Public Interest Disclosure Bill

HL Deb 05 June 1998 vol 590 cc611-39

12.34 p.m.

Lord Borrie

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Borrie.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Murton of Lindisfarne) in the Chair.]

Clause 1 [Protected disclosures]:

Lord Wedderburn of Charlton moved Amendment No. 1:

Page 2, line 13, after second ("disclosure") insert ("knowingly or recklessly").

The noble Lord said: Perhaps I may explain the approach which my noble friends and I have taken as regards amendments to this Bill. I was unavoidably absent at Second Reading, but I share the view expressed by many in that debate—by the Minister, the noble Lord, Lord Borrie, and my noble friends Lady Turner and Lord McCarthy—that this is an excellent and long overdue venture. It follows the usual procedure now for matters of this kind of a Private Member's Bill supported by the Government. I congratulate the noble Lord, Lord Borrie, and the members of Public Concern at Work on putting this Bill forward.

However, no Bill is perfect. We apprehend that it is equally our job, with a Bill that goes through this procedure, to suggest revisions where we believe it is proper so to do. But it is sometimes difficult to know to whom to direct the suggestions, whether to the originators of the Bill or to the Minister. No doubt they will explain their own individual positions.

In addition, we have not tabled every possible amendment that we believe should be made. Perhaps I may use this opportunity to mention one or two matters which deserve a second look, but which we did not include in our amendments. For example, in the new Section 43C it is suggested that an employer may—or by inference may not—authorise a grievance procedure. At Second Reading (Hansard, 11/5/98; col. 901.) the Minister said, very sensibly, that employers, may build upon existing grievance procedures or it may be more appropriate to designate a senior manager, the company's lawyer or an auditor as the person with whom concerns should be raised".

Perhaps the Bill does not take full account of the fact that in 1995 the Employment Appeal Tribunal held that in these days, It is an implied term in a contract of employment that the employers will reasonably and promptly afford a reasonable opportunity to their employees to obtain redress of any grievance they may have". That was in the case of Goold v. McConnell in 1995. I am not suggesting—and neither are my noble friends—that a grievance procedure, as it is usually understood, is precisely the sensible procedure to have for disclosures of this sort, but with a small amount of adjustment what is now a legal duty could be made to serve, as the Minister suggested, in this Bill.

We have not put down amendments on the question of the burden of proof. I ask the Minister if he will, with his skilled advisers, look through the Bill to see exactly on whom lies the burden of proving something true or false.

I shall speak to Amendment No. 1, which arises in this way. The whole philosophy of the Bill would appear to be based on a worker taking reasonable action on the basis of reasonable belief. That does not in any way summarise fully the terms of what will be new Sections 43C, 43G and 43H on which we shall no doubt spend more time later. The thread that I found was that if a worker is behaving reasonably, he might on the whole be able to slip through these hoops.

However, that is certainly not so with regard to one subsection. I refer to the case of a worker who in good faith and reasonably, so he believes, wants to disclose to a proper person some misfeasance of Maxwellian proportions. He may find that unintentionally he has transgressed some strict rule of the criminal law. We no longer teach our students that mens rea or a guilty mind is necessarily part of a criminal offence. If that employee is working with someone who is hacking information from another programme—a few years ago we made that a crime—he may not know that that information is coming from a young hacker, who will probably be aged about 12 because in order to get a really good hacker one has to go down the age range, that employee will be committing a crime. However, the worker sitting next to him, who then wants to disclose the matter, may he an accessory. In certain circumstances, I would be prepared to argue that he could be a principal.

The example that is usually given is of someone finding that he is acting contrary to by-laws. That arises especially where a worker is giving the information, on paper, as it were, in a place where he is not supposed to do that. It is easy to find by-laws that may be transgressed. It has been suggested to me that there may be situations in which such an employee could innocently trespass with others into private property and find that he was part of an aggravated trespass under the Police and Criminal Evidence Act.

In such circumstances, the amendment suggests that that employee may be made to lose his protections under the Bill—that is what is at stake in subsection (3)—if he commits any criminal act with or without mental intent. The amendment retains the loss of protection where the worker has acted either knowingly or recklessly in that way. The word "recklessly" covers a wide ground. As the noble and learned Lord, Lord Denning, once put it, it is the man who turns a blind eye. Other members of the judiciary have described it as including "Nelsonian knowledge". I accept that. Indeed, I am asking for a small area of ground in which the worker maintains the possibility of protection under the rest of these provisions when he knows none of the elements, and has failed to inquire into any of the elements, which constitute a criminal offence.

At Second Reading, the noble Lord, Lord Borrie, said something with which I entirely agree. He said: This … will become a statute which will not be easy for the ordinary worker in the workplace to interpret without some help".— [Official Report, 11/5/98; co1.904.]

I entirely accept that. Indeed, I have adopted that line. Surely the ordinary worker will understand whether he is being penalised—because now we are saying that he will lose his protections—just because in the course of his action he wandered into some area of criminal liability about which he knew nothing and of which no one had advised him. If the employee has reason to take advice, that still falls within the provisions of the Bill. Surely it is not a circumstance which should remove the protection of disclosure by a worker wholly taken by surprise at his criminality. I fear the day when the worker is deprived of his protection when others are not merely because of what may be the accident of criminality in the actions in which he has joined. I take it that the provisions would cover the position of a worker who is part of a group which could be said to be a conspiracy, aiming at the same venture; the acts of one being attributed as the acts of all.

This is a small amendment, based on what many people believe to be the philosophy of the Bill, which is that if workers act reasonably, are sensible, and take advice when they obviously should, they will be protected in a broad sense. We think that subsection (3) offends that. We do not believe that there is any problem with the Official Secrets Act. Anyone who is subject to that Act will know that they have to get things cleared. We thought that we should table this small amendment for your Lordships' consideration. I beg to move.

12.45 p.m.

Lord Nolan

I totally applaud the motive underlying the amendment, and perhaps I may say a word or two about it. The clause as it stands requires proof of the commission of a criminal offence by the employee who is to be deprived of the protection of the Bill. If he has been prosecuted in a criminal court, questions of proof will proceed on ordinary lines. If the question arises in, say, an industrial tribunal, I believe the law to be that the offence would still have to be proved according to the standard appropriate for crime. That was certainly the view expressed by my noble and learned friend Lord Lane when he was Lord Chief Justice, and on a number of occasions by my noble and learned friend Lord Denning. It would be a rare and rash judge who would take a different view.

I cannot put my finger on every one of these offences, but I suspect that many, if not all, contain their own specified type of guilty mind, guilty knowledge or perhaps a defence for the innocent, unwitting transgression of a statute. I wonder whether some confusion might arise if, on top of the requirements of the provisions for the commission of a particular offence, the tribunal considering the matter has to add in the adverbs "knowingly or recklessly". Might that not present the tribunal with some difficult questions of law when I hope that that will not be necessary? In other words, I hope that the fact that the offence has been committed will itself be a matter of sufficient gravity as to deprive the employee of the protection of this measure as long as he fulfils the ordinary requirements of the relevant Act for the commission of the offence. Of course, it might be one of strict liability, but they are rare. Usually some guilty mind is required. I question whether the additional words might muddy the waters instead of clarifying the law, which is the intention of the amendment.

While I am on my feet perhaps I may add that, like my noble and learned friend, I was unable to attend the Second Reading debate. However, I should like now to welcome the Bill. My three years in a previous incarnation as chairman of the Committee on Standards in Public Life persuaded me of the urgent need for such a measure. That view was shared by all my fellow committee members. I congratulate the noble Lord, Lord Borrie, and his colleagues at Public Concern at Work for so skilfully achieving the essential but delicate balance in this measure between the public interest and the interests of employers.

Lord McCarthy

Perhaps I may disagree with the direction taken by the noble and learned Lord. He seems to be concentrating on what might happen if a case got to court or to a tribunal. The noble and learned Lord may be right about that; I would not know; but the object of the Bill is to get things started. The object of the Bill is that if workers believe that their employers, or those acting for them, have committed a criminal offence, not complied with a legal obligation, have been party to a miscarriage of justice, have put at risk health and safety and so on, they want to know whether they can do anything about it under an Act of Parliament. Can they now do something about it? The Bill states that they can take advice from a lawyer. We say that they should also be able to see a trade union official. But what will they be told? They will be told that, while they may have evidence, they cannot know all the details, what the employer's defence will be or whether he has certain explanations for what has happened.

The worker may say that that is all he knows and ask whether he can have a go. We suggest that at that moment the person who offers advice can say to the worker that he will not be done for ignorance but for recklessness. It will require caution and care, but if there is something of which the worker is unaware he will still be protected. We fear that unless something like that is available at the beginning of the process there will not be a process at all.

Lord Haskel

I very much welcome the contribution of the noble and learned Lord, Lord Nolan, to our consideration of the Bill today, and in particular his support for it. The Bill fulfils one of the key points made in the second report of the Committee on Standards in Public Life which the noble and learned Lord chaired with distinction: the need to encourage greater openness within organisations when dealing with wrongdoing or failures. We feel that this Bill will encourage greater openness in both the public and private sectors. I also acknowledge the important work carried out by the noble and learned Lord's committee identifying the need for effective internal procedures to allow employees to raise their concerns. We believe that the Bill will encourage employers to use existing procedures or to introduce new ones where necessary to facilitate internal disclosures and the prompt resolution of problems.

Turning to the amendment, Section 43B(3) in Clause 1 excludes protection for workers where they make a disclosure that involves a criminal offence. The Bill could not possibly provide carte blanche protection for those who made disclosures that breached other statutory prohibitions on disclosures and therefore involved criminal offences. If it did, the Government could not possibly support such a measure; yet the purpose of the amendment is to provide a defence in a case where the individual did not know, and it was reasonable for him not to know, that an offence was being committed.

We believe that the amendment is both unnecessary and undesirable. In some cases lack of knowledge is already a defence against breaches of statutory prohibitions on disclosure, and one example of that is the Official Secrets Act. In such cases the amendment would assist workers. However, ignorance of the law in other cases is no excuse. The Bill must not undermine the statutory provisions that Parliament has put in place. If individuals ought to be able to disregard the law because they did not know of its existence, that should be provided in the statute itself, not just in the particular circumstances covered by this Bill. The effect of the amendment is that employers could be prohibited from disciplining an employee who had committed a criminal offence. That cannot be right.

I turn to the particular case of the hacker raised by my noble friend Lord Wedderburn. Section 43B(3) in Clause 1 excludes from protection disclosures which involve a criminal offence, but that does not mean that there must necessarily be a conviction or a criminal prosecution for the section to apply. My noble friend Lord McCarthy referred to the Bill being reasonable. I believe that if the matter went before a tribunal a high standard of proof would be required before the tribune could decide whether an offence had been committed. That would ensure a fair hearing for the employee. Nor would it be the same as finding the individual guilty of a criminal offence. But clearly it would be wrong to protect workers who had broken the law and the Bill cannot do so. Bearing that in mind, I hope that my noble friend will reconsider his amendment.

Lord Borrie

This Bill is meant to encourage any worker in any workplace who discovers a malpractice of some kind, whether it is financial, a breach of safety regulations or the commission of a criminal offence by the employer—several examples were given by me and other noble Lords during Second Reading—to disclose those matters in the public interest. It is not concerned with a worker who wishes to disclose some malpractice for his own ends, possibly to try to gain a private advantage. As the title of the Bill clearly indicates, it is concerned with the public interest. In our society and the general scheme of things because the law states that a criminal offence can be committed only when it takes place knowingly or recklessly, or where it is a strict liability offence, as my noble friend Lord Wedderburn has indicated, it is very difficult to say that the commission of a criminal offence by a discloser can nonetheless be in the public interest. That is the difficulty I face in supporting the amendment.

I am most grateful to the noble and learned Lord, Lord Nolan, not only for his support for the Bill but for his comment that, as and when a matter of this kind comes before an industrial tribunal, because a worker, having disclosed some malpractice, is victimised or dismissed, if it is faced with the argument on the part of the employer that the employee, by disclosing the malpractice, has committed a criminal offence that must be proved before that tribunal to the criminal standard; that is, beyond reasonable doubt. The case cited by the noble and learned Lord, Lord Nolan, was one decided by the former Lord Chief Justice, the noble and learned Lord, Lord Lane, who held that in disciplinary proceedings involving a solicitor, where it was alleged that a professional had committed a serious crime, the tribunal should apply the criminal standard of proof. Having in mind the situations that may arise under this Bill, the consequences for the reputation and employability of an employee who is dismissed because he is thought to have committed an offence of some kind will be no less grave than those for a professional such as a solicitor who is struck off as a result of allegations of a serious crime affecting his professional integrity. Therefore, I respectfully agree with the noble and learned Lord, Lord Nolan. I suggest that it is safe to assume that an industrial tribunal will follow that precedent and adopt the criminal standard of proof in applying Section 43B(3).

My noble friend Lord McCarthy said that that may well be the situation if the matter comes to an industrial tribunal, but he is concerned with the encouragement or discouragement at the earlier stage where an employee is considering the possibility of disclosing a malpractice, going perhaps to someone for advice on the subject and being told, "Well, there are certain provisions in the Act which will protect you if you are victimised as a result of disclosing a malpractice but not if you commit a criminal offence". But anyone, including any lawyer, with whom that is discussed will surely make the point made also by the noble and learned Lord, Lord Nolan, that the employer will not have any defence to a claim for unfair dismissal following victimisation and so on unless it can be proved to a criminal standard of proof that an offence has been committed.

I do not think I need to go into the Official Secrets Act because, although that was raised during the Second Reading debate by the noble Lord, Lord Newby, my noble friend Lord Wedderburn has appreciated that there are defences there if a prosecution is brought under that Act, whereby no offence is committed should there be reasonable cause to believe that the matter did not relate to defence or security matters, intelligence and so on.

There is a residue, if one may put it that way, of purpose to this amendment which I respect. It relates solely to strict liability offences. However, apart from the point made particularly by the noble and learned Lord, Lord Nolan, with regard to the burden of proof before any industrial tribunal, in many of the secrecy offences—of which there are several hundred involving strict liability—there is no matter of having to prove knowledge or recklessness before you can be found guilty. The freedom of information White Paper which was produced a few months ago, Cmnd. 3818, entitled Your Right to Know, points out: The Government intends where appropriate that the new Act— the freedom of information Act, as it will be— should repeal or amend the many existing statutory bars to disclosure that have been identified". If it were not for that, I would see a greater risk which the amendment would justify and would be seeking to deal with. However, I am content that many provisions are being reviewed by the Government concerning strict liability offences. One hopes that the Government will bear in mind these matters when they come to the freedom of information Act as it will eventually become, and the earlier secrecy provisions in a whole range of Acts of Parliament will disappear.

It seems to me that at the end of the day in a public interest disclosure Bill it is not appropriate to say that it is in the public interest to disclose things that are under the existing law criminal. Let us rest on the belief that many strict liability offences that currently exist perhaps should not exist and can be argued against in due course when we discuss the freedom of information Bill. I would ask the proposers of this amendment not to pursue it because it is not appropriate, in a Bill dealing with particular matters of disclosure between employers and employees, to seek to make it appear that it is in the public interest to disclose something even though the disclosure involves something that is currently a criminal offence.

1 p.m.

Lord Wedderburn of Charlton

I thank those who have made comments on our amendment and I shall try to be brief in responding. So far as the Minister is concerned, my noble friend spoke at one point about convictions, but of course this amendment is not about convictions. The problem which the noble and learned Lord and my noble friend Lord Borne have touched upon is twofold. First, it has behind it a whole raft of sections of clauses which express the public interest in terms of what it is right or not right for the worker to disclose. We have such a complicated set of provisions on the public interest that I take it my noble friend Lord Borrie is reasonably satisfied with them as he has not put down any amendments. Therefore when it comes to the tribunal, it comes, it is true, as a civil matter but, subject to one place—I cannot find any other place in the Bill where this is so—it comes to the tribunal with the question: was this dismissal protected or was this detriment within the terms of what we will come to later on?

The tribunal, the EAT, the Court of Appeal and, if need be, the House of Lords will decide this according to the usual civil tests of probability. Of course counsel may say—my noble friend Lord McCarthy made the point—or the manager may say to the worker, "Don't you go on with this because I have got a little strict liability crime in my books that I have been told about and so you had better shut up". The employee, being on the one hand a very loyal employee and on the other hand subject to the problems of flexibility these days, says, "Oh dear". If I may say so, building a point for those to come later, that is the point at which he needs his trade union official. But many workers will say, "I had better shut up".

We must remember that the point of new Sections 43A and 43B, especially subsection (3,) is that they knock the whole procedure down into the dustbin. If you cannot pass that, you do not get to all these wonderful procedures in the remainder of the new sections. We will look in Hansard, but I am not sure that my noble friend Lord Borne did really represent the amendment. We are not planning to have any Divisions today and this is the only chance we have of discussing this very important Bill. But the worker may not know, has no reason to know and could not with reasonable acts and omissions know that there was some element of criminality here. My noble friend Lord Borrie asked, "Do you mean to say that he did not have any of those things? Are you going to exempt him from a number of secrecy provisions?". I would say, "Yes". It is not unknown for one Bill to adapt itself to another. If the criminal argument is strict—because I believe that the public interest has to be served—he is then allowed, not necessarily to disclose, let us be clear, but he is past the first hoop and he can go on to new Sections 43B, 43C and so on.

What resistance to this amendment does is to cut him out, very likely in a situation where he most needs advice and does not have it, probably on the shop floor. After that, one wonders what will happen. However, I can see that we are not going to get any assistance on this, although I was hoping that the Government would say they are going to look at this. The whole point of a Committee stage is to be able to look at matters such as this before the later stages of a Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Turner of Camden moved Amendment No. 2:

Page 2, line 35, at end insert ("or ( ) to an independent adviser falling within the terms of sections 9 and 10 of the Employment Rights (Dispute Resolution) Act 1998.").

The noble Baroness said: I beg to move Amendment No. 2. It will perhaps be recalled that at Second Reading several noble Lords referred to the need to refer to unions as being appropriate organisations to which individuals could report dangerous or fraudulent practices. I referred to the Private Member's Bill that I, with the help of my two noble friends, Lords Wedderburn and McCarthy—I am glad to see them here today—succeeded in getting adopted several years ago.

It will be recalled that the appalling Piper Alpha disaster might have been prevented had reports been made earlier about dangers inherent in the practices being carried out or omissions that had occurred. In that incident, it became clear that the unions to which many of the employees belonged were not recognised. Indeed, the employers were hostile. Moreover, since employees were employed on short-term contracts, they were unwilling to be identified as possible trouble makers since they otherwise would probably not have had their contracts renewed. Our whistle blowers' Bill gave such individuals who reported on unsafe practices protection without their having to wait two years for it as was normal in the case of other unfair dismissal cases. That Bill was later absorbed in a more general health and safety at work measure now on the statute book.

However, it was natural for the employees at that time to report their concerns to the unions. Our amendment makes that explicit in the new Bill. We have taken wording that already exists in legislation and which has, moreover, been used by a Bill recently accepted by the Government (now an Act), the Employment Rights (Dispute Resolution) Act. That defines who is a relevant independent adviser. I quote from the schedule to the Employment Rights (Dispute Resolution) Act 1998. A relevant independent adviser is such for the purposes of the legislation,

1. "(a) if he is a qualified lawyer,
2. (b) if he is an officer, official, employee or member of an independent trade union who has been certified in writing by the trade union as competent to give advice and as authorised to do so on behalf of the trade union,
3. (c) if he works at an advice centre (whether as an employee or a volunteer) and has been certified in writing by the centre as competent to give advice and as authorised to do so on behalf of the centre; or
620
4. (d) if he is a person of a description specified in an order made by the Secretary of State".

It seems to us that this is a comprehensive, good and complete definition. It deals also with the situation if the union is not recognised.

It is important to have such a measure in the Bill. As at present drafted, protection exists if the union's solicitor intervenes on behalf of a member. But if the intervention is by an authorised union official who may know a great deal more about the circumstances involved than perhaps an outside lawyer, then the protection is not explicit. I believe that that was not the Government's intention, or that of the noble Lord, Lord Borne, in drafting the Bill. I am certain that it was intended that unions should be given status within the context of the Bill. I beg to move.

Lord Gladwin of Clee

I support the amendment because, together with my noble friend Lady Dean of Thornton-le-Fylde I am a member of the council of the Public Concern at Work. I am anxious that the Bill should reach the statute book as soon as possible. I believe that every effort should be made to encourage industry and commerce to create credible machinery in which employees have faith so that perceived malpractices and wrongdoing can be handled internally. The Bill deals with circumstances where such machinery does not exist. That brings me directly to Amendment No. 2.

In my experience as a trade union official, the normal channel for an employee to seek to reveal a perceived wrongdoing is to his or her trade union official, usually a fairly senior official outside the immediate place of work; in other words, the kind of union official described several times in Schedule 1 to the Employment Rights (Dispute Resolution) Act which my noble friend has already cited. If someone has been certified as competent and authorised to give advice, why cannot disclosure to such a person be protected?

Secondly, I find a lack of clarity between disclosure made to a trade union official in a workplace where the union was recognised, and one where there was no recognition. Where unions are recognised, there is normally a collective agreement covering terms and conditions of employment, grievance handling and disciplinary procedures. My guess is that as yet few of the collective agreements specifically refer to whistle blowing. In those circumstances, will a disclosure made in good faith to a union official—after all, he may be the signatory of such a collective agreement—be a protected disclosure; and, if not, why not?

The third situation relates to an employee who is a trade union member but works in a workplace which does not recognise trade unions for collective bargaining, so there is no collective bargaining agreement; there is no whistle-blowing procedure. The employee goes to his union official and in good faith discloses his concern about perceived wrongdoing. My noble friend has pointed out that it would appear that if the union's solicitor writes to the employer the disclosure is protected. But if the union official takes the matter up, then the disclosure is not protected. Is that correct? If it is, is it not quite unreal?

Finally, I have a direct question of the Minister. How does the exclusion of trade union involvement in this Bill square with the proposal in the Fairness at Work White Paper which proposes the creation of a legal right for employees to be accompanied by a trade union representative during grievance procedures? I welcome clarification from both my noble friends.

1.15 p.m.

Lord Haskel

When my noble friend Lord Borrie spoke to the first amendment, he reminded us that we want to encourage the use of proper internal procedures. That is why the purpose of Section 43C in Clause 1 of the Bill is to encourage workers to raise their concerns with the employer first, whether directly or through proper internal company procedures. They need only act in good faith in doing so, which is deliberately not an onerous condition.

The Bill is therefore very much in line with the Government's partnership approach, which seeks to encourage greater co-operation between employers and workers and trade unions.

I appreciate my noble friend's wish to see a role for trade unions in internal whistle-blowing procedures. But the amendment is not the best way to go about it. My noble friend Lord Gladwin asks how this is reconciled with the Fairness at Work White Paper. The Government have already set out a package of proposals in the Fairness at Work White Paper. It is in that context that we should regard the role of employers, workers and their representatives, including trade unions, in establishing greater co-operation. The White Paper includes welcome proposals on trade union recognition and proposals making it unlawful to discriminate by omission on grounds of trade union membership or non-membership. Indeed, the paper lays down proposals about workers being able to be accompanied by a trade union official

The Bill is a specific measure. It is about protecting responsible whistle blowers. As drafted, it delivers necessary protection and will encourage the use of proper agreed procedures and greater openness between employers and workers. On that basis, it has received widespread support. The Bill contains powers to prescribe persons for the purposes of disclosure. When we come to make the order, we shall consider which persons or bodies should be prescribed. We will consider my noble friend's views in that context and also the views of the noble Baroness, Lady Turner.

But our present intention is to prescribe those such as the Health and Safety Executive or the Financial Services Authority with a specific role in regulating and investigating wrongdoing. Our present view is that it would not be appropriate for trade unions to be fitted into the structure, but we are open to further discussion. For those reasons, the Government cannot support the amendment.

The Fairness at Work White Paper proposes to create a legal right for employees to be accompanied by a colleague or a trade union representative of their own choice at grievance and disciplinary procedures. We believe that that will help to assure employees that they will receive a fair hearing. The proposal is a contribution to the way in which we would like to see problems resolved in the workplace, involving all interested parties working together to ensure that companies can maintain their competitiveness and that workers are treated fairly.

Lord McCarthy

The noble Lord invites us to respond and we must do so. He said that the Government are listening and we must respond. He said that the Government are interested in proper procedures. But he also said that this is a specific measure and that is the difficulty. The noble Lord rightly mentioned many times Fairness at Work, but the Government propose to encourage a legal right for all employees to be accompanied by a fellow employee or trade union representative of their choice during grievance and disciplinary procedures. With great respect, we are not talking about grievances or discipline. We are talking about alleged corruption and alleged illegality. It is not a grievance on the part of the worker that illegality and corruption is occurring. The employee wants to make a public protest and to put it right. This is a specific measure.

I am worried when the Minister goes on to say that these public activities are not the functions of trade unions. In Heaven's name, why not? If one looks at the history of trade unions one sees that we have a Labour Party because it was interested in public concerns, not only in the grievances and disciplinary activities of its members. It had a role and a function.

I hope that the Minister will listen to the argument that on any reasonable case the trade unions should be involved.

Lord Wedderburn of Charlton

I wish to put to the Minister some words of his own and to quote from what he said on Second Reading. He rightly brought to our attention the fact that there are two ways of looking at what the worker wants to do; there is the internal procedure, which those who frame the Bill would like to be tried first, and there is an external procedure. He stated: the Bill also protects workers where it is appropriate for them to disclose information to someone other than their own employer or the designated regulator. That may happen where it is unreasonable to expect internal disclosure because the worker reasonably believed that he or she would he victimised or that information would he covered up if the employer were alerted".—[Official Report, 11/5/98; col. 901.] Those are two proper examples where the employer is alerted.

More important for the individual is the case where he fears victimisation. To whom does the worker turn in such a case? Certainly not to the internal list, which the Minister properly gave us, but to the external list. Those in charge of the Bill say that there will be a list of people who are designated under Section 43F, although it sounds as though trade union officials will not be designated under that section. According to the Second Reading debate, they are being confined to giving advice on codes of practice.

We are saying that our noble friend the Minister is right that people will fear victimisation, but we want them to have a chance of talking to someone on a reasonable basis which is not cut off from other lawful procedures. If a worker is threatened with victimisation, or believes that he is, and has begun proceedings in an industrial tribunal, it is now possible to allow a compromise agreement to end the proceedings. That procedure has been up and running for only a few years. It used to be something which one could not or should not do. However, we passed that provision in 1996.

My noble friend Lady Turner referred to the three groups of people to whom the worker can go for advice and to discuss the issues on a compromise agreement. But it is likely that in the middle of the discussion with his trade union representative, not with the lawyer—and we query the position of the representative from the citizens advice bureaux—the trade union representative, usually of a senior level, will say, "There seems to me more in this". The worker will say, "Yes, I could tell you tales that would make your hair stand on end". The trade union representative will say, "For goodness sake, level with me. Come on, I want to know about this". As the Bill stands, they must go through the provisions in Sections 43G and 43C. No legal advice is involved so Section 43D does not apply. Why on earth is it wrong for the worker in that situation to tell the trade union representative who is acting for him what the case is about when it would not be wrong to do so if he were sitting with a legal adviser, perhaps acting in the same industrial tribunal case? My noble friend's amendment is eminently reasonable.

Lord Haskel

The noble Lord is right in saying that if there are good reasons for not disclosing first to the employer because of the fear of victimisation, the individual will not lose protection if he or she goes to someone else. That someone else could be a trade union official. Obviously, a tribunal would look at it one way if a person went to a trade union official and another way if he went to a journalist.

I refer the noble Lord to Section 43F. The Secretary of State is obliged to prepare a list of those external people to whom an individual can go. Certain trade union officials could be included in the list, but that matter is open for discussion and has not yet been settled.

Lord Borrie

As regards the substantive issue, there is no difference between the sponsors of the Bill and the sponsors of the amendment. Undoubtedly, individual trade union officials will play a major role in implementing this legislation at a number of different levels. Apart from the role which trade unions will have in advising employers and negotiating with them on suitable whistle-blowing procedures, the Bill recognises that unions will have a valuable part to play in advising individual members who have concerns.

Where a union is recognised—I will not go into what Fairness at Work states about that and the future possibilities—I have no doubt that management will actively want it to play a role as an alternative channel to line management in receiving disclosures of malpractices in the workplace. In that way, trade unions or trade union officials will be part of the employers' whistle-blowing procedures and as such the union will be protected under Section 43C.

Where a member makes a disclosure to his union in the course of obtaining legal advice—and here, if you like, I am talking about the union solicitor—then, irrespective of whether the union is recognised at the workplace, if there is such a disclosure and a seeking of legal advice on how to raise the matter, that disclosure to the union solicitor will be protected under Section 43D.

However, I should now like to emphasise a point to which I shall return later. It is something which none of the speakers in favour of the amendment has so far mentioned; namely, that a key aspect of all such disclosures to lawyers mentioned in the Bill, as reflected in Section 43B(4), is that the communication is confidential. That is a point of some significance to the role of the unions to which I shall return shortly.

Where a union does not come within any of those provisions which I have mentioned, then, as my noble friend Lord Wedderburn said, Section 43G will apply. In cases where the employee is victimised because he went to his union for assistance, that fact alone should meet the provisions in Section 43G(2)(a) and relieve him of the need to raise the matter with management because of fear of victimisation. The key issue in anything to do with Section 43G is whether the disclosure made to the union was reasonable. In those cases, I suggest that it would indeed be reasonable. I give way to my noble friend.

Lord Wedderburn of Charlton

I am most grateful to my noble friend for giving way. He cited Section 43G(2)(a). Am I right in thinking that that deals with a disclosure which is primarily internal; in other words, it deals with the situation where the person concerned, makes a disclosure to his employer or in accordance with section 43F"? However, we should put Section 43F aside because we do not know what the Government will do as a result of their new thinking. Surely this relates to disclosure to the employer.

Lord Borrie

No. Section 43G refers to someone outside the workplace—that is to say a union official—where at the time that the person makes the disclosure, as set out in Section 43G(2)(a), he, reasonably believes that he will be subjected to a detriment by his employer if he makes a disclosure to his employer". The points that I have been making suggest to me that, in practice, the Bill—and, admittedly, it is subtle detail—is adequately comprehensive. One anticipates that there will not really be any problems about disclosures to unions or union officials. However, if I am wrong in that respect, then, as my noble friend the Minister indicated, unions will no doubt want to make a case to the Government to be "prescribed" persons under Section 43F. The list in that respect has not yet been devised. Indeed, on Second Reading I believe that I used as examples regulators such as the Financial Services Authority, and so on. However—who knows?—a case could be made and that would he for secondary legislation.

I turn now to the wording of my noble friend's amendment—

Lord McCarthy

Before my noble friend refers to that wording, perhaps I may make a point which I do not want to be overlooked. My noble friend mentioned the word "confidential". I do not want that to escape our attention. I was very pleased that he mentioned the word, but he then passed on to something else.

Lord Borrie

I should tell my noble friend that I intend to return to that word.

Lord McCarthy

I shall make further comment at that stage.

Lord Borrie

I am sure that I indicated that I would return to the matter in due course. I do not need to repeat the wording of my noble friend Lady Turner in listing the people who are "independent advisers" under the Employment Rights (Dispute Resolution) Act 1996. I need not speak about qualified lawyers because clearly there is no problem in that respect. We also have officers and employees of unions who are certified as competent to give advice and workers in an advice agency. That provision deals with advice and assistance in the compromise of claims. As such, I am not sure that it is directly relevant to the subject matter of this Bill. I doubt that it is appropriate that disclosures to someone in those three groups should be equated with a reporting of a malpractice to the employer. Indeed, whether the person is an advice worker or a trade union official, it is difficult to equate that with the first line of approach, as it were, in the Bill which is to an employer or someone in the employer's organisation.

Where a person is approached for confidential legal advice, protection under Section 43D will apply. As with all disclosures for legal advice, Section 43B(4) ensures that the lawyer cannot do as he pleases with the information. That is a most important point. As it stands, the amendment would not impose on advice agencies and unions the linked obligation under Section 43B(4). Unless the advice agency or union accepts that the information is subject to clear obligations of confidence, it will be free to do as it pleases with the information.

It is possible that certain advice agencies—or, indeed, unions—will accept as a matter of practice strict obligations of confidence. However, the amendment does not deal with that aspect of the matter. I shall now pursue that issue because, if I do not do so, I am sure that my noble friend Lord McCarthy, will urge me to do so. One solution would be to say that the disclosures to unions under the provision should be subject to obligations of confidence. Therefore, that would make it the same as disclosures to lawyers. But to do so would have a significant effect on the role of unions in labour relations. It would mean that the information could be used for no other purpose than the one to which the client had agreed. It could not be used in the course of general negotiations with the employer. More significantly, if the information related to some safety risk, but the whistle blower decided that he did not want to raise it or pursue it, it would not be open to the union to take up the matter itself even though the well-being of some of its members might well be affected.

Without such an obligation of confidence as a quid pro quo to trade union officials being equated with lawyers, one possible effect of the amendment would be to give irresponsible whistle blowers a potential passport to media and more public disclosures if they were to find an individual union member or officer who would brief the media. The publication would he effected by that person on his own behalf. The employer would have no recourse against the employee whose disclosure would be protected. We are sure that this is an unintended effect of the amendment because, as my noble friend Lady Turner said on Second Reading, disclosures to the irresponsible and sensational parts of the media should not be encouraged. I give way to my noble friend.

Lord Wedderburn of Charlton

I am much obliged. Does my noble friend recognise the fact that this point is always made about trade union officials? Indeed, it is never made about anyone else. There is a clause in the Bill, though not very well drafted, about lawyers; but surely that does not alter the very simple fact—as the Court of Appeal has pointed out on many occasions—that there is a law of confidence. My noble friend the Minister said on Second Reading that the courts apply a public interest test when considering whether or not there is a duty of confidence.

If it is confidential information, it will he a breach of confidence to impart it other than in the public interest. That does not depend on any aspect of the Bill but it does apply to all the other people involved, such as those that the Minister suggested would he proper first targets; for example, the auditors and advisers of the company, trade union officials and all sorts of other people. They are all equally governed by the law of the land. If you want to put in something about lawyers you may do so, but you had better look first at their fees.

Lord Borrie

I understand my noble friend's point. However, surely he will accept that there is a special provision in the Bill stating that lawyers to whom disclosure is made are under an obligation of confidentiality. If you have that in the Bill, but allow disclosures to other people without a similar provision, the legislation might well be interpreted as meaning that a provision of confidentiality applies to one group but not to the other, whatever the general law may state.

Lord McCarthy

I thank the noble Lord for giving way. I have no desire to claim any special legal privileges for trade unions. If the Government can accept our amendment if a similar obligation is placed upon trade unions as is already placed upon everyone else, we have no objection to that. We do not seek any immunity for trade unions. We want them to be treated exactly the same as others. However, a large part of the imaginings of the noble Lord are imaginings. In which negotiations could unions learn secrets that they are better off not knowing? It is suggested that if they do not know these secrets they can "clobber" the employer. However, it is suggested that if their shop stewards tell them these secrets, they cannot "clobber" their employer. That is fantasy. Collective bargaining negotiations are not based on secrets. They try to influence and to persuade people. It is not a matter of passing secret envelopes to and fro. This is a matter for the union to decide. If the union thought that giving the kind of advice we are discussing could compromise it in collective bargaining, perhaps the union would not give that advice. I repeat we are not asking for special privileges. We are saying that trade unions should be put on exactly the same footing as everyone else.

Lord Borrie

As regards what my noble friend Lord McCarthy has just said, I do not feel there is any great difference between us on this matter. I refer to the phrase that he and the Minister have used, which is taken from the White Paper; namely, "grievance procedures". The noble Lord, Lord McCarthy, made the point that if we are talking about public interest disclosure of malpractice, that is not what he or I would typically think of as a grievance procedure. Surely my noble friend will accept that the phrase "grievance and disciplinary procedures" appears only in a White Paper at the moment. We are not talking about words in a Bill. Therefore there is surely scope for us to pursue that matter to ensure that if the word "grievance" does not cover what we are talking about here, it should be amended to enable unions to assist their members to pursue with employers the disclosure of malpractices. It is clearly the Government's intention in the Fairness at Work White Paper that irrespective of whether a union is recognised in a workplace, an employee should have the right to union representation in these matters. If that is the case, it is implicit in that procedure that there is a disclosure between the employee and the union official; otherwise, how on earth can the union official represent the employee? In those circumstances I ask my noble friends to withdraw the amendment on the basis that the Bill and further legislation will cover this issue. I believe that they need not pursue the matter further.

1.45 p.m.

Baroness Turner of Camden

I thank the Members of the Committee who have contributed to this extremely interesting debate. I was sorry to learn that my noble friend the Minister does not feel that the Government can support the amendment. I am glad that the noble Lord, Lord Borrie, has said that there is not much between us on this question. However, issues have been raised in the debate which give me cause for concern. As regards recognition, I accept that as the Bill stands at present it is possible that where a procedure exists—the emphasis is on introducing good procedures—that may well cover the situation. However, I stress that in those cases where there is no recognition and the employer is hostile, difficulties of this kind can arise. For example, an employer may not have put in place good safety measures. It is that kind of employer who may give rise to problems. An employee of such an employer is most likely to feel that he will be subjected to victimisation if he raises the issue. Therefore it is essential that it should be spelt out clearly in the Bill that that is a protected disclosure in regard to trade unions.

I take the point made by my noble friend the Minister that under new Section 43F(2) it is intended to produce a list—as I understand it—of persons or descriptions of persons who will be regarded as appropriate in terms of disclosure within the remit of this Bill. However, I still feel that some issues that have been raised in the debate give me cause for concern. The issue of confidentiality has been dealt with explicitly by my noble friend Lord McCarthy. I have spent most of my life as a union official. We were in the habit of receiving confidential information during the course of our activities. We, of course, respected that confidential aspect; otherwise, we would not have been able adequately to represent the interests of members either collectively or individually. I do not accept the notion that because unions, unlike lawyers, do not have an obligation in this regard, we are in some way less able to deal with confidential information than lawyers.

The noble Lord, Lord Borrie, mentioned the possibility that the press could become involved in these matters. I must dispute that because again I come back to the point that unions are used to keeping confidential information confidential, if that is necessary. I take it that in any event new Section 43G(1)(c) is intended to deal with the press as it states that an individual, does not make the disclosure for purposes of personal gain". Often the press is involved precisely because they offer personal gain to individuals who provide information. I believe the Bill intends that an individual should not seek out the press first but should seek to pursue all the avenues available under procedures or—the option we would consider—by reference to a trade union.

I do not intend to press this amendment to a Division. I shall consider what has been said. I hope that my noble friend the Minister will consider the points that have been made by myself and my noble friends because they are important. I hope that we can reconsider this matter at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McCarthy Amendment No. 3:

Page 4, leave out lines 37 and 38 and insert— ("(d) he believes on reasonable grounds that the relevant failure is of a very serious nature, and").

The noble Lord said: This, again, is a small and narrow amendment which relates to new Section 43H which governs the conditions necessary for qualified disclosure where an employee believes that there has been an exceptionally serious failure. I suppose that the most likely situation is mentioned in new Section 43B(1)(b) which refers to a failure, to comply with any legal obligation".

If an employee feels that an exceptionally serious failure has occurred, presumably involving some legal dereliction, there is a procedure whereby he or she is protected in disclosing that information.

There are five conditions that have to be met. The wouldbe complainant, or whistle-blower, must be acting in good faith; must believe that the complaint is substantially true; there must be no personal gain; and he or she must believe that the failure is "of an exceptionally serious nature". It is the fourth condition that we do not like and wish to change. We wish to replace, "exceptionally serious nature", with, "of a very serious nature". The matter still has to be serious, but has to be very serious and exceptional.

It is generally accepted, and has been stated by a Minister, that one of the advantages of this procedure is that, under it, the worker is most likely to be able to avoid telling the employer. So it is a rather useful gateway. It might be said that in the circumstances an employee does not know who to tell on the employer's side or that he or she would rather go to one of the bodies set up by the Government, or even to a trade union. We therefore believe that this item is rather important. It is important that if an employee has "reasonable grounds"—the concept included in the amendment—he or she should be able to show that there has been a "very serious" dereliction or illegality rather than an "exceptional" one.

It might be asked what the difference is. "Exceptional", might relate to a matter that cannot be known. There might be some databank indicating the average, the mean, the norm; and it might then be said that the matter was an exception: that only 4 per cent. or 8 per cent. of illegalities were of this kind, and this one was therefore exceptional. It would be very difficult for anybody to he certain that a complaint was exceptional. I find it an exceptional word. It would be easier to operate if the matter was "very serious". A "serious" matter would not be trifling, incidental or unimportant; and a matter that was "very serious" would he the same, only more so. We should not then get into this "roundabout", whereby we are trying to calculate whether a matter falls within the top 5 per cent. of illegality. We therefore believe it more reasonable and sensible to change the wording on the face of the Bill in the way that we suggest. I beg to move.

Baroness Miller of Hendon

I intervene very briefly and shall not delay the Minister. I had not intended to speak so much on the difference between "exceptionally serious" and "very serious", although "exceptionally serious" is better in this context. My concern was with the other words in the amendment; namely, he believes on reasonable grounds that", which were not mentioned by the noble Lord, Lord McCarthy. We are not happy with that wording. We believe that "reasonably" is a subjective concept, and that the whistle-blower should be required to have a better case than merely that, "he reasonably believes".

Lord Haskel

New Section 43H provides protection for workers who make disclosures about exceptionally serious failures. The intention is to provide as clear an indication as possible that the order of seriousness—if I may put it that way—is greater than that for other disclosures. The new section is meant to apply only in very rare cases. The purpose of inserting "exceptional" is to indicate that the case is indeed a rare case. Nobody wants individuals disclosing confidential information to other bodies unless the circumstances are exceptional.

However, we all recognise that there will be concerns that are rare, but so grave that they need to be disclosed and dealt with as soon as possible. We believe that the current wording conveys that very clearly. In our view, the proposed amendment is less unambiguous, and leaves room for doubt as to how this section should be interpreted in practice.

We believe that the best way to convey the order of seriousness under new Section 43H is by referring to failures that are objectively judged to be exceptionally serious. There may be disclosures which are very serious, but hardly exceptional, and such disclosures would be protected under other provisions in the Bill.

I realise that my noble friend Lord McCarthy has some concerns about whether an individual will be able to judge if a matter is exceptionally serious. He mentioned that issue at Second Reading. It is a very fair point. He raised it in the context of guidance on the Bill.

Public Concern at Work will be liaising with the CBI and the TUC in developing guidelines. These will provide a user-friendly explanation of the Bill, and the best practical way for workers to proceed if they are worried about wrongdoing or failures in the workplace. That will be of considerable practical value to employers and workers alike.

In addition, the Department of Trade and Industry will be issuing its own guide to workers' rights under the Bill. This, too, will set out a straightforward explanation of the provisions in the Bill. Like other DTI guidance on employment rights, it will be available free from a range of sources. We will certainly do our best to ensure that the Bill is well understood. I hope that my noble friends will find this a helpful and acceptable alternative to their amendment, and that the guidelines will indeed serve to show what is exceptional and what is rare.

Lord McCarthy

I am glad to hear the noble Lord's remarks. We are starting to move on this matter. He agrees with me, as Hansard will show, that there are some circumstances that are "very serious" but hardly "exceptional". In other words, he says that we are trying to make it just a little easier to use this provision in the Bill. Yes, of course, that is what we are attempting. Indeed, we say that it is almost impossible to know in advance what is exceptional; whereas, rather more broadly, matters can be found that are very serious when they cannot be said to be exceptional. So we are making some small progress.

One point worried me. As I understand it, the Minister is saying that the purpose of new Section 43H is to speed matters up. He seemed to be saying that if they were very serious or exceptionally serious, the matter would come to a tribunal more quickly. I do not know whether that is the Government's aim. The aim is not clear; that is part of the problem. I thought that the aim of this new section was to provide one of the circumstances in which an employee might be more likely not to inform an employer and still be protected; namely, because a matter was "exceptionally serious". If it is not about the gravamen of a dereliction of law and is about moving upstream in the queue, then I shall have to think again. Perhaps the Minister will also think again. I may have misunderstood his remarks.

Turning to the point made by the noble Baroness, Lady Miller, the Bill is peppered with the idea, "on reasonable grounds", as is almost every Bill. I do not know whether it is now the policy of the Opposition not to like the word "reasonable" and that they want us to remove it from all future measures. My noble friends wrote this amendment and inserted the word "reasonable". At first, I thought, "That old thing again". It is not exceptional to have such a provision in the Bill. The crux of the matter is whether we insert "very" and remove "exceptional". However, at this stage I am prepared to withdraw the amendment and beg leave to do so.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

2 p.m.

Clause 2 [Right not to suffer detriment]:

Lord Wedderburn of Charlton moved Amendment No. 4:

Page 6, line 25, at end insert (", or threatened with.").

The noble Lord said: In moving Amendment No. 4, I shall, with permission, speak also to Amendments Nos. 5, 6 and 8, which all deal with the problem of inadequate remedy, where we wish the right to be made stronger than it is.

In Clause 2, it is the right of a worker not to be subjected to any detriment by an employer. Here, having learned from the Wilson and Palmer cases, the legislator has put in, by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure".

When we look at the other way in which a victim may be victimised or prejudiced, Clause 5, the new Section 103A to the main Act, states that An employee who is dismissed shall he regarded … as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure".

I hope that the amendment will not be regarded as particularly contentious. It seems to me extraordinary that the worker retains his protection where he has made disclosures but the employer can come in before the act is complete and before there is the protection under the various clauses we have looked at, and, for example, make a threat or do something else to the prejudice of the employee. I believe I am right in saying that it is the view of the campaign which produced the Bill that, if an employer threatens to commit an act which is, in a broad sense, prejudicial to an employee, if it is only a threat it is taken out of the protection of the Employment Protection (Consolidation) Act.

I have always had some sympathy with that view, but, unhappily, last year the Court of Appeal, in the case of Mennell v. Newell and Wright, referred to in The Times of 18th July, rejected that argument. It is not the first time, as my noble friend Lord Gladwin will know, that the Court of Appeal has done a worse job than the Employment Appeal Tribunal.

Briefly, the situation was that a worker, who was a lorry driver, had put to him, as had been put to his colleagues, a new set of contracts. The new contracts which the employer wished to press upon them provided for a deduction from wages in order to pay for their training, which had previously been paid for by the firm. The lorry driver complained and was dismissed. He said that he had been dismissed for asserting a statutory right, which is now provided in Section 104 of the Employment Rights Act 1996, which prevents the dismissal being proper.

The Employment Appeal Tribunal agreed with that reasoning—at somewhat more length, of course. But the Court of Appeal said no: that, although a complaint could be presented under the 1986 Act even where an employee had not been employed for two years—as so often, that was at the centre of the matter—an industrial tribunal had no jurisdiction to deal with a threatened deduction of wages under, originally, the Wages Act but could hear complaints only where an employer had actually made a deduction.

What I gain from that case, unhappy though it is, is that the courts are drawing a clear distinction between things that an employer does and things that an employer threatens to do. As the Bill stands, it does not cover things which an employer threatens to do to the disadvantage of an employee.

Lord Borrie

Does that not depend on the interpretation of the word "detriment" in the Bill?

Lord Wedderburn of Charlton

If we were trying to upset the Court of Appeal decision in Mennell v. Newell and Wright, I would join my noble friend in making that plea. There are several ways in which one can argue that it is wrong. What I am saying is that the law today, when the legislature is to make its decision, is, according to the Court of Appeal, that threats are out and acts are in. That is true of the Bill. I think my noble friend Lord Borrie and I are very close on this matter. I agree that I should want to argue if an employer came along and said: "I know all about you, Borrie. We know you are going to make complaints about what is going on in the firm. We know you haven't started to do so yet, and you certainly have not got yourself protected, but you had better go and join the awkward squad. You will not get so much overtime".

Lord Borrie

But is it not a detriment to me if I have that hanging over me?

Lord Wedderburn of Charlton

With respect, I think it is, but the Court of Appeal said it was not. One has to find some distinguishing factor in Mennell v. Newell and Wright. My noble friend does not agree. I am trying to do my best with a decision which I think is a bad decision. I am asking the legislature to help us by making the position absolutely clear. Why people should want to rely upon the opaque nature of the law when they can put it right in a place such as this House, I cannot think.

If we do not like that position, there is Clause 5, which makes it absolutely clear that the protection against unfair dismissal applies only where an employee has made a protected disclosure. There is no question of that section being a problem. It must be right, if the employer or manager comes along and threatens the worker.

Let us think for a moment of the situation we are considering. The worker believes that management is doing something wrong. He is faced with the question, "Shall I disclose this? If I do, I may have to go home and say that I have been given my cards and the family does not have a wage the following week". He has to make that decision, helped, we hope, by his trade union representative. Surely he will look at the Bill and say, "It must be that I am protected from dismissal for making this proper disclosure, even though I have not gone about it fully according to the provisions of the other clauses".

This clause should provide for the employee who is dismissed to be regarded as having been unfairly dismissed, if the reason for the dismissal is that the employee made, attempted to make or perhaps intended to make—I have not put that in my amendment—a complaint. I should like the Government to think about that and prevent whistle blowers—if they be called such—from being dismissed by managers who take action before the employee takes all the necessary steps before he is protected. I beg to move.

Lord Borrie

Before my noble friend sits down, I thought he was speaking to three different amendments, one of which is Amendment No. 5, which seeks to insert the word "intend". I have not understood that amendment so far. It seems to me that if somebody intends something and it is merely in his mind, that cannot give rise to a situation which could result in either victimisation or a claim for unfair dismissal.

Lord Wedderburn of Charlton

My noble friend is right to question the situation. It is true that we added those words but we added them for this reason. Where a worker, in discussion no doubt with others because people talk to each other, said, "I think what they are doing up there is wrong and intend to make it an open matter and disclose"; somebody may say, "You have heard of this Act and had better watch out". However, the worker says that he intends to complain. The manager hears about it and says, "I hear that you are intending to use these procedures to allege that we do terrible things, which we do not".

The matter rests on the evidence. If he is subject to a detriment, it is on the ground that he intended to follow the procedures in the Bill. I hope that the Committee will see that that is a situation in which he should be protected.

The Earl of Balfour

I feel that the addition of these words will weaken the position of the worker. Perhaps I can put it this way. A worker has the right not to be subject to or threatened with any detriment by any act or a deliberate failure to act by his employer. With all due respect to what has been said, I feel that the words of the Bill are better without the addition of the amendment.

These amendments are grouped with Amendment No. 8. Perhaps I may ask the Committee to take a minute to look at Clause 5. So far in the passage of this Bill we have been dealing with amendments to the 1996 Act. We have been talking about "workers". Perhaps Members of the Committee will be good enough to look at the first line of the proposed new Section 103A. It begins: An employee who is dismissed shall he regarded". I feel that for the sake of consistency it should read "a worker". Equally, page 7, line 21, which deals with the addition of subsection (6A) to the 1996 Act, reads, the principal reason) for which the employee was selected for dismissal". Again, we have so far talked of the "worker" up to this point and perhaps we should substitute "worker" for "employee" in both cases. It is a technical point, but one worth making.

2.15 p.m.

Lord Haskel

Perhaps I may quickly respond to the last point made by the noble Earl. Lord Balfour. I think that the word "employee" is in the Bill because the protection applies to anybody working in the company, be he a worker working on the shop floor or an employee in the boardroom. I think that the intention is that it should apply to everybody who is involved in the company and not just workers.

I turn to Amendments Nos. 4 and 6 and the point made by my noble friend Lord Wedderburn. I am not a lawyer, and I am not sure that I want to get into an argument over particular cases. Indeed, we may have to write to the noble Lord about this particular case, but it seems to me that the notion of detriment includes being threatened. That is already well understood. I am not sure whether or not the case quoted by my noble friend Lord Wedderburn undermines that. Detriment is a broad concept and the Bill makes it clear that it includes deliberate failures to act as well as actions.

Our understanding of how this would work can be illustrated by an example. An employee who has made a disclosure to the employer could be threatened with relocation to a remote branch of a company, for instance, where promotion prospects are poorer. That kind of threat is a detriment and even though the worker can be assured that the employer could not lawfully carry out the threat, the fear of the threat may well amount to detrimental action. Any threat which puts a worker at a disadvantage constitutes in itself detrimental action. Certainly, such a threat would be contrary to the openness which we hope to see between employers and employees working together in dealing with wrongdoings or failures under the Bill.

The wording of the Bill follows the drafting of existing provisions of the Employment Rights Act 1996, which provides protection against detrimental treatment on specified grounds such as carrying out duties of a health and safety official. These provisions have not caused difficulties of interpretation, but to use different wording in this case, as suggested by the amendments, we feel would cast doubt on whether threats were covered in those other cases.

I turn to the clauses to which Amendments Nos. 5 and 8 are proposed, providing protection for employees who are victimised or unfairly dismissed for making a protected disclosure. I can understand my noble friends' wish to ensure that an employee who failed to get his message across should not lose protection. However, it seems to me most unlikely that such a situation would arise. Normally, a disclosure made to the employer or via internal procedures is likely to get through, rather than be merely attempted.

But even if the worker passes information on internally and it does not reach the right person who is responsible for dealing with such matters, it seems to me that a tribunal is likely to find that the employee has disclosed to the employer and is protected, provided that he acted in good faith.

These amendments could allow workers to argue that although they had failed to follow the correct procedures, they had intended to do so and so had attempted to make a protected disclosure. This would of course undermine the clear procedures set out in the Bill. The Bill already contains provision in Section 43J to prevent employers placing "gagging" restraints on employees. The amendments could be misinterpreted to enable workers to use the threat of disclosure as a bargaining counter with their employers, rather than working in partnership with them to resolve the concerns. This would be contrary to the spirit of the Bill.

I hope that noble Lords will accept this explanation as to why the Government could not accept these amendments.

Lord Borrie

I do not need to add very much because my noble friend the Minister has set out the reasoning that I would have employed in terms of these linked amendments. In relation to what the noble Earl, Lord Balfour, said, the word "worker" appears throughout. Of course only a worker can be dismissed under the unfair dismissal procedures. But I think that the word "employee" appears because it is inserting something into an existing Act where the word "employee" is used.

I asked my noble friend Lord Wedderburn about the amendment dealing with intention. I thought that intention could be just something in one's mind and therefore nothing could possibly arise out of that in terms of victimisation or a claim. He said that people who have an intention to disclose may well talk about it to others. I can understand that. But as soon as the employee talks to someone who is a senior person—a manager or someone in line management—he is part of the organisation of the employer and a disclosure to him, talking to him, is a disclosure within new Section 43C, and therefore there comes about the protection against victimisation and so on in the legislation. So I cannot see the value of the amendment dealing with intention. As for "attempt", the attempt involves, as I understand it, some sort of move towards disclosure which has not been completed. There may be some marginal value in that, but it requires the strong imagination of my noble friend to think that that adds something to the Bill.

It is clear from the earlier words of my noble friend Lady Turner that we are to have a Report stage. I shall read in Hansard what everyone has said. I ask my noble friend to withdraw the amendment.

Lord Wedderburn of Charlton

I am grateful to all those who have taken part in the debate. I appreciate that I did not deal separately with each amendment. I wish to reply to the discussion with three points. First, I would say to my noble friend Lord Borrie, "By all means choose words different from ours". The only difference between us is the state of the evidence, as it were, of what the employee is doing. Surely he would join us, and persuade the Minister to join us, in so framing the Bill as to prevent a manager from imposing a detriment or even effecting a dismissal before the employee has completed the acts which are necessary for his disclosure, albeit that it is down to everyone, or only to the two of them, that he has the intention and wish, or even made the attempt, to go a little way but has not yet fallen within one of those areas of dense prose in new Sections 43C and 43H. That is the challenge before us. I appreciate that my noble friend will really say, "If you find someone who is doing that kind of thing, either he is protected or he ought to be protected".

I make my second point to the Minister. Will he stir the stumps of his department to look out for him the judgment in Mennell v. Newell and Wright, as the argument he put forward is, by analogy at least to that judgment, exactly the argument which lost in that case? I never understand why people whose arguments have lost in a case do not take the advantage of being in the legislature to get their own way, as it were, and overrule the courts.

Thirdly, I agree with my noble friend Lord Borrie about "worker" and "employee". "Employee" is substituted in the relevant legislation where it is inserting something. The noble Earl. Lord Balfour, mentioned that. I hope that on reflection my noble friend can support our amendments. Given the time, I have in mind an occasion, which I have cited in writing elsewhere, on which Mr. Balfour, as he was then, in 1906 complained that Sir Charles Dilke and others, but Sir Charles Dilke especially, the grandmaster of trade union law at that time, were going on too long at four o'clock on a Friday afternoon in August. I do not wish to be the reason for that to happen. Therefore, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Clause 2 agreed to.

Clause 3 [Complaints to employment tribunal]:

[Amendment No. 6 not moved.]

Clause 3 agreed to.

Clause 4 [Limit on amount of compensation]:

Baroness Miller of Hendon moved Amendment No. 7:

Page 7, leave out lines 10 to 12 and insert— ("there shall be no limit on the amount of compensation that may be awarded by the tribunal."").

The noble Baroness said: Like the noble Lord, Lord Wedderburn, and the noble and learned Lord, Lord Nolan, I too, was unable to be here at Second Reading. But I and other noble Lords are aware that this Bill received considerable support from all sides in the other place, as well as in your Lordships' House where, unlike in the other place, it received a formal Second Reading debate. Indeed, Clause 4, with which this present amendment is concerned, was also not debated in Committee there.

The subject of the capping of compensation for wrongful discrimination caused concern on all sides of your Lordships' House during the debate on the Second Reading. It was expressed by the noble Baroness, Lady Turner of Camden, when she cited the difficult case of Maxwell v. BICC. It was expressed again by the noble Baroness, Lady Dean of Thornton-le-Fylde. Both were supported by my noble and learned friend Lord Fraser of Carmyllie. The noble Lord, Lord Haskel, said that the Government shared some of our concerns.

There is some inconsistency in the approach to this problem. Since the Government have said that they support this Bill, it is as much their responsibility as that of the noble Lord, Lord Borrie, to correct that inconsistency. As drafted, the Bill limits compensation to the amount payable under the employment rights Bill.

But this Bill is at least as much about sexual discrimination as it is about other cases of unfair dismissal or improper discrimination. In the Race Relations (Remedies) Act 1994, which I had the privilege of conducting through your Lordships' House, I pointed out the need for consistency between compensation for sexual discrimination and racial discrimination.

In the case of Marshall v. Southampton and South West Health Authority, the European Court of Justice ruled that a limit on the amount of compensation payable in sex discrimination cases is incompatible with Community law. As a result of that decision, the Sex Discrimination Act was amended by secondary legislation and the Race Relations Act was amended by the remedies Bill I have just mentioned.

There is a second inconsistency. The Government have just published their White Paper Fairness at Work. On page 16, paragraph 3.6 the Government announced, The Government intends to abolish the maximum limit on awards for wrongful dismissal".

So important did the Government regard this announcement that they printed it in bold type. I cannot understand why, if the law is to be changed in any case, the Government cannot anticipate that change by carrying it into effect as regards the subject matter of this present Bill.

This is a probing amendment, and we on this side of the Committee and, I suspect other Members on both sides of the Committee, will be glad to learn of the views of the noble Lord, Lord Borrie, on this matter and no less important, those of the Government. I beg to move.

Lord Haskel

The noble Baroness is quite right that we featured her point in the Fairness at Work White Paper. Perhaps it would be helpful if I explain what is proposed on compensation in the White Paper.

The first point to make is that the Government have proposed, in the Fairness at Work White Paper, to remove the limit on compensation for unfair dismissal cases, which currently stands at £12,000. The existence of this limit means that some individuals may not be properly compensated for their losses. That point was made by the noble Baroness, Lady Turner, and others at Second Reading. We believe the removal of the maximum limit will help ensure that all workers are properly compensated. I am sure that all noble Lords will welcome that proposal.

The White Paper also invites views on removing limits on special awards under Section 125 of the 1996 Act. It is the Government's suggestion that compensation under the Bill should be based on special awards, which already involve a higher level of compensation. The White Paper acknowledges that limits may deter some people from exercising their legitimate rights, which I believe, is one of the points the noble Baroness is making.

These proposals would make the amendment unnecessary, since both the compensation for detriment under this provision and the compensation for unfair dismissal which it must not exceed will be based on the individual's loss and will not be limited. I believe that that deals with the point raised by the noble Baroness about sexual discrimination.

Perhaps I may make clear at this point a misconception which may arise about the Bill. Although we have talked about the Bill affording protection to workers and encouraging a greater degree of co-operation and openness between employers and workers, the Bill also affords protection to all people working in companies, from shopfloor to director level. I know that that approach has been welcomed by all sides.

Lord Borrie

We are glad that the noble Baroness, Lady Miller of Hendon, has raised this matter. It enables me to remind the Committee that when the Bill was going through another place a consultation was undertaken in which 85 per cent. of those consulted, including all the key bodies such as the CBI, the TUC and the professions, agreed that there should be no ceiling on the limit of compensation. One is delighted that the Fairness at Work White Paper has indicated the Government's proposals, as outlined by my noble friend Lord Haskel, and that they take full account of the responses of interested parties.

I welcome this proposal for two reasons. First, compensation for one's loss will reassure many relatively well paid workers that they are adequately protected. As such, it will help to ensure that the Bill's potential as a check on malpractice will apply in all kinds of workplaces, whether in the industrial belts or the City of London.

Secondly, if the guarantee of a special award of at least £17,000 is removed, one can welcome the fact that there will be no risk that people will look for a whistle to blow. I hope that the noble Baroness will withdraw her amendment in the light of what my noble friend said.

Baroness Miller of Hendon

I thank the noble Lords, Lord Borrie and Lord Haskel, for their helpful remarks, in the light of which I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 [Unfair dismissal]:

[Amendment No. 8 not moved.]

Clause 5 agreed to.

Clauses 6 to 18 agreed to.

House resumed: Bill reported without amendment.