noble Baroness that the Government will naturally look with interest at the committee's report in due course. However, I do not believe that a case has been made for the introduction of the wide-ranging right of access which the new clause contains.

As your Lordships will be aware, except for certain payroll and medical details, employers' records which are computerised are covered by the Data Protection Act 1984 in the same way as other computerised records. I am aware that some noble Lords believe that the Act should be generally extended to cover manual records, but that is not an issue which can arise on this Bill.

The debate today has once again indicated that the main concern of the Opposition is with the activities of the Economic League, but the new clause would have a far wider impact. It would apply to any person who provides information to an employer about an applicant's union activities. It would apply to any employer who gives a confidential reference to another employer which contains any factual statement about an act that may be a trade union activity covered by the clause. It would apply to individuals, businesses and organisations of any kind and would not be restricted to information which the employer had solicited. Nor must it have been given at any particular time, for example at or near the time of an interview.

In all those cases, whether or not the information provider knew—or even intended—that the employer should act on the information, the information provider is required to throw open all his records on the union activities of the individual concerned. The noble Baroness must know that the Government cannot possibly support such a proposal.

Baroness Turner of Camden

My Lords, I am a little disappointed but not surprised by the response from the Government. Much of it was not directed at the amendment but at different cases altogether. The amendment is concerned with a rather narrow point. It is not concerned with the activities of the Economic League which are currently under investigation in another place. The outcome of that, for all we know, may be legislative provisions far more sweeping than what the amendment suggests. All we propose in the amendment is that if secret records are kept on people those people should have access to them.

We are, as I said in moving the amendment, becoming a very much more open society. We have the Access to Health Records Bill. It is widely accepted now that there should be access to housing, and local government records and those covering a variety of spheres as a matter of civil liberty. There seems even more reason to have access to records when one's very livelihood can be at stake than to medical records, important though that is.

I do not accept that there is anything wrong with the proposal in principle. I believe that it is a highly commendable approach to say that people should have access to secret records that are kept on them. Records should cease to be secret in that sense: they should be accessible to the individual concerned.

I note what the noble Lord, Lord Renton, had to say about the drafting of the amendment. I have tried to deal with that point by making clear that it is the individual who may make application to the industrial tribunal to enforce the right of access. Even if there are problems with the wording of the amendment—and I make no great claims for it—nevertheless I believe that the principle is of such importance that it ought to be considered and voted on by your Lordships' House. I therefore intend to ask your Lordships to do precisely that.

5.29 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 74; Not-Contents, 119.

Division No. 2
CONTENTS
Addington, L.	Kilbracken, L.
Birk, B	Leatherland, L.
Blackstone, B.	Listowel, E.
Bonha[...]-Carter, L.	Llewelyn-Davies of Hastoe, B.
Boston of Faversham, L.	Lloyd of Kilgerran, L.
Bottomley, L.	Lockwood, B.
Bruce of Donington, L.	Longford, E.
Carmic[...]ael of Kelvingrove, L.	Lovell-Davis, L.
Carter, L.	McCarthy, L.
Cledwyn of Penrhos, L.	McNair, L.
Cocks of Hartcliffe, L.	Mason of Barnsley, L.
David, B.	Milner of Leeds, L.
Davies of Penrhys, L.	Molloy, L.
Dean of Beswick, L.	Morris of Castle Morris, L.
Dormand of Easington, L.	Mulley, L.
Ennals, L.	Murray of Epping Forest, L.
Ewart-Biggs, B.	Nicol, B.
Falkland, V. [Teller.]	Ogmore, L.
Foot, L.	Oram, L.
Gallacher, L.	Peston, L.
Galpe[...], L.	Phillips, B.
Graham of Edmonton, L.	Pitt of Hampstead, L.
[Teller.]	Prys-Davies, L.
Grey, [...].	Rochester, L.
Grimond, L.	Serota, B.
Hampton, L.	Shackleton, L.
Harris of Greenwich, L.	Shepherd, L.
Hatch of Lusby, L.	Stedman, B.
Hirshfield, L.	Stoddart of Swindon, L.
Holliscf Heigham, B.	Strabolgi, L.
Houghton of Sowerby, L.	Taylor of Blackburn, L.
Howie of Troon, L.	Thomson of Monifieth, L.
Hughes L.	Tordoff, L.
Jay, L.	Turner of Camden, B.
Jeger, [...].	Underhill, L.
Jenkins of Hillhead, L.	Wedderburn of Charlton, L.
Jenkins of Putney, L.	Williams of Elvel, L.
John-Mackie, L.

NOT-CONTENTS
Allerton, L.	Brigstocke, B.
Ampthill, L.	Brougham and Vaux, L.
Arran, E.	Butterworth, L.
Atholl, D.	Caldecote, V.
Auckland, L.	Campbell of Alloway, L.
Balfour. E.	Campbell of Croy, L.
Belhaven and Stenton, L.	Carlisle of Bucklow, L.
Beloff, L..	Carnegy of Lour, B.
Belstead, L.	Carnock, L.
Bessborough, E.	Cavendish of Furness, L.
Blatch, B.	Clanwilliam, E.
Blyth, L.	Colwyn, L.
Boardman, L.	Cox, B.
Borthwick, L.	Cullen of Ashbourne, L.
Boyd-Carpenter, L.	Davidson, V. [Teller.]
Brabazon of Tara, L.	Denham, L. [Teller.]

Derwent, L.	Napier and Ettrick, L.
Eccles of Moulton, B.	Nelson, E.
Elles, B.	Norfolk, D.
Elliot of Harwood, B.	Nugent of Guildford, L.
Faithfull, B.	O'Hagan, L.
Ferrers, E.	Onslow, E.
Flather, B.	Orkney, E.
Fraser of Kilmorack, L.	Orr-Ewing, L.
Geddes, L.	Oxfuird, V.
Glenarthur, L.	Pearson of Rannoch, L.
Granville of Eye, L.	Pender, L.
Gray of Contin, L.	Peyton of Yeovil, L.
Greenway, L.	Plummer of St. Marylebone, L.
Gridley, L.	Reay, L.
Halsbury, E.	Redesdale, L.
Harmar-Nicholls, L.	Renton, L.
Henley, L.	Rippon of Hexham, L.
Hesketh, L.	Robertson of Oakridge, L.
Hives, L.	Rodney, L.
Holderness, L.	Romney, E.
Hooper, B.	St. Davids, V.
Howe, E.	Sanderson of Bowden, L.
Hylton-Foster, B.	Seebohm, L.
Johnston of Rockport, L.	Shannon, E.
Joseph, L.	Sharpies, B.
Kimball, L.	Skelmersdale, L.
Kinnoull, E.	Slim, V.
Kitchener, E.	Stodart of Leaston, L.
Layton, L.	Strange, B.
Long, V.	Strathcarron, L.
Lyell, L.	Strathclyde, L.
McColl of Dulwich, L.	Strathmore and Kinghorne, E.
Mackay of Clashfern, L.	Swinton, E.
Macleod of Borve, B.	Thomas of Gwydir, L.
Mancroft, L.	Trumpington, B.
Manton, L.	Tryon, L.
Margadale, L.	Ullswater, V.
Masham of Ilton, B.	Vaux of Harrowden, L.
Merrivale, L.	Wade of Chorlton, L.
Mersey, V.	Wedgwood, L.
Monteagle of Brandon, L.	Willoughby de Broke, L.
Mottistone, L.	Wynford, L.
Munster, E.	Young, B.
Murton of Lindisfarne, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.36 p.m.

Clause 4 [Secondary action]:

Lord Wedderburn of Charlton moved Amendment No. 2: Page 5, leave out lines 9 to 14 and insert: ("(5) Primary action in relation to a trade dispute shall not be relied on as secondary action in relation to another dispute. Primary action means an act done in contemplation or furtherance of a trade dispute.").

The noble Lord said: My Lords, there are some points of importance which emerge often only late in the progress of a Bill. I believe that this is one such point. The Minister may have to suspend disbelief but I assure him that this amendment is a genuine attempt to deal with what we believe is a problem. It is not in any way an attack upon the clause, as our previous amendments have been. We dislike Clause 4 but it will be enacted and must work.

The new feature on employment law in Clause 4 is that not only is secondary action defined but for the first time in our legislation primary action is defined. We thought—as I said in one of our more critical amendments—that that might well be helpful. However, it can only be helpful, simply in terms of clarity, provided that the definition of primary action is right.

Looking again at the matter, after discussion with a number of people in the trade of labour law and employment law, as it were, we now believe that there may be some problems with the definition. If that belief is right, nothing can be more important than to put the matter right because the definition of primary action will be absolutely central to the operation of labour law.

There are three main defects in the definition and description of primary action in subsection (5). First, it states: An act in contemplation or furtherance of a trade dispute which is primary action in relation to that dispute". I pause there because those words clearly allow for the meaning—perhaps must mean—that there may be an act done in contemplation or furtherance of a trade dispute which is not primary action in relation to the dispute. Purely as a matter of grammar there would otherwise be no point in expressing the subsection in that way. That there should be some unstated factor which makes an act done in contemplation or furtherance of a trade dispute a primary action is not something, I believe, that the Government intend. The Minister's speeches were not clear on that point. However, I take it that the Government do not mean to upset the interpretation of the phrase "in contemplation or furtherance" which your Lordships decided in 1982 in Express Newspapers Ltd. v. McShane was clearly stated to require only an honest belief by the defendant that he was acting in furtherance of a trade dispute. If the Government intend no change to that fundamental test, then I believe that they should reconsider the beginning of the definition. We believe that what they are really saying, as the amendment suggests, is that primary action means an act done in contemplation or furtherance of a trade dispute. If there is some other factor, then it should be clearly stated. It would be worrying if that were so. The difference may seem small to non-lawyers. However, it is on such points that cases are won and lost and Acts come to be interpreted in ways which were not intended.

The second defect is in the proposition in subsection (5) that primary action in contemplation or furtherance of a trade dispute, may not be relied on as secondary action in relation to another trade dispute". That protects the primary action from being dubbed secondary and therefore under Clause 4 unlawful without exception. But the provision in subsection (5) is only in relation to a trade dispute; that is, a dispute which satisfies all the requirements of Section 29 of the 1974 Act. An act done in furtherance of its own trade dispute should not be capable of being relied upon as secondary action in relation to any other industrial dispute, whether or not that other dispute is technically a trade dispute within Section 29. I believe that that interpretation may well be the Government's intention. If it is not, then they need to explain why, in relation to a dispute which is not a trade dispute in law, the primary action would somehow lose its quality.

The third defect inheres in the second sentence of subsection (5) which defines primary action by reference to paragraphs (a) or (b) of subsection (2). Subsection (2) (a) and (b) defines secondary action in relation to two types of liability. The definition of primary action is made analogous except that the employer will now be a party to the dispute. The difficulty is that paragraphs (a) and (b) describe the dominant and ordinary liabilities arising in the law of tort from industrial action. For brevity I call them (a) inducing breach of contract; and (b) intimidation by threats to break a contract. If the definition of primary action is confined to those liabilities, as secondary action is, then primary action is confined in a way that is too narrow. There have been cases of primary action where the employment contracts were not broken, where, for example, the organisers were liable for civil conspiracy. That civil conspiracy, as a tort, is protected in a trade dispute by Section 13(4) of the 1974 Act if the act is done in contemplation or furtherance of a trade dispute.

Yet under this definition it would not be primary action because it would not have the content of either paragraph (a) or (b) of subsection (2). It may be a rare case but there is no ground for excluding it. It is not the only type of liability. There may be liability for economic duress under the case law developed since the Universe-Tankships case in 1983 in your Lordships' Judicial Committee. That too is not covered by paragraphs (a) or (b), but I hope that the Government wish it to be primary action.

The point may be put this way. While it works to define secondary action by reference to two out of the many possible liabilities, the same is not true for primary action. If it is an act done in contemplation or furtherance of a trade dispute, it should surely remain primary action no matter what tortious liability it encounters.

I believe that it is an important matter. There are three points of interpretation. In response to the last amendment, the Minister showed how keen he is to look carefully at the drafting. He is right to do so. I strongly urge him to say that he will at least look at the matter before Third Reading. I beg to move.

5.45 p.m.

Lord Campbell of Alloway

My Lords, first, I accept that the amendment is devised to meet problems of construction as seen by the noble Lord, Lord Wedderburn. However, with the greatest respect to him, there is no time, and this is not the occasion, to go into detailed analysis. In my respectful submission those problems of analysis simply do not arise.

Secondly, the noble Lord referred to problems that arise from the case of McShane. As I understand it, that case presents no difficulties. The noble Lord draws a distinction between trade disputes and other disputes. On a fair construction of the Bill as it stands, the distinction does not cause any hint of confusion.

Thirdly, the noble Lord says that primary action is too narrowly defined. So be it. In my respectful view the definition is totally satisfactory.

I fear that the amendment is totally unacceptable for three short reasons. First, it undermines, and is intended to undermine, the plain effect of Section 15 of the 1982 Act as modified. Secondly, it is incompatible with the policy of excluding immunity for secondary action and tends to obfuscate, not to clarify, the distinction between primary and secondary action in an ell[...]ptical and most confusing manner. Thirdly, the definition of primary action as proposed in the amendment is but declaratory and, with respect to the noble Lord, otiose.

Lord Strathclyde

My Lords, we return to the subject of secondary action, most particularly to the definition of primary action in Clause 4(5).

Your Lordships' discussion of subsection (5) in Committee focused on the first limb of Clause 4(5). Those provisions ensure that where workers take primary action in contemplation or furtherance of a trade dispute with their own employer, that cannot be held to be secondary action simply because, looked at from the point of view of another employer, who happens to be in dispute with his own workers it has secondary effects.

Clause 4(5) is relevant to the situation in which there is more than one trade dispute. It protects genuine primary action in one dispute which may happen to have an effect on another dispute. As I said in Committee at col. 195, it will be for the courts to determine from the facts of the case where relevant proceedings are brought before them whether any particular call to take industrial action is primary or secondary. But Clause 4(5) ensures that genuine primary action will not fall foul of the provisions intended to prevent secondary action.

The first sentence of the amendment taken on its own is technically defective because it assumes, incorrectly, that the same action can be both primary and secondary at the same time. I do not know what the first sentence is intended to achieve beyond what is achieved by the first part of the existing Clause 4(5). But it is clear that it is inconsistent with the way in which the clause as a whole is structured.

Lord Wedderburn of Charlton

My Lords, will the Minister allow me to intervene? The amendment does not repeat what is in the Bill. Clause 4(4) states that each dispute is a separate dispute.

Lord Strathclyde

My Lords, perhaps I may come back to that point in a moment. The real intention of the amendment, so far as I can see, is revealed by the second sentence which addresses the definition of primary action for the purposes of the clause.

When we discussed this point in Committee, the noble Lord, Lord Wedderburn, seemed positively to welcome the introduction of definitions of primary and secondary actions as terms of art. His appreciation of the difference was masterly in its simplicity. He said: The basic distinction is that in primary action the employer is party to a dispute with his own employees". [Official Report, 10/7/90; col. 194.] The definition proposed by the amendment would mean that action which would fall to be treated as secondary action under the present law would in future fall to be treated as primary action and hence not be deprived of immunity. The only further test would be whether a relevant act was done in contemplation or furtherance of a trade dispute. That would mean any trade dispute, whether or not with the workers' own employer, thereby greatly extending the potential immunity for organising industrial action.

Lord Wedderburn of Charlton

My Lords, has the Minister forgotten that the 1982 Act redefined "trade dispute" as meaning a dispute with one's own employer? Therefore, a trade dispute cannot be a dispute with anyone else.

Lord Strathclyde

My Lords, that was the way in which I read the meaning of the noble Lord's amendment. The second limb of the proposed Clause 4(5) provides what is, in effect, the only appropriate interpretation of primary action for the purposes of the clause; that is to say, action where the employer under any contract which would be affected by the relevant call for, or threat of, industrial action is the employer party to the dispute.

It is a fundamental principle of the rationale for Clause 4 that there is no reason why employers who are not party to a dispute should be at risk of having industrial action organised against them. But the amendment is designed to allow precisely that; it is no less than a charter for secondary action.

When we debated this clause in Committee the noble Lord, Lord Wedderburn, claimed that he never intended to subvert. In the light of this amendment, however, I wonder whether he may have changed his position slightly. The amendment, if accepted, would certainly subvert not only Clause 4 but also the benefits which the 1980 Act has secured over the past 10 years.

No doubt the noble Lord, Lord Wedderburn, will consider that I have not responded articulately enough to the points made in his amendment. However, the point is that, taken as a whole, it seeks to create a new provision for legal secondary action. I believe that to be unacceptable and I hope that the noble Lord will withdraw his amendment.

Lord Wedderburn of Charlton

My Lords, at this stage of the summer there is no alternative. However, the Minister must allow me to say a few words, even if only out of professional integrity. He should not have read his Committee brief after I had told him that I was not making the same points as in Committee. I told him that we believed that there was a problem and that it was in everyone's interest to clear it up.

With great respect, if the noble Lord, Lord Campbell of Alloway, took a little more time and avoided some of the epithets, he would get more out of it. There are problems none of which has been answered except by a reply giving the pre-1982 definition of a trade dispute. It is the first time that that has been done in this House.

There are three problems which I shall relate to the Minister again. Our amendment states: Primary action means an act done in contemplation or furtherance of a trade dispute". It cannot possibly be secondary action if it is done in contemplation of a trade dispute because that now means your own employer—

Lord Strathclyde

My Lords, as regards that specific point, the 1982 Act did not have that effect. A trade dispute is a dispute in contemplation or furtherance of a dispute between workers and their own employer. But action by workers at plant A could relate to disputes at plant B.

Lord Wedderburn of Charlton

My Lords, now we are winkling out something. If it is the Government's intention to deprive a primary action of its immunity and protection if it relates to another dispute at plant B, they have not achieved it. The subsection is so obscure that they will not get that out of it. However, if that was what the Minister wished, he took another large step in this legislation. Every time we receive a further reply and supply of information there appears another hole into which, unhappily, the Minister is bound to fall, and I sympathise.

I shall put the points to the Minister and he can then discuss them with his advisers. It would be much better to sit down at a later date and discuss the three points. First, if the act in contemplation is said to be primary action only if it relates to the two types of liability, what happens if it relates to some other type of liability? I shall not repeat the point or give way because the Minister and I know that it is better to deal with the matter round the table.

Secondly, if it is said to be primary action in relation to another trade dispute, what happens if the other dispute is not technically a trade dispute? The noble Lord, Lord Campbell of Alloway, misunderstood that point and he should think on it again. Thirdly, if the act done in contemplation or furtherance of a trade dispute has to have something else added or, as the Minister now says, it loses its quality if it is an act in relation to another trade dispute, in what circumstances does it lose that quality?

I shall withdraw the amendment on the basis that if the Minister looks at those three points he will see that from the Government's point of view the drafting is inept. I beg to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [Minor amendments relating to ballots]:

Lord McCarthy moved Amendment No. 3: Page 6, line 9, at end insert ("and for the purpose of this section, and section 15 of the 1988 Act, where an appointed scrutineer is unable to act, his appointed deputy may act in his place.").

The noble Lord said: My Lords, the amendment deals with an old friend from the 1988 Act; the scrutineer. As a result of the provisions of Section 15 of the Act, the scrutineer appears in elections and political ballots and he has a range of functions. He must produce and distribute the ballot papers; he must receive and supervise the counting of those ballot papers; he must make a report of the result and conduct of the election; he must keep those ballot papers in a secure place; and, above all, he must act competently and independently as specified in the Act and by any orders of the Secretary of State.

The scrutineer therefore is an important person. As I read the 1988 Act, the ballot cannot go forward without the presence of the scrutineer. Clause 5 of this Bill adds a series of provisions. Under the provisions of the clause the unions must now publish the name of the scrutineer. He or she is not an unnamed person but an individual and the name must be told to members before the ballot takes place. The new subsection (bb) to Section 15(2) of the Employment Act 1988 states that the union must send a notice stating the name of the scrutineer to every member of the union to whom it is reasonably practicable to send such a notice, or … take all such other steps … as it is the practice of the union to take when matters of general interest to all its members need to be brought to their attention". We do not know what that provision means or what a court might say it means. It might be safer for the union to send a notice stating the name of the scrutineer, but there it is. We now have the necessity to specify this important person crucial to the holding of legal election or political ballots. The members must be told who the person is in advance of the ballot.

I readily admit that in the other place and in this Chamber in Committee we on this side of the House focused on other aspects of the clause. Frankly, we did not fully appreciate the problems involved in the specification of the name of the scrutineer and his additional responsibilities. The simplest way to specify the problems is to suppose that after the name has appeared, the members have been told, the ballot is about to take place or has begun, the union has spent a considerable sum of money and for some reason the scrutineer is indisposed. He could die; he could be struck down; he could fail to turn up (people do fail to turn up); he could resign from the union; or he could act in ways which give the union or someone reason to believe that he is no longer independent. Madam CROTUM might have an application in one of her daily telephone calls saying that there is reason to believe that the scrutineer is no longer independent. What is the union to do? For example, must the AEU stop electing the whole of its national executive and start again? Must the TGWU say that it does not have a general secretary because the old secretary has gone and there must be a re-ballot? Must the result be declared invalid? Should the union rush around with a new name, amend the ballot papers and try to make the best of the situation? There is nothing in the Bill to help on that. The amendment seeks to assist.

The Minister may say—and I shall accept it if he does—that this amendment does not achieve that end and that we should go away and think of an alternative. This amendment suggests that there should be the appointment of a deputy. He should be independent, his name should be put on the ballot paper and if for some reason—and it must be a good and sufficient reason or a complaint could be made to CROTUM—the original scrutineer is indisposed, then the union has a second string. It has a deputy scrutineer. This is a very simple and modest amendment which I hope will find favour with the Government. I beg to move.

6 p.m.

Lord Campbell of Alloway

My Lords, I have considerable sympathy for this amendment. On the face of it, it is a reasonable provision and serves as a lubricant for the balloting machinery. It involves no derogation of principle.

However, there is a problem as regards the name of the scrutineer. The noble Lord, Lord McCarthy, referred to "he" or "she". I shall be corrected if I am wrong but I believe that under the regulations a partnership can be appointed as scrutineers. Therefore, I suggest that the amendment should state, "where a scrutineer is appointed other than a partnership". A partnership can be appointed. However, if a partnership is not appointed—and there is no reason why it should be—and the individual appointed scrutineer dies, collapses or is indisposed, it seems to me reasonable that the union should be spared the aggravation and expense.

Lord Strathclyde

My Lords, I have no desire to come back to this point on Third Reading so I shall try to clarify the matter now.

The amendment provides that in circumstances where the scrutineer appointed by the union is for some reason unable to continue his duties, an appointed deputy could act in his place. In practice, it is likely that the individual scrutineer appointed would employ assistants to help him supervise the ballot. In such circumstances, a temporary incapacity on the part of the scrutineer may not render him unable to complete his duties and produce the necessary report.

Of course the Government do not wish unions to be in the unfortunate position of having to re-run a ballot, with all the expense and inconvenience which that would involve; for example, if an appointed scrutineer were taken seriously ill and was unable to complete his duties. However, the solution is in the union's own hands. As my noble friend Lord Campbell of Alloway pointed out—and he is correct the relevant statutory order allows a partnership to be appointed as the scrutineer provided that every member of the partnership is potentially qualified as an individual to be a scrutineer.

Unions wishing to avoid the possibility of such problems would therefore be well advised to appoint a partnership or one of the existing specified bodies as scrutineer rather than an individual. After all, that is what a company would do if it was worried that an individual accountant might not be able to complete the audit of its accounts.

Therefore, I appreciate the motives behind this amendment. However, this proposed solution to problems which should arise only in rare circumstances would not be satisfactory. In short, I believe that the amendment is unnecessary and could have unsatisfactory results. I hope that the noble Lord will withdraw his amendment.

Lord McCarthy

My Lords, I am pleased that the noble Lord, Lord Campbell of Alloway, points out that a partnership can be appointed. I am sure that that is right. I would ask—and I believe that the noble Lord, Lord Campbell of Alloway, agrees with me—why unions should have to appoint partnerships. They may wish to appoint scrutineers who are known to them, who have worked for them in the past and with whom they have had associations. They might wish to appoint as scrutineer an individual and not a limited company. In those circumstances the noble Lord, Lord Campbell of Alloway, says—and I shall be happy to table an amendment at a later stage which takes this on board—that our amendment should be changed so that it includes the words "other than a partnership". That is a perfectly reasonable modification. I only wish that the Government could have seen their way to look in the direction of our amendment or the modification as suggested by the noble Lord, Lord Campbell of Alloway.

The Minister said that assistants may be used to carry out the job. However, that could be so only if the scrutineer does not drop dead. If the scrutineer had passed away, then that is not the case. I do not believe that that is a satisfactory response to what is a very real problem. It is not enough to say that it is a matter for the unions.

Lord Campbell of Alloway

My Lords, can an assistant act if he is not qualified?

Lord McCarthy

My Lords, no. The noble Lord is right. I do not believe that the Minister was saying that an unqualified assistant could so act. It may be that where there is a qualified assistant there will also be a partnership or a limited company. Therefore, the problem arises when a union does not act in that way.

The Minister said that that is a matter for the union, like so much else in this Bill. The Minister has not given a satisfactory response but I suppose that in some ways we should expect that at this stage of the Bill. Nothing is done to assist small trade unions who may not wish to appoint partnerships or limited companies. The Minister could easily have accepted our amendment or the modification suggested by the noble Lord, Lord Campbell of Alloway.

The Minister tells me that the amendment is not necessary and goes on to say that it may have certain disadvantageous consequences but does not explain what they are. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 [Responsibility of trade union for acts of officials, etc]:

Lord Wedderburn of Charlton moved Amendment No. 4: Page 6, leave out lines 31 to 33 and insert ("who included members of the union the purpose or principal purpose of which was organising or co-ordinating industrial action and of which he was at any material time a member for that purpose. In this paragraph, organising or co-ordinating industrial action does not include bringing or seeking to bring industrial action to an end.").

The noble Lord said: My Lords, I shall try to overcome the resistance to trying to help the Government in case I receive answers to amendments other than those which I am moving or information from 1981.

Perhaps I may take the Minister's description of the position to which Clause 6 applies from Hansard in Committee. He introduced the notion of Clause 6 by saying that it involved: first, widening the potential liability of unions, so that this applied in respect of relevant acts done by any of its officials or committees, including shop stewards; and, secondly, ensuring that, where any union official or committee called for industrial action and that act came to the knowledge of the union's executive, president or general secretary, they would have to make it clear to all concerned if the union repudiated what the official or committee had done".—[Official Report, 10/7/90; col. 2201 That is clearly the Government's aim. Their aim is to extend the range of acts for which the union is responsible in law as regards industrial action even further than the 1982 legislation.

The Government are determined to make unions liable for acts done by each and every official, even officials of a branch—for example, the lay branch treasurer and so on—no matter what their authority or what the rules say and to impose after that procedures which make it at the very least extremely difficult for the union to be sure that it has repudiated what has been done.

This amendment—and I shall say this twice for the Minister—does not challenge, does not challenge any of that. This amendment challenges the far greater extension of union liability in Clause 6. The new subsection (3A) (b) makes the union liable for acts done or authorised not by its committees but by any group of persons or members of a group of persons who may not be members of the union—a group of strangers. The conditions for that wholly extraordinary imposition of liability vicariously on a body for the act of a stranger are twofold. First, the group must have purposes which include the organising or co-ordinating of industrial action. That need not be the principal purpose. It need not be any more than an incidental or fleeting purpose. As the Bill stands, a situation in which a group of workers are discussing matters for a few hours, and for a few minutes in the course of that time they discuss industrial action to the degree that they are co-ordinating it—whatever that means—will satisfy the clause. Secondly, there must be some contact with the union, however curious. That occurs when any union official has at the material time been a member of the group.

Out of interest I ask the Minister what is the "material time"? It does not seem to be the time of co-ordinating the action; that is the purpose of the group. Is it any time that the group exists? It would be useful to have the explanation on record. It appears to be all or most of the time that the group exists. A local full-time official, for example, may have called in for a brief discussion regarding a dispute with the people taking part. One person may be a member of his union and the rest may not. The official may have called in contrary to the instructions of his union. Suppose the general secretary telephones and says, "Don't go near that unofficial dispute. We do not want anything to do with it". If the official then comes in and joins in with the group as a member at some material time and the group has obviously had functions of co-ordinating industrial action or taken some part in organising it, that is enough to make the union liable.

That is a quite extraordinary type of liability. It is said that the Transport and General Workers' Union, with something like 1¼ million members, is now to be liable to the full extent of its assets by reason of an act done by a non-member who was part of a group of persons which had as a minor purpose the co-ordination of unofficial industrial action by reason that at a material time—whatever that may be—a shop steward, contrary to his authority and contrary to instructions from headquarters, had taken part in one of the meetings. The Government claim that the clause is necessary to combat unofficial action. In that scenario it is difficult to see how the combating of unofficial action would be effected. As the noble Lord, Lord Rochester, said in Committee at col. 226 of Hansard, this surely is a provision which goes "over the top".

The amendment leaves the paragraph—and I hope the Minister will accept this—wider than we would wish. However, the paragraph would be consistent with the Minister's general description of the nature of the clause and in touch at least with ordinary rules of law which restrict vicarious liability to notions of authority or course of employment. That is to say, it would require that the group were members of the union, that the purpose was a principal purpose and that the official had not attended merely for the purpose of trying to bring industrial action to an end.

In practice if this clause and this paragraph were put into effect, shop stewards who, to use the phrase of my noble friend which was taken up by the Donovan Commission in 1968, are in industry more of a lubricant than an irritant would cease to be able to fulfil that role much to the annoyance of a large number of managers, quite apart from the question of trade union organisation.

Some softening of the paragraph is surely needed if managers and union officials are to play useful parts in ending disputes, quite apart from the question of co-ordination. I beg to move.

6.15 p.m.

Lord Rochester

My Lords, as the noble Lord, Lord Wedderburn, said, in Committee we had some discussion on an amendment which sought to delete subsection (3A) (b) of Clause 6. I supported that amendment on the grounds that it was unreasonable for a union, unless it went through an elaborate procedure of repudiation, to be held liable for the actions of a single member of a group which perhaps unbeknown to the local union official had decided to take industrial action.

The noble Lord, Lord Wedderburn, quoted from the reply of the noble Lord, Lord Strathclyde, to that debate at col. 226. I particularly noted the words of the Minister at col. 227, where he said: The provisions of Section 15(3A) (b) proposed by Clause 6 will not prevent union officials using their influence to avoid or end industrial action organised by others". The last sentence of the amendment takes the Minister at his word and simply seeks to incorporate that assurance into the Bill. That makes sense to me and I therefore support the amendment.

Lord Strathclyde

My Lords, this amendment seeks to undermine the intended effects of Section 15 of the 1982 Act as it would be modified by the clause by enabling union officials to avoid proper responsibility for what members will see as "acts of the union" by getting others with whom they are associated to do the relevant act "on their behalf".

Clause 6 recognises that when union members are called upon to take industrial action by a group of which their shop steward is a member, as far as the members are concerned that will be a call by "the union". That reality will be reflected in the provisions of the modified Section 15. But it is vital to appreciate that we are not going as far as saying that a union cannot avoid liability for relevant acts of its officials or committees. Other provisions mean that such liability can be avoided where a union finds it necessary and appropriate to do so by following the procedure for "effective repudiation". That too is reasonable and right.

Bearing these points in mind, let me address this particular amendment. The amendment would modify the provisions of section 15(3A)(b) as they would stand amended by Clause 6(3). The new Section 15(3A)(b) is needed to ensure that a union will be potentially liable if a relevant act is done by a group of persons of which an official is a member. If this was not done, it would be impossible to know whether a union was liable for a relevant act done by such a group unless it could be established that the official had personally done the act in question. However, it seeks to make the provisions much more restricted. Liability would only apply if the official was a member of the group "for the purpose" of organising or co-ordinating industrial action. That would allow a shop steward, for example, to give his "authority" to the activities of a group which might then call for industrial action, but there would be no liability if the shop steward could show that he personally had not been a member of the group for that purpose.

I would add that the idea of an official being a member of a group for some purposes of the group but not for others is strange in itself. Surely a person who chooses to be a member of a group would usually be a member for all its purposes? In addition, by its reference to "purpose or principal purpose", Amendment No. 4 would allow wide scope for union officials to organise industrial action through groups which had "organising or co-ordinating industrial action" as a secondary or subsidiary purpose. The amendment would certainly undermine the intended effects of these provisions.

The provisions in the final sentence of the amendment are completely unnecessary. There is simply no question of any court holding that an act which has the genuine purpose of, bringing or seeking to bring industrial action to an end", is an act for the purpose of "organising or co-ordinating industrial action". On the other hand, just because a relevant group of which a union official is a member has both purposes should not enable a union to avoid its proper liability for the acts of that group or its members in so far as they involve calling for industrial action.

Furthermore, stating that, for the purposes of these particular provisions: organising or co-ordinating industrial action was not to include: bringing or seeking to bring industrial action to an end", could actually call into question whether there might not be just that implication in respect of other provisions of the law. It simply cannot be right to raise any such doubts or unnecessarily to complicate these provisions in the way proposed by the amendment.

The noble Lord, Lord Wedderburn, asked a specific question. He wanted to know what the Government meant by "material time". I can tell the noble Lord that "material time" is when the act for which the union is potentially liable was done. The noble Lord—essentially supported, as I understood him, by the noble Lord, Lord Rochester—went on to cite an example of what would happen when a union official goes to see what is the problem which has given rise to unofficial action, and suggested that the official's involvement might amount to becoming a member of the group such as to make the union potentially liable. I see no reason whatever to worry about such an eventuality. I do not believe that unions or their officials should worry about it either. What constitutes membership of a group falls to be decided as a matter of fact and according to common sense principles. In the case described the union official would not be a member of any relevant group.

The provisions of Clause 6 will not prevent union officials using their influence to avoid or end industrial action organised by others. Nor will they allow a group which calls for unofficial action to have the authority which might be imparted to it by a shop steward being among its members unless the shop steward is willing to risk making his union potentially liable for what the group, or any of its members, does by way of organising industrial action.

Essentially, this amendment is all about blatant avoidance of liability falling upon the union. I hope that in the light of those remarks the noble Lord will withdraw his amendment.

Lord Murray of Epping Forest

My Lords, the noble Lord appealed to our common sense. I do not pretend to understand the legal complexities of this clause but I thought, when exercising my common sense in reading it—perhaps the noble Lord will explain why I am wrong—that an official becomes a member by attending a meeting: the mere fact that he goes to a meeting makes him a member of that meeting.

As I understand it, if an official goes to a meeting with the express purpose of saying, "Do not be crazy. This is absolutely daft. Do not do it", by being there he becomes a representative of the union and a member of the group for that purpose. I am sure that I am wrong, but will the Minister explain to me how, if the official attends the meeting for that purpose, it does not have the effect that he described?

Lord Strathclyde

My Lords, if, for example, a shop steward goes to a union meeting to, say, stop the group from indulging in unofficial action, there would be no problem. However, if the shop steward plays a full part in that meeting and perhaps even encourages unofficial action, it is fair and basic common sense that the union should therefore be liable.

Just because an official goes to a meeting of a group, that does not, in itself, make him a member. That is the point that the noble Lord, Lord Murray, sought to make, and that is the key to it. There is no desire to catch out union officials. We are trying to create a system whereby unions cannot deny liability when a union official has blatantly played a part in organising unofficial action.

Lord Murray of Epping Forest

My Lords, I find that reply very helpful. Perhaps the noble Lord can help me a little further. Will he explain to me, as I do not fully understand, where the words appear in the clause which state that if the official goes to a meeting for the purpose of not endorsing the action he is therefore not a member of that group? Where do I look in the Bill for that explanation?

Lord McCarthy

My Lords, before the Minister answers that question, will he take on board my related point? Will he accept an amendment which makes it absolutely clear, since it does not appear to be on the face of the Bill, that if a shop steward or a full-time official of the union attends a meeting and plays a full part, but with the object of persuading members not to undertake the unlawful act, the union will not be liable because the official will not be regarded as being a member of the meeting?

Lord Strathclyde

My Lords, I am sorry that I have not made myself clear. I said earlier that what constitutes membership of a group falls to be decided as simply a matter of fact. You are either a member of a group or you are not. It is that which comes under clear common sense principles. There is no need to go further. If noble Lords opposite cannot understand that, I am sorry.

Lord McCarthy

My Lords, the noble Lord is saying that if you are at a meeting that is a fact and you are liable. He is completely contradicting what he said two minutes ago; that you can be there, that it can be a fact you are there, but if you support the law and try to get people not to strike you are not a member and not liable.

Lord Renton

My Lords, may I be so bold as to remind your Lordships that this is not a Committee stage?

Lord Strathclyde

My Lords, with the leave of the House and for clarification perhaps I can deal with that final point. This is not about whether or not someone is at a meeting. It is about whether someone is a member of a group. That is the issue at stake. That is the matter of fact, not the geographical position of the person being present at a meeting. I believe that I have made the position clear.

Lord Wedderburn of Charlton

My Lords, this amendment has probed a number of matters which should have been probed before. The further the Minister went, the more extraordinary the Bill appeared. We should remember that we are discussing liability in law for a body of persons whose funds are held in trust, jointly, for all the members and whether that body will be made liable in the courts for an act done by a stranger. The noble Lord has not in any way denied, nor can he, that the actual act done—say, the calling out of a shop on unofficial strike—may be the act of a stranger. The link is back through the group to the official.

Before we do that, the Minister's reply on material time in that connection is remarkable. As I understood it the Minister said—he will correct me if I am wrong—that "material time" is the time when the act is done for which the union is responsible in law. The act done in the example—it is a perfectly normal example—is the act of calling out workers in the shop. By that time the group has gone home. The official is not a member of anything by that time; the group met the night before. Therefore, if he is a member at the material time the paragraph is an absurdity. The whole point is that it is dealing with unofficial groups who are likely to have dispersed before the act is done.

In regard to membership, if the official has to be a member at the material time, presumably all the official has to do—I would not like to draft a clause so easily evaded—is to become a member before the act is done and make sure that he is not a member at the time the act is done. I cannot believe that the courts would read the Bill to mean that. Of course they would not. They would read the Bill to be much more draconian, as it is meant to be.

My noble friend Lord Murray and the noble Lord, Lord Rochester, aimed their shots at the question: when are you a member? The Minister now tells us that you are not a member merely by being present. On the other hand, he said earlier that you cannot pick and choose. If you are in a group you must share all the purposes. Therefore, what kind of test does the evidence have to come up to? What does the affidavit of the official who has gone in and tried to solve the dispute have to say?

I stick by the average case. When something blows up that nobody knew about of course the first telephones to ring will be those of the works manager, or other manager, and the local official of the union. If the union official tries to do his best to help, or at any rate participates to any degree, he will be regarded by the courts as being a member of the group. The paragraph is absolutely plain. The Minister is not giving the interpretation that a court would place on it. It is a totally unreasonable paragraph and we shall divide the House against it.

6.30 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 66; Not-Contents, 105.

Division No. 3
CONTENTS
Addington, L.	Kirkhill, L.
Airedale, L.	Listowel, E.
Attlee, L.	Llewelyn-Davies of Hastoe, B.
Barnett, L.	Lloyd of Kilgerran, L.
Birk, B.	Lockwood, B.
Blackstone, B.	Lovell-Davis, L.
Bonham-Carter, L.	McCarthy, L.
Boston of Faversham, L.	McIntosh of Haringey, L.
Bottomley, L.	Mason of Barnsley, L.
Brooks of Tremorfa, L.	Milner of Leeds, L.
Carter, L.	Morris of Castle Morris, L.
Cocks of Hartcliffe, L.	Murray of Epping Forest, L.
David, B.	Nicol, B.
Davies of Penrhys, L.	Ogmore, L.
Dean of Beswick, L. [Teller.]	Oram, L.
Dormand of Easington, L.	Peston, L.
Ewart-Biggs, B.	Phillips, B.
Falkland, V. [Teller.]	Prys-Davies, L.
Foot, L.	Rea, L.
Gallacher, L.	Rochester, L.
Galpern, L.	Serota, B.
Glenamar, L.	Shackleton, L.
Graham of Edmonton, L.	Shepherd, L.
Grey, L.	Stoddart of Swindon, L.
Hampton, L.	Strabolgi, L.
Harris of Greenwich, L.	Taylor of Blackburn, L.
Hatch of Lusby, L.	Thomson of Monifieth, L.
Hollis of Heigham, B.	Tordoff, L.
Hughes, L.	Turner of Camden, B.
Jay, L.	Underhill, L.
Jeger, B.	Walston, L.
Jenkins of Hillhead, L.	Wedderburn of Charlton, L.
John-Mackie, L.	Williams of Elvel, L.

NOT-CONTENTS
Aldington L.	Fraser of Carmyllie, L.
Arran, E.	Gardner of Parkes, B.
Atholl, D.	Glenarthur, L.
Auckland, L.	Gray of Contin, L.
Balfour, E.	Greenway, L.
Beloff, L.	Gridley, L.
Belstead, L.	Halsbury, E.
Blatch, B.	Harmar-Nicholls, L.
Blyth, L.	Henley, L.
Boardman, L.	Hesketh, L.
Borthwick L.	Hives, L.
Boyd-Carpenter, L.	Holderness, L.
Brabazon of Tara, L.	Hooper, B.
Broadbridge, L.	Howe, E.
Butterworth, L.	Johnston of Rockport, L.
Caithness, E.	Joseph, L.
Caldecote, V.	Kimball, L.
Campbell of Alloway, L.	Kinloss, Ly.
Campbell of Croy, L.	Kinnoull, E.
Carnegy of Lour, B.	Kitchener, E.
Carnock, L.	Lauderdale, E.
Carr of Hadley, L.	Lawrence, L.
Cavendish of Furness, L.	Long, V.
Clanwilia[...], E.	McColl of Dulwich, L.
Colwyn, L	Mackay of Clashfern, L.
Cox, B.	Macleod of Borve, B.
Craigavon, V.	Mancroft, L.
Darcy (de Knayth), B.	Margadale, L.
Davidson, V. [Teller.]	Merrivale, L.
Denham, L. [Teller.]	Mersey, V.
Elles, B.	Monteagle of Brandon, L.
Elliot of Harwood, B.	Mottistone, L.
Erroll, E.	Munster, E.
Ferrers, E.	Murton of Lindisfarne, L.
Flather, B.	Napier and Ettrick, L.

Nelson, E.	Skelmersdale, L.
Norfolk, D.	Slim, V.
Nugent of Guildford, L.	Stodart of Leaston, L.
Orkney, E.	Strange, B.
Orr-Ewing, L.	Strathcarron, L.
Oxfuird, V.	Strathclyde, L.
Pearson of Rannoch, L.	Strathmore and Kinghorne, E.
Pender, L.	Swinfen, L.
Reay, L.	Swinton, E.
Redesdale, L.	Thomas of Gwydir, L.
Rees, L.	Trumpington, B.
Renton, L.	Tryon, L.
Rippon of Hexham, L.	Vaux of Harrowden, L.
Romney, E.	Wade of Chorlton, L.
St. John of Fawsley, L.	Willoughby de Broke, L.
Sanderson of Bowden, L.	Wynford, L.
Seebohm, L.	Young, B.
Sharpies, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.37 p.m.

Lord Wedderburn of Charlton moved Amendment No. 5: Page 6, line 35, after ("union") insert ("save for the purpose of determining whether the principal executive committee has caused a person to cease to be an official.").

The noble Lord said: My Lords, this amendment has been tabled partly because at Committee stage on 10th July the Minister said that he would look at the matter again though he promised nothing. I hope that he has looked at it again. I do not know quite how to deal with the amendment in view of the response that I received to the second amendment on the Marshalled List. This amendment is another attempt to avoid what one might reasonably call a near absurdity in the Bill. At any rate, it is a difficulty which could give rise to quite unnecessary litigation. That is The point that arose before.

I hope that the Minister will have some positive response to make. The clause deals with making unions liable for their officials. But who is an official? The Bill drops the old special definition of an official that was relevant. That is quite understandable because it will not be relevant to the new law. Therefore, the definition rests on that given in the 1974 Act with which we have no quarrel. There an official is described as, a person elected or appointed in accordance with the rules of the union to be a representative of its members or some of them".

The question that arises is this: how do we know whether an official has been properly appointed, properly dismissed or his appointment terminated? A difficulty arises because the new subsection (3) (B) added to Section 15, tells us that we must approach that issue in the relevant context of the clause, notwithstanding anything in the rules … or in any contract or rule of law".

In Committee we put it to the Government that in their zeal to exclude the rules of the union on the one hand and to make the union liable for all officials on The other they had run on to a legal sandbank. The union is not to escape liability merely because the rules have been broken in the appointment of an official. Although one has difficulty, one can see that a de facto appointment might be enough for a court to recognize the proper appointment of an official. But the position with dismissal or termination—or, in trade union terms, withdrawal of credentials—of a shop steward or other similar official will not be so simple. If the union withdraws the credentials of a shop steward, although the rules may give, say, the national executive committee authority to do so, we cannot look at the rules. Therefore, if the shop steward said, "My credentials have not been properly withdrawn. I argue that it is within the competence of the divisional committee, or some other body or group in the union", how would that dispute be resolved in court? If the court cannot look at the rules what does it decide?

In Committee I suggested the absurd conclusion might be drawn of "once an official always an official" if that person did not agree to be dismissed or have his credentials withdrawn. Knowing the Government's fierce objections in another context to tenure of posts even when it is necessary, I cannot think that it is their intention to back tenure here.

I accepted the Minister's objections to another point in our previous amendment, which allowed for automatic termination—for example, a rule which said that as soon as an official did wrong that official's tenure came to an end. I accepted that that would not be in accordance with the Government's clause, so we have not repeated it in this amendment.

In this amendment we have a provision which says that the principal executive committee has to act to cause a person to cease to be an official, and that that at least should be determinative in the court. That may seem a small point, but I hope the Minister will address the problem and will tell us that he has a better answer to it than ours. If it is not addressed it will give rise to unnecessary litigation and uncertainty on both sides of industry, which cannot be the intention of the Bill. I beg to move.

Lord Campbell of Alloway

My Lords, let us accept that in the past, fortunately, on few occasions, we have seen some unacceptable manoeuvring by principal executive committees. Let us not indulge in the names of unions or officers, or any personalities concerned. However, any government has to take that sort of factor into account in order to make its legislation work and stick.

A union could resort to this amendment to escape potential liability for acts of its officials under Section 15 of the 1982 Act, as proposed to be amended by Clause 6. The amendment is incompatible with Clause 6. Therefore, I hope that my noble friend the Minister will not accept the amendment.

6.45 p.m.

Lord Strathclyde

My Lords, the Green Paper Unofficial Action and the Law explained the case for changing the present law on union liability for certain acts done by its officials and committees. If I had to summarise the nature of its particular proposals, I would say that they involved widening the potential liability of unions, so that this applied in respect of relevant acts done by any of its officials or committees, including shop stewards, and ensuring that where any union official or committee called for industrial action, and that act came to the knowledge of the union's executive, president or general secretary, they would have to make it clear to all concerned if the union did, in fact, repudiate what the official or committee had done.

That is what clause 6 is all about. It builds upon the present law concerning union liability for relevant acts—that is to say, Section 15 of the 1982 Employment Act—so as to update that law. On the other hand, this amendment seeks to undermine the intended effects of Section 15 of the 1982 Act by providing scope for unions or their officials to evade liability by adopting rule book devices.

As the noble Lord, Lord Wedderburn, said I promised to give further consideration to the issues that he highlighted in Committee. I am delighted to tell the noble Lord that there is a simple answer to his problem. The provisions of Section 15, as proposed, would mean that a union is only liable for acts of relevant officials at the time when they are such officials. In his example, if the shop steward was no longer a union official, any call he made to take industrial action would not render his union potentially liable. But that does not mean that unions can escape potential liability by some sort of rule which attempted to provide that any official ceased to be an official at the moment of calling for industrial action. The provisions of the proposed Section 15(3B) are designed to cut out exactly that sort of avoidance device.

It may be helpful if I express the position in generalised terms. What will matter under the provisions of the amended Section 15 will be an individual's status at the time of the relevant Act. If a person is a union official, a relevant act such as a call to take industrial action will render his union potentially liable. However, if the union, following repudiation of what its official has done, takes steps which mean that the person is no longer elected or appointed in accordance with the rules of the union, a similar act thereafter by the same person would not be an act for which the union would be potentially liable. Accordingly, the problem which the noble Lord thought he had identified simply does not exist.

The amendment enables a union to avoid potential liability for any relevant act of its officials or committees by having a rule which provided that in relevant circumstances an official who did a certain act was no longer to be regarded as an official. What would happen if any such option was to be open to unions? It must be reasonable to assume that unions would proceed forthwith to make such rules as were necessary to restore the status quo. Certainly, the union's rules might then deny shop stewards the authority to call for industrial action on behalf of the union. But would members appreciate that sort of technical difference? I venture to suggest that they would not.

I believe the amendment to be unnecessary; I hope that the noble Lord will withdraw it.

Lord Wedderburn of Charlton

My Lords, there is a difference with this Employment Bill. In my experience there has never been an Employment Bill where at Report stage there have begun to emerge so many fundamental points of greater difficulty than at Committee stage.

The noble Lord looks puzzled. Let me put it simply, and in so doing reply also to the noble Lord, Lord Campbell of Alloway who said that the amendment would mean that a trade union could escape liability for its officials. Let us suppose that on Sunday the noble Lord, Lord Campbell of Alloway, is appointed a shop steward wholly in accordance with all the procedures; on Monday the noble Lord calls for unofficial action, and his union is liable; and on Tuesday, no doubt at the instigation of the Minister, who is general secretary, the union withdraws his credentials. Under the amendment—for we say that one needs the amendment to enable him to do that—there is no retroactive effect. The union is not escaping liability for something he has done. It is operating an organisation by saying that, according to its procedures, on the Tuesday this particular person no longer holds that particular post. It may need a vote of a committee, but that is how it works. There is nothing retroactive about that.

At one stage of his reply—this is an important matter—the Minister said that if that kind of thing happened—I hope I have him right; he will tell me because he has the information there to look at—the official, no longer being elected or appointed in accordance with the rules, is no longer an official. However, if he said that to the court, counsel against him would say, "Have you not overlooked subsection (3B)?", which states that the provisions of the relevant paragraphs, apply not withstanding anything in the rules of the union". If the noble Lord wants his Bill to mean what he said then, he must put in an amendment. I am perfectly prepared to accept that ours is not perfectly worded. I could suggest some slightly better words now that we have debated it, but something along those lines is necessary.

That is not the only thing that the noble Lord said. That is where the distinction comes in. At the heart of his reply he said the exact opposite; namely, that if you allowed the kind of thing in our amendment, it would allow unions to undermine the purposes of the clause. The amendment allows unions according to a procedure that involves the principal executive committee—if the noble Lord does not like that, I am willing to put in anything he wants—to bring to an end the tenure of an official. He says that that will subvert the purposes of the clause. There are those who believe that that is the right answer and that the purpose of the clause is to make trade unions liable for any arid every official, even for one who has ceased under the rules to be an official according to the union's practices, because that is what the Bill says.

Finally, the noble Lord said, "Of course it's all very easy". We shall come back to the matter on later amendments. He said that, no matter what the right answer here of liability and what he called potential liability, about which I shall have to read in Hansard, the union can always repudiate. That is where we come to the truth of the matter. It appears that the Government intend to make a trade union—a body of persons with funds on trust—liable for the wholly unauthorised person.

The noble Lord looks surprised. If he belonged to a club, would he like the subscription that he had made over the years to go out in legal proceedings and liabilities because a stranger or an official had acted covertly and secretly and had bound the club? He would be outraged. I see that he is outraged, but he is not outraged when it involves a trade union because a trade union is a special body and must therefore repudiate everything.

When we consider the realities of repudiation, it is that part of the clause that we must keep in mind because repudiation in many cases is a false trail. Perhaps I may stay with it. In the type of case that I put, the shop steward, who the union says has come to the end of his tenure but who disputes that and then goes off and does something for which the Minister makes the union liable, is much more likely to do it secretly than openly. Therefore, to say that the union can repudiate is to say that it always knows what all the people for whom it is made liable are doing when, by hypothesis under the clause, they are people of whom the union will not have much knowledge in a dispute.

It is extraordinary that what I thought was a relatively simple suggestion to the Government that might have met with some positive contribution from them in terms of administering the Bill has provoked such a response. They do not want to administer industrial relations. They do not believe in industrial relations. They believe in union liability. That is the Minister's favourite phrase. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McCarthy moved Amendment No. 6: Page 7, line 15, at end insert: ("(5C) The Secretary of State shall within three months of the passing of this Act introduce a scheme by order made by statutory instrument providing for payments by the Certification Officer on the application of a trade union towards expenditure incurred by it in satisfying paragraph (i) of subsection (5) (b) above, where it has in the preceding six months been required by reason of that paragraph to write individually to more than 1,000 members.").

The noble Lord said: My Lords, we turn now to an issue which we raised in Committee but which we have tried to bring back in a different way in the hope that the Government might listen to it in a slightly more sympathetic way.

In Committee we argued that the Government should agree to extend Section 1 of the 1980 Act, allowing payments towards the cost of statutory ballots, to cover what one might reasonably term statutory repudiations because, with statutory repudiations as with ballots, the union has no choice. The idea that there should be repudiation and that repudiation should be the only way out for a union in a whole range of circumstances, as my noble friend Lord Wedderburn has spelt out, is in the Bill. It is as compulsory as the necessity to have political and election ballots. We suggested it because it is all square with the statutory procedure on election and political ballots and because we believe that the cost to the union of the process might be equally as severe as that of political or election ballots.

The Minister replied in a number of ways. It is because we are not satisfied with the ways in which he replied and because we believe that they varied according to where we were in the debate that we have come back to the argument this evening.

The Minister replied first of all by arguing that it was not normal to subsidise the carrying out of public duties and that statutory repudiation was a public duty. He said: It is exceptional for the costs of carrying out statutory duties to be subsidised from public funds".

The Minister says, "Hear, hear". He went on to say: The position in respect of trade unions is no different and there is no good reason why the public should bear any of the costs which properly fall upon trade unions".

We replied, "But you did it for ballots. If you have done it for ballots and it is provided for a statutory duty or a ballot, why not provide it for revocation notices, which are equally statutory and inescapable and might be equally costly?" The Minister replied that it did not start as a statutory duty; it started as an incentive to voluntary practice. That was a different explanation. He said: the ballot funding scheme was established to encourage the voluntary extension of balloting before industrial action. The law was subsequently changed to require unions to ballot their members as a condition of securing immunity from legal proceedings but the Government have not as yet seen fit to terminate the scheme".

The Minister then made a remarkable suggestion. It was the first time that it had been made. At least the Government appeared to be making concessions at that point, if not concessions that we could conceivably pick up. He said: If the Opposition is concerned about an alleged inconsistency, that can soon be removed by abolition of the ballot funding scheme, although I must add that at present there is no plan to do so".

We replied, "Why not remove that inconsistency in an alternative way which will be more generous and acceptable to the union by applying Section 1 of the 1980 Act to both types of expense?" The Minister replied that he could not do that. My noble friend Lord Wedderburn said: There is no difference whatever. Both are matters of civil liability and both are conditions imposed by statute framing the civil liability or exculpation".

The noble Lord, Lord Strathclyde, replied: The noble Lord is right".—[Official Report, 10/7/90; cols. 243–44.] By this time, the Minister had come full circle, so we are trying another tack.

A reasonable case might have been made against the terms of our amendment. You might say that our amendment was not required in small-scale examples. After all, the certification officer spent £1.3 million last year on 67 unions, an average of £20,000 a union. You might say that sums of that kind will not be needed in many repudiation cases. That would be a reasonable argument. A reasonable reply would be the terms of the amendment to limit the opportunity for repudiation funds, as it were, to those situations in which the union has a significant number of members. That is what we suggest in the amendment and that is why we put it to the House. I beg to move.

7 p.m.

Lord Campbell of Alloway

My Lords, I oppose the amendment in principle. Why on earth should the taxpayer fund the trade unions? There is no true analogy, as is sought to be made, between reimbursement of postal costs on ballots under the Employment Act 1980 and expenditure incurred in giving notice to avoid liability for acts of officials. There is no analogy whatever. The industrial relations situation in 1980—that is, the early days of the Thatcher Administration—was very different. Every reasonable inducement was offered to ensure that ballots should be held in the interests of protecting the rank and file membership.

However, in the changed situation of today there is a totally different industrial climate. One supposes that that is wholly acceptable to the Labour Party. Nevertheless, if I remember correctly, the balloting proposals were opposed 10 years ago. At all events, the proposed refund for expenditure, is not limited to postal costs and includes all manner and kind of expenditure". Therefore, the amendment is also open to objection on that ground, if none other.

Lord Rochester

My Lords, I rise to express my support for this amendment. If unions are to be obliged by law to go through the whole complicated process of repudiation, then they will be burdened with administrative and logistical problems. They may also have to incur quite heavy expenditure. I believe that there are good reasons for asking the Government to fund some of the expenditure involved. Indeed, that is what the amendment seeks to achieve. It is significant that in its briefing memorandum on the Bill, the British Institute of Management also thought so.

In my opinion, Clause 1 of the Employment Act 1980 affords a reasonable precedent. The response of the Government to the amendment could be precisely that advocated by the noble Lord, Lord Campbell of Alloway; namely, that if in future people are so foolish as to engage in unofficial action for which the union would be legally liable unless it repudiates the action, it is just too bad, the union will have to accept the financial consequences, along with all the other attendant problems. I hope that that will not be the Government's response, although I am not very sanguine about the matter. I suggest that this is one area in which they could gain a little credit by showing some magnanimity. I trust that they will do so.

Lord Campbell of Alloway

My Lords, before the noble Lord sits down I should like to ask him a question. Does he understand expenditure as including what it appears to say—that is, all expenditure—or is it merely limited to postal costs?

Lord Rochester

My Lords, I am not very strong on expenditure of any kind. However, a virtue of the matter seemed to me to be that, in moving the amendment, the noble Lord, Lord McCarthy, was not seeking to cover all expenditure; he was seeking to cover only the expenditure which applied where more than 1,000 people were involved.

Lord Boyd-Carpenter

My Lords, I see no reason that this expenditure should be put upon the taxpayer. The taxpayer has had nothing whatever to do, ex hypothesi, with the circumstances under which this liability has arisen. It has arisen solely because the union has got itself into a bit of a mess. Therefore, if it has got itself into a bit of a mess, it should pay for it.

Lord Strathclyde

My Lords, there is no reason why the public should be expected to bear any of the costs that properly fall upon trade unions which find it necessary to go through the process of effective repudiation.

If union officials, and groups or members of groups with which they are involved, do not make unlawful calls for industrial action, they will not render their union potentially liable. That is the best way for a union to avoid having to go through the repudiation process. But where such calls are made, the Government believe that it is entirely right that a union should, where appropriate, have to make it clear to all concerned that it has in fact repudiated any such call. The provision of individual written notice is simply a means to this end.

Therefore, when the Opposition tell us that they are worried about the "burdens" that these arrangements may cause, they are really telling us that they expect union officials and others with whom such officials are associated, to act—or even to go on acting—in the same irresponsible way.

I was disappointed by the remarks made by the noble Lord, Lord Rochester. He said that he was not very good at expenditure. However, I hope he realises that we have considerably better things upon which to spend our money. Therefore, perhaps I may conclude by saying that it would be quite unacceptable for public funds to be used to compensate unions for costs that may arise where their officials make unlawful calls for industrial action which the union is subsequently obliged to repudiate. The Government cannot justify applying, public money for such a purpose. I hope that noble Lords will appreciate the absolute logic of the position. I also hope that the noble Lord will feel able to withdraw the amendment.

Lord McCarthy

My Lords, I am glad to see that we have managed to get another reason out of the Minister. He is very fecund as regards the reasons given. Indeed, we never receive the same answer twice, but I shall return to that matter later. The noble Lord, Lord Campbell of Alloway, said that there is no possible connection and no similarity between the two aspects of the matter. Of course, in a way, that is what the Minister now says. However, it is not what he said to my noble friend in Committee when he said that they were square and at one. On that occasion he said that my noble friend was right. That is not what the Government used to say, but it may well be—if my understanding tonight is correct—that they are saying so because they cannot think of anything else to say.

The noble Lord, Lord Campbell of Alloway, then said that the existing scheme includes all manner of expenditure. Of course it does not. The studies which have been carried out on the benefits of the scheme suggest that—

Lord Campbell of Alloway

My Lords, I trust that the noble Lord will forgive my intervention. I must point out to him that I did not say that. However, if I did, I did not mean it. I intended to say that the existing balloting scheme covered only postal expenses.

Lord McCarthy

My Lords, I take the noble Lord's point. However, I shall have to read the report in Hansard tomorrow. I thought that he said the reverse: that it covered all manner of expenses. We now agree that it covers about 50 per cent. and that it does not in fact cover all expenses. That brings me to the third point about what he said. We never said that what we are suggesting in our amendment would cover every aspect of expenditure. If one reads the amendment carefully, one will see that in the third or fourth line when referring to payments it says: on the application of a trade union towards expenditure". I emphasise the word "towards". We are not referring to all expenditure. Indeed the Secretary of State and the certification officer could specify in the scheme introduced what could or could not be paid for. In any event, under the provisions of the amendment nothing would happen until a union had 1,000 members. Therefore, we are not suggesting paying out largesse to all kinds of people.

The noble Lord, Lord Boyd-Carpenter, said that trade unions had got themselves into this mess, that it was their mess and therefore why should the taxpayer pay for it. That is a familiar argument, especially from the noble Lord. We have sat here while one industrial relations Employment Bill after another has been introduced. It seems that everything is the fault of the unions. If you impose all kinds of liabilities on unions which cost them all sorts of money and which create all kinds of discomfort, it is all their fault. Everything is done by the Government and everything which goes wrong is the fault of the trade unions. As I said, that is a very familiar argument. I see that the noble Lord, Lord Boyd-Carpenter, wishes to intervene and I am perfectly happy for him to do so.

Lord Boyd-Carpenter

My Lords, we are not dealing with the generalisations which the noble Lord is making; we are dealing with a very simple case where something has gone wrong. For example, some of the members of the union have done things which the union cannot support and the union is therefore baling itself out in the most sensible and economical way. It is not a generalised question such as he put; it is precisely whether, when the union has got itself into this particular mess, the taxpayer should pay for it.

Lord McCarthy

My Lords, the point at issue is whether this is in fact a mess. I have no doubt that, in similar circumstances, someone who thought like the noble Lord could be sitting underneath the tumbrels in the French Revolution saying that as they had all got themselves into that mess, they must get themselves out of it. Our position is that the Government have got the trade unions into this mess. Noble Lords opposite may well laugh at that, but that is what we have been saying.

We have been saying—and we shall continue to do so—that this particular clause is a mess. It is impossible for trade unions to remain in this mess. They will be liable—we shall continue to argue this point—to all kinds of legal liabilities as a result of the mess of the Bill. That is why I generalise. We have said it before and the answer is always the same, "It is not our mess; it is your mess".

I come to what the Minister says. He says that he is worried about placing on the taxpayer the burden of unions acting in that irresponsible way. It is more or less the same argument as the one we had from the noble Lord, Lord Boyd-Carpenter. We expect the Minister to say that. It is not an argument at all, but at this stage and at this time of night, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Long

My Lords, I beg to move that further consideration upon Report be adjourned until 8.10 p.m.

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