HL Deb 06 May 1993 vol 545 cc818-66

4.10 p.m.

Consideration of amendments on Report resumed on Clause 22.

Baroness Turner of Camden moved Amendment No. 45A: Page 41, line 44, leave out ("fourteen") and insert ("eighteen").

The noble Baroness said: My Lords, this amendment seeks to improve the length of maternity leave allowed for in the Bill from 14 weeks to 18 weeks. It is true that this was discussed in Committee, but I make no apology for returning to it because the matter came up very late and it was not possible in the circumstances for it to be adequately discussed and certainly not voted upon. It is important enough to he raised again.

I accept, as the Minister said earlier, that the majority of women will be free to take some of their maternity leave after the birth and that even the minority whose leave is triggered by sickness will have, in most cases, a period of leave remaining after the birth. I accept also that the Bill does not prevent employers and employees negotiating a longer period of leave on a voluntary basis. Some employers may well be willing to do that. Indeed, as I said in Committee, some good employers believe that the provision of good maternity leave actually saves them money that they might otherwise have to spend on recruiting and retraining new employees. Nevertheless, if all employers were good ones, it would not be necessary to have minimum legislative provision in this or indeed in any other field. We have to legislate minimum standards which are reasonable to apply across the whole spectrum of employment.

The potential burden on employers has been given as the reason for not accepting the proposals contained in this amendment. The Equal Opportunities Commission, however, has done a lot of work on the subject and advises that, on balance, there will be no additional burden on employers arising from the provision of 18 weeks' maternity leave. On the other hand, it believes that there are good reasons to make provision for at least 18 weeks' leave for all women, including the need to reduce complexity.

Statutory maternity pay is payable currently for 18 weeks for women with six months' service. By matching minimum leave with minimum pay, complexity is reduced, with no increase in the cost of pay provision. Indeed, some employers have already told the EOC that they support the 18 weeks' leave proposal for that reason. According to surveys undertaken by the EOC, at present British women take a median of 20 weeks' leave for the birth of their first child and 18 weeks for subsequent births. Therefore, it is questionable whether many women will wish or will be able to exercise the right of return after only 14 weeks.

The EOC survey of contractual schemes provided by 100 employers in both public and private sectors shows that none of those employers makes provision for less than 18 weeks. The Minister will no doubt say, as he did in Committee, that the 14-week period is one which has been accepted by all EC member states. Yes, I agree, but it is of course a minimum requirement. Surely we should have some regard as to what is most likely to suit our own situation.

As we have shown, British employers who wish to retain female staff have found in practice that it is necessary to agree to a period longer than 14 weeks. The cost would appear to be minimal and the benefits to the mother and her child may be great. Therefore, I hope that this time round the Minister will be willing to accept the arguments which have been put forward. I beg to move.

Baroness Lockwood

I support my noble friend who has moved this important amendment. There are a number of reasons why the Government should be able to support it today. In the first place, the fact that we are now introducing another length of maternity leave into the system adds to what is already a very complicated situation. National Audit Office research into statutory sick pay and maternity pay indicated the difficulties employers already have in operating maternity pay.

An extension of the period from 14 weeks to 18 weeks would bring it into line with the period for which paid maternity leave is already available. That would give 18 weeks plus the 42 weeks which an employee is entitled to take, but without pay.

My noble friend referred to the good employers. I understand from the EOC that 18 weeks is the minimum period given by employers who provide contractual maternity leave. That is better than the statutory leave. Again, we would get a line-up on the 18 weeks' period.

In Committee the Minister, the noble Viscount, Lord Ullswater, referred to the increased costs which he said would be significant if we were to extend the 14 weeks to 18 weeks. Of course, it is in the early weeks of maternity leave that the greatest costs are borne. The employer has to decide whether or not to replace the woman on maternity leave. If he does, it is in that initial period that the major costs in advertising, employing and training are borne. If he decides not to replace the woman on maternity leave, which is the policy of many employers, then there is some cost at that stage. It is the cost in terms of productivity and lower efficiency because one person has been taken out.

That is the choice of the employer, and that cost would be borne in any case. I believe that the Minister has exaggerated the additional amount that would be borne by employers if the period were to be extended. We have to bear in mind that the absence of anyone from work involves cost, whether it is for sick leave, holidays or maternity leave. The cost to the country if women decided not to have babies would be even more than it is at present and would create a crisis. These days many women choose to follow a career and not to have a family. As legislators, we should try to facilitate the combination of a woman continuing with her career and having a family as well. The amendment would help in that respect. I hope that the Minister will be able to accept it.

Baroness Seear

I want briefly to support the amendment. Most of the important points have been made. I wish, however, to make an additional point which has not been mentioned. It depends on when the woman decides to go on leave. If she goes early because she is not feeling well and is having difficulties, then the amount of leave that she has after the baby is born is correspondingly reduced. That can mean that the amount of time which she has for looking after the child in those early weeks is very short indeed. The extra four weeks cannot make very much difference to the employer.

As the noble Baroness, Lady Lockwood, said, the real expenses are incurred in recruiting and training a person. The employer who has done that will get a better return on his money by replacing the mother for 18 weeks because by that time the replacement is beginning to be productive. He is getting a return on the money he has invested. This amendment involves a very small addition, but it could make a considerable amount of difference, not to an enormous, but to an important, number of women.

Viscount Ullswater

My Lords, this amendment has been debated at every stage of the Bill, so it will come as no surprise to the House that I am unable to accept it. I have, of course, listened carefully to the noble Baronesses who put their names to the amendment. The noble Baroness, Lady Turner, knows that the Government's view is that a longer period of statutory maternity leave would impose too great a cost on employers. She has suggested that the costs would not be so great as we calculate, and that indeed employers may reap savings from the greater simplicity which would arise if the leave period were aligned to that for statutory maternity pay.

We have prepared a compliance cost assessment in the usual way which covers not only the Bill's maternity leave provisions but also its maternity dismissal provisions. The assessment indicates that the costs to employers are likely to be in the range of £100 million to £250 million annually —not a small sum.

If any particular employer believes that it is the right thing to do, there is of course nothing to prevent him from making available to his employees a longer period of leave than is laid down by the statutory minimum. The Government welcome additional rights being provided on a contractual basis where employers consider that they can afford to provide them. But that is a different matter from requiring all employers to provide such enhanced rights whether or not their circumstances make this appropriate. It is the role of legislation to lay down necessary minimum provisions on which employers can build as they see fit.

Fourteen weeks has been set as the necessary EC minimum period of maternity leave by all member states, including the UK, under the provisions of the Pregnant Workers Directive. If employers as a whole were required to provide a longer period of maternity leave there would be a considerable danger that they would seek to escape such obligations by avoiding recruiting women of child-bearing age.

Noble Lords have also argued both in Committee and at this stage that 14 weeks' leave gives insufficient time after the baby's birth before the woman has to return to work. However, as I have pointed out before, under the provisions the woman can choose to begin her maternity leave period at any time up to the birth of her baby, unless she is unfit for work because of her condition. Even then she can choose to take sick leave unless she is within six weeks of the expected week of birth, which would still leave her with a reasonable length of time—some eight weeks or so—at home afterwards.

If a woman chooses to begin her leave 11 weeks before her baby is due that is entirely for her, but it is her choice and it would not be right to impose additional burdens on employers as a result.

The provisions do, of course, cater for the unusual case where a woman would otherwise run out of leave because she started her leave early and her baby was born very late. We have made it clear, in line with the requirements of the directive, that in no circumstances will the woman have to return to work less than two weeks after the week in which the baby is born.

I should add, of course, that most women will in any case be entitled to return to work after an absence of significantly longer than 14 weeks. Those with two years' service will have the right to return to their job up to 29 weeks after the birth of their baby. Over 60 per cent. of working women have sufficient service to qualify for this considerable period of absence.

At around 40 weeks, the UK has the longest period of maternity absence in Europe; and, at 18 weeks, one of the longest periods of paid maternity absence. In addition, all pregnant employees in the UK have had the right to paid time off for antenatal care since 1980—a right which women in some other European countries will enjoy only as a result of the directive. The provisions in the Bill will further enhance our already substantial package of maternity rights. I believe that those arguments are conclusive and I ask the noble Baroness not to press the amendment.

Lord McCarthy

My Lords, before the noble Viscount sits down, can he say a word or two about the figures of £100 million and £150 million? From where does he get them? At the moment, the Government are not suggesting that the employer should pay women who are on maternity leave. We do not know what they are going to do about that. Where does that money come from?

Viscount Ullswater

My Lords, the compliance cost assessment has been undertaken by the Government. Those amounts include paying for substitute labour and the recruitment costs for those who are placed—

Baroness Seear

My Lords, but whoever is paying the substitute is not paying the woman. It is not extra; it is instead of.

Viscount Ullswater

My Lords, costs are involved, such as those of recruiting other labour. It may be that the rate of pay for a short period is not the same as the rate of pay that may be given to the woman in post. Other costs may also be involved. As I said, the compliance cost assessment has come up with the figure—I gather that it is a fairly wide figure—of between £100 million and £250 million.

Baroness Lockwood

My Lords, before the noble Viscount sits down, is he referring to the total cost for the 14 weeks' maternity leave or to the cost if maternity leave were extended to 18 weeks? It seems to me that he is saying that the cost of between £100 million and £150 million—I believe that is what he said—includes the initial cost, whereas what we have been arguing from this side is that the extra four weeks at the end will work out at a proportionately lower rate than the initial early rates.

Viscount Ullswater

My Lords, with the leave of the House, I think that I made it quite clear that we have prepared a compliance cost assessment. That has been placed in the Library, so the noble Lord, Lord McCarthy, can study it at will. What I said is that it covers not only the Bill's maternity leave provisions but also its maternity dismissal provisions. I was quite clear about that. I was not talking solely about the four weeks to which the noble Baroness was referring. What I am saying is that the provisions already cost employers between £100 million and £250 million.

Baroness Turner of Camden

My Lords, I am not really surprised at the Minister's response because, as he said, we have discussed this before in Committee. However, I am disappointed that he has not had some fresh thoughts since we raised these issues earlier. I am not at all happy simply to leave the issue there. I feel that the figures that he has given us this afternoon are really rather dubious. We are saying that the extra four weeks will not cost very much. My noble friend Lady Lockwood has dealt with that. Indeed, the EOC survey came up with the finding that the 100 or so employers whom it contacted welcomed the extra simplicity, as they see it, that would be involved in having the 18-week period, which is the same as the statutory maternity pay period. They thought that that would simplify matters. As we have heard, the situation is already complicated enough.

We do not accept the figures that the Minister has given us because we do not think that the extra four weeks, which is all that we are asking for in this amendment, will be all that costly. In any event, employers will already have had the expenditure involved in taking on somebody to stand in while the woman who is having the maternity leave is away. Therefore, we cannot really see that any extra cost is involved. On the other hand, as my noble friends have said, the benefits to the women concerned and to their babies are substantial.

It seems to me that the Minister is making an awful lot of what is really quite a modest request from the organisations that are concerned with maternity leave. The Maternity Alliance, the EOC and a number of other organisations that are very much concerned with the welfare of women and their children have all been pressing for this. I am very surprised that the Minister has not seen fit at this stage to say that he is prepared to accept the amendment. In those circumstances, it is my intention to test the feeling of the House.

4.29 p.m.

On Question, Whether the said amendment (No. 45A) shall be agreed to?

Their Lordships divided: Contents, 87; Not-Contents, 143.

Division No. 1
Acton, L. Graham of Edmonton, L.
Addington, L. Greene of Harrow Weald, L.
Airedale, L. Halsbury, E.
Allenby of Megiddo, V. Hampton, L.
Ardwick, L. Hanworth, V.
Aylestone, L. Harris of Greenwich, L.
Beaumont of Whitley, L. Hayter, L.
Birk, B. Henderson of Brompton, L.
Blackstone, B. Hilton of Eggardon, B.
Blease, L. Hollis of Heigham, B.
Bonham-Carter, L. Jay, L.
Boston of Faversham, L. Jay of Paddington, B.
Bottomley, L. Jeger, B.
Bruce of Donington, L. Jenkins of Putney, L.
Callaghan of Cardiff, L. John-Mackie, L.
Carmichael of Kelvingrove, L. Listowel, E.
Carter, L. Llewelyn-Davies of Hastoe, B.
Castle of Blackburn, B. Lockwood, B. [Teller.].
Charteris of Amisfield, L. Lovell-Davis, L.
Cledwyn of Penrhos, L. Macaulay of Bragar, L.
Cocks of Hartcliffe. L. McCarthy, L.
Dean of Beswick, L. Mclntosh of Haringey, L.
Dormand of Easington, L. Mackie of Benshie, L.
Eatwell, L. McNair, L.
Falkender, B. Mallalieu, B.
Falkland, V. Mason of Barnsley, L.
Fisher of Rednal, B. Merlyn-Rees, L.
Gallacher, L. Milner of Leeds, L.
Galpern, L. Molloy, L.
Gladwyn, L. Morris of Castle Morris, L.
Mulley, L. Seear, B.
Nicol, B. Shackleton, L.
Peston, L. Shaughnessy, L.
Pitt of Hampstead, L. Stedman, B.
Plant of Highfield, L. Stoddart of Swindon, L.
Ponsonby of Shulbrede, L. Strabolgi, L.
Prys-Davies, L. Taylor of Blackburn, L.
Rea, L. Tordoff, L.
Redesdale, L. Turner of Camden, B.
Richard, L. Wedderburn of Charlton, L.
Rochester, L. White, B.
Russell, E. [Teller.] Williams of Elvel, L.
Sainsbury, L. Williams of Mostyn, L.
St. John of Bletso, L.
Abercorn, D. Hailsham of Saint Marylebone, L.
Aberdare, L.
Abinger, L. Harding of Petherton, L.
Aldenham, L. Hardinge of Penshurst, L.
Aldington, L. Harvington, L.
Alexander of Tunis, E. Hayhoe, L.
Annan, L. Hemphill, L.
Archer of Weston-Super-Mare, L. Henley, L.
Hesketh, L. [Teller.]
Astor, V. Holderness, L.
Astor of Hever, L. Hood, V.
Atholl, D. Howe, E.
Attlee, E. Hylton-Foster, B.
Bessborough, E. Ilchester, E.
Birdwood, L. Jenkin of Roding, L.
Blatch, B. Kimball, L.
Blyth, L. Kintore, E.
Boardman, L. Knollys, V.
Boyd-Carpenter, L. Lauderdale, E.
Brabazon of Tara, L. Leigh, L.
Braine of Wheatley, L. Lindsey and Abingdon, E.
Bridgeman, V. Long, V.
Broadbridge, L. Lyell, L.
Butterworth, L. McColl of Dulwich, L.
Cadman, L. Mancroft, L.
Caithness, E. Marsh, L.
Campbell of Alloway, L. Merrivale, L.
Campbell of Croy, L. Mersey, V.
Carnock, L. Monson, L.
Carr of Hadley, L. Mottistone, L.
Chalker of Wallasey, B. Mountgarret, V.
Chelmsford, V. Mowbray and Stourton, L.
Clark of Kempston, L. Moyne, L.
Colnbrook, L. Munster, E.
Colwyn, L. Murton of Lindisfarne, L.
Constantine of Stanmore, L. Nelson, E.
Cox, B. Norrie, L.
Craigavon, V. O'Brien of Lothbury, L.
Cranborne, V. Onslow, E.
Cross, V. Orr-Ewing, L.
Cullen of Ashbourne, L. Oxfuird, V.
Cumberlege, B. Park of Monmouth, B.
Dacre of Glanton, L. Pearson of Rannoch, L.
Davidson, V. Pender, L.
De Freyne, L. Peyton of Yeovil, L.
Denham, L. Rankeillour, L.
Denton of Wakefield, B. Reay, L.
Downshire, M. Rennell, L.
Eden of Winton, L. Renton, L.
Elliot of Harwood, B. Renwick, L.
Faithfull, B. Rippon of Hexham, L.
Ferrers, E. Rodger of Earlsferry, L.
Finsberg, L. Romney, E.
Flather, B. St. Davids, V.
Forester, L. Sanderson of Bowden, L.
Fraser of Carmyllie, L. Sandford, L.
Fraser of Kilmorack, L. Seccombe, B.
Gainford, L. Shannon, E.
Geddes, L. Sharples, B.
Gilmour of Craigmillar, L. Skelmersdale, L.
Gisborough, L. Slim, V.
Goschen, V. Soulsby of Swaffham Prior, L.
Gray of Contin, L. Stewartby, L.
Strafford, E. Trefgarne, L.
Strange, B. Ullswater, V.
Strathclyde, L. Vivian, L.
Strathmore and Kinghorne, E. [Teller.] Wade of Chorlton, L.
Wakeham, L. [Lord Privy Seal.]
Sudeley, L.
Swinfen, L. Westbury, L.
Taylor of Hadfield, L. Wise, L.
Terrington, L. Wynford, L.
Teviot, L. Young, B.
Thomas of Gwydir, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.38 p.m.

Viscount Ullswater moved Amendments Nos. 46 and 47:

Page 43, line 14, at end insert: ("Requirement to inform employer of return during maternity leave period.

.—(1) An employee who intends to return to work earlier than the end of her maternity leave period shall give to her employer not less than seven days notice of the date on which she intends to return.

(2) If an employee returns to work as mentioned in subsection (1) without notifying her employer of her intention to do so or without giving him the notice required by that subsection her employer shall be entitled to postpone her return to a date such as will secure, subject to subsection (3), that he has seven days notice of her return.

(3) An employer is not entitled under subsection (2) to postpone an employee's return to work to a date after the end of her maternity leave period.

(4) If an employee who has been notified under subsection (2) that she is not to return to work before the date specified by her employer does return to work before that date the employer shall be under no contractual obligation to pay her remuneration until the date specified by him as the date on which she may return.").

Page 43, line 38, at end insert: ("Contractual right to maternity leave.

.—(1) An employee who has the right to maternity leave under section 33 and a right to maternity leave under a contract of employment or otherwise may not exercise the two rights separately but may, in taking maternity leave, take advantage of whichever right is, in any particular respect, the more favourable.

(2) The provisions of sections 34 to 38 shall apply, subject to any modifications necessary to give effect to any more favourable contractual terms, to the exercise of the composite right described in subsection (1) as they apply to the exercise of the right under section 33.").

The noble Viscount said: My Lords, I have already spoken to these amendments with Amendment No. 45. I should like to move them en bloc. I beg to move.

On Question, amendments agreed to.

Earl Russell moved Amendment No. 48:

Page 43, line 38, at end insert: ("Paternity leave.

.—(1) An employee whose spouse has given birth shall be entitled to take ten working days leave (referred to in this section as paternity leave).

(2) Paternity leave can be taken at any time from the birth until the end of three months following the birth.

(3) An employee on paternity leave shall be entitled to full pay.

(4) The employee has the right to decide when to take paternity leave except that the employer must be given—

  1. (a) 21 days notice of the expected week of confinement of the employee's spouse, and
  2. (b) reasonable notice of the time when paternity leave is to be taken when that is practicable.

(5) For the purposes of this section a spouse includes a man and a woman who are not married to each other but are living together as husband and wife.

(6) Regulations may provide for the provisions of the 1978 Act and Schedule 2 to this Act, to have effect as if the words "given birth" were substituted "accepted the placement of a child for adoption" and the regulations may include such incidental or supplemental provisions as appear to the Secretary of State necessary or desirable."").

The noble Earl said: My Lords, the purpose of this amendment is to provide for a right to paternity leave. When we discussed the matter in Committee, the noble Viscount rehearsed, as he saw it, the purposes of maternity leave; namely, to provide for and recover from childbirth and, in his words:

"to nurse and care for her baby in its early life".—(Official Report, 25/3/93; col. 550).

The first purpose clearly does not apply to fathers; but the second, as I see it, does.

We are in the middle of a fairly considerable change—it has perhaps been going for some 150 years and may be half way through—in the basic pattern of the relations of the sexes. It is probably the biggest change in our social history in 2,000 years. It needs a good deal of adjustment. It takes a good deal of working out; and, as I see it, the task of government is to make things easier for people to work it out for themselves and not to impose any particular pattern. It is in that situation possible that fathers may wish to be involved in caring for their children from their very earliest days. In fact, many do. When I visit couples among my junior colleagues, I am often as likely to find the baby in the father's arms as in the mother's.

When people decide which parent is to carry the weight of the early days of caring, the choice may depend upon the urgency of the jobs of the two partners. I recall the case of a woman who was in merchant banking who went into labour halfway through concluding a multi-million pound deal. She concluded the deal later that evening at her hospital bedside. In an occupation such as that, one may see why the father, who was equally successful but in a job with a rather less urgent time schedule, might have become involved, as he did, in the care of the child. In those circumstances, it might make a great deal of sense for the father to be able to take time off work to help to get the arrangements working smoothly.

There is no reason why the father should not have as much right as the mother to be involved in the early care of the child. When we discussed this issue in Committee, the Minister said that it was not an appropriate matter for legislation. I hope that he has now reconsidered that remark because it is one which will not receive a favourable reaction from the younger members of our population. Indeed, it might produce a certain amount of merriment. I hope that in abandoning it, the Government will enter the 20th century just in time to leave it. I beg to move.

Baroness Turner of Camden

My Lords, I have nothing to add to what the noble Earl said. We supported a similar amendment in Committee. We support the amendment this afternoon.

Lord Swinfen

My Lords, I have quite a lot of sympathy with the amendment. I thoroughly enjoyed looking after my four children. I hope that in due course my son will enjoy looking after his children. But I cannot accept the amendment as drafted because of subsection 5(5). That states: For the purposes of this section a spouse includes a man and a woman who are not married to each other but who are living together as husband and wife". One should not encourage people to live together as husband and wife if they are not prepared to take on that very special position, either as a husband or a wife, which in my view means that one is intending to be constant to the other. It is not right to encourage to live together people who are not prepared to get married.

What would be the position of a man and woman living together, with the woman giving birth to a child, while the man in fact had a wife elsewhere whom he is supposed to support? To my mind that would be impracticable. I feel that the amendment would be impracticable to operate. What is the position where a woman has a miscarriage? Does that count as a birth? Would similar leave be due? It is important for a husband to support a wife in the event of a miscarriage. In many ways it is more important than where a healthy child has been born, because there is a bereavement which needs to be overcome at the same time. For the reasons that I have stated, especially in connection with subsection 5(5), I cannot accept the amendment.

4.45 p.m.

Lord Boyd-Carpenter

My Lords, I fully agree with what my noble friend Lord Swinfen has said. I would add only that to put into an Act of Parliament a statement that where a couple are living together as man and mistress they should be referred to and considered as man and wife, is an outrageous idea which would disgrace the Bill into which it was inserted. For that reason alone, I should have thought that your Lordships should reject the amendment.

I have also to admit that I have no enthusiasm for the doctrine of paternity leave. One can put forward an argument for it; but one has to be careful about imposing additional burdens upon employers, especially in the present state of the economy. It would be unwise to add this provision. However, leaving that aside, for the reason that my noble friend so eloquently gave, I would regard this as a most improper—I use the word deliberately—proposal to insert into an Act of Parliament.

Lord Marsh

My Lords, I do not share the views of either of the two previous speakers. I find this amendment to be an abomination. Parenthood is an extremely important condition, but it is also a completely voluntary condition. Most working people nowadays receive in excess of three weeks' holiday. If anyone is taking parenthood seriously, then once, twice, or even three times in a working lifetime, it would not be outrageous to expect the father to take a few days of his annual holiday to assist his wife if she needed help.

Baroness Lockwood

My Lords, an important principle is involved here. It is whether we allow fathers to share the responsibility and delights of parenthood. In modern society it is important —the Government tell us this time and time again—for women to be integrated into the workforce. At a time when more and more women are employed and embarking upon careers, it is important that they can share the burdens and joys of the birth of the child with their husbands.

The concept is not new. Many of the best employers already provide some paternity leave for the men in their employment. Most of our Continental neighbours have facilities for paternity leave. It is that point that we need to address. I understand the point about subsection 5(5) that has been made by the noble Lord, Lord Swinfen; but under UK and European legislation we already have laws which prevent our discriminating upon grounds of marriage. I am not sure that if we were to accept paternity leave for married men, that we should not be infringing the law if we denied it to a single man who was living in a sound and stable relationship with the woman who was bearing his child. I am not sure that that would not conflict with the existing law.

Baroness Seear

My Lords, is it not correct that paternity has to do with being a father and not with being a husband?

Baroness Lockwood

The noble Baroness is right. If a man can be proved to be the father of a child, a woman has the right to seek subsistence for the child. The question is not whether one is married. The noble Lord, Lord Swinfen, is entitled to his opinion on the matter from a moral point of view. However, we must look at the situation which now exists; and, as the noble Baroness said, we are talking about paternity leave.

Viscount Ullswater

My Lords, as I explained in Committee, I do not consider that the measures proposed in the amendment are appropriate for legislation. During those discussions it was suggested that the arguments in support of statutory provisions on maternity leave could equally be applied to paternity leave. I do not believe that that is the case. At this stage it would not be right for me to go into the problems foreseen by my noble friends Lord Swinfen and Lord Boyd-Carpenter, although I have some sympathy with the thoughts which lie behind them.

The statutory maternity provisions are designed to safeguard the mother's career while also giving her a period to prepare for and to recover from childbirth. They also give her the opportunity to nurse and to care for her baby in its early life. The same considerations simply do not apply to paternity leave. The proposed statutory requirements would add to employers' costs and would inevitably reduce job opportunities. That is why I firmly believe that such measures, whether they concern paternity or perhaps adoption leave, are best dealt with on a voluntary basis by individual employers directly with the employees concerned. In that way the parties involved can take proper account of their own particular needs and circumstances. I took note of what was said by the noble Lord, Lord Marsh, about parental duties, and I entirely agreed with his sentiments.

In respect of paternity leave, there is growing evidence that the voluntary approach is working. Examples of voluntary arrangements have been well documented and are growing in use and popularity. A survey conducted in 1990 by the labour research department pointed to the rapid increase in paternity leave provision in the UK in recent years. Forty one per cent. of cases in the sample had introduced paternity leave for the first time since,the start of 1988.

As I said in Committee, the majority of companies in the UK approach such matters on a voluntary footing. That approach allows them the flexibility to tailor arrangements to the particular circumstances of each case and to take proper account of what can be afforded. The Government see their role as encouraging good practice among employers in this field. The imposition of one particular set of arrangements by law would undoubtedly jeopardise the wide range of voluntary child care arrangements already in place. By increasing costs and reducing employment, the measure would harm those whose welfare it is aimed to improve.

I hope that in the light of my comments the noble Earl will agree to withdraw his amendment.

Earl Russell

My Lords, I can hardly say that I am encouraged by that reply. I was grateful for support in principle from the noble Lord, Lord Swinfen. I listened with care to the point that he made about couples, but he is out of line with a good deal of legislation already on the statute book. When one looks at the Child Support Act or the income support general regulations, one sees that it is an accepted legal principle that we deal with couples who live together on a regular and consistent basis and in many practical ways in the same way as we deal with man and wife.

I respect the noble Lord's moral principle; but if he is dealing with practical legislation for society as a whole, he is arguing the case about 30 years too late. He reminded me of an 18th century Member in another place who spoke for three hours until the Chamber was almost empty. He began to read the Riot Act when Edmund Burke, of all people, rose and said, "Ah, my friend, you are too late. See you not the crowd has dispersed?". I believe that the noble Lord has made his point about 30 years too late. However, I agree with his comments about a miscarriage. That is a matter which we might with propriety address in another amendment on which I hope we shall be able to work together.

I listened to what was said by the noble Lord, Lord Boyd-Carpenter, about business costs. I shall take that argument from the noble Lord because he made it in other circumstances in which we have worked together. I shall have more to say about business costs as the day goes on, but I shall say nothing further now.

The Minister wanted the practice on a voluntary basis; but we are concerned with freedom of choice. That is a principle which in other circumstances is congenial to the Government. We want people to be able to choose whether they want to have a matrimonial pattern with the father involved in the care of the children. But they cannot make that choice unless they are able to take the leave.

I shall not press the amendment today. The time will come to press it, but that is some years ahead yet. The Minister is young and I hope in due course to see him voting with me in favour of the provision. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 [Dismissal rights]:

[Amendments Nos. 49 and 50 not moved.]

Lord Henderson of Brompton moved Amendment No. 51:

After Clause 25, insert the following new clause:

("Written reasons for dismissal

.For Section 53 of the 1978 Act there shall be substituted— (2) An employee shall not he entitled to a written statement under subsection (1) unless on the effective termination he has been or will have been, continuously employed for a period of six months."").

The noble Lord said: My Lords, I shall move the amendment only briefly because it will be useful to have the Minister's reply in the Official Report. Officials of the Department of Employment have been extremely helpful to me and to members of the citizens' advice bureaux. It is largely as a result of their comments that I am able to keep my remarks brief.

The purport of the amendment is to reduce the qualifying period for an employee receiving written reasons for dismissal from two years to six months. There are manifest advantages in the employee and the employer receiving written reasons. The reasons for an employee having a certificate in his hand are obvious and I need not elaborate on that. However, often there is a saving of time, cost and trouble to the employer if the certificate is given because the employer is not then badgered to provide one, for good reason. It would be a once-and-for-all transaction undertaken when the employee's occupation came to an end.

When claiming social security benefit, as the dismissed employee would, time would be saved at the employment office. Therefore, in the experience of the CAB the reduction to six months of the qualifying period enabling the employee to receive written reasons for dismissal would help a great deal on the ground. For that reason, I beg to move.

Lord McCarthy

My Lords, we support the amendment. It is an attempt to return to the previous position, which was changed by the Government's Acts of 1982 and 1989. No justifiable explanation was given as to why the situation was changed. The noble Lord, Lord Henderson, explained why it would be useful for the employer to give such reasons but it would also be useful to the employee. Indeed, most personnel managers would say that the giving of reasons for dismissal is elementary, good personnel practice. It forces the employer to think precisely why the dismissal is taking place. Sometimes, when the employer is forced to give a reason, he decides that he does not wish to dismiss the person after all because he cannot formulate a precise legal and justifiable reason.

It is also useful for the worker when he goes for another job because he knows why he has been dismissed. He can say, "It was not for stealing or for this or for that; it was for something else". That helps the employee when he goes to the job centre because he is able to say what the dismissal was about and what aspects of his conduct were said to be unsatisfactory. It is elementary, good industrial relations. All good employers follow that practice and there is no reason why the others should not be forced to do so after an employee has been employed for six months.

5 p.m.

Lord Wedderburn of Charlton

My Lords, I had some doubts as to whether I could support the amendment because it is so modest. It is important to remind ourselves that the section of the Act concerned requires an employer to give notice of the reasons for dismissal only at the request of the employee. There is no remedy for failure at all. The only remedy is for unreasonable refusal. Therefore, we begin with what is called in the literature a very occasional obligation in that respect.

I suspect that if any noble Lord were dismissed, no matter how many weeks or months he had been employed, he would regard it as rather unreasonable not to be given some reason for dismissal. On that basis, the noble Lord's amendment is very modest. Of course, it may be a step along the way. As my noble friend said, when the extension was introduced by the Government the noble Lord, Lord Strathclyde, said: It is to make a further contribution to our general policy of reducing burdens on business, in particular by simplifying legislative requirements for small firms".—[Official Report, 16/10/89; col. 768.] He went on to say that that would be a factor in creating new job opportunities. It may be that it is early days but it has not had much effect. If the Minister cannot show us that it has had effect, then he is advised to accept the amendment.

Lord Finsberg

My Lords, I cannot join in this strange consensus. I could have understood the logic of Amendment No. 51 had Amendment No. 50 been moved because the two flow together. However, it is unacceptable to say that the right to claim unfair dismissal after six months should not be provided but then to require written reasons for dismissal after a period of six months' employment.

There are many reasons why employers will wish to dismiss employees. They do not wish to put on paper some of those reasons. It may be chemistry. Anyone who has dealt with individuals over a period of years knows that sometimes chemistry does not fit. In exactly the same way, people are now much more cautious, because of the immense urge to go to litigation, about giving a reference. Although you may wish to say what is true, on many occasions you think twice about it and decide that although it may be true, it is probably better to hedge your bets and say something less precise.

That would certainly put an additional burden on employers. Would it be of benefit to an employee? I am not sure. However, I am certain that if you wish to make a useful contribution to industrial relations, it is better to leave the two matters together. If a two-year period for a claim of unfair dismissal is correct, then it should also be correct that the reasons are given after a period of two years rather than six months.

Lord Wise

My Lords, I cannot agree with my noble friend. I support the noble Lord, Lord Henderson. Written notice must be given to employees employed for at least two years. It seems unfair that that should not apply also to employees who have been employed for a shorter term; namely, six months or more.

I cannot see that that imposes a greater burden on employers. I should have thought that it is better to give a written statement at the time of dismissal rather than to enter into lengthy protracted correspondence with the employment service which must determine whether or not a dismissal was fair. This is a fair and reasoned amendment and I hope that my noble friend will look favourably upon it.

Baroness Denton of Wakefield

My Lords, I have listened carefully to the views of noble Lords. I thank the noble Lord, Lord Henderson, for indicating that consultations between our officials, the CAB and the noble Lord proved of value to all parties. That is important, and I know that our officials have listened carefully to matters brought before them.

The right to receive written reasons for dismissal depends upon the same qualifying period of service as the right to complain of unfair dismissal. That is as it should be, as my noble friend Lord Finsberg confirmed. The main purpose of the statement will generally be to help the employee decide whether he or she has grounds for making an unfair dismissal complaint. That is why we brought the two qualifying periods into line in 1989. That is why we wish to keep them in line.

To require employers to provide written reasons for dismissal to employees who do not qualify to complain of unfair dismissal would create an additional burden for employers. As the noble Lord, Lord Wedderburn, pointed out, the Government's long-term strategy has been and is to reduce regulation on employers to encourage enterprise and job creation. Amendment No. 51 would run counter to that strategy. The more restraints the Government place on employers, the greater will be the disincentive to the creation of new employment opportunities. We believe that the creation of those opportunities is crucial to the growth of the economy. Therefore, I hope that the noble Lord, Lord Henderson, will withdraw the amendment.

Earl Russell

My Lords, before the Minister sits down, before Third Reading will she consult with her friends at the Department of Social Security as regards how this amendment might save work in dealing with appeals against voluntary unemployment penalties?

Baroness Denton of Wakefield

My Lords, with the leave of the House, consultation between departments is continuous and ongoing, but I shall certainly ensure that it has been so in this case.

Lord Henderson of Brompton

My Lords, I thank all of your Lordships who have taken part in the debate. I am disappointed with the reply. I should say to the noble Lord, Lord Wedderburn of Charlton, that I would happily have cast the amendment in a form which he would desire but I did not think that there was a hope in hell or heaven that it would be accepted. I hoped that this more modest amendment would be accepted. Knowing as I do how much the Government place value on reducing regulation and so on, nevertheless I thought that this amendment might escape the net. I am sorry that it has not done so.

The amount of money involved would be extremely small but the gain would be great, not only to the employer and employee. Despite what the noble Lord, Lord Finsberg, said, I believe that the employer would gain. Certainly, the employment offices would gain. I am sad that the Government have not been able to accept this amendment, but I must take note of what the Minister said. I shall not press the matter, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 52 not moved.]

Schedule 4 [Provisions substituted for sections 1 to 6 of 1978 Act.]:

Viscount Ullswater moved Amendment No. 53: Page 75, line 7, after ("give") insert ("to the employee").

The noble Viscount said: My Lords, in speaking to Amendment No. 53 I should also like to address Amendments Nos. 54, 55, 59, 65 and 70, as well as Amendment No. 68 which is a minor one designed simply to ensure that new Section 4 has the intended effect. I hope that the latter need not detain us.

The purpose of the main group of amendments is to allow employers some leeway to give the written statement of particulars in the form of instalments, provided, of course, that they are all given to the employee within the two months' deadline which the Bill establishes. At present, the Bill provides that the written statement must be given in the form of a single document. We have decided, on reflection, that that is an unduly onerous requirement which could cause administrative difficulties for some employers—and we have indeed received a number of representations which lend weight to that view. It could also, in many cases, work to an employee's disadvantage as it would mean that the employer had to wait until all the information had been collected together before any single part of it could be given.

Having said that, the Government believe it is only right that certain fundamental details should still be given in one document, for ease of reference. It is indeed a requirement of the EC Proof of Employment Directive that certain details should be included or referred to in one document. That is why Amendment No. 65 provides that specified particulars must be given together in a "principal statement". The particulars in question are: the identities of the parties; the dates when the employment and period of continuous employment began; the amount and frequency of pay; hours of work; holiday entitlement; job title or brief job description; and work location.

All those particulars, with the exception of holiday entitlement, are required by the EC directive to be included, or in some cases referred to, in a single document. The Government are also committed to implementing the proposal, first put forward in the White Paper People, Jobs and Opportunities, that employees should receive explicit details of pay, hours and holiday entitlement. We consider it appropriate that all those fundamental matters, including holidays, should be covered in the principal statement.

In summary, this group of government amendments introduces additional flexibility which I hope will be welcomed by all noble Lords. The amendments do not in any way affect the amount or the type of information which must be given to an employee in the written statement; they merely provide for the statement to be set out in what may, in some cases, be a more convenient form. I commend them to the House. I beg to move.

Lord Mottistone

My Lords, I am most grateful to my noble friend the Minister for moving the amendment which is substantially the same as the one I moved in Committee. I had retabled it for debate now, but I withdrew it when I saw that my noble friend's amendment was almost exactly the same. As he explained, he has required slightly more than the European Community law requires in relation to holiday entitlement and the date upon which continuous employment begins. I shall not press those small points now. All I wish to do in relation to the amendment is to express my grateful thanks to my noble friend. I hope that that is a sign of further help in the future.

5.15 p.m.

Lord Wedderburn of Charlton

My Lords, lest it be thought that there is agreement in every part of your Lordships' House on Report in the matter, I should point out that this is the first time that we have debated the issue. It should be said that there are some difficulties for those who are employees rather than for the employers who have made the representations and, as the noble Lord, Lord Mottistone, made clear, have had them accepted. We do not know all the arguments; indeed, they have been put forward very briefly. But there are arguments in relation to an employee who in receiving his or her written particulars does not receive, as is widely believed, a written contract: he or she receives the best evidence of the contract of employment. Their place as evidence of the terms of contract of employment has grown more and not less important with the growth of such statutory rights as are still in force. For example, in redundancy matters the calculation of the normal week and normal pay will refer to the pay, et cetera, under the contract.

It may be thought that the whole edifice, such as it is, of statutory rights is based upon the common law contract of employment of which those particulars are best evidence. Therefore, if they are given as instalments we have no point of time at which that best evidence of the contract of employment is to be consulted by a court. If they come in driblets 1 should like to know the answer to the following two questions. First, if certain matters of the contract are covered by the first instalments but nothing is done until near the end of two months and a dispute breaks out, or if there is an adjudication about a particular further matter in the contract of employment which is held to be of particular meaning and the employer then issues his final instalment covering the same matter but containing a particular written with a different meaning, what is the evidence of the contract of employment? The Government must have given thought to those issues. I hope that the noble Viscount will reply, in general, as regards the relationship between the contract of employment, and proof thereof, and the later instalments which may not wholly accord, at least with the view of the employee, as to what those terms were to be.

Secondly, I note that the major matters of the employment must be stated in what is called the "principal statement". I appreciate that that was necessary because of the directive. However, the Government have not gone further than is allowed under the directive in favour of the worker. Indeed, I should point out to the Minister that it is because it is in favour of the worker that the Government are allowed, so to speak, to exceed the directive's minimum floor, not in favour of the employer. I do not say that the amendments do the latter.

However, why did the Government not make it a requirement that the principal statement should be issued first? What happens if a few of the minor matters of the contract of employment are put forward on paper by the employer and then, only late in the two-months' period—after, perhaps, the employment has been acted upon and the agreement is thought to be of a certain kind by both parties—the employer changes his mind and says, "Here is your principal statement with pay, hours and place of work", and so on?

Those problems have been introduced anew by this new idea to have written statements of particulars in instalments. I have referred to only two of the major problems. I ask the Government now to answer my questions. It is possible that on Third Reading we shall have to return to the matter to consider even further problems which are not quite so important but which, nevertheless, are of very practical importance.

Lord McCarthy

My Lords, I agree with everything said by my noble friend. I should like to begin very gently by complaining about the way in which the Government put forward these extraordinarily complicated changes in their own Bill at the very last moment. I cannot see why we have to have a very major change in a basic document, such as particulars in the contract of employment, introduced at Report stage in this House.

We all know—and I am not complaining—that the noble Lord, Lord Mottistone, has been putting the case all the while the Bill has been before this Chamber. We all know that the CBI, and perhaps other employer organisations, are in favour of it. However, so far as I know it has not been the subject of consultation. The trade unions have not been asked what they think about it. I do not even know whether the Institute of Personnel Management has been asked what it thinks. But it is a major change in the content of the employment particulars.

In particular, if that change is taken in connection with what is being done to the employment particulars as a result of European directives, we really are moving into a very uncertain area. The consequence of the schedule as it was first presented to us, and as it was presented to the other place, is that the employment particulars will now have to be much more detailed; indeed, they are much longer and much more precise. There are now many more particulars. Moreover, as my noble friend said and as I understand the amendment—if I am wrong I hope that the Minister will tell me—they can be dribbled out in dribs and drabs over a two-month period.

It seems to be the case that the principal statement will have to be issued. Whether it has to be issued before the dribbles I do not know. Perhaps the Minister can tell us that and whether there is any limit on the number of dribbles. After all, a large number of issues can be included in the employment particulars. It is not helpful for the average worker to have a statement this week and another statement next week, and information about collective agreements last month and information about the rate of remuneration next month.

If the Government want to introduce a measure of this kind, of this diversity and complexity and with this degree of change we should have more time to consider it. I agree that when we have had time to consider it we may very well wish to come back to the matter at Third Reading.

Lord Rochester

My Lords, I feel that from these Benches I must support what the noble Lord, Lord McCarthy, has just said about the way in which these amendments have been introduced at Report stage in this House without consultation. That is to be deplored. I must confess that I had not appreciated the complex issues which arise from the amendments, but I felt that I must comment on the disregard for adequate consultation.

Viscount Ullswater

My Lords, it just goes to show that one cannot please people by trying to accept a great many recommendations. We believed that they would assist with the dispersal of the written particulars. The noble Lord, Lord Wedderburn, has given the best reason for delaying the giving of particulars until the last minute, which was a problem we wished to overcome. Of course, the particulars have to be correct when they are given to the employee and they have to be correct at a date not more than seven days before they are given. Obviously, subsequent instalments would deal with different matters, but if there was a change in a matter which had already been dealt with in an instalment, there would be a requirement for a changed statement under paragraph 4 of this schedule. The principal statement need not come first if the employer is able to give one of the other statements at an earlier stage. It would he of no benefit to employees if they had to wait for the full two months for any statement at all.

The noble Lords, Lord McCarthy and Lord Rochester, complained that at Report stage we were introducing major changes. Of course, we take careful note of the representations which are made to us. I do not believe that the changes are as major as the noble Lords make out. I believe that it is of assistance to both employers and employees to have accurate and timely evidence of the written particulars of the employment. I ask the House to accept the amendments on that basis.

Lord Wedderburn of Charlton

My Lords, before the Minister sits down perhaps I may point out that Amendment No. 70 seems to refer in paragraph (c) to changes which occur after the end of the two-month period. The noble Viscount spoke of a need to give further particulars of changes within the two-month period. I find it difficult to reconcile that with his amendment, or even to find it in any subsection (4) of the many sections introduced by the schedule.

Viscount Ullswater

My Lords, I said that if there was a change in a matter which had already been given in an instalment, there would be a requirement for a changed statement under Section 4. I still believe that that is the case.

On Question, amendment agreed to.

Viscount Ullswater moved Amendments Nos. 54 and 55:

Page 75, line 7, leave out from ("statement") to end of line 8 and insert ("which may, subject to subsection (3) of section 2, be given in instalments before the end of that period.").

Page 75, line 16, after ("statement") insert ("or instalment of the statement containing them").

On Question, amendments agreed to.

Viscount Ullswater moved Amendment No. 56:

Page 75, line 32, leave out ("determine") and insert ("terminate").

The noble Viscount said: My Lords, I hope that this drafting amendment need not detain us. It merely inserts the word "terminate" in new Section 1(3)(e) in place of the word "determine" in order to provide consistency of terminology in the legislation for the action of terminating a contract. It has no substantive effect. I beg to move.

On Question, amendment agreed to.

Lord Rochester moved Amendment No. 57:

Page 75, line 43, at end insert: ("(jj) any arrangements through which the employer—

  1. (i) provides employees systematically with information on matters of concern to them as employees;
  2. (ii) consults employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests.").

The noble Lord said: My Lords, the amendment stems from one moved by the noble Lord, Lord Wedderburn, in Committee in which he sought to add to the particulars which the employer is obliged to include in the written statement to the employee information about the works council or other machinery, if any, by which the employer consults employees on matters connected with their employment and the affairs of the business. That would have supplemented particulars concerning collective agreements directly affecting the terms and conditions of the employment which under Section 1(3) (j) must be included in the statement.

In Committee, I said that there were many organisations where there was no union representation but where some machinery existed which enabled the employer to consult with employee representatives on matters connected with their employment. I argued that in principle there was just as much need in those instances as there was in organisations where there were collective agreements with trade unions for the employees concerned to be informed in writing of the relevant arrangements. If the principle is good for trade unions, it should also he good for other forms of consultative machinery. I might have added that there are many organisations in which there are both collective agreements and consultative machinery such as works councils.

In reply the noble Baroness, Lady Denton, said that there was a tightrope in deciding between what was of benefit and which points should be included in the written statement and which should not. She argued that there were many matters where employers had policies of which the employees should he made aware but she could not accept that this particular one should be included in the statement.

I have since been able to discuss the matter, and the background to Amendment No. 89, which I shall he moving later, with the noble Viscount, Lord Ullswater. I am most grateful to him for giving me the opportunity to do so. At first sight the phrasing of Amendment No. 57 may seem a little surprising. It is taken, in fact, from the Government's own wording in Section 1 of the Employment Act 1982 which is now incorporated in the Companies Act. It forms part of the statement which companies have since then been obliged to include in their annual directors' reports concerning the action they have taken during the financial year to develop employee involvement. I was instrumental in getting that section included in the statute and ever since I have been looking for opportunities to further the same cause in legislation in ways which might prove acceptable to the Government.

Following the 1982 Act the Institute of Personnel Management and the Industrial Participation Association (now the Involvement and Participation Association) produced a code and action guide aimed at helping companies to develop employee involvement in practical ways. I think that I am right in saying that both organisations asked the Government to give statutory effect to the code but the Government were unwilling to do so. It seems to me that this Bill presents the Government with an excellent opportunity to demonstrate in statute the support they have often expressed for the concept of employee involvement by agreeing to include Amendment No. 57 in Schedule 4.

I realise that paragraph 1 of the schedule consists partly of items called for by the European Community Directive, Proof of Employment Relationship, and partly of other items going beyond the requirement of that directive and arising out of responses to the Government's White Paper entitled People, Jobs and Opportunity. I recognise too that for the most part those items are of general application. However, the inclusion of the word "any" in Schedule 4(1) (3) (j) is a sufficient indication that in many organisations there are no collective agreements. Therefore the fact that not all organisations have other arrangements for consulting and providing employees or their representatives with information is not a valid reason for excluding reference to such arrangements in the section. Moreover, given the way in which, for better or worse, in recent years collective bargaining in industrial and other organisations has been replaced by other ways of dealing with individual employees, inclusion of Amendment No. 57 in the Bill would recognise that fact.

I have stated why the amendment is framed as it is. However, I am not wedded to its wording. If the Government believe that the principle underlying the amendment could be framed in a different and possibly shorter way at Third Reading, that would be entirely acceptable. However, I hope that the principle will be accepted by the Minister and by the House. I beg to move.

5.30 p.m.

Lord McCarthy

My Lords, we wish to support the amendment. However, I am a little confused because I had understood that Amendment No. 57 was grouped with Amendments Nos. 58 and 67. Does the noble Lord shake his head? Are the amendments being taken together?

Lord Rochester

My Lords, I believe that the amendments are grouped together. I personally am not responsible for either of the other two amendments. No one has spoken in support of them.

Lord McCarthy

My Lords, I shall concentrate on Amendment No. 57. We certainly like Amendments Nos. 57, 58 and 67. I agree with what the noble Lord said on Amendment No. 57. As he rightly said, Amendment No. 57 carries through Government legislation, whereas Amendments Nos. 58 and 67 make additions. In effect it is stated, "You have already legislated to say that companies should put those factors in their annual report. Surely, if companies include such matters in their annual report, the workers ought to be informed of them. Obviously providing information about consultation machinery is appropriate in employment particulars. For that reason, we support the amendment.

Baroness Denton of Wakefield

My Lords, I confess to sharing the confusion of the noble Lord, Lord McCarthy, because I, too, believed that we were speaking to Amendments Nos. 57, 58 and 67. I shall content myself to reply to Amendment No. 57. It is an important matter to the noble Lord, Lord Rochester. He stated that he has consulted with my noble friend Lord Ullswater on the issue. He seeks to add to the list of matters on which an employer is required to give particulars in an employee's written statement and main terms and conditions.

That is not acceptable to the Government. As I made clear when we debated similar amendments in Committee, the provision in Sections 1 to 6 of the 1978 Act have never been designed to cover every single aspect of an employee's terms and conditions. Rather, their purpose is to ensure that employees receive a useful written statement of the main or most important aspects of their employment.

Perhaps in my support I may refer to a statement of the noble Lord, Lord Wedderburn of Charlton. He stated in Committee that transparency and meaningful particulars are not necessarily created by having everything written out on a piece of paper for a particular worker.

The Government themselves are already providing in the Bill for a number of additions to the list of particulars which have to be included. Those are details concerning the duration of temporary contracts; information on the work location; a description of any collective agreements which directly affect the employee's terms and conditions; and certain further details for employees required to work abroad for a period of more than one month. We are also adding a brief description of the work for which the employee is employed, as an alternative to the title of the job. That is of course as a result of an amendment of the noble Lord, Lord Wedderburn, which we were happy to accept in Committee. In addition, we are providing that details of the most fundamental terms and conditions must be given explicitly in the statement, whereas previously employers have been able to give them by reference.

However, any further additions would undoubtedly increase the costs to employers of producing the information; and this would, in our view, be unacceptable. One must draw the line somewhere, and we believe that the Bill has got it right.

Furthermore, there are obvious advantages to employees in having a relatively brief, clear statement of their main or most important terms and conditions of employment. To add significantly to the list of matters which have to be covered in the statement, as the noble Lord seeks to do in the amendments, would create the real risk of them being snowed under with information, not all of which would be of equal importance.

The noble Lord, Lord Rochester, raised the issue of works councils and other consultative machinery. In the United Kingdom, the involvement of employees in the enterprises for which they work is a purely voluntary matter to be determined by agreement between the parties concerned. We believe that such an approach is most appropriate as it enables organisations to adopt flexible arrangements best suited to their own needs and those of their employees. In that way, companies will develop suitable mechanisms for informing and consulting their employees in matters of interest to them. We do not believe that it is necessary or helpful to introduce any element of compulsion and inflexibility into what is a very successful voluntary system.

I appreciate too that the noble Lord, Lord Rochester, tabled a similar amendment to the amendment that he now proposes in what became the Employment Act 1982. The amendment which was accepted by the Government required directors of larger companies to include in the report accompanying their annual accounts a statement describing action taken during the accounting year on employee involvement. That provision now resides within the Companies Act 1985. While the Government remain totally supportive of the Companies Act legislation, and would certainly accept that it is good practice for companies to include in their annual return such information, there are important differences between that legislation and the proposed amendment before us today.

First, while I believe that an indication in directors' reports of employee involvement arrangements is appropriate, I do not accept that the written statement is the right place to include details of information and consultation procedures. As I have said before, an over-abundance of elaboration and detail will not necessarily help the employees and may confuse the coverage of their main terms and conditions of employment.

Secondly, unlike the Companies Act requirement, it is not a single annual event but would be required to be included in all employees' written statements, thereby adding to business costs and making administrative arrangements cumbersome. Thirdly, the Companies Act requirement only impinges on larger companies which have adequate resources to deal with such matters. The proposed amendment would affect very much smaller companies which would carry heavy burdens.

Finally, the intention of the amendment to the 1982 Act was to bring into existence a mechanism which most companies did not at that time operate. That is not the case in the amendment before us today.

I turn now to the remarks of the noble Lord, Lord Rochester, on employee involvement. Of course, the Government firmly support effective employee involvement and has sought to encourage good practice in this area in a variety of ways. For example, the current campaign run jointly with the CBI seeks to demonstrate the importance of such involvement to key aspects of business performance and has proved most successful. Only last month the Chancellor of the Exchequer launched a joint. Treasury and Employment Department publication entitled Sharing in Success, which seeks further to promote employee financial participation.

But it remains the Government's view that employee involvement arrangements should be a voluntary matter to be determined by employers in the light of their own business needs and the needs of their employees. The strength of the voluntary approach is the flexibility it allows for employers to develop and implement arrangements which take account of local conditions and practice. Under the voluntary framework in this country, UK companies have developed a wide range of successful employee involvement schemes which are suited to their own circumstances. We believe this is the right approach and we hope very much that the best practice will spread. The written statement of terms and conditions is evidence of some of the employee's rights and obligations under the relationship which he or she has, as an individual, with his or her employer.

The purpose of Amendment No. 57, by contrast, is to require information to be provided on the arrangements which the employer has made with the workforce as a whole for the giving of information. The written statement is not the right place for this. I hope that in a somewhat lengthy answer I have been able to give reasons which will make it possible for the noble Lord to withdraw his amendment.

Lord Wedderburn of Charlton

My Lords, before the noble Baroness sits down, would she be prepared to examine her argument and consider whether a similar form of words to those in the amendment of the noble Lord, Lord Rochester, would be acceptable? By my count, she insisted seven times that the Government's stand was upon voluntary procedures and voluntary arrangements. The amendment which the noble Lord moved refers to arrangements through which the employer already systematically provides employees with information and already consults employees. The choice is the employer's under this formula, or if it is not clear enough perhaps it could be made clearer. Does her argument deal with that or would she reconsider it?

Baroness Denton of Wakefield

My Lords, by leave of the House, I can tell the noble Lord, Lord Wedderburn, that I continue the argument which he raised in Committee that we must avoid oceans of paper. It is clearly a matter of judgment as to what is included. As I said, I am unpersuaded that any of the matters covered by the amendment should be made a special case.

Lord Rochester

My Lords, I am grateful to the noble Lords, Lord McCarthy and Lord Wedderburn, for their expressions of support for the amendment. I am disappointed with the noble Baroness's reply, I had hoped that as a result of my discussion with the department there might have been a more positive response, given the explanation I endeavoured to give to the noble Viscount on the reasons underlying the amendment. I feel that all the more strongly, given that, as I said in my earlier remarks, the wording coincides precisely with part of Section 1 of the Employment Act 1982.

Like the noble Lord, Lord Wedderburn, I was surprised at the suggestion which seemed to be made by the noble Baroness that in moving the amendment I was in some way seeking to oblige employers to introduce consultative machinery and was thus not conforming with the voluntary principle. However, as the noble Lord, Lord Wedderburn, made plain, there is nothing in the amendment to suggest that any element of compulsion was intended. What is stated there would apply only to arrangements which are already in existence on a voluntary basis.

I do not believe that any useful purpose would be served by my pursuing the matter further now, but I should like to examine more closely what the noble Baroness said in reply. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

[Amendment No. 58 not moved.]

Viscount Ullswater moved Amendment No. 59: Page 76, line 14, leave out ("any") and insert ("a").

The noble Viscount said: My Lords, I have already spoken to this amendment with Amendment No. 53. I beg to move.

On Question, amendment agreed to.

Lord Mottistone moved Amendment No. 60:

Page 76, line 19, after ("of") insert ("a collective agreement or").

The noble Lord said: My Lords, in moving Amendment No. 60 I shall also speak to Amendments Nos. 61, 62, 66 and 71. They address an important problem for employers which arises from the existing provisions of the Bill; namely, the limited facility for the use of centrally held reference documents for notifying employees of particular terms and conditions of employment. Their purpose is not dealt with by the Government's Amendment No. 65 and the consequential amendments which I have already welcomed.

As currently drafted, the provisions of Schedule 4 only permit the employer to refer to other documents or particulars of terms and conditions relating to sickness and pensions, any disciplinary rules applicable to the employee, the later stages of disciplinary appeals procedures and grievance procedures, and particulars on notice rights.

Although the terms of the proof of contract directive preclude the use of reference documents in notifying certain particulars of employment, the Government have gone further than the directive requires by failing to permit reference to master documents for particulars of items which are not even required to be notified under the terms of the directive itself, as in the case with the initial stages of disciplinary appeals and grievance procedures and the contracting out arrangements for occupational pension schemes.

While I fully support the principle that all employees should receive written notification of their main terms and conditions of employment when they are employed for a significant number of hours each week, it is clear that the Government's proposal to restrict the use of reference documents will seriously affect flexibility and create an unacceptable administrative burden for businesses.

In connection with flexibility, I notice that my noble friend Lady Denton said how important flexibility was and how the Government welcomed it, so I think that what I propose to your Lordships encourages the flexibility that the Government would clearly like anyhow.

I also suggest that flexibility is of assistance to the employees and that the employees will benefit from not having too much paper put before them. My noble friend Lady Denton talked about oceans of paper, so we are all speaking along the same lines. What one wishes to do is to make it possible to have flexibility for the employers while at the same time not unnecessarily overburdening employees with the detailed particulars of their own terms and conditions and to use, where available, the reference documents that are relevant to everyone's situation.

Employers are not aware that current arrangements, under which collective agreements or other documents are held readily available for reference, create any complaints either from employers or employees, or create any discontent. What matters most is that employees are provided with information and that the wide variety of existing practices—and that is a key factor—means that employers should have the maximum amount of flexibility.

Even if the Government's approach in seeking to notify pay, hours and holidays individually is considered correct, there seems to be no basis why, for example, disciplinary rules can be notified by reference but not disciplinary appeal procedures, and similarly why pension rules can be notified by reference but not details of whether a scheme is contracted in or out of the National Insurance scheme. That is what Amendments Nos. 60, 61, 62, 66 and 71 are designed to address, by reintroducing the flexibility which is permitted by the terms of the directive. These amendments together will provide, to the extent permitted by the directive, some much-needed flexibility for employers to comply with the new requirement and will help to ease the administrative burden. They are relatively simple and innocuous and I hope very much that my noble friend the Minister will be prepared to support their inclusion in the Bill. I beg to move.

Baroness Turner of Camden

My Lords, 1 listened with interest to the comments of the noble Lord, Lord Mottistone, in moving the amendment. We on this side of the House have no strong objection to it. In fact I rather welcome the reference to a collective agreement. In my experience many collective agreements in industry are extremely comprehensive documents. I should have thought that pointing employees in the direction of a collective agreement which had been entered into on their behalf was an appropriate way of dealing with this situation. I hope that the Minister will be prepared to respond favourably to what has been said.

Lord Rochester

My Lords, I, too, wish to offer my support to the noble Lord, Lord Mottistone, on these amendments. I was pleased to note the terms of Amendment No. 66—I think I am right in saying that that amendment is also being spoken to—relating to disciplinary procedures. I believe that to be a most important element in management and deserves the comprehensive treatment which is provided for it in Amendment No. 66.

Lord Wedderburn of Charlton

My Lords, I wish to support the thrust of this amendment but I do so in order to put a particular question to the Minister. If all or part of the Government's response is to say they cannot do what the noble Lord, Lord Mottistone, wants them to do by reason of the directive, will they please set out for us precisely where the borderline of the directive falls? There are problems with the directive. It may be that the Government find the debate easier to conduct without reference to the directive or provisions within it. If that is not so, it would be helpful if the Government would say where they think the amendment proposed by the noble Lord, Lord Mottistone, transgresses the directive, if it does.

Viscount Ullswater

My Lords, I am grateful to my noble friend for his explanation of these amendments, all of which relate to the use of reference documents. I hope it will be helpful if I begin by explaining the Government's policy on this issue. At present the Employment Protection (Consolidation) Act 1978 provides that none of the particulars specified in the existing Section 1(3) need be given explicitly in an employee's written statement if, instead, the employer gives them by reference. Reference may be made to any other document which the employee has reasonable opportunities of reading in the course of his or her employment, or which is made reasonably accessible to him or her in some other way.

In the Government's view this position is no longer justifiable, particularly in today's labour market when individual employer/employee relationships are becoming ever more important. That is why the provisions in Schedule 4 to the Bill reverse the current position so that in general the particulars in the new Section 1(3), which include certain additional items, must be given explicitly in the written statement and cannot be given by reference to another document. Even so. there are some important exceptions as regards details of pensions, sickness provisions and notice entitlement and also certain details of disciplinary and grievance matters which are dealt with in the new Section 3. We believe that employers should continue to be able to give these details by reference, if that would be more convenient, as they may often be quite lengthy or complicated. In the case of notice entitlement, the employer may quite legitimately wish to refer the employee to the statutory provisions governing this matter.

I now turn to the specific amendments before us. Amendment No. 60 seeks to make clear that in the limited exceptional circumstances where the Bill allows reference, this can be to a collective agreement as well as to any other document. I am happy to assure my noble friend that the term "document" as used in the Bill already encompasses collective agreements, and that his amendment is therefore unnecessary.

Amendments Nos. 61 and 62 allow employers to make use of reference documents in providing certain details of the special pay and other entitlements of employees who are required to work abroad for a period of one month or more. As such they are contrary to the Government's policy as I have just described it. Our policy is that, following the coming into force of these provisions of the Bill, particulars relating to pay entitlement should always be given explicitly in the employee's written statement. This could he considered especially important in the case of employees who are required to work abroad as clearly they are unlikely to be in a position to refer to staff handbooks, collective agreements and other such documents while they are out of the country.

Amendment No. 66, concerning the provision of details relating to disciplinary and grievance matters and a statement as to whether or not a contracting-out certificate is in force for the employment in question, is unacceptable to the Government. We can see no justification for the change which my noble friend seeks to make. I can assure my noble friend that the Bill places no more onerous an obligation on employers in this respect than do the existing provisions which do not appear to have caused employers any difficulty up until now. Indeed, I find it hard to believe that any employer would regard it as more onerous to have to include explicitly in the written statements, rather than by reference to another document, the name or position of a person to whom application should be made about a disciplinary or grievance decision, the manner of making such applications, or a simple statement of whether or not a contracting-out certificate was in force. If that is what my noble friend is suggesting, I believe he is greatly overstating his case.

Amendment No. 71 is again contrary to the Government's policy that employees should in general be entitled to receive explicit details of any changes to the matters covered by the written statement. The Bill, as drafted, provides that explicit details must be given of any change to a matter which must itself be covered explicitly in the employee's written statement. Similarly, it allows reference documents to be used for providing details of any change to a matter which may itself be given by reference. That seems entirely logical and reasonable.

The noble Lord, Lord Wedderburn, asked whether we were in any way constrained by the application of the proof of employment directive. The directive does, of course, contain certain provisions relating to reference documents, but as will be clear from what I have said, the Government have other reasons for opposing the amendments proposed by my noble friend. I have, of course, considered the amendments carefully but, for the reasons given in Committee and on this occasion in regard to the requirements of Schedule 4, I hope that my noble friend will feel able to withdraw them.

Lord Mottistone

My Lords, I thank my noble friend for his fairly full description of his views on the various amendments I have tabled. I thank noble Lords opposite for their support for these amendments. I feel there is still room for this Bill to be improved in this area in a way that the Government at the moment do not accept. I have a feeling that between now and Third Reading we might be able to achieve my purpose of flexibility. My noble friend did not refer to the matter of flexibility or of making things easier for employers and of easing the burden both for employers and employees. There is still room for that to be improved without, so to speak, quarrelling with the principles which my noble friend enunciated at the beginning of his speech.

I shall work on this matter, together with the CBI, and find whether we can come up with something to which everybody can agree at Third Reading. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6 p.m.

[Amendments Nos. 61 and 62 not moved.]

Lord Wedderburn of Charlton moved Amendment No. 63:

Page 76, line 29, at end insert ("provided that the provisions of the law or of an official summary thereof or of the collective agreement, as the case may be, are reasonably accessible at the place of work.").

The noble Lord said: My Lords in moving this amendment I shall speak also to Amendment No. 72, which is a parallel amendment at another place in the Bill. I shall not go over again the ground that we have just debated. On the other hand, it is germane to the issue about which the Minister quoted a phrase of mine; namely, the problem of an ocean of paper. I believe that many managers now see that as a possible difficulty with the proposals put forward to implement the directive.

The noble Viscount confirmed that the reason why reference to, or incorporation of, collective agreements and collective arrangements had been leaned against, as it were, by the Government's proposals, was that the Government preferred individual arrangements. The White Paper is straightforward about it. But, as any personnel manager or trade union official knows, if one tries to make all the arrangements individual in a rather large or even medium sized workforce, when one is required to give particulars one risks getting an ocean of paper and not merely in the first instance.

If the Government are serious—their proposals and their amendments to the Bill seem to suggest that they are—about having individual notification of changes in employment terms, it is an ocean that rolls in every week on a new tide. The reality of life is not employment terms that remain the same but employment terms that frequently change—say, from month to month—in certain small respects. In large matters one can understand the demand for individual notification, but not otherwise.

The procedure of reference or incorporation whereby written particulars say in effect. as so many millions of them do, that terms on this or these matters are to be found in the collective agreement, the unilateral employers' works rules or some other document has operated within a framework of the law which remains the same as that laid down by the admirable Conservative Administration of 1963 that introduced the notion of written particulars. Some noble Lords sitting behind the Minister must look back to that time as a golden age. It was certainly a bold step to take. It worked because sensible use was made of the principle of reference.

The three functions of the written particulars, if the matter was operated properly, were therefore fulfilled. There was what is now called in Community-speak "due transparency" of the terms. From the employee's point of view there was the reasonable protection, although some thought 13 weeks too long to wait—it is admirable that now the particulars should be given within two months—of seeing the evidence of the terms of the contract.

Lastly, as the noble Lord, Lord Mottistone, pointed out, there has been reasonable flexibility. In many places of work the flexibility and protection function has been based upon the principle which has grounded the legislation up to now; namely, where reference to another document is allowed, that document must be reasonably accessible to the worker at the place of work, or it must be reasonably open for him or her to read—and have an opportunity to read—during the employment. Reasonable accessibility at the place of work and sensible agreed use of reference to another document—especially sensible reference which says that the changes will be entered in that other document which is accessible to the employee—has saved the scheme from an ocean of paper.

Everything that the Government have said today and much in the Bill and in their amendments work the other way. These amendments do not make a full challenge on that point but my remarks have been occasioned by the debates that we have had today. If I were the noble Lord, Lord Mottistone, I should leave here today very worried. If employers have to give notice to each individual every time something is changed, there will be big problems.

However, if sensible use is made—there is still some use made in Schedule 4 that the Government put forward—of the reference procedure, a further problem arises. It arises because of the language of both the directive and the Bill. In both documents there is reference to the ability to refer to another document—to a law or a collective agreement. But it is not made clear whether that reference can simply be a reference to the fact that there is such an agreement and, perhaps, the place where it might be found.

My amendments suggest that where it is right and allowable to accept the doctrine of reference—I believe that it will continue to be practised almost irrespective of the schedule—then, when a law or collective agreement is referred to, it must be reasonably accessible at the place of work, according to the principle laid down in 1963. That principle has been a bipartisan element in the operation of this area of the law since that time.

It may be that the Government feel that the particular words of my proviso are not acceptable. However, since we are having so many new principles put to us in regard to the written particulars and since there is such difficulty about the issue of reference to other documents, I ask them to consider carefully the principle that where a collective agreement or a law (the directive allows for a law) is referred to, the worker must at least have a reasonable chance of seeing what that document contains. Otherwise the particulars as to his rights are meaningless. I beg to move.

Lord McCarthy

My Lords, I support the amendment. It is interesting to see why, if it is the case, the Government resist returning to the phrase about reasonable accessibility. If there are to be references to other documents, it seems to me obvious that they should need to be reasonably accessible.

The problem for the Government—it was shown clearly when the Minister replied to the previous set of amendments—is that they now fear an ocean of paper. The simple way to avoid that ocean is to use reference documents. But the most obvious document to use is a collective agreement and the Government do not like collective agreements. Even if they use other documents, those documents should be reasonably accessible. For that reason I support the amendment.

Baroness Denton of Wakefield

My Lords, I always listen very carefully to the arguments of noble Lords on the other Benches. With regard to the reference to collective agreements, I believe that the noble Lord, Lord Wedderburn, has a point. If employers make reference to collective agreements, as they may still do for particulars of pensions, sickness entitlement or certain details relating to disciplinary and grievance matters, they must ensure that the employees concerned have reasonable opportunities to read those agreements in the course of their employment or make the documents reasonably accessible in some other way.

I can think of no good reason why a different situation should apply when employers make such reference for particulars of notice entitlement. Therefore, I am happy to give the noble Lord an assurance that if he is prepared to withdraw his amendments, the Government will return at Third Reading with their own amendments to meet the point on collective agreements.

However, I must stress that I cannot accept the noble Lord's amendments as they stand. They go too far in one respect. Where an employee's notice entitlement is no more than the statutory minimum, it is entirely reasonable that in the written statement the employer should be able simply to refer to the relevant provision, which is in fact Section 49 of the Employment Protection (Consolidation) Act 1978.

I can assure the noble Lord that we do not consider that it would be sufficient for the employer simply to state that the employee could rely on his or her statutory rights. In order to fulfil the relevant requirement of the Bill, the employer would have to make a specific reference to Section 49. However, to go further than that by placing the employer under a statutory obligation to make the actual text of the legislation, or a summary of it, reasonably accessible for the employee's inspection, would unjustifiably increase the cost of producing the information.

The employment department has produced an excellent booklet on the statutory notice provisions, which is available completely free of charge from all local employment offices and job centres and also from ACAS, which, as always, is happy to advise on any industrial relations issue. In that aspect of his amendment, I believe that the noble Lord seeks unreasonably to increase the burdens on business. However, I hope that he will take some comfort from my undertaking with regard to collective agreements and will not wish to press the amendment.

Lord Wedderburn of Charlton

My Lords, I am grateful to the noble Baroness. I shall resist any temptation to argue about the second half of what she said, especially since, when I thought about it, in view of the booklet being produced by the Department of Employment, it may increase unemployment in the department. I am therefore happy to accede to her argument and thank her for the first half of her answer on collective agreements. We look forward to seeing the Government's amendments on the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 64 had been withdrawn from the Marshalled List.]

Viscount Ullswater moved Amendment No. 65:

Page 76, line 30, leave out from ("1(2)") to end of line 31 and insert ("and the following provisions of subsection (3)—

  1. (a) paragraphs (a) to (c),
  2. (b) head (i) of paragraph (d),
  3. (c) paragraph (f), and
  4. (d) paragraph (h),
shall be included in a single document (in this Part referred to as the "principal statement")").

The noble Viscount said: My Lords, I spoke to Amendment No. 65 with Amendment No. 53. I beg to move.

On Question, amendment agreed to.

[Amendment No. 66 not moved.]

Lord Henderson of Brompton moved Amendment No. 67:

Page 76, line 41, after ("rules") insert ("and procedures")

The noble Lord said: My Lords, perhaps I can speak briefly to Amendment No. 67. It was to have been moved with Amendment No. 58 which, inadvertently, I failed to move. If the Minister will kindly indulge me by responding to Amendment No. 58 as well as to Amendment No. 67, I shall be grateful.

Both amendments relate to Schedule 4 and seek to insert minor amendments. Amendment No. 58 sought to ensure that information about redundancy selection procedures was included in the statement. Amendment No. 67 seeks to add "and procedures" after the word "rules" in the section on discipline. I should be grateful if the Minister could answer both amendments, even though we have passed Amendment No. 58, so that what the Government have to say is on the record.

I believe that in the present situation and for the foreseeable future it is only reasonable that information about redundancy selection procedures should be included in the statement. I shall be glad to hear whether the Government will agree to add the words "and procedures" after the word "rules" in the statement on discipline. I beg to move.

6.15 p.m.

Lord McCarthy

My Lords, I am glad that we have come back to Amendment No. 58 while debating Amendment No. 67. There are a number of quick points which can be made. In relation to Amendment No. 58— information about redundancy selection procedures"— I hope that when the Government reply they will take on board the fact that redundancy selection procedures are extremely diverse. Once upon a time, when the world was young, it was "first in, last out". Now it is anything but that. Employers have subtle and flexible redundancy procedures. Sometimes they are based on decisions on relative performance; sometimes on labour market skills; sometimes on the employer's attitude towards the age structure of the labour force, and sometimes the workers would say it is "blue-eyed" boys and girls.

These days it is not a simple redundancy selection procedure based on first in, last out. Therefore it is good management industrial relations practice that the employer should be compelled to give the worker some information about the redundancy selection procedures that he uses. The same thing could be said in regard to Amendment No. 67. A disciplinary procedure which is just a set of rules given to the worker tells him nothing. The worker must know the process by which the discipline is carried out, otherwise he cannot know whether or not he is likely to receive natural justice. Both amendments are reasonable and constitute good management practice. We are prepared to support them.

Lord Finsberg

My Lords, I would have thought that there was some merit in Amendment No. 67, mainly because the side notes in the Bill talk of disciplinary procedures. That seems to me to be a perfectly harmless amendment.

With regard to Amendment No. 58, they were far from golden days when one was forced to have a last in, first out procedure. It meant that on many occasions one had to part with better people or keep people who were not as good. It was an unpleasant rule of thumb and I am delighted that it was got rid of.

Baroness Denton of Wakefield

My Lords, I should point out that I am speaking to Amendment No. 67; but, in order to be helpful, I will briefly cover Amendment No. 58. In speaking to Amendment No. 57, I covered extensively the need to walk this difficult tightrope of balancing paperwork between what simply provides information and what confuses by its excess.

While we believe that employers should apply fair and objective procedures in the event that they need to select employees for redundancy, we are talking of the information which must be given to an employee in his or her initial statement of main terms and conditions of employment to be provided by the employer within two months of when the employee started work. In drawing a line between those matters which it is reasonable for an employer to be required to cover in every statement, and those which it is not sensible to make the subject of a statutory requirement, information on redundancy procedure falls the wrong side of the dividing line. As my noble friend Lord Finsberg pointed out, the needs of the company to survive for the benefit of all workers are involved in the issue and often the reasons why redundancies prove necessary—the economic facts—can be variable. Therefore we would not wish to accept the amendment.

In relation to Amendment No. 67, I am happy to assure the House that the Bill as drafted already requires employers to give certain details of disciplinary procedures as, indeed, does the current legislation in the 1978 Act. It is provided for in the new Section 3(1). I hope that the noble Lord will find it acceptable that we believe the amendment to be unnecessary.

Lord Henderson of Brompton

My Lords, I am grateful to the noble Baroness for agreeing to extend her remarks to Amendment No. 58 as well as to Amendment No. 67 which is before the House. But I am disappointed that she cannot offer any hope. I realise that it is a fine line. I am sorry that she has come down on the wrong side of it. I must regret that, especially in view of the support I received on both amendments from the noble Lord, Lord McCarthy. Nevertheless, I do not think it is a matter that I should take to a Division. I am sorry about Amendment No. 67, which has the support of the noble Lord, Lord Finsberg, for which I was very grateful and which I found unexpected. As it clearly is not necessary, I shall not press the amendment to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Ullswater moved Amendment No. 68:

Page 77, line 26, at end insert ("or, where no such statement is given, after the end of the period within which a statement under section 1 is required to be given").

On Question, amendment agreed to.

[Amendment No. 69 not moved.]

Viscount Ullswater moved Amendment No. 70:

Page 77, line 35, at end insert:

("() In a case where the statement under section I is given in instalments, subsection (1) applies—

  1. (a) in relation to—
    1. (i) matters particulars of which are required to be (whether they are or not) included in the instalment comprising the principal statement, and
    2. (ii) other matters particulars of which are included or referred to in that instalment;
  2. (b) in relation to matters particulars of which are included or referred to in any other instalment; and
  3. (c) in relation to any change occurring after the end of the two-month period within which a statement under section 1 is required to be given in matters particulars of which were required to be included in the statement given under section 1 but which were not included in any instalment;
as it applies in relation to matters particulars of which are required to be included or referred to in a statement under section 1 not given in instalments.").

The noble Viscount said: My Lords, I spoke to this amendment with Amendment No. 53. I beg to move. On Question, amendment agreed to.

[Amendments Nos. 71 and 72 not moved.]

Baroness Lockwood moved Amendment No. 72A:

After Clause 26, insert the following new clause: ("Rights of part-time workers

.—(1) Schedule 13 to the 1978 Act (normal working weeks) shall be amended as follows.

(2) In paragraph 3, for "sixteen" there shall be substituted "eight".

(3) In paragraph 4, for "sixteen" there shall be substituted "eight".

(4) In paragraph 5, sub-paragraphs (1) and (2) shall be omitted.

(5) In paragraph 6, sub-paragraphs (1), (2) and (3) shall be omitted.").

The noble Baroness said: My Lords, the purpose of this amendment is to extend the same employment protection to those people working between eight and 16 hours as is enjoyed by those working 16 hours-plus. Currently, protection is given only to workers employed for between eight and 16 hours if they have worked for five years or more with the same employer. The Government are keen to advocate flexibility in the labour market. I believe that they are right to do so. It suits many employers to do so and it certainly suits many employees, particularly women. Currently, some 25 per cent. of the workforce work part-time; 90 per cent. of them are women. The point at issue is whether these workers should be treated differently from full-time workers.

The Equal Opportunities Commission, the body with statutory responsibility for promoting equality between the sexes, has been consistently of the opinion that they should be treated equally. Moreover, the commission and many other bodies take the view that it is indirect discrimination against women to treat part-time workers differently from full-time workers. Recently a letter was sent to the Secretary of State for Employment from a group of women's organisations asking the Secretary of State to amend employment law along the lines of this amendment. It was not a group of "way out" organisations but a group of long-standing ones which are held in high esteem by the community at large; namely, the Fawcett Society, the National Alliance of Women, the National Council of Women of Great Britain, the National Federation of Women's Institutes, the Townswomen's Guilds and the UK Federation of Business and Professional Women. That is a fairly representative body. If one adds the TUC, it can be seen that there is widespread support for the amendment, and support among those who represent part-time workers.

In December 1990 your Lordships' European Communities Committee, looking at the directive from Europe on part-time and temporary employment, came to a similar conclusion. I know the Government claim that it would be a disadvantage to women to extend these benefits to part-time employers. It was said by the then Minister, who met your Lordships' Select Committee, that it would deter employers from employing women. There is no evidence to substantiate that proposition. Part-time work is offered because it suits the work pattern of some employers. It enables industry to be more efficient by extending the number of hours during which plant and machinery is used, meeting peaks in productivity and providing services for the public at a time when the services are needed.

Evidence from the Government's own survey in 1988 came out in support of that view. The Department of Employment study by Wood and Smith in 1988 on whether or not employers employ people as part-time or temporary workers because they have fewer rights under employment legislation found that less than 1 per cent. of the employers gave that as a reason for employing part-time workers. The overwhelming reason given by employers for using part-time staff was that it gave them greater flexibility in their operations. The amendment would meet the views of those employers.

The Government have also claimed that to extend protection to these part-time employees would be too costly. The memorandum accompanying the letter to the Secretary of State from the women's organisations showed just how exaggerated that claim is. Your Lordships' Select Committee, while recognising that some costs were likely to be involved, was unconvinced of the accuracy of the Government's statistics on this point and considered that the general economic conditions of the country would have a far greater effect on the employment of part-time workers.

The arguments for the amendment on grounds of efficiency are formidable. The arguments on grounds of equality for women are overwhelming. Women's work patterns clearly indicate the need for a choice to take part-time work while their children are young. This keeps them in touch with changes in employment techniques. It helps smooth the passage back into full-time employment and it ensures that their skills and talents are not entirely lost to employment during their time of family formation. These women are an essential and important part of the workforce. They are not a marginalised sector of it, to he treated as cheap labour. I suggest that the Government could recognise the importance of these workers by accepting the amendment before us. I beg to move.

Lord McCarthy

My Lords, the noble Baroness, Lady Lockwood, has covered most of the important arguments in favour of the amendment—the efficiency argument, the quality argument, the discrimination argument and the fact that there is no real evidence that it will have any deleterious effect on employment. I want to put forward one or two other arguments. First, it should be stressed how wide these rights are. We are talking about all those rights that are dependent on continuity of employment. Workers employed for under 16 hours now cannot qualify to be considered as people who have continuity of employment. They have no right to written terms, no right to guaranteed pay, no right to time off for public duties, no right to redundancy pay, no maternity rights and no unfair dismissal rights unless they are employed for five years. That is the situation we arc seeking to remedy—a very wide span of civil work rights which we believe can be moved forward by the amendment.

An argument not mentioned by the noble Baroness is that not only is 25 per cent. of the workforce part-time now but the part-time section of the workforce is rising six times as fast as the rise in the full-time workforce. The workforce is becoming a part-time workforce. These people are not abnormal and atypical; they are becoming increasingly typical. Therefore, unless we do something to bring them into the framework of workers' rights, the rights which we do have will become less representative and a smaller and smaller section of the labour force will qualify for those rights. That is a very important point for the House to remember.

It is undoubtedly the case that those are specially vulnerable groups. The relative power position of those people is weak. They are very difficult to organise in trade unions and they are very dependent on such statutory rights that exist, except that those rights are denied them because they do not work 16 hours a week. For all those reasons, we suggest that this is a very worthwhile amendment and we commend it to the House.

6.30 p.m.

Lord Rochester

My Lords, I have been impressed by the increasing volume of evidence that companies are converting full-time jobs into part-time posts as a means of cutting employment costs rather than providing new opportunities for the unemployed. There is nothing to stop employers recruiting part-time employees and then asking them to work overtime in a way which means that they are in effect full-time employees working without the benefits which normally accompany full-time employment.

I believe I am right in saying that opting out of the social chapter will give licence to the United Kingdom to be the only European Community country where that exploitation—I do not believe that is too strong a word—is possible. Amendment No. 72A seeks to end that anomaly, and I am glad to support it.

Lord Finsberg

My Lords, I found the speech of the noble Baroness, Lady Lockwood, beguiling and very interesting. I began to think that it was worthy of support. However, the noble Lord, Lord McCarthy, totally destroyed that and showed that basically he was inside what now appears to be a Trojan horse because the enormous flow of things which followed from what he said brought back to me the industrial relations which I had to deal with 20 to 30 years ago. Therefore, I do not believe that this amendment is a good idea. The noble Lord has scuppered the very helpful and moving speech of the noble Baroness, Lady Lockwood, in moving the amendment.

As regards the points made the noble Lord, Lord Rochester, I believe that we are much more concerned to make certain that companies can stay alive employing people. If companies were forced to have the social chapter, which he seems to like so much, many more jobs would be lost and I do not want to see that happen.

Earl Russell

My Lords, if people do not get a living wage from their employer they tend to become dependent on the benefits system. I understand why the Government are concerned to reduce the social security budget. Accepting this amendment might be one way to set about it.

Viscount Ullswater

My Lords, I have listened carefully to the arguments put forward by the noble Baroness and noble Lords. However, they have not changed my view that the amendment before us would represent an unacceptable additional burden on employers which would reduce job opportunities for everyone, and in particular for those working part-time. We discussed this important issue in Committee, and I explained then the Government's position.

The Government welcome the great expansion of part-time working over the past decade or so. It is a sign of increased labour market flexibility, which is good for the economy and good for employees. Noble Lords opposite sometimes give the impression that they see part-time working as a bad thing which the Government should step in to eliminate. The European Commission has a tendency to display the same view. However, the noble Baroness, Lady Lockwood, has a much more balanced view about this particular aspect.

I remind noble Lords and the noble Baroness that the vast majority of people working part-time do so through choice, and, if they were obliged to work full-time, would give up work altogether. I cannot believe that this is what any of us would wish to see.

Equally, I should remind the House that there is no question of part-time workers being unprotected under the legislation. Fifty-seven per cent. of all employees who work part-time in fact work 16 or more hours a week and enjoy exactly the same employment protection rights as full-time employees. Another 9 per cent. of part-timers already qualify for rights because they have worked for their employer for five years. Furthermore, many important rights extend to all employees, regardless of their hours of work, and we have introduced such additional protection in this Bill.

I agree with my noble friend Lord Finsberg that the list which the noble Lord, Lord McCarthy, read out, was indeed a long one. I have to say in answer to the noble Lord, Lord McCarthy, that the Government are certainly willing to extend part-time workers' rights where such measures will not create unreasonable burdens for employers and have a detrimental effect on part-time work opportunities. I am sure that I do not need to remind noble Lords of the provisions in the Bill which extend important new rights to all employees regardless of their hours of work or length of service. Those include rights relating to maternity leave and dismissal on grounds of pregnancy; health and safety matters; a number of trade union matters; and protection against being dismissed for trying to exercise statutory employment rights.

We have to create a balance of opportunities and protection. I believe that the Government have got the balance right. We have to take a very carefully considered view about the protection which legislation should provide to employees and the commensurate burden which employers should be required to bear. We have drawn the line at the point we consider right.

I do not say that that line is immovable. Indeed, as I have pointed out, we are moving it substantially in this Bill. But to accept the proposal that everyone who works as little as one day a week should enjoy the full range of rights and protections which apply to full-time employees would be to place unacceptable and inappropriate burdens on business. The effect would be to reduce employment opportunities for part-time workers, placing them at a disadvantage in the labour market rather than improving their lot. I hope that I can persuade the noble Baroness to withdraw the amendment.

Lord McCarthy

My Lords, the noble Viscount was kind enough to list for us a number of new rights in this Bill which do not depend on continuity of employment. Can he tell us what is the difference between those rights and those that I listed which are dependent on continuity of employment? What is it that shows that it is perfectly reasonable to make one lot available for everyone and the other not available for everyone?

Viscount Ullswater

My Lords, with the.leave of the House perhaps I may respond. After reading out the list, I then gave the answer to the noble Lord. Perhaps he should examine Hansard. I said that we have taken a very carefully considered view about the protection which legislation should provide to employees and the commensurate burden which employers should be required to bear.

Baroness Lockwood

My Lords, I find the Government's view very difficult to understand. The Minister welcomed the expansion of part-time employment. He says that he wants to see that continue. If it does continue we can move into a situation where more and more people in the workforce will not have the protection which they have today. He told us that 50 per cent. of the workforce works 16 hours or more and therefore have protection and that 9 per cent. have worked for an employer for five years or more and therefore also have protection, which gives us 59 per cent. of the quarter of the workforce which works part-time. What about the other 41 per cent.? They are not covered by all the employment protection which other employees enjoy. It means that we are marginalising them and making them a separate part of the workforce. As I said, many of those workers are working part-time for a temporary period in their careers. They are working part-time while their children are young and I do not see why we should penalise them for doing that.

I feel that if we are to have a flexible workforce it must suit not only employers but employees also, and that we must protect them. I am afraid that I cannot accept the Minister's views, and I should like to test the opinion of the House on this amendment.

6.40 p.m.

On Question, Whether the said amendment (No.72A) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 108.

Division No. 2
Addington, L. Archer of Sandwell, L.
Airedale, L. Beaumont of Whitley, L.
Birk, B. McCarthy, L.
Blease, L. Mclntosh of Haringey, L.
Boston of Faversham, L. McNair, L.
Callaghan of Cardiff, L. Malialieu, B.
Carmichael of Kelvingrove, L. Mason of Barnsley, L.
Carter, L. Merlyn-Rees, L.
Castle of Blackburn, B. Meston, L.
Cledwyn of Penrhos, L. Molloy, L.
Cocks of Hartcliffe, L. Morris of Castle Morris, L.
Dormand of Easington, L. Mulley, L.
Eatwell, L. Nicol, B.
Gallacher, L. Ogmore, L.
Galpern, L. Perry of Walton, L.
Graham of Edmonton, L. Peston, L.
Greene of Harrow Weald, L. Pitt of Hampstead, L.
Harris of Greenwich, L. Richard, L.
Healey, L. Robson of Kiddington, B.
Hilton of Eggardon, B. Rochester, L.[Teller.]
Houghton of Sowerby, L. Russell, E.
Irvine of Lairg, L. Shackleton, L.
Jay, L. Stoddart of Swindon, L.
Jay of Paddington, B. Strabolgi, L.
Jeger, B. Turner of Camden, B.
Jenkins of Putney, L. Wedderburn of Charlton, L.
Listowel, E. White, B.
Llewelyn-Davies of Hastoe, B. Williams of Elvel, L.
Lockwood, B. [Teller.] Williams of Mostyn, L.
Macaulay of Bragar, L. Young of Dartington, L.
Abinger, L. Goschen, V.
Archer of Weston-Super-Mare, L. Greenway, L.
Hardinge of Penshurst, L.
Astor, V. Hayhoe, L.
Astor of Hever, L. Hemphill, L.
Atholl, D. Henley, L.
Auckland, L. Hesketh, L. [Teller.]
Banbury of Southam, L. Holderness, L.
Belstead, L. Howe, E.
Blake, L. Hylton-Foster, B.
Blatch, B. Jellicoe, E.
Blyth, L. Jenkin of Roding, L.
Boardman, L. Kimball, L.
Bolton, L. Kitchener. E.
Boyd-Carpenter, L. Lane of Horsell, L.
Brabazon of Tara, L. Leigh, L.
Braine of Wheatley, L. Lindsey and Abingdon, E.
Brentford, V. Long, V.
Brougham and Vaux, L. Mancroft, L.
Butterworth, L. Merrivale, L.
Cadman, L. Mersey, V.
Caithness, E. Monson, L.
Campbell of Alloway, L. Mottistone, L.
Campbell of Croy, L. Mountevans, L.
Chalker of Wallasey, B. Mowbray and Stourton, L.
Chelmsford, V. Munster, E.
Clark of Kempston, L Murton of Lindisfarne, L.
Colnbrook, L. Norfolk, D.
Constantine of Stanmore, L. Norrie, L.
Cranborne, V. Onslow, E
Crickhowell, L. Orkney, E.
Cross, V. Oxfuird, V.
Cumberlege, B. Park of Monmouth, B.
Davidson, V. Pearson of Rannoch, L.
Denham, L. Rankeillour, L.
Denton of Wakefield, B. Reay, L.
Dormer, L. Renfrew of Kaimsthorn, L.
Downshire, M. Rippon of Hexham, L.
Elliot of Harwood, B. Rodger of Earlsferry, L.
Elphinstone, L. St. Davids. V.
Erroll, E. Seccombe, B.
Ferrers, E. Simon of Glaisdale, L.
Finsberg, L. Skelmersdale, L.
Flather, B. Stewartby, L.
Fraser of Carmyllie, L. Strafford, E.
Gainsborough, E. Strathclyde, L.
Gardner of Parkes, B. Strathmore and Kinghorne, E [Teller.]
Gilmour of Craigmillar, L.
Gisborough, L. Sudeley, L.
Glenarthur, L. Swansea, L.
Swinfen, L. Ullswater. V.
Tebbit, L. Wade of Chorlton, L
Teviot, L. Wakeham, L. [Lord Privy Seal]
Thomas of Gwydir, L.
Torrington, V. Wynford, L.
Trefgarne, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.48 p.m.

Clause 28 [Dismissal on ground of assertion of statutory right]:

Viscount Ullswater moved Amendment No. 73:

Page 46, leave out lines 25 to 27 and insert: ("(2) It is immaterial for the purposes of subsection (1) whether the employee has the right or not and whether it has been infringed or not, but, for that subsection to apply, the claim to the right and that it has been infringed must be made in good faith.").

The noble Viscount said: My Lords, noble Lords on all sides have welcomed Clause 28; which the Government introduced in Committee. The clause gives valuable protection to individuals who might otherwise fear to ask their employer to comply with a statutory employment protection provision —for example, by providing written particulars of the individual's employment—in case the employer should retaliate by dismissing them. Such a reaction would be inexcusable.

These two amendments ensure that the provisions will work as we intend, and that individuals do not lose protection because of technicalities. The new subsection (2) also provides that the individual will in no circumstances get the benefit of the protection from dismissal where his claim was not made in good faith.

The first amendment makes three changes. The first is to ensure that an employee who seeks to exercise a right in good faith is not deprived of protection if he is dismissed for doing so simply because, perhaps because of a technicality or because of some obscure point of law which took considerable time and effort to untangle, he turns out not to have been entitled under the right he sought to claim. The second change is to make clear that, where a complaint is made in bad faith, the protection does not apply. Thirdly, it is possible that the previous subsection (2) may, because of its drafting, have applied only to paragraph (b) of subsection (1) and the amendment clarifies that the subsection applies to paragraph (a) as well.

Together, these amendments mean that there will be no need for the industrial tribunal to reach a firm decision about whether the individual is in fact entitled to the right, or if entitled has had his right infringed, before it can decide the issue about the dismissal.

Amendment No. 74—the amendment to subsection (3) of new Section 60A—ensures that the individual does not lose the protection of the section because, as is often the case, he has specified inexactly on his industrial tribunal application what right he is claiming. It clarifies that the subsection applies to (a) as well as (b) of subsection (1), so that, provided the application form is reasonably clear, that will be sufficient. This was always the intention and this redraft will ensure that it is fulfilled.

As your Lordships will realise, one of the rights in respect of which this clause gives protection is Section 146 of the 1992 Act, which deals with action short of dismissal on the grounds of trade union membership and activities.

In that connection, I would like to take this opportunity to advise your Lordships of an amendment which the Government will be tabling for debate on Third Reading. As your Lordships may be aware, the Court of Appeal reached a judgment last Friday which held an employer to be in breach of the law now contained in Section 146 where he had offered financial inducements to his employees to move away from collective negotiation to personal contracts.

It was never the Government's intention, when the current law on action short of dismissal was introduced, that it should be interpreted in this way or that it should interfere with an employer's freedom to seek to make such a change. The number of cases recently has shown that the existing law is giving rise to difficulties and confusion in the tribunals. The Court of Appeal rulings have confirmed that the present position is unsatisfactory. We therefore propose to introduce an amendment before Third Reading which will clarify the effect of the law in this area. There will of course be an opportunity for your Lordships to debate this matter fully at Third Reading if necessary. However, I thought that it would be helpful to give notice of the Government's intentions at the earliest opportunity.

Returning to Amendments Nos. 73 and 74, I hope that noble Lords will welcome the improvements that they make. I beg to move.

Baroness Turner of Camden

My Lords, I thank the noble Viscount for his explanation of Amendments Nos. 73 and 74, to which we certainly do not intend this evening to offer any objection from this side of the House. I thank him also for giving us early warning, so to speak, of the amendment that it is intended to put down for Third Reading arising from the recent Court of Appeal decision. We shall of course have to consider that when we see the text of the amendment, but in the meantime perhaps the noble Viscount will make arrangements for the Court of Appeal decision to be placed in the House so that we may have the opportunity of reading it before we see the text of the Third Reading amendment. However, as regards Amendments Nos. 73 and 74, which are all that are before your Lordships this evening, we on this side of the House certainly do not intend to offer any objection to what has been said.

Earl Russell

My Lords, I should like to welcome Amendments Nos. 73 and 74 and to thank the noble Viscount for them. On the further amendment of which he has given notice, I thank him for that notice. It would be a notable courtesy if he would send us copies of the amendment as soon as it is tabled and, if possible, table it some days ahead of Third Reading.

Lord Wedderburn of Charlton

My Lords, although I welcome Amendment No. 73, the Minister has told your Lordships of a serious step that the Government are about to take. Having had—I think I am right—five days to consider two major Court of Appeal judgments, they have decided to reverse the law from what it has been since 1975. The Court of Appeal held in both cases that the action of an employer who offered sweeteners, or what some would call bribes, to people with personalised contracts to encourage them to leave the union on a de-recognition of the trade unions infringed the rights of those employees as trade union members in respect of their membership and, as I understand the judgments, in one respect also, of their activities.

I have these questions to add to those which my noble friend and the noble Earl on the Liberal Benches have asked. First, is it clear to the Government that neither of these Court of Appeal decisions is being taken to the House of Lords, your Lordships' Appellate Committee? If they are or if intention is still unknown on that matter, will the Government not stay their hand until we see what the House of Lords says, as it is a declaration by the Court of Appeal which has triggered the Government into taking this intemperate step of today's announcement? With great respect to the noble Viscount, I think that is what it is.

Secondly, did the noble Viscount's announcement relate to the judgments in both the Palmer and Wilson cases? Will he put in the Library a further statement as to the relationship of the Government's coming step to both of these Court of Appeal judgments? It is quite extraordinary for a government to react so quickly to a Court of Appeal interpretation in two cases of some complexity and technicality, though it is one which does not surprise anyone who has studied this area of the law since 1975.

Finally, I join with the noble Earl, Lord Russell, who said quite rightly that the Government must surely give us long notice of the contents of the amendment. If we have to go to Third Reading to discuss these difficult issues on a few days' notice, the change in the law will not be appreciated by anyone and it is highly likely that we will get the thing wrong from everyone's point of view. Will the noble Viscount, who has obviously given the matter intense thought since the judgments of 30th April, give us at least a week's notice of the discussion of the text that he will have placed in the Library or that he will have tabled as an amendment to the Bill on Third Reading?

Viscount Ullswater

Perhaps I may first dispose of Amendments Nos. 73 and 74. I am grateful for the welcome that they have received from noble Lords opposite. In answer to the noble Earl, Lord Russell, the amendment which will be tabled has not yet been prepared, as the full transcript of the Court of Appeal's ruling is not yet available. In response to the noble Baroness, Lady Turner, I shall take every opportunity to lodge that transcript in the Library as soon as it is available. I am assured that there will be ample opportunity to discuss and debate the amendment on Third Reading.

In reply to the noble Lord, Lord Wedderburn, it is not yet clear whether the case will come to this House for further judgment, as the Court of Appeal has refused leave to appeal. However, it is clear that the law on action short of dismissal is not achieving its intended purpose—I take issue with the noble Lord on his interpretation—and is being used to prevent employers from making perfectly legitimate decisions about how they wish to negotiate with their work force. It was also the view of the Employment Appeal Tribunal, which reached a decision contrary to that now given by the Court of Appeal, that it may be necessary to clarify the law in this case. I would have thought that your Lordships would welcome the fact that the Government intend to clarify an area of law which has been thrown into confusion by the Court of Appeal's decision, but in which the tribunals and the courts themselves have suggested that they need clearer guidance.

Lord Wedderburn of Charlton

My Lords, perhaps I may ask the noble Viscount—how shall I put this so that it is easy for him to answer?—whether, if there is obscurity which must be clarified, the Government have ever turned their mind to this point since 1979? Has it lurked there as a difficulty, unspotted? Why the haste and the rush?

Viscount Ullswater

My Lords, the Government have been keeping this matter under review. However, the Employment Appeal Tribunal decisions were in line with the Government's clear intentions at the time the current legislation was enacted. Until last week's Court of Appeal judgment it was by no means clear that any amendment was necessary.

On Question, amendment agreed to.

7 p.m.

Viscount Ullswater moved Amendment No. 74:

Page 46, line 30, leave out from ("right") to end of line 31 and insert ("claimed to have been infringed was.").

On Question, amendment agreed to.

Clause 32 [Amendments of transfer of undertakings regulations]:

Viscount Ullswater moved Amendment No. 74A:

Page 50, line 19, at end insert:

("( ) In Regulation 5 (effect of relevant transfer on contracts of employment, etc)—

  1. (a) in paragraph (1), at the beginning, there shall be inserted the words "Except where objection is made under paragraph (4A) below,";
  2. (b) in paragraph (2) after the words "paragraph (1) above" there shall be inserted the words "but subject to paragraph (4A) below,";
  3. (c) after paragraph (4), there shall be inserted—

"(4A) Paragraphs (1) and (2) above shall not operate to transfer his contract of employment and the rights, powers, duties and liabilities under or in connection with it if the employee informs the transferor or the transferee that he objects to becoming employed by the transferee.

(4B) Where an employee so objects the transfer of the undertaking or part in which he is employed shall operate so as to terminate his contract of employment with the transferor but he shall not be treated, for any purpose, as having been dismissed by the transferor."; and (d) in paragraph (5), for the words "Paragraph (1) above is" there shall be substituted the words "Paragraphs (1) and (4A) above are".").

The noble Viscount said: My Lords, this amendment, like Amendment No. 75 tabled by the noble Lord, Lord Wedderburn, is concerned with the situation where an employee does not wish to transfer to a new employer when the undertaking in which he works is transferred. Like the noble Lord's amendment, it takes as its starting point the recent European Court of Justice judgment in what is generally known as the Katsikas case.

In its judgment, the court made it clear that the Acquired Rights Directive does not prevent an employee from opposing the automatic transfer of his employment contract to the new employer. The court went on to say, however, that the directive: does not require the Member States to provide for the maintenance of the contract of employment or the employment relationship with the transferor where the employee decides of his own accord not to continue the contract of employment or the employment relationship with the transferee. It is for the Member States to decide how the contract of employment or the employment relationship should be dealt with in that situation.

Noble Lords may be aware that there has been speculation in recent weeks about the implications of the Katsikas case in the UK. I have seen it suggested that under existing UK law the contract of an individual who refused to transfer to the new employer would remain in force with the old employer, whether the old employer wished that to be the case or not. If the old employer declined to maintain the contract of employment it has been suggested that he would be found to have dismissed the employee, who would be entitled to a redundancy payment or, possibly, compensation for unfair dismissal.

The Government do not share that view. The advice I have received is that an individual who refused to have his contract of employment transferred to the new employer in that way would have no continuing rights against the old employer. He would, in effect, have resigned from his employment.

It seems that the noble Lord, Lord Wedderburn, may share the Government's view, because his Amendment No. 75 seeks to introduce an explicit right for individuals who refuse to transfer to continue their employment with the old employer. It is, however, apparent that the Katsikas judgment has given some scope for uncertainty about the position of individuals who make use of their right to object to the transfer of their employment contracts.

In the Government's view, Amendment No. 74A does not change the existing law but merely puts the position beyond doubt. It makes it clear that an individual has the right to inform either the old employer or the new employer that he objects to the transfer of his employment contract. It also makes it clear that when such an objection is made the individual's contract terminates. He will not have been dismissed or made redundant—his contract will merely have come to an end.

The Government believe that this amendment will have a useful role in putting the position beyond doubt and thus preventing further speculation and uncertainty. It is wholly in line with the judgment of the European Court and I commend it to your Lordships' House. I beg to move.

Baroness Turner of Camden

My Lords, I thank the Minister for his explanation of Amendment No. 74A. However I am most unhappy about its wording, especially that of paragraph (4B). It seems to me that that paragraph provides for all employment rights to be extinguished. I do not believe that there is any basis for that. Amendment No. 75 tabled by my noble friend Lord Wedderburn, which I prefer to Amendment No. 74A, covers the same ground but does not extinguish the rights that the employee might otherwise be entitled to receive.

If the Government persist with Amendment No. 74A and it is included in the text of the Bill we shall be looking at this issue again on Third Reading, having taken some further advice. I give the Minister notice, as he gave us notice of an amendment that he intends to move on Third Reading, that we shall be probably tabling an amendment also at that stage to remove paragraph (4B).

Lord Wedderburn of Charlton

My Lords, the Minister kindly referred to my amendment, which I shall not be moving as it is grouped with his. I should like to speak to it and to the amendment that he has moved. It may be somewhat unfortunate that this matter is to be discussed now. It is a matter which affects millions of employees. It affects the transfer of undertakings regulations. The Government are sensitive in the area of transfer of undertakings, given their belief that the Community directive and the regulations passed in this country in 1981 did not apply to competitive tendering. Of course, to a great extent they are shown to be applicable in most of such cases and so one can understand the Government's sensitivity.

Secondly, I submit with respect that it is not a matter merely to be clarified, as the Minister suggested. The Katsikas case decided by the European Court of Justice on 16th December 1992, but unhappily known about some time later as is the case with these judgments, clearly corrected a misapprehension which almost everyone—I admit that it was mine as well—had about this area of the law. We believed that if a transfer of undertakings took place then the transfer to the transferee included all the contracts of employment relating to the workers employed by the transferor.

We have been proved to have been wrong, because one has to add to that a proviso that now, in view of the Katsikas case, where the employee objects, his personal contract cannot be transferred. The Minister quoted from the Katsikas judgment, but I must cite it further. He will be aware that I do not object to his truncated citation in view of the time but, nevertheless, the court said: If the Directive … allows an employee to remain in employment with a new employer on the same conditions as those agreed with the transferor it cannot be interpreted as obliging the employee to continue his employment relationship with the transferee.

Such an obligation would undermine the fundamental rights of the employee who must be free to chose his employer and cannot be obliged to work for an employer". The judgment then continued that the directive's provisions: do not prevent an employee from objecting to the transfer of his contract of employment or of his employment relationship". Then, lastly, the passage that the Minister quoted: In such cases, it is for the Member States to determine the fate of the contract of employment or of the employment relationship". That is the structure of the judgment.

Of course I accept that it is therefore for the national law —that means this Bill—to determine what are the rights of an employee who says, "Yes, you are transferring the undertaking, but I do not want to go to the new employer". This is a serious matter, for the employee may have serious grounds for not wishing to be in the employment of the transferee employer. Without elaborating, your Lordships may imagine that this is a protection for the employee to which the European Court refers as one of his fundamental rights.

It is true that the national law can then say what is to be the fate of the employee who objects. The difference between the Government solution and mine—give or take a bit of drafting which I would have to put right—is that the Government explode the nuclear device of employment law as soon as the worker objects. As soon as he says, "I won't go", the Government say, "You're out. You have no rights. You have no contract. You are finished". My solution says, "You can object, and you remain with the transferor who, of course, can give you notice". No one is saying that the transferor has to employ the employee for longer than he had to employ him before.

It is the transferor who triggers the transaction, because he has decided to transfer the undertaking. He has an employee to whom he has to give, before that, notice to terminate the contract. After he triggers it, under my solution he must give to the employee who objects the same notice as before. The Government may have one reasonable objection to that provision. It is that my amendment does not confine itself to that right. It might be sensible to say that the employee cannot claim for redundancy or he cannot have a number of other statutory rights. I do not know.

I plead with the Government to allow money in lieu of notice. It is the few weeks' money which the transferor was obliged to give before the transaction which he himself initiated. Surely it is right to allow the transferor's employee, who does not want to be moved to an employer to whom he has good reason to object, to have his notice and his money in lieu of notice. I believe that that is what the European Court of Justice referred to when referring to his fundamental right not to be moved and, of course, having no further rights in his initial employment than he had before. The suggestion that he can stay for ever with the transferor is wrong. Were it allowed to change the wording of my amendment, one could easily make that clear.

I hope that the Government will think about that matter. My noble friends on the Front Bench suggest that we return to the matter on Third Reading. That stage will be quite an event because the Government have introduced so many new measures on Report that the rules will have to be applied with some sensitivity to everyone's interests. I ask the Minister to look at the difference between Amendments Nos. 74A and 75.

Viscount Ullswater

My Lords, of course I recognise the difference between the two amendments. The noble Lord, Lord Wedderburn, is seeking to have the law provide that where an employee objects to having his contract of employment transferred to the new employer that contract remains in force with the original employer. The Government cannot agree to that. The transfer regulations protect individuals by giving them automatic rights in relation to the new employer. If an individual voluntarily relinquishes those rights it hardly seems reasonable to argue that he should instead be given rights in relation to the old employer. His job still exists with the new employer.

Of course, if a substantive change is made in an individual's working conditions to his detriment he will retain the right contained in Regulation 5(5) to resign and claim constructive dismissal. The fact is, as I have indicated, that the directive specifically does not require the Government to create a situation whereby an employer is obliged to continue a contract of employment with an employee who does not wish to transfer to the new employer. The Government do not believe that it is necessary or appropriate for it to do so and that is what Amendment No. 74A achieves.

On Question, amendment agreed to.

[Amendment No. 75 not moved.]

Viscount Goschen

My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again at 8.10 p.m.

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

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