Employment Relations Bill

HL Deb 08 July 1999 vol 603 cc1037-101

4.20 p.m.

Report received.

Schedule 1 [Collective Bargaining: Recognition]:

Lord McIntosh of Haringey moved Amendment No. 1: Page 18, leave out lines 25 to 32 and insert— ("2A.—(1) This paragraph applies for the purposes of this Part of this Schedule. (2) The meaning of collective bargaining given by section 178(1) shall not apply. (3) References to collective bargaining are to negotiations relating to pay, hours and holidays; but this has effect subject to sub-paragraph (4). (4) If the parties agree matters as the subject of collective bargaining, references to collective bargaining are to negotiations relating to the agreed matters; and this is the case whether the agreement is made before or after the time when the CAC issues a declaration, or the parties agree, that the union is (or unions are) entitled to conduct collective bargaining on behalf of a bargaining unit. (5) Sub-paragraph (4) does not apply in construing paragraph 29(3). (6) Sub-paragraphs (2) to (5) do not apply in construing paragraph 32.")

The noble Lord said: My Lords, in moving Amendment No. 1, I should like to speak also to government Amendments Nos. 9 and 52 and then to respond in due course to Amendment No. 8 in the name of my noble friend Lord McCarthy.

The purpose of Amendment No. 1 is to clarify the scope of collective bargaining and how it may be altered. We wanted it to be absolutely clear that even if the CAC issued a declaration of recognition, the union and employer could agree to alter the scope of collective bargaining to include matters other than pay, hours and holidays.

Amendment No. 52 clarifies the scope of collective bargaining in Part III of the schedule, which is the part that deals with changing the bargaining unit, by introducing new paragraph 74B. It also allows the parties to vary a bargaining method imposed by the CAC under Part III, in new paragraph 74C. This mirrors the existing provision in paragraph 29 for bargaining methods imposed under Part I.

I now turn to the issue of whether a union should be required to give up an existing collective bargaining agreement in order to apply for recognition under Part I. Amendment No. 8, to which my noble friend Lord McCarthy will speak, covers this point, as does the Government's Amendment No. 9. I shall not pre-empt anything my noble friend may say, but perhaps I may explain why the Government want to deal with this issue in a slightly different way from that proposed by my noble friend.

We have proposed Amendment No. 9 which changes one of the preliminary tests an application must pass in order for the CAC to accept it. The test currently requires the CAC to reject applications for recognition in a bargaining unit if any union, including the applicant union, is already recognised to conduct collective bargaining on behalf of one or more workers in the bargaining unit. One effect of this is to require a union which has a very limited but possibly long-standing recognition agreement—covering the union's role in disciplinary matters, for example—to give up that recognition in order to apply for statutory recognition under Part I.

That is not an unusual arrangement. In my own company, I recognised a union for disciplinary matters and such issues as the location of the business but not for pay, hours and holidays because my employees preferred to negotiate on these matters individually with me. The point is: should such recognition for what might be called "non-core" issues bar the union from seeking recognition through the procedure for pay, hours and holidays?

I do not think it is desirable for a union to be required to end a recognition agreement covering the "non-core" issues if both the employer and union are happy with it. The union should be able to seek recognition on the "core" issues of pay, hours and holidays without being forced first to tear up an existing agreement. Amendment No. 9 therefore provides that a voluntary agreement which does not include bargaining about pay, hours or holidays does not bar the recognised union from applying under Part I. The employer will, of course, still be able to terminate the voluntary agreement if he wishes. It may be that an employer, faced with an application for recognition on pay, hours and holidays, wants to renegotiate on the matters for which he already recognises the union. The Government's amendment allows for that. I beg to move.

Lord McCarthy

My Lords, the Government have introduced this change or modification—I do not want to call it a "volte-face" because they may not like that—at a very late stage. We argued this point in Committee and the Minister said that we could not have it. Never mind, he now comes along and says that the Government will not function in such a way that unions which are recognised for matters other than wages, hours and conditions have to quarrel this away in order to negotiate about core conditions. To my colleagues and I in Committee, that seemed to be only common sense. If you have a Bill, the object of which is to encourage and assist recognition, you do not, as I said in Committee, operate pontoon; you do not say that people have to twist or bust. You say that if you have a little non-core recognition, you can come along and see whether you can get core recognition. If you do not get it, you still have what you had in the first place. You do not have to go back to square one.

In practice, I do not think that employers who have allowed a certain limited amount of recognition of the kind the Minister described in his own company will cancel it if their employees want to extend it. The real difficulty will be those employers who give no recognition at all, who would not be seen dead with recognition and where the union would have to come from a position of non-recognition to a position of core recognition. In that circumstance—I thank the Government for making a concession at this late stage—my amendment has no purpose because it was an attempt to get the Government to limit their existing position so that it applied only to new unions. The Government have come round to that. Therefore, my amendment has no purpose and I do not intend to move it. I thank the Government very much.

Baroness Miller of Hendon

My Lords, I intervene in the debate on this amendment for only one reason. It is right and proper—I am sure the Minister will indulge me—that at the very earliest possible moment of the Report stage I should get something off my chest.

This Bill began in the other place, but it was then completely recast by the government amendments, so that the Bill that left there was totally different in form from the one that had started. The Bill which your Lordships have been asked to deal with was therefore the Employment Relations Bill Mark II. The Government extensively amended the Bill in Committee so that we now have Mark III. However, some 48 hours before this present stage, the Government tabled some 16 pages of amendments to Schedule 1 alone, plus about another dozen spread around the Bill. So what we are really being asked to consider is the Employment Relations Bill Mark IV.

I certainly accept that several of the amendments that the Government have introduced at this stage are to honour pledges made to the Opposition at earlier stages; and for that I most certainly thank the noble Lord. I also appreciate the courtesy of the Minister and his staff in sending me part of the material "hot off the press", as it were. But what this really shows is that the Government are once again legislating on the hoof. That means that they are churning out ill considered Bills which they have to amend as they progress through Parliament, or as with an amendment that the Government will certainly be introducing later today, a year after an Act has received Royal Assent and three months after it has come into effect.

Having got that off of my chest, I add that some of those belated amendments may need a little further amendment. I have not had very much time to look at them, so where I have something to say, I shall try to indicate that. It may be that we shall have to deal later with any reservations that I am left with.

With regard to Amendment No. 1 itself, we have no objection to this further clarification of the meaning of "collective bargaining".

Lord McIntosh of Haringey

My Lord, I thank the noble Baroness for the typically courteous way in which she rebukes me. As I think I said in Committee, there are three kinds of government amendment. First, there are those which respond to points made at an earlier stage by the Opposition or indeed by Government Back-Benchers. Secondly, there are those which are tidying up amendments—it is not a political matter; it happens under all governments. Thirdly, there are those which mark changes in policy.

I fully accept the noble Baroness's point that it is undesirable for the third type of amendment to be introduced at a late stage. I apologise for the fact that that happens in some cases. It will happen in amendments put down for consideration today. We try to keep those to a minimum but we do not always win.

I thank my noble friend Lord McCarthy for his recognition that Amendment No. 9 achieves the point he made in Committee. That was what we intended. I do not apologise for the fact that we are flexible and listen to debate. That is, after all, the purpose of a revising Chamber. I commend Amendment No. 1.

On Question, amendment agreed to.

4.30 p.m.

Baroness Miller of Hendon moved Amendment No. 2: Page 18, line 42, leave out ("21") and insert ("50")

The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 2, 3 26, 27, 55 and 56. The amendments are identical. They propose to increase the definition of a small business which is exempt from the provisions of the Bill requiring compulsory union recognition from one with fewer than 21 employees to one with fewer than 50.

I make no apology for bringing back the amendment. I believe that it is of vital importance to the stability of small businesses. Small businesses are constantly praised by the Government, in particular the incumbents of the office of Secretary of State for Trade and Industry, of whom we are now on our third in just over two years. They acknowledge them as the potential engines of new enterprise and employment. Yet time after time their legislation ignores the difference between small businesses and large ones. Ever increasing administrative burdens are placed on them. I shall not take up your Lordships' time with a catalogue of those burdens because we are now debating another stumbling block being placed in their path—another disincentive to expansion for a small business which survives its dangerous first three years

The possibility imposed by the Act is that if the business has grown large enough to reach a small threshold in number of employees, it may then be faced with a demand for unionisation—a union which, if history is anything to follow, will want to alter the flexible working, multitasking and other processes of "mucking in" together which help those small business get off the ground.

Do not think that I decry the usefulness of unions in larger businesses. I believe that they are a useful tool, reducing the need for negotiating with individual employees and helping to smooth out problems when they arise. However, in the case of small businesses a union inevitably creates the atmosphere of "them" and "us" which does not happen when a handful of people work together. This is especially so when, in a business of the size the Government propose as the starting point, fewer than a dozen employees can impose their will on the other 10 who are probably working alongside them in the same building, if not in the same room.

When this amendment was discussed in another place, the Secretary of State agreed to take the power to alter the number from 21. Paragraph 6(6)(b) now gives him the powers to vary the number of workers. I optimistically assume this means that he concedes that it is possible for the Government to have got their numbers wrong and that the threshold of 21 may, as we predict, be just too low. On the other hand, the power may have been inserted merely to keep the Opposition quiet.

I am not happy to leave the matter in what I believe is an unsatisfactory state. This is especially so as the power to vary the number is so ambiguously worded that it means that the Secretary of State could reduce still further the figure of 21. Indeed, in his response to the debate on the amendment in Committee, the noble Lord, Lord McIntosh of Haringey said—ominously, in my opinion, We acknowledge that it may have to vary in either direction. It could be too stringent or not stringent enough".—[Official Report, 7/6/99; col. 1174] In other words, having got their foot in the door with the figure of 21, the Government could reduce the figure to 11, five or even three. The Government have the power to vary the figure. There would seem no reason why they should not start at the more sensible and appropriate figure of 50. The reason I refer to an appropriate figure of 50 is because of the recommendation of the Commission of the European Union concerning the definition of small and medium-sized enterprises which was dated 3rd May 1996. I shall paraphrase it and quote from it. It recorded that as long ago as 1990 the Commission had proposed to limit the proliferation of definitions in use in the Community. In 1992 it proposed a threshold of 50 employees for a small business, and 250 for a medium-sized business. The 1996 report states: Some programmes will fix very varied thresholds". That is what the Government are doing in this Bill. The report continues: In a single market without internal frontiers, the treatment of enterprises must be set on a set of common rules". Of all the criteria used for defining a small business including the turnover, the report says that, the number of employees is undoubtedly one of the most important and must be regarded as imperative". That is from the preamble. The formal recommendation in Article 1 paragraph 2 states that, a 'small enterprise' is defined as an enterprise which has fewer than 50 employees". That should be clear enough to the Government.

Because I do not wish to be accused of selective quoting, I point out that the same paragraph includes modifications to ensure that businesses with a high annual turnover, or large balance sheet net worth, or those which are not independent, do not fall into that definition. We on this side of the Chamber would not object if the Government were to accept the Commission's recommendation for the purposes of this Bill but in return applied the modifications proposed in the same paragraph.

In Article 3 of the same document, the Commission undertook to adapt the statistics it produces for various purposes under size classes of one to nine, 10 to 49, and 50 to 249 employees—and then two other categories with which we are not concerned today. The Fourth Council Directive, No. 78/660/EEC, has been amended to incorporate the criteria proposed in the recommendation. It will be no use for the Minister to tell us that the figure of 21, which I described to the Committee as seemingly having "been plucked from the air", is not related to small businesses and was chosen for some other reason.

I remind noble Lords that in the preamble to the recommendation the Commission decried the use of varied thresholds for different purposes. Only a year ago, in June 1998, in the Late Payment of Debts (Interest) Act, a small company was defined as one with fewer than 50 employees. Perhaps the Minister will explain the Government's different approach in the two Acts. What does that say as regards consistency? I told the Committee that despite the Government's claim to have consulted widely over the provision, the IOD, the EEF and the Small Business Bureau are not content with that figure. The Government have to pay at least as much attention to them, and to the European Commission, as they do to the unions. The proposals seem to be in breach of the EC directive by which we are bound. I beg to move.

Baroness Hogg

I support the amendment moved by my noble friend. The Bill as draf:ed is peculiarly insensitive to the needs of small businesses, in particular small service businesses. I am concerned that the Bill does not seem to make a sufficient distinction between part-time and full-time employees. Small catering businesses, for example, may well at times employ over 20 part-timers but in real terms are small businesses with low turnover.

I refer to Amendment No. 2. The Bill appears to make it necessary for the number to exceed 20 on one day only because the line in the Bill ends with the word "or" rather than "and" before moving to the averaging proposal over 13 weeks. That seems to border on the ridiculous. I should be grateful for reassurance from the Minister.

Lord Cavendish of Furness

My Lords, I have declared an interest in this subject; I refer noble Lords to the Second Reading debate. I have businesses that would be affected by the Bill.

I support the amendment moved by my noble friend Lady Miller of Hendon. She makes a compelling case, to which I do not have much to add. I have been involved in businesses that employed only a few people and in some that employed 200 or more. I do not believe that either figure is correct. If there is to be compulsion—I do not like that anywhere—my instinct is that somewhere in the region of 80-plus might be a suitable figure for union recognition.

It must be acknowledged that much that emanates from the European Community attracts distrust, and even hatred, among the fraternity of small businesses. However one aspect, of the EC that small businesses admire, and would like to see developed further, is the single market. My noble friend made a particularly important point when she said that recommendations from the EC about the definition that support and enhance the workings of the single market should be encouraged. I support the amendment.

Lord Wade of Chorlton

My Lords, I hope that the Government will look sympathetically at this amendment. As the Government have said on many occasions, it is important that we do not do anything to hinder either the start-up or the growth of small businesses. They are the key and the major employers in the country. Small businesses are delicate flowers, and it takes little to disrupt the investment for growth and development that is the necessary to our future economic success. This is an important amendment and I hope that the Government will support it.

Lord McCarthy

My Lords, this may be a point of order, although I am not sure whether we have such things in this place. Is this not a waste of time? These amendments are virtually the same as those about which we had a long and protracted debate in Committee. Is it right that we should go over the same ground twice?

4.45 p.m.

Lord McIntosh of Haringey

My Lords, we are at Report stage. There are strict rules governing what happens at Third Reading, but, unfortunately, there are much less clear rules about what follows between the Committee and Report stages. It was interesting to hear again the arguments advanced by the noble Baroness, Lady Miller. I had heard them before and I had read them. However, she was able to remind noble Lords who did not pay the attention that I did to her speech in Committee about her concerns.

Before I move on to the substance of her amendments, I must correct a misapprehension that the noble Baroness has about the operation of the 21-worker limit. She laboured under that misapprehension in Committee and she continues to do so today. On 7th June, she said: The employer must recognise the union if a mere nine employees—40 per cent of the workforce—requires it and the majority vote in support. In other words, if only three bother to vote, it would take just two votes to approve.".—[Official Report, 17/6/99; col. 1161.] That is not correct. It must be my fault because I have not explained properly the workings of a recognition ballot.

In order for a union to win a recognition ballot, a minimum of 40 per cent of all workers must vote in favour of recognition—I repeat, they must not just vote, but vote in favour. Therefore, if there are 21 workers, at least nine of them must vote in favour of recognition. If only three people bother to vote, the union will not be recognised. The union must also gain the majority of the votes. Therefore, if 10 workers are in favour and 11 are against, the ballot will be lost and recognition will not be granted.

I return to the issue of a threshold for small businesses. A fundamental reason for having a statutory scheme for union recognition is to provide a means for workers to be represented collectively by a trade union when they wish it. I know that the noble Lord, Lord Cavendish of Furness, does not like that; he has said it before and he said it again today. I appreciate his point of view, but that is what the Bill is about. There is a strong argument that the right to be collectively represented should not be subject to any threshold. Some of my noble friends agree with that argument: they take the view that the situation should be the same as that which pertains to health and safety legislation. It does not have any threshold for small businesses—for rather obvious reasons.

There is a further argument that employment relations in the smallest businesses are different—more personal and less formal—and that statutory collective bargaining is inappropriate in such cases. We listened to both sides and we were persuaded that the smallest firms are, on the whole, different. That is not to say that there is anything wrong with collective bargaining in these firms: some small firms already recognise unions. I told your Lordships in Committee and again today of my experience in this area. There is nothing to stop such businesses continuing to recognise unions if they so wish.

We accept that to apply the statutory provisions to firms with 20 or fewer workers could be onerous and inappropriate. That is why we propose the threshold at that level. I disagree with the noble Baroness, Lady Miller, now as much as I did in Committee when she suggested that there must be a single threshold for all purposes. I have already given the example of health and safety legislation, where I think everyone would agree that there should be no threshold. There are much higher thresholds for works councils under European legislation. There is no reason why there should not be thresholds of 20, 50 or 80—as the noble Lord, Lord Cavendish of Furness, advocates on this occasion—for different purposes. There is nothing magical about any of those figures.

The noble Baroness asked whether we had consulted about the matter and she pointed out that the Federation of Small Businesses and the Institute of Directors, in particular, oppose the threshold of 20. I note that she did not mention the Confederation of British Industry. In any case, the fact that she was able to support her argument by referring to those organisations proves that we consulted fully.

Of course, this figure—any figure—is arbitrary to some extent. The noble Baroness suggested 50 employees, but a firm with 50 employees is a much more substantial undertaking. In many branches of activity, a firm with 50 employees would be considered to be a medium or even a large business—I think particularly of agriculture or retailing. A restaurant or a hotel with 50 employees—I return to the remarks of the noble Lord. Lord Cavendish of Furness—is not a minnow in the hospitality industry. A business of that size must, of necessity, have a more developed personnel function.

We have proposed a realistic, fair and workable solution. However, if that proves not to be the case, as a last resort the Bill confers the power to vary the figure upwards or downwards if that is shown to be necessary. The noble Baroness said that the Bill now contains that power and that that is some sort of admission on our part. However, the Bill has contained that power from the beginning and it was envisaged initially in the White Paper. We are talking about excluding 8.1 million people—or about 31 per cent of the total workforce—from the statutory recognition provisions in this Bill. I think that we have demonstrated, both in Committee and on this occasion, that that is reasonable.

The noble Baroness, Lady Hogg, asked about the calculation of 21 workers. If the numbers fluctuate, workers may find it difficult to know whether a firm employs 21 people on a given day. The Bill proposes two tests: either the employer has 21 workers on the day that the application is received; or the firm had an average of 21 workers over the preceding 13 weeks. The situation is more complicated than the noble Baroness seems to believe. That test is outlined in paragraph 6 of Schedule 1 to the Bill. It aims to ensure that an employer who gets word that an application is about to be submitted cannot avoid recognition by sacking enough workers to get below the threshold for a few days. I do not think the noble Baroness would wish to encourage such a practice.

Baroness Hogg

My Lords, surely what is sauce for the goose is sauce for the gander. The fact that the word "or" appears means that they would have only to choose a day on which employment was over that number for the full panoply of the Bill to apply.

Lord McIntosh of Haringey

My Lords, unfortunately, employers have the power to decide how many people work for a business; employees do not. Therefore, it cannot be sauce for the goose in the same way as sauce for the gander. No, we have given full consideration to the matter and reached the right conclusion. I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Miller of Hendon

The Minister will not be surprised to know that I am disappointed with his response. Incidentally, I am grateful to him for pointing out my mistake in the number needed to start the whole procedure. However, I do not believe that he has dealt with my problems. I have never mentioned in this House that I started my own small business. I had to do this kind of thing, it would never have got off the ground and expanded into three countries. It is only right that I should test the opinion of the House.

4.50 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 126; Not-Contents, 134.

Division No. 1
CONTENTS
Aberdare, L.	Charteris of Amisfield, L.
Addison, V.	Clanwilliam, E.
Ailsa, M.	Clark of Kempston, L.
Alexander of Tunis, E.	Coleraine, L.
Allenby of Megiddo, V.	Coleridge, L.
Annaly, L.	Cope of Berkeley, L.
Archer of Weston-Super-Mare, L.	Courtown, E.
Astor of Hever, L.	Cox, B.
Attlee, E.	Crickhowell, L.
Bathurst, E.	Cross, V.
Belhaven and Stenton, L.	Davidson, V.
Bell, L.	Denham, L.
Biddulph, L.	Dixon-Smith, L.
Biffen, L.	Dundee, E.
Birdwood, L.	Dundonald, E.
Blatch, B.	Dunleath, L.
Bowness, L.	Eden of Winton, L.
Brabazon of Tara, L.	Ellenborough, L.
Bridgeman, V.	Elles, B.
Brougham and Vaux, L.	Elton, L.
Burnham, L. [Teller.]	Fookes, B.
Buscombe, B.	Gainford, L.
Cadman, L.	Gardner of Parkes, B.
Campbell of Alloway, L.	Glentoran, L.
Carnock, L.	Gormanston, V.
Cavendish of Furness, L.	Gray, L.

Harding of Petherton, L.	Northbrook, L.
Harlech, L.	Northesk, E.
Harmsworth, L.	Norton of Louth, L.
Hayhoe, L.	O'Cathain, B.
Henley, L. [Teller.]	Onslow of Woking, L.
Higgins, L.	Oppenheim-Barnes, B.
Hogg, B.	Park of Manmouth, B.
Holderness, L.	Plummer of St. Marylebone, L.
HolmPatrick, L.	Rees, L.
Hooper, B.	Renton, L.
Howe, E.	Renton of Mount Harry, L.
Jenkin of Roding, L.	Renwick, L.
Keyes, L.	Roberts of Conwy, L.
Kintore, E.	Romney, E.
Kitchener, E.	Rotherwick, L.
Knight of Collingtree, B.	St Davids, V.
Lauderdale, E.	Seccombe, B.
Long, V.	Shaw of Northstead, L.
Lucas. L.	Skelmersdale, L.
Lucas of Chilworth, L.	Strafford, E.
Lyell, L.	Strathcarron, L.
McConnell, L.	Strathcona and Mount Royal, L.
Marlesford, L.	Strathmore and Kinghorne, E.
Massereene and Ferrard, V.	Swansea, L.
Merrivale, L.	Tenby, V.
Mersey, V.	Teviot, L.
Miller of Hendon, B.	Thomas of Gwydir, L.
Milverton, L.	Trumpington, B.
Monk Bretton, L.	Vivian, L.
Monson, L.	Waddington, L.
Montrose, D.	Wade of Chorlton, L.
Morris, L.	Weatherill, L.
Mountevans, L.	Westbury, L.
Munster, E.	Wharton, B.
Murton of Lindisfarne, L.	Wise, L.
Napier and Ettrick, L.	Wynford, L.
Norfolk, D.	Young, B.

NOT-CONTENTS
Acton. L.	Falkland, V.
Addington, L.	Farrington of Ribbleton, B.
Alli, L.	Fitt, L.
Amos, B.	Geraint, L.
Archer of Sandwell, L.	Gilbert, L.
Ashley of Stoke, L.	Goodhart, L.
Bach, L.	Gould of Potternewton, B.
Beaumont of Whitley, L.	Graham of Edmonton, L.
Berkeley, L.	Grenfell, L.
Blackstone, B.	Hacking, L.
Borrie. L.	Halsbury, E.
Bragg, L.	Hamwee, B.
Brookman, L.	Hanworth, V.
Bruce of Donington, L.	Hardy of Wath, L.
Burlison, L.	Harris of Greenwich, L.
Calverley, L.	Harris of Haringey, L.
Carlisle, E.	Haskel, L.
Carter, L.[Teller.]	Hayman, B.
Christopher, L.	Hollis of Heigham, B.
Clarke of Hampstead, L.	Hughes, L.
Clement-Jones, L.	Hughes of Woodside, L.
Clinton-Davis, L.	Hunt of Kings Heath, L.
Cocks of Hartcliffe, L.	Irvine of Lairg, L.[Lord Chancellor.]
Crawley, B.
Currie of Marylebone, L.	Janner of Braunstone, L.
David, B.	Jay of Paddinigton, B.[Lord Privy Seal.]
Davies of Oldham, L.
Desai, L.	Jeger, B.
Dholakia, L.	Judd, L.
Dixon, L.	Kennet, L.
Donoughue, L.	Laming, L.
Dormand of Easington, L.	Levy, L.
Dubs, L.	Longford, E.
Evans of Watford, L.	McCarthy, L.
Ezra, L.	Macdonald of Tradeston, L.
Falconer of Thoroton, L.

McIntosh of Haringey, L.[Teller.]	Rogers of Riverside, L.
	Russell, E.
Mackenzie of Framwellgate, L.	Sainsbury of Turville, L.
McNair.L.	Sandberg, L.
McNally, L.	Sawyer, L.
Maddock, B.	Serota, B.
Mar and Kellie, E.	Sewel, L.
Merlyn-Rees, L.	Shepherd, L.
Methuen, L	Simon, V.
Milner of Leeds, L.	Simon of Glaisdale, L
Molloy, L.	Simon of Highbury, L.
Monkswell, L.	Smith of Clifton, L.
Montague of Oxford, L.	Smith of Gilmorehill, B.
Morris of Castle Morris, L.	Stone of Blackheath, L.
Morris of Manchester, L.	Strabolgi, L.
Murray of Epping Forest, L.	Symons of Vernham Dean, E
Newby, L.	Taylor of Blackburn, L.
Nicol, B.	Thomas of Walliswood, B.
Phillips of Sudbury, L.	Thornton, B.
Pitkeathley, B.	Thurso, V.
Plant of Highfield, L.	Tomlinson, L.
Ponsonby of Shulbrede, L.	Tordoff, L.
Prys-Davies, L.	Turner of Camden, B.
Puttnam, L.	Uddin, B.
Ramsay of Cartvale, B.	Walker of Doncaster, L.
Randall of St. Budeaux, L.	Wallace of Saltaire, L.
Razzall, L.	Warner, L.
Rea, L.	Watson of Invergowrie, L.
Redesdale, L.	Wigoder, L.
Rendell of Babergh, B.	Williams of Crosby, B.
Richard, L.	Williams of Elvel, L.
Rochester, L.	Williams of Mostyn, L
Rodgers of Quarry Bank, L.	Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

5 p.m.

[Amendment No. 3 not moved.]

Baroness Miller of Hendon moved Amendment No. 4: Page 19, line 20, at end insert— ("() For the purposes of sub-paragraphs (1)(a) and (1)(b) there shall be excluded from the number of persons classified as "workers"—

1. (a) directors or any company secretary or other officers or manager of a limited company,
2. (b) shareholders in any private limited company or company whose shares are not quoted on any recognised stock exchange, and
3. (c) members of a partnership.")

The noble Baroness said: My Lords, having considered the argument made by the Government in Committee when they rejected this amendment, I feel that I have no alternative but to bring it to the attention of your Lordships again.

The amendment excludes from the definition of workers the directors, the company secretary and any other persons who are regarded as officers of the company. There can be no logical reason to include such persons in the quorum required to trigger the recognition procedure. That is even true in the case of a small company with, say, three directors and a company secretary, which would represent 20 per cent of the target figure of 21 proposed in the Bill.

It is equally illogical if the company secretary is, as so often happens, an outside accountant who has nothing to do with the operation of the company, except to sign a couple of forms every year. Logic does not enter the Government's ambitions. The more people, however irrelevant, who can be counted as workers, the greater chance there is for an ambitious trade union organiser to try to reach the magic figure. That is likely to be a two-edged sword because the board of a company that is inclined to resist union recognition would presumably vote against it in the ballot so that the union starts off with an assured X number of votes against it. However, far be it from me to tell the union how to manage to obtain votes!

The amendment refers also to shareholders, specifically in the private company or one that is not quoted on the Stock Exchange. That would be a case where employees have helped to finance the business for which they work by acquiring shares in it. They are, in effect, part owners. They are no different from minority partners in a business which is not a limited company. Even the Government do not consider that individual owners working in their own business are employees for the purposes of the Bill.

The noble Lord, Lord McIntosh of Haringey, argued that only officers of the company who had a contract of employment were workers for the purposes of the Bill. He went on to say: I am sure that the noble Baroness is not arguing that those who have contracts of employment should be excluded from the head count implied in the cut-off point of 21". I must apologise to the Minister for not having made myself clear on the previous occasion. That was precisely what I was arguing.

The noble Lord has told us on several occasions about his experiences when he was engaged in his own market research business. Perhaps as a director with or without a contract he may have regarded himself as one of the workers. Perhaps as a long-term honorary principal of the London Working Men's College that may possibly have coloured his thinking on the subject. I am sure that he held that position with the greatest of honour.

I said "Working Men's College" and not "Working Persons' College". I cannot resist saying that in view of an amendment that I tabled in Committee on the Greater London Authority Bill.

Lord McIntosh of Haringey

My Lords, let me assure the noble Baroness that the letterhead of the Working Men's College and the sign outside say the "Working Men's College for Men and Women". The original title was formed in 1854 and there would have been some disquiet if we had changed it.

Baroness Miller of Hendon

My Lords, I am delighted to hear that. That ties in with how I tried to change the word "chair" to "chairman" in the Greater London Authority Bill because I consider the word "chairman" as all embracing. I am glad that it is all embracing in the Working Men's College.

Notwithstanding what a model employer the noble Lord undoubtedly was, I do not imagine that his employees regarded him as just another member of the staff. He was the boss and they did what he told them—at least I should imagine that they did. That is the real test of who or who is not a worker. Are you the teller or the "tellee"? The same applies to the hundreds of thousands of directors of the hundreds of thousands of small family businesses around the country whose directors do not consider themselves workers, and whose employees, without knowing the niceties of the existence of employment contracts, would laugh if you described a director as one of the workers.

I was only too right—as I often am!—to want to treat directors with or without a contract of employment as not being employees for the purposes of the Bill. I stress for the purposes of the Bill alone. In February the Court of Appeal in the case of the Secretary of State for Industry v. Bottrill said that whether an employer and employee relationship existed could be decided only by having regard to all the relevant facts. If an individual had a controlling shareholding, that was a fact that was likely to be significant in all situations and sometimes may be decisive. On the other hand, the industrial tribunal had held that the fact that Mr Bottrill had a contract made him an employee. The Court of Appeal upheld that decision against the Secretary of State on the facts of that case.

Why do I mention a case that seems to contradict my argument on this amendment? We have the Secretary of State vigorously arguing before the Court of Appeal at the expense of thousands of pounds of taxpayers' money while attempting to save a disproportionately few pounds for the redundancy fund, that a director, even with a contract of employment, is not an employee.

Now the Minister argues exactly the opposite. If the Minister is right, we could have a situation in a company with two directors where one is treated as an employee and the other is not. That would be ludicrous. The Court of Appeal said that every case depended upon the relevant circumstances.

Here we want absolute certainty and consistency. We do not want the question of whether there should or should not be a ballot to depend upon the outcome of a piece of litigation between the employer and the union and the view that the court takes on the facts of that director's status. In this case we can have that certainty by saying that, with or without a contract, a director is not to be counted as a worker. I beg to move.

Viscount Thurso

My Lords, perhaps I may ask the noble Baroness whether, if there were a ballot in a small firm with a family worker who is a director—not a worker—and that director was to vote for union recognition, that would be the most comprehensive argument in favour of union recognition in that firm.

Baroness Miller of Hendon

My Lords, I must apologise to the noble Viscount. My Front Bench was talking to me and I did not hear what he said. I am sure that he would not say anything that was incorrect.

Lord McIntosh of Haringey

My Lords, I do not know that I can act as intermediary.

Perhaps I said something in Committee that could have led to confusion. I said to the noble Lord, Lord Tebbit, that persons who do not have a contract of employment do not count as workers. The relevant definition which I mentioned is the one in Section 296 of the Trade Union and Labour Relations Consolidation Act 1992. The definition of worker in that Act includes those with contracts of employment, but also, an individual who works or normally works or seeks to work … under any other contract whereby he undertakes to do or perform personally any work or services for another party to the contract who is not a professional client of his". In other words, some people who do not have contracts of employment count as workers.

I am sorry to see that the noble Baroness has tabled Amendment No. 4 because that means that she was not convinced by my arguments, or perhaps she did not understand my arguments—both of which are my fault—that such an amendment is quite unnecessary. I understand her concern that an inventive union organiser may try to establish that the directors of a company are workers, but the definition of a worker in the 1992 Act is clear: directors of a company are not workers unless they have contracts of employment or other contracts bringing them within the definition that I have read out.

Most directors, and particularly non-executive directors, will not normally be workers. However, where they do have such contracts it would surely be wrong in principle not to include them in the count. Surely that works both ways. From the union's point of view, you want to get up to the 21 workers and in a tiny minority of cases, just to the threshold. But, from the union's point of view, surely you do not want to have—this is the point made by the noble Viscount, Lord Thurso—people who, because they are directors and also workers, will inevitably vote against recognition. The noble Baroness, I think, is arguing against her own case. The point I want to make is that the commonsense definition which the noble Baroness wants is already part of the 1992 Act which was enacted under the government of her party.

Similarly, the question of share ownership is not relevant to who counts as a worker. No one qualifies as a worker of a company simply by virtue of holding shares in it. The noble Baroness's amendment would mean that any employee who did hold shares in the business would not count as a worker for the purposes of the schedule. I cannot see why employees who participate in a share scheme should lose their rights to take part in a ballot on union recognition. Again, the argument seems to be against the noble Baroness's own interest. If you exclude those who rake part in an employee share ownership scheme, you are going to exclude people who might be inclined to support the management.

In a small family business, family members helping out may or may not count as workers. That would depend on the basis on which they worked. The noble Baroness, Lady Hogg, is not in her place, but I am responding in part to what she said on the previous amendment. It would depend on whether they were paid or purely voluntary, the frequency and regularity with which they worked, and so on. If they are workers, surely they should count towards the threshold. People should not be deprived of their rights simply because they work in a family business. But if they are not workers as defined, they will not count.

Finally, members of a partnership do not normally count as workers, since they do not have contracts of or for employment. They are the owners of the business. Some partnerships do have a category of "partners" who receive a salary. The John Lewis Partnership is usually given as an example, although those shares in the business are held in a trust and the so-called "partners" do not own the business but are employees. 'The "partners" who receive a salary are generally accepted to have a different status from "real" partners. Again, the existing definition is good enough.

I hope that in the light of this further explanation, the noble Baroness will accept that the definition of "worker" in the Bill, which comes from previous legislation over a period of time, is perfectly adequate for the purpose and that she will withdraw her Amendment No. 4.

Baroness Miller of Hendon

My Lords, the noble Lord the Minister had no need to take the blame or to think that I had not understood his response properly because he had not explained it properly the first time. I am quite sure that he explained it very well the first time and he has explained it very well the second lime. I do not really want to accept it, but I certainly will. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord McIntosh of Haringey moved Amendment No. 5: Page 22, line 23, at end insert—

("Notice to cease consideration of application

15A.—(1) This paragraph applies if the CAC has received an application under paragraph 10 or 11 and—

1. (a) it has not decided whether the application is admissible, or
2. (b) it has decided that the application is admissible.

(2) No further steps are to be taken under this Part of this Schedule if, before the final event occurs, the parties give notice to the CAC that they want no further steps to be taken.

(3) The final event occurs when the first of the following occurs—

1. (a) the CAC issues a declaration under paragraph 20(2) in consequence of the application;
2. (b) the last day of the notification period ends; and the notification period is that defined by paragraph 22(5) and arising from the application.")

The noble Lord said: My Lords, I should like to move Amendment No. 5 and speak also to Amendments Nos. 7, 24, 25, 28, 29, 53 and 54. I apologise for the delay in tabling these amendments. The idea behind them is relatively straightforward, but we have to do some very careful checking to make sure that there are no unintended or unhelpful consequences.

Let me start by repeating what I said in Committee. The Government intends to exclude from the scope of Part II any purely voluntary agreement, including all agreements made before Schedule 1 comes into force. Part II, which refers to voluntary agreements, will apply only to those agreements made in consequence of an application for recognition under paragraph 3 of Part I. These are referred to as "agreements for recognition" in our amendments. In essence, these agreements will be binding on the employer for three years. After three years, the employer will be able to derecognise the union without having to apply to the CAC, just as if the union had been recognised voluntarily.

We believe this change is necessary and desirable for several reasons. It closes a loophole by which an employer could agree recognition, perhaps after a union's application had been accepted by the CAC and a bargaining unit determined, and then derecognise the union. In this way an employer could avoid recognition even if all his workers were union members. So these amendments would make "semi-voluntary" recognition binding for three years, just as statutory recognition is binding for at least three years.

By providing a union with some security in a recognition agreement, and by providing the employer with more flexibility to derecognise than does statutory recognition, this change will promote voluntary—or perhaps I should say semi-voluntary—agreements. If the parties can reach agreement without a ballot, perhaps with the help of ACAS or the CAC, or after the bargaining unit has been determined, they do not need to go through the entire statutory recognition process—involving balloting and so on—in Part I.

We have also provided a procedure whereby an employer or union can complain to the CAC that a bargaining method agreed after recognition has not been followed. If the CAC finds that this is indeed the case, it will be able to impose a bargaining method. This will apply whether the original recognition was via the statutory process in Part I or was an agreement for semi-voluntary recognition under Part II. Wholly voluntary agreements will not be affected.

Turning to the text of the amendments, Amendment No. 5 requires the CAC to cease work on an application for recognition if the parties request it to do so. This is a prerequisite for semi-voluntary recognition, but it is also a commonsense clarification. Amendment No. 7 allows an employer or a union to apply for a bargaining method to be determined if the union was recognised under Part I; an equivalent for semi-voluntarily recognised unions is inserted by Amendment No. 25. Amendment No. 24 first sets out, in the new paragraph 40, the detail of what constitutes semi-voluntary recognition, and secondly provides, in the new paragraphs 41 and 41A, for the necessary interpretative provisions. It thirdly provides, in paragraph 41B, a procedure for resolving disputes about whether recognition is semi-voluntary, and finally sets out in paragraph 41C, the consequences of semi-voluntary recognition. Paragraph 41D ensures that bargaining arrangements are ended if recognition is ended.

Amendment No. 25 provides a period in which a semi-voluntarily recognised union and an employer may seek to agree a bargaining method without the involvement of the CAC, as well as a procedure for the imposition of a method by the CAC if either party fails to carry out the agreed method. Amendment No. 28 ensures that the procedure may be used only by independent unions, and Amendment No. 29 prohibits the unilateral withdrawal of an application for an agreed method if the CAC is required to determine a method.

Finally, Amendments Nos. 53 and 54 make a change to Part IV, the derecognition provisions, which is consequential to the changes to Part II. Because derecognition of a semi-voluntarily recognised union is not allowed for three years, but can be done at any time thereafter, it is necessary to remove semi-voluntary recognition from the scope of Part II. That is what Amendments Nos. 53 and 54 seek to do.

These amendments make important changes, which I flagged up when we considered Part II of Schedule 1, to the way in which the schedule deals with voluntary recognition. Genuine voluntary agreements will fall outside the scope of Part II, but voluntary agreements made as a result of applications under Part I will be more attractive to employers and unions. These are changes which we have considered at length and we believe they are of benefit to all parties. I beg to move.

Lord McCarthy

My Lords, it is very difficult for us to know how to react to these amendments because they are, as the Minister himself said, extremely complicated and they come at very short notice. It is extremely difficult to trace through and see precisely what is left of the old Part II. One cannot say that it is subject to subsequent correction and change because this is the last moment. If we get this amendment wrong now and we do not complain about it now, we shall not have another opportunity to do so because here we are in the upper House at Report stage.

Nevertheless, as I understand it—indeed, as the Minister explained it—this is far better than the pseudo-monster of Part II, which is on the face of the Bill. I was always against Part II. I could never gain an honest admission from people that they had invented it or that it was their idea. No one would say who asked for it; it just appeared. It was supposed to be there because unions had complained about the non-enforcement of their collective agreements by employers.

The first objection to that view is that, when you investigate what unions are complaining about, it invariably turns out that they are not complaining about the non-observance or non-enforcement of a written, formal agreement; they are talking about employers taking back customs and practices which were never put in writing and which we never really agreed at all. They are complaining about sudden, immediate acts of management authority. They have not got it written down and do not have protection, but they think they have. Therefore, I was always extremely sceptical that they would get much out of this.

Secondly, if the unions did challenge, what they were being asked to do under the Part II now in the Bill was to turn their existing agreement, or some other construction of it, into a legally enforceable document. But no one would have wanted that. We do not have any legally-enforceable collective agreements in this country. That is not the tradition; it is not the method. That is part of the problem about the way that this Bill seeks to enforce recognition. However, I shall leave that point aside for the moment. So, if this were taken seriously by employers, unions would suddenly find that they were being asked to accept all kinds of legally enforceable restrictions on, for example, their relations with their shop stewards or their members or, indeed, on the use of industrial action. They would not want that anyway on the second ground.

Thirdly, if it ever came to the point of the CAC wanting an existing agreement to be legally enforceable and beefed up in some way and the employer did not like it, the obvious reaction for the sensible employer would be to derecognise the union. We would have a rash of derecognitions if ever the unions sought to put the pseudo-barmy Part II into effect. Therefore, the fact that that has gone cannot be a bad thing; indeed, it is an entirely good thing. I regard it as the second great concession which has been made this afternoon and am grateful for it.

However, why do we not just abolish it? Why have we thought up another pseudo-Part II to put in its place? It is possible that I do not understand it because it has been put forward at the last minute. Therefore, I have a few questions for my noble friend the Minister. I understand—I am sure I have this bit right—that it is confined to applicants for recognition; in other words, it cannot affect anyone who does not apply.

Secondly, it applies where you have gone for recognition because the employer will not grant you this, but you have not got the ballot and you have not had a CAC declaration which will turn itself into a "method", whatever this is, and be enforced. Indeed, if you had got that far, this part of the system would not apply. It also applies if one party signs what I believe my noble friend called a "semi-voluntary" or "partly-voluntary" agreement but the other party doubts whether there is in fact an agreement. So you can go to the CAC and it will determine whether the agreement which was signed is really an agreement. I cannot imagine the circumstances in which this would arise; but never mind.

The other occasion when it arises is where one party says, "We have got an agreement but the other party is not carrying it out". If I have got it right, those are the circumstances. I have several points to make. First, I find it impossible to envisage such a situation ever arising in the real world. Employers who refuse to recognise, and who take themselves to the stage where they appear before the CAC which makes an award against them, will not suddenly recognise half-way through, sign what actually turns out not to be a proper agreement and then fail to observe it. This is a world about which I know nothing at all. As I said, I cannot envisage such a situation arising. But, never mind, if it does not arise, you might say that it does not matter.

However, it is not clear to me what happens if it should arise. What answers are given by the CAC? Let us suppose that such a situation did arise and one party, perhaps a union, goes to the CAC and says, "This agreement is not an agreement". What does the CAC do? It may give a declaration, but are there any sanctions behind this? Do you then move on to a legally enforceable method? Does the CAC then write the agreement because the agreement in question turns out not to be an agreement? That is not very clear to me. On the other hand, let us suppose that it is an agreement and the problem is that it is not being carried out. What is the sanction? If the CAC decides that the agreement exists, that it is a good one but that it is not being carried out, what is the sanction? Is it the same old sanction that appears in other parts of the Bill; that is to say, "specific performance"? Do we go back to a situation in which the CAC puts in what is in effect a legally enforceable agreement and then, if the employer does not take notice, the union can, so to speak, go to court and seek to impose it on him because he is breaking a contract and it can get "specific performance"?

If that is the case, what have we added? What have we done? What would be different if we took this provision away? If there were another sanction at this stage—for example, one that the Government had rejected, like compulsory arbitration—that would be saying something different. But I do not think that that is here and I do not see it in the Bill. Frankly, having got rid of the old Part II, I am not convinced that we need the new Part II at all.

Lord McIntosh of Haringey

My Lords, perhaps I may reassure my noble friend on one point immediately. When a totally new amendment is introduced on Report, it is perfectly proper under the conventions of the House for any noble Lord to table an amendment to that amended part of the Bill on Third Reading. It will inevitably be new material and there would be no difficulty in that respect. However, my noble friend's argument is much more detailed than that. Perhaps I may try to reassure him, although I do not know whether I can cover all the possibilities that he envisaged in his speech.

My noble friend is quite right in his first assumption. These amendments and Part II are about applicants for recognition; in other words, those who have made an application for recognition under paragraph 3 of Part I and started off the statutory procedure. My noble friend then went on to ask whether these are cases where there has been no ballot or where the procedure has not been completed. The easiest way to describe it is to say that it will apply where the procedure for statutory recognition has been started but has been aborted by the employer agreeing recognition, perhaps after a union's application had been accepted by the CAC and a bargaining unit determined, although it could be aborted at quite a number of different stages. Then, under the provisions of the Bill, without these amendments and with the statutory procedure having been aborted, the employer could derecognise the union. In that way, the employer could avoid recognition even if all his workers were union members. That is why we have brought in the semi-voluntary procedure.

My noble friend also asked about sanctions and suggested a number of alternatives. The sanction here is that a semi-voluntary recognition is binding for three years, just as is the case with statutory recognition. We believe that to be an effective and appropriate sanction.

Part II will apply only where there has been a formal application under Part I and the parties reach agreement for recognition without a ballot or membership count; for example, the employer and the union may disagree only about the bargaining unit. But once that has been settled by the CAC, they may be able to agree recognition.

The point of these amendments is to ensure that the employer can be held to that recognition for three years and the agreement enforced, if necessary, through the imposed procedure, as recognition under Part I can. My noble friend has far more experience than I of whether this is likely to happen on the ground, but I hope he will agree that this was a loophole—at least in theory—and that what we have done to Part II closes that loophole and—as I think he acknowledges—is an improvement to the Bill. I beg to move.

On Question, amendment agreed to.

5.30 p.m.

Lord McIntosh of Haringey moved Amendment No. 6: Page 23, line 15, leave out from beginning to end of line 24 and insert— ("(2) Within the decision period the CAC must decide whether the application is invalid within the terms of paragraphs 38A to 38H. (3) In deciding whether the application is invalid, the CAC must consider any evidence which it has been given by the employer or the union (or unions). (4) If the CAC decides that the application is invalid—

1. (a) the CAC must give notice of its decision to the parties,
2. (b) the CAC must not proceed with the application, and
3. (c) no further steps are to be taken under this Part of this Schedule.

(5) If the CAC decides that the application is not invalid it must—

1. (a) proceed with the application, and
2. (b) give notice to the parties that it is so proceeding.

(6) The decision period is—

1. (a) the period of 10 working days starting with the day after that on which the parties agree an appropriate bargaining unit or the CAC decides an appropriate bargaining unit, or
2. (b) such longer period (so starting) as the CAC may specify to the parties by notice containing reasons for the extension.")

The noble Lord said: My Lords, in moving Amendment No. 6 I wish to speak also to Amendments Nos. 12 to 23, 49, 51, 60 to 69 and 80. All of these amendments deal with how the CAC handles applications. There are three main subjects covered by them, all of which are interlinked: the reapplication of preliminary tests, three-year bars on repeat applications and clarification of the derecognition procedures.

At present, preliminary tests are applied by the CAC when it receives an application for recognition. The tests are set out in paragraphs 30 to 38 and are applied by paragraph 14. Some of them are intended to rule out applications which would disrupt other bargaining arrangements by imposing statutory recognition on top of them. However, if the bargaining unit changes during the process, under paragraph 16 or 17, the tests need to be reapplied to ensure that no existing collective bargaining arrangements are affected.

Amendment No. 6 provides for the preliminary tests relating to a particular bargaining unit to be reapplied if the bargaining unit changes, and Amendment No. 20 gives the tests themselves. Amendments Nos. 12, 14, 21, 22 and 23 are consequential to Amendments Nos. 6 and 20.

Turning to the issue of three-year bars on repeat applications, I should like to draw attention to what the Government set out in the White Paper, Fairness at Work: New applications for recognition or de-recognition will not be considered by the CAC until three years after the date on which a previous application was determined".

That is set out in paragraph 4.18 on page 25.

A three-year bar on reapplications for recognition after a failed request and on applications for derecognition after a successful application for recognition has been in the schedule since it was first introduced in another place. Amendment No. 18 will mean that successful applications for derecognition bar recognition of the same union in respect of that bargaining unit for three years; Amendments Nos. 15 and 19 are consequential to it. Amendments Nos. 60, 61, 63 and 67 bar reapplications for derecognition for three years after an unsuccessful application; Amendments Nos. 62, 64 and 69 are consequential.

Amendment No. 80 concerns the three routes by which an employer may seek derecognition: having fewer than 21 workers, a "standard" procedure and a procedure for use if the union was recognised via the "automatic" recognition procedure in paragraph 20. The schedule does not currently make any provision for dealing with multiple applications. The amendment would give the Secretary of State power to direct the CAC as to the order in which competing applications for derecognition should be treated by the CAC. The Government intend that an employer should have to choose a single ground on which to apply for derecognition, rather than being able to run several applications simultaneously or consecutively. The other amendment of substance in this group is Amendment No. 51 which makes explicit provision for the withdrawal of applications under Part III. This is equivalent to the provision in Part I, paragraph 15. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 7: Page 28, line 21, at end insert—

("Method not carried out

29A.—(1) This paragraph applies if—

1. (a) the CAC issues a declaration under this Part of this Schedule that the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of a bargaining unit,
2. (b) the parties agree a method by which they will conduct collective bargaining, and
3. (c) one or more of the parties fails to carry out the agreement.

(2) The parties may apply to the CAC for assistance.

(3) Paragraph 29 applies as if "paragraph 28" (in each place) read "paragraph 28 or paragraph 29A".")

The noble Lord said: My Lords, this has already been spoken to with Amendment No. 5. I beg to move.

On Question, amendment agreed to.

[Amendment No. 8 not moved.]

Lord McIntosh of Haringey moved Amendment No. 9: Page 28, line 33, at end insert— ("(1A) But sub-paragraph (1) does not apply to an application under paragraph 10 or 11 if—

1. (a) the union (or unions) recognised tinder the collective agreement and the union (or unions) making the application under paragraph 10 or 11 are the same, and
2. (b) the matters in respect of which the union is (or unions are) entitled to conduct collective bargaining do not include pay, hours or holidays.")

The noble Lord said: My Lords, this has already been spoken to with Amendment No. 1. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 10: Page 28, line 35, leave out ("64(3)") and insert ("66(1)")

The noble Lord said: My Lords, in moving Amendment No. 10 I wish to speak also to Amendments Nos. 11, 36, 39, 40, 57, 58, 59, 78 and 79. These amendments all correct cross-references and grammatical errors. Only two are of any real substance, but all are necessary. Amendments Nos. 10 and 11 correct a cross-reference, while Amendments Nos. 36, 39 and 40 are grammatical. Amendments Nos. 57 and 59 correct another cross-reference; Amendment No. 58 corrects a third.

The two amendments of any substance are Amendments Nos. 78 and 79. These refer to the power of the CAC to request the Secretary of State to amend the automatic recognition procedure and the power of the Secretary of State to issue guidance to the CAC on how automatic recognition should operate. The present text refers to the procedure in paragraph 20, which is in Part I of the schedule. However, there is an equivalent provision in Part III, in paragraph 70. Amendments Nos. 78 and 79 allow the CAC to comment on the operation of the procedure in both parts and for the Secretary of State to issue guidance which applies to both. paragraph 20 and paragraph 70. So these amendments are purely for consistency. I beg to move.

On Question, amendment agreed to.

Lord McIntosh, of Haringey moved Amendments Nos. 11 to 25: Page 28, line 37, leave out ("64(3)") and insert ("66(1)") Page 29, line 32, leave out (", and") and insert ('or proceeds under paragraph 18 with an application relating to a bargaining unit, (aa) the application has not been withdrawn, (ab) no notice has been given under paragraph 15A(2),") Page 29, line 34, at end insert (", and (c) no notification has been made under paragraph 22(2)") Page 29, line 46, after ('unit") insert ("or proceeds under paragraph 18 with an application relating to a bargaining unit") Page 30, line 10, after ("37") insert ("or 37A") Page 30, line 1. after ("declaration") insert ("under paragraph 27(4)") Page 30, line 13, at end insert ("; and this is so whether the ballot concerned is held under this Part or Part III of this Schedule") Page 30, line 24, at end insert— ("37A.—(1) This paragraph applies if the CAC issues a declaration under paragraph 99(3) that bargaining arrangements are to cease to have effect; and this is so whether the ballot concerned is held under Part IV or Part V of this Schedule. (2) An application under paragraph 10 or 11 is not admissible if—

1. (a) the application is made within the period of 3 years starting with the day after that on which the declaration was issued.
2. (b) the relevant bargaining unit is the same or substantially the same as the bargaining unit to which the bargaining arrangements mentioned in sub-paragraph (1) relate, and
3. (c) the application is made by the union which was a party (or unions which were parties) to the proceedings leading to the declaration.

(3) The relevant bargaining unit is—

1. (a) the proposed bargaining unit, where the application is under paragraph 10(2) or 11(2);
2. (b) the agreed bargaining unit, where the application is tinder paragraph 11(4).")

Page 30, line 25, leave out ("and 37") and insert ("to 37A") Page 30, line 28, at end insert—

("General provisions about validity

38A.—(1) Paragraphs 38B to 38H apply if the CAC has to decide under paragraph 18 whether an application is valid.

(2) In those paragraphs—

1. (a) references to the application in question are to that application, and
2. (b) references to the relevant bargaining unit are to the bargaining unit agreed by the parties or decided by the CAC.

38B.—(1) The application in question is invalid if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit.

(2) But sub-paragraph (1) does not apply to the application in question if—

1. (a) the union (or unions) recognised under the collective agreement and the union (or unions) making the application in question are the same, and
2. (b) the matters in respect of which the union is (or unions are) entitled to conduct collective bargaining do not include pay, hours or holidays.

(3) An agreement for or declaration of recognition which is the subject of a declaration under paragraph 66(1) must for the purposes of sub-paragraph (1) be treated as ceasing to have effect on the making of the declaration under paragraph 66(1).

(4) In applying sub-paragraph (1) an agreement for recognition (the agreement in question) must be ignored if—

1. (a) the union does not have (or none of the unions has) a certificate under section 6 that it is independent,
2. (b) at some time there was an agreement (the old agreement) between the employer and the union under which the union (whether alone or with other unions) was recognised as entitled to conduct collective bargaining on behalf of a group of workers which was the same or substantially the same as the group covered by the agreement in question, and
3. (c) the old agreement ceased to have effect in the period of three years ending with the date of the agreement in question.

(5) It is for the CAC to decide whether one group of workers is the same or substantially the same an another, but in deciding the CAC may take account of the views of any person it believes has an interest in the matter.

38C. The application in question is invalid unless the CAC decides that—

1. (a) members of the union (or unions) constitute at least 10 per cent of the workers constituting the relevant bargaining unit, and
2. (b) a majority of the workers constituting the relevant bargaining unit would be likely to favour recognition of the union (or unions) as entitled to conduct collective bargaining on behalf of the bargaining unit.

38D.—(1) This paragraph applies if—

1. (a) the CAC accepts an application under paragraph 10 or 11 relating to a bargaining unit or proceeds under paragraph 18 with an application relating to a bargaining unit,
2. (b) the application has not been withdrawn,
3. (c) no notice has been given under paragraph 15A(2),
4. (d) the CAC has not issued a declaration under paragraph 20(2), 25(2), 27(3) or 27(4) in relation to that bargaining unit, and
5. (e) no notification has been made under paragraph 22(2). (2).

(2) The application in question is invalid if—

1. (a) at least one worker falling within the relevant bargaining unit also falls within the bargaining unit referred to in sub-paragraph (1), and
2. (b) the application in question is made by a union (or unions) other than the union (or unions) which made the application referred to in sub-paragraph (1).

38E.—(1) This paragraph applies if the CAC accepts an application under paragraph 10 or 11 relating to a bargaining unit or proceeds under paragraph 18 with an application relating to a bargaining unit.

(2) The application in question is invalid if—

1. (a) the application is made within the period of 3 years starting with the day after that on which the CAC gave notice of acceptance of the application mentioned in sub-paragraph (1),
2. (b) the relevant bargaining unit is the same or substantially the same as the bargaining unit mentioned in sub-paragraph (1), and
3. (c) the application is made by the union (or unions) which made the application mentioned in sub-paragraph (1).

(3) This paragraph does not apply if paragraph 38F or 38G applies.

38F.—(1) This paragraph applies if the CAC issues a declaration under paragraph 27(4) that a union is (or unions are) not entitled to be recognised as entitled to conduct collective bargaining on behalf of a bargaining unit; and this is so whether the ballot concerned is held under this Part or Part III of this Schedule.

(2) The application in question is invalid if—

1. (a) the application is made within the period of 3 years starting with the date of the declaration,
2. (b) the relevant bargaining unit is the same or substantially the same as the bargaining unit mentioned in sub-paragraph (1), and
3. (c) the application is made by the union (or unions) which made the application leading to the declaration.

38G.—(1) This paragraph applies if the CAC issues a declaration under paragraph 99(3) that bargaining arrangements are to cease to have effect; and this is so whether the ballot concerned is held under Part IV or Part V of this Schedule.

(2) The application in question is invalid if—

1. (a) the application is made within the period of 3 years starting with the day after that on which the declaration was issued,
2. (b) the relevant bargaining unit is the same or substantially the same as the bargaining unit to which the bargaining arrangements mentioned in sub-paragraph (1) relate, and
3. (c) the application is made by the union which was a party (or unions which were parties) to the proceedings leading to the declaration.

38H.—(1) This paragraph applies for the purposes of paragraphs 38E to 38G.

(2) It is for the CAC to decide whether one bargaining unit is the same or substantially the same as another, but in deciding the CAC may take account of the views of any person it believes has an interest in the matter.")

Page 30, line 31, after ("35(1)") insert ("or 38D(1)")

Page 30, line 34, after ("35(2)") insert ("or the application in question referred to in paragraph 38D(2); but an application cannot be an original application unless it was made under paragraph 10(2) or 11(2)")

Page 30, line 37, after ("35") insert ("or is invalid by reason of paragraph 38D")

Page 31, leave out lines 5 to 21 and insert—

("Agreements for recognition

40.—(1) This paragraph applies for the purposes of this Part of this Schedule.

(2) An agreement is an agreement for recognition if the following conditions are fulfilled in relation to it—

1. (a) the agreement is made in the permitted period between a union (or unions) and an employer in consequence of a request made under paragraph 3 and valid within the terms of paragraphs 4 to 8;
2. (b) under the agreement the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of a group or groups of workers employed by the employer;
3. (c) if sub-paragraph (5) applies to the agreement, it is satisfied.

(3) The permitted period is the period which begins with the day on which the employer receives the request and ends when the first of the following occurs—

1. (a) the union withdraws (or unions withdraw) the request;
2. (b) the union withdraws (or unions withdraw) any application under paragraph 10 or 11 made in consequence of the request;
3. (c) the CAC gives notice of a decision under paragraph 13(7) which precludes it from accepting such an application under paragraph 10 or 11;
4. (d) the CAC gives notice under paragraph 14(4)(a) or 18(4)(a) in relation to such an application under paragraph 10 or 11;
5. (e) the parties give notice to the CAC under paragraph 15A(2) in relation to such an application under paragraph 10 or 11;
6. (f) the CAC issues a declaration under paragraph 20(2) in consequence of such an application under paragraph 10 or 11;
7. (g) the CAC is notified under paragraph 22(2) in relation to such an application under paragraph 10 or 11;
8. (h) the last day of the notification period ends (the notification period being that defined by paragraph 22(5) and arising from such an application under paragraph 10 or 11);
9. (i) the CAC is required under paragraph 39(3) to cancel such an application under paragraph 10 or 11.

(4) Sub-paragraph (5) applies to an agreement if—

1. (a) at the time it is made the CAC has received an application under paragraph 10 or 11 in consequence of the request mentioned in sub-paragraph (2), and
2. (b) the CAC has not decided whether the application is admissible or it has decided that it is admissible.

(5) This sub-paragraph is satisfied if, in relation to the application under paragraph 10 or 11, the parties give notice to the CAC under paragraph 15A before the final event (as defined in paragraph 15A) occurs.

Other interpretation

41.—(1) This paragraph applies for the purposes of this Part of this Schedule.

(2) In relation to an agreement for recognition, references to the bargaining unit are to the group of workers (or the groups taken together) to which the agreement for recognition relates.

(3) In relation to an agreement for recognition, references to the parties are to the union (or unions) and the employer who are parties to the agreement.

41A.—(1) This paragraph applies for the purposes of this Part of this Schedule.

(2) The meaning of collective bargaining given by section 178(l) shall not apply.

(3) Except in paragraph 45(2), in relation to an agreement for recognition references to collective bargaining are to negotiations relating to the matters in respect of which the union is (or unions are) recognised as entitled to conduct negotiations under the agreement for recognition.

(4) In paragraph 45(2) the reference to collective bargaining is to negotiations relating to pay, hours and holidays.

Determination of type of agreement

41B.—(1) This paragraph applies if one or more of the parties to an agreement applies to the CAC for a decision whether or not the agreement is an agreement for recognition.

(2) The CAC must give notice of receipt of an application under sub-paragraph (1) to any parties to the agreement who are not parties to the application.

(3) The CAC must within the decision period decide whether the agreement is an agreement for recognition.

(4) if the CAC decides that the agreement is an agreement for recognition it must issue a declaration to that effect.

(5) If the CAC decides that the agreement is not an agreement for recognition it must issue a declaration to that effect.

(6) The decision period is—

1. (a) the period of 10 working days starting with the day after that on which the CAC receives the application under sub-paragraph (1), or
2. (b) such longer period (so starting) as the CAC may specify to the parties to the agreement by notice containing reasons for the extension.

Termination of agreement for recognition

41C.—(1) The employer may not terminate an agreement for recognition before the relevant period ends.

(2) After that period ends the employer may terminate the agreement, with or without the consent of the union (or unions).

(3) The union (or unions) may terminate an agreement for recognition at any time, with or without the consent of the employer.

(4) Sub-paragraphs (1) to (3) have effect subject to the terms of the agreement or any other agreement of the parties.

(5) The relevant period is the period of three years starting with the day after the date of the agreement.

41D.—(1) If an agreement for recognition is terminated, as from the termination the agreement and any provisions relating to the collective bargaining method shall ease to have effect.

(2) For this purpose provisions relating to the collective bargaining method are—

1. (a) any agreement between the parties as to the method by which collective bargaining is to be conducted with regard to the bargaining unit, or
2. (b) anything effective as, or as if contained in, a legally enforceable contract and relating to the method by which collective bargaining is to be conducted with regard to the bargaining unit.")

Page 31, line 23, leave out from beginning to end of line 28 and insert—

("42.—(1) This paragraph applies if the parties make an agreement for recognition.

(2) The parties may in the negotiation period conduct negotiations with a view to agreeing a method by which they will conduct collective bargaining.

(3) If no agreement is made in the negotiation period the employer or the union (or unions) may apply to the CAC for assistance.

(4) The negotiation period is—

1. (a) the period of 30 working days starting with the start day, or
2. (b) such longer period (so starting) as the parties may from time to time agree.

(5) The start day is the day after that on which the agreement is made.

42A.—(1) This paragraph applies if—

1. (a) the parties to an agreement for recognition agree a method by which they will conduct collective bargaining, and
2. (b) one or more of the parties fails to carry out the agreement as to a method.

(2) The employer or the union (or unions) may apply to the CAC for assistance.

42B.—(1) This paragraph applies if an application for assistance is made to the CAC under paragraph 42 or 42A.

(2) The application is not admissible unless the conditions in sub-paragraphs (3) and (4) are satisfied.")

On Question, amendments agreed to.

[Amendments Nos. 26 and 27 not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 28 and 29: Page 31, line 33, leave out from beginning to end of line 37 and insert— ("(4) The condition is that the union (or every union) has a certificate under section 6 that it is independent.") Page 33, line 13, at end insert— ("(5A) If the CAC accepts an application, the applicant may not withdraw it after the end of the agreement period.")

The noble Lord said: My Lords, these amendments were spoken to with Amendment No. 5. I beg to move.

On Question, amendments agreed to.

Lord McIntosh of Haringey moved Amendment No. 30: Page 33, line 27, at end insert (", and ("(b) provisions relating to the collective bargaining method apply in relation to the unit.")

The noble Lord said: My Lords, in moving Amendment No. 30 I wish to speak also to Amendments Nos. 31 to 35, 37, 38, 41 to 48 and 50. These amendments concern the treatment of voluntary and semi-voluntary recognition under Part III of the schedule; that is, the schedule dealing with changes affecting the bargaining unit. 'The amendments can be classified in two categories. The first category is amendments to the scope of Part HI which mean it will apply only to unions which were recognised through the statutory process in Part I. The second category of amendments ensures that Part HI deals appropriately with outside bargaining units; that is, with workers falling within a new unit who are covered by a different collective agreement. The amendments deal with the various categories of recognition in the outside unit; that is to say, voluntary, semi-voluntary and statutory. There are also some minor or consequential changes.

I turn to the amendments. Amendments Nos. 30 and 31 ensure that Part III applies only if there is a collective bargaining method. This is for the avoidance of doubt and for logical consistency. Amendment No. 32 is for consistency of wording with Amendment No. 30. Amendments Nos. 34 to 38 and 43 mean that Part III applies only to statutory recognition. If a union and an employer have agreed voluntary or semi-voluntary recognition, it will be up to them to negotiate a change in the bargaining unit if the employer's business changes.

Amendments Nos. 41, 42, 45, 46 and 48 correct a deficiency in the schedule. Paragraph 66 deals with the case where the CAC decides on a new bargaining unit which contains workers covered by another statutory recognition arrangement. As it stands, the schedule says nothing about how workers in the new unit covered by a voluntary or semi-voluntary agreement should be treated. Amendment No. 46 rectifies this by inserting a new paragraph 66A, similar in construction to paragraph 66, which provides that if a new unit contains workers covered by a voluntary or semi-voluntary recognition agreement recognition will cease for members of the original unit but the voluntary or semi-voluntary bargaining arrangements will not be affected.

Amendment No. 44 is a minor amendment to allow for the possibility that there may be more than one outside bargaining unit. Amendments Nos. 47 and 50 improve the procedure for dealing with outside bargaining units if there is more than one new unit. At present, paragraph 67 allows the CAC to re-declare recognition in an outside bargaining unit minus any "bites" taken out of that unit by new units. The CAC has to do so separately in relation to each new unit. However, it is possible that more than one new unit will each take a "bite" out of a single outside unit. In this case it would be better for the CAC to wait until it has dealt with all the new units before sorting out what remains of the outside unit. That is what Amendments Nos. 47 and 50 do. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 31 to 54: Page 33, line 33, at end insert ("which apply in relation to the original unit.") Page 33, line 34, leave out first ("the") Page 33, line 43, leave out from beginning to end of line 12 on page 34 Page 35, line 14, leave out ("or agreement") Page 35, line 32, leave out ("or 47") Page 38, line 30, leave out ("in") and insert ("under") Page 38, line 45, leave out ("or agreement") Page 39, line 12, leave out ("or 47") Page 40, line 6, leave out ("appropriate or units which are") and insert ("(or units which are)") Page 40, line 9, leave out ("appropriate or units which are") and insert ("(or units which are)") Page 40, leave out lines 18 and 19 and insert— ("(1) This paragraph applies if in the CAC's opinion the new unit contains at least one worker falling within a statutory outside bargaining unit. (1A) In such a case—") Page 40, line 27, leave out ("the outside unit") and insert ("each statutory outside bargaining unit containing workers who fall within the new unit") Page 40, line 29, leave out ("or 47") Page 40, line 30, leave out second ("the") and insert ("an") Page 40, line 45, leave out ("An") and insert ("A statutory") Page 41, line 9, at end insert ("66A.—(l) This paragraph applies if in the CAC's opinion the new unit contains—

1. (a) at least one worker falling within a voluntary outside bargaining unit, but
2. (b) no worker falling within a statutory outside bargaining unit.

(2) In such a case—

1. (a) the CAC must issue a declaration that the original bargaining arrangements, so far as relating to workers falling within the new unit, are to cease to have effect on a date specified by the CAC in the declaration, and
2. (b) the original bargaining arrangements shall cease to have effect accordingly.

(3) The original bargaining arrangements are the bargaining arrangements as defined in paragraph 46. (4) A voluntary outside bargaining unit is a bargaining unit which fulfils these conditions—

1. (a) it is not the original unit;
2. (b) a union is (or unions are) recognised as entitled to conduct collective bargaining on its behalf by virtue of an agreement with the employer;
3. (c) the union (or at least one of the unions) is not a party referred to in paragraph 46.

(5) The date specified under sub-paragraph (2)(a) must be—

1. (a) the date on which the relevant period expires, or
2. (b) if the CAC believes that to maintain the original bargaining arrangements would be impracticable or contrary to the interests of good industrial relations, the date after the date on which the declaration is issued;

and the relevant period is the period of 65 working days starting with the day after that on which the declaration is issued.") Page 41, leave out lines 10 to 33 Page 41, line 34, after ("66(1)") insert ("or 66A(1)") Page 43, line 45, at end insert ("(8) Paragraphs (a) and (b) of sub-paragraph (6) also apply if the CAC issues a declaration under paragraph 25(2).") Page 44, line 5, at end insert— ("73A.—(1) This paragraph applies if—

1. (a) the CAC has proceeded as stated in paragraphs 66 to 72 with regard to the new unit (if there is one only) or with regard to each new unit (if there are two or more), and
2. (b) in so doing the CAC has issued one or more declarations under paragraph 66.

(2) The CAC must—

1. (a) consider each declaration issued under paragraph 66, and
2. (b) in relation to each declaration, identify each statutory outside bargaining unit which contains at least one worker who also falls within the new unit to which the declaration relates;

and in this paragraph each statutory outside bargaining unit so identified is referred to as a parent unit. (3) The CAC must then—

1. (a) consider each parent unit, and
2. (b) in relation to each parent unit, identify any workers who fall within the parent unit but who do not fall within the new unit (or any of the new units); and in this paragraph the workers so identified in relation to a parent unit are referred to as a residual unit.

(4) In relation to each residual unit, the CAC must issue a declaration that the outside union is (or outside unions are) recognised as entitled to conduct collective bargaining on its behalf. (5) But no such declaration shall be issued in relation to a residual unit if the CAC has received an application under paragraph 49 or 58 in relation to its parent unit. (6) In this paragraph references to the outside union (or to outside unions) in relation to a residual unit are to the union which is (or unions which are) recognised as entitled to conduct collective bargaining on behalf of its parent unit. (7) If the CAC issues a declaration under sub-paragraph (4)—

1. (a) the declaration shall have effect in place of the existing declaration that the outside union is (or outside unions are) recognised as entitled to conduct collective bargaining on behalf of the parent unit, so far as the existing declaration relates to the residual unit;
2. (b) if there is a method of collective bargaining relating to the parent unit, it shall have effect in relation to the residual unit with any modifications which the CAC considers necessary to take account of the change of bargaining unit and specifies in the declaration.")

Page 44, line 20, at end insert—

("Withdrawal of application

74A.—(1) If an application under paragraph 49 or 58 is accepted by the CAC, the applicant (or applicants) may not withdraw the application—

1. (a) after the CAC issues a declaration under paragraph 52(3) or 61(3),
2. (b) after the CAC decides under paragraph 60(2) or 60(3),
3. (c) after the CAC issues a declaration under paragraph 66(1), 68(2), 69(3) or 70(2) in relation to the new unit (where there is only one) or a declaration under any of those paragraphs in relation to any of the new units (where there is more than one),
4. (d) after the union has (or unions have) notified the CAC under paragraph 72(1) in relation to the new unit (where there is only one) or any of the new units (where there is more than one), or
5. (e) after the end of the notification period referred to in paragraph 72(1) and relating to the new unit (where there is only one) or any of the new units (where there is more than one).

(2) If an application is withdrawn by the applicant (or applicants)—

1. (a) the CAC must give notice of the withdrawal to the other party (or parties), and
2. (b) no further steps are to be taken under this Part of this Schedule.")

Page 44, line 20, at end insert—

"Meaning of collective bargaining

74B.—(1) This paragraph applies for the purposes of this Part of this Schedule.

(2) Except in relation to paragraphs 52(5), 61(5) and 66(6), the meaning of collective bargaining given by section 178(1) shall not apply.

(3) In relation to a new unit references to collective bargaining are to negotiations relating to the matters which were the subject of collective bargaining in relation to the corresponding original unit; and the corresponding original unit is the unit which was the subject of an application under paragraph 49 or 58 in consequence of which the new unit was agreed by the parties or decided by the CAC.

(4) But if the parties agree matters as the subject of collective bargaining in relation to the new unit, references to collective bargaining in relation to that unit are to negotiations relating to the agreed matters; and this is the case whether the agreement is made before or after the time when the CAC issues a declaration that the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of the new unit.

(5) In construing paragraphs 52(3)(c), 61(3)(c), 67(5)(b), 68(2)(c), 70(6)(b) and 72(6)(b}—

1. (a) sub-paragraphs (3) and (4) do not apply, and
2. (b) references to collective bargaining are to negotiations relating to pay, hours and holidays.

Method of collective bargaining

74C.—(l) This paragraph applies for the purposes of this Part of this Schedule.

(2) Where a method of collective bargaining has effect in relation to a new unit, that method shall have effect as if it were contained in a legally enforceable contract made by the parties.

(3) But if the parties agree in writing—

1. (a) that sub-paragraph (2) shall not apply, or shall not apply to particular parts of the method, or
2. (b) to vary or replace the method,

the written agreement shall have effect as a legally enforceable contract made by the parties.

(4) Specific performance shall be the only remedy available for breach of anything which is a legally enforceable contract by virtue of this paragraph.")

Page 44, line 39, leave out from beginning to end of line 2 on page 45

Page 45, line 5, leave out from ("declaration") to end of line 8

On Question, amendments agreed to.

[Amendment Nos. 55 and 56 not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 57 to 69: Page 45, line 38, leave out ("(1)(b)") and insert ("(1)(a)") Page 45, line 49, leave out ("81") and insert ("80") Page 46, line 2, leave out ("(1)(b)") and insert ("(1)(a)") Page 46, line 32, at end insert— ("(4) An application is not admissible if—

1. (a) a relevant application was made within the period of 3 years prior to the date of the application,
2. (b) the relevant application and the application relate to the same bargaining unit, and
3. (c) the CAC accepted the relevant application.

(5) A relevant application is an application made to the CAC—

1. (a) by the union (or the unions) under this paragraph,
2. (b) by the employer under paragraph 86, 87 or 106, or
3. (c) by a worker (or workers) under paragraph 91.")

Page 48, line 38, at end insert— ("88A.—(1) An application under paragraph 86 or 87 is not admissible if—

1. (a) a relevant application was made within the period of 3 years prior to the date of the application under paragraph 86 or 87,
2. (b) the relevant application and the application under paragraph 86 or 87 relate to the same bargaining unit, and
3. (c) the CAC accepted the relevant application.

(2) A relevant application is an application made to the CAC—

1. (a) by the union (or the unions) under paragraph 81,
2. (b) by the employer under paragraph 86, 87 or 106, or
3. (c) by a worker (or workers) under paragraph 91.")

Page 49, line 2, leave out ("and") and insert ("to") Page 49, line 28, at end insert— ("91A.—(1) An application under paragraph 91 is not admissible if—

1. (a) a relevant application was made within the period of 3 years prior to the date of the application under paragraph 91,
2. (b) the relevant application and the application under paragraph 91 relate to the same bargaining unit, and
3. (c) the CAC accepted the relevant application.

(2) A relevant application is an application made to the CAC—

1. (a) by the union (or the unions) under paragraph 81,
2. (b) by the employer under paragraph 86, 87 or 106, or
3. (c) by a worker (or workers) under paragraph 91.")

Page 49, line 39, leave out ("and") and insert ("to") Page 54, line 40, leave out ("to the CAC") Page 54, line 44, leave out ("to the CAC") Page 54, line 47, at end insert— (" 107A.—(1) An application under paragraph 106 is not admissible if—

1. (a) a relevant application was made within the period of 3 years prior to the date of the application under paragraph 106,
2. (b) the relevant application and the application under paragraph 106 relate to the same bargaining unit, and
3. (c) the CAC accepted the relevant application.

(2) A relevant application is an application made to the CAC—

1. (a) by the union (or the unions) under paragraph 81,
2. (b) by the employer under paragraph 86, 87 or 106, or
3. (c) by a worker (or workers) under paragraph 91.")

Page 55, line 1, leave out ("to the CAC") Page 55, line 9, leave out ("and") and insert ("to")

The noble Lord said: My Lords, Amendments Nos. 57 to 59 were spoken to with Amendment No. 10; Amendments Nos. 60 to 69 were spoken to with Amendment No. 6. There is a misprint in Amendment No. 60 as it appears on the Marshalled List. The second sub-paragraph should be "(5)". With that minor amendment, I beg to move Amendments Nos. 57 to 69 en bloc.

On Question, amendments agreed to.

Lord McIntosh of Haringey moved Amendment No. 70: Page 56, line 18, at end insert— ("114A. An application under paragraph 114 is not admissible if the CAC is satisfied that any of the unions has a certificate under section 6 that it is independent.")

The noble Lord said: My Lords, in moving Amendment No. 70 I shall speak also to Amendments Nos. 71 to 75. The Bill allows voluntary recognition of unions which do not hold a certificate of independence. If workers are happy to be represented by such unions, there is no problem. But we do not think it would be right for an employer to be able to prevent workers from being represented by the independent union of their choice by recognising a non-independent union. Part VI of Schedule 1 therefore provides a procedure for workers to request and, via a ballot, to require an employer to derecognise a non-independent trade union.

On Report in another place, the Secretary of State said that, there is an issue that the Government want to consider further: where a staff association or a non-independent union has applied for a certificate of independence, whether the CAC should not consider any application for derecognition until the outcome of that process is known".—[Official Report, Commons, 31/3/99; col. 1185.] On further consideration, we believe it is right that a union which may be independent of control of the employer and which has applied for a certificate of independence should not be subject to derecognition under Part VI unless it fails to obtain that certificate. These amendments put the principle into effect. An application for derecognition made by workers after the union has applied for a certificate of independence will be suspended pending the outcome of the union's application to the certification officer. If the certification officer grants the certificate and the union becomes independent, it can no longer be derecognised under the procedure. If, however, the certification officer refuses the certificate, then the workers' application for derecognition can go ahead.

However, we believe it is important to prevent unscrupulous employers using an application for a certificate of independence by a sweetheart union which they control to delay a perfectly fair application under Part VI. We have therefore provided that the union's application must be made before the application for derecognition, to prevent applications made simply to delay matters. An application for derecognition will be stalled only until the certification officer reaches a verdict on the union's application for a certificate of independence. If the certification officer refuses the certificate, the application will then be allowed to proceed, even if the union appeals against the certification officer's decision. Of course, if an appeal is made and succeeds at any time during the course of an application for derecognition, the application will lapse. Paragraph 117D, which is inserted by Amendment No. 73, achieves this. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 71 to 75: Page 56, line 25, at end insert— ("(115A. An application under paragraph 114 is not admissible if the CAC is satisfied that—

1. (a) the union (or any of the unions) has made an application to the Certification Officer under section 6 for a certificate that it is independent, and
2. (b) the Certification Officer has not come to a decision on the application (or each of the applications).")

Page 56, line 29, leave out ("and 115") and insert ("to 115A") Page 57, line 11, at end insert— ("117A.—(1) This paragraph applies if—

1. (a) the CAC accepts an application under paragraph 114,
2. (b) during the period mentioned in paragraph 117(1) or 117C(3) the CAC is satisfied that the union (or each of the unions) has made an application to the Certification Officer under section 6 for a certificate that it is independent, that the application (or each of the applications) to the Certification Officer was made before the application under paragraph 114 and that the Certification Officer has not come to a decision on the application (or each of the applications), and
3. (c) at the time the CAC is so satisfied there has been no agreement or withdrawal as described in paragraph 117(1) or 117C(3).

(2) In such a case paragraph 117(1) or 117C(3) shall cease to apply from the time when the CAC is satisfied as mentioned in sub-paragraph (1)(b). 117B.—(1) This paragraph applies if the CAC is subsequently satisfied that—

1. (a) the Certification Officer has come to a decision on the application (or each of the applications) mentioned in paragraph 117A(1)(b), and
2. (b) his decision is that the union (or any of the unions) which made an application under section 6 is independent.

(2) In such a case—

1. (a) the CAC must give the worker (or workers), the employer and the union (or unions) notice that it is so satisfied, and
2. (b) the application under paragraph 114 shall be treated as not having been made.

117C.—(1) This paragraph applies if the CAC is subsequently satisfied that—

1. (a) the Certification Officer has come to a decision on the application (or each of the applications) mentioned in paragraph 117A(1)(b), and
2. (b) his decision is that the union (or each of the unions) which made an application under section 6 is not independent.

(2) The CAC must give the worker (or workers), the employer and the union (or unions) notice that it is so satisfied. (3) In the new negotiation period the CAC must help the employer, the union (or unions) and the worker (or workers) with a view to—

1. (a) the employer and the union (or unions) agreeing to end the bargaining arrangements, or
2. (b) the worker (or workers) withdrawing the application.

(4) The new negotiation period is—

1. (a) the period of 20 working days starting with the day after that on which the CAC gives notice under sub-paragraph (2), or
2. (b) such longer period (so starting) as the CAC may decide with the consent of the worker (or workers), the employer and the union (or unions).

117D.—(1) This paragraph applies if—

1. (a) the CAC accepts an application under paragraph 114,
2. (b) paragraph 117A does not apply, and
3. (c) during the relevant period the CAC is satisfied that a certificate of independence has been issued to the union (or any of the unions) under section 6.

(2) In such a case the relevant period is the period starting with the first day of the negotiation period (as defined in paragraph 117(2)) and ending will the first of the following to occur—

1. (a) any agreement by the employer and the union (or unions) to end the bargaining arrangements;
2. (b) any withdrawal of the application by the worker (or workers);
3. (c) the CAC being informed of the result of a relevant ballot by the person conducting it;

and a relevant ballot is a ballot held by virtue of this Part of this Schedule. (3) This paragraph also applies if—

1. (a) the CAC gives notice under paragraph 1 17C(2), and
2. (b) during the relevant period the CAC is satisfied that a certificate of independence has been issued to the union (or any of the unions) under section 6.

(4) (n such a case, tile relevant period is the period starting with the first day of the new negotiation period (as defined in paragraph 117C(4)) and ending with the first of the following to occur—

1. (a) any agreement by the employer and the union (or unions) to end the bargaining arrangements;
2. (b) any withdrawal of the application by the worker (or workers);
3. (c) the CAC being informed of the result of a relevant ballot by the person conducting it; and a relevant ballot is a ballot held by virtue of this Part of this Schedule.

(5) If this paragraph applies—

1. (a) the CAC must give the worker (or workers), the employer and the union (or unions) notice that it is satisfied as mentioned in sub-paragraph (1)(c) or (3)(b), and
2. (b) the application under paragraph 114 shall be treated as not having been made.")

Page 57, line 15, after ("117(1)") insert ("or 117C(3)") Page 57, line 22, at end insert— ("(c) the reference in paragraph 97(4) to the CAC refusing an application under paragraph 97(2) included a reference to it being required to give notice under paragraph 117D(5)")

The noble Lord said: My Lords, I have just spoken to these amendments. I beg to move them en bloc.

On Question, amendments agreed to.

Lord McIntosh of Haringey moved Amendment No. 76: Page 59, leave out line 42

The noble Lord said: My Lords, in moving Amendment No. 76 I shall speak also to Amendment No. 77. These amendments remove references to a worker's breach of contract from the provisions on detriment and dismissal connected with recognition in Part VIII.

I should start by explaining what these amendments are not intended to do. They are not intended to allow workers to breach their contracts in pursuit of union recognition. The purpose of the amendments is to prevent employers from circumventing the provisions which protect workers from detriment or dismissal arising from campaigning about recognition.

The existing text of the Bill is deficient in two ways. First, it would allow employers to write into workers' contracts a requirement not to campaign about recognition. Obviously, that would undermine the entire purpose of providing protection for workers in the schedule—indeed, of providing the schedule itself.

Secondly, in providing that actions in breach of contract are not protected, the schedule is currently different from other detriment and dismissal provisions—for example, Section 44 of the Employment Rights Act 1996—because those provisions do not contain any mention of breach of contract. Retaining the existing text in the Bill might be taken to imply that a worker is always protected under other similar provisions where he acts in breach of contract. Again, that is obviously not desirable.

These amendments would continue to protect a worker from detriment or dismissal if, and only if. the worker's action is reasonable. In most cases it will be unreasonable for a worker to breach his or her contract, so I do not believe this change represents a substantial alteration of the provisions. It does, however, reduce the risk of circumvention of the provisions by unscrupulous employers and of unintended consequences on other legislation. On that basis, I hope that the House will agree that this is a desirable change. I beg to move.

Baroness Turner of Camden

My Lords, I thank my noble friend for introducing this amendment. My recollection is that this was one of the issues we raised in Committee. I am very glad that the point has been accepted and I hope the House will give it full support.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 77 to 80: Page 61, leave out lines 32 and 33 Page 62, line 14, after ("20") insert ("or 70") Page 62, line 24, after ("20") insert ("or 70") Page 62, line 44, at end insert—

("Directions about certain applications

139A.—(l) The Secretary of State may make to the CAC directions as described in sub-paragraph (2) in relation to any case where—

1. (a) two or more applications are made to the CAC,
2. (b) each application is a relevant application,
3. (c) each application relates to the same bargaining unit, and
4. (d) the CAC has not accepted any of the applications.

(2) The directions are directions as to the order in which the CAC must consider the admissibility of the applications.

(3) The directions may include—

1. (a) provision to deal with a case where a relevant application is made while the CAC is still considering the admissibility of another one relating to the same bargaining unit;
2. (b) other incidental provisions.

(4) A relevant application is an application under paragraph 81, 86, 87, 91 or 106.")

The noble Lord said: My Lords, I have spoken to Amendments Nos. 77 to 80. I beg to move them en bloc.

On Question, amendments agreed to.

Clause 3 [Blacklists]:

Lord McIntosh of Haringey moved Amendment No. 81: Page 2, line 2, leave out ("recruitment") and insert ("discrimination in relation to recruitment or in relation to the treatment of workers")

The noble Lord said: My Lords, in moving Amendment No. 81, I shall speak also to Amendments Nos. 83 and 84 which are consequential upon it.

When the House last debated this matter, I referred to the fact that the Delegated Powers and Deregulation Committee had questioned aspects of our approach. We have reflected in particular on the comments made by the committee that the power should define more clearly the prohibition. We have looked again at Clause 3(1)(b) of the Bill, which describes the purposes to which blacklists are put. As drafted, the subsection seeks to prohibit lists which are, compiled with a view to being used by employers or employment agencies for the purposes of recruitment". The main use of blacklists is undoubtedly in recruitment. However, the Government acknowledge that there exists a very real possibility that lists may be compiled and used to discriminate against workers already in employment. For example, the information could be used to encourage the dismissal of workers currently in employment.

The Government have therefore reflected on this issue and we conclude that the current form of words has too narrow a focus. It contains a potential loophole that might permit the use of blacklists to discriminate against existing members of a workforce.

Amendment No. 81 amends subsection (2)(b). It does so by expanding the prohibited purpose to include the use of lists for the purposes of discrimination against the existing members of a workforce as well as against prospective workers who are applying for work. I think it will be agreed that this is a sensible amendment. It closes the loophole that I have described and ensures that employers can be prevented from relying on the lists to sack or otherwise penalise their existing employees.

Amendment No. 83 is a consequential amendment to the interpretative subsection (5). It provides that the use of "worker" in Amendment No. 81 has the same meaning as it has in Clause 13 of the Bill, so ensuring that it covers agency workers, home workers and persons in Crown employment. This is a sensible definition. It will ensure that some of the more vulnerable members of the workforce are protected.

Finally, I turn to Amendment No. 84, which is also consequential. As currently drafted, subsection (6) states that terms used in the clause have the same meanings as they have in the Trade Union and Labour Relations (Consolidation) Act 1992.

The amendment ensures that the term "worker" in this clause, which is defined in subsection (5). is excluded from that rule of interpretation. That is necessary because the 1992 Act gives a different and narrower meaning to "worker". The amendment is therefore clarificatory and avoids interpretative confusion that might otherwise occur. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 82: Page 2, line 8, at end insert— ("() include provision for or about the grant and enforcement of specified remedies by courts and tribunals; () include provision for the making of awards of compensation calculated in accordance with the regulations; () include provision permitting proceedings to be brought by trade unions on behalf of members in specified circumstances; () include provision about cases where an employee is dismissed by his employer and the reason or principal reason for the dismissal, or why the employee was selected for dismissal, relates to a list to which subsection (1) applies;")

The noble Lord said: My Lords, this provision amends Clause 3, which gives a power to the Secretary of State to bring forward regulations to prohibit the compilation, dissemination and use of blacklists. The clause does not contain the substantive provisions themselves.

We know that the drafting of these regulations will be a complicated matter. We want to ensure that they are well targeted and deal with wrongdoing without outlawing the proper use of information about trade unionists.

We have repeatedly stated our intention to consult in detail on the draft regulations. We shall be especially interested in views about how the sanctions against blacklisting should be defined and how the prohibition can be enforced in the courts or in the tribunals.

As currently drafted, the clause unnecessarily confines the range of enforcement methods and remedies which can be included in the regulations. Some important options might be closed off before we even began to consult on them. For example, it is unclear whether the Government would have the power to introduce regulations which gave the courts or the tribunals the authority to order blacklisting organisations to stop disseminating their lists and to ensure that such orders can be enforced. It is also unclear whether the regulations could enable compensation to be awarded to individuals who have lost their jobs or failed to find employment because their names were included on the lists.

In addition, we want to explore the possibility that unions should be able to bring proceedings on behalf of their members. It might be possible for multiple cases to be handled as one by a union, saving time for the tribunals or the courts, as well as the parties.

The amendment allows such options to be explored during the consultations by expressly stating on the face of the Bill that the regulations could include such remedies. Obviously, I do not wish to pre-judge the results of the consultation. There is no presumption on our part that the regulations will definitely include such solutions. But certainly they appear to be worth examining in closer detail.

The amendment therefore removes an unhelpful rigidity in the power to regulate in this area. It opens up the possibility that the regulatory regime can be more finely attuned to the views of those who are being consulted. I beg to move.

On Question, amendment agreed to

Lord McIntosh of Haringey moved Amendments Nos. 83 and 84: Page 2, line 28, at end insert— (", and "worker" has the meaning given by section 13.") Page 2, line 29, at beginning insert ("Subject to subsection (5),")

The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move.

On Question, amendments agreed to.

Schedule 3 [Ballots and notices]:

Baroness Miller of Hendon moved Amendment No. 85: Page 66, line 16, after ("and") insert ("depending on the circumstances")

The noble Baroness said: My Lords, this amendment relates to what has been called the "health warning" that the Bill requires shall be inserted on a strike ballot form. It tells the employee his rights not to be dismissed in rather one-sided words, referring only to where such dismissal would be unfair, without mentioning the fact that in some circumstances it might be fair.

In Committee, I proposed an amendment to redress the balance. In reply, the noble Lord, Lord McIntosh of Haringey, said that my amendment was unnecessary. However, after further discussion the noble Lord relented and generously agreed to look at the matter again. 'The noble Lord has honoured that promise, and my amendment now contains the wording that both meets my point and, I believe, is acceptable to the Government. I beg to move.

Lord McIntosh of Haringey

My Lords. this amendment seeks to amend the wording of the statutory health warning statement which all voting forms must contain, to make it clear that the dismissal of striking workers after the eight-week period may not necessarily be unfair. The health warning as set down in Schedule 3 simply reads that the dismissal "may be unfair", and the noble Baroness is concerned that it does not explicitly make the point that dismissals could be fair. She will remember that, as a market researcher, I am used to the idea that a question should contain both options in order to be a proper question.

We rejected the noble Baroness's amendment previously on the grounds that, strictly speaking, the health warning conveyed the notion that dismissals could be fair or unfair. However, as she said, we undertook to look at the matter again. The noble Baroness clearly feels strongly about this issue, and I want, as she does, to make sure that the wording is as clear as possible. In those circumstances, we are happy to accept the amendment.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 86: Page 66, line 16, at end insert— ("() In the definition of "strike" in section 246 (interpretation) after "means" there shall be inserted "(except for the purposes of section 229(2))".")

The noble Lord said: My Lords, in moving this amendment, I should like to speak also to Amendment No. 87. These two amendments contain the Government's proposals to amend Schedule 3 on industrial action ballots and notices.

Amendment No. 86 arose from a helpful discussion that we had in Committee on our proposals to define overtime and call-out bans as "action short of a strike". My noble friend Lord Wedderburn drew attention to our failure to spot the need to amend Section 246 of the Trade Union and Labour Relations (Consolidation) Act 1992. I undertook to look at the matter again. I have done so, and I conclude that we need to make a consequential change to Section 246 of the 1992 Act along the lines of my noble friend's suggestion.

Amendment No. 86 makes it clear that the general definition of a strike given in Section 246 does not apply when it comes to the categorisation of overtime and call-out bans as "action short of a strike" for the purpose of the balloting provisions. The amendment helps avoid possible confusion in the future and ensures that Section 246 cannot be drawn upon, as it was in the recent Connex v RMT case, to justify the classification of such action as a "strike".

Amendment No. 87 deals with the treatment of merchant seamen during industrial action ballots. Obviously, such workers move around. They are often away from home. That can create problems for them during industrial action ballots because, to comply with the existing law, most ballot papers have to be sent to their home addresses. If members are away at the time, it can be very difficult, if not impossible, for them to vote.

The current law allows seamen to be balloted on board ship, or at a port where the ship is, as long as they are at sea or at a foreign port during the entire period of the ballot. This helps the balloting process to a certain extent. But it does not deal adequately with the situation where a seaman is at sea for just a part of the balloting period. In such circumstances, it may be impractical for a seaman to return to his home address. For example, he might well be staying at a port elsewhere in the UK awaiting embarkation.

Amendment No. 87 deals with these circumstances. It enables the union to send the ballot paper to the ship or to a UK or foreign port where the ship is, if its member is at sea or at a foreign port for any time during the balloting period. In deciding whether to do this, the union must judge whether it would be convenient for the member to receive the ballot paper in this way. In practice, this judgment should not pose difficulties for unions. If in doubt, they can always ask their members in advance of any ballot what their movements are expected to be. The amendment makes it easier for individual seamen to participate in ballots.

I also want to take this opportunity to give notice to noble Lords that we are considering a further amendment to Schedule 3. This concerns the simplification of the law on separate workplace ballots. This aspect of the law is notoriously complicated and we are continuing our efforts to identify a suitable way to clarify its effects. If successful, we hope to come forward with an amendment at Third Reading. I apologise for proceeding in this way. But I hope noble Lords will agree with me that it would be best for us to proceed only when we are sure that our proposals are correct in every respect. I beg to move.

On Question, amendment agreed to.

6 p.m.

Lord McIntosh of Haringey moved Amendment No. 87: Page 66, line 16, at end insert—

("Conduct of ballot: merchant seamen

. In section 230 (conduct of ballot) for subsections (2A) and (2B) there shall be substituted—

"(2A) Subsection (2B) applies to a merchant seaman if the trade union reasonably believes that—

1. (a) he will be employed in a ship either at sea or at a place outside Great Britain at some time in the period during which votes may be cast, and
2. (b) it will be convenient for him to receive a voting paper and vote while on the ship or while at a place where the ship is rather than in accordance with subsection (2).

(2B) Where this subsection applies to a merchant seaman he shall, if it is reasonably practicable—

1. (a) have a voting paper made available to him while on the ship or while at a place where the ship is, and
2. (b) be given an opportunity to vote while on the ship or while at a place where the ship is."").

On Question, amendment agreed to.

Clause 5 [Training]:

[Amendments Nos. 88 to 90 not moved.]

Schedule 4 [Leave for Family and Domestic Reasons.]:

Lord Sainsbury of Turville moved Amendment No. 91: Page 70, line 2, leave out ("conferred by the regulations") and insert ("under this Chapter")

The noble Lord said: My Lords, this is a purely technical amendment to new Section 75(1)(e) of the Employment Rights Act, which provides that an employee who has maternity rights under her employment contract and under the statutory scheme can choose to exercise whichever is the most advantageous to her in any particular respect. This is similar to the existing provision in the Employment Rights Act.

The need for the amendment is simply because the Bill as drafted refers to rights conferred by regulations whereas the rights in question are in fact contained in the primary legislation.

I wish also to speak to Amendments Nos. 93, 94 and 95. These amendments address the issue of a maximum limit on parental leave raised by the amendment which the noble Baroness tabled in Committee, and which she kindly withdrew when I offered to consider further and bring forward a revised version today.

The amendments affect the fallback parental leave scheme which we are intending to set out in regulations. They provide for some additional powers to ensure that the fallback scheme can, if considered appropriate, set a maximum period of leave to be taken at one time or within a given period.

Let me clarify what will be the result. The Bill already provides for the minimum length of an absence to be set out in regulations, and the most that an employee could take overall will be governed by the entitlement, which will be three months, in line with the parental leave directive.

As a result of these amendments we will have more options to shape the fallback scheme in line with the views we have already received, the matters raised in this House, and in response to our impending consultation. We will have more flexibility to arrive at a balanced scheme. For example, we could provide for a single period of leave to be taken as a minimum period of a week, but no more than a month.

We could limit the amount of leave which could be taken in a given timescale, say six months or a year, without reducing the overall entitlement. We could set out a fair and reasonable framework while leaving it to the individual to choose whether or not to take their leave as a single block or in shorter spells within the framework.

Amendments Nos. 96 and 97 are technical. Their object is to achieve our aim of ensuring that employers and employees have the maximum possible freedom to make their own parental leave arrangements. The amendments replace the existing provisions on collective and workforce agreements in new Section 81 with a more flexible arrangement, which is to be inserted at the end of new Section 78. Our intention, as I made clear in Committee, is to encourage businesses and their workforces to come to their own agreements about how parental leave will operate for them.

We want to ensure that there is sufficient scope for agreements to replace or supplement the statutory provisions, except where these are set in stone as minimum requirements. It will not be possible for collective and workforce agreements to undermine certain minimum requirements; for example, the entitlement to at least three months' leave to care for a child, and the precondition of a year's service in order to qualify for the entitlement, although we will always applaud more generous provision where it can be afforded.

However, there are more discretionary matters, such as the notice requirements or the arrangements for taking leave in short or long periods, where workforces and their employers could agree something different from the fallback scheme which will be provided for in the regulations.

Under the existing provisions, collective and workforce agreements can only substitute for the statutory scheme to the extent that they cover the same ground as the regulations, whereas this amendment will ensure that any relevant agreement can substitute, provided that the contract of employment incorporates or operates by reference to a collective or workforce agreement which provides for parental leave.

This will ensure more flexibility in practice—the light touch we are aiming for. In effect this amendment will also help to ensure that all parties are clear when an agreement is substituting for the discretionary fallback provisions. I commend our amendments in this group to the House and beg to move.

Baroness Miller of Hendon

My Lords, Amendments Nos. 93 and 97 to which the noble Lord has just spoken modify the disruption that may be caused to an employer by the introduction of the concept of parental leave. I am particularly pleased that the Minister considered carefully what we said earlier about the cost to industry and commerce and the loss of competitiveness. We believe that any reduction in those burdens, even the modest ones proposed in the amendment, are most welcome. I am especially pleased to see the alteration of line 43 on page 70, so that any regulations by the Secretary of State may specify the maximum period of parental leave as well as the minimum, which is all the Bill originally provided.

As the noble Lord, Lord Sainsbury of Turville, said, I proposed a similar amendment in Committee and I wanted to require the setting of minimum and maximum limits. He replied that it would require further consideration, although the principle was accepted. I am glad that there has been further consideration. I am happy that by altering the word "and" to "or" the Government have found a solution.

However, I wish to point out in the gentlest possible manner that after the passing of the amendment the clause would read that regulations may, specify a minimum or maximum period of absence". I do not know whether it is correct, but my legal adviser tells me that this might prevent a regulation from specifying both parameters. I am certain that the Secretary of State will sort it out when he gets round to issuing the regulations. Subject to that minor quibble, we support the amendments.

I turn to Amendments Nos. 91A and 92 which are grouped with the noble Lord's amendments. Amendment No. 91A is a one-word amendment to the important provision entitling a worker to parental leave. Parental leave is something in addition to the maternity leave to which a mother is entitled. Throughout all the discussion about the provision, it has been made clear that parental leave shall be unpaid. The noble Lord, Lord Sainsbury, told the Committee: We are absolutely clear and we have been from the outset that there will be no requirement to pay for parental leave and the Bill provides for that".—[Official Report, 16/6/99: col. 318.] On that basis, I withdrew my identical amendment. I do not for one moment doubt the noble Lord's word, I am absolutely certain that if he says it is in the Bill, it is somewhere in the Bill. But despite a careful search, I cannot find it, nor can my advisers, nor the trade association which has briefed me on some aspects of the Bill. It may well be that we have overlooked a clause. However, I thought it best in the end to bring it back so that the Minister could tell me where it is. I am sure it would be helpful. The fact is that it is not in an obvious place where an employer can easily put his finger on it; it should be, even if it is repeated elsewhere in the Bill. For the sake of absolute clarity, I hope that the Government will accept my amendment which merely reflects what they say is the current position. Therefore, they should not have a problem with it.

Amendment No. 92 instructs the Secretary of State as to the nature of the regulations he may make in relation to parental leave. The detailed wording is in the text, but in very shortened form, and provides that the regulations must not impede small and medium size undertakings. It also entitles the employer to postpone the right to parental leave for what are called "justifiable reasons" listed under four headings. This is not just a wish list from the Opposition or industry but exceptions that are specifically allowed for by the working time directive which is the basis of the imposition by the Government of that obligation on industry and commerce. In accepting the limitations imposed by these amendments the Government would demonstrate their good intention neither to goldplate any regulations nor to impose any that constituted an undue burden on commerce, especially small and medium size enterprises.

Lord Sainsbury of Turville

My Lords, I totally understand the concern of the noble Baroness that employers should be free of any doubt that parental leave is to be unpaid. But, as I assured her when we debated in Committee, there is no cause for concern. The Bill makes clear that there will be no requirement for employers to pay parental leave.

Perhaps I may rehearse the arguments to make the position absolutely clear. These provisions are about introducing unpaid parental leave. New Section 76 does not itself confer a right to paid leave. It provides for the Secretary of State to make regulations which will in turn provide for a right to parental leave. As I affirmed in Committee, new Section 77 makes clear that any terms and conditions required by the regulations to continue during parental leave cannot include terms and conditions about remuneration. I can assure the noble Baroness that the effect is to ensure that parental leave cannot be required to be paid and, therefore, her amendment is unnecessary.

I turn to Amendment No. 92. The noble Baroness and I are at one on the principles behind the amendment, if not on the method of dealing with them. The Government strongly believe that legislation must not damage business competitiveness and in particular that the needs of small businesses are paramount. The Prime Minister has only recently reaffirmed the need to ensure good regulation. This means the minimum provisions necessary to ensure a bottom line of acceptable standards. Noble Lords will recall that in Committee I announced that we were adopting a new approach to the regulations. My right honourable friend the Secretary of State for Trade and Industry intends to operate with a light touch.

The basic right to parental leave will be set out in the regulations but we will encourage employers and employees to make their own arrangements. The Government's amendment to follow new Section 78 of the 1996 Act will make it possible for regulations to provide for employers and employees to opt out of the details of the regulations through collective and workforce agreements. These regulations will provide a fall-back arrangement which automatically take effect if employers and employees cannot agree on, or do not wish to make, their own arrangements. We shall consult further on the details of the fall-back scheme, including the provisions relating to the postponement of leave.

I fully share the concern of the noble Baroness that employers should be able to postpone leave if necessary. It is clearly right that, faced with perhaps several requests for leave at a busy time, the employer should be able to say, "I'm afraid not now, but later." We want to consult on what the regulations should say. My concern is that the amendment would pre-empt that consultation. I hope that the noble Baroness is reassured that in resisting the amendment we are not rejecting the principles it embodies. We have taken account of the views of the business community throughout the process and have gained the support of both sides of industry for our minimalist approach to the regulations.

6.15 p.m.

Baroness Miller of Hendon

My Lords, I am reassured by what the Minister said but when I read the wording of the Bill the position relating to unpaid leave is not clear. I shall certainly have another look at the matter.

On Question, amendment agreed to.

[Amendments Nos. 91A and 92 not moved.]

Lord Sainsbury of Turville moved Amendments Nos. 93 to 97: Page 70, line 38, at end insert— ("() require parental leave to be taken as a series of periods of absence in all cases or in specified cases;"). Page 70, line 43, after ("minimum") insert ("or maximum") Page 70, line 44, at end insert- ("() specify a maximum aggregate of periods of parental leave which may be taken during a specified period of time."). Page 71, line 43, at end insert— ("() Regulations under section 76 may provide for specified provisions of the regulations not to apply in relation to an employee if any provision of his contract of employment—

1. (a) confers an entitlement to absence from work for the purpose of caring for a child, and
2. (b) incorporates or operates by reference to all or part of a collective agreement, or workforce agreement, of a kind specified in the regulations.")

Page 72, line 45, leave out from beginning to end of line 8 on page 73

On Question, amendments agreed to.

Lord Sainsbury of Turville moved Amendment No. 98: Page 73, leave out lines 13 to 43 and insert—

("Dependants

TIME OFF FOR DEPENDANTS

57A.—(1) An employee is entitled to be permitted by his employer to take a reasonable amount of time off during the employee's working hours in order to take action which is necessary—

1. (a)to provide assistance on an occasion when a dependant falls ill, gives birth or is injured or assaulted,
2. (b) to make arrangements for the provision of care for a dependant who is ill or injured,
3. (c) in consequence of the death of a dependant,
4. (d) because of the unexpected disruption or termination of arrangements for the care of a dependant, or
5. (e) to deal with an incident which involves a child of the employee and which occurs unexpectedly in a period during which an educational establishment which the child attends is responsible for him.

(2) Subsection (1) does not apply unless the employee—

1. (a) tells his employer the reason for his absence as soon as reasonably practicable, and
2. (b) unless paragraph (a) cannot be complied with until after the employee has returned to work, tells his employer for how long he expects to be absent.

(3) Subject to subsections (4) and (5), for the purposes of this section "dependant" means, in relation to an employee—

1. (a) a spouse,
2. (b) a child,
3. (c) a parent,
4. (d) a person who lives in the same household as the employee, otherwise than by reason of being his employee, tenant, lodger or boarder.

(4) For the purposes of subsection (1)(a) or (b) "dependant" includes, in addition to the persons mentioned in subsection (3), any person who reasonably relies on the employee—

1. (a) for assistance on an occasion when the person falls ill or is injured or assaulted, or
2. (b) to make arrangements for the provision of care in the event of illness or injury.

(5) For the purposes of subsection (1)(d) "dependant" includes, in addition to the persons mentioned in subsection (3), any person who reasonably relies on the employee to make arrangements for the provision of care.

(6) A reference in this section to illness or injury includes a reference to mental illness or injury.")

The noble Lord said: My Lords, in moving Amendment No. 98 I wish to speak also to Amendments Nos. 103 to 110 and 112. The Government are committed to putting in place a framework of fair and decent statutory rights which will help employees to balance their work and home responsibilities. At the same time, we are determined to ensure that this statutory framework does not place unnecessary and unjustifiable burdens on employers. Our competitive economy depends upon strong, modern businesses. Good working practices contribute to a competitive business by encouraging a committed and productive workforce. But too many demands on employers will undermine their competitive edge. This is an important reason why the Government are committed to cutting bureaucracy and burdensome regulations. I hope that what we are doing will be welcomed by the noble Baroness who, I know, shares some concerns about this provision.

In tabling this group of amendments we have listened to representations in the other place and concerns raised by business that the provisions on time off go beyond what is necessary to achieve our aims. In particular, the noble Baroness drew attention to this matter by tabling a number of amendments in Committee. We have never wanted to adopt the wording of the parental leave directive. It would lead to a too narrow and begrudging approach. That fosters the wrong culture of distrust and fear and goes against our main objective to support employees who have caring responsibilities.

We want to ensure that employees who have to take time off work to deal with an emergency involving someone else who depends on them are able to do so without fear of victimisation. But we recognise that the Bill as published provides a wide right to time off for domestic incidents, and we are persuaded that it could be interpreted as going beyond our policy intentions. The provisions were never intended to allow employees time off to get their washing machines mended, for example. We had intended to use the regulation-making powers if necessary to clarify the matter. However, employers were concerned that such a wide provision in the Bill could easily be abused.

These amendments will put the provision back on a proper footing and cut out the risk of abuse by those who may seek to take time off to deal with running repairs to the home. The statutory right will be limited to urgent cases of real need. The emergency must involve a dependant who is either a family member or someone who relies upon the employee for assistance in the particular circumstances. By "family member" I mean a child, parent, husband, wife, partner or other household member, but not someone who is in the household because he or she is the employee, tenant, lodger or boarder of that employee. By "someone who relies upon the employee for assistance" I mean an individual for whom the employee has primary caring responsibility or someone who is involved in a serious emergency where the employee is the only person who can help: for example, an elderly neighbour living alone who falls and breaks a leg.

We have now set out clearly on the face of the Bill the circumstances in which leave can be taken. In so doing we will remove the need for long and complex regulations, or for collective or workforce agreements to opt out of the regulations. This approach has been supported by the CBI. The majority of employers already allow time off in emergencies and we do not want to discourage them from doing so. This amendment ensures that all employees will be entitled to time off in specific circumstances which most of us would accept.

Let me spell out what the amendment is intended to cover. We intend the right to apply where a dependant becomes sick or has an accident, or is assaulted, including where the victim is distressed rather than physically injured. It provides for reasonable time off, if an employee suffers a bereavement of a family member, to deal with the consequences of that bereavement, such as making funeral arrangements, as well as to take time off to attend the funeral.

Employees will be able also to take time off in the event of the unexpected absence of the carer, where the person is a dependant of the employee. So if the childminder or the nurse does not turn up, the employee will be able to sort things out without fearing reprisals at work.

Employees may have to take time off to attend to a problem arising at their children's school or during school hours—for example, if the child has been involved in a fight, where the child is distressed, or if the child has committed a serious misdemeanour which could lead to expulsion. Again, the provision will secure their right to do so.

A father will have the right to be on hand at the birth of his child. After the birth, a father may be able to take parental leave to care for his child—but that is a matter which we will leave for the time being to the parental leave consultation.

I hope everyone can agree that all these are sensible, limited circumstances in which every employee should be able to take a reasonable amount of time off if necessary in order to deal with the matter.

We have not set a limit on the amount of time which employees can take off. This right is to help people deal with emergencies. A limit would not make sense and could be seen as a minimum, which employees might well consider an entitlement to be added to their annual leave. In all cases, the right will be limited to the amount of time which is reasonable in the circumstances of a particular case. For example, if a child falls ill with chickenpox the leave must be sufficient to enable the employee to cope with the crisis—to deal with the immediate care of the child and to make alternative longer-term care arrangements. The right will not enable a mother to take a fortnight off while her child is in quarantine. In most cases, whatever the problem, one or two days will be the most that are needed to deal with the immediate issues and sort out longer-term arrangements if necessary.

I am sure we can all agree that it is only reasonable to expect employees to notify their employers of their absence, the reason for the absence and, where possible, the duration of the absence, as soon as reasonably practicable. The amendment builds in this requirement.

This right gives important protection to employees. No employee should have to fear victimisation or dismissal for taking time off if his or her child has an accident; and an employee will be able to complain to an employment tribunal if the employer has unreasonably refused time off.

I am sure these amendments, which provide clarity without bureaucracy, will receive widespread support from noble Lords. I hope the noble Baroness will be satisfied that they meet the concerns raised about this issue, including those of business. I commend them, and I beg to move.

Baroness Miller of Hendon

My Lords, as the noble Lord the Minister said, the amendment deletes the whole of the former proposed clause and replaces it with an entirely new one. We on this side of the House entirely welcome that.

The major amendment that the Government have introduced is to get rid of the proposal that the rule should be prescribed in regulations, which would be thought up some time later. I hope that this new method will be adopted in other Bills, rather than the Government's producing what are largely enabling Bills on many important topics.

I congratulate the team of Ministers who have been dealing with the matter and the team of officials in the Box who have found a way of dealing with it at the appropriate time. In this case they have bitten the bullet, and despite the inability of the Minister of State in the other place to define a domestic incident they have now spelt out in straightforward terms exactly the circumstances in which such leave is to be taken.

The Bill as originally drafted was vague and woolly. The noble Lord the Minister was correct when he talked about it not being a matter of time off to have a washing machine repaired. I think that may have been something to which I referred when I said how woolly the Bill was. In fact, it seemed wide and woolly but it looked nothing less than gold-plating the European Union's directive, which used the expression "force majeure".

My own amendment was to specify what should be covered, by using the EU's own wording. Perhaps it is just as well that this will not now be necessary, because in 1904 Mr Justice Walton was asking "What is the meaning of force majeure?" In 1915 Mr Justice Bailhaghe complained that the words were taken from the Napoleonic Code; and in 1922 Mr Justice Sankey said that he absolutely regretted the introduction of foreign words into English statutes without any definition being given. I apologise for my having attempted to do that in my amendment. I am only glad that the Government have done the right thing and told us precisely what is involved. I have, of course, withdrawn my amendment defining the grounds of such leave.

I am also very glad to see that the Government have in their new subsection (2) adopted my intended amendment requiring the employee to do the minimum courtesy of informing his employer of the reason for taking such leave and to predict the date of his return. Therefore, I am able to withdraw my amendment covering that point as well.

Amendment No. 103, to page 73, line 45, inserts the concept of reasonableness to judge an employer's conduct if he refuses such leave. This is also most welcome. The Department of Trade and Industry has often been reluctant in other cases where I have argued for acceptance of "reasonable", as if it was not sure whether it could reasonably understand what "reasonable" meant. It is absolutely great that in this case it has been accepted. This change of heart, and the insertion of just two words that I never thought I would hear the Government utter, enabled me to withdraw an entire amendment covering 15 lines and containing two subsections and four paragraphs.

Yet again I am pleased to note that the Government have now inserted a new and detailed amendment, defining in subsection (3) the dependants whose problems, to use a wholly inadequate word, might give rise to the need for such leave. It may be recalled that I proposed an amendment along those lines at an earlier stage to eliminate what I described as a limitless definition in the Bill. The Government did not accept my amendment, but the noble Lord, Lord Sainsbury of Turville, said that they would consider the matter carefully. He said: We need to arrive al a definition which is effective, but simple for employers to operate".—[Official Report, 16/6/99; col. 318.] Although the wording of the Government's definition is quite different from that which I proposed, I am grateful that they have taken my concerns on board and have dealt with the matter in a most satisfactory manner in the new clause.

I mentioned my amendments, en passant, not to detract from the reasonable way in which the Government have dealt with these matters but to give credit where credit is due, which I like to think is down to me. We support that amendment as well as Amendments Nos. 104 to 112.

After all this good will, it is perhaps churlish of me to mention my own very minor amendment, Amendment 98A, to the Government's amendment. This inserts "unpaid" to qualify the time off provided for in the opening words of the Government's new clause. I will not take up much time in arguing this point as I dealt with it in connection with the new clause 76 inserted by the Schedule. If we agree that an employee should be entitled to time off because of a serious domestic emergency, there is no reason why his or her employer should be compelled to pay him at the same time.

Of course I accept, and it is right, that most employers will be sympathetic and probably would not dream of docking any pay. But some, particularly small firms, may have no alternative, especially if they have to employ somebody to make up the time and work of their absent employee. In all the discussions in the other place it was made clear that parental leave was to be unpaid. That was in the explanatory notes to the Bill, though I did not find it in the Bill itself. I do not believe that there is any reason why there should be a distinction in the case of emergency leave. On the assumption that that is the intention, this clarification will put the matter beyond argument. I hope that the Government will find it possible to accept this minor modification of their very good amendment, which we otherwise support.

Baroness Pitkeathley

My Lords, the House will not be surprised that I rise to speak very warmly in support of Amendment No. 98 in particular. It gives employees who are carers the right to take a reasonable amount of time off in order to deal with a whole range of difficult caring situations, such as making arrangements for residential care if alternative care arrangements break down.

The amendment sets out very clear parameters for both employers and employees about the right to time off. It is particularly welcome that it is phrased in such a way as to encompass a wide range of caring situations and does not discriminate against different groups of carers, such as those looking after unmarried partners or those who have responsibilities for people living outside the family home. I particularly welcome the fact that the amendment mentions the kinds of problems that are stress-related and are not just to do with physical injury.

Carers' national associations, which have been campaigning for many years for the right to time off for working carers, welcome the amendment. It fulfils a pledge made in the national strategy for carers that they would have time off from work to deal with caring situations. This is part of a package of family-friendly employment policies which I welcome most warmly, and I know that all working carers will do so too.

6.30 p.m.

Lord Sainsbury of Turville

My Lords., the provision to which this amendment relates, new Section 57A of the Employment Rights Act 1996, will be incorporated into a part of that Act which includes a number of different provisions for time off for various reasons. The amendment is not necessary; indeed, it could cause some confusion. I shall explain.

In the case of some of those provisions—provision for time off for ante-natal care is an example—the section providing for the right is immediately followed by another section providing for the time off to be paid. In the case of others—for example, the section providing for time off for public duties—there is no following section providing for remuneration. New Section 57A will not be followed by a remuneration provision. The clear result will accordingly be that an employer is under no obligation to pay the employee in respect of the time off provided for.

Were we to make the amendment, it would create confusion about how other provisions for time off were to be interpreted. It would be arguable that, because the word "unpaid" appeared in Section 57A but not Section 50 (which provides for time off for public duties), employees taking time off under Section 50 had to be paid for the time off taken.

Should the noble Baroness, Lady Miller, need any further persuasion on the point, she could consider new Section 57B which will be inserted into the Employment Rights Act 1996 after Section 57A. It provides that an employee may make a complaint to an employment tribunal if his employer has unreasonably refused to permit him to take emergency leave but it does not entitle him to complain that the employer has failed to pay such leave. I hope that that illustration helps to reassure the noble Baroness that the amendment is not necessary.

Baroness Miller of Hendon

My Lords, I thank the Minister for his clear explanation. I would not wish to make the issue more complicated and I am satisfied with the Minister's explanation. I beg leave to withdraw my amendment.

Amendment No. 98A, as an amendment to Amendment No. 98, by leave, withdrawn.

On Question, Amendment No. 98 agreed to.

[Amendments Nos. 99 to 102 not moved.]

Lord Sainsbury of Turville moved Amendments Nos. 103 to 110: Page 73, line 45, leave out ("failed") and insert ("unreasonably refused") Page 74, leave out lines 15 to 30 Page 74, line 44, leave out ("for domestic incidents") and insert ("under section 57A of that Act (dependants)") Page 75, line 6, leave out ("for domestic incidents") and insert ("under section 57A of that Act (dependants)") Page 75, leave out line 14 and insert ("under section 57A of that Act (dependants),".") Page 75, line 40, leave out ("for domestic incidents") Page 76, line 27, leave out ("for domestic incidents") Page 77, line 19, leave out ("for domestic incidents") and insert ("under section 57A")

On Question, amendments agreed to.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury) moved Amendment No. 111: Page 77, leave out lines 24 to 26.

The noble Lord said: My Lords, the noble Lord, Lord Meston, who is not in his place on the Liberal Democrat Benches—

Lord Razzall

My Lords, he is a judge now.

Lord Simon of Highbury

My Lords, thank you. I need eyes in the back of my head. I wish to thank the noble Lord, Lord Meston, because during Committee stage he tabled an interesting amendment which had been inspired by the decision of the Court of Appeal in the case of Carver v. Saudi Arabian Airlines. In that case, the employee's contract of employment, at the time it was made, required her ordinarily to work in Saudi Arabia. As a result, when she was dismissed she was deprived of the redress she sought through an employment tribunal, even though by that time she had worked in the UK for four years. In turn, the Government have been inspired to take the matter further and bring forward this present group of amendments.

We have been considering the operation of Section 196, which limits the operation of the Employment Rights Act 1996 to employees who ordinarily work in Great Britain. It is a complicated section, the result of several consolidations, some relating to legislation at least a quarter of a century old. After careful consideration, we have concluded that the complexities are unnecessary. International law and the principles of our own domestic law are enough to ensure that our legislation does not apply in inappropriate circumstances. There must be some proper connection with the UK first, and in such cases it is right that UK law should apply.

Other legislation has no need of such restrictions. We believe that now is the time to simplify the provisions in line with our commitment to simplify and improve regulation, which my noble friend the Minister mentioned a moment ago. Furthermore, repealing the section has a number of other significant advantages. It ensures that we are fulfilling our EU obligations, which in some circumstances mean that European-derived rights should apply to individuals working abroad who may not currently be covered. It extends employment rights to employees temporarily working in Great Britain and thus implements some of the provisions of the posting of workers directive which otherwise would require further regulations later this year.

It also means that people like Mrs Carver, who had worked for some years in the UK but was nevertheless excluded from claiming under the Employment Rights Act 1996, will be able to rely on the protection of our legislation as should be the case. I do not claim that the amendment will have drastic effects in practice. Very few cases like Mrs Carver's arise, and the additional costs to employers will be minimal. Nevertheless, it takes forward an important principle and modernises and simplifies our legislation.

We are taking care of the special position of seafarers. Special provisions already apply to them under existing Sections 196 and 199. We will ensure that the amendment to Section 199 maintains their current position, if necessary through a technical adjustment at Third Reading.

The new clause grouped with the amendment I have moved, makes a parallel change to the Trade Union and Labour Relations (Consolidation) Act 1992, removing the territorial restrictions in that Act on rights to be consulted about mass redundancies. The other amendment is a purely technical change to powers in the 1992 Act to extend rights to offshore installations. Currently no procedure is specified for making the order. The amendments will provide for negative resolution in line with that in the Employment Rights Act 1996. I hope noble Lords will join me in welcoming this group of amendments. I beg to move.

Lord Razzall

My Lords, I shall try to clarify the interchange that just took place. My noble friend Lord Meston no longer sits on the Liberal Democrat Benches because he has become a judge and has joined the Cross Benches. Having said that, I know that I speak on his behalf in thanking the Minister for making those concessions.

On Question, amendment agreed to.

Lord Sainsbury of Turville moved Amendment No. 112: Page 77, line 41, leave out ("for domestic incidents") and insert ("under section 57A").

On Question, amendment agreed to.

Baroness Young moved Amendment No. 113: Page 5, line 12, at end insert— ("() This section shall not apply to an employer who shows that to comply with it would conflict with his religious beliefs and conscience.")

The noble Baroness said: My Lords, the amendment and the related Amendment No. 116 are concerned with a matter of conscience. They are not difficult to understand and the issue has been debated in another place. They are tabled at the request of the Plymouth Brothers. I should perhaps start by saying that I do not belong to that organisation. However, I understand the sincerity of their religious beliefs.

The Plymouth Brothers have asked me to say how grateful they are for the care and sympathy they received following written and other representations made during the passage of the Bill. They are asking for freedom to practice their religion as they believe appropriate.

The Plymouth Brothers are a small community. They run some 1,200 businesses, mainly small ones, and they employ some 6,500 people—all but 2,000 of whom are members of the organisation. They are generally regarded as very good employers, but they do not believe that it is appropriate for trade unions or employees associations to intervene in industrial relations.

When the Minister in the other place replied to similar amendments, he said that, the Government cannot accept that the religious freedom of employers, who are, after all, free to choose whether to employ others and how to arrange their affairs, should take precedence over the rights of individuals to form and join trade unions for the protection of their interests".—[Official Report, Commons, 30/3/99; col. 993.]

This raises an awkward point, to which I drew attention when the Human Rights Bill was going through the House, as to what should be done when the rights of two groups of people clash as each group is entitled to certain rights. That is the situation with which we are confronted. It is appropriate that the rights of those with deeply held religious convictions should be considered.

It is rather disingenuous to say that all employers are free to employ whoever they wish. Of course an employer will not take on someone that he does not regard as appropriate, but one cannot be certain in any business where you may not require to employ someone who has specialist skills but who is not a Plymouth Brother. So I do not think that that argument entirely stands up.

I would be very worried about the final argument the Minister used. He said there was a danger that any religious exemption would be a loophole through which unscrupulous employers would seek to exploit the Bill. If one thing is absolutely clear about the Plymouth Brothers, it is that they lead a highly disciplined and different life front almost everyone else. The idea that anyone, unless he was prepared to lead this kind of life, could just join in simply does not stand up.

It is worth reminding the House that the Plymouth Brothers have important features of their conscientious beliefs. They arise out of an innate belief of what is morally right or morally wrong. It is not based on a whim or a fancy or on personal or political preferences but on what is perceived to be a moral principle. It is a deep conviction, not a shallow or a superficial one. A person holding it would feel that it was his duty to do so. It is durable, being held with a degree of tenacity and consistency over time, and it is held regardless of any question of personal advantage or disadvantage. One has only to look for a short period of time at the kind of lives the Plymouth Brothers lead to realise that the idea that other organisations could somehow claim an exemption on this ground simply is not true.

I very much hope that the Government will view the amendment with sympathy. It is a very real point; it is a matter of human rights; and it is a difficult situation. But I do not think that such an amendment could be exploited by other organisations in different circumstances. We have a duty to consider minorities and to make sure that their interests are protected. I hope that the Government will look at the amendment sympathetically. If the wording is not quite right, I shall be more than happy to take the amendment away and reword it. I am speaking on a very real point of conscience and one which I think the House will recognise as being unlike any other situation. One cannot imagine any other employer claiming this exemption unless he had these beliefs. I beg to move.

6.45 p.m.

Baroness Miller of Hendon

My Lords, I support the amendment. I was particularly moved by what my noble friend said about the features of real conscientious belief. I believe that in this society we should be tolerant and make exceptions for the really genuine religious beliefs of our fellow citizens. I am proud when I think how much this country does to welcome people of different ideas, to be tolerant of them and to accept them. I say that as someone who comes from a minority religion and as a grand-daughter of four people who were persecuted in different countries. I find standing at the Dispatch Box in the House of Lords very moving. I believe that our people really are tolerant and do their very best to accommodate the ideals of all the different religions.

The idea that anyone would invent a device to avoid legislation such as this, particularly in following a religion like the Plymouth Brothers, which is a difficult religion to follow, is nonsense. It would be taking avoidance tactics to the extreme for someone to invent a whole new religion just to keep the unions out of his business. The Plymouth Brethren are an established and well respected sect. It may well be that some people consider their views and practices somewhat quirky, but their views are genuinely held. No one could claim to be a Plymouth Brother without following very rigorous requirements, including the banning of radio and television and not being able to join in any associations. Only last week my husband was out to dinner. In the course of conversation the gentleman with whom he was friendly told him that he had just taken over a business in Plymouth. Indeed, it was a business that had been owned by the Plymouth Brethren. My husband's friend told him that he was amazed when he discovered that his whole sales force in the business had cars but had taken the radios out of the cars because the Brethren did not allow them.

It is impossible for the Brethren to deal with the unions in this way, but I cannot imagine that the whole trade union structure would come crashing to the ground if the Government were able to accept the amendment and show some acceptance of the views of the few members—it would not be many—who might be involved. My noble friend said that it might be the case that her amendment could be better worded. Perhaps the Government could take the amendment away and look to find some accommodation in order to help people who have a deeply held religious view. I support my noble friend.

Lord McCarthy

My Lords, one sympathises with a great deal of what has been said in support of the amendment, but it does not really fit in with what I know of the fundamental objections of the Plymouth Brethren. Those objections are to external associations. For example, although they do not believe in joining trade unions and would not join trade unions, they do not say that they will dismiss anyone who they find is a member of a trade union. That would be regarded as outside their purview. If one of their employees came up and reasonably requested to be accompanied at a hearing by another employee who is already in their employ, I cannot see why their fundamental objection of being yoked with unbelievers would apply with regard to this part of the clause. The only part of the clause to which they might object is where a trade union official came in from outside and provided that representation. But I believe that they would find no difficulty in applying nine-tenths of Clause 10. I cannot remember—I am sure that the noble Baroness is right—exactly what was said in Committee by the Minister. However, we are not talking about trade unions but about workers who reasonably request to be accompanied at the hearing.

If the noble Baroness's amendment were passed, a person could exempt himself on religious grounds or on grounds of conscience from the effect of Clause 10. An individual worker could reasonably request to be accompanied by a fellow worker and could be told by an employer, "I have a conscientious objection". I do not think that that is right.

Lord Simon of Highbury

My Lords, the two noble Baronesses on the Opposition Benches have made it clear that this is a case which raises the issue of conflict of interest due to religious beliefs. They have both cited the group of the Brethren. I make it clear that I do not comment in any way on anyone's right to be a Brother. I very much endorse the positive remarks made.

However, I wish to talk about the principle. That may not arise solely for the Brothers. There may be other cases where we have to address this principle. The aim of the amendments is to exempt the Brethren from a legal obligation to give their workers the right to be accompanied—the right that we are discussing at great length in Clauses 10 to 14 of the Bill.

The noble Baroness, Lady Young, mentioned—perhaps she will correct me if I am wrong—that 2,000 people employed by the Brethren are not members of the Brethren. If that is the case we are concerned with their status. It may be a minority of the employees whom the Brethren employ but they may wish to join trade unions and call on the unions to assist them if they find themselves in dispute with their employer. The Brethren do not recognise that right.

The amendments raise the difficult issue of whether workers' rights under law should be curtailed because of their employers' religious beliefs. The Government totally respect people's religious freedoms. But they also respect the right to freedom of association, as my noble friend Lord McCarthy made clear, and the right to form and join trade unions. I am sure that the noble Baroness is aware—I believe that it was mentioned in her argument—that both religious and trade union freedoms are enshrined in the European Convention on Human Rights. In tabling the amendments, I am sure that the noble Baroness is thinking of Article 9 of that convention which provides the right to freedom of thought, conscience and religion.

That article provides the right. It also says that freedom to manifest one's religion or beliefs may be subject to, such limitations as are prescribed by law and are necessary in a democratic society … for the protection of the rights and freedoms of others". Article 11 provides that, Everyone has … the right to form and to join trade unions for the protection of his interests". The Government's view on the issue has already been stated, as the noble Baroness recorded correctly, in another place and was debated in depth. It remains that, although the Article 11 right is subject to a similar qualification about the protection of the rights and freedoms of others, the reality is that the right of individuals, most of whom have no choice but to be employees, to join trade unions would take precedence over the religious freedom of employers who are free to choose whether to employ others and how to arrange their affairs.

The Government are therefore satisfied that the Bill is in conformity with the European Convention for the Protection of Human Rights and Fundamental Freedoms. The Government do not agree that workers should be deprived of their statutory rights to be accompanied at grievance and disciplinary hearings because of the religious beliefs of their employers. Moreover, there must be a danger, however small, that that can be used as a loophole, although I do not want to make that a major argument. We are arguing the point of principle in the human rights convention.

With all respect to the Brethren, we do not accept the amendments. I note that in the 1990 legislation when the right to employment as a member of a trade union was put to both Houses and the Brethren applied for exemption, the previous government did not offer them exemption under that legislation. Purely on the ground of consistency, I hope that the arguments of principle and practice will be accepted. I ask the noble Baroness to withdraw the amendment.

Baroness Young

My Lords, I find that a disappointing reply. The Minister has explained the arguments put forward in another place more sympathetically and more clearly than was done in another place. He is saying that the rights of the trade unionists must override the rights of religious freedom.

Lord Simon of Highbury

My Lords, my statement was that the rights of the individual to make a choice about association with a union override the rights of an employer to hold a religious belief and determine individual rights of others in employment.

Baroness Young

My Lords, I accept entirely that that is what the Minister said. It is a debatable point on two rights: which, one is superior to the other. The fact that it was raised in earlier legislation may or may not be right. I am not one who has always felt that everything the Conservative government did was right. Unlike some people, I think for myself on a number of occasions. It is a serious point about human rights. It is not a matter to laugh about. People who hold these beliefs are entitled to them; and in this Bill and in the 1990 legislation they are being discriminated against. In effect, that is what is being said.

I am glad that the Minister did not suggest that this issue is a major loophole. I do not think that that is true. My noble friend Lady Miller explained clearly the restrictive lives that these people lead. The idea that many people will lead similar lives and want to find a way through the law is most unlikely. I am glad that that argument has been dropped.

It is a sad day when the Government cannot accept the amendment. That we have reached this stage says something sad about society. I shall withdraw the amendment, but I shall consider carefully whether I shall return with some newly drafted amendment at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Highbury moved Amendment No. 114: Page 5, line 20, leave out ("an official of a trade union") and insert ("employed by a trade union of which he is an official")

The noble Lord said: My Lords, in moving the amendment, I speak also to Amendments Nos. 115 and 117. All these amendments serve to clarify important terms used in Clauses 10 to 14. Amendments Nos. 114 and 115 deal with the accompanying companion, while Amendment No. 117 deals with the hearing. I shall speak to them together.

Amendments Nos. 114 and 115 concern the list of persons who may be an accompanying person. Noble Lords will be aware that this subject has been much discussed in another place and, more recently, during consideration by this House of Clauses 10 to 13 at the second day in Committee.

I recall that the debate centred on an amendment tabled by the noble Baroness, Lady Miller. It sought to minimise the scope for people who were not fellow workers to act as an accompanying person. The Government do not believe that the right should be confined to fellow 'workers only. This would cast the right too narrowly and it would exclude some of the most appropriate and effective individuals—experienced trade unionists—from performing a standard function of a trade union.

I think noble Lords from all sides of the House would not disagree with me on that point. Indeed, during the debate on 16th June, the noble Lords, Lord Gladwin of Clee and Lord Tebbit, both made helpful remarks about the wealth of expertise and experience that full-time and lay officials can bring to bear during grievance and disciplinary proceedings. However, the Government are mindful of the concerns of those who believe that allowing unqualified or inexperienced outsiders to participate in internal procedures might be unhelpful or even disruptive.

As a consequence, we have revisited the list of people who may be an accompanying person with a view to ensuring that only those who are suitably qualified for the task will be entitled to act as the accompanying person. We consider that the right for a fellow worker to act as a companion should remain as it is. Of course, in many cases the fellow worker will also be the local union representative. Fellow workers are qualified to perform this function on the basis of their intimate knowledge of the employer and local employment practices.

Our concern in these amendments is with the outsiders who can attend hearings. To that end, the first of these amendments has the effect of stating that officials who are employees of a union are suitable outsiders who can act as an accompanying person. This category includes the majority of full-time union officials. These people are extremely experienced in a variety of representative roles, and there can be no question about their competence to act as an accompanying person.

The second amendment, Amendment No. 115, limits the lay officials—that is, officials not employed by the union—who may act as an accompanying person. It does this by placing a qualifying condition on lay officials that they may act as an accompanying person only if certified in writing by their union as competent to carry out the accompanying function. As I have said, this does not affect the right of a worker to have a fellow worker who is a lay official as his companion because that is allowed under subsection (2)(c). Fellow workers are a separate category of persons who may be companions.

The amendment should provide an important measure of quality assurance to both employers and workers, shielding both parties from the incompetent or inexperienced. Workers and employers can of course jointly agree to the involvement of an outside lay official who does not possess the necessary certification. However, they are not required to do so. I should add that it is not the Government's intention to place a burden on trade unions by insisting that their lay officials undertake any formal accreditation by a third party. That would be expensive and bureaucratic. A trade union will simply need to certify in writing that its officials who are to perform this kind of work are competent so to do.

It is up to the unions to decide how they operate this accreditation process. Unions have a strong interest in ensuring that they field suitable lay representatives: otherwise, full-time officials might have to be called in to sort out difficult or botched cases. Unions stand to lose members and the confidence of employers if their service is seen to be second rate. Most trade unions already provide training for their lay representatives, often via the educational services of the TUC. I would imagine that unions will not consider issuing a certificate to new lay officials at least until they have completed a basic shop steward's course or have been in post for a certain length of time. For the purposes of clarity, the Advisory, Conciliation and Arbitration Service code on the new right could well include guidance to unions on this issue. The ACAS council membership comprises some eminent trade unionists and it is well placed to advise on the matter.

These are sensible amendments that will benefit all parties to grievance and disciplinary hearings. Individuals will have the assurance that their accompanying companion is competent and employers can rest assured that their procedures will not be thwarted by inexperience or incompetence.

I turn now to Amendment No. 117. During our debates on the right to be accompanied in grievance and disciplinary hearings, we have had discussions about the definition of a hearing to which this right should apply. I am thinking in particular of observations made by my noble friend Lord Monkswell at Second Reading and of the debate on Amendment No. 266 tabled by the noble Lords, Lord Meston and Lord Razzall, during the second day of Committee on 16th June.

Noble Lords will recall that the Government rejected that amendment on the grounds that it was too widely drawn and would cast doubt on the provisions of Clauses 10 to 14. The Government have reflected on these questions and we have looked particularly at Clause 13 to see whether the definition of a hearing to which the right should apply can be improved.

It is the Government's clear intention that the right should apply where a disciplinary or grievance hearing addresses a serious issue. However, as currently drafted, subsection (4) implies that hearings about serious issues could take place at which the right would not apply because the hearings do not form part of any pre-existing procedure. If allowed to stand, the present wording might enable employers to argue that they did not operate a procedure, even though they held hearings to deal with serious grievance and disciplinary matters. It might complicate matters for workers, who would be required to demonstrate that, de facto, a procedure existed through custom and practice. It might also present problems for tribunals in deciding whether a procedure in fact exists. This issue would be particularly difficult to decide when the employer had never, or seldom, held hearings in the past. We believe that this weakness in the Bill should be addressed. This amendment contains an improved form of words that makes it clear that the right to be accompanied applies to all hearings where serious issues are at stake.

I wish to make two things clear. First, this amendment in no way affects the provision that the right applies to hearings about serious disciplinary and grievance matters only. It certainly does: we are not providing a loophole through which minor or trivial issues can slip into the right. Secondly, it remains the case that the Bill does not require employers to establish disciplinary procedures where they do not have them; nor are they required to hold a hearing where a procedure exists. Of course, as I have made clear in earlier debates on this subject, a failure by an employer to deal with a grievance or a disciplinary issue in an appropriate procedural manner can count against him or her should tribunal proceedings ever result.

Noble Lords will be aware that the Government are aiming to encourage employers to establish procedures as a matter of good employment practice. This message will be underlined in the new code of practice setting out in more detail how the right to be accompanied will apply in practice and taking account of my argument to the House. I am pleased to inform noble Lords that ACAS has agreed to draw up the code. In so doing, it will, in effect, be revising and extending the existing code. ACAS has an excellent reputation for providing sound advice and practical guidance on industrial relations, and I am sure that noble Lords will join me in welcoming that news.

The amendments will ensure that, whenever an employer holds a hearing about a serious matter, the right to be accompanied—and accompanied appropriately—will apply. In so doing, it will make clear the obligations and entitlements of both employers and workers and it will remove uncertainty as to the law's intended effect. I beg to move.

Lord Razzall

My Lords, I support the amendment entirely, but I wonder whether the Minister will consider a point raised by the Royal College of Nursing that falls slightly outside the amendment as drafted.

I understand that the Royal College of Nursing has a practice of using unpaid stewards to represent members of the college at disciplinary hearings. Those stewards are neither employed by the same organisation as the member nor paid officials of the trade union. Will the Minister confirm that Amendment No. 115 will enable the Royal College of Nursing to continue that practice?

Baroness Miller of Hendon

My Lords, we certainly welcome Amendments Nos. 114, 115 and 117. Amendments Nos. 114 and 115 narrow the definition of a trade union official—which, as the Minister may recall, concerned us somewhat. We were, and perhaps still are, slightly worried that there will be a new profession of trade union advocates travelling from one firm to another and intervening in problems that would be better settled internally.

We believed that the person who accompanies a worker to a hearing should either be a colleague employed by the same business, or an official of the union to which the worker belongs or which has negotiation rights with the employer. What we believe should not be allowed, because it is undesirable, is that the shop steward from union A, working for company B, can accompany worker C who is employed by company D. If that is as confusing as it sounds, the ideal solution would be to have only three parties; the employer, the worker and the union official from the union recognised by the company, unless there is no such union.

We are also concerned that the accompanying union official should at least have some qualifications or experience in disciplinary and grievance proceedings because we believe that it is all too easy for an inexperienced advocate, trying to make a name for himself, to exacerbate an already delicate situation. This is one of those instances in which I might have liked to table a constructive amendment, but I believe that it is far too late for probing amendments.

I welcome the Minister's comments on the problem that 'we believe exists and should like to learn whether he is prepared to consider further modifications either here or in the other place in order to ensure that the Bill promotes good employment relations rather than to risk unnecessary strife by outsiders.

I thank the Minister for tabling Amendment No. 117. Once again, the Government have taken on board concerns that were expressed at an earlier stage by Members on both sides of the House and by his noble friends. The new layout and few alterations in wording have made all the difference. The clause now gives a more positive definition of disciplinary proceedings, and breaking it up into separate lettered paragraphs has made it much easier to understand and has provided greater clarity.

Lord Simon of Highbury

My Lords, I thank both noble Lords opposite for their generous support for the rewording of the clauses. It is clear that we gained from the good debate we had on the issue in Committee.

In answering the two questions which were raised, I can confirm to the noble Lord, Lord Razzall, that unpaid stewards could accompany provided that they are authorised by the union. It would be a question of authorisation. Secondly, I say to the noble Baroness, Lady Miller, that the Government do not have in mind revisiting the terms of clauses, but, if she still has doubts, many of the points she raised will have light thrown upon them by the redrafting of the ACAS code and the advice that is given under those circumstances about how good relationships between management and union, which we know are the preponderance of the relationships in this country, can be furthered everywhere within our industrial community. We should prefer to operate through the code, so perhaps that is the most promising answer at this stage.

Amendment, by leave, withdrawn.

Lord Simon of Highbury moved Amendment No. 115: Page 5, line 21, at end insert— ("() an official of a trade union (within that meaning) who has been certified in writing by the union as competent to act for the purposes of this section,")

On Question, amendment agreed to.

Clause 11 [Complaint to employment tribunal]:

[Amendment No. 116 not moved.]

Clause 13 [Interpretation]:

Lord Simon of Highbury moved Amendment No. 117: Page 8, line 1, leave out subsection (4) and insert— ("(4) For the purposes of section 10 a disciplinary hearing is a hearing which could result in—

1. (a) the administration of a formal warning to a worker by his employer,
2. (b) the taking of some other action in respect of a worker by his employer, or
3. (c) the confirmation of a warning issued or some other action taken.

(4A) For the purposes of section 10 a grievance hearing is a hearing which concerns the performance of a duty by an employer in relation to a worker.")

On Question, amendment agreed to.

Lord Monson moved Amendment No. 118: Page 8, line 11, leave out ("the United Kingdom") and insert ("Great Britain")

The noble Lord said: My Lords, in moving Amendment No. 118, I shall speak also to Amendment No. 119. During Committee, I suggested that the term "the United Kingdom" in Clause 13 was erroneous, since with one tiny exception the Bill does not apply to Northern Ireland. Moreover, the term "Great Britain" is used everywhere else in the Bill.

I sensed from the reply of the noble Lord, Lord McIntosh, that he had some sympathy with my point. Accordingly, I tabled Amendments Nos. 118 and 119 to rectify what appears to be a drafting anomaly. I beg to move.

Lord Simon of Highbury

My Lords, I am grateful to the noble Lord, Lord Monson. He has raised a detailed but extremely useful point; namely, that an inconsistency exists between the definitions used to define "working day" in Schedule 1 and Clause 13. As noble Lords will recall, during the debate on 17th June the noble Lord, Lord Monson, suggested that references to United Kingdom in Clause 13(5) had been caused by a drafting error. The noble Lord was correct; he has a very sharp eye and I am glad to see that that can exist with bifocal help.

The noble Lord will also know that I have since confirmed in writing to the noble Lord that the inconsistency does not reverse the overall effect of Clause 37, which provides that the Bill does not apply to Northern Ireland. However, I recognise his concern that allowing such an inconsistency to stand might create unnecessary confusion on that matter. It certainly might inconvenience employers, workers and their unions when they come to apply the law in practice.

The Government are mindful of the need to reduce any scope for confusion. I am grateful to the noble Lord for spotting the error and I am happy to accept his amendments correcting it.

Lord Monson

My Lords, I am grateful to the Minister for his reply and his kind words.

On Question, amendment agreed to.

Lord Monson moved Amendment No. 119: Page 8, line 16, leave out ("the United Kingdom") and insert ("Great Britain")

On Question, amendment agreed to.

7.15 p.m.

Lord Simon of Highbury moved Amendment No. 120: After Clause 14, insert the following new clause—