HL Deb 07 March 1991 vol 526 cc1552-8

7.6 p.m

The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater) rose to move that the draft code laid before the House on 31st January be approved [9th Report from the Joint Committee.]

The noble Viscount said: My Lords, I beg to move that the House should approve the draft ACAS Code of Practice on Time Off for Trade Union Duties and Activities. The background briefly is that the Employment Act 1989 amended the provisions in the Employment Protection (Consolidation) Act 1978 on time off for trade union duties. I recognise that the noble Lord opposite argued against that amendment, but their views did not prevail in the parliamentary process. There was a full debate on this matter in 1989 and it would not be right now to go over the same ground in any detail. However, it would, I think, be helpful to your Lordships in considering this draft ACAS code if I gave a very brief explanation of why the amendment to the 1978 Act was made. It will help to set the present debate in context.

The amendment to the 1978 Act had its origins in the White Paper Building Businesses … not Barriers, which was published in 1986. Paragraph 7.9 of that White Paper said that the Government intended to limit the range of duties for which time off with pay must be allowed to the scope of union recognition by the employer. The reason for the White Paper proposal was to reduce unnecessary statutory burdens on employers. The law as it stood at that time could result in employers having to pay for lay trade union officials to take time off to deal with matters unrelated to those matters for which the employer recognised their union. That put a cost on employers and did not seem fair or right.

The Government implemented the White Paper proposal in Section 14 of the Employment Act 1989. That section restricted the time off for trade union duties in the manner I have indicated and was, in the Government's view, a modest, reasonable and necessary measure in the cause of good industrial relations. In our view the time-off provisions as amended strike a fair balance between the rights of trade union officials and the obligations which it is reasonable to impose on employers.

Turning now to the code, the Advisory, Conciliation and Arbitration Service is required by the Employment Protection Act 1975 to provide practical guidance in a code of practice on the time-off provisions. Such a code of practice has a status similar to that of the Highway Code. That is to say, failure to observe a provision of the code does not make anyone liable to tribunal proceedings but the code may be taken into account by the industrial tribunal in any proceedings before it. There is a specific reference to the code in the time-off provisions of the 1978 Act. It is a reasonably well-known and established procedure and has not, I think, caused any problems since the current code of practice came into force in 1978.

The amendment of the law on time off for trade union duties in the 1989 Act meant that the ACAS code, which has been in force since 1978, was out of date and had to be amended. If a code of practice is to provide practical guidance it must reflect the law accurately. If the law is changed, then so must the code be changed. Under the Employment Protection Act 1975 it was therefore necessary for ACAS to go through the procedure of drawing up a revised code to replace the existing one. In doing that it took the opportunity of improving the presentation of the code, as well as making sure that it reflected the change in the law.

As noble Lords will see, the code gives clear guidance on the legislative provisions themselves, the responsibilities of employers and trade unions, the advantages of establishing agreements or understandings on time off, the position where there is industrial action and the procedure for making a complaint to an industrial tribunal. In addition there is what I am sure noble Lords will agree is a very useful annex setting out the law in full.

As required by the 1975 Act, ACAS published a draft of the new code and circulated it to a wide range of organisations. Six thousand copies were sent out and comments were received from some 40 organisations. The great majority welcomed the draft as an improvement on the existing 1978 code. The new presentation was particularly well received, especially the typographical distinction between statutory provisions and practical guidance.

ACAS made some amendments to the draft in the light of the consultation. As required by the 1975 Act, it then presented the revised draft to the Secretary of State. Perhaps I could in parenthesis at this point remind noble Lords that both the TUC and CBI have members on the ACAS council.

The Secretary of State approved the draft code and has now laid it before this House for your Lordships' approval. With that explanation I commend the draft code of practice to your Lordships.

Moved, That the draft code laid before the House on 31st January be approved [9th Report from the Joint Committee].—(Viscount Ullswater.)

Lord Campbell of Alloway

My Lords, with the assent of the noble Baroness, Lady Turner of Camden, I follow my noble friend the Minister, as behind this debate there lies a fundamental question of recognition which affects the due and orderly conduct of industrial relations on which the party opposite may well wish to comment. Before coming to this I wish to say that surely the Government are much to be congratulated on this code, which is a document that meets all current essential requirements.

First of all, the legal status is made plain in paragraph 7 of the introduction. Secondly, it is in a form suitable for use as evidence in industrial tribunal proceedings relating to time off for trade union duties and activities, and indeed on appeal in the courts from the industrial tribunal. Thirdly, it is intelligible, concise and written in good, plain, ordinary English. Lastly, it recognises the need to maintain a good working relationship between employers and trade unions. It is designed to serve, and indeed shall serve, such an important purpose.

Time off with pay entitlement is to be available for employees who are trade union officials to carry out trade union duties (examples of which are given in paragraph 12) —the list is not exhaustive: this for the purpose of collective bargaining—and I shall return to that when I come to the fundamental question of recognition—and other related matters to such duties which the employer has agreed the trade union may perform: also to undergo training relevant to the carrying out of such duties as approved by the Trades Union Congress or the union, as stated in paragraphs 15 and 16.

But without some effective recognition procedures the code will remain of limited use and application and cannot fulfil, or ever fulfil, its potential. This we all appreciate—the noble Baroness opposite and no doubt the noble Lord, Lord Rochester—is a matter for primary legislation, and I referred to this in Hansard, Vol. 525, No. 31, at col. 272: there is no object in repetition.

My attention has since been directed to the findings of the Oxford Institute of Economics and Statistics, which concludes that recognition of manual unions reduces investment in an enterprise by some 23 per cent. This is worrying. But as predictability, so essential to productivity, cannot be achieved without collective bargaining, and as productivity and profits are on any economic analysis the magnet for investment, the hope must be that the findings of the Oxford Institute shall not be used as an argument against setting up some effective recognition machinery to complement this excellent code of practice.

Surely this question of recognition, long ripe for sane and sensible resolution, warrants the attention of the TUC, and is ripe for consideration by government. I thank my noble friend the Minister for his detailed and wholly comprehensible introduction, and I hope he will not take it amiss if I use this occasion, as I have used other occasions, to suggest that the primary law should be substantially amended.

Baroness Turner of Camden

My Lords, I rise to thank the Minister for his clear explanation of what this code is about and to say that there is very much to welcome in the code. I understand that the Trades Union Congress, which, as the noble Minister has said, has representatives on ACAS, believes that the code is as good as it is possible to be, bearing in mind the legislation on which it is based.

As the Minister has already indicated to the House, we on this side of the House did not like the restrictions imposed in the 1989 legislation. We hope there will come a time in the not-too-distant future when we shall have the opportunity of amending those restrictions, because surely it is to the benefit both of employers and employees that there should be a good and reasonable working relationship between representatives of recognised unions in a plant, factory or office and the management. Certainly time off with pay for a number of agreed activities is one of the elements in achieving a reasonable industrial relations environment.

There are aspects of the code to which I wish particularly to draw attention because they are important. I am sure that the Minister will agree that it is essential to do everything possible to encourage trade union democracy. That means providing facilities to lay members to take part in trade union activities—for example, to stand for election to national executive councils of unions and, when elected, to participate in the work of the executive and the union. It is the Government's repeatedly stated policy that unions should be returned to their members. I never thought that they belonged to anyone else. Nevertheless, that is the Government's philosophy. Therefore, I welcome those elements in the draft code which appear to encourage that development.

I have some doubts about the reference to associated employers. There are now very many large conglomerates which consist of a number of free-standing companies. Negotiations on pay bargaining and so on take place on a day-to-day basis in the free-standing companies. Therefore, I see no difficulty about time off for representatives handling those issues in the free-standing companies. However, there are often arrangements where, for example, pension schemes are negotiated on a group basis. I hope that the code as currently drafted will allow representatives to negotiate outside the free-standing companies with the main conglomerate in such circumstances.

As the noble Lord, Lord Campbell of Alloway, said, the code shows a great improvement in the way in which it is drafted, the general presentation and appearance. I join with him in congratulating the Government upon that. I also thank him from this side of the House for raising sharply the issue of recognition, which we have repeatedly raised from this side of the House. We have raised it whenever an Employment Bill has been before the House. We have lost our amendments directed at achieving a statutory means of securing recognition. That is an area to which we shall have to return even though the context of a draft code of practice is not the appropriate vehicle. Nevertheless, I thank the noble Lord, Lord Campbell, for raising the issue. It is one to which we shall return in this House when the opportunity presents itself. I thank the Minister for the presentation of the code and offer no objection to it.

Lord Rochester

My Lords, I join in thanking the noble Viscount, Lord Ullswater, for the way in which he has presented the revised code. As he said, it is based on the proposition underlying Section 14 of the Employment Act 1989 that the right of officials of recognised trade unions to paid time off for trade union duties should be limited to duties concerned with matters for which the union is recognised and that, similarly, paid time off for training must be relevant to duties meeting the same conditions.

When we debated the clause before it became part of the 1989 Act, I opposed it on the ground that the 1978 code, as interpreted by various court cases which followed its publication, provided a reasonable legislative framework for determining when a union official should be entitled to time off. I took the view that in the great majority of cases the flexible arrangements relating to time off that were already in operation were working well enough and that there was no need to change them to rest on management-based recognition agreements.

However, as the noble Viscount has reminded us, for better or worse the Act took effect. Within the restrictions that have now been introduced, ACAS has predictably produced an excellent document. I particularly welcome the way in which the summary of statutory provisions relating to time off is distinguished from practical guidance by appearing in bold type. I suppose that the only way in which the present arrangements can now be radically altered would be to revert to conditions under which it would be easier for trade unions to obtain recognition from employers. The noble Lord, Lord Campbell of Alloway, has canvassed such a course.

Like the noble Baroness, I have some sympathy for what he had to say, but I do not propose to follow him down that road now. Nevertheless, I shall be interested to hear whatever the noble Viscount may now have to say in response to the speech made by the noble Lord, Lord Campbell of Alloway. The only other comment I have to make is that under conditions in which so many companies, particularly small firms, are finding it hard enough even to survive, paragraph 31 of the revised code will often, unfortunately, be the operative one. I say that because I have been told that, with the best will in the world, in many cases employers are finding it impracticable to grant requests from trade unionists for time off and at the same time, in the words of that paragraph, ensure adequate cover for safety or to safeguard the production process". That is a matter for regret, but it is no doubt unavoidable in the present circumstances. On behalf of my noble friends, I am happy to accept the code.

Viscount Ullswater

My Lords, I pay tribute to the noble Baroness, Lady Turner of Camden, for welcoming this ACAS code. ACAS has obviously done a great deal of work on it by sending it out for consultation. This is the final product. The noble Lord, Lord Rochester, also welcomed the code, as did my noble friend Lord Campbell of Alloway, who congratulated the Government on it. I was very pleased to accept that praise, but the congratulations are due to ACAS.

I stress to the noble Baroness, Lady Turner, and to the noble Lord, Lord Rochester, that the important point in all this will depend on the terms of the particular recognition agreement and the subject matter covered. I need not remind your Lordships that recognition agreements vary as to the subjects covered. For example, one recognition agreement may provide that pensions are to be the subject of negotiation between the employer and the trade union while another recognition agreement may cover pay only and exclude further matters such as pensions.

The application of the time off provision to which this code is drawing attention, crucially depends on the terms of the recognition agreement. Generally speaking, if the recognition agreement covers a particular matter and is concerned with negotiations, then the employer is under a statutory duty to allow time off in relation to that matter.

My noble friend Lord Campbell of Alloway referred to the importance of trade union recognition. He also drew attention to a study to be published shortly in the British Journal of Industrial Relations which apparently shows that corporate investment is significantly lower in companies that recognise trade unions for collective bargaining. Perhaps I may take that point first. I am grateful to my noble friend for drawing attention to the imminent publication of that study. I agree with him that the results of the study appear to be significant. I assure him that my department will examine them very carefully.

I turn briefly to the general subject of trade union recognition. My noble friend was quite right to stress its importance in the context of this debate. The statutory right to time off for trade union duties in the Employment Protection (Consolidation) Act 1978, as amended by the Employment Act 1989, is entirely dependent on having a recognition agreement between the employer and the trade union. If there is no such recognition agreement there is no statutory right to time off. That has been the case since the statutory provisions were first enacted by the Labour Government in 1975. However, since 1980, when this Government repealed the statutory recognition procedure enacted by the Labour Government, the decision whether to recognise a trade union has been entirely a matter for the employer to decide. I completely understand that that is the point at issue between my noble friend and myself.

I should state that in our view that is how it should be. Our view is that the decision to recognise a trade union is a matter which only the employer can decide in the light of his own particular circumstances. He has a freedom of decision in this matter which seems to us to be right, bearing in mind the general voluntary nature of industrial relations in this country. But if an employer decides that he will recognise a union, he is subject to certain statutory duties. I shall not enumerate them all but I give one or two examples. One is the statutory obligation to allow time off for trade union duties. That is the subject of the ACAS codes which we are discussing this evening. Another statutory right which follows from recognition is the right for trade unions to have information disclosed to them by the employer which they need for the purposes of collective bargaining. That is provided for in the Employment Protection Act 1975.

It is important that we strike a correct balance in these matters between the obligations on the employer and the rights of the trade union. I believe that we have the balance right. Union recognition is voluntary, but if the employer decides to recognise the union certain statutory obligations flow from that decision. I believe that those statutory obligations strike a fair and reasonable balance between the obligations of employers and the rights of the unions which I mentioned. The change which the Employment Act 1989 made in the right to time off for trade union activities, reflected in the draft ACAS code of practice, was another element ensuring that the balance is correct.

We have had a useful debate and we have explored one or two of the interesting aspects of the subject. In my view—I hope noble Lords will agree—the new ACAS code of practice is an improvement on the old code. I am glad that my noble friend indicated his approval of the new layout and presentation of that code. It brings the code into line with the law as embodied in the Employment Act 1989 and its new presentation and style makes it easier to use by its customers—employers and unions. I commend the draft code of practice to the House.

On Question, Motion agreed to.