National Minimum Wage Bill

HL Deb 20 July 1998 vol 592 cc672-706

8.50 p.m.

Further consideration of amendments on Report resumed on Clause 11.

Baroness Miller of Hendon moved Amendment No. 29:

Page 8, line 40, leave out ("shall").

The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 30 to 34. The mandatory sentence for anyone convicted of murder is life imprisonment. I do not know of any other penalty where the judge does not have some sort of discretion, even if it is only the power to take into account "special reasons" for offences like the road traffic offences. However, if I am mistaken and there are others, there are enough lawyers in this House whom I am sure will correct me on the point.

There are to be just two offences for which the judge has no discretion to take into account mitigating factors, extenuating circumstances or even the financial ability of the offender to pay the fine. One of those offences is murder; the other is thwarting the ambitions of the trade unions. In simple terms, the clause as drawn gives the employment tribunal absolutely no discretion whatever as to the penalty to be imposed on an employer who fails to produce records or to accord an employee his rights under Clause 10. The combined effect of the amendments is to do just that.

To give the employment tribunal some discretion, the combined effect of the amendments would make Clause 11(2) read as follows: Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall make a declaration to that effect and may make an award that the employer pay the worker such sum not exceeding 80 times the hourly amount of the national minimum wage (as in force when the award is made) as it considers just and equitable having regard to the employer's default". If the owner of the struggling corner mini-market objects to the presence of the minder that the employee chooses to bring into his shop, then its owner is to be fined 80 times the national minimum wage—that is, £288—until the national minimum wage is increased, which I am sure it inevitably will be. Never mind that, due to the owner's lack of command of the English language, he did not understand the employee's rights under Clause 10(9)(b), and never mind that a fine of £288 means that the owner cannot meet his cash-on delivery commitments for stock, and loses a vast and probably ruinous amount of trade as a result.

At the same time as this happens, International Conglomerate plc fails to give access to the records of one of its employees within 14 days due to some bureaucratic blunder. It, too, is fined £288—that is less than it spends on paper clips in a year and less than it spends on flowers for the director's dining room in a month. Two offences committed inadvertently—but offences nonetheless—with vastly different financial consequences to the employers. At the same time, the owner of a sweat shop is caught paying a pittance in cash, with no records kept, to the illegal immigrants he employs under the threat of reporting their presence to the authorities if they complain. As no records can be produced, the employer is in breach of Clause 10(1)(b). For deliberately flouting the Act, this unscrupulous employer will be fined the same amount for each offence; namely, £288.

When we considered these amendments in Committee on 15th June, the noble and learned Lord the Solicitor-General explained that the reason why the Government did not want to give the employment tribunal any discretion was because the provision would, enable cases to be handled much more swiftly and effectively in a tribunal, there will be no need for the tribunal to spend time considering specific amounts".—[Official Report, 15/6/98; col. 1412.]

I see that the noble and learned Lord the Solicitor-General was admitted to the Bar in 1974, long after the demise of the old Bow County Court. One of the many no doubt apocryphal stories told about that court was the occasion when a barrister arrived five minutes late and discovered that his case had been heard without him. When he complained, the usher said, "Well, you see Sir, we dispense with justice very quickly in this court." That is what the Government are saying should happen in these cases: in the interest of administrative expediency, employment tribunals should dispense with justice. How many cases are the government expecting anyway?

I spent 20 years as an active magistrate. No matter how long our list, we always felt it our duty to consider the penalty no less carefully than whether or not the defendant was guilty. A few extra minutes, sometimes less, is no burden to those exercising a judicial function. The Government are saying that, in the case of the inadvertent failure to produce a single sheet of paper or a delay perhaps caused by the illness of the one-man owner of a small business, there should be no mitigation of the penalty. The Government are saying that, contrary to the criminal law, the means of the defendant to pay a fine are not to be taken into account. The Act deprives the tribunal, exercising a judicial function, of any discretion to show mercy in appropriate cases—all in the interests of expediency, and a few minutes of its time.

In passing, I should just like to mention Amendment No. 43 relating to Clause 19, tabled in the name of the noble Lord, Lord Clinton-Davis. Of course we welcome any provision that will allow an employment tribunal to correct a mistake. We shall not object to that amendment when it is called. The pity is that the Government have not seen fit to frame the Bill so as to enable tribunals to avoid a different error altogether; namely, the error of committing an injustice because of a lack of discretion over the penalties.

The noble and learned Lord the Solicitor-General holds one of the most senior offices in our judicial system. He needs no permission from the Secretary of State to concede the point that I am making. On the contrary, it is the Secretary of State who, constitutionally, must be guided by his advice. The House of Lords is the highest court in the country. We cannot—we must not—send out a signal that justice is something that can be dispensed with in the interests of expediency. I urge the noble and learned Lord to use the discretion that he undoubtedly has and here and now agree to accept these amendments. I beg to move.

Lord Falconer of Thoroton

My Lords, we had a full debate on these identical amendments in Committee. In the meantime, my noble friend Lord Clinton-Davis has written to the noble Lord, Lord Monson, in response to particular points which he raised during that debate. I believe that a copy of that letter has been placed in the Library of the House.

I believe that I set out fully and clearly in that debate the Government's position on the making of awards under Clause 11. However, perhaps I may briefly go over the ground again just to indicate the Government's thinking on the matter. The amendments to Clause 11 require a change of wording from "shall" to "may". This is essentially a procedural clause. It concerns the failure of an employer to allow access to records, and the awards that can be made by employment tribunals in that event, as well as the period for bringing a complaint.

All the amendments in the group are directed towards that clause. As the noble Baroness rightly said, their overall effect would be to allow a tribunal to be more lenient to an employer who had not complied with his obligations to allow access to records under Clause 10. Indeed, the amendments would have that effect or would be ancillary to it.

Amendment No. 32 takes the proposed discretionary power a step further in that it gives the tribunal the option of awarding less than the full amount (which is currently set at 80 times the national minimum wage rate) to the worker, to be paid by the employer. Amendment No. 33 is linked with the discretionary notion as it would give the tribunal the right to consider what is a just and equitable award.

The noble Baroness is characteristic with her style. She makes this right to award 80 times the national minimum wage if somebody fails to comply with an order to produce documents appear parallel to the charge of murder. She says that it is similar in that respect and that it is the only offence in the country, apart from murder, where there is a fixed penalty. Perhaps I may make three points in that respect. The noble Baroness's argument is well put. However, I would submit that it is somewhat disproportionate. First, this is not a criminal sanction; it is a civil sanction for failure to comply with what we all agree is a necessary procedural right in relation to the minimum wage. Secondly, it is most certainly not alone in the way that such rights are enforced. By way of an example, I should point out to the House that there is a right to each employee to be told the reasons for his dismissal. If he is not given the reasons, then, assuming that the tribunal found the complaint well founded and all the procedural grounds had been gone through, it must award two weeks' pay to the employee. Again, that is a fixed amount. That is an incredibly sensible way of dealing with this kind of problem, rather than creating a whole series of discretionary matters which will be argued before employment tribunals. Far from being good for an employer, that would be bad. There would be some merit in what the noble Baroness had said if an unsensible or disproportionate amount had been prescribed for not complying, but with regard to the proposed present minimum wage the amount is £288. I appreciate that may be a significant sum for some people, but their remedy to avoid paying that sum is to comply with their obligations under the law.

The noble Baroness gave two examples of where that may cause problems. The first concerned a situation where—as she put it—an employee might introduce a "minder" into a shop whom the employer does not like. I think I responded to that point when I responded to the previous amendment. Secondly, there is the matter of someone who is unable to produce records within 14 days. A judgment has to be made about how long it takes to produce records. We take the view that most people—particularly small employers—will be able to produce wage records within 14 days if they have only one or two employees. Frankly, that seems a perfectly reasonable period of time within which to do that.

One can choose to impose an easy, sensible remedy which is easily obtained in the industrial tribunal and which is not disproportionately severe or, as the noble Baroness would have it, a remedy in an industrial tribunal dependent on submissions by both sides which would involve greater legal complexity and arguments before the tribunal. I think we have the balance right. We have indicated the importance of not complying but our remedy is not disproportionate and it is quick. Although we have considered carefully the proposals that have been made by the noble Baroness, in our view we have the balance right. I believe the more one thinks about it the more one recognises that. I hope that, in the light of the explanation I have given, the noble Baroness will feel able to withdraw her amendment.

9 p.m.

Baroness Miller of Hendon

My Lords, perhaps when I read the noble and learned Lord's explanation in detail I may agree with him. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 30 to 34 not moved.]

Clause 13 [Appointment of officers]:

Lord Clinton-Davis moved Amendments Nos. 35 and 36:

Page 10, line 2, after first ("any") insert ("Minister of the Crown or").

Page 10, line 3, at end insert ("Minister,").

The noble Lord said: My Lords, in moving Amendments Nos. 35 and 36, I wish to speak also to Amendments Nos. 38, 40 and 41. These linked amendments are essentially technical. They are designed to maintain the status quo of the enforcement arrangements envisaged in the Bill. I have written to the noble Baroness, Lady Miller, and to the noble Lord, Lord Razzall, with a detailed explanation of the amendments. There may be some points I have not covered in writing, in which case an explanation or a letter will be placed in the Library. I beg to move Amendments Nos. 35 and 36 en bloc.

On Question, amendments agreed to.

Clause 15 [Information obtained by officers]:

Lord Clinton-Davis moved Amendment No. 37:

Page 11, line 36, at end insert—

("(6A) Subsection (2) above does not affect the title or rights of—

1. (a) any person whose property the information was immediately before it was obtained as mentioned in subsection (1) above; or
2. (b) any person claiming title or rights through or under such a person otherwise than by virtue of any power conferred by or under this Act.").

The noble Lord said: My Lords, in moving Amendment No. 37, I wish to speak also to Amendments Nos. 39, 42, 64, 65 and 67. The purpose of these amendments is essentially to clarify the situation. They are being proposed to avoid any doubt and inconsistency as to who holds information for the purposes of the information exchange provisions of the Bill. What I had to say before applies equally in relation to the letter and/or the explanation. I beg to move.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendment No. 38: Page 11, line 37, after ("any") insert ("Minister of the Crown who, or").

On Question, amendment agreed to.

Clause 16 [Information obtained by agricultural wages officers]:

Lord Clinton-Davis moved Amendment No. 39:

Page 11, leave out line 42.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendments Nos. 40 to 42:

Page 12, line 2, after ("any") insert ("Minister of the Crown,").

Page 12, line 3, after ("that") insert ("Minister,").

Page 12, line 27, at end insert— ("(bb) in relation to information obtained by an officer acting in an area which is partly in England and partly in Wales, the Ministers mentioned in paragraphs (a) and (b) above acting jointly;").

On Question, amendments agreed to.

Clause 19 [Power of officer to issue enforcement notice]:

Lord Clinton-Davis moved Amendment No. 43:

Page 14, line 21, at end insert— ("(9) The powers of an employment tribunal in allowing an appeal in a case where subsection (8) above applies shall include power to rectify, as the tribunal may consider appropriate in consequence of its decision on the appeal, any penalty notice which has been served under section 21 below in respect of the enforcement notice. (10) Where a penalty notice is rectified under subsection (9) above, it shall have effect as if it had originally been served as so rectified.").

The noble Lord said: My Lords, the purpose of this amendment is to cut unnecessary red tape and prevent enforcement from being potentially weakened in a specific area. I beg to move.

On Question, amendment agreed to.

Baroness Miller of Hendon moved Amendment No. 44:

After Clause 22, insert the following new clause—

PROVISIONS OF INSOLVENCY ACT 1986 AND BANKRUPTCY (SCOTLAND)

ACT 1985: FAILURE TO PAY NATIONAL MINIMUM WAGE

(" . The failure of an employer to pay any wages at all as required under a contract of employment or a contract for services shall not be treated for the purposes of this Act as a failure to pay the national minimum wage when such failure is due to the operation against the employer of any of the provisions of the Insolvency Act 1986 or the Bankruptcy (Scotland) Act 1985 or the corresponding bankruptcy and insolvency legislation in force in Northern Ireland and no enforcement procedures under sections 17 to 22 of this Act shall be undertaken in such cases.").

The noble Baroness said: My Lords, I return to this amendment which I moved in Committee because the Government have not met the case that I advanced on 15th June. I must say at the outset that I accept the blame for this because on re-reading the wording of my original amendment I feel that it did not make my point sufficiently clearly, although I thought it did when I spoke. I therefore propose a revised amendment which I believe fully meets the Government's objection. I regret that I have been unable to specify precisely the primary legislation affecting Northern Ireland but I do not have the research facilities available to the Government. That can no doubt be rectified on Third Reading.

In presenting my amendment on a previous occasion, I said that this was not a device to enable an employer to escape paying the national minimum wage by the simple expedient of not paying any wages at all. This was to cover the situation where an employer becomes bankrupt or goes into liquidation or receivership and is unable to pay the wages due to the staff. The noble and learned Lord the Solicitor-General proceeded to demolish the case for an employer saying, as it were, "Look, we are a bit short of money at the moment. Do you mind not being paid anything at all for the next few weeks?" That was the case that I had expressly said I was definitely not putting forward. The Minister began the passage I just quoted by saying: Putting aside a case of bankruptcy or liquidation". But that was exactly the case I asked to be covered. The fact that the noble and learned Lord the Solicitor-General acknowledged that bankruptcy and liquidation were a separate case makes the case for this amendment.

Clause 31(8) of the Bill provides a partial but slightly ambiguous defence by an insolvent employer from the criminal sanctions constituted by Clause 31(1). This amendment makes the position absolutely clear: an employer who is already suffering the misfortune of insolvency is not only absolved from criminal prosecution but from the other sanctions and penalties provided for in Clauses 17 to 22. The Solicitor-General has already recognised that that situation is a special case. All I ask is for the Government to put a statutory seal on it. I beg to move.

Lord Falconer of Thoroton

My Lords, I am grateful to the noble Baroness for explaining the purpose of the amendment. It is worth making a general point first about the operation of bankruptcy and insolvency law. Its purpose is not to penalise the employer or anyone else, as the amendment would seem to suggest. Instead, I regard that legislation as providing a systematic means of sorting out a financial mess that has inevitably arisen. That must be in the interests of everyone concerned.

If the amendment is intended to highlight the position of the Crown as a preferential creditor of an insolvent business, capable of emptying the pot before employees can get their hands on any remaining assets, I have to say that that is not my understanding of how the process works.

I am advised that preferential creditors do not rank ahead of each other in that way. In other words, if there are £500 of assets to distribute and £5,000 worth of preferential claims, each preferential creditor gets 10p in the pound—whether that creditor is the Crown or an employee in respect of pay. So the somewhat alarmist scenario envisaged by the noble Baroness in Committee, along the lines that the Government could take all the money and prosecute the employer for failure to pay the national minimum wage, seems to be based on a misapprehension of the way in which bankruptcy and insolvency law operates. The scenario to which I have referred was suggested by the noble Baroness in Committee. The way in which she presented this amendment indicates that it is designed to cover the situation to which I referred then.

In any event, it is highly unlikely that a genuinely insolvent company or bankrupt employer would be subject to criminal prosecution for failure to pay the minimum wage if he had first postponed other payment obligations not involving a criminal offence and was still unable to pay the minimum wage due to financial collapse. Where he does have sufficient money, however, it seems only right that he should use that to pay the minimum wage rather than to discharge other civil debts. Clearly, a position in which employers were entitled to postpone payment of the minimum wage to their lowest paid workers before postponing payment of purely civil obligations would be unacceptable.

The criminal offence which the Bill creates in that respect is the refusal or wilful neglect to pay the minimum wage. Clearly, the surrounding circumstances would be taken into account in deciding whether there should be a prosecution in any particular case. Again, referring to what was said in Committee, I do not believe that over-zealous officials would or could take advantage of the situation. Such officers will in any event be working to the remit provided by the Secretary of State.

The wider question is how a worker can secure any outstanding payments owed to him by the business which is unable to pay him irrespective of the minimum wage legislation. In that event our concern is to ensure that the worker receives his money, not to punish the insolvent employer.

There are already mechanisms in place for such payments to be made to workers where a company is unable to meet its obligations. The Department of Trade and Industry's redundancy payments service can make certain payments to the former employees of insolvent employers under the Employment Rights Act 1996.

The question of whether a worker has received the national minimum wage therefore becomes subsumed in the larger question: has he received his wages at all? If it transpired that the wages owed were actually lower than the minimum required because the employer had been breaking the law, the redundancy payments service would pay the minimum wage to which the worker was entitled.

I appreciate that the explanation I have given is rather dense in the sense that it relates to provisions under insolvency and bankruptcy law. I do not think that anybody, whatever the time of day, could have taken it in at one shot. However, I believe that I have dealt with the points that the noble Baroness legitimately raised. I could not reasonably expect the noble Baroness, or anybody, to take all of my reply in at the speed at which I delivered it. I suggest that the noble Baroness reads my reply in Hansard. She will then realise that there is no need to pursue the amendment.

Baroness Miller of Hendon

My Lords, I thank the noble and learned Lord for saying that his explanation was rather dense. I began to think that perhaps I was rather dense. I shall read it very carefully. I shall certainly take his advice. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 [The right not to suffer detriment]:

Lord Clinton-Davis moved Amendment No. 45: Page 16, line 40, after ("will") insert ("or might").

The noble Lord said: My Lords, it may be for the convenience of the House if we also consider Amendments Nos. 46 and 47. The purpose of these amendments is to ensure that there is no loophole in protection against dismissal or detrimental action for workers and employees who would be entitled to the full rate of the national minimum wage or who were about to qualify for a higher rate, even when no rate has yet been set in the months following commencement of these clauses. These are technical matters. I beg to move.

On Question, amendment agreed to.

Clause 25 [Right of employee not to be unfairly dismissed: Great Britain]:

Lord Clinton-Davis moved Amendment No. 46: Page 18, line 27, after ("will") insert ("or might").

On Question, amendment agreed to.

Clause 26 [Right of employee not to be unfairly dismissed: Northern Ireland]:

Lord Clinton-Davis moved Amendment No. 47: Page 19, line 36, after ("will") insert ("or might")

On Question, amendment agreed to.

Clause 28 [Reversal of burden of proof]:

9.15 p.m.

Baroness Miller of Hendon moved Amendment No. 48: Page 21, line 6, leave out ("qualifies or, as the case may be, qualified") and insert ("does not qualify or did not qualify").

The noble Baroness said: My Lords, in moving Amendment No. 48, I wish to speak also to Amendments Nos. 49 and 50. This little clause, tucked away half-way through the Bill, involves a matter of major constitutional importance. I hope that the noble and learned Lord the Solicitor-General will not get very upset about that and tell me that the House will get upset about it. As I pointed out to him, the Government will be bringing in much more major constitutional issues.

The marginal note to Clause 28 describes it as providing for the, Reversal of burden of proof', a frank admission that the Government, contrary to the safeguards long since established by our courts and the common law, are requiring the defendant to claim to prove his innocence.

How do the Government seek to justify this? Let me again remind your Lordships of the flamboyant language used by the Minister of State at the Department of Trade and Industry in Committee in the other place. He said: For far too long, low-paid workers, who have little or no representation, have found it almost impossible to do anything about their employment status or to gain access to basic minimum rights in the labour market". Later he said: I am putting the case not only for the Government but for millions of workers who, over the years, have not had the opportunity to make their voices heard". I see that the noble and learned Lord the Solicitor-General is nodding his head. I am surprised. I did not think that he would agree with those comments, put in exactly that way. But there we are; we live and learn. I believe that that was a remarkable piece of rhetoric from a warrior in the class war, riding to the rescue of the huddled masses of the oppressed proletariat with which he imagines the country abounds. That is why I did not think that the noble and learned Lord the Solicitor-General would agree with the words from the other place.

This piece of nonsense clearly demonstrates the mind-set that afflicts the Government. This clause is nothing less than an attempt by the Government—freely admitted by the Minister in the passages that I have just quoted—not to create a level playing field in what, after all, amounts to a civil piece of litigation about a civil dispute but to make the employer face an uphill struggle. Not that I have ever heard of a downhill struggle. It is an uphill struggle in which the employer is required to do the almost impossible: to prove a negative.

What is the justification for that? Again, let me quote the Minister of State in the other place. At 2.30 in the morning he asked the Committee: Where does this information come from … Who maintains records about national insurance contributions and pay-as-you-earn issues? … Who maintains the record of hours worked by the employees?"—[Official Report, Commons, Standing Committee D, 29/1/98; col. 649.] Hardly pausing for breath—rather like me at this stage of the evening—he triumphantly answered himself, "The employer does". Five out of 10. But the employee knows what he has been paid; the employee knows how many hours he has worked.

More than that, Clause 12 of the Bill empowers the Secretary of State to make regulations requiring the employer to provide the employee with detailed information, including, quoting the words of Clause 12(2)(b): prescribed information for the purpose of assisting the worker to determine whether he has been remunerated at a rate at least equal to the national minimum wage during the period to which the payment of remuneration relates". Surely the Minister of State should have known that this provision was in the Bill.

The reality is that this Bill will not impinge on the large commercial concerns, which probably are already paying the national minimum wage; or, if they are not, will easily do so by simply putting a penny or two on the price of a loaf of bread, a gallon of petrol or whatever their product is. No, it will most affect the little corner shop. Often that shop is owned by people who arrived in this country penniless, fleeing from more real oppression than the Minister of State in the other place could ever conceive of. It will most affect the corner shop, the petrol station, the local hairdresser's, the flower shop and manufacturing businesses, which are the ones which provide a huge number of jobs; the little shops and small manufacturing businesses which are pestered with the over-zealous enforcement of petty regulations emanating from Brussels, while their continental counterparts disregard them with impunity because their governments do not take them seriously.

Apart from the data supplied by his employer in accordance with the Bill, and which the employee only has to read to get all the information he needs, rights are granted by Clause 10 to see what is in the employer's records as to wages paid, hours worked, and so on. The noble and learned Lord the Solicitor-General gave them to me again at great length. That disposes of the Government's argument that the common law right of the owner to have any case against him positively proved and not to have to prove his innocence is due to the fact that the employer is in some sort of dominant position. I believe that, if anything, the reverse is the case. The noble and learned Lord the Solicitor-General is either nodding or shaking. It must be very difficult for him. He is wincing; that is something new.

At the Committee stage I tried to explain the problems of an employer in having to prove a negative: that he had not failed to pay the national minimum wage. How could he do such a thing when, in the case of a small business, there were probably no computer records; when, in common with most employers, wages would be paid in cash; when requiring a receipt each pay day was not a practical probability; and when an employee could reasonably be expected to protest vigorously and immediately if the payslip which the Bill will require to be given to him does not correspond to the cash that he receives in his hand?

What was the Government's response to what the Solicitor-General was kind enough to describe as my "eloquent and effective speech"? I see that the noble and learned Lord remembers that phrase well. Eloquent it undoubtedly was; but effective it clearly was not. The Government absolutely refused to budge one single iota.

What was the Solicitor-General's explanation for that obduracy? He prayed in aid the Industrial Relations Act 1971 which he pointed out had been introduced by a former Conservative administration. He did not mention that that Act, which he now endorses, had been fought tooth and nail by the Labour Party. But perhaps that is what always happens when parties get into government.

It is with considerable trepidation that I stand here about to argue a point of law with one of the two distinguished Law Officers in the Government. The noble and learned Lord, Lord Falconer, is, after all, a QC, when in fact I must confess that I never even finished eating my dinners in Middle Temple—something which I now very much regret.

However, I have to say, with the greatest respect, that his analogy is not a correct one. Under the Industrial Relations Act 1971 and the Acts which succeeded it, culminating with Section 94 of the Employment Rights Act 1996, an employee has the right not to be unfairly dismissed. The noble and learned Lord actually mentioned that earlier this evening.

Under Section 92, the employee has the right to receive a written statement of the reasons for his dismissal. The written statement, or indeed reasons given verbally, constitute an allegation of facts which the employer, as the person making the allegation, has to prove. What point will there be in the employee going to the Employment Tribunal and saying "I was dismissed unreasonably. There were no facts which justified it."? Full stop. Where would the case go from there if the employer had previously had to justify and prove his case?

Of course the employer, as instigator of the act of dismissal, and the one contending that it is justified, has the responsibility of proving the facts on which he is relying. That is exactly the same situation as applies under the present Bill. The employee is alleging that he did not receive the national minimum wage, whether because of a simple underpayment or an unauthorised deduction. Therefore it is up to him to prove it.

The Minister conjured up a picture of employees, in a moderately vulnerable position. Many of them may be isolated from other workers". However, they will not be isolated by the time they have called in the assistance of the enforcement officer, and the minder that Clause 10 permits to assist him in the invasion of his employer's premises—perhaps I should not use the word "invasion"; I know the Minister does not like it; I can substitute the word "entry"—pursuant to Clause 10(8)(a) of this Bill.

Then the noble and learned Lord called in aid the touching picture of this wretched downtrodden employee, sometimes not very well able to express themselves in English".—[Official Report, 15/6/98; col. 1428.] However, many of the small businesses we constantly talk about in connection with this Bill—the corner shops—are owned by people who work hard, long hours, often harder and longer than their employees, who also have English as their second language.

That is the problem with both this whole Bill and the Government's attitude to any suggested amendments, however reasonable. The Government are still motivated by the thinking of old Labour. It is them and us; workers on one side, employers on the other. And the workers are always right.

The workers rights to receive the national minimum wage are fully protected under this Bill. They do not need to be added to by depriving the employer of an elementary historical right to have any case against him proved before he has to answer it. I beg to move.

Lord Falconer of Thoroton

My Lords, earlier in the evening, I understood the noble Baroness to accept that records should be kept by employers. I understood her to disagree with us as to whether it was right that a particular form of records should be on the face of the Bill, but I understood her enthusiastically to accept the proposition that all employers, whether employers in a corner shop or ICI, should keep records. That explodes the whole of her case in relation to Clause 28.

As she rightly acknowledged, Clause 28 states that the burden of proof in showing, first, that someone is an employee or a worker entitled to be paid the minimum wage and, secondly, whether an employee or worker had been paid the minimum wage, is on the employer. That is an important element of the Bill and more generally of the Government's enforcement strategy in relation to the Bill. The Bill extends the right to the minimum wage to workers whose employment status might often be unclear. I have in mind particularly homeworkers and agency workers. Such workers are often in low paid categories. In other words, they are among the workers whom the Bill is designed particularly to help. Often they may be working without any explicit workers' contract. Frequently they may be working on their own or without any access to representation. If such vulnerable workers believe that they have not received the national minimum wage, without Clause 28 the position would be that they would have to prove, first, that they are workers for the purposes of the Bill and, secondly, that they have not received the amount of the minimum wage. The effect of Clause 28 is to place this burden on employers, not workers. In any dispute about status, employers will have to show that the individual concerned is not a worker. Similarly, in any dispute about payment, it will be for the employer to show that the minimum wage has been paid.

The noble Baroness gave the example of the small shop. She accepts that the small shop has to keep records of wages. Therefore, on the basis of her position, there is obviously no difficulty about the small shop producing the records of what wages it has paid. The employee may not be in as good a position to know what he or she has been paid. The noble Baroness asks those on her right and on her left, "Why not?", and the noble Baroness, Lady Blatch, asks the same. The reason why not is that very many people do not keep a record of what they are paid. I am sure that the noble Baroness, Lady Blatch, would keep a record of what she was paid. But I can assure her that large numbers of employees, particularly low paid employees, do not keep a proper record of it. Who would have the record? The answer is the employer; even the small shopkeeper employer. I was asked what is the nature of the arrangement between the employer and the employee and whether there would be any difficulty in the person who owns the small shop explaining to an industrial tribunal what was the nature of the arrangement on which the employee was paid. I would have thought not; whereas, if it was a homeworker or someone like that, there would be considerable difficulties.

To sum up, what the clause achieves is to shift the balance a little towards the vulnerable worker who may otherwise be deterred from taking on a powerful and well advised employer or even a small employer. Underlying it all is the simple principle that those who are entitled to the national minimum wage should not be discouraged from ensuring that they get it. In the past the burden of proof has been to the advantage of employers. It is a strength of this clause and of the Bill as a whole that the burden is being shifted to the advantage of workers in the situations that I have described.

The noble Baroness proved that it was a great and substantial loss to the Middle Temple and to the Bar as a whole that she did not finish eating her dinners, because the argument that she put with such appallingly bad material was so good and so eloquent that she would have had a huge following at the Bar. I say that with sincerity. The simple point is surely this. In the unfair dismissal example, under the 1971 Conservative legislation, what is being said is that the employer is alleged to have committed a wrong—namely, unfairly dismissed someone—but, as everyone recognised, all of the detail in relation to that would in the normal case be more likely to be in the hands of the employer rather than in the hands of the employee. As a sensible, practical matter, therefore, the Conservative Government recognised that it was right to place the burden of proof on the employer. It is exactly that approach which is being followed here. It is nothing to do with infringing a common law principle. It is to do with being sensible and practical and making sure that justice is done in the end.

The arrangements for the Industrial Relations Act 1971 have been repeated and used frequently and successfully over the decades. The party opposite has made no attempt to change the legislation in that respect despite 18 years in power between 1979 and 1997. The effect of the amendments proposed by the noble Baroness is to negate the reversal of the burden of proof and to shift the balance back towards the employer, to a greater or lesser extent. I do not think that I need to go through what each of the amendments does, but they have been dealt with as a matter of principle which is fair enough.

The effect of these amendments is that workers would again be left in a position where an employer could seek to evade his responsibility by claiming that they were self-employed, or they would find that the presumption of non-payment would be subject to actual evidence of non-payment. The effect of this requirement would be to devalue the presumption and negate its benefit to the worker.

For example, an employee has to establish that he has not been paid the minimum wage. The employee has not kept proper records and goes to court and states that he has not been paid the minimum wage. The employer simply says, "prove it", when everyone knows that he has records. That would be a travesty of justice. Vulnerable workers would be less likely to take cases forward and, where they did so, they would be less likely to succeed. I ask the noble Baroness to consider very carefully what I have said and to think about what is practical and what is just. We appreciate the position of the small businessman, but we believe that his position is properly accommodated. Despite the eloquence of her speech, I ask the noble Baroness to withdraw the amendment.

9.30 p.m.

Baroness Miller of Hendon

My Lords, I say to the noble and learned Lord the Solicitor-General that I do not accept that the balance is always in favour of the employer because if an employee is claiming that he has not been paid the national minimum wage, how would he know that unless he had some kind of indication as to what he ought to have been paid? It goes both ways. I am glad that the noble and learned Lord thought that I argued a very poor case very well: I thought that I argued a very good case not well enough. However, I shall read what the noble and learned Lord said with great care. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 49 and 50 not moved.]

Clause 34 [Agency workers who are not otherwise "workers"]:

Baroness Miller of Hendon moved Amendment No. 51: Page 24, line 9, leave out from ("principal") to ("and") in line 12.

The noble Baroness said: My Lords, in moving this amendment I speak also to Amendment No. 52. In listening to the Minister's response at Committee stage, I was quite unable to understand why the Government were objecting to a very simple pair of amendments which neither detracted from the principles of the Bill nor reduced workers' rights, but by simply clarifying the legal position it prevented an injustice being done to an innocent employer. However, I accept that the Minister is finding it difficult ever to assume that there is such an employer. Not that the Government seem to accept the concept of there being such a thing as an innocent employer: they all seem to be unscrupulous and goodness knows what they are trying to do.

At one stage the noble and learned Lord the Solicitor-General spoke about an unscrupulous employer pretending to be in financial difficulties in order to avoid paying any wages at all. At Committee stage the noble Lord, Lord Clinton-Davis, managed to conjure up a scenario of an employer deliberately marrying an employee to avoid paying her the national minimum wage. We are not discussing unscrupulous or devious employers trying to deprive the workers of their legitimate rights. We are not discussing workers of the world who have nothing to lose but their chains. We are not involved in the rhetoric of the class struggle which I thought new Labour had thrown overboard with the rest of the socialist baggage, but it may be that, deep down, it has not.

In this amendment we are trying to see that employees get what they are legitimately entitled to under the Act, but to get it from the person who is responsible for paying them and not from a third party with whom—to use a phrase that the Minister has repeated on numerous occasions—the worker does not have a worker's contract. I believe I have said this before this evening, but one thing than a politician hates is to have his words quoted against him. I remind the Minister what he said in debate at Committee stage as regards the first amendment in the Bill. The noble Lord, Lord Clinton-Davis, said, The Bill makes it manifestly plain that the responsibility for"— and we were referring to paying the national minimum wage— lies with the employer, and there is no alternative to that. The approach of the Bill, just as with other employment law, is based on the relationship between employer and worker". A few moments later, he said on the subject of tips: customers in restaurants are not employers … They have no share in the responsibility to pay the staff the minimum wage".—[Official Report, 11/6/98, col. 1199.]

If the customers of restaurants are not employers, neither are the clients of secretarial agencies. If customers in restaurants have no share in the responsibility to pay the staff, neither do the clients of office cleaning contractors. That is notwithstanding the mental gymnastics by which the Government have changed their stance and reversed their own arguments in the 23 pages of this Bill, between Clause 1 and Clause 34, where we are now.

The Minister argued, contrary to what he said on Clause 1, that the client should be potentially liable even if he was not actually the employer. He said that that was because the Government were concerned that there could be cases where there was a doubt about whether the contract was with the agency or the principal. Indeed, he suggested that, Sometimes the existence of a contract is undoubtedly questionable".—[Official Report, 15/6/98; col. 1436]. I do not think that that is right. The existence of a worker's contract can never be in doubt. If A is working for B, that can be only as a result of a contract. However, I shall return to that point in a moment because I do not want to lose the train of my argument.

As I said, the Minister was worried about whether the worker would know with whom he had a contract. On the other hand, I said that there could never be any such doubt. As we both agreed that certainty for the worker was essential on this point, I asked myself how the Minister and I could both look at the same clause, but read it in such different ways. I therefore did what I promised to do when I withdrew the amendment in Committee. I carefully considered and read every single word that the Minister had said. As a result of that reconsideration, I believe that I have discovered the cause of our misunderstanding. The problem is that the Minister is a lawyer and I am not. The problem is the definition of "agency" in subsection (1). The legal concept of an agent is as defined in the Oxford Dictionary as, A person who acts for another in business, politics, etc.". Clearly, that is not the same as what we are considering.

A secondary meaning of "agency", which has crept in recent years, is "a person or a company who provides a specified service". That is the sort of agency about which we are speaking. I refer, for example, to cleaning contractors; catering contractors; those who run works canteens; secretarial agencies; and suppliers of building workers. The people they place with the clients of their agencies are the employees of those agencies, not the employees of the clients. The real test of who is the employer is simple. It is the answer to the question: who actually engaged the worker? The client will usually never have set eyes on the worker before he or she first sets foot on his, the client's, premises. Who is responsible for the PAYE and the national insurance? Does the client pay an ongoing fee to the agency for providing the services of the employee? Can the agency substitute one worker for another if the need arises?

It is simply not credible or feasible that a worker should be engaged by "Cleaners and Dusters International", hand over his P.45 from his former employers and still not know for whom he is working, irrespective of where he was directed to perform his duties. After all, the worker may be sent to several sites in one day. That will tell him that he is not working for the office or site owner, but for the agency. By the very definition contained in Clause 34(1), an "agency worker" is someone who works for an agency and not someone who works for the client.

I refer to the misconception by the draftsman of this clause when he refers in Clause 34(1)(b) to the absence of a worker's contract. As I have just pointed out, in the phrase that I quoted the Minister repeated the same misconception. It is not possible for anyone to be employed by anybody without a contract. If I say to someone, "Come and work for me and I will pay you £x per week" and if he or she says yes, that is a legally binding and enforceable contract. The misconception on the part of both the Government and the draftsman was shared by the late Samuel Goldwyn, who said: A verbal contract isn't worth the paper it's written on". Contrary to what the draftsman thinks and, with the greatest respect, contrary to what the Minister said, the existence of the worker's contract does not depend on the existence of a piece of paper—not even the one that the employer is supposed to supply under the Employment Rights Act 1996 in which the essential terms are to be spelled out for the employee.

The use of the words "the principal" in the clause is a misconception. The so-called agency is not engaging the worker to work for what I have called the client; it is employing someone to perform the duties that the agency itself has contracted to perform for the client to clean his office, to supply a temporary typist, to provide a hospital with a nurse, or whatever the case may be. If those duties are not performed, it is the agency that is liable to pay the client damages. The client has nothing whatever to do with the pay or the other terms of employment of the worker. His entire arrangement is with the agency, as I have demonstrated.

There is absolutely no reason why a worker should be in any doubt as to who is his employer. The Government have themselves made that clear in Clause 12 of the Bill. That clause requires an employer to provide a written statement containing "prescribed information relating to this Act". One assumes that that prescribed information includes the name of the employer. That provision completely negates the Minister's argument at an earlier stage that an employee may not know who is his employer. On the basis of the Government's drafting of Clause 12—to say nothing of the Minister's arguments that I have quoted in relation to Amendment No. 1—there is no reason whatever why the client of an agency should be saddled with the responsibility for matters over which he has no control. For that reason these amendments seek to avoid a possible injustice. In this case I do not ask the Government simply to accept the amendment; I expect them to do so. I beg to move.

Viscount Thurso

My Lords, I intervened to speak to the amendments moved by the noble Baroness at Committee stage. With the massed ranks of my party behind me I should like briefly to speak again to this matter. Having read carefully in Hansard the words of the noble Lord, Lord Clinton-Davis, I concluded that as to the principle of the clause my fears were largely ungrounded but as to the detail it was unclear that the provision achieved what was sought. At Committee stage the noble Lord said that Clause 34 should represent a belt and braces approach, ensuring that where the position was uncertain—because it was unclear whether there was a contract with either the agency or the principal—such workers should be covered. I applaud that. I agree that either the agent or the principal should be responsible.

However, I believe that Clause 34 potentially traps both parties. For example, if in my business I employ a contracting company to install central heating, as Clause 34(1)(a) is written, should that plumber fail to obey the legislation it is possible that liability to ensure the payment of the minimum wage falls upon me as the employer of the contractor. The first matter on which I seek reassurance is whether in those specific circumstances any liability falls upon me as employer. As a sub-question, if in my contract with that plumber I require him to contract that he will obey the legislation, does that provide me with a suitable defence?

I believe that the heart of the Clause 34 is in line 11. Paragraph (b) provides that Clause 34 applies in any case where an individual, is not, as respects that work, a worker, because of the absence of a worker's contract between the individual and the agent or the principal". It is unclear to me whether that deals with the agent or the principal, or both. I believe that if the words "or the principal" are deleted or the word "either" is inserted before reference to the agent or principal the Government will achieve the clarity that they seek.

Secondly, is the position that the Government are seeking to achieve that somebody must be responsible, who will be either the agent or the principal, but that if the principal has taken just cause to ensure that the agent is paying properly, he or she will not be liable simply because the agent has not obeyed the law?

9.45 p.m.

Lord Clinton-Davis

My Lords, first, can I reassure the noble Baroness, who constantly wishes to erect barricades—and I have a sense of understanding as to where she might put herself there—that we certainly have not regarded all employers as unscrupulous. That is nonsensical. After all, employers were involved in the work of the Low Pay Commission—they were involved in the consultation. They do not share the Opposition's sense of foreboding and even malice about the Bill. It is clear that the Government place great importance upon consultation with all sides of industry. That was part and parcel of what we sought to do long before the last election and since. I think that that was unworthy of the noble Baroness. She is often extremely persuasive—albeit wrong—and always entertaining. I hope she will regard that as a compliment.

The noble Baroness said quite rightly that I had referred last time—though I thought I said it was an extreme example—to somebody marrying to avoid the effects of the national minimum wage legislation.

Baroness Miller of Hendon

My Lords, when the noble Lord raised the matter I could not believe my ears, but I was about to say that maybe, if an employer had two female employees, he might suggest that the employer marries both and so commits bigamy in order not to pay the national minimum wage.

Lord Clinton-Davis

My Lords, that is on a par with most of the noble Baroness's arguments during the course of this debate. The fact is that I have heard of less good grounds for marriage. Of course, we were dealing somewhat ironically with the situation.

The noble Baroness said that the existence of a contract can never be in doubt. We have employment tribunals which are constantly visited with these problems. They deal with the nature of a contract, the contracting parties, the legality of contracts and so forth. These matters are not always simple; nor can they be reduced to the alleged commonsense simplicity in which the noble Baroness delightfully indulges us from time to time. She even said that I and my noble and learned friend took a rather different view because we are lawyers; that we look at these things in an arcane way almost deliberately. I would remind her, although I do not think she needs reminding, that she is married to a lawyer, and a very nice labour lawyer he is. I take umbrage on his behalf at that particular remark. Of course one would like to be able to deal in these somewhat simplistic ways, but it cannot always work out like that. That is the problem. That is why there is such a burden of case law dealing with employment matters, and this will not be immune to that.

These amendments, and the point made by the noble Viscount, Lord Thurso, to which I will come later, all relate to Clause 34 dealing with agency workers. It is quite clear that there are some misunderstandings about how the Bill works and the way in which agencies work, and they still remain. What the noble Baroness has argued, in effect, is that the principal, is, as a matter of fact, never the employer. The employer is always the employment agency which supplies the worker. I believe that that is fundamentally wrong. It may be the case in some instances but it is not the case in all instances. The DTI has an entire section devoted to enforcing employment agency standards. I regret to say that there is much case history which shows that sometimes it is not at all easy to determine who is the employer.

In some cases it is clear that it is the principal who is the employer, but not in all instances. We are dealing with the law, perhaps regrettably from the noble Baroness's point of view. There are three parties involved in the arrangements. It is not unusual for there to be more than three. The parties can come up with whatever arrangements suit them. More and more agencies use arrangements where the contract is specifically with the employer and not with the agency.

I want to make clear that there is nothing illegal about that. There are examples in almost every sector of industry. Perhaps I can give an illustration. In the world of the theatre it is often the case that an actor is supplied by an agent but employed by the theatre or film company. It is almost long-established practice. One finds such a situation in many other instances. For the noble Baroness, it is easy to identify the employer at all times, because that is the person who has the contract of employment. With respect, that is a misunderstanding of the clause because the clause does not refer to those with ordinary contracts of employment. Those are the straightforward cases. The clause relates to those agency workers who are not otherwise workers and who cannot be readily identified as being employed by the agent. That is the point I tried to make in earlier debates and the point raised by the noble Viscount, Lord Thurso. The contract cannot be both with the agent and with the principal. It has to be with one or the other.

The majority of agency workers is likely to be covered automatically by the Bill regardless of Clause 34 because they have the status of worker by virtue of a contractual arrangement with the agency or the agency's client whom the Bill identifies as the principal. Most people will be covered by such arrangements. We are talking about a situation where it is difficult to determine the position. There will be grey areas. It is that situation which brings in Clause 34.

I thought that we had explained that point in previous debates. We set it out in the Notes on Clauses. I hope that the noble Baroness will think again about what I have been saying. She was kind enough to say to my noble and learned friend that she will spend all of her working days and working nights reading his words. Perhaps she will do the same with what I have said, but with less emphasis. I referred rightly to Clause 34 being a belt-and-braces clause. I hope that I have dealt with that point. I think that I have covered most of the ground that I wanted to cover in relation to that amendment.

I turn now to Amendment No. 52. I do not entirely dismiss what the noble Baroness said in relation to it. It is an interesting amendment. It relates to Clause 34(2) which, in the absence of the worker's contract, defines the person with whom the agency worker is to be regarded as having a contract. I went into the matter at some length in Committee. Perhaps I may offer a resumé of those arguments.

Clause 34(2)(a) provides that the contract is regarded as being with either the agent or the principal, depending on which of them is responsible for paying the agency worker. Clause 34(2)(b) provides that, where neither the agent nor the principal is responsible for payment, the contract is to be regarded as being with whichever of them actually pays the agency worker.

The effect of the amendment would be that the agency worker would be regarded as having a "worker's contract" in all cases with the agency in the absence of such a contract or in case of doubt as to the person with whom it was held. Is that the right conclusion that we wish to draw here? It is simple; there is certainly an advantage in simplicity. But it would mean that even where it was understood by all concerned—the agency, the principal, the worker—that the principal will pay the worker, the agency has legal responsibility for paying the worker the national minimum wage. I cannot believe that that is a satisfactory outcome for such a situation.

It is not an easy point, but it is important. There is a growing tendency for some organisations to use agency workers to provide flexibility. Although the use of agency workers provides significant advantages to a client company, the uncertainty of the employment status of the worker can lead to a lack of legal protection. That is what we are concerned about in protecting this aspect of the matter.

I said that there was some merit in the noble Baroness's proposal, although I doubt whether all agencies would agree. It would be simpler. It would be easier for agency workers to identify the person from whom they could claim—the agency. It would ensure that agencies could not use the clause as a loophole to put the onus on the client (or principal, in the terms of the Bill) to pay the minimum wage. However, it is difficult to judge the extent of the benefit because it is difficult to determine the likelihood of an agency being able to get away with such a course of action.

I appreciate the importance placed by the noble Baroness on this matter. I do not dismiss it lightly. However, we are of the opinion that the clause as drafted provides a better outcome than the amendment suggested by the noble Baroness. We believe that the amendment would go unnecessarily far by interfering too much in existing arrangements. While, therefore, the amendment would be workable, I do not think that it is as effective as the provision that we have sought to import into the law. If the noble Baroness proposes to read what I have said, I hope that on this occasion she will withdraw the amendment.

Viscount Thurso

My Lords, before the Minister sits down, perhaps I may take what he said as an assurance that where there is a contract with either an agent or a principal, and one of those persons fails to pay the minimum wage, the other person does not become responsible simply by virtue of the fact that they are available.

Lord Clinton-Davis

My Lords, of course not. The liability has to reside with the person who is liable as a matter of law. That is what we seek to assert.

Baroness Miller of Hendon

My Lords, I shall read the words of the noble Lord, Lord Clinton-Davis, with even greater care than I shall read the words of the noble and learned Lord the Solicitor-General, considering the kind words he said about my husband the lawyer. I was not being derogatory about lawyers—far from it. I should not be derogatory about any profession with which my husband is concerned.

We view the agency from an entirely different point of view. The Minister pointed out how the Government view it. Perhaps I may give a purely practical example as someone who has engaged a cleaning agency—let us say, Busy Bees. After a time I got rid of them because every day it was a different worker. I knew not who they were and I did not employ them. My contract was with the agency and it was down to the agency not only to pay the wages but also the income tax. I believe that the provision will turn the meaning of "agency" on its head.

10 p.m.

Lord Clinton-Davis

My Lords, I am grateful to the noble Baroness for giving way. She is saying that she was clear, as a matter of law, that the contract she entered into in those circumstances was with the agency. I do not deny that that occurs. I am saying that one has to be specific as to whom the contract is with: who is responsible for paying the national minimum wage?

Baroness Miller of Hendon

My Lords, I believe that when one has a contract with an agency, the agency is responsible and not the principal. However, as always, I shall read carefully the speech in Hansard, taking note of the response which the Minister gave to the noble Viscount, Lord Thurso. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 52 not moved.]

Clause 41 [Power to apply Act to individuals who are not otherwise "workers"]:

[Amendment No. 53 not moved.]

Baroness Miller of Hendon moved Amendment No. 54:

After Clause 44, insert the following new clause—

FAMILY BUSINESSES

(" . A person who is employed by his spouse, parent or child, or by a private limited company of which his spouse, parent or child is a substantial (but not necessarily a controlling) shareholder, does not qualify for the national minimum wage in respect of that employment.").

The noble Baroness said: My Lords, in moving Amendment No. 54, I shall speak also to Amendment No. 55. I said on the previous occasion that I was disappointed with the Minister's response to Amendment No. 54. Having carefully read what the Minister said, as I promised I would, I have brought it back for your Lordships' further consideration.

In his response to me, the Minister referred to the drafting history of this amendment. Frankly, at that time I could not see the relevance of that because what the Committee had to deal with was only the final version. But his observation on that point and his subsequent remarks lead me to believe that he and the Government have misunderstood the whole philosophy behind this new clause.

It is true that in the other place the amendment was restricted to proposals to exempt spouses. Of course, I was not consulted about the amendment at that stage. But with my own experience both as someone who has managed a rather large family business for some 17 years and as someone with a long and close connection with a small business bureau, I know that many small businesses are not merely run by husbands and wives but that children often work in their parents' businesses and sometimes vice versa. Incidentally, for some reason or other, the Minister thought that I was talking about small children. Of course, that was not the case.

After I tabled the amendment, I continued to reflect on the problems of small businesses, something which I believe the Government have singularly failed to do in relation to this Bill. Passing a local newsagent, I noticed from its sign board that it was operated by a limited company. A huge number of limited companies—in fact, the vast majority of those trading in Britain—are run by members of the same family or by what are in reality partnerships. To my mind it would be unfair if the wife of Mr. Smith were exempted from the national minimum wage, whereas Mrs. Smith, the wife of the principal shareholder of Smith Limited, were not. That is why I closed up the last loophole; not in order (to quote the Minister) to make the matter as complicated as possible.

It is clear that the Minister may well have misunderstood the objectives of the clause. It is not to exclude as many people as possible, as he put it. It is, however, to exclude a group of people in whose private affairs the Government have absolutely no right or reason to interfere. We are not discussing total strangers becoming employees of some person with whom they have no connection outside the relationship as employer or employee. We are discussing people in the closest possible relationships known to the law; relationships which would exist irrespective of family businesses in which they were both working. I refer to a family business where they could have been partners except for the fact that for whatever reason the business is registered in the name of only one of them. These are not cases where the relationship of employer or employee is intended to be created.

In the old, less politically correct days, that relationship used to be called "master and servants". If we were still unfortunate enough to use that phrase, perhaps the Minister would have better understood the difference I was getting at. In these family employment cases, despite whoever is regarded as the owner of the business, for the purposes of income tax, rates, liquor licences, signing leases and so on, they often operate so as to pay the family household expenses without anyone receiving a formal wage. Sometimes a nominal wage is put through the books in order to take advantage of tax allowances. The essential point is that in reality the spouses or the parents or the children do not regard themselves as employees as such. But the definition of "employee" in Clause 1(2) is, of course, wide enough to catch them.

On various occasions in our debates the Minister has sought to refer to a contract of employment as if that is necessarily some formal written document, but I do not believe that it has to be. The employer is supposed to give the employee, a written statement of particulars of employment", in accordance with Employment Rights Act 1996. However, that provision is often more honoured in the breach than in the observance. The contract between the employer and the employee exists whether or not the employer has complied with his obligation to furnish written details.

I believe that the Government cannot have it both ways. Either spouses, children or parents are not employees merely because they work in the family business—in which case why will the Government not agree to make that clear beyond all doubt by saying so in the legislation?—or the Government contend that they are employees and that they claim the right to interfere in the purely domestic arrangements of very close relatives—interference which, by the actions of an over-zealous official whom the Act describes as an "enforcement officer", could result in someone being penalised and acquiring a criminal record because he failed to give his wife sufficient house-keeping money. That interference will simply result in the bureaucratic process of transferring money from one family pocket to another, with of course the Inland Revenue and the Contributions Agency taking a large bite out of it in the process. There is part of the reason for the Government's intransigence over logical requests for exemptions from the operations of the Act.

The Treasury stands to gain considerable sums of money from the stringent effects of the legislation. The amendment is not intended to create exemptions just for the sake of doing so; its intention is to exclude from the Act people who I do not believe should have been caught by it in the first place. The Government must either say that the state definitely intends to interfere in private arrangements between close relatives, or they must say that they have no such intention and concede that the very carefully drafted amendment would prevent this from happening.

I now turn to Amendment No. 55, which involves precisely the same principle as Amendment No. 54. The majority of limited companies are controlled by their directors; in other words, the company which employs the directors is owned by the directors. I shall return to the employment aspect in a moment. What the Government are trying to do is to tell a director how much he should pay himself. If the directors decide that for some reason they cannot afford to pay themselves during a particular pay reference period, or if they decide for some reason that they do not want to pay themselves, they should not have to do so. It is a free country—or at least it used to be before this legislation was introduced. However, if an enforcement officer discovered that the directors were committing the heinous offence of not transferring their own money from one of their pockets to another, it could bring the whole panoply of the enforcement procedures down on their heads.

I turn now to the question of whether a director of a company is an employee. When speaking on the point in Committee, the Minister said that, a director of a company … would not normally be entitled to receive a national minimum wage because the legal status of the director … is that of an office holder".—[Official Report, 22/6/98; col. 59.] However, with the greatest possible respect, I believe that to be a totally specious argument. There is absolutely no reason why the status of being an officer of a company means that someone cannot simultaneously be an employee.

I notice that the Minister did not cite any authority, whether judiciary or statutory, for that statement. However, on the other hand, I did cite an authority; namely, the Secretary of State for Trade and Industry v. Bottrill. Despite this being a case involving his own department, the Minister said that he was not familiar with it. In the month that has passed since the last debate, I hope that the noble Lord has had a chance to look into the matter. The point is that this is the latest in a long line of cases which say that a director is an employee. Even noble Lords who, like me, are not lawyers will recall seeing innumerable reports in the press of directors going before employment tribunals complaining of wrongful dismissal. They were able to do so precisely because they were employees.

The Minister went on to claim that the definitions in Clause 54 make it clear who is covered by the Bill; indeed, that is so. In Clause 54(1) it says that an employee, means an individual who has entered into or works under … a contract of employment". Moreover, subsection (2) says that a contract of employment, means a contract of service … whether express or implied, and (if it is express) whether oral or in writing". Noble Lords should note the words "express or implied", and whether or not the contract is in writing.

The Minister conceded that a director who is an employee of his own company could claim the national minimum wage from that company. I admire his courage in making that point. I would certainly not have dared to advance the argument that a director who had decided to forgo his salary could or would, schizophrenically, lodge a complaint against himself with an enforcement officer. The Minister also conceded that a director who is the employee of his own company may claim other employment rights. Precisely, but the fact is that every director, as I have already pointed out, is an employee as well as being the holder of an office.

The Minister finished his remarks by inviting me to read them carefully. I always pay rapt attention to every single word he utters. I am sorry the Ministers are talking because I very much want them to know that it is rapt attention that I pay to every single word of wisdom that they utter. That is why I was utterly astounded by the Minister's final point, so much so that I could hardly believe my ears. That is why I did not respond on the spot but waited until I was able to read his comments. He said that he could not envisage an enforcement officer taking action against a director employee who did not pay himself the national minimum wage. We are not in the business of passing laws involving criminal sanctions and then approaching the responsible enforcement authority, "Nudge, nudge, do not take any action over this". That is an astounding proposition. If the Minister concedes, as he clearly does, that an anomaly could arise, or that there is a potential ambiguity, or even that there is merely scope for misunderstanding, it is Parliament's job, and the Government's responsibility, to see that it is corrected.

Lord Clinton-Davis

My Lords, I am obliged to the noble Baroness for giving way. It is not unknown to the criminal law even where the law is very specific, for the prosecuting authorities to exercise a discretion in all the circumstances.

Baroness Miller of Hendon

My Lords, that is correct, but it is not normally the case, before a Bill is passed, and while we are debating it, when I talk about a factor that could cause problems, for someone to say that the chances are that that will not be dealt with anyway. One does not know whether that will or will not occur until one knows all the circumstances of the case.

I was saying that if the Minister concedes—as he clearly does—that an anomaly could arise, or that there is a potential ambiguity, or even that there is merely scope for misunderstanding, I believe it is Parliament's job, and the Government's, to see that that is corrected before the Bill is passed (that is the point I was making to the Minister) because afterwards it is too late. My Amendment No. 55 addresses that point. I beg to move.

Lord Haskel

My Lords, the amendment of the noble Baroness would exclude family members from entitlement to the minimum wage. I think that was the point of her argument. We discussed this at some length in Committee. Our objection is that it goes entirely against the thrust of the Government's philosophy and of the Bill. This amendment appears to be yet another example of the Opposition's keenness to exclude as many categories of worker as possible from the minimum wage. Our wish is to include as many people as possible.

The amendment raises issues about the nature of ownership and control and whether a person is a substantial or a controlling shareholder. As regards the Bill, that is something of a red herring. The Bill is founded on the basis of whether or not a person is a worker, not whether he is in control of the business or is a family member. The status of shareholders, or family relationships, have absolutely nothing to do with it. It all boils down to a quite simple principle that a worker should be entitled to the minimum wage, whoever he or she has as his employer.

In particular, I see no reason why a person should be disenfranchised from the minimum wage just because the employer is his or her spouse, father, mother, niece or child, or whatever. However, it all depends on the nature of the relationship. If the family member is a worker, he or she will qualify for the minimum wage. If he or she is simply helping out on an informal basis, that is unlikely to form the basis of a worker's contract. As I said, we wish the Bill to be inclusive, not exclusive. It is a fair and sensible way to proceed. That is why we opposed the amendment previously, and why I recommend that the House reject the amendment on this occasion.

The question of directors was discussed at some length in Committee. The Government have not changed their view, which is clear. Under the Bill, a person who is a director of a company, limited or otherwise, will not normally be entitled to the national minimum wage. But that is because of the legal status of the director. Whether it is a small business—for example, the corner shop of which the noble Baroness is so fond—or a multi-million pound business, the director is an office-holder.

It is possible to be both an employee and a director. There may be many cases where a director additionally has a contract of employment with the business. That may be explicit or implicit. In this case, he or she would also be an employee of the company and would therefore be entitled to the national minimum wage. But that entitlement would be the result not of being a director but of being an employee. That may apply, for example, to some managing directors or directors who are "one-man bands" in charge of their own business.

The Bill is clear in its effect. Directors who are simply office-holders will not be entitled to the minimum wage, and directors who are employees will be entitled to it. The distinction derives from existing employment law.

That is an important point. The Bill relies at heart for its main definition of "worker" in Clause 54 on the approach taken by existing employment law. In the Bill we have tried to follow that. Much of the legislation, including the Employment Rights Act 1996, was introduced or maintained by the previous Conservative administration. I am therefore puzzled as to why the noble Baroness makes continuous efforts to change, or at least appears to call into question, the previous position of people under the Employment Rights Act 1996.

The amendment is therefore not necessary. The definitions in Clause 54 make it quite clear who is covered by the Bill. Where directors are not workers, they will not be covered; where they are workers, they will be covered.

I hope that the noble Baroness will consider this matter of principle and will withdraw her amendment.

10.15 p.m.

Baroness Miller of Hendon

My Lords, I shall certainly withdraw the two amendments that I have spoken to. However, I did not agree with the Minister's remarks. I am surprised that he did not comment on the case on which I asked him to comment; namely, Secretary of State for Trade and Industry v. Bottrill, which I believe refutes what he said. I totally accept that the noble Lord, Lord Clinton-Davis, was not in a position to comment previously. However, I thought that within the month I might receive a satisfactory answer. I suggest that the Minister looks up the case when this matter arises again at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 55 not moved.]

Baroness Miller of Hendon moved Amendment No. 56:

After Clause 44, insert the following new clause—

EXCLUSION OF DISABLED PERSONS AND EMPLOYMENT FOR THERAPEUTIC

PURPOSES

(" .—(1) The Secretary of State may, after consultation with the Low Pay Commission, make an order exempting disabled persons from the provisions of this Act.

(2) An order under subsection (1) above shall provide for the issue of permits by the Secretary of State to those persons whom he believes to be disabled and may make provision for—

1. (a) the procedure for applying for and issuing such permits;
2. (b) the procedure for establishing the minimum wage to which each permit holder shall be entitled (being less than the single hourly rate prescribed under section 1(3) of this Act);
3. (c) the appointment by the Secretary of State of suitably qualified persons to assess such applications; and
4. (d) the procedure for appealing against a refusal to issue such a permit.

(3) No person shall be guilty of an offence under this Act in respect of an employee who holds a permit issued in accordance with an order made under this section.

(4) For the purposes of this section, a person is disabled if he is so affected by physical injury or mental deficiency or infirmity due to age or any other cause as to be incapable of earning the national minimum wage.

(5) A person whose employment is primarily undertaken for the purpose of therapy and whose employer is a non-profit-making organisation does not qualify for the national minimum wage in respect of that employment.").

The noble Baroness said: My Lords, the wording of this amendment is slightly different from that of the one I introduced in Committee. The difference is that I have used the word "disabled" in place of "incapacitated".

Representations were made to me by the noble Lord, Lord Rix, that the word "incapacitated" is objectionable to disabled persons because it is not representative of the problems that they face. Merely because a person suffers from any sort of disability does not mean that that person is incapable of normal, useful and productive activities. Naturally, I accept the correction. I very much hope that my drafting did not cause any offence.

Knowing the capacity of the noble Lord, Lord Clinton-Davis, for compassion, I could not understand his rejection of my amendment, which he agreed related to a difficult issue. We were arguing diametrically opposite cases, but with the same objective: to assist disabled workers. On reading his arguments in Hansard, I think I have discovered the reason. It is the classic conundrum of whether a glass is half empty or half full. The noble Lord saw it as a risk of discrimination, although he was gracious enough immediately to acquit me of any such intention. He said that it could, deny the minimum wage to the very people who are most in need of its protection".—[Official Report, 22/6/98; col. 65.] I, on the contrary, see it as an opportunity for disabled people who would otherwise find it impossible—at the very least difficult—to obtain work to do so.

This amendment is not designed as a licence for what the Government call unscrupulous employers whom they see lurking round every corner and ready to exploit vulnerable people. I was amazed when previously the noble Lord, Lord Clinton-Davis, commented on the fact that I kept saying that the Government regarded employers as unscrupulous. I suggest that, if the noble Lord has time, he should read the debates on some of the other amendments as carefully as I have done and count how many times unscrupulous employers have been referred to.

Lord Clinton-Davis

My Lords, the point I was trying to make was that if everyone in this world was scrupulous we would not require legislation. Most legislation is designed to deal with those people who, ambitiously and deliberately, set about avoiding legal provision. That is why it is necessary to have laws. It is as simple as that. It is the unscrupulous who disadvantage the scrupulous employer by seeking an unfair advantage.

Baroness Miller of Hendon

My Lords, I accept the noble Lord's reasoning for the word, even if I do not necessarily agree with it. The amendment provides the opportunity for sympathetic employers to lend a hand to people with disabilities by enabling them to do a useful and satisfying job, to earn some money of their own instead of relying on state handouts and at the same time to build their own self-esteem.

In his response the Minister quoted selectively from the report of the Low Pay Commission by referring to paragraph 1.6, which said that a majority of witnesses, including the Government, saw no justification for an exemption or a lower rate of national minimum wage for disabled persons. As regards the Government's evidence, they are opposing this amendment, so I expect that that is what they would say. On the other hand, the Minister did not comment on the paper published by the Joseph Rowntree Foundation, published ahead of the Low Pay Commission's report, which I quoted. I remind your Lordships that it said: Disabled people may have been affected by a wider and systematic shift in employment patterns. As the supply of labour has expanded employers have become more selective in their choice of staff. Marginal workers such as disabled have been excluded … preliminary evidence suggests that very few have found a job". The Minister also disregarded the evidence, reported on page 39 of the Low Pay Commission's Report, of the Royal National Institute for the Blind. The institute said: Blind and partially sighted persons face bleak prospects in employment". It goes on: Significantly, blind and partially sighted people are concentrated in lower paying, semi-skilled, unskilled and routine manual occupations … Many blind and partially sighted people are therefore caught in poverty even when in work". I do not understand how the Government can believe that putting another obstacle in the way of disabled people obtaining employment will help them.

I believe that the Government have totally misunderstood the purport of my amendment, which is far more detailed than the one that received perfunctory attention in the other place. I hope that, despite the Minister's very heavy workload, he has had time to consider and reflect on the detail of what I proposed in my amendment and which I explained in Committee. I am emphatically not proposing a blanket exemption from the national minimum wage for disabled persons en masse. This clause provides for an exemption for individuals on a case-by-case basis. Each request for exemption will have to be initiated by the employee, not by the employer or potential employer. Each case will have to be examined on its own separate merits. The Secretary of State will make regulations to prescribe the criteria to be applied in deciding whether exemptions should be granted. I suggested that the procedure should be conducted by those expert assessors who already decide about disablement benefit. But that would be for the Secretary of State to decide. What the doctor or other assessor would be looking at is an applicant who says, for instance, "My disability prevents me from working for more than a few hours a day" or "I cannot go to work more than an odd regular day" or "I can only do limited tasks, but I would like to get a job from a sympathetic employer who is prepared to take me on despite my problems".

We must recognise that many such employers would be willing to employ disabled persons as a commendable social duty. So why should those employers not pay the full national minimum wage? Of course, there is nothing to prevent them from so doing, but human nature being what it is, they in turn may face problems with their other employees—"Why should he be paid the same wage as me when I do more work, produce more widgets in a day or do not need so much time off?" Nothing in the clause requires a disabled person to take a job at an unacceptable wage. Nothing in the clause enables an employer to recruit an employee at a rate lower than the national minimum wage unless that employee has himself obtained an exemption after a stringent assessment procedure.

Finally, I turn to subsection (5), which deals with persons whose work is primarily undertaken for therapeutic purposes with a non profit-making purpose. We are talking of disabled people living in community homes, staying in hospital or attending some kind of day centre. They can often do jobs—frequently handicrafts, but sometimes small industrial applications. The work they do is partly to help them overcome their disability. Pay is not necessarily the prime consideration, though it is a factor in establishing the self-esteem of the worker who is possibly, simultaneously, a patient.

I told the Committee of my experience on a visit to a community home for people—mostly adults with learning difficulties—where I was presented with a vase made by one of the residents who spent his time working in the pottery shop. The shop sells the products to visitors to provide extra comforts for the residents. If the community home had to pay them a commercial wage for work which has no real commercial value, it would simply have to discontinue that operation. That would be to the considerable detriment of the residents who would then have to spend their time watching TV.

My noble friend Lord Oxfuird is not able to be present today. If he had been, he would have told your Lordships of a letter he received from the Enham Trust—a charity with which he works for those suffering from cerebral palsy. The national minimum wage would be to the disadvantage of disabled workers and may impose extra financial burdens on the excellently supported employment programme administered by the Employment Service Department.

In closing their ears to our request for disabled persons to be exempted, if they individually ask to be, do the Government realise the wider implications of that action? This is one case where the Government cannot produce their usual scenario of an attempt by some unscrupulous employer to evade the Act. The qualification is that the employer providing therapeutic work must be a non-profit-making organisation. Similarly, no part of the first four subsections will enable any employer to evade the Act. It will not affect a disabled person unless he and nobody else applies for the exemption. He will not obtain that exemption unless it is granted after careful appraisal by a qualified assessor using the same criteria as apply to evaluating a person's disability for other purposes. It is entirely to the advantage of the employee and nobody else. For the Government to continue to refuse to agree to the exemption will condemn numerous disabled people to exist, often for life, on benefits doled out by the DHSS offices instead of the benefit of useful and fulfilling work.

The noble Lord, Lord Rix, is also not in his place. I saw a copy of the letter he wrote to the Minister as chairman of MENCAP—the organisation that he leads with such distinction. I believe it is a fair reading of his letter that MENCAP would not wish in any way to become involved in what it sees as a political dispute—and that is quite right in view of its charitable status. He shares the Minister's view which I have already quoted; that is, that the pay of the disabled is a difficult issue. He reminded the Minister that MENCAP's evidence to the Low Pay Commission was that in reality the employer is often doing the disabled worker a favour and is not necessarily guaranteed to do so if the cost is doubled. He pointed out that even low wages were far better than the derisory sums they received at some day centres.

The noble Lord, Lord Rix, posed two questions to the Minister, of which I only wish I had been the author. So I repeat them myself because they require simple, straight answers, yes or no. First, are the Government suggesting that all arrangements for disabled workers below the national minimum wage should become illegal and that this is the necessary price of progress for the wider constituency of low paid workers? Secondly, is not the function of the national minimum wage to lay down some rules at one end of the spectrum and not to rule out provision at the other end of the spectrum? The noble Lord, Lord Rix, said that he did not wish to undermine the national minimum wage. Well, I admit that he and I do not see eye to eye on the worth of this politically doctrinaire piece of legislation. But he also said that he did not wish to undermine jobs which are of importance to those disabled persons who have them but which are not viable at the national minimum wage levels. The noble Lord, Lord Rix, asked the Minister to help him; and so do I. I beg to move.

10.30 p.m.

Viscount Bridgeman

My Lords, in supporting my noble friend Lady Miller in her amendment, perhaps I may further refer to the findings of the Low Pay Commission. In Committee, the noble and learned Lord the Solicitor-General quoted the Low Pay Commission: Moreover, for those people with severe disabilities that limit their productivity, the Government funds the Supported Employment Programme which helps employers recruit and maintain these workers in jobs".—[Official Report, 22/6/98; col. 65.] That is all very fine in theory and we must indeed pay regard to the Low Pay Commission's findings. But what are the practicalities? We are looking at a small firm. There will be a good deal of ill-affordable time tied up in getting the various subsidies available and almost certainly they will come after the wage has been paid, so there will be a cash flow problem for small firms. The result will be that employers with the highest intentions will say, "This is not worth the candle", and a disabled person will lose that chance of a job. That must be of concern to every Member of your Lordships' House.

How much simpler it would be if we could go straight to the problem so that, as my noble friend outlined, each case was individually dealt with? We are not talking about a sweat shop composed of disabled people. This issue is not sectional and is not political. It is of the highest public concern. I urge the Minister to think again about making an exemption for this disadvantaged group of people.

Lord Falconer of Thoroton

My Lords, in Committee we discussed an almost identical amendment. The noble Baroness has indicated why it is not identical. I entirely respect her reasons for changing it, but it has the same effect. It is a fundamental principle and one that we would all share that disabled people should not be discriminated against in the workplace. I appreciate that that is not the intention of the amendment; rather it is to allow a permit system to operate allowing partial exemptions on the basis of incapacity and to exempt those who work for therapeutic reasons. The amendment risks discrimination, although that is not its intention. It invites us to distinguish between the able bodied and those who are, to quote her amendment, incapable of earning the national minimum wage". With respect to the noble Baroness, that is a loose and difficult concept. In practice, the amendment could lead to the totally unacceptable situation where some people are denied the minimum wage when they have just as much right to it as anyone else. It could easily become the thin end of a very large wedge, denying the minimum wage to the very people who are most in need of its protection.

Perhaps I may refer again to what the Low Pay Commission had to say on these points. I do not make any apology for returning to this part of the report on such an important matter. It faced up to the issue. We all recognise that it is a difficult issue and we all recognise that it is an issue on which we want to come to the right conclusion. Having taken considerable evidence, the Low Pay Commission stated at page 14, paragraph 1.6 of its report, We believe that there are compelling arguments for treating disabled workers in the same way as other workers. To do so recognises the value of disabled workers to employers and supports a culture of social inclusion". I believe that is what we all have in mind. The noble Baroness, Lady Miller, then referred to page 39, paragraph 3.15. The relevant part of that report states, Blind and partially sighted people face bleak prospects in employment. In addition to the barriers to securing and retaining paid work there is extensive discrimination in work. Significantly, blind and partially sighted people are concentrated in lower paying, semi-skilled, unskilled and routine manual occupations, and fewer are employed in professional and skilled occupations. Many blind and partially sighted people are therefore caught in poverty even when in work". I see absolutely no reason why such people should not have the protection of the national minimum wage. I think it is not appropriate that, because it can be argued that they could fall within the definition of somebody incapable of earning a minimum wage, they should not be treated exactly like those who are sighted. They are just as strongly entitled not to be exploited as everybody else.

Why did the commission arrive at the clear conclusion that it did, the conclusion that I believe the noble Baroness accepts it reached? It is because it recognised the overwhelming rightness of the case. It notes that, although a "small minority" of those who gave evidence had suggested exemptions or lower levels for the disabled, the vast majority saw no justification for that.

I believe that it is highly significant that the commission's very wide ranging consultations did not report any support for the type of arrangements proposed by this amendment. Yet the commission received views from several organisations representing or with interests involving the disabled. Perhaps I may mention who they were. They were, the National Advisory Council on Employment of People with Disabilities; the National League for the Blind and Disabled; the Royal Society for Disability and Rehabilitation; the Royal National Institute for the Blind and the Royal Society for Mentally Handicapped Children and Adults. What are their views on the noble Baroness's proposals? They all gave evidence to the Low Pay Commission, which rejected the idea of any sort of amendment along the lines suggested by the noble Baroness. It is a difficult issue and we have to come to the right conclusion on it. We have thought about it a great deal. The weight of opinion is against this sort of amendment, but if the noble Baroness tells us that these bodies thought we were wrong, they should tell us.

The question of therapeutic earnings is a separate point. The commission's report points out that, for those with severe disabilities that limit their productivity, the Government fund a supported employment programme which helps employers recruit and maintain these workers in jobs. The noble Viscount, Lord Bridgeman, said that that was all very well in theory, but what about the practice? The supported employment programme helps about 22,000 people with severe disabilities who can work but who are unlikely because of their limited productivity to get or keep jobs in open employment.

Government funding is being maintained at over £155 million for 1998–99. In my book that is going a lot further than simply putting forward theoretical ideas. It is a very practical way of helping the people who are most concerned. Anyone working on a voluntary, unpaid basis will be exempt in any case as a result of Clause 44, which is the clause dealing with voluntary workers. We have thought about it and we very much hope that the noble Baroness will consider the matters I have referred to in relation to these amendments and will withdraw the amendment advanced and not move the others.

Baroness Miller of Hendon

My Lords, I agree with the noble and learned Lord that this is a very sensitive issue. It is clearly a very difficult one. As I believe I said when I moved the amendment, we both want exactly the same on both sides of the House, but it is simply that we believe there is a different way.

Lord Clinton-Davis

My Lords, perhaps I may allude to the letter to which the noble Baroness referred and of which my noble and learned friend the Solicitor-General was not aware. I have not seen that letter. I note that it is not dated. I am grateful to the noble Baroness for making a copy available. I shall, of course, make investigations into the matter, but I am informed by my officials who are present tonight that they have not seen the letter either. I shall find out from my private office whether it has been received. There may be a simple explanation, but I shall certainly look into it.

Baroness Miller of Hendon

My Lords, I am sure that there will be a simple explanation. I am certain that both sides of the House share the view that this is a difficult issue. We think that our way is better, but I take support from the fact that the Minister has said that the Government have gone into this carefully and that they believe that their way is right. I hope that it is. Indeed, I am sure that if time should show that it is not right, the Minister will ensure that his Government come back with some alterations to the provisions. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 57 not moved.]

Schedule 1 [The Low Pay Commission]:

[Amendments Nos. 58 and 59 not moved.]

Lord Clinton-Davis moved Amendment No. 60:

Page 36, leave out line 26.

The noble Lord said: My Lords, in moving Amendment No. 60, I should like to speak also to Amendments Nos. 61 and 62. This is a technical drafting amendment which is designed to avoid wording that some might regard as offensive. Perhaps I may take a moment to explain what this is all about.

Paragraph 1 of Schedule 1 relates to membership of the Low Pay Commission. Paragraph 1(6)(b) as currently formulated permits the Secretary of State to dismiss a member of the Low Pay Commission who is, incapacitated by physical or mental illness". I believe that it is as well to avoid that particular formulation. Instead, the three linked amendments achieve the same result as the original intention, which is to ensure that the Secretary of State can terminate the duties of any Low Pay Commission member who, for whatever reason, is unable to carry out his functions as a member. I hope that the House will be able to support the amendments. I beg to move.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendments Nos. 61 and 62:

Page 36, line 29, leave out ("who") and insert— ("(d)").

Page 36, line 29, leave out ("otherwise").

On Question, amendments agreed to.

[Amendment No. 63 not moved.]

Schedule 2 [Amendments relating to remuneration etc of agricultural workers]:

Lord Clinton-Davis moved Amendments Nos. 64 and 65:

Page 41, line 26, leave out from ("1998") to end of line 30.

Page 46, line 29, leave out from ("1998") to end of line 33.

On Question, amendments agreed to.

Lord Clinton-Davis moved Amendment No. 66:

Page 46, line 43, leave out ("Act") and insert ("section").

The noble Lord said: My Lords, this is a purely drafting amendment. I beg to move.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendment No. 67:

Page 51, line 31, leave out from ("1998") to end of line 35.

On Question, amendment agreed to.

House adjourned at sixteen minutes before eleven o'clock.