§ 212B.—(1) An employee shall not be subject to constraint or pressure, directly or indirectly imposed upon him by an employer or other person, connected with his agreement to take part or to continue to take part in an arbitration to which a scheme under section 212A applies.
§ (2) An employee may apply to an employment tribunal in respect of a contravention of this section, and where the contravention is proved the tribunal shall make a declaration and may award such compensation to him as is just and equitable against any such employer or other person.
§ (3) Where a tribunal makes a declaration under this section, the employee may apply to the court which, where it finds that the constraint or pressure is continuing, may make such order as seems to it just and equitable."").
§ The noble Lord said: I refer to a situation in which a worker's rights depend upon the agreement established between him or her and the employer. One must understand that in some firms at any rate the inequality of bargaining and negotiating power may be such that some further protection is required. The Committee may be pleased to hear my next point. I know from anecdotal evidence that an interesting set of developments is taking place on just this question in the United States. Unhappily—or perhaps happily for the Committee—the written evidence which was supposed to arrive in the post has not yet done so. I know that in the 7th Circuit Court of Appeal and, I understand, in a case that has been referred to the Supreme Court, the following issue will be discussed. An employer may tell an employee, "You agree to a grievance arbitration procedure and I shall do this or that" while implying that he will do no such thing unless the employee goes ahead with the procedure.
§
Some protection is required for employees. We in this Chamber do not live in such an unreal world as many people believe. We know perfectly well that employees will be leant upon in some cases when they do not belong to a good independent trade union or when they
683
do not have technological skills that the employer cannot do without. Surely therefore the Government must agree with the words of the amendment which states,
An employee shall not be subject to constraint or pressure … Imposed upon him
to agree to take part in arbitration or to agree not to do so. I should have thought this matter is non-controversial. I beg to move.
§ Lord MestonI support this amendment because the spirit of the provision, as I understand it, concerns voluntary arbitration—the emphasis being on the word "voluntary". However, I wonder whether it goes far enough. It seems to me to be an important corollary of this amendment that it should invalidate any term of the contract of employment which appears to require an employee to go to arbitration as opposed to exercising any of his other remedies before a tribunal or a court.
§ Lord Archer of SandwellI confess that I am persuaded by my noble friend that there could be a problem in some circumstances. I am certain that not all employers are so beyond criticism that they would not seek to apply pressure. I remind the Committee that the Bill already contains a safeguard in that the procedure does not operate at all unless either it has been instigated by a conciliation officer or the party has received advice of a kind which we shall debate in a few moments.
If there is pressure which goes beyond that—that is to say, to persuade an employee to ignore the advice which he is given, or to ignore what he is told by a conciliation officer—I am not wholly sure what safeguards we can include in this Bill. If there is that kind of pressure, there will also be pressure to prevent an employee from taking advantage of the safeguard which my noble friend now seeks to include. I believe that there is a difficulty with this. We have to accept that there are some kinds of pressure which may be used surreptitiously and against which there can be no safeguards in this Bill. I hope that my noble friend will see the difficulty which occurs to me.
§ Lord HaskelI speak to Amendment No. 22. As my noble friend has said, this amendment appears to be reasonable in that it is aimed at offering a protection against being pressurised into agreeing to refer a case to the ACAS arbitration scheme. However, the Government do not consider that it is necessary in the light of other protections which are already, or will be provided for, in the Bill. There is the requirement to obtain independent advice from one of those specified in Clause 9, as amended, or a conciliation officer will have been involved. These are important protections and will seek to ensure that the decision to refer the dispute to arbitration is a voluntary one. If an employee considers that he or she is being pressurised to take part in arbitration, it is highly unlikely that he or she will do so. That person need not give his consent and in the absence of it the case will proceed to a tribunal hearing. 684 This requirement for consent informed by independent advice is in my view the real safeguard against undue pressure.
§ Lord Wedderburn of CharltonI am grateful to my noble friend the Minister for that reply. I restrain myself to pointing out that my amendment goes rather wider than I have perhaps given it credit for. It applies not merely to an agreement to take part in arbitration but also to an agreement to continue to take part in arbitration. An employee may have agreed to go to arbitration and a manager may then say to him, "You go on with this stuff and you will not get any more over time even if you are reinstated and come back here". We know that such things happen. This is not a game of chess, as it were, where we move pieces about. We are dealing with real people. I say to my noble and learned friend Lord Archer of Sandwell that I am of course speaking about those employers who will act in such a way. Fortunately there is a large number of employers who will not act in such a way. Perhaps the small employers might act in such a way rather than the large employers. However, an employer may say to an employee, "You have started this arbitration game and we do not like that sort of thing here". I believe that out of his mouth there has already been a constraint. Already there is something from which an employee needs protection. With the best will in the world, I do not find such protection in the Bill. If there is to be provision in the Bill, I look forward to that with gratitude.
§ Lord Archer of SandwellBefore my noble friend sits down, will he address the point I made? If that kind of constraint is being applied to the employee, will he then apply to an employment tribunal in respect of the contravention?
§ Lord Wedderburn of CharltonYes. That is what happens all the time in employment protection law. At this point the worker says, "I have to give up here. I cannot go back to that employment". Of course, if he continues with the employment perhaps he does not need extra protection. In this provision I am giving him some extra protection in the form of compensation as a restraint upon the employer. I put it fairly high. It is true that he will lose that employment. I assume that that is so with such an unreasonable employer. But he would go away with some compensation. Under the Bill he receives nothing. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 7, as amended, agreed to.
§ Clause 8 [Effect of arbitration agreements]:
§ [Amendments Nos. 23 and 24 not moved.]
§ Clause 8 agreed to.
§ Clause 9 [Advice of non-lawyer]:
§ Lord Archer of Sandwell moved Amendment No. 25:
§ Page 8, line 32, leave out (""independent advice"") and insert (""advice from a relevant independent adviser"").
685
§
The noble and learned Lord said: The law currently provides that a compromise agreement is valid only if the applicant has received independent advice from a qualified lawyer. That is already independently of this Bill. The Bill amends the provision, widening the qualifying sources of advice by providing that the applicant need only have received independent advice—that is to say, not necessarily from a qualified lawyer. Clause 10 provides that for the agreement to be valid, the person giving the advice must have been in possession of a,
'contract of insurance, or an indemnity'".
§
The amendment of my noble friend Lady Turner further alters that provision. It would restrict the qualifying sources of advice by providing that the advice comes from someone who is independent of the employer, and specifying three categories of person qualified to give the advice. The first is a qualified lawyer; that is the current position. The second is a full-time official of an independent trade union. I believe that the position of my noble friend Lady Turner is that it should be a full-time official. I would wish to add that many part-time officials or voluntary officials of trade unions may be well qualified to give the advice. Apart from that, I go along with my noble friend. The third category of my noble friend's amendment is that it should be,
a person of a category designated … by the Secretary of State".
§
I accept that one advantage of my noble friend's amendment as against mine is brevity. I apologise for the length of some of my amendment. If they are accepted there are a fairly substantial number of consequential amendments. In Amendment No. 36 I propose that a person shall be within the qualification if he is a qualified lawyer, or,
an officer, official, employee or member of an independent trade union who has been certified in writing by the trade union as competent",
and authorised to give the advice. The onus would be upon the union to ensure that the person in question was competent to give the advice. The third category refers to a worker in an advice centre who has been certified as competent to give the advice, or a person of a description specified in an order by the Secretary of State.
§ I should make it clear that a person would not be a relevant independent adviser if he was employed or acting for the other party or was connected with the other party; or if the trade union or advice centre was the other party or connected with the other party; or if the person was charging for the advice—one thing we all want to exclude is someone making a fat profit from giving advice and giving it badly—or in the case of a person designated by the Secretary of State if he did not satisfy the other conditions in the order.
§ Amendment No. 36 then defines the meaning of "qualified lawyer" for the purpose of the other provisions. It defines an "independent trade union" and what is meant by "connected" for those purposes. I do not think that I would earn the undying gratitude of the Committee if I were to go into further details about the consequential amendment. We all seek to get the 686 provision right. I do not guarantee that my amendment is beyond improvement. However, if my noble friend Lady Turner is prepared for my amendment to proceed and to withdraw her amendment, then at least we could meet any further criticisms when they arise. I beg to move.
§ Baroness Turner of CamdenI thank my noble and learned friend for introducing this extremely comprehensive amendment, which I fully support. It goes far beyond and is much more detailed than my amendment and is very valuable for that reason. I particularly welcome the inclusion in Amendment No. 36 of the paragraph relating to the official of a union who may or may not be a full time official but who has to be certified by the union as being an appropriate person to give the advice. I think that that is a good amendment.
I shall not move my amendment in the light of this comprehensive amendment proposed by my noble and learned friend.
Baroness BlotchFor the benefit of those following the debate, has the noble and learned Lord, Lord Archer of Sandwell, spoken to Amendments Nos. 25 to 29, 36, 37, 39, 42 to 47 and 49 in this grouping?
§ Lord Archer of SandwellI certainly intended to. That is why I said that I doubted I would earn the gratitude of the Committee if I dealt with them individually. But I am grateful to the noble Baroness. I omitted to say at the outset that it would be for the convenience of the Committee perhaps to discuss them altogether.
§ Lord HaskelFor the benefit of the Committee, I should like to speak to Amendments Nos. 25 to 29, 36, 37, 39, 42 to 47 and 49, which are the amendments of my noble and learned friend Lord Archer.
The Government fully support the amendment which he has tabled. At Second Reading a number of Peers made it clear that they felt that Clause 9, unamended, would be likely to enable unscrupulous people to set up as advisers. The Government consider that the persons and the categories specified in my noble friend's amendment are suitable to provide advice on compromise agreements, especially given the safeguards which he has so elegantly built into the clause.
§ On Question, amendment agreed to.
§ [Amendments Nos. 26 to 29 not moved.]
§ Clause 9, as amended, agreed to.
§ Clause 10 [Indemnity cover]:
§
Lord Archer of Sandwell moved Amendment No. 30:
Page 8, line 44, at end insert ("profession or").
§ The noble and learned Lord said: This is an amendment simply to set right what I believe was an oversight. The insurance provisions of the Bill as initially drafted would apply to solicitors who are members of the Law Society. Some solicitors are not members of the Law Society but they are still provided 687 for by the indemnity fund. It was not intended to exclude them and this amendment ensures that we do not. I beg to move.
§ 8 p.m.
§ Lord HaskelThe Government support this amendment.
§ On Question, amendment agreed to.
§ Clause 10, as amended, agreed to.
§ Clauses 11 and 12 agreed to.
§ Clause 13 [Internal appeal procedures and unfair dismissal awards]:
§
Lord Archer of Sandwell moved Amendment No. 31:
Page 10, line 34, leave out from ("was") to ("but") in line 36 and insert (", at the time of the dismissal or within a reasonable period afterwards, given written notice stating that the employer provided the procedure and including details of it,").
§ The noble and learned Lord said: The purpose of Clause 13 is to encourage parties to resolve disputes closer to the source, before they resort to tribunal proceedings. The merits of that principle are too obvious to require argument. It is a general principle of jurisprudence that those aggrieved should avail themselves of those remedies that are immediately to hand before they range further afield. However, at Second Reading and in subsequent discussions a number of my honourable friends urged upon me the need for safeguards. For example, a party ought not to be penalised for failing to avail himself of a procedure of which he does not know.
§ There are already some safeguards which I believe will be effective. Noble Lords will recollect that Section 207 of the 1992 Act requires that, in any proceedings brought before a tribunal, the ACAS code of practice on disciplinary practice and procedure is admissible in evidence and is to be taken into account. That code provides, among other things, that there should be a disciplinary procedure; that it should so far as possible be one that is accepted as reasonable by all those affected; that the management shall seek to involve employees in compiling the procedure; and that trade unions should, where possible, have a role in that process. It also provides that employees should be made fully aware of the procedure and how to avail themselves of it.
§ Reflecting further on what was said at Second Reading and subsequently, I tabled this amendment. It seeks to provide that, before an employee is penalised for failing to make use of internal procedures, he must have been notified in writing at the time of the dismissal or within a reasonable period afterwards that the procedures exist and as to what they entail. So it would not be sufficient that an employee should have been told at some time in the distant past. I believe that this provision will help to implement the real intention of the clause, which, after all, is not that anyone should be penalised but that people should avail themselves of a sensible internal procedure. I beg to move.
§ Lord Wedderburn of CharltonMy noble and learned friend has put a case for his amendment that is 688 unanswerable. I wonder, however, whether between now and Report some slight difference might be made to the wording in the light of the decision, which we did not discuss before but which I know he now has, in the case of Goold v. McConnell in 1995. The reason the case is important is that the Employment Appeal Tribunal decided that it was,
an implied term in a contract of employment that the employers will reasonably and promptly afford a reasonable opportunity to their employees to obtain redress of any grievance they may have",and that they should have a written statement as to that procedure.Although the judgment goes wider, one reason that the obligation arose was Section 3 of the Employment Rights Act 1996, which, coming through other Acts before it, amounts to the implementation in British law of the 1991 directive. The directive required us to ensure that notification was given to employees at the time of the contract of employment—a provision that we had largely implemented previously, after 1963. Given Section 3 of the 1996 Act, the worker or employee ought to have notice of the grievance procedure at the time, within two months of his engagement, unless he is engaged by an employer with fewer than 20 employees, an exception that it is possible to make under Section 3 of the Act.
I noted with care my noble and learned friend's remark that the requirements that the employee must be told at the time of dismissal, or within a reasonable period afterwards, were separate to and additional upon the requirement, as he said, at some distant time in the past, at the time of his engagement. I therefore put a question to be considered by him and his advisers before Report. Would it not be worth including in this text a provision to make clear that it is a requirement in addition to any requirement under Section 3 of the 1996 Act?
§ Lord Archer of SandwellBefore my noble friend sits down, the point he raises is largely a drafting one; namely, the amendment achieves what we all want it to achieve. I certainly undertake to examine the point and to consider the matter with him before Report stage.
§ Lord MestonI hesitate to interrupt, but it occurs to me that the amendment does not go quite far enough. As I understand the present position in law, an internal appeal procedure, if exercised, does not necessarily prevent time running for the purposes of commencing industrial tribunal proceedings. So although the amendment goes some way towards ensuring that an employee is provided with information about the internal appeal procedure if he does not already have it, it does not meet the mischief in some cases of the employee thinking that, although he has been dismissed, the fact that he is exercising the internal appeal procedure operated by his employer will prevent time running for the purposes of applying to the employment 689 tribunal. That has always struck me as unfortunate. The tribunals have a discretion; nevertheless, it can work against the employee to his considerable detriment.
§ Lord Archer of SandwellI am grateful to the noble Lord for pointing that out.
§ Lord HaskelThe Government wholeheartedly support my noble and learned friend's amendment. We firmly believe that, where possible, parties to disputes should resolve those disputes voluntarily between themselves rather than by recourse to a third party or a tribunal.
As my noble and learned friend indicated, since the tribunal must take into account the circumstances of the case and the ACAS code of disciplinary practice and procedures in employment, an employee will not be penalised for failing to use a procedure which the tribunal considers to be unfair.
§ On Question, amendment agreed to.
§
Baroness Turner of Camdenmoved Amendment No. 32:
Page 11, line 12, at end insert ("but no reduction shall be made under this section where a reduction has already been made in the compensation awarded to the employee under section 122").
§ The noble Baroness said: This issue can be dealt with quite simply. The Bill provides for a reduction to be made in the award where the employee has failed to use internal procedures. My amendment is very simple. As I understand it, there can be a reduction in the basic award where there has been some degree of industrial fault. The intention is that there should not be a double reduction: a reduction in the basic award for industrial fault as well as a reduction because the employee has failed to use the internal procedures specified in the Bill. It is a simple point, and I wonder whether the Minister would be good enough to respond to it. I beg to move.
§ Lord Archer of SandwellI am grateful to my noble friend for her concise introduction of the amendment. It is a matter which my noble friend Lord Haskel and I have considered. The difficulty is that it is possible for one of the parties to have behaved unreasonably twice. There would be unreasonable behaviour which led to the dismissal and then further unreasonable behaviour not to avail themselves of the redress. I wish to reflect further before I agree to my noble friend's amendment. I do not know the view of my noble friend Lord Haskel.
§ Lord HaskelI am speaking to Amendment No. 32. As my noble and learned friend Lord Archer made clear, the intention of this clause is to encourage the use of internal appeals. But, as he said, there are cases where it might not be unreasonable for two deductions to be made: for example, if a dismissed employee unreasonably refused an offer of reinstatement. However, the tribunal will be able to take account of all the circumstances of the case.
§ Baroness Turner of CamdenI thank my noble friend for that response. I was most anxious to ensure 690 that there was not a double penalty on the employee and that is what the amendment was about. I am grateful to my noble and learned friend for his acknowledgement that there could be a problem here. It is not my intention to press the amendment. It is a simple issue. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 8.15 p.m.
§ Baroness Turner of Camden moved Amendment No. 33:
§
Page II, leave out lines 13 and 14 and insert—
("(4) The amount of such a reduction shall not exceed the amount of two weeks' pay and the amount of such a supplementary award shall be such as is just and equitable, but where the complainant is not reinstated or re-engaged shall not be in any case less than the amount of ten weeks' pay.
(5) An amount awarded as a supplementary award under this section shall not be taken into account in the calculation of the limits on the amount of compensation under section 124 of this Act."").
§ The noble Baroness said: It is well understood that the purpose of this part of the Bill is to ensure that there are internal procedures and that they are properly utilised. At Second Reading I expressed some concern that such procedures might not be known to the employee or could have been imposed unilaterally without negotiation. The employee might therefore feel suspicious of them. To a considerable extent, the point is met by Amendment No. 31 to which the noble and learned Lord spoke.
§ The Bill also provides for a supplementary award to be made in certain circumstances where the employee has been prevented by the employer from utilising internal procedures. As I read the wording, the supplementary award which may be made if the employee has been prevented by the employer from utilising an internal procedure is two weeks' pay or, rather, not more than two weeks' pay. I believe that that is insufficient.
§ My amendment provides for a supplementary award of not more than 10 weeks' pay. If the intention is to encourage the use of internal procedures, it could be done in one way by making it more of a penalty on the employer if he prevents the employee from utilising the procedures. Therefore, if one gives up to 10 weeks' pay as a supplementary award at the discretion of the tribunal, it seems to me that it is surely not too much of a penalty to impose on an employer who has prevented the employee from utilising an internal procedure. I beg to move.
§ Lord Archer of SandwellI understand the purpose of my noble friend's amendment. However, I am bound to say that the intention throughout the whole of the Bill is that it should enjoy the confidence of both employers and employees. I think that she would agree that probably if her amendment were incorporated it would appear to be less than symmetrical as between the two. This may be a case where appearances are rather important. I am grateful to my noble friend for pointing 691 out that the difficulty in her mind is addressed by Amendment No. 31. I hope that she will not wish to press the amendment.
§ Lord HaskelI am speaking to Amendment No. 33. I agree with my noble and learned friend Lord Archer that in our view it would produce an unfortunate imbalance in the working of the Bill and would move away from what we are seeking to achieve.
§ Baroness Turner of CamdenI thank the Minister for that response and also for the comment made by my noble and learned friend. It is not my intention to press the amendment, I wanted to give voice to my concern that where an employer has been particularly obstreperous and has prevented the use of a procedure, there should be some penalty on him. Up to 10 weeks' pay seemed to me to be appropriate. But in view of what has been said about the desire for a degree of symmetry, if I may put it like that, in the way in which both sides are treated, I shall not press the amendment. I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Clause 13, as amended, agreed to.
§ Clauses 14 and 15 agreed to.
§ On Question, Whether Clause 16 shall stand part of the Bill?
§ Lord BleaseClause 16 refers to Northern Ireland and I wish to make a brief point at this Committee stage for the record. As I understand it, if the Bill has parliamentary approval the clause provides that the principles of the Bill can be enacted in Northern Ireland. However, that will require an appropriate Order in Council procedure.
Perhaps I can say in support of the clause that from views expressed in Northern Ireland on employment rights, the Bill has warm approval. It has been welcomed by many experienced people, those directly involved with legal employment matters and those in general industrial relations practice and in industry. For many years there has been a close practical working relationship and exchange of relevant information between ACAS and the Northern Ireland Labour Relations Agency and with the Northern Ireland Department of Economic Development.
I wish to reinforce the point that the Bill has support in Northern Ireland. Mr. Gerry Loughran, speaking a few days ago at a conference on industrial relations, said:
The growing Northern Ireland economy has benefited enormously from the good industrial relations which it enjoys…The Government has a full and challenging economic and social agenda which will require the co-operation of employers, employees, businesses and trade unions working in partnership towards fair protection for people at work, hope for the long-term unemployed while at the same time maintaining and improving business competitiveness".I understand that the support for the Bill in Northern Ireland reinforces the objectives required. I support Clause 16.
§ Lord Archer of SandwellPerhaps I may express my gratitude to my noble friend for what he has just 692 said. For many years I was personally closely associated with industrial relations in Northern Ireland and some of those to whom he referred were close friends of mine. I am grateful for their approval and for what he said.
§ Clause 16 agreed to.
§ Clause 17 [Commencement]
§ Lord Archer of Sandwell moved Amendment No. 34:
§ Page 12, line 12, after ("18") insert ("and paragraph I6A of Schedule 1").
§ The noble and learned Lord said: It may be for the convenience of the Committee if, with Amendment No. 34, we discuss Amendments Nos. 35, 41 and 48. The point is a brief one.
§ Part of the jurisdiction of the industrial tribunal is to hear breach of contract cases. That was a jurisdiction conferred by Section 3 of the Industrial Tribunals Act 1996. Unhappily, it did not make provision for appeals to the Employment Appeals Tribunal. The amendment simply intends to clarify the position by making it plain that the industrial appeals tribunal has jurisdiction to hear appeals in these cases. I beg to move.
§ Lord HaskelLet me say briefly that the Government support the amendments of my noble friend because they are necessary to clarify an oversight in the existing legislation.
§ On Question, amendment agreed to.
§ Lord Archer of Sandwell moved Amendment No. 35:
§
Page 12, line 16, at end insert—
("() The amendment made by paragraph 16A of Schedule 1 shall be deemed always to have had effect.").
§ On Question, amendment agreed to.
§ Clause 17, as amended, as agreed to.
§ Clause 18 agreed to.
§ Schedule 1 [Minor and consequential amendments]:
§ Lord Archer of Sandwellmoved Amendment No. 36:
§
Page 13. leave out lines 13 to 21 and insert—
("2. For section 77(4B) and (4C) of the Sex Discrimination Act 1975 substitute—
(4B) A person is a relevant independent adviser for the purposes of subsection (4A)(c)—
(4C) But a person is not a relevant independent adviser for the purposes of subsection (4A)(c) in relation to the complainant —
(4D) In subsection (4B)(a) "qualified lawyer" means—
(4E) In subsection (4B)(b) "independent trade union" has the same meaning as in the Trade Union and Labour Relations (Consolidation) Act 1992.
(4F) For the purposes of subsection (4C) any two persons are to be treated as connected—