§ 9.51 p.m.
§ Baroness Turner of Camden rose to move, That an Humble Address be presented to Her Majesty praying that the regulations be annulled.
§ The noble Baroness said: My Lords, I rise to move the Motion standing in my name on the Order Paper. Very little time or opportunity has been given to either House to discuss these important changes in the arrangements about consultation on collective redundancies. They are due to become operative on 26th October. The only way in which this House will have the opportunity for discussion is on the Motion that I put forward.
§ As your Lordships know—at least those Members of your Lordships' House who take an interest in labour relations—the Government's provisions in regard to consultation about collective redundancies were found to be wanting by the ECJ. As a result, new regulations have had to be issued.
§ A period for consultation has been allowed. I am glad to say that the result of that consultation with the CBI, the TUC and others is that amendments to the original draft have been made. We certainly welcome that. Even so, in my view the proposed regulations do not meet the ECJ requirements either in the spirit or the letter.
§ The intention was certainly not to undermine existing systems of industrial relations or to encourage employers to de-recognise unions where recognition currently existed. That may be in line with the current philosophy of the Government, but it is not the philosophy generally accepted within the EU, where the concept of social partnership with organisations representative of employees' interests is firmly established and widely accepted.
§ As the regulations now stand, however, employers are given a unilateral choice as to whether to consult representatives of recognised unions or, alternatively, representatives elected by employees. It would be possible for an employer who was contemplating collective redundancies to consult with the representative of an ad hoc group that he might have been instrumental in setting up in order to bypass the recognised trade union. This aspect of the proposed regulations seems to me to owe more to anti-union ideology than to a genuine concern to make sure that employee representatives are properly consulted in advance of redundancies.1087
§ It is as well to remind ourselves of the reasons for the consultative process insisted upon by the ECJ. The handling of redundancies is, admittedly, a difficult—sometimes heart-rending—process. Unfortunately, it has become all too common in recent years. But the position is likely to be made worse if encouragement is given to employers by means of the regulations to exclude recognised trade union representatives from the consultation process. One of the main purposes of a consultative process is to enable discussions to take place with a view to minimising the negative effect upon employees. Hence, redeployment and retraining may be discussed within this context. The representatives most likely to be able to assist appear to be those whose job it has been to represent workers in the establishment on a continuous basis.
§ The regulations would appear to give an employer who just wants to cut the workforce without any concern for the welfare of the employees the opportunity to do so by giving him the right, even where there is a recognised trade union, to set up alternative arrangements of his own in opposition to the recognised union. It is quite true that, as a result of the consultations with the CBI and TUC, to which I have already referred, the Government have been willing in this draft to make provision opposing discrimination against employee representatives. Furthermore, rights to time off have been included for candidates who also will have some protection.
§ These are improvements on the original draft which, as I said before, I welcome. However, there are no real guarantees about the independence of elected non-union representatives. The reliance on ad hoc arrangements weakens the effectiveness of consultation as there is no element of continuity and the representatives, unless of course they come from a recognised union, will have had no training or preparation for their role. Moreover, the regulations give the employer control over the timing and arrangements for the elections, thus providing scope to frustrate the consultation process.
§ It is the view of the TUC that the proposed sanctions are inadequate where an employer fails to hold proper elections. There should be provision for obtaining a High Court order to ensure that proper elections are held, until which time the status quo should be maintained. Under the regulations only the employer can initiate elections and the only obligation on the employer is to issue an invitation to the employees who might he dismissed to elect representatives long enough before the time that consultation should start to allow them to elect representatives by that time.
§ The TUC's view is that the vague wording may very well not meet the terms of the ECJ's judgment. It is the employer who determines when an announcement on job losses is made and it should not therefore be the employer who determines when employee representatives are elected.
§ Moreover, the regulations are silent on the election process. They appear to give the employer a free hand in deciding on matters such as the number of representatives, constituencies, the nomination process and balloting arrangements. The fact that the regulations 1088 leave to employers the determination of election arrangements is another reason why the regulations may not comply with the ECJ ruling.
§ Furthermore, excluding redundancies involving fewer than 20 posts over 90 days is a serious erosion of existing rights of consultation. It will automatically remove from consultation rights the 5½ million workers in small firms as well as larger firms where fewer than 20 redundancies are proposed over a 90-day period.
§ Perhaps the Minister may argue this evening that it is unlikely that employers exist who might seek to frustrate the intention of the ECJ judgment and the regulations in the manner in which we have suggested. However, if everyone behaved reasonably, there would be no need for laws and regulations. Experience teaches us that there are always some who do not behave well; and in a general labour relations environment in which the Government have been actively seeking to get employers to bypass unions, it is not surprising that we should seek to close any loopholes which may exist.
§ As I said at the outset, it clearly was not the intention of the ECJ actively to discourage consultation with recognised trade unions. But we fear that that may be the result of the draft if it is not modified by the Government before it becomes operative. I beg to move.
§ Moved, That an Humble Address be presented to Her Majesty praying that the regulations be annulled.—(Baroness Turner of Camden.)
§ 9.58 p.m.
§ Lord Rochester
My Lords, from these Benches I should like to support the Motion so cogently put forward by the noble Baroness, Lady Turner of Camden. I do so even though my approach to this matter differs from hers to some extent.
Like the noble Baroness, I spoke on the Unstarred Question asked by the noble Lord, Lord McCarthy, last March. Indeed, my interest in the subject goes back to the debates in this House on the Trade Union Reform and Employment Rights Bill in 1993. At that time I tabled amendments which questioned and sought to overturn the Government's contention that the relevant clauses of the Bill brought the detailed provisions of UK legislation fully into line with the requirements concerning consultation contained in the two directives.
As the noble Baroness reminded us, the Government's legislation at that time obliged employers to consult only the representatives of recognised trade unions, both when they were contemplating large scale redundancies and when the transfer of an undertaking was in prospect.
My amendments to the Bill sought to extend the right to information and consultation to employee representatives generally. Unfortunately the Government were unwilling to accept them. Now, however, following last year's judgments of the European Court, they have had to acknowledge the need to introduce procedures for the designation of employees' representatives whom employers must consult about proposed redundancies and business transfers. Whether the Government's arrangements provide a mechanism that will prove to be legally adequate for that purpose is highly questionable.
1089 At first sight it may be thought that my noble friends and I would welcome unreservedly the Government's concession on this basic point. The trouble is that, in conceding to employee representatives the right to be consulted, the Government propose to make it possible for the same right to be taken away from representatives of trade unions.
I cannot accept that, where trade unions are recognised, they should retain the exclusive right to be consulted on these matters. But in allowing employers to choose whether to consult either with union representatives or with representatives elected by employees generally, the Government seem almost to be inviting employers no longer to recognise trade unions for these and possibly even other purposes. That may not be of much concern to this Government, but to those of us on these Benches who share the view that, where strong support for trade unions can be demonstrated, employers should be obliged to recognise them, it is a matter of great importance.
For my part, I cannot see why there should not be, first, a general requirement for employers to consult employee representatives about prospective redundancies and business transfers; and, secondly, a requirement that where trade unions are recognised, their views should also be taken into account before decisions are made.
I shall be grateful for any comments the noble Lord, Lord Chesham, feels able to make when he replies to these suggestions. I can hardly expect a considered response, if only because of the unseemly haste, as it seems to me, with which the Government are planning to push through these regulations. It has taken them 16 months to respond to the judgment of the European Court and now it is intended that the regulations should come into force next week, even though they will not apply to redundancies or transfers until March 1996.
I should like to make a number of other points, on one of which I can compliment the Government. In the draft proposals circulated by the Department of Employment last April, I could find no reference to the obligation which the directives placed on employers to consult,with a view to reaching agreement".
I am therefore pleased to see that that phrase is now included in the regulations. We may wonder, as did my noble friend Lady Seear in our debate last March, what that phrase—a sort of half-way house between consultation and negotiation —actually means in practice. It should at least ensure, in the words employed by the noble Lord, Lord Inglewood, in winding up that debate, that,Both parties must engage in a constructive dialogue".—[Official Report;20/3/95; col. 1095.]A number of proposals give the impression that in framing the regulations the Government have been keen to do the absolute minimum in responding to the judgment of the European Court. One of the most notable examples is the deregulatory proposal to amend UK legislation so that the requirement to consult will arise only when an employer plans to dismiss as redundant 20 or more employees over a 90-day period. 1090 That has the effect—the noble Baroness referred to this point—of removing the rights to consultation which millions of people working in firms with fewer than 20 people now enjoy, and appears on the face of it to be particularly mean minded.
The Government further claim, on the question of the timing of consultation on redundancies, that replacement of the phrase "at the earliest opportunity" by the words "in good time" provided for in the directive will avoid unnecessary disputes about precisely when consultation should begin. It is to be hoped that they are right in that. But my fear is that this change may result in even more legal quibbling as to what "in good time" means in the particular case.
Lastly, it appears that under the regulations it is left to the employer to initiate elections of the employee representatives who are to be consulted. In the draft proposals circulated by the Department of Employment last April it was specifically stated that,the Government does not propose to specify the means of election",and that they believe it to be,a matter which should be left to employers and employees to arrange in the manner they think best, having regard to the particular circumstances".No doubt in most cases the necessary arrangements will be amicably agreed. But in other cases there does not appear to be much by way of remedy available for employees who may object to the system that is adopted by a rogue employer wishing to make arrangements for a ballot that is calculated to produce the outcome he desires. Difficult problems could also arise if employers try to hold elections on an ad hoc basis, as they are entitled to do under the regulations, in the bitter atmosphere which often surrounds large scale redundancies. Such difficulties could be exacerbated by time pressures, since employers would have to leave enough time both to hold proper elections and to have meaningful consultation with employee representatives.
I hope that I have said enough to make it plain that these regulations as they stand are not a satisfactory response to the judgments of the European Court. I only hope that they do not prove too damaging to industrial relations in this country and necessitate further judgments having to be brought forward by the court.
§ 10.8 p.m.
§ Lord Wedderburn of Charlton
My Lords, I rise to support the arguments already advanced, especially by my noble friend, at the outset declaring that I have in the past given advice professionally on some matters that are not central but germane to the two directives of 1975 and 1977. I preface my remarks by asking the Minister whether he will be so kind when he responds to address the two questions of which I have given him written notice, since there is some technicality in the matter. They relate to Regulation 3(2), excluding the duty of consultation on dismissal where there are fewer than 20 employees, and to Regulation 8, in part reversing the effect of recent decisions so as to exclude the rights of workers unfairly dismissed in transfers of undertakings who have no two-year qualification. My question in relation to each of those is: since neither of these issues is a necessary consequence of the Court of 1091 Justice's decision of 8th June 1994, on what ground do the Government find it proper to include them in these regulations made under the Act of 1972 rather than afford us an opportunity of a full debate and possible amendment in primary legislation, as was done on parallel matters in the Act of 1993?
On the regulations as a whole, in my submission the test is a legal test as to their validity. That test is clearly set out by the Court of Justice in the decision of 8th June 1994. It is put in two ways. The first is the question of whether the scheme of the domestic or national law would,allow the employer to frustrate the protection of the workers",or secondly, "impede that protection" of the employees concerned. The question is not whether employers are likely to act so as to "frustrate" or "impede"—many sensible employers would certainly not do so—but whether the regulations and their national implementation leaves open the possibility that the rights accorded by the directives in European law will not be properly implemented. This is a matter not merely of legal technicality. As usual, the law in this area shrouds a very important and, as my noble friend said, profound social issue. We are discussing people who are going to lose their jobs.
The regulations provide that the elections are to be held as and when the employer chooses—even if an independent trade union is recognised for bargaining. I know that some people will say that there is not much difference between negotiating with the officials of a recognised union and negotiating with representatives resulting from elections. However, the regulations show that that need not necessarily be so. The employer may impose whatever electoral process he chooses. What is more, the appropriate representatives for elections designated by the employer are elected at his "invitation" issued to,any of the employees who may be dismissed"—that is to say, in one part of the regulations it is clear that the representatives represent only the employees who may be dismissed. There is a clear contrast with the representatives of a trade union who can take account of the interests of the workforce and of the enterprise as a whole.
There are not just two types of electoral representatives in the regulations — there are four. First, there are the representatives of a recognised trade union. Secondly, there are the representatives elected by some or all ofthe employees who may be dismissedat the "invitation of the employer". Thirdly, there are the representatives elected "by employees" more generally, a constituency comprising not necessarily only the employees who may be dismissed. Finally, there is the special case of representatives who are elected at any time to a body or for a purpose other than consultation on dismissals, such as a staff council, where that is an appropriate body to make use of for consultation. I repeat the phrase "to make use of because it is for the employer to make use of any of those four avenues which he chooses to select.
1092 Against what must we test that quite remarkable power which is given to the employer? The only test—the only proper test—is what the directives of 1975 and 1977 both demand. They demand that there shall be,consultation with a view to agreement".
That requirement was inserted at long last in our domestic law in 1993. If there is to be consultation with a view to agreement, there must manifestly be representatives on both sides. On the employees' side, they must certainly be freely chosen without interference or constraint. They must be chosen in such a way that they are independent of the employer's control. They must be chosen by electoral procedures which are impartial and fair. They must have the resources and capacity to make and administer the agreement and, some would say, they must be chosen by secret ballot. Not a single one of those elementary principles appears in the legal part of the regulations—or in the regulations as law. As to free choice, the employer is told by the Department of Trade and Industry's note of guidance that that is something that no doubt he "will no doubt wish to consider". I repeat that it is suggested the employer "will wish to consider" the free choice of the employees in that process as he decides when is the reasonable time for nominations, what is a reasonable balance of constituencies, and all the other parts of the procedure.
Although elected representatives must be allowed access to the employees threatened with redundancy, at an earlier stage the employer is not obliged to be even-handed about access to candidates. He can, if he wishes, give certain candidates access to the voters, and exclude other candidates at his whim.
One might have thought, in passing, that, as this is a matter of the protection —the court will certainly take this view—of the employees, there might have appeared somewhere a legal right for the workers to trigger elections at their chosen time, since it is their jobs that are in issue.
Nor is there any provision in the regulations for independence. That is of course the most startling omission. The representatives, in order to negotiate an agreement, or consult with a view to agreement, must have independence from the employer. It is true that the regulations now—it is an improvement on the consultative document—afford some negative protection against discrimination or dismissal. But there is no provision to ensure that the employer does not discriminate by giving preference in the elections to his chosen candidates or by arranging the electoral machinery to suit some candidates rather than others.
A provision on independence would have been easy to draft. There is an analogy with the definition in Section 5 of the Trade Union and Labour Relations Consolidation Act 1992 on independent trade unions. As regards independence, the specific is perhaps more important than the general: that is to say, why is there no provision in the regulations outlawing interference or constraint on the voters? In every piece of trade union legislation passed by the Government since 1984 there has been a provision that in the ballot members must not be subject to interference or constraint by the union or its officials or employees. Why do these regulations 1093 so glaringly omit a similar provision to outlaw constraints imposed on employees or candidates by an employer?
In these regulations, it is clear that the interest of the employees which the directives purport to put forward can be impeded and could be frustrated by an employer making use of all these vast powers. It is not a scheme for representatives of employees in the proper sense. It is a scheme which would allow an employer to get what he wanted in terms of employee representation. That is exactly the type of scheme which the judgments of 8th June 1994 clearly outlawed.
The Government would save a lot of time and money in litigation and, I suspect, another weary dispute with the Commission, which might see them hauled off once more to the court in Luxembourg, if they agreed at this late hour to take back these regulations for extensive amendment in the matters to which I have referred.
§ 10.18 p.m.
§ Lord McCarthy
My Lords, although it is comparatively late at night, we should congratulate ourselves on two things: first, we should congratulate ourselves on the fact that my noble friend Lady Turner has been instrumental in producing the debate. We are so far the only one of the two Houses of Parliament which has had a debate of this kind, and a debate which will take place before the regulations are law. If they have a debate down at the other end, it will have to be after they are law. At least we have managed to get the debate in. It was difficult to get it in. We got it in only late at night, but we got it in. I suppose that we should congratulate ourselves on that.
Secondly, the noble Lord, Lord Chesham, should congratulate himself on being, as I see it, the first DTI spokesman to reply on an industrial relations issue since 1915, when of course the Ministry of Labour and National Service, as it was then, was created. I take it that the noble Lord replies for the DTI, because I know that he has many responsibilities. He may be replying for the Foreign Office and he may he replying for the Whips' Office, but I take it that he is replying for the DTI. If he is, he will be the first Minister of the Crown to be replying on industrial relation issues for the DTI since 1915. We must congratulate him on that.
As regards the regulations, I wish to focus on a narrow, single issue in the hope that I shall receive an answer. It was mentioned by previous speakers and it is the issue of independence. On what possible grounds can the Government justify the denial of the simple test of independence? I refer to the Advocate-General who, after all, is frequently quoted by the Government in relation to the regulations. At paragraph 10 of his report he stated that the essential point was that,the designation of representatives ought not to depend on the free choice of the employer".
The Advocate-General said that that was the essential issue and, if it is, it is about independence.
I turn to what was said by the noble Lord, Lord Inglewood, who, unfortunately, has disappeared somewhere else and has some other departmental duties. I cannot recall them at the moment. He spoke to this 1094 House as a Minister on 20th March when he represented the now dead and gone Department of Employment. He said that workers' representatives,must clearly have appropriate guarantees of independence".— [Official Report, 20/3/95; col. 1095.]Why have the Government gone back on that? Was the noble Lord, Lord Inglewood, speaking outside the brief? Were they the last dying spasms of the old Department of Employment which believed in the independence that we do not now get from the Foreign Office or the Department of Trade and Industry? Are the Government completely revoking everything that the noble Lord said—that workers' representatives must have appropriate guarantees of independence?
After all, the Government have not completely revoked the notion of independence. They apply it to trade unions, which is the fantastic thing. The House will know that there are two ways in which one can conform to the regulations: one can recognise trade unions or one can have an electoral system. If one recognises trade unions, they must be recognised trade unions and they must be independent. Independence comes in but only where trade unions are concerned. In other words, it is the definition of independence which is contained in Section 5 of the Trade Union and Labour Relations (Consolidation) Act 1992.
My next question to the Government is: why is not the definition of "independence" on the face of the regulations? Why does it not apply not only to recognised trade unions but to the funny little elected organisations? The Act states of an independent trade union that it:
That seems to me to be a perfectly good workable definition of "independence". Why should not the elected representatives be not under domination or control of an employer or group of employers? Why should not they be not liable to interference from an employer via the provision of financial or material support? Why should not that be on the face of the Bill? Was not that what the noble Lord, Lord Inglewood, was getting at? But, of course, that was the old Department of Employment.
- "(a) is not under the domination or control of an employer or group of employers…
- (b) is not liable to interference by an employer … arising out of the provision of financial or material support".
When we turn to the requirements of elected representatives, which is the second issue on the face of the regulations, we find:employee representatives [shall be] elected by them…as the employer chooses".
That is in direct contravention of what was said by the Advocate-General. As was said by my noble friends Lord Wedderburn and Lady Turner, that is not the only thing that the employer can decide. He can decide which employees will be eligible for election; whether they will be elected by universal ballot directly or indirectly; whether they will be elected by a show of hands or a secret ballot; whether he wants to count the votes or whether he will let his foreman do so; and whether there is any right to report back, and so forth.
1095 I mention those matters to noble Lords because, as my noble friend Lord Wedderburn said, all those matters—who is liable for election, whether the election shall be universal, direct or indirect, by show of hands or secret ballot—are very closely regulated in all the Acts affecting trade unions, now consolidated in the 1992 consolidation Act passed by this Government. All those rules regulate independent organisations when they are trade unions, but there is no sign of those rules applying to the other system. I ask the Government why.
It seems to me that there are only two possible conclusions. The first conclusion —and I ask the Government to say this—is that they do not believe at all in consultation. They do not believe in the passage of information. They believe that the best workers are the ignorant workers and the more they are told, the more trouble is created. If Europe makes them introduce this system, the less effective it is, the better. They do not believe in it from the beginning, through the middle to the end. Although it is twenty-five minutes past ten, if that is the case, I suggest that we should congratulate ourselves if they were actually to get up and tell us that.
The second possibility—and the two are not necessarily mutually exclusive —is that this is just one further attempt to undermine the trade union organisation. The reason that the TUC, the Labour Party and anybody who has any interest in the representation of workers has moved away from the old system, where they supported the Government in saying that these regulations, these directives, need concern only trade unions and that you had to join a trade union to enjoy those rights, is that they now know that those measures have been used as a way to encourage employers not to recognise unions. Therefore, we say that representation must no longer be a trade union monopoly. That would be quite wrong today. Representation has to be something to which individual workers have a right and if they wish action to be taken through a trade union, so be it. But if they do not wish that approach, they do not have to have it. However, the Government do not believe that.
The second possibility is that the Government want to find a way to penalise those who recognise trade unions, those who go through the union text. Therefore the Government say, "If you choose the first method of recognising a union, that has got to be independent and the union will have all kinds of rights and its members will have all kinds of rights against the employer and the union itself'. They would say that that is the organised, recognised bureaucratic way. But they say, "If you do not recognise an independent union, you do it yourself and you do it how you like". What could be a more constructive way in which to encourage employers not to recognise unions? The Government say that if you want to know how to take no notice of these regulations, the one thing you must not do is to recognise a union.
Therefore, the second possibility is that the purpose of the regulation is that it is one more way to discourage recognition of unions and encourage the de-recognition of unions. It is for the Government to say whether I am right on ground one or ground two or whether they have another ground. I look forward to hearing the answers.
§ Earl Russell
My Lords, listening to this debate, I have been persuaded that the Government have introduced these regulations in the spirit in which the noble Lord, Lord Tebbit, introducing some regulations against racial discrimination in another place, is alleged to have said, "I move these regulations in the spirit of a wine waiter asked to serve a Coke". My Lords, I like my spirits a bit stronger than that.
§ 10.30 p.m.
§ Lord Chesham
My Lords, we have had an interesting debate this evening on these complex regulations. I am conscious that this is not the first debate in this House on the important subject of the Government's response to the judgments of the European Court of Justice of 8th June 1994. The noble Baroness has, as before, argued her case forcefully and articulately and has been amply supported by noble Lords opposite. I must however oppose the Motion to annul the regulations.
As your Lordships are aware, these regulations have two purposes. First and foremost, they give effect to judgments of the European Court of Justice concerning the implementation in the United Kingdom of the 1975 Collective Redundancies Directive and the 1977 Acquired Rights Directive. However, Regulation 8 deals with a separate matter and reverses the effect of the judgment of the Employment Appeal Tribunal in Milligan and Bailey v. Securicor Cleaning Ltd in which the EAT had interpreted the Transfer of Undertakings (Protection of Employment) Regulations 1981 in a way which Parliament had not intended.
Before I turn to the detail of the regulations, I shall deal first with the question raised by the noble Lord, Lord Wedderburn, concerning the inclusion in an instrument made under Section 2(2) of the European Communities Act 1972 of Regulation 8 and the provisions of Regulation 3 which limit the obligation to consult about collective redundancies. I am grateful to the noble Lord for giving me notice of his question. It concerns a matter to which the Government have given careful consideration. Section 2(2)(a) of the 1972 Act enables regulations to be made for the purpose of implementing any Community obligation; Section 2(2)(b) of the Act enables regulations to be made for the purpose of dealing with matters arising out of or related to any such obligation.
Article 1 of the Collective Redundancies Directive defines collective redundancies. It allows member states to choose between two thresholds for the number of dismissals concerned, below which thresholds the directive does not apply. The Government have chosen the second of those options; that is where the employer proposes at least 20 dismissals over a period of 90 days. The amendment made by Regulation 3 is entirely consistent with Article 1 of the directive. As the proposed regulation has the purpose of implementing our Community obligation, albeit in different terms from the manner in which it is at present implemented, or alternatively arises out of or is related to that obligation, the use of Section 2(2) of the Act is entirely appropriate.
1097 With regard to Regulation 8, Article 4(1) of the Acquired Rights Directive permits member states to exclude specific categories of employees who are not covered by national law concerning protection against dismissal. That is what Regulation 8 provides for. Indeed, Regulation 8 is intended simply to restate the position intended by the 1981 regulations which, I would remind the House, were made under the 1972 Act. Regulation 8, therefore, concerns a matter which is clearly related to our obligation to implement the directive and again it is appropriate that it be included in regulations made under Section 2(2) of the 1972 Act.
I turn now to the substance of the regulations. As your Lordships are aware, both directives require an employer to consult, in the relevant circumstances, workers' representatives defined in each directive as,the workers' representatives provided for by the laws or practices of the Member States".In implementing the Collective Redundancies Directive in 1975 the then Labour Government required an employer to consult only where there was a recognised trade union. In 1981 the Government in implementing the Acquired Rights Directive followed the same approach. The ECJ ruled that by failing to provide for the designation of workers' representatives where an employer does not recognise a trade union the United Kingdom had not met its obligations under those directives. That is the history of the matter. The regulations now provide for consultation by an employer whether or not the employer voluntarily recognises a trade union. They therefore bring UK law into line with the directives as interpreted by the ECJ.
What we have done is to give effect to our Community obligations in a way which gives the maximum flexibility to employers in this country to decide how to meet their obligations. That has always been our intention. My noble friend Lord Inglewood told the House on 20th March (Official Report, col. 1095):Our aim, consistent with the points I have made tonight, will be to bring forward proposals which, while fully implementing the requirements of the two directives, which have been clarified by the ED judgment, provide the maximum flexibility for employers to make arrangements consistent with their business circumstances and the particular needs of their employees. They must recognise the need to minimise the burden on business: they must not interfere with the delicate balance of industrial relations generally and must ensure proper consultation with employees' representatives.My noble friend could not have stated our approach more clearly. The regulations which we are discussing tonight are fully consistent with what he said then. I ask the House to look closely at what the regulations actually do. They require an employer to inform and consult, in the relevant circumstances, either a recognised trade union or representatives elected by the employees themselves. I shall repeat the point, for it is an important one—representatives elected by the employees themselves. An employer may choose whether to consult a union or elected representatives, but he cannot choose not to consult anyone at all. That is a significant extension of the obligation to consult. There are those who will argue, as has been argued here 1098 tonight, that an employer who recognises a union should not be free to consult anyone other than that union. I ask simply, why not?
We must recognise that the extent and nature of union recognition has changed substantially over the past decade and the next decade may well see further changes as employers and unions have to adapt to ever more competitive markets and changing employment patterns. Many—probably most—employers who recognise a trade union will wish to continue to consult that trade union about redundancies and business transfers. These regulations provide no obstacle to that, and unions which are confident that they speak for the majority of the workforce and act responsibly in the best interests of both their members and the business should have nothing to fear from this measure.
However, the regulations also recognise that some employers have developed other channels for consultation with their employees, whether or not they recognise a trade union for particular groups of employees. We want employers to be able to use such machinery where it exists and where the employer judges it right to do so. An employer who recognises a union for some categories of employee but not others may well, for example, feel that it would be simpler and more appropriate to consult elected representatives for all the employees affected by a proposal, rather than a mixture of union and elected representatives. We believe that it is right, therefore, to offer that flexibility and freedom of choice. But let me repeat, it is a freedom of choice concerning who to consult, not whether to consult.
It has been argued that the regulations should set out detailed rules for the conduct of elections and require standing machinery to be established. It is a fact that the regulations do not provide for such matters; we have deliberately chosen not to do so. Again, our watchword is flexibility. There are good reasons for not dealing with such matters by statute. The circumstances surrounding the employers' obligation to consult will vary considerably. This would inevitably lead to complex statutory rules designed to cover all possible circumstances. Such complexity benefits neither employers nor employees. Nor do we see any reason why employers with perfectly acceptable existing machinery should have to adapt it to fit with rigid bureaucratic requirements. Rather, we believe it is right to set out the purpose of the consultation and the necessary safeguards and leave it to those who know the particular business circumstances best to determine detailed arrangements. That is what we have done.
As to whether ad hoc arrangements are acceptable, we believe that they are, subject to certain safeguards. Of course an argument can be made for standing arrangements, and some larger employers may well wish to establish such arrangements. That is a judgment which they must make. But many employers will never, or very rarely, be faced with having to make collective redundancies or be involved in a business transfer. It would be absurd for us to require those employers to establish and maintain some machinery which might never be used. That would be bureaucracy gone mad.
1099 But I made clear that there must be some safeguard to prevent abuse and we have provided that. An employer cannot leave it to the last moment to begin consultation. Consultation must be in good time and, in the case of redundancies, the legislation prescribes a minimum time before the first dismissal takes effect. Regulation 3(8) requires that where there is no standing machinery and the employer therefore invites the employees to elect representatives, he must allow sufficient time for them to do so and for the consultations to take place. A similar provision is made in respect of transfers by Regulation 9(10).
The Government entirely accept that simply to provide for consultation with elected representatives where there is no recognised trade union would, without more, be inadequate protection. But we have provided substantially more than that. The regulations provide protection for elected representatives against dismissal or detriment short of dismissal on the grounds of their status or activities as a representative. Those protections have been drafted so as to provide protection not only to those who are presently representatives but also to those who have ceased to operate in that capacity and to candidates for election. They provide a right to time off with pay to carry out representative duties and a right to appropriate access to the affected employees and to facilities such as telephones. The regulations also amend the provisions concerning who may bring a complaint to an industrial tribunal. These are extended to include not only elected representatives but also in appropriate cases individual employees who have been affected by the proposal. Those are substantial rights and protections and I trust that the House will recognise their importance as part of a coherent package of measures.
We have spoken tonight of the deregulatory element of the proposal on redundancies. The Government considered very carefully what measures should be taken to ensure that the burden on employers resulting from these additional measures should be minimised. I would not expect some noble Lords opposite to accept that any deregulation can ever be a good thing, but the Government believe firmly that to hamstring employers with unnecessary regulations is to damage the ability of our businesses to compete, to grow and therefore to provide jobs for people in this country. In drawing up the package of measures in response to the ECJ judgments we believed it was right therefore to look for ways of balancing the additional obligations which would be imposed on employers. Restricting the statutory obligation to consult through representatives to collective redundancies, as defined in the directive, is just such a measure. We believe that it is vital to ensuring the coherence of the package of measures.
The directive imposes very specific and detailed requirements on an employer. By setting a threshold below which these requirements do not apply, the Council of Ministers recognised that these would not necessarily be appropriate to small firms or to small numbers of redundancies. That must surely be right.
Limiting the obligation to consult through representatives about collective redundancies will provide substantial relief for small and medium-sized employers in particular. But let me make it quite clear. 1100 It does not absolve employers from the obligation to act fairly and reasonably in handling individual redundancies, including informing and consulting employees individually as appropriate. There is ample case law showing the importance which industrial tribunals attach to such matters in considering whether or not a dismissal is unfair. It is simply not the case, as some may suggest, that our regulations now give employers a free hand to dismiss without any fear of sanction.
I return now to the change made by Regulation 8 of these regulations concerning the right to bring a claim of unfair dismissal in connection with a business transfer. When the draft TUPE regulations were debated in this House in 1981, my noble friend Lord Lyell stated (Official Report 10th December 1981; col. 1483) that the normal provisions governing unfair dismissal—for example, the qualifying period necessary to bring a claim—would continue to apply where employees were dismissed because of a transfer. That is how the regulations were understood to operate until earlier this year when the Employment Appeal Tribunal held, in the case of Milligan and Bailey v. Securicor Cleaning Ltd, that the 1981 regulations did not prevent an employee with less than the normal qualifying service from bringing such a claim. The EAT noted that member states were entitled under the Acquired Rights Directive to exclude categories of employees who do not qualify for dismissal protection. But it held that, as drafted, the regulations did not exclude such employees from bringing a claim.
The effect of that judgment would be to give employees greater rights on transfer than they enjoyed if there was no transfer. We do not believe that to be consistent with the purpose of the directive or, in light of what was said in the 1981 debate in this House, with the wishes of Parliament. Regulation 8 therefore seeks to clarify beyond any doubt that the normal qualifying conditions for unfair dismissal apply in these circumstances.
In conclusion, I wish to thank all noble Lords who have taken part for their contributions to tonight's debate and also for their approval of certain things that we have done, if not everything. There is much on which we do not and cannot agree, but I hope that the House will recognise that the package of measures contained in these regulations is a coherent and proper response to the ECJ judgment of 8th June 1994. It is one which provides for the maximum flexibility in approach consistent with an employer's obligation to consult in the relevant circumstances.
I repeat that, though we are providing flexibility and freedom of choice, it is a choice about how to meet the obligation to consult rather than whether to do so. The obligation is clear and the necessary safeguards are there. I commend the regulations to the House.
§ Baroness Turner of Camden
My Lords, the House will not be surprised to learn that I am disappointed with the response. We had hoped that, as a result of the arguments advanced from this side, the Government would take back the regulations and re-think them. I am sorry that we have failed to persuade the Minister to do so because we hold the view strongly on this side of the 1101 House that the regulations do not meet the requirements of the ECJ decision. We believe that that means that there may well be a situation in which again there will be a challenge to what has been done. Once again, the Government may be faced with a situation in which they have to re-vamp regulations and present a fresh set of regulations for consideration by both Houses.
We hold strongly to the view already expressed that the regulations as they stand allow employers to bypass existing trade union organisations and trade union representatives. We are concerned that there are no guarantees of independence for representatives. We note what the Government have had to say about maximum flexibility for employers, but we are also concerned about the rights of employees and their organisations. We regret that we have not persuaded the Government to re-think the regulations and are afraid that we may well be debating re-vamped regulations at some time in the future because they have failed to meet the requirements of the ECJ decisions. However, I beg leave to withdraw the Motion.
§ Motion, by leave, withdrawn.