§ ("In section 7 of the Employment Tribunals Act 1996, after subsection (4) insert—
§ "(4A) Employment tribunal procedure regulations may make provision for representative proceedings to be brought on behalf of a number of persons having the same interest in proceedings in respect of an alleged contravention of any of the employment provisions of the Sex Discrimination Act 1975, Race Relations Act 1976, Disability Discrimination Act 1995 or in respect of an equality clause within the meaning of the Equal Pay Act 1970.").
§ The noble Lord said: I have already spoken at some length on Amendment No. 7. In response to what has already been said, I wish to make one or two further comments. Amendment No. 7 comes well within the object and purpose of the Bill which, as I understand it, is to promote efficiency in industrial tribunals provided that the procedures adopted are fair and workable. As I have sought to explain, Amendment No. 7 does not seek to impose any procedure on an industrial tribunal. It simply seeks to empower the Secretary of State—after the working parties have reported—to be able, by subordinate legislation, to introduce appropriate representative proceedings regulations in whatever form the Minister then thinks fit. It is important to have that power included in this Bill so that this rather urgent matter can be dealt with thereafter. I hope the Committee does not think that the speech therapists' case was in any way unique. There have been many others. The ghastly mess of the coal board case comes to mind in which I was not involved. I have acted on behalf of employers as well as employees. I can assure the Committee that we are engaged in a game of snakes and ladders on both sides with plenty of snakes and not many ladders.
§ My concern in putting this measure before the Committee is that we should have a power in place which can be used and modified in the light of the findings of the working groups. Many years ago Professor F.M. Cornford wrote a marvellous guide for young academic politicians in which he referred to the doctrine of the unripe time; that is, the doctrine that one should not do today what one knows to be right because at some unspecified time in the future one might get round to doing something about that. I have not heard anything to suggest that the time is not ripe to allow 652 hundreds and thousands of individual cases to be able to be joined procedurally where the interests of justice so require, but not otherwise.
§ I do not seek to divide the Committee on this matter, but I hope that the Government and the noble and learned Lord, Lord Archer of Sandwell, might reflect further before the next stage to see whether an appropriately vague power can be included which will not prejudge the precise form of representative procedures but will at least enable them to be introduced as the justice of the situation demands in the light of the findings of these various working parties and those of other worthy workings of the mill. As I said, I do not seek to divide the Committee on this point or press the matter any further. I shall not move Amendment No. 7.
§ [Amendment No. 7 not moved.]
§ Clause 3 [Hearings etc. by chairman alone]:
§ Lord Wedderburn of Charlton moved Amendment No. 8:
§ Page 3, line 5, leave out ("11, 163 or").
§ The noble Lord said: This amendment has been grouped with Amendment No. 9. This is the territory, as it were, not of a full hearing but of a hearing by the chair alone. I use the vernacular of all who are under 25 as their generation has come to know the chair as something other than a piece of furniture. I appreciate that noble Lords have not yet arrived at this desirable level of converse, but the term gets one out of the sexist problems when using the word "chairman" or, as in our committees, the phrase "my Lord Chairman" when a noble Baroness presides.
§ The problem of a chair sitting alone worries a number of people who are concerned with the work of tribunals. The amendments ask my noble and learned friend and the Minister about the principles on which we are extending the jurisdiction of chair alone. Are there principles underlying the movement? Some people argue that the movement towards a chair alone relates to the cost of the wing persons. I do not say that myself, but it is a concern.
§ The move is to keep out of the territory of chair alone Section 163 concerned with redundancy payments and enforcements, and subsection (4) of the clause concerned with the enforcement of small sums—up to four weeks' compensation—which workers may receive under the scheme introduced to implement the directive of 1977 which begat the TUPE regulations of 1981. I shall not say that again; I put it more easily. Subsection (4) is the way in which in the last resort one enforces one's compensation for failure by the employer to meet his obligations under the transfer of undertakings regulations.
§ I can see arguments one way and another. However, the amendments are put forward with the ambition that my noble and learned friend or the Minister will tell us on what principles we are extending the chair alone jurisdiction. In some circles that is seen as a derogation from tripartism. The industrial tribunals—hey are now to be called employment tribunals—n many ways have been a good example of tripartism at work, with a legal chair, an employee or union representative on one side, and an employer representative on the other. The 653 Committee should not forget that many on the Continent view those tribunals as something of interest which works rather better than some of their labour courts. I should be grateful if the Minister will reassure us about the principles of the matters raised in Amendments Nos. 8 and 9. I beg to move.
§ 5.45 p.m.
§ Lord Archer of Sandwell
Not for the first time, my noble friend Lord Wedderburn and I are shoulder to shoulder. I yield to no one in my support of tripartism. It is their tripartite nature on which the tribunals' enviable reputation is founded. Nevertheless, there are jurisdictions in which the role of what we call lay members— am in no way disrespectful; I simply distinguish them from legal chairmen, and I use that word following the statute—s less relevant. Typically those are technical cases, and ones which may turn more on law than on fact or judgment about what is reasonable or fair. The Bill proposes to make some fairly minor additions to the categories in which a chairman may sit alone, although he will have power in an appropriate case to decide that he will sit in a full tribunal of three.
My noble friend's amendments refer to three of the additions: Sections 11 and 163 of the Employment Rights Act 1996; and Regulation 11(5) of the Transfer of Undertakings (Protection of Employment) Regulations 1981. The Committee may think that each of those jurisdictions is eminently suitable to be determined under the sit alone provision.
Section 11 provides that where an employer has failed to provide a written statement of employment particulars, or written notice of any changes in them, or an itemised pay statement, his employee may apply to an industrial tribunal. In such cases the issue is whether a party has received something in writing to which he is quite clearly entitled. There are unlikely to be any disputes about the facts. However, if during the proceedings any factual issues arise, the chairman may well use his discretion to bring in two lay colleagues.
Section 163 of the 1996 Act provides that a tribunal may hear proceedings relating to the right to and amount of statutory redundancy payments. The principle there is that the issue to be determined is essentially straightforward in nature, in the vast majority of cases. It is nothing more than simply ensuring that an employee's entitlement is correctly calculated and that he has received it. If factual questions emerge, again the chairman is directed to use his discretion to sit as a tribunal of three.
I hope that the Committee will consider that the principle is fairly clear, although one has to consider each jurisdiction on its merits.
Amendment No. 9 in effect deletes subsection (4) of the clause which refers to regulation 11(5) of the 1981 regulations. That is the regulation which allows an employee to complain to a tribunal on the ground that he or she falls within a category of employees who have been given an award of compensation—t is sometimes called a protective award—or the failure to inform and consult employees' representatives about the transfer of 654 an undertaking; and that he or she has received no such compensation. Again there are unlikely to be any factual issues. It is almost a debt-collecting process, as I am sure that, with his experience, my noble friend will accept.
I stress that the Bill does not seek to alter the position relating to proceedings under regulation 11(1)—that is, proceedings in which a protective award is being sought in the first instance. They should always be heard before a full tribunal. They will generally involve subjective judgments about the operation of information and consultation procedures—all the matters about which my noble friends are so knowledgeable. Clearly it is right that lay members should form part of the tribunal in those circumstances.
What Clause 3(4) seeks to do is to allow a chairman to sit alone in cases where a protective award has already been awarded under that procedure but the employer has not paid it. So there are just two questions for the tribunal to consider: first, is the applicant an employee of a description to which an award has been made; and, secondly, has the employer failed to pay the money? Again, those are straightforward questions. I hope that my noble friend will feel that they are exactly questions on which there are unlikely to be issues of fact or questions of what is fair and reasonable, when either it was a debt-collecting procedure or there is a question of law. That is the procedure which it is intended to follow.
§ Lord Haskel
I should like to take this opportunity to put on record the Government's commitment to the use of lay members. Their practical experience in the workplace is valuable in the majority of tribunal cases. However, the jurisdictions included under this provision are ones in which the contribution of lay members is less valuable. Therefore the Government must resist these amendments because they are inconsistent with our objectives for the clause. They prevent a chairman or chairwoman sitting alone from hearing cases under eminently suitable jurisdictions where determinations are made on agreed matters of fact and principles of law. As my noble and learned friend Lord Archer said, where factual discrepancies emerge, the chairman is directed by the regulations to consider using his discretion to sit as a tribunal of three. I therefore hope that my noble friend will withdraw his amendment.
§ Lord Wedderburn of Charlton
I am sure that I shall be able to satisfy the Minister if he will just give me a moment. It should be understood that what has been said about tripartism does not represent the model that all of us share. That is to say, when there is a group of three of this sort, especially if they sit together more than once, they tend to work up a corporate or neo-corporate sense. Indeed, chairs know that if they are outvoted by the wing persons, they should not resent it, even if it is on a point of missed law and fact. It happens all the time. I shall read Hansard very carefully; however, if the model of tripartism advanced in this debate were followed, turning the pages of all the statutes involved I suspect that the wing persons would be present on only a very small number of sections. That 655 does not mean a small number of occasions, but a small number of sections. However, I promised to satisfy the Minister and therefore beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 9 not moved.]
§ Clause 3 agreed to.
§ Clause 4 agreed to.
§ Clause 5 [Legal officers]:
§ Baroness Turner of Camden moved Amendment No. 10:
§ Page 4, line 4, at beginning insert ("in respect of the functions defined in subsection (6A).").
§ The noble Baroness said: Clause 5 deals with the appointment of legal officers. My amendments Nos. 10, 11 and 12 are grouped; with the permission of the Committee I shall speak to all three. Their intention is to define what are the functions of the legal officer. They do not appear to be defined in the Bill.
§ The amendment specifies that the functions are to make such inquiries as are necessary at an interlocutory stage of the proceedings, including the taking of statements from a party who appears to be unrepresented, with a view to clarifying the issues in the proceedings.
§ The range of functions determines what kind of qualifications will be required. If they are to be highly qualified and experienced lawyers, what then is their relationship to the chairman to be? If, however, the functions are as described in the amendment, then it would be an appropriate appointment for, for example, a young law graduate. It would not be necessary to have an experienced solicitor or a barrister, or in Scotland an advocate.
§ The Notes on Clauses, for whose receipt I am indebted, state that the legal officers appointed will be able to do everything that a chairman is permitted to do under the rules of procedure. If that is so, why not simply have more chairmen rather than this new kind of appointment? On the other hand, it seems that there is a useful limited range of functions which could quite well be performed by a legal officer who perhaps would not necessarily be experienced but would have an appropriate legal qualification. It would not be necessary in that case to have someone who had experience as a solicitor or a barrister. Otherwise there could be some conflict between the legal officer and the chairman if such officers are to be able to do everything that the chairman is permitted to do. There is a case for having this, as it were, superior kind of clerk who handles the kinds of functions referred to in the amendment and who would not therefore need to be quite so experienced but would perhaps have legal qualifications in the sense of having a law degree. I beg to move.
§ Lord Lester of Herne Hill
I have some difficulty in speaking to these amendments because of the lack of clarity in the Bill itself. My problem is that, on the face of it, the proposal in Clause 5 would permit regulations 656 to be made that would allow these legal officers to do what a chairman may do under the rules of procedure. That is anything at all. The provision is widened by an earlier clause in the Bill. On the other hand, the Notes on Clauses that have been most helpfully provided tell us that what is contemplated is narrower than that, but not as narrow as what is proposed in these amendments; namely, that the legal officers are to relieve the tribunal chairmen of some of the interlocutory duties that they currently carry out. Those, we are told, include granting postponements and extensions of time; making witness orders; requiring parties to answer questions; ordering further and better particulars and the discovery of documents; and disclosing the cases being dismissed on withdrawal by parties.
I do not start with any inherent objection to using legal officers, provided they are properly qualified, to take those interlocutory decisions. But the difficulty we are in is that, on the face of it, the Bill allows people with probably only three years' legal qualification to do the work that is presently done by people with 10 years' qualification or more—the chairmen and women—and to do in principle not only the interlocutory work but anything that can be done by the chairmen.
I hope that we shall receive clarification on the matter since I may later suggest to the Committee that if the Notes on Clauses accurately reflect what is intended that is what should be stated in Clause 5. However, my difficulty in supporting these amendments is that they reduce the function of the legal officers to something so narrow that it will not relieve the chairmen of industrial tribunals of the burdens unnecessarily placed upon them.
My other difficulty is that Amendment No. 12 on its own, forgetting Amendment No. 11, would mean that the legal officers would not have to be legally qualified even though they would be taking important interlocutory decisions. I cannot see that anyone without some legal background and qualification could decide important questions such as whether to order further and better particulars or the discovery of documents, which can often be critical in the outcome of a case.
That is a long-winded way of saying that I believe that Amendments Nos. 11 and 12, standing together, give too limited a role to the legal officer; but if one separates them, then the advice in Amendment No. 12 is that judicial powers will be exercised by people without any legal qualifications. The real vice is not addressed by these amendments; namely, that Clause 5 seeks too much—it seeks to give these legal officers all the powers of a chairman, not only the interlocutory powers listed in the Notes on Clauses. I hope that that is clearer than mud.
§ Lord Archer of Sandwell
It may be for the assistance of the Committee if I indicate first what is proposed in relation to legal officers as I understand it. My noble friend Lord Haskel will correct me if I go wrong. It is hoped that, as the noble Lord, Lord Lester said, they may relieve chairmen of some of the burdens that they are presently required to shoulder. It has been suggested that one could achieve the same objective by having more chairmen. The answer to that is that there 657 is little point in using resources to employ more chairmen if some of their functions may be discharged more economically.
I spend hours of my time asking for more resources to be allocated to tribunals to improve the service that they give. In the real world we are not likely very often to win that argument. I should be reluctant to weaken the argument by pressing for resources which do not improve the service which they give.
So the question is: are there some duties at present falling to chairmen which might be more economically carried out equally well by less experienced legal officers? It is not intended that they shall perform all the duties at present performed by chairmen. The Government's intention, as I understand it, is that what duties it would be sensible to confer on them should be tested by a pilot scheme. The kinds of functions such people might fulfil have just been referred to by the noble Lord, Lord Lester: making orders for further and better particulars, making orders about listing and so on.
Perhaps I may turn first to my noble friend's amendment. She seeks to do two things. First, according to the amendment—although I follow that it might not be her intention in moving it—she seeks to use legal officers for a purpose which was never envisaged. Secondly, she seeks to ensure that they cannot be used for any other purpose, not even the purpose for which they were envisaged. My noble friend wants them to be used, as I understand it, to assist unrepresented and unassisted parties. There may well be a need for that role and perhaps my noble friend and I will be on the same side if that issue arises. But it would be quite inconsistent with an adjudicating function adjudicating objectively if they are advising one of the parties. We could not have the same people exercising both functions. So unless my noble friend wishes to say that she opposes even the idea of testing a role for legal officers which the Bill envisages, we could not confer those alternative functions on them. I hope that she does not intend to eliminate them altogether.
As to the qualifications of the legal officers, the noble Lord, Lord Lester, stated the question: are there some functions which people with fewer qualifications or perhaps less experience than chairmen might sensibly carry out? It would relieve chairmen of that burden. I understand that what the Government have in mind in their pilot scheme—and again I shall be corrected by my noble friend if I am wrong—is that they will be barristers and solicitors, probably—although it is not yet set in stone, as I understand it—of three years' experience. It seems to me that the kind of issues which the noble Lord, Lord Lester, ventilated could be carried out perfectly well by people with that experience. That is what is suggested. The decisions will be subject to review, in the same way as a review is now available in interlocutory matters and their decisions will, of course, be subject to appeal.
I should have thought that if one attempted to employ legal officers with fewer qualifications, confidence in the system would be undermined and we might be inviting all kinds of appeals and applications for judicial review and that kind of difficulty. So I hope that my 658 noble friend and the noble Lord will agree that, as an experiment, as a recipe for the initial pilot scheme, the Bill has it about right. But again I would not say that we are so right that it is beyond any possibility of amendment. The trouble is: in which direction do we amend? Either someone will say: "You are not providing people with the appropriate qualifications", or they will say: "You are giving them jobs which are beyond what they are qualified to do." I hope that we might be allowed at least to try the pilot scheme.
§ 6 p.m.
§ Lord Haskel
I am speaking to Amendments Nos. 10, 11 and 12. Perhaps I may clarify the Government's position on legal officers since it might be helpful to the Committee. It is our intention that the concept of legal officers will be tested by way of a pilot scheme. The details of the scheme will be specified in the tribunal procedure regulations after consultation with the tribunal presidents. I can inform the Committee that the consultations are already in progress.
I can also assure Members of the Committee and the noble Lord, Lord Lester, who was concerned, that it is our intention that legal officers will be qualified barristers, solicitors or advocates, to ensure that tribunal users and the public at large can have confidence in their determinations.
Legal officers will not be able to conduct full hearings. We propose to restrict further their competency by the regulations during the pilot study. It is not envisaged in the pilot that they will conduct pre-hearing reviews or a determination under the new procedures introduced under Clause 2 of the Bill. My noble and learned friend Lord Archer has already listed the kind of function which we expect to fall within the legal officers' remit. These might include disposing of settled or withdrawn cases, granting postponements, extending time limits, making orders for the provision of further and better particulars and making orders requiring the attendance of witnesses or the discovery or inspection of documents.
The aim of the legal officer scheme is to provide a useful support for chairmen, particularly those working in the overstretched major city centres. In particular, we want to release them from some of their interlocutory work, to leave them free to sit in tribunals, actually hearing cases. We will work closely with the tribunal presidents to ensure that any pilot is properly tested and evaluated.
Given our aims for the scheme, I am therefore unable to support the amendments as tabled. It is essential that in the primary legislation we are given the flexibility necessary to draw up a scheme and to amend it as the results of the pilots suggest and as experience unfolds. The regulations will strictly define all elements of the scheme, including the functions which the legal officer may perform and the qualifications he or she will have. I have indicated today what those qualifications will be and the kind of work which a legal officer will be 659 expected to do. I therefore hope that the Committee will accept those assurances and await the results of the pilot scheme.
§ Lord Lester of Herne Hill
Before the Minister sits down, can he clarify two points in his helpful statement? First, am I right in thinking that the legal officers will not be appointed by the Lord Chancellor or by the Lord Advocate in Scotland, but by the Secretary of State? If that is right, might there not be problems about the appearance of independence and impartiality in terms of the European Convention on Human Rights if the appointment is by the Minister and not by either of the high judicial officers of the state?
Secondly, when the Minister referred to "qualified barristers, solicitors or advocates," will it be enough if they simply have the bare qualifications? Alternatively, will there be some requirement, as I hoped, that they would have some experience, even if it were only two or three years? That is because they will be dealing with matters like discovery which can require quite difficult matters of judgment which can determine the outcome of a case.
§ Lord Haskel
In reply to the noble Lord, I can confirm that the Secretary of State will appoint the legal officers and that they will have some experience. However, the definition of that experience has not yet been decided.
§ Baroness Turner of Camden
I thank the Minister for his explanation of what is intended here, and what it is intended that the legal officer should do. In response to the noble Lord, Lord Lester, I should say that my noble friend and I had intended that Amendments Nos. 11 and 12 should stand together. I had envisaged a much lower level of function than has been explained today. Perhaps I had envisaged it as a possible career opportunity for the numbers of law graduates who now leave universities sometimes wondering whether they will obtain employment.
However, as regards the proposed range of functions, I can quite see that it would be necessary for the people concerned to have relevant experience. I take note of what has been said about the pilot scheme and the consultations which are to take place—indeed, which are currently taking place—and the fact that once the pilot scheme has been completed the results will be considered. No doubt, if amendments have to be made to the scheme, they will be made. In view of what has been said this afternoon, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 11 and 12 not moved.]
§ On Question, whether Clause 5 shall stand part of the Bill?
§ Lord Lester of Herne Hill
I gave notice that I should like to be heard on this Question. There has already been a fairly full debate and much useful clarification. My attention was drawn to the problems raised by Clause 5 by an extremely experienced chairperson, sitting well north of Hendon. I had better not name her or him; suffice it to 660 say that the person concerned is extremely experienced and most concerned about possible unfairness that could result from an over-broad use of this power.
I confess that I still have two difficulties. One is that, on its face, the provision is not limited to interlocutory matters at all. The power permits regulations to be made to allow the legal officers to do everything that a chairman is permitted to do under the rules of procedure. I shall not take up the time of the Committee in going through the question of how wide those functions are: they are very wide indeed. If, in truth, this provision is to deal only with interlocutory matters in the way that, say, in England and Wales a Master does in the High Court of Justice, I should have thought it was not asking too much for the power to be limited to interlocutory matters. Certainly, that would allay my concerns. I should be grateful if further thought might be given to that point.
My second point concerns the power of appointment. This matter indeed troubles me. It is not a mere technicality if the Secretary of State is to appoint judicial officers. There are cases in Strasbourg which hold—certainly where a government is involved in any matter, and governments can be involved in cases before employment tribunals, as the equal pay cases exemplify—that, where a judicial officer is appointed by a Minister and not by someone wholly independent (in the way in which the Lord Chancellor guarantees separation of powers in his one body, or as the Lord President in Scotland guarantees more formally as well), serious questions may be raised.
I certainly do not wish to divide the Committee on this matter. But I hope that further thought may be given to those two main points, which would allay my concerns.
The noble Lord, Lord Lester, has done good service by drawing attention to this rather strange clause. I support what was said but I should like to add one or two comments. It looks as though on a wide range of matters, as the noble Lord said, the chairman of the tribunal or a legal officer, who may not have consulted each other at all, can exercise powers which the tribunal as a whole would have power to exercise and can do so without even consulting it.
It may be that the noble Lord hopes and believes that there will be such consultation. But, on the face of this clause, that is what can happen.
Perhaps I may point to page 4 of the Bill, where, at lines 6 and 7 it says:any act so done, shall be treated as done by an employment tribunal".That introduces a legal fiction and is something that we should try to avoid. I hope that the Government will give further thought to this clause. I feel that it needs reconsideration.
§ 6.15 p.m.
§ Lord Archer of Sandwell
I thought I was fairly clear as to the answer I proposed to give to the noble Lord, Lord Lester. I am not so sure about the point made by the noble Lord, Lord Renton, whose views on these matters we all treat with the greatest respect. Perhaps we should have further discussions on this matter. If the noble Lord was saying that it should not be open either 661 to chairmen or legal officers to make interlocutory decisions without consulting the full tribunal, I am not wholly clear about the procedure that he envisages. Judges of the High Court make decisions every day of the week without consulting all the other judges. Consultation within the tribunal is something which it seems to me ought not normally to be provided for. If have misunderstood the noble Lord, and the fault may well be mine, I should be happy to discuss his anxieties with him.
With regard to the two specific anxieties raised by the noble Lord, Lord Lester, I understand that he prefers to limit the powers in the Bill if it is not intended to use very wide powers. That is almost the precise point that I would have made when I was in this kind of debate. The difficulty that we are always in is that, if we propose to impose a limitation on a power, then just when one needs to use it, we discover that it has been limited in a way that no one intended. Certainly, I should not be adverse to discussing with the Government whether there is a sensible way of imposing some limit on the power, if only so that people are not misled.
As to the noble Lord's second point about who should make the appointments, it has usually been the position of the Council on Tribunals that it would prefer to see appointments made by the Lord Chancellor. I confess that the difficulty had not occurred to me in the context of this clause. But now that the noble Lord has raised it, I should, perhaps, without in any way seeking to predetermine the outcome, like to have some discussions about it with the Government.
Before the noble and learned Lord sits down, as he was so good as to refer to what I had to say, perhaps I may ask him to bear in mind that it is not just interlocutory procedural matters which are involved. At the bottom of page 3 of the Bill, there is a reference to:any act required or authorised by the regulations to be done by a tribunal".It says "by a tribunal". That could go very wide indeed. We have not, of course, seen the regulations or been told what they will contain. So this matter must be reconsidered by the Government.
§ Lord Archer of Sandwell
I believe that the point now made by the noble Lord is precisely the point made by the noble Lord, Lord Lester; namely, that the powers expressed in the Bill are wider than the powers it is intended to use. Certainly, if it were intended to use those powers, I can well understand the noble Lord's anxiety.
§ Lord Haskel
The Government are certainly happy to discuss the limits on the powers of legal officers in the light of the pilot scheme. It is the whole purpose of the pilot scheme to gain experience of the work of the legal officers.
662 As for appointments, certainly we would give further consideration to this matter; but I should say that the tribunal lay members at the moment are appointed by the Secretary of State.
§ Lord Lester of Herne Hill
Before the Minister sits down, perhaps he would clarify one matter. So far as concerns his first point, am I right in thinking that the Government intend the powers to be limited to interlocutory matters, as the Notes on Clauses made clear, and not to deal with substantive matters going to the merits of the issues in dispute? As I understand the remarks of the noble and learned Lord, Lord Archer of Sandwell, and the Notes on Clauses, that is the intention. It is not, therefore, a question of the pilot study, because the pilot study will simply study the use of the powers to deal with interlocutory matters and nothing more.
As for the power of appointment, although it is right that lay members are appointed by the Secretary of State, the legally qualified chairman—am I not right?—is appointed by the Lord Chancellor. So far as I am aware, all legally qualified chairmen of tribunals are appointed by the Lord Chancellor or, in Scotland, the Lord President. Will the Minister therefore look at the matter again to see whether the legal officer—who is to be the "mini" judge like a master in the Supreme Court—should not also be appointed by the Lord Chancellor and his department?
§ Lord Haskel
The Government agree entirely with the noble Lord, Lord Lester. He described exactly how those officers are appointed. In relation to the envisioned work of the legal officers, that might include the disposing of settled or withdrawn cases, granting of postponements, extending time limits and making orders. I listed the various things that they may do.
Will the noble Lord be so good as to at least comment on the points made by the noble Lord, Lord Lester, and supported by me in regard to the uncertainty of the powers which the chairman or the legal officer—or both—will be able to exercise without consultation with other members of the tribunal? We do not know to what extent those powers will be limited to administration, minor and interlocutory matters.
§ Lord Hope of Craighead
Perhaps I can intervene briefly in this debate against the background of my experience. I was the Lord President in Scotland until recently and, as an administrator, had to deal with a similar problem; that is, the delegation to clerks of court—to use the Scottish language—of precisely the kind of powers discussed in this clause.
My experience indicated that there is a great range of issues, some of which are simple and can safely be delegated. In practice they were delegated without a need for consultation back to the judge on whose authority the order was ultimately being pronounced. Other issues, such as discovery, were much more complicated. In practice it was left and still is left to the clerk of court to exercise a measure of commonsense, subject also to a degree of supervision, as to whether consultation was required. In my experience—I say this 663 with the greatest respect to all those who have spoken—it would be unwise to attempt to define too precisely in the clause what is to be covered. A great deal will depend on whatever regulations or instructions are given once the clause is put into effect.
One further point in relation to what the noble Lord, Lord Lester, said in regard to appointments may also be relevant, though I appreciate the force of what he said against the background of the European Convention. The clerks of court to whom I delegated the power to grant this kind of order in my capacity as Lord President were officials appointed through the court service. Unlike the judges, they were not the subject of independent appointment. For my part, I was content to delegate those functions to them against that background.
§ Lord Lester of Herne Hill
As I am the only person who is formally opposing the question on Clause 5, and having listened especially to the noble and learned Lord, Lord Hope, I withdraw my opposition. I am reassured by everything he said. I am grateful to the Committee for giving me the opportunity of airing these matters, which seemed to me to be of some importance.
§ Clause 5 agreed to.
§ Clause 6 agreed to.
§ Clause 7 [ACAS arbitration scheme]:
§ Lord Wedderburn of Charlton moved Amendment No. 13:
§ Page 5, leave out line 44 and insert—
§ ("(a) setting out—
- (i) an arbitration scheme for the resolution of disputes concerned with a contravention or alleged contravention of Part X of the Employment Rights Act 1996 under subsection (1)(a), under which an arbitrator or arbitrators may decide whether there has been such a contravention, or
- (ii) an arbitration scheme for the resolution of disputes under any other enactment specified under subsection (1)(b), and").
§ The noble Lord said: On Second Reading, my noble friend and I made it clear that we wished to try to find greater protection for the arbitration system which is being inserted into the procedures of unfair dismissal in this Bill. The amendments which follow are meant to move in that direction.
§ We feel that the Bill, as it stands, contains various risks which are unnecessary. To plunge in medias res, let us take an arbitrator who goes way outside his remit; he is someone who depends upon the statute for his position. Some lawyers will think immediately of judicial review. I say at once that I understand judicial review to be extremely unusual in arbitration matters. When one looks at the learned and authoritative tome of the noble and learned Lord, Lord Mustill, and Mr. Boyd—thinking back to the old rule of becoming an authority after one is dead, I am happy to say that they are both still with us—one sees that they make it clear that judicial review is rare. However, if one reads the whole of their book it makes it clear that that is 664 concerned with commercial arbitration. It is also usually concerned with arbitrators who do not have a statutory face such as those arbitrators in the ACAS scheme.
In our view, if the situation were left unchanged, then the prospect of disaster for the arbitration system would be just as great as the Grunwick case disaster for recognition procedures under the Act of 1975. Indeed, the two professors who have been extremely influential and led this wing of the alternative disputes movement—it is a much more general movement in academic and intellectual circles—wrote in 1995 after the Green Paper put the question on the map, that perverse decisions of arbitrators,
could be challenged through the process of judicial review".
They went on to quote from the well-known judgment of the noble and learned Lord, Lord Diplock, in Council of Civil Service Unions v. Minister for the Civil Service (1985) setting out the three headings of illegality, irrationality and procedural impropriety as the modern basis of judicial review. My noble and learned friend Lord Archer will always prefer that we do not call it "irrationality", but Wednesbury "unreasonableness". I do not believe that there is any ground for disagreement among the lawyers that those are the possibilities and that they must rate pretty high for the arbitrator who goes outside his powers or in some way is bitten by irrationality of the Wednesbury kind.
§ We therefore suggest that where there is a need for a reference—I stress that it is a question of a reference—Members of the Committee will see later that we use the Employment Appeal Tribunal. However, in Amendment No. 13 we are pointing out that two things are needed for the arbitration to stand up, apart from the agreement of the parties: first, the threshold; and, secondly, the substantive remit.
§ The Bill sets out the threshold. It is clear in Clause 7 that the threshold in subsection (1) of the new Section 212A will be a claim which could be the subject of proceedings arising out of a contravention or alleged contravention of Part X of the Employment Rights Act 1996. Part X deals with unfair dismissal. Once the arbitrator has in his hands a complaint of that kind, he can go ahead. But then one asks, "How wide can he go?"
§ There is an assumption in the Bill and an assumption in the ACAS document, kindly produced for us in draft, that one always knows what kind of case one has in one's hands. I suspect that it is not unusual in litigation or arbitration begun on one footing—a complaint, perhaps, of unfair dismissal—to find that on the second day or when the documents or evidence are in that the central point becomes something quite different. Perhaps it is a point on sex discrimination or a point on equal pay. What is the arbitrator to do in such a case? The Bill does not tell us and the ACAS document is uncertain. The ACAS document says that if either party is unhappy with the non-legalistic nature or lack of appeal on a point of law it need not opt to go to arbitration. But one does not know whether one wants an appeal on a point of law or on a point of anything else when one has not yet opened the case. That comes only when one is beginning to see what the answer is. 665 It is, with respect, a necessary part of this scheme, if it is not to founder very quickly under judicial review or similar proceedings, that the arbitrator is clearly told that the central thrust of the project is unfair dismissal and not anything else.
I am not suggesting that arbitrators will, out of some malevolence, seek other grounds for their competence; merely that when other points arise they need to be told what to do. Our amendment, in sub-paragraph (i), goes to what I call the substantive remit. It refers to a scheme,
under which an arbitrator or arbitrators may decide whether there has been such a contravention".
That will very often merely be a matter of discretion on reasonableness and the like. That is what people have in mind. But the arbitrator must surely not go outside that. There is nothing anywhere to give him notice that it is dangerous to go outside the contravention which is his basic issue.
Perhaps I may make one further point. It is often said, and it is said by ACAS, that what is needed among the arbitrators is what it calls "experience of the world at work" and "the possession of analytical and social skills". Those are highly desirable. But it also adds:
Legal experience is not considered necessary".
That is part of the approach which fails to designate the arbitrator's position in a proper way. Let us consider, for example, the case of the arbitrator who wants to indicate an award of compensation. It is a matter of discretion, but a matter of discretion within Part X of the Employment Rights Act 1996. Let us suppose he sees a case where there has been agreed arbitration. There is an agreed unfair dismissal but it is an unfair dismissal where only some of those who were dismissed who have come to him as a party were taking industrial action at the time. The employer says, "Well, fine, but we must reduce this compensation by a proper amount." They say, "You cannot reduce our compensation merely because we were taking industrial action. That is to be put aside."
§ That is, in a very short compass, what your Lordships' Judicial Committee decided just a week or so back in the case of Tracy v. Crosville Wales Limited. I defy anyone to read the extraordinarily interesting judgment of the noble and learned Lord, Lord Nolan, without some legal experience. What is the arbitrator to do if he has no legal experience or does not know where to turn? It is not the proper approach to legalism to believe that it is only lawyers who bring in legalisms. We all know plenty of people who can be very legalistic but who do not happen to be lawyers. We also know some lawyers who are fairly legalistic. But the identical nature of the two groups is not proven and is not clear.
§ To come back to Amendment No. 13, what would I say? I would say to the arbitrator, "It will be difficult for you. It may be that you need legal advice. But you must at least remember"—under the last two lines of sub-paragraph (i)—that you are an arbitrator who must decide whether there has been such a contravention and work to that standard—the standard of Part X of the Act—and not go elsewhere". I do not suggest that our amendment solves all the difficulties. It may be that it would have been a good idea to have had some 666 regulations made to spell out the problems. However, I do submit that without something further than is in the Bill many arbitrators will get into a difficult position very early on. It is the experience of the arbitration system in the first three or four years which matters most to this important experiment in our employment jurisprudence. I beg to move.
§ 6.30 p.m.
§ Lord Archer of Sandwell
I am grateful to my noble friend both for the way he introduced the amendment and for his courtesy in having discussed it with me prior to these debates. I wonder whether it would assist our debates if, like my noble friend, I made one or two general comments first on what we are seeking to achieve in introducing the arbitration option.
The intention is that the ACAS arbitration scheme should be final and binding. That is precisely its advantage. That is the inducement to people to use it—in appropriate cases. We are not attempting to set out an alternative tribunal system. We are providing an alternative means for the parties to resolve their disputes. By definition, the arbitration scheme will be different and I do not believe we should seek to replicate the features of the tribunal system. Nevertheless, I wholly agree with my noble friend that it is important for the scheme to have safeguards and to ensure that the remedy for unfair dismissal, whether it is received from the tribunal or as a result of arbitration, should be comparable in the two cases. The remedies, too, will be set out in the scheme itself. We shall be debating the remedies later.
On the question of serious errors, I agree with my noble friend that if there is a serious irregularity in the way the arbitrator has performed his role we need some kind of safety valve. Whether that should be through the Employment Appeal Tribunal, as is suggested in a subsequent amendment, is something we can discuss when it arises. The tribunal's primary function is to consider appeals on points of law arising out of the decisions of industrial tribunals, whereas I suspect that what we may be considering is cases where there has been an irregularity in the procedure. Some may argue that the High Court has more experience of dealing with that kind of situation.
There have been discussions as to whether the Arbitration Act 1996 should apply automatically. Members of the Committee will have observed that there is a power in the Bill for the Secretary of State to apply provisions of it and to modify those provisions. I think my noble friend and I would agree that that was designed for commercial arbitrations and is not wholly appropriate to fit into the industrial relations field. However, having considered it further, I am persuaded that it contains a number of useful provisions of which an ACAS arbitration scheme might sensibly take account. The enforcement provisions are an obvious example. They would permit the exclusion of appeals on points of law but give the courts powers to intervene in proceedings where it is absolutely necessary to prevent substantial injustice.
667 The difficulty we are all in at this stage is that these discussions have taken place at a comparatively late point prior to our debates. My understanding—I shall be corrected by my noble friend Lord Haskel if I am wrong—is that the Government are minded that at least both the enforcement proceedings and the serious irregularity appeal provisions should apply but they wish to discuss with ACAS what is the best way of doing that and whether any modifications will be necessary. The serious irregularity provisions appear to be ideally suited to cover what happens if the arbitration goes wrong in that way. It would allow a court to consider a complaint that there were procedural irregularities and other sources of injustice.
I turn to Amendment No. 13 specifically, but we are again in difficulty with the grouping because we are dealing with principles which apply to more than one amendment. As I understand what my noble friend has just said, he is seeking in his amendment to ensure that the arbitrator shall be told clearly, "You will deal with unfair dismissal issues. You won't deal with other issues which are later discovered to have crept into the dispute". I have every sympathy with that. I hope that my noble friend will confirm that it is intended that ACAS will prepare a scheme for arbitration relating to unfair dismissal disputes—that is, a scheme arising out of contravention of Part X of the Employment Rights Act. It is self-evident that any scheme which the Secretary of State approves for the arbitration of disputes about unfair dismissal will attempt to make it clear that the jurisdiction relates to disputes arising out of an infringement of Part X. Therefore, I hope that the difficulty which I think that my noble friend has envisaged is not likely to arise.
On the question of what test of fairness is to be applied, I understand that discussions are taking place with ACAS to determine whether it is possible for the scheme to build on the existing test to take account of an industrial relations standard based on the ACAS code of practice. It might be considered desirable to allow the parties to ask the arbitrator to have regard to the ACAS handbook on discipline at work. As I understand it, the minimum will be the standard of fairness which is set out in Part X.
I fear that we have a difficulty in all these debates, but I think that we all agree on the objective. I hope that at this stage my noble friend will not seek to tie the hands of the Secretary of State by including provisions which can be addressed at a later stage when considering what is to be in the order (when the Secretary of State makes the order) or when ACAS puts forward a scheme. If we attempt at this stage of the Bill to circumscribe those powers too closely, particularly since we are all in the kind of difficulty which my noble friend has mentioned, we may later live to regret it.
§ Lord Haskel
In reply to my noble friend, I can confirm that the serious irregularity and other provisions will apply. I can also confirm that the ACAS scheme will be for unfair dismissal. It is clear that the Secretary of State would be approving a scheme relating to unfair dismissal claims because of this and the arbitration 668 would have no powers to consider any other jurisdiction. It would be for the parties to satisfy themselves that their case was limited to unfair dismissal. If the arbitrator discovered another issue, the parties would have the right to take that issue to an industrial tribunal. The agreement to arbitrate would not have removed the tribunal's jurisdiction in these areas.
My noble friend Lord Wedderburn asked about the legal experience of the arbitrators. The view of ACAS is that arbitrators will be deciding mainly on questions of fact, such as whether the person was dismissed fairly or unfairly. However, I have no doubt that ACAS will have heard what my noble friend said and will take his words into consideration. Therefore, I believe that my noble friend's amendment is not necessary.
§ 6.45 p.m.
§ Lord Wedderburn of Charlton
I thank the Minister for that reply to my amendment. This is not the first time that I have been known to be "not necessary". Indeed, one of the problems of dealing with my noble friend the Minister and my noble and learned friend is that normally when there are two people in to bat, we can throw the ball in at one end and hope to run them out, but it is much more difficult to manage when two batsmen are hitting the ball at the same time. I say that because my noble and learned friend Lord Archer turned his mind to various other matters to which we shall come and which I should like to keep until we come to consider the Arbitration Act 1996.
With regard to Amendment No. 13, I have to say that the Minister has not completely convinced me that the existing provisions are sufficient to bring to the mind of the arbitrator the risks that he may run. Indeed, all three of us have skated over the very simple point that, given an unfair dismissal case, the arbitrator may find that an equality clause with regard to equal pay is at the centre of the matter although nobody realised it before. However, there are centres and centres and it may be that the arbitrator can still deal with the unfair dismissal, having in mind the other matters that have arisen, or it may be that the arbitrator finds that sex discrimination or equal pay really is at the centre of the case. I suggest to the Minister that before we come to Report we should consider including in the Bill—or at any rate in the ACAS scheme—provisions emphasising the centrality of the issue of unfair dismissal and that that should be put to the arbitrator. With those remarks, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton moved Amendment No. 14:
Page 6, line 12, after ("section") insert ("and after receipt by the employee or employees party to the proceedings of independent advice within the meaning of section 9 of the Employment Rights (Dispute Resolution) Act 1998").
§ The noble Lord said: We come to the question of the written agreement of the parties and their informed consent. As we had this debate on a previous clause, I had not been intending to say anything about it now because it seemed that we had said enough on the matter previously. However, I am moving the amendment 669 because here we have one of those mysterious and odd groupings which I think it is agreed have to be changed. As I understand it, through the proper channels I have de-grouped Amendments Nos. 16 and 17 which will now be dealt with separately after Amendment No. 15. I understand also that if I provide the launching pad, my noble friend Lord Gladwin will be able to move Amendments Nos. 19 and 20 at this point and still remain in order. I hope that that is clear. I beg to move.
§ Lord Gladwin of Clee
I wish to move Amendment No. 19—
§ Baroness Turner of Camden
—to speak to Amendment No. 19.
§ Lord Gladwin of Clee
No, I wish to move Amendment No. 19. That is what I wish to do. Perhaps someone can guide me as to whether I can and I shall then speak to it.
At the moment, the law provides industrial tribunals with three remedies to deal with cases of unfair dismissal: compensation, reinstatement and re-engagement. In this amendment I am concerned only with reinstatement or re-engagement. An order by the tribunal that an unfairly dismissed employee shall be reinstated is defined as an order that,the employer shall treat the complainant in all respects as if he had not been dismissed and must include benefits payable in respect of the period since dismissal and rights and privileges, including seniority and pensions";In other words, the sacked worker goes back to the position that he enjoyed the day before he was unfairly dismissed.
The second remedy that is available to an employment tribunal is re-engagement. This is similar in effect to reinstatement except that the employee does not necessarily go back to the same job that he had before he was dismissed. The job to which he returns must be comparable, suitable and, as far as reasonably practical, as favourable as the previous position. It may be with an associated or successor company. The tribunal decides what terms should apply and the date by which there must be compliance. This is a more flexible remedy than reinstatement but it preserves the employment rights of the unfairly dismissed worker.
Why, therefore, does the Bill provide for the fourth remedy of re-employment? What does re-employment mean? The suspicion is that it may be re-employment in a post less favourable than the one previously held by the worker before he was unfairly dismissed. I am sure that that is not the intention of the Bill, but it is unwise to give arbitrators an ill-defined remedy that is neither needed by nor provided to employment tribunals, particularly when this clause in the Bill gives to employment tribunals the duty to enforce re-employment orders that they themselves cannot make.
I should like to speak also to Amendment No. 20. This is a probing amendment which provides a vehicle for putting a number of questions to my noble friend. Industrial tribunals make compensation orders against employers who have unfairly dismissed employees. If the employer does not pay, the sacked worker takes the 670 order that he has received from the tribunal to the county court for redress. If an employment tribunal orders reinstatement or re-engagement and the employer does not comply with that order, the unfairly dismissed employee returns to the tribunal and is awarded compensation and an enhanced award by way of a kind of penalty against the employer for not reinstating him. If the employer does not pay, the employee takes that order to the county court for enforcement.
What happens under the new arbitration scheme? First, does the worker who has been awarded compensation for unfair dismissal go straight to the county court if his former employer has not paid the compensation? Secondly, where an arbitrator has awarded reinstatement or re-engagement and the employer has refused to comply with such an order, why must the employee get in the queue and go to an employment tribunal for compensation and the additional award that must be assessed? Why should not the employee return to the arbitrator for an order? After all, he knows all of the details of the case and he is in a much better position than the industrial tribunal to determine the level of compensation and exemplary damages. This is particularly important where there has been an award by an arbitrator of re-engagement, because re-engagement is a much more complex business upon which to adjudicate.
I believe that these questions require an answer, and I look forward to the response of my noble friend.
§ Baroness Turner of Camden
For some strange reason, Amendments Nos. 23 and 24 have been included in this group. I should like to speak to Amendments Nos. 23 and 24. During Second Reading several noble Lords made reference to the undesirability of including discrimination cases in the new arbitration procedures since they were often extremely complicated and might very well result in references to the ECJ. At Second Reading I gave examples of cases that had been very complex. This afternoon the noble Lord, Lord Lester, has given the example of a sex discrimination case involving a speech therapist that has been on the go for 11 years and has included a reference to the ECJ.
At Second Reading there appeared to be general agreement that the new fast-track procedures proposed in the Bill would be suitable for only relatively simple unfair dismissal cases. If that is so, it does not appear to me that the clauses of the Bill to which my amendment refers are necessary. I had the impression at Second Reading that the noble and learned Lord had some sympathy for that point of view. One wonders, therefore, whether there are any views on the amendments, whose object is to leave out those references to discrimination cases which, if it is not proposed to deal with discrimination through the fast-track procedures, it is not necessary to include in the Bill.
§ Lord Meston
I intervene simply to join the noble Lord, Lord Gladwin of Clee, in questioning the usefulness of the words "or otherwise re-employ". It would be very unfortunate if arbitrators had a power that was not given to an ordinary tribunal exercising this 671 jurisdiction. It may be that the purpose of those words is to recognise that the statutory provisions to enable re-employment by associated or subsidiary companies are not wide enough. That may be one possible argument. I had experience of a case involving the employee of a government department that ceased to exist. The question arose whether the tribunal could make an order that she be re-employed by another government department. On a reading of the statute it appears that the existing provisions covering subsidiary and associated companies do not meet the requirements. If that is so, that may be a reason for adopting this phraseology, but in that case the amendment may be made not merely to this power but to the substantive power in the main legislation.
I turn to the amendments spoken to by the noble Baroness, Lady Turner. I share her concern, which has not been ventilated so far except in passing by the noble Lord, Lord Wedderburn, about the risk of a case that appears to be an unfair dismissal case turning out to be an equal pay or discrimination case, as all too often happens in practice. I have been involved in cases where that has happened. Of course, the tribunal can adapt its procedures and carry on dealing with the real issues between the parties. It would be very unfortunate if arbitrators could not do that or there had to be a bifurcated procedure whereby the arbitrator was tempted to carry on with the unfair dismissal aspect, leaving the issue of discrimination to a separate hearing. If arbitrators are not to deal with discrimination it is most important that there should be a clear means of ensuring that there is no potential discrimination element in the case before the matter goes to arbitration.
§ 7 p.m.
§ Lord Lester of Herne Hill
Because of the unhappy grouping of the amendments, we are having to jump all over the place. I support what was said by the noble Baroness, Lady Turner of Camden, especially in relation to Amendment No. 23. I hope that the Minister will be able to obtain some advice on the matter, because I take this amendment as an important one upon which to focus. Under the Bill as it stands, the jurisdiction of the ordinary courts and tribunals is to be ousted by arbitration, where the parties agree, in cases involving sex discrimination or unequal pay. That is an area where European Community law, of course, has direct effect. It overrides any national inconsistent legislation to the contrary, including an Act of Parliament.
The two directives that deal with that are the equal pay directive and the equal treatment directive in employment. They guarantee to every employee that every member state will introduce into its national legal system the methods necessary to enable all who consider themselves wronged by a failure to apply to them the principle of equal treatment or equal pay to pursue their claims by judicial process after possible recourse to other competent authorities.
I cannot see how an arbitration system that binds in this way, and excludes utterly the jurisdiction of the employment tribunal or other court, can possibly be described as satisfying the obligations contained in the 672 equal pay and equal treatment directives. Therefore it seems to me that, quite apart from the unfairness of the matter in relation to other forms of discrimination, to focus upon just the one type of discrimination where employees are given directly affected rights, a right to judicial process after possible recourse to other competent authorities, must be protected by Parliament, by government, and by the courts. Therefore I beg the Minister to take advice upon this matter, because it seems to me that the case for Amendment No. 23 is unanswerable.
§ Lord Archer of Sandwell
I do not wish to appear to repeat ad nauseam our gripe, but the grouping has now led us into a situation where anyone reading these debates will find it almost impossible to decipher what we are talking about.
I shall deal first with the amendment tabled by my noble friend Lord Gladwin. The purpose of the clause is to allow an industrial tribunal to enforce an order involving re-employment. As he said, it is where the employer has not honoured the order that the question of enforcement then arises. There are two possibilities: first, to take it back to the arbitrator; or, secondly, to refer it to the tribunal. It seems more sensible to allow the matter to be dealt with by the tribunal as though it were an order of the tribunal.
ACAS has not yet of course prepared the scheme. It has prepared a memorandum but there are many details which yet require to be discussed. The scheme itself will set out all the remedies available under it. My understanding is that the Government intend the awards of re-employment by arbitrator to be similar, if not identical, with the remedies available in Part X, but they do not want to rule out the possibility of an order by an arbitrator which may consider it sensible to add something like:and there shall be a bonus paid for the new work because of some change in the situation".I understand that my noble friend is suspicious of that. It might be used to impose upon an employee a form of employment which is less advantageous to him than that which he has lost. I do not believe that that is the intention, and I do not believe that it has to follow. It would be possible to formulate a reference to an arbitrator which took account of that. What is more likely is that an arbitrator might want to offer some kind of compensation.
What I think everyone wants to avoid is the situation where, if that were done, if it did not fall precisely into the formula under Part X, no one would have power to enforce it. That, I think, is why the Government are anxious to include in the clause the words which my noble friend wishes to delete.
I believe that we need to think further about this. I understand my noble friend's anxieties. However, I am certain that the Government's concern is not to permit something to be imposed on employees which they may not wish; it is for something to be included to enable an employee to feel that he has not had a raw deal. That is the purpose. It may be that were my noble friend not to pursue his amendment at this stage, we could have further discussions before Report.
673 As to the point made by the noble Lord, Lord Meston, we have to accept that it is not intended totally to duplicate in arbitration schemes the jurisdiction of the tribunal. They are, as I believe I said earlier, two different methods of resolving a dispute. They are not intended to be two alternative forms of tribunal jurisdiction. Of course it is not intended that they should administer two totally different systems in law. So I wholly take the point made by the noble Lord.
I believe that the parties will normally ensure that a dispute which they refer to an arbitrator is a dispute about unfair dismissal and not about discrimination. Most arbitrators would want to ensure that that is what they were embarking upon before they embarked upon it, but I can see that something could arise in the course of an arbitration which had not been foreseen. I think that we are all looking for some way of dealing with that.
I turn now to Amendment No. 23. We are in this difficulty, if the Committee will forgive me, that before I address Amendment No. 23 I should say a word about my Amendment No. 21 which is for debate at a later stage, although I do not believe that it is a highly controversial proposal. The Committee may remember that on Second Reading I said that the proposal in Clause 7 is confined, in the first instance, to claims for unfair dismissal, but the Bill would empower the Secretary of State to extend it to other occasions for dispute, such as discrimination. That could be done by means of the negative procedure. That is what is in the Bill.
I said on Second Reading that that seemed to be open to two objections; first, the objection of principle, voiced by the Council on Tribunals many times, that a new jurisdiction should be established, wherever possible, by primary legislation and that where, for some reason, that could not easily be done, it should be established by an order requiring affirmative resolution, because it should be subject to the maximum parliamentary control.
Secondly, the Committee may recollect that I said that I accepted that some noble Lords took the view that while the proposal might sensibly provide a further option for those claiming for unfair dismissal, it was not normally a suitable method for dealing with other forms of dispute. One solution, which I think my noble friend Lady Turner chose, was to debate the issue at this stage and to exclude ab initio part of the spectrum of the option.
I hope that my noble friend Lord Haskel will confirm that in the present circumstances the Government have no intention of extending the scheme to any further forms of dispute. The Committee will remember that he assured us on Second Reading that if ever there were such a proposal there would be the fullest consultation. The question therefore is whether we should decide the issue now or when it arises after the consultation and after we have had some experience of how the scheme works already in relation to unfair dismissal. I am convinced that we must ensure that there can be no extension of the scheme without such a debate taking place. I hope that my noble friend agrees that the 674 sensible time for that is when we are in a position to weigh up what has happened to the scheme and to the consultation and the situation that exists at the time.
Returning to Amendment No. 23, not only does it seem better to debate the question of whether the provision should be extended if and when it arises, but I believe that my noble friend's amendment will have an effect opposite to what she intends. Members of the Committee will remember that the consultation paper proposed that parties should be able to exclude the jurisdiction of the tribunal by referring the dispute to any form of arbitration. The Bill provides that the jurisdiction of the tribunal will be excluded only by agreement to refer to an ACAS scheme and only if that agreement comes about in the course of an action by a conciliation officer or by way of a valid compromise agreement.
The problem is that the present legal position appears to be uncertain. I am bound to say that if I am pressed on the matter I cannot give the result of detailed research because I can quote only the advice that was given to me at a late stage in our consultations. However, it may well be that the present position is that it is uncertain whether any form of arbitration may exclude the jurisdiction of the tribunal. I understand that the question has not been decided. One important effect of Clause 8 is to preclude that possibility. If the disputes which my noble friend has in mind are removed from Clause 8 that possibility may be reopened. I am sure that that is not my noble friend's intention, nor an outcome which any Member of the Committee would seek to bring about.
For those reasons, I hope that we may have at least time for further thought and that at this stage my noble friend will withdraw her amendment.
§ Lord Lester of Herne Hill
Before the noble and learned Lord sits down, will he deal with the point that I raised? It was that in one area European Community law is paramount and we must preserve the right of access to the judicial process after arbitration, if there is to be arbitration. That must be guaranteed, or we are in clear violation of both directives. We must take that into account as a serious matter.
§ Lord Archer of Sandwell
I am sorry, I overlooked the point. It is the subject of a later amendment, but I shall be happy to deal with it now. We have had substantial discussions on the issue—indeed, I am told that some officials lost a night's sleep when considering it last night. Everyone agrees that the point must be dealt with, but we may need to consult on how it should be dealt with. I can give the noble Lord an assurance that it has not been and will not be overlooked.
§ Baroness Blatch
Heaven forfend that officials are losing nights' sleep over anything. Perhaps the Minister will forgive me for intervening at this point, but there has been such a great deal of disquiet on all sides of the Chamber about the ordering of the groupings that I find it baffling. I understood that in respect of any Bill groupings are agreed by those who table amendments. If 675 they disagree with the grouping they can either uncouple ahead of the agreed groupings or indulge in asking the House to rearrange them on the Floor.
I am disturbed by the disquiet because it appears to be affecting the noble and learned Lord, Lord Archer, the noble Lords, Lord Lester and Lord Wedderburn, and the noble Baroness, Lady Turner. It sounds like a minor matter, but it would make more sense to the debate to have a grouping agreed by those who have tabled amendments.
§ 7.15 p.m.
§ Lord Haskel
In view of the confusion over the grouping, perhaps it would help the Committee if I deal with the amendments one at a time. I agree with my noble and learned friend Lord Archer the impact that Amendment No. 14 would have where a conciliation officer has already taken action. We, too, regard the amendment as undesirable. However, we regard it as important that, where an employee is considering entering a compromise agreement, he will need to receive independent advice. That is provided for in Clause 8.
Amendment No. 18 would seek to reverse the power of the Secretary of State to apply parts of the Arbitration Act. My noble friend explained why the Government have it in mind to apply some of the provisions of the Arbitration Act, notably in relation to enforcement and serious irregularities, subject to consultation with ACAS. This provision will allow proper safeguards to be included in the arbitration scheme.
As regards Amendment No. 19, my noble friend has explained why it might restrict the powers of the tribunal to enforce the award of an arbitrator. I can confirm that the Government intend that the remedies or award which an arbitrator may order should be identical or similar to those in Part X of the Employment Rights Act. However, in the event that the ACAS scheme provides awards or remedies which differ, albeit slightly, from those in Part X, we wish to ensure that it can be enforced.
Amendment No. 20 is unnecessary in the light of the Secretary of State's power to apply the Arbitration Act. I confirm that the Secretary of State has it in mind to apply the enforcement provisions of the Act, subject to consultation with ACAS. However, we will consider further what noble Lords have said about that.
As regards Amendments Nos. 23 and 24, I can confirm that at present the Government have no plans to introduce further arbitration schemes. As I said on Second Reading, if the Government wished to consider other arbitration schemes—for example, as regards discrimination provisions—they would first consult widely with interested parties—for example, the Equal Opportunities Commission, the Commission for Racial Equality and groups of the disabled. Furthermore, the amendment tabled by my noble and learned friend Lord Archer will make the power of the Secretary of State subject to the affirmative procedure.
676 I hope that I have given the Committee the assurances that it seeks. As regards the comments of the noble Lord, Lord Lester, we will consider them and seek further advice.
§ Lord Wedderburn
I suspect that the debate that we have just had was riding on the back of Amendment No. 14. Therefore, it is right that I should beg leave to withdraw that amendment. However, the debate included Amendment No. 18, which deals with the problem with the Arbitration Act. Perhaps I may make one comment on that Act; I believe that for the first time the Minister said that the Government would consult seriously with ACAS to consider importing some sections of it. I beg the Government to consult not merely with ACAS, because it does not know a great deal about the Arbitration Act 1996. Arbitration Acts have always been excluded from employment matters. I beg the Government to consult with those who are expert in commercial arbitration, for which the 1996 Act was passed, in order to ascertain whether it is a suitable vehicle to use as an answer to problems to which no other answer has yet been given. With that, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Wedderburn of Charlton moved Amendment No. 15:
Page 6, line 14, at end insert—
§ The noble Lord said: Amendment No. 15 has also been semi-discussed in the wider debates that the Committee has had. Perhaps I may recapitulate very briefly. First, it raises the problem which the noble Lord, Lord Meston, put to us where the duckling of an unfair dismissal case turns out, after a day or so, to be the swan of equal pay or sex discrimination. What is the arbitrator to do?
§ Unfair dismissal certainly includes dismissal under the TUPE regulations of 1981. The Court of Appeal had cause to hold that again this year in the course of MRS Environment Services v. Marsh. But as the noble Lord, Lord Lester, pointed out more than once, European Community law requires the availability of judicial process, certainly in Directive 76/207, Article 6, on equal treatment, and there are those who argue that the demand for judicial process goes somewhat wider.
§ Therefore, it cannot be that this Parliament will pass a Bill which leaves with an arbitrator a decision on matters which could be about equal pay and sex discrimination. There must be some judicial process. It was the bother with that question which led my noble friends and I to table Amendment No. 15.677
§ Perhaps I may just explain it. It provides that where there are reasonable grounds to believe that a reference should be made—and perhaps that should read "might be made"—to the European Court of Justice or the arbitrator concludes that such grounds have been shown to exist, he must refer the case.
§ The question arises as to where he should refer the case. It has been argued this evening that the reference should be to the High Court. With great respect to those who have argued that point, I adhere to what has been put into the amendment. The High Court may or may not know anything about employment. As everyone who goes there knows, you may be lucky or unlucky. I do not believe that the judges of the High Court would deny that. But the one place where an appeal can be heard which does know something about employment law is the Employment Appeal Tribunal. There seems to us no reason, therefore, why we should not put to the Employment Appeal Tribunal a case which, if it is put at the back of the queue for industrial tribunals, will have to wait another year. That is not the spirit of the Bill. It should not be put back to the industrial tribunal but should be put straight to the EAT. The EAT should be asked whether it will give leave and we have built in an extra defence mechanism against trivial, unimportant matters. If the EAT says, "Yes, this is the sort of case where a reference is likely to be made", we can formulate the questions. I do not expect that this amendment has all its semantics correctly posed, but it is an outline of an answer to a question to which, if we do not provide an answer, we shall put through a Bill which is contrary to the European sources which, whatever we think of them, we must respect.
§ We used to find that the previous government did that sort of thing, but I do not believe that our Government will wish to do anything of the kind. I hope that the Minister will tell us that he will consider this very favourably when the matter is considered before Report. I beg to move.
§ Lord Lester of Herne Hill
I agree with the object of the amendment but I disagree with the means employed. The object is to try to introduce a judicial process where it is needed as a result of European Community law. That need was illustrated in a famous case, Johnston v. the Chief Constable of the RUC 10 years ago when the European Court of Justice in Luxembourg looked at Article 6 of the European Convention on Human Rights and said that there had to be proper judicial process. The other European Court in Strasbourg has made it clear that the national court must be able to look at facts as well as law: there must be a merits determination by an independent and impartial tribunal established by law. Therefore, the two European courts are on exactly the same lines. They both require a merits determination by an independent tribunal which satisfies all the requirements of judicial process. Of course, arbitration can come first but that has been made quite clear.
The difficulty about the amendment is that it does not achieve that. Of course, the arbitrator or arbitrators cannot refer a question of law to Luxembourg. It must be a court or tribunal. That is why the noble Lord, 678 Lord Wedderburn of Charlton, has drafted an amendment which seeks to get questions sent to Luxembourg by a court—by the Employment Appeal Tribunal. However, it fails to deal with the real problem; namely, that the arbitration is no substitute for judicial process. The amendment merely seeks to ensure that questions of Community law can be sent to Luxembourg whereas it is up to the national system to guarantee a national court or tribunal that can decide questions of fact, having applied the questions of Community law.
To understand that, one must read a lot of rather dull European human rights convention cases together with the case of Johnston to which I referred. I apologise for all of that legal gobbledegook but I believe strongly that there is a very serious problem which is not solved by the amendment.
§ Lord Archer of Sandwell
I do not wish to repeat what I said earlier on this matter. I take fully the point made by my noble friend and I take fully the addendum of the noble Lord, Lord Lester. Part of our difficulty is that at present the European Court of Justice is seized of a number of cases on the extent to which arbitral awards should be the subject of judicial review or other forms of review. As I understand it, the United Kingdom has intervened in those cases on the basis that it wishes to preserve so far as possible the principle of finality which is the very inducement to enter into arbitral proceedings.
It may be that my noble friend Lord Haskel will confirm this, but my understanding is that the Government wish to reserve their position on the extent to which references on arbitration to the European Court of Justice must be allowed until the outcome of those cases.
I take fully the point and share the impatience of my noble friends who would like to resolve something at this stage. However, I believe that we are more likely to get ourselves into difficulties with the European Court of Justice if we jump the gun. This is precisely the sort of case management where, in the tribunal, we should persuade a legal officer or perhaps a chairman to stand the matter out. We are not in a position to do that with our procedures but I think that until at least the next stage in our debates, I ask my noble friend to withdraw the amendment.
I should just add that it is possible under the Arbitration Act for my right honourable friend the Secretary of State to make use of Section 45 to ensure that there is a method of referring the matter to the European Court. I understand that that may not appeal to my noble friend who does not like the Arbitration Act anyway.
§ Lord Wedderburn
of Charlton: Oh, I like it.
§ Lord Archer of Sandwell
I would not seek to be doctrinaire about it. I know that it was designed for commercial arbitrations. I can see the difficulty about applying it to employment law but it may be a possible way forward. I do not seek to say more than that at this stage but I hope that my noble friend will make it possible to have further discussions.
§ 7.30 p.m.
§ Lord Lester of Herne Hill
Perhaps the noble and learned Lord can clarify one matter. I take it that the pending cases are not dealing with what is meant by judicial process in the equal pay and equal treatment directives where it is clear beyond argument that they are dealing with the process before an independent and impartial tribunal established by law. Therefore, as I understand it, the noble and learned Lord is not suggesting that arbitration would be a substitute for judicial process within the meaning of those directives.
§ Lord Archer of Sandwell
I do not think that that is being suggested. However, I would not like to give a definitive answer without seeing the exact nature of the pleadings, which I have not as yet been able to do. Nevertheless, I take the point that the noble Lord makes. It is possible that they do not deal directly with that point, but they certainly impinge very widely on the debate that has just taken place.
§ Lord Haskel
Perhaps Members of the Committee will understand my reluctance to come between such eminent lawyers as regards matters of European law. I thank my noble and learned friend Lord Archer who eloquently addressed the complex legal question in relation to the issue. I can confirm that the Government need to wait until the European Court of Justice has given its decisions on these cases before addressing the question of references to that court. If, in the light of the decisions from the European Court of Justice, it is considered appropriate to provide for references to the European Court of Justice, I can assure Members of the Committee that the Government will do so. I noted what my noble friend Lord Wedderburn and the noble Lord, Lord Lester, said and can confirm that the Government will give serious consideration as to whether the Employment Appeal Tribunal would be the appropriate court to consider such matters in the first instance.
§ Lord Wedderburn of Charlton
In order to make progress I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Wedderburn of Charlton moved Amendment No. 16
Page 6, line 14, at end insert—
("(5A) A scheme under this section shall provide that, where a party claims on reasonable grounds that the arbitration award contains or is based upon a serious error of law or some other ground which might have been cause for judicial review, that party may apply within one month after the date of the award to the Employment Appeal Tribunal which, if it gives leave, shall have jurisdiction to hear and determine the application.
(5B) The Secretary of State shall make an order providing for the jurisdiction of the Tribunal under subsection (5A) and shall in particular provide that the remedy for a complaint shall he the remedy stated in subsection (5A) and not otherwise.").
§ The noble Lord said: I shall speak briefly to Amendments Nos. 16 and 17. Again, part of the thrust of the amendments has congealed in our rambling debates around various previous amendments. The central point of both amendments is as follows. Where a party, or the arbitrator, sees that there are reasonable 680 grounds for saying that what would normally be a course for judicial review has arisen—I put it in that very quick form because obviously the grounds of judicial review are various and we have touched upon them in previous debates—or, to put it a different way as regards Amendment No. 17, where there has been a substantial divergence from the provisions of Part X of the 1996 Act on unfair dismissal, what might well have gone to the High Court under the judicial review process would, under our suggestion, go to the Employment Appeal Tribunal.
§ When I think back to the amendment we have just dealt with, I can quite understand the objections which have been made about the Employment Appeal Tribunal in previous discussions. However, with respect, I do not believe that they apply in this respect. No Members of the Committee have dissented from the view that the EAT is a judicial body of quite unusual character with a High Court judge and two wing persons all of whom are senior in their understanding of industrial relations employment law. That would be a suitable body to hear or determine an application made to it on such a matter, or to give such direction or remedy as it "considers appropriate", to use the words of Amendment No. 17.
§ Both amendments suggest that the Secretary of State should make regulations or an order providing for the application of Part X of the 1996 Act on unfair dismissal and state that this should be the only route and remedy. In other words, our text would cut off the remedy of judicial review to the High Court because we have provided an avenue to the Employment Appeal Tribunal. Of course, I appreciate the view that has been put to me as regards both amendments; namely, that the normal appellate route from the EAT to the Court of Appeal and the House of Lords would remain open. It would not be proper to cut that off in any way or even to suggest that one could do so.
§ However, in the normal case, one has to find an answer to the question: what do you do where, with the best will in the world, the arbitrator has been led astray when dealing with a sex discrimination case, an equal pay case, or whatever? I am now falling into the pit of my noble and learned friend's area of Wednesbury unreasonableness. It can happen, but what are we to do about it? As far as we know, the Bill and the draft scheme do not tell us. The amendments are a suggestion of an answer to the problem. I have not yet heard any answer forthcoming from anywhere. Such suggestions do not depend on any cases which are awaiting decisions from Luxembourg or anywhere else; they are immediate suggestions to solve an immediate problem in the Bill. If it is not solved, as I said earlier, the Bill's arbitration system may well founder on a Grunwick type of case. That would be most unfortunate. The amendments are meant to avoid such a situation. I beg to move.
§ Lord Archer of Sandwell
I confess to a feeling of déjà vu. I believe that we had this part of the debate earlier in the evening. There is certainly a wide area of agreement between my noble friend and myself and indeed my noble friend Lord Haskel. We need a safety valve but I am not sure about the extent of such a safety 681 valve. For example, I do not know whether it should include a Wednesbury situation. I know that my noble friend referred to me in that context. The fact is that I confided to him that I have lived all my life with the expression "Wednesbury mad" because I was born and bred in Wednesbury. I should remind Members of the Committee that that was a case in which it was decided that the council of Wednesbury had not been mad and in fact had been totally reasonable. However, whether we want to include that kind of unreasonableness is something which I believe requires a little further thought.
The second matter which requires a little further thought is what would be the immediate channel to proceed to from the tribunal. Whether it should be the EAT which is certainly eminently qualified to deal with mistakes of law or whether it should be the High Court which deals with mistakes in procedure is something which, again, requires perhaps a little more thought. My noble friend is absolutely right to say that we will probably have to make some decision on the matter. A possible solution would be to leave the matter to ACAS and its scheme and to the Secretary of State in the order that he makes. I can see some Members of the Committee shaking their heads at that suggestion and I suspect that, if I were not actually presenting the Bill, I might be doing the same. As I said, I should like to have further discussions on the matter. I have outlined the two areas where I believe further discussions are required. I hope that my noble friend will not press the matter tonight.
§ Lord Haskel
I shall speak to Amendments Nos. 16 and 17. The Government certainly agree that a safety valve is necessary. That is why we are minded to use the serious irregularities provisions of the arbitration Act, subject to consultation with ACAS. In that way the Government will ensure that the rights of individuals are protected. As my noble and learned friend Lord Archer said, the remedies might be set out in the scheme itself. I should like to stress that they are likely to be the same as those in Part X of the Employment Rights Act 1996. However, we shall take note of the points made by my noble friend and my noble and learned friend and consider the matter further.
§ Lord Wedderburn of Charlton
I am grateful to my noble friend the Minister for his comments. I believe it is the first time we have agreed that a solution must be found in this Bill, or, as he says, in the scheme. I am tempted to read Section 68—but I shall not—of the Arbitration Act which concerns irregularity. However, I shall leave that for the Committee's bedtime reading because the types of irregularity set out in Section 68 go far wider than Wednesbury unreasonableness and concern ultra vires provisions or a lack of procedural fairness. It is difficult to see how they can apply to this kind of arbitration. However, I note that the Government wish to consider the section and they have the power under Clause 7(6) to amend the Arbitration Act if they wish to adopt it as amended. That could form the basis of something useful. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 17, 18, 19 and 20 not moved.]
§ Lord Archer of Sandwell moved Amendment No. 21:
Page 6, line 43, leave out ("which") and insert—
("(10) No order shall be made under subsection (1)161 unless a draft of the statutory instrument containing it has been laid before Parliament and approved by a resolution of each House.
(11) A statutory instrument containing an order under this section (other than one of which a draft has been approved by resolution of each House of Parliament)").
§ The noble and learned Lord said: The expedition with which we have dealt with the previous few amendments rather overtook me. I have already spoken in effect to this amendment. I do not think it is controversial and I have explained it twice in the course of our debates. I beg to move.
§ On Question, amendment agreed to.
§ 7.45 p.m.
§ Lord Wedderburn of Charlton moved Amendment No. 22:
§ Page 6, line 44, at end insert—