NATIONAL SECURITY EMPLOYEES

HL Deb 08 July 1999 vol 603 cc1101-43

(". Sections 10 to 13 shall not apply in relation to a person employed for the purposes of—

1. (a) the Security Service,
2. (b) the Secret Intelligence Service, or
3. (c) the Government Communications Headquarters.")

The noble Lord said: My Lords, Amendment No. 120 concerns the sensitive issue of national security. As currently drafted, Clause 13(1) applies the right to be accompanied in grievance and disciplinary hearings to persons in Crown employment. It therefore applies to employment within the Security Service, Secret Intelligence Service and the Government Communications Headquarters.

The staff of the security and intelligence agencies have a unique status. The sensitive nature of their employment sets them apart from other workers and we have therefore given further consideration as to their inclusion in this part of the Bill.

On reflection, we consider that it could create genuine difficulties for the security and intelligence agencies if outsider union representatives were allowed as of right to attend hearings at which highly confidential information might be disclosed. I should stress that the problem is not that such people are trade unionists; rather, the difficulty is that they are outside the security and intelligence agencies. The same difficulty would arise if the accompanying person came from any other walk of life. It is with this in mind that the Government believe that the security and intelligence agencies' staff should be excluded from the provisions on the right to be accompanied.

I am aware that the House might be concerned that employment relations in the agencies might suffer if the right to be accompanied did not apply to these staff. Obviously, staff in the agencies—just like any other workers—need to be treated fairly if they are to give of their best. I can assure the House on this point. The security and intelligence services already have good grievance and disciplinary procedures in place, which are tailored to meet their own needs, providing fair treatment yet minimising security risks. For example, the procedures allow for individuals to be accompanied at hearings, usually by fellow workers. At GCHQ, the accompanying person can be a trade union representative.

As noble Lords will be aware, there are amendments yet to be debated which, if accepted, will bring into the Bill provisions which will open up access to employment tribunals for staff engaged in security and intelligence work. That is a major step. In that context the new entitlements are relevant because they will also help to ensure that internal procedures are applied faithfully in practice. Any failure to do so may count against the agencies at the tribunals which I have just mentioned.

This amendment deals sensibly with the special case of the security and intelligence agencies in the knowledge that the agencies already operate sound procedures and have well-understood employment practices. I beg to move.

Lord McCarthy

My Lords, perhaps I can ask the Government to be flexible in this matter. They have changed the Bill so many times that they cannot say that they cannot change it any more. There has yet to be Third Reading.

It is true, as the noble Lord, Lord Simon, says, that there is no reason why we should insist on a Clause 10 that enables someone in the Security Service or the Secret Intelligence Service or the Government Communications Headquarters to bring in people from outside. We are talking about fellow workers. Most of Clause 10 talks about the choice from among fellow workers. Surely, it would be possible to amend the Bill so that that is clear and so that those three categories of people were able to take their advisers and spokespersons from inside the organisation but not from outside. That could be done at Third Reading.

Lord Watson of Invergowrie

My Lords, I want to speak in a similar vein. Coming from a background as a Civil Service trade union general secretary, I know relatively little of the arrangements that apply to the Security Service or to the Secret Intelligence Service. As a trade union official in the Civil Service arena, I know much about the Government Communications Headquarters. A couple of years ago, when the Government were elected, I was personally involved in the return of trade union representation to GCHQ.

One of the issues that we have campaigned on is the unfair treatment of staff at GCHQ, as we saw it, with regard to industrial tribunals. I know that efforts have been made to provide alternatives, but I am not sure whether the Government are correct in regard to GCHQ. Have the Government had consultations with the PCS, the union involved in representing the staff at GCHQ, and what has been the out-turn of such negotiations? If there have not been any consultations or discussions with the PCS, why not? Perhaps they will be prepared to do so before we get to the final position on this legislation.

Lord Norton of Louth

My Lords, I sympathise with the arguments set out by the noble Lord, Lord Simon, as to why people employed in those categories need special consideration. Before accepting that the clause stand part, I want to ask the Minister whether the Government have considered whether there are any private sector employment areas where similar issues of security apply. I am thinking of data centres in private companies where sensitive information regarding people's financial, medical and legal records is kept and other such secure environments. There may be other situations to which the same considerations may apply. Does the Minister know whether they need to be accommodated in a similar way?

Baroness Park of Monmouth

My Lords, I had not intended to speak on this amendment. I did not know that this matter was to be raised. As a former member of one of the services involved, I want to express my appreciation to the Government for the fact that they have accepted and recognised that there are problems in those areas. I am not speaking of GCHQ, about which I know nothing, but I feel considerable relief and appreciation of the fact that the Government have accepted and put forward this idea.

Lord Simon of Highbury

My Lords, I shall say two things to the noble Lord, Lord McCarthy. Clearly, there is nothing on the face of the Bill to prevent employees being accompanied by a companion of their choice from within their own employment. I made that point clear when stating the case. Indeed, it is part of existing procedures that they do so. Putting such a matter on the face of the Bill is unnecessary because the right is already covered.

Of course, GCHQ workers currently can be accompanied by a union official. If I am correct—I believe I am—in some cases hearings have been held where employees have been accompanied by an outside trade union official. I believe that both cases put forward by colleagues from my own Benches are cases that are merely trying to put on the face of the Bill matters that are already covered by current practice: by a member of the same organisation accompanying the employee or, in the case of GCHQ, a union official.

I am not aware that consultations have taken place with PCS, but I am aware that GCHQ rules allow assistance by friend, colleague, welfare officer or Civil Service trade union official in oral representations, subject to the proviso that the adviser is a member of GCHQ. The argument will be considered, but I do not believe that adding anything to the face of the Bill will add to the extremely good procedures that I am aware that both services currently have in place.

On the question of the private sector's interest in having separate arrangements, we have consulted widely on the terms of the Bill to date. I am sure that those cases have been adequately put. Of course, where there are security issues, the nature of ACAS advice is helpful in outlining the way in which matters can be taken forward. However, I do not believe that the face of the Bill is the place for differentiating private sector experiences. For that reason, we do not intend to change the way in which the procedures are currently written.

On Question, amendment agreed to.

Schedule 5 [Unfair Dismissal of Striking Workers]:

Baroness Miller of Hendon moved Amendment No. 121: Page 79, line 3, leave out ("eight") and insert ("four")

The noble Baroness said: My Lords, this is a short amendment that I hope I can explain with equal brevity.

Along with other industrial nations, we ascribe to the right to strike rather than the more civilised, less disruptive and less aggressive process of compulsory binding arbitration, a topic that I may bring to your Lordships' attention when time permits on another occasion.

An employee exercising his rights to impose that sanction on his employer should not be subject to dismissal unless he commits some tortuous or criminal act or unless a time arises when it is reasonable for his employment to be terminated. The difference between us and the Government is how long that time should be. We believe that eight weeks is grossly excessive. Very few industrial disputes last for as long or longer than that. That period can only be regarded as a potential restriction on the rights of the employer to protect his business after a reasonable time.

The present provisions make any dismissal within the eight-week period unfair, whatever the behaviour of the union or the employee. Let us suppose that as a bargaining tactic the union declines to negotiate or merely goes through the motions of negotiating for the greater part of the eight week period; that it refuses to enter conciliation, to take the dispute to an independent arbitrator or to honour an established agreement to resolve disputes. It may do any or all of those things in order to weaken the employer and to reduce its powers to oppose a claim.

No doubt the Government have chosen this long period remembering the outcome of the dispute in which the print unions were involved with Rupert Murdoch. The purpose of this Bill, according to the Government, is to be even-handed between employer and employee, which it most certainly is not in this case. They also say it is to foster good industrial relations, which I believe the unbalanced provision in this clause most certainly will not do. On the contrary, it will only serve to encourage obstinacy and a continuance of bad relations after the dispute is resolved, as inevitably it will be.

Bearing in mind that a strike comes at the end of a period of negotiations or discussions, four weeks should be long enough to concentrate the minds of the employees and their representatives on finally reaching a settlement without inflicting further loss and damage to their employers and possibly their co-workers who may not be involved in the dispute. I beg to move.

Lord McIntosh of Haringey

My Lords, this issue was discussed at some length in the House of Commons and an amendment was tabled by the noble Baroness at Committee stage, although she decided not to move it. We do indeed intend to deter employers from dismissing workers soon after industrial action has begun. Precipitate dismissals are undesirable, they often complicate industrial disputes, and they make them more difficult to resolve. Dismissal should be seen as one of the last resorts, not one of the first. That is, of course, the approach taken by the large majority of businesses. Relatively few employers ever consider sacking workers who take industrial action. Only poor employers, or those involved in prolonged and intractable disputes, seriously consider this option.

Our proposals mean that it will be automatically unfair to dismiss workers for the first eight weeks of action. We want to set a period which allows a reasonable time for the parties to resolve their dispute and therefore avoid the possibility of dismissals. In our judgment—and I admit it is a judgment—eight weeks gives enough time for detailed and serious discussions to take place, possibly involving third parties such as ACAS.

The noble Baroness's amendment to reduce the period to four weeks is too short a time span for sensible negotiations always to take place. Obviously, we hope that disputes can be settled within a shorter period. Most of them are. Whenever that happens the eight weeks does not apply. Indeed, our proposals actually encourage early settlements by encouraging negotiation. However, it is not our intention to put pressure on the parties to reach agreement within a period when it is just not possible to do so. Some disputes are complicated, they take time and skilful negotiation to resolve. We have therefore framed the protection to ensure that the parties have sufficient time to work through their problems.

The noble Baroness argued that this was an incentive for unions to delay real negotiations towards the end of an eight week period. I cannot accept that. When a dispute is taking place the people on strike are not getting any money, or at least they are not getting any money from the employers. There is always an incentive for unions to resolve a dispute as early as they possibly can, and for that an eight week period is reasonable. It provides enough opportunity to hold constructive negotiations and explore all avenues to resolve the dispute. I hope the noble Baroness will not press this amendment.

Baroness Miller of Hendon

My Lords, the noble Lord the Minister said that it was a question of judgment and he is quite right. He thinks eight weeks is correct. I think that four weeks is correct. He mentioned that he thought four weeks was precipitate. I do not think it is precipitate. We have become so friendly over this Bill that it would have been nice to make a suggestion of splitting the difference and going for six weeks, but, listening to the noble Lord the Minister, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 122: Page 80, line 13, leave out ("(7A)") and insert ("(7C)")

The noble Lord said: My Lords, I should like to move Amendment No. 122 and speak also to Amendments Nos. 123 and 124. Their purpose is to ensure that the new circumstances, in which selection for redundancy amounts to unfair dismissal added to Section 105 of the Employment Rights Act 1996 by paragraph 5(3) of Schedule 5, is inserted at the correct point in the section, and that the cross-references in that section to that new circumstance, and another circumstance added by the Tax Credits Act 1999, are right.

In drafting paragraph 5 of Schedule 5 we have unintentionally made incorrect consequential amendments to Section 105 of the 1996 Act regarding the right not to be dismissed by means of selective redundancy. Section 105 has to be changed in the light of the new right introduced under Schedule 5 to ensure that an employee cannot be fairly dismissed by selective redundancy if he is either selected for participating in official industrial action during the first eight weeks of industrial action, or if he is selected for redundancy after the eight week period and the employer has failed to take reasonable steps to resolve the dispute.

To take account of the new provisions, paragraph 5 inserts a new subsection 7A into Section 105 of the 1996 Act. However, since its enactment in 1996, subsections 7A and 7B have already been inserted into the Act (via the National Minimum Wage Act 1998 and the Tax Credits Act 1999 respectively.)

These amendments simply ensure that all the references are right. I beg to move.

Baroness Miller of Hendon

My Lords, I have to say to the noble Lord the Minister that I am very grateful for his explanation of what these amendments are about. I have to say that because they were tabled so late I did not have an opportunity to read them properly and I could only understand about 7A changing to 7C and 7A being got rid of and putting in 7B, and then, further on, we had to take out 7A and insert 7C. Because the explanation came late I did not understand it and I think that the note I have is not really joined to the amendment. As it concerns Schedule 5 perhaps the noble Lord the Minister could answer a question—either by way of a note from his advisers or, alternatively, by writing to me.

I understand that the Bill provides for a worker who is dismissed during that protected period of eight weeks, which we were discussing a moment ago, to be able to claim compensation for unfair dismissal. Will the noble Lord the Minister say what factors will determine the amount of compensation payable? More specifically, will there be scope for the award to be reduced if the employer can demonstrate that the union failed to behave reasonably during this period? If the noble Lord the Minister is able to help me with that I shall be most grateful. Otherwise I shall feel that I have merely stood up out of turn.

Lord McIntosh of Haringey

My Lords, what these amendments do is to add selection for redundancy as a possible new circumstance which amounts to unfair dismissal. That is all it is doing. It does not change any of the unfair dismissal procedures.

On the issue of what will affect the compensation payments, that clearly is a complicated issue outside the scope of these amendments and I will therefore have to write, in detail if necessary, to the noble Lady. In brief, the answer is that the award will be based on the tribunal's assessment of the individual's circumstances and behaviour. A tribunal may take into account any misconduct which led to his dismissal but that does not include his participation in industrial action. If the individual's conduct has contributed to a selection for dismissal—for example, behaviour on the picket line—then it can be taken into account by the tribunal in determining both the case and the award.

I hope that that may be enough and that I may be spared the duty of writing to the noble Baroness. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 123 and 124: Page 80, line 14, leave out ("(7)") and insert ("(7B) (inserted by Schedule 3 to the Tax Credits Act 1999)") Page 80, line 15, leave out ("(7A)") and insert ("(7C)")

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

On Question, amendments agreed to.

Lord Razzall moved Amendment No. 125: After Clause 16, insert the following new clause—

DISCRIMINATION IN THE WORK-PLACE ON GROUNDS OF

SEXUAL ORIENTATION

(" .—(1) The Secretary of State may make regulations for the purpose of prohibiting, in relation to any employment matter, discrimination by an employer against another person on grounds of that person's sexual orientation.

(2) In subsection (1) ''employment matter" includes—

1. (a) the offer or refusal of employment;
2. (b) the termination of employment;
3. (c) terms and conditions of employment;
4. (d) the provision of training or skills development opportunities;
5. (e) promotion and career progression.

(3) Regulations under subsection (1) may—

1. (a) specify the types of action, or failure to take action, which are to be taken to constitute discrimination for the purpose of this section;
2. (b) confer jurisdiction (including exclusive jurisdiction) on employment tribunals and on the Employment Appeal Tribunal in relation to cases brought under this section;
3. (c) provide for penalties to be imposed or, as the case may be, compensation to be awarded in respect of offences committed under paragraph (a) above.

(4) No regulations shall be made under this section unless a draft has been laid before, and approved by resolution of, each House of Parliament.")

The noble Lord said: My Lords, 'with the leave of the House, in moving Amendment No. 125 it might be convenient if I spoke also to Amendment No. 126. Amendment No. 125 is the same amendment that was moved from these Benches in Committee which goes to the requirement to insert a clause in the Bill dealing with the issue of discrimination against employees or potential employees on the grounds of their sexual orientation. We have brought this back today but we do not propose to re-debate the issues that were discussed extensively in Committee.

It is certainly common ground between the Liberal Democrat Benches and the Government Benches that this is a serious problem for employees and potential employees, so I do not really need to rehearse on Report the nature of the problem. There have been some extremely tragic and difficult cases in recent years. The Government accept that there is a problem. I believe that the noble Baroness, Lady Blackstone, indicated last year, when the Bill on sexual orientation and discrimination ran out of time, that this was an area where the Government were proposing to legislate.

Having listened carefully to what the Minister said in Committee, and having read the Government's remarks in Hansard—, I wonder when we are going to have action in relation to the problem. The Government have emphasised that the Bill is the last of their cornerstone pieces of legislation affecting rights of employment in this country and that the regulations being made under it and under previous legislation set the framework under which employer and employee rights will be established. But we are now half-way through the Parliament leading to the next general election. If no action is taken in the area by way of this Bill, my fear is that we will have no legislation this side of the next general election to deal with the issue.

The response of the Minister in Committee was that it was a very complicated issue and that the Government were having extensive consultations upon it. Secondly, they had received the report from the Equal Opportunities Commission which said that they must legislate. Thirdly, the attitude was, "It is not my ministry which is responsible. Therefore, don't ask me to do anything about it because, after all, I am a DTI Minister not a Department for Education Minister." I do not regard that as a satisfactory response on such an important point. I return to the fundamental tenet of my argument; namely, that the Government are saying that this is the final piece of their fundamental legislation on employment relations. Surely it is in this Bill that the framework of protection ought to be inserted to enable the necessary consultation to be undertaken, the necessary regulations to be drafted, and the necessary preparations to be made before those regulations are implemented. It must be 'within the framework of this Bill, not a future Bill, which, I fear, we will not get this side of the next general election.

Amendment No. 126 deals with potential discrimination with regard to age. This is a totally different issue to the one covered by Amendment No. 125. Again, I do not want to tease the Minister as we did in Committee with the fact that the Government have changed their mind on this issue since they were in opposition. At that time they made it very clear that, once elected, a Labour Government would bring in legislation to outlaw discrimination on the grounds of age. The then Tory Government took the view that this was best dealt with by a voluntary code. Although I do not know what the current Tory position is., the Government's position has now changed since their days in opposition. They now believe that this would be best dealt with by way of a voluntary code.

Having read carefully what the Minister said in Committee, the major thrust of my argument is that the arguments that were used against our amendments were put forward on the assumption that, on the face of it, such amendments sought to deal with the very tricky issues which would have to be dealt with in the consultation process. However, that is far from the case. Both amendments simply provide a legislative framework within which the Government can bring in the necessary regulations to outlaw the practices which, after very necessary and extensive consultation, would be determined as appropriate.

If we look at what is happening on the ground with the minimum wage Act and the working-time directive, we find that the Government are conducting a never-ending consultation process with employers and business in order to establish amendments to the regulations and modify them. I envisage that that process will happen with regard to the age discrimination regulations which are covered under the Bill. For those reasons, I ask the Government to think again on both of these important issues. I beg to move.

7.45 p.m.

Baroness Turner of Camden

My Lords, I was, unfortunately, unable to be present in Committee when these issues were debated. I had attached my name to the amendments, but I was suffering from flu and was unable to be here. I hope that the Government will be prepared to consider these amendments seriously. I am sure that noble Lords will recall that I have on several occasions sought to introduce legislation on the subject of sexual orientation by way of Private Members' Bills. On two occasions, the Bills I introduced into the House gained the support of your Lordships but failed to make any progress in the other place.

Therefore, this Bill provides us with an opportunity to deal with discrimination in the workplace, which we know does take place. Indeed, the Government acknowledge that it is a problem. It cannot be too often stated that there is no protection in law against discrimination on the grounds of sexual orientation; no protection in law against being treated less favourably; no protection against being paid less; no protection against harassment, no protection against discrimination in promotion and appointment; and no protection, really, against dismissal. I do not want to go into the details here because, as the noble Lord, Razzall, said, they were fully dealt with in Committee. However, there are employers who have equal opportunities policies which cover sexual orientation. In my view, it is necessary to try to change bigoted attitudes, which we know exist. Amending the legal framework is one of the ways in which this can be done. Therefore, I support the amendment.

I also support the amendment as far as concerns age discrimination. I was involved in the work done by the Carnegie Third Age Committee some years ago. Its report was debated in the House at that time. The research undertaken by the committee revealed very considerable discrimination on grounds of age throughout UK industry and commerce. This was even more marked during the years in which mass redundancies, especially in manufacturing industry, became common. Many people who took early retirement did so rather unwillingly, knowing that it was unlikely that they would secure other employment despite the fact that they were some years off retirement age. Some firms later regretted their willingness to dispense with experienced and loyal staff. I therefore welcome the amendment. Having had the opportunity to consider the matter since Committee, I hope that my noble friend the Minister will be able to offer us something in response to the issues which have been raised.

Earl Russell

My Lords, I, too, express my support for these amendments. There is a certain illogicality about discrimination. When women were first admitted to jobs in the Northern Irish Civil Service, they were allowed to have three children but were not allowed to be married. They were not allowed to be married because, in those days, it was thought that women who worked were not married. However, because the service wanted to be non-discriminatory, it was decided to extend to women all the other qualifications for male employees. This included the limitation to three children, which was understood within certain quarters of the unionist community to be an anti-Catholic provision. That was a really curious mish-mash of logic.

When you get discrimination surviving in what is in part an anti-discriminatory culture, you get these illogicalities multiplied. It is surely better to accept the basic simple point that the only ground on which you select candidates for a job is fitness to do that job, and the only ground on which you keep people who are doing a job is the competence with which they do it. If one accepts that, one ought to accept that discrimination on grounds of sexual orientation is wrong, contrary to the interests of the person and contrary to the interests of the business, just like discrimination on grounds of race, gender or any other grounds.

I do not assert that there is any objective right to work, but I think that there is a right to contest for work, to compete for it on equal terms. When the penalties for not actively seeking work are so severe and when the penalties for voluntary unemployment are so severe, it is vitally important that that should be the case. This is particularly relevant to homosexuals, because a large proportion of those who lose work because of their sexual orientation are forced out by a process of harassment of the sort which women working for the first time in a previously all-male industry have come to know painfully well.

In these cases, if you cannot convince a tribunal that you were forced out, you are found guilty of voluntary unemployment and you lose benefit for anything up to 26 weeks. That is a severe penalty for something which is in no way your fault. I think it important that the law should not encourage that. I also think that this is an issue of public policy and that thinking of it from the point of view of the Department of Social Security accepting this amendment would be in line with government policy because the basic thrust of government policy is to remove obstacles to people seeking work. They want more people to be able to seek work and therefore fewer to be dependent on the budget of the Department of Social Security. That, I think, with small qualifications, is an objective we would all share. However, people who are discriminated against for their orientation cannot effectively seek work, so the Government are pickling a rod for their own back. Even the Treasury might see an interest in accepting this amendment.

I also support Amendment No. 126. There are arguments of some importance for that arising from the welfare reform Bill which we shall consider next week. That Bill contains clauses which compel recently bereaved widows to start actively seeking work after six months and which deny incapacity benefit to people who have not paid any contributions within the previous two years. That is an increase in the compulsion to seek work. In return for that people deserve an adequate and equal chance of getting work. Unless Amendment No. 126 is accepted, they will not have it. If the Minister does not accept this tonight, we may return to it on the welfare reform Bill.

Lord Sainsbury of Turville

My Lords, as I explained in Committee, the Government are sympathetic to the concerns raised by the noble Lord, Lord Razzall, in this amendment and in Amendment No. 126 which I shall also address.

As I said in Committee we stated in our manifesto, We will seek to end unjustifiable discrimination wherever it exists". However, I think we are talking about means here. I hope I explained in Committee that given the number of different issues involved here I do not think that this Bill is the appropriate place to deal with them. If we do not deal with this matter properly we are in danger of making the situation worse rather than better.

The Government have repeatedly said that they deplore discrimination on the basis of sexual orientation and are appalled by the treatment which some gay men and lesbians experience. We recognise that there is a gap in the protection we offer to those discriminated against on grounds of sexual orientation, in comparison to measures to prohibit discrimination on grounds of race and disability, for example.

However, for the reasons that I gave in Committee, this Bill is not the appropriate vehicle for this large topic. Not only would it be a radical step away from the intentions set out in the Fairness at Work White Paper on which we consulted, but it would rightly require extensive consultations in its own right. I do not accept that this can be dealt with simply by regulations. As I shall mention later, I believe that there are some deficiencies in the way this amendment is drafted which would not permit it to be covered in regulations. We must get the basic principles right and cover all the issues. I see no reason why there should not be another piece of legislation. This is a bedrock piece of legislation that does not preclude other pieces of legislation being introduced.

However, this does not mean that the Government are ignoring this important issue. As I said in Committee, the Equal Opportunities Commission formally presented to the Government last November its recommendations following a review of sex equality legislation. These included a proposal that there should be specific legal protection for lesbians and gay men. The Government—particularly the Department for Education and Employment, which lead, on this policy—are carefully considering this and the EOC's other recommendations. However, there were 62 recommendations and therefore the matter requires careful consideration.

We are also considering the Better Regulation Task Force's suggestion of a non-statutory code of practice. The task force is generally in favour of making current legislation work better. It also points out the importance of evaluating a code of practice before taking any further steps. There is also a further angle which has to be considered properly; namely, the wider European developments. I am, of course, referring to Article 13 in the Amsterdam Treaty. Now that this new treaty is in force, the Commission will be able to bring forward recommendations which the Government will consider positively and constructively.

This Government well appreciate that this is an important and sensitive issue. We need to make sure that whatever action is taken, the results will not be counter-productive to gay men and lesbians. We will want to be sure that in removing injustice we are doing so thoughtfully and in full knowledge of the impact of any legislation, and that would require full consultation with many relevant parties such as industry, the Forces and the Churches. In Committee we discussed the different angles to this matter. If we do not approach them properly, I believe that will be counter-productive.

For that reason I regret that the Government cannot support this proposed new clause. Although it is not clear whether a legislative measure would be the appropriate way to proceed, I hope that those proposing this new clause are reassured of our commitment to act in this area. Our differences are over means rather than the objectives. I trust that this amendment will be withdrawn.

I turn to the amendment promoting age diversity and tackling age discrimination in employment. This is a key part of the Government's strategy of building a country where everyone, whether young or old, can play their full part. The question the Government have asked, and continue to ask, is: which is the most effective way to achieve this goal? It would have been easy to legislate, as the noble Lord, Lord Razzall, has proposed. But the use of legislation—again I am afraid that I repeat what was said in Committee—has not proved to be the best way forward in this complex area.

As noble Lords are aware, my honourable friend the Minister for Employment carried out a year-long consultation on this issue. The result of this consultation was the publication of a non-statutory code of practice on 14th June this year. The Government developed this code with some key social partners, including the TUC, CBI, the Employers Forum on Age, Age Concern, the Institute of Personnel and Development, the Federation of Recruitment and Employment Services and the Institute of Management. This code has been widely welcomed. Those groups which in the past have lobbied for legislation in this area have praised the code. The Better Regulation Task Force has also endorsed the Government's approach.

I hope that noble Lords will forgive me if I do not repeat all that I said in Committee. Suffice to say that the code's effectiveness will be fully evaluated by February 2001. The results of that will help inform future plans for legislation in this area, including the approach the Government will take to proposals for EU directives or regulations under Article 13 of the new Treaty of Amsterdam.

This Government are far from inactive in this area. We share the commitment of noble Lords to action against unjustified age discrimination in the work-place. Where we differ is over the means. We do not believe the time is right for a legislative measure such as that which has been proposed. We have just produced the code and the essential thing now is to evaluate what progress we make on that. I am sure that the House would agree with me that we should see how well the code works before considering whether regulations are necessary. I ask the noble Lord to withdraw his amendment.

Earl Russell

My Lords, before the Minister sits down, I thank him for a very careful reply. In order to avoid wasting his or his colleague's time, perhaps he can give us one more piece of information. If this is not the right place to press for Amendment No. 125, where is?

Lord Sainsbury of Turville

My Lords, I hoped that I had made it clear that the Government were considering this issue. We shall come forward with proposals, and that would be the time to join with us in pressing this issue forward.

8 p.m.

Lord Razzall

My Lords, I thank the Minister for his response. Obviously I am disappointed that the spirit of co-operation which has been created over the Bill has not extended to meeting the points that I and my noble friends have made. Having listened to the answer given by the Minister, the Government are on stronger ground on Amendment No. 126 than they are on Amendment No. 125. In both Amendments Nos. 125 and 126 I have no doubt about the Government's commitment. In Amendment No. 126 they have followed the commitment with action. I am worried that with Amendment No. 125 their commitment has not been followed with action and, as I indicated earlier, I fear that we are a long way off action. In withdrawing the two amendments tonight, I give notice that we may wish to return to them, certainly to Amendment No. 125, at Third Reading.

Amendment, by leave, withdrawn.

[Amendment No. 126 not moved.]

Lord Sainsbury of Turville moved Amendment No. 127: After Clause 20, insert the following new clause—

NATIONAL MINIMUM WAGE: COMMUNITIES

(". The following shall be inserted after section 44 of the National Minimum Wage Act 1998 (exclusions: voluntary workers)—

"Religious and other communities: resident workers.

44A.—(1) A residential member of a community to which this section applies does not qualify for the national minimum wage in respect of employment by the community.

(2) Subject to subsection (3), this section applies to a community if—

1. (a) it is a charity or is established by a charity,
2. (b) a purpose of the community is to practise or advance a belief of a religious or similar nature, and
3. (c) all or some of its members live together for that purpose.

(3) This section does not apply to a community which—

1. (a) is an independent school, or
2. (b) provides a course of further or higher education.

(4) The residential members of a community are those who live together as mentioned in subsection (2)(c).

(5) In this section—

1. (a) "charity" has the same meaning as in section 44, and
2. (b) "independent school" has the same meaning as in section 463 of the Education Act 1996 (in England and Wales), section 135 of the Education (Scotland) Act 1980 (in Scotland) and Article 2 of the Education and Libraries (Northern Ireland) Order 1986 (in Northern Ireland).

(6) In this section "course of further or higher education" means—

1. (a) in England and Wales, a course of a description referred to in Schedule 6 to the Education Reform Act 1988 or Schedule 2 to the Further and Higher Education Act 1992;
2. (b) in Scotland, a course or programme of a description mentioned in or falling within section 6(1) or 38 of the Further and Higher Education (Scotland) Act 1992;
3. (c) in Northern Ireland, a course of a description referred to in Schedule I to the Further Education (Northern Ireland) Order 1997 or a course providing further education within the meaning of Article 3 of that Order." ").

The noble Lord said: My Lords, I beg to move Amendment No. 127. I bring forward the amendment in the expectation that we will all agree that this is a common-sense measure.

The Low Pay Commission has recently recommended that the position of the intentional communities under the national minimum wage should be clarified. Members of those communities are not "workers" in the way the term is normally understood. Resident members of intentional communities share living accommodation and tasks with the purpose of advancing a common religious or spiritual aim. They are often required to engage in work on behalf of the community in which they live. Their basic requirements such as meals and accommodation are met by the community. In many instances, residential members also receive small sums of money. Some communities treat their residential members as workers, issuing contracts of employment. But these workers are working because they share common aims and aspirations. They reside together as one community, sharing in the common tasks. Their work is driven by considerations quite apart from the desire for financial reward.

These individuals would probably not be regarded as "workers" at all but for the arrangements that many of the communities have put in place—for example, by issuing contracts of employment. Indeed, I should make clear that the traditional religious communities in monasteries and the like are in any case completely outside the legislation already as there are no contractual obligations and therefore no workers' rights. But certain other communities run the risk of being caught up in the new law if we do not make this amendment. That is because in many cases we understand that their arrangements could be construed as creating contractual obligations.

Let me be absolutely clear: this exemption is about members of genuine intentional communities. Workers who are not "members" will be protected by the National Minimum Wage Act and will benefit from the protection in that Act against detriment and unfair dismissal. We do not wish any establishments which are not ''intentional" in this sense to be included; that is why we specify that those working for residential educational bodies will not be exempted.

These are genuinely unique circumstances and only some 1,000 individuals will be covered by the exclusion. The Low Pay Commission recommended that the exemption would need to be, clearly and tightly refined … we would not want to inadvertently create loopholes".

We have done this. I therefore commend this amendment to the House.

The Lord Bishop of Ely

My Lords, I wish to express the gratitude of these Benches for the inclusion of Amendment No. 127. The Minister has spoken about the intentional communities, which are, in a way, a modern off-shoot of the monasteries which are very much a feature of our culture. They are places where men and women practise an extremely modest way of life as a vocation in order to benefit their fellow human beings. They include the L'Arche communities, where remarkable work is done with people suffering from acute learning difficulties; the Pilsdon community; and the Emmaus UK community, which supports homeless people and which began in my own diocese. The acceptance of the case for making an exception of these communities is very generous and gracious. I wish to express my gratitude for that.

Part of the amendment makes explicit the fact that the exemption will not be applicable to communities providing courses of further or higher education. As I am about to become principal of one such community and thus to leave both my diocese and your Lordships' House, I wish to place on record my deep gratitude for the kindnesses which have been extended to me here. I count it an extraordinary privilege to have participated, on a very modest scale, in your Lordships' proceedings. I shall continue in my new place of work to offer my prayers for the success of your Lordships' deliberations.

Lord Brookman

My Lords, I, too, welcome the statement from the Minister. People have expressed concern to me about the possibility of loopholes in the legislation. Their main concern is that people who work for or are employed by charities and communities will not be eligible for the minimum wage. There should be no loopholes through which one can drive a tractor. We should be specific about what we are saying: that people who work for or are employed by charities and communities will be: eligible for the minimum wage.

Baroness Miller of Hendon

My Lords, I, too, welcome the amendment by which the Government seek to alter the National Minimum Wage Act 1998. We think it is right that there should be this exemption and we on this side of the House are pleased about it.

Perhaps I may remind your Lordships that when the National Minimum Wage Bill was before the House I proposed an amendment then that would have given the Secretary of State power by Statutory Instrument to give total or partial exemption in certain areas. I will not repeat what was said, other than to say that the last area was occupations or categories of persons. It would have been a power that the Secretary of State need not have used, but we would not have had to come back with further legislation.

Your Lordships were kind enough to pass my amendment—the only one that was passed—with a generous majority of 58. We won with the very welcome support of the Liberal Democrat Benches at that time. However, when the Bill was returned to the other House, the Minister of State drew himself to his full height and denounced the amendment as one which wrecked the whole Bill. It certainly did not.

Perhaps I may make one point. The beneficiaries of this amendment are persons who reside in a religious community; they do so voluntary. I have heard what the noble Lord who has just spoken said. I hope he will forgive me, but I cannot remember his name.

Lord Brookman

Brookman, my Lords.

Baroness Miller of Hendon

My Lords, he: will never forgive me. He is always so nice to me outside the Chamber. I am terribly sorry that I did not remember his name.

There is another category of persons whose situation is not voluntary. I refer to people who by reason of one incapacity or another live in some other sort of community or need to attend day centres and who for therapeutic reasons do some sort of work for which they receive token pay. I am not talking about people who are just employed but about those who are able to do only a little in certain circumstances. They, and those who look after them, are no less deserving of exemption from this legislation than a group of devout monks who work to support themselves and share the income. It is right that such people have been exempted; I should have liked the provision to extend further.

However, we cannot re-fight old battles. Any exemption from the legislation has our support and we welcome the amendment. The only other point I wish to make is that what is sauce for the goose should be sauce for the gander. That is why I have tabled Amendment No. 127A, which is grouped with this one.

As I explained, we believe that this group is no less deserving and certainly needs to be exempted. It comprises those whose employment chances are impaired because of one of various misfortunes: they have fallen into a category through absolute disability or sickness or as the result of an accident. They include, for example, people with learning difficulties living in sheltered accommodation who are able to engage in craftwork which is then sold by the establishment's gift shop for the benefit of the residents. They include people with some physical disability which prevents them from working full-time or at the same rate as a colleague on the next bench. They include those whose medical advisers believe that working will help improve their physical or mental condition but who find it difficult to find regular employment.

In 1998, the Joseph Rowntree Foundation, an organisation whose opinions are generally approved of by the Government, said in a report: Disabled people may have been affected by a much wider and systematic shift in employment patterns. As the supply of labour expanded faster than demand, employers have been much more selective in their choice of staff. Marginal workers, such as disabled people, have been excluded … Preliminary evidence shows that very few have found jobs". In its evidence to the Low Pay commission for the purposes of the National Minimum Wage Act, the National Institute for the Blind stated (at page 39): Blind and partially sighted persons face bleak prospects in employment … Significantly blind and partially sighted people are concentrated in lower paying semi-skilled and routine manual occupations. Many … are therefore caught in poverty even when they are working". In the debate on this very amendment just a little over a year ago, I said that, It is simplistic to suggest that the solution to their problems will be to increase their pay entitlement. On the contrary, we believe that such action would increase their problems. It would make employers even less inclined to employ disabled people so long as they can employ able-bodied persons to do the same work for the same pay, possibly at a higher rate of productivity".—[Official Report, 22/6/98; col. 63.] I go further than that. It would be positively disruptive if two people working side by side, one being substantially less productive and subject to frequent absences for medical reasons, were to be paid at the same rate.

The Government saw two main objections to my amendment. First, they said that it would be used as a device by unscrupulous employers to exploit vulnerable people. That is not right. There are many publicly minded employers who employ disabled workers, at some inconvenience and expense to themselves, and regard it as a duty, rather than doing it for some ulterior and unworthy motive.

As recently as 20th June, the Sunday Telegraph made a powerful case for exemption for the disabled. The article is far too long for me to quote in full, but I urge the Minister to read it, as I feel certain that he will reject my amendment. If he were to read that article over the weekend, he might speak differently about my amendment at Third Reading. To paraphrase the article heavily, it states that as many as 10,000 disabled and mentally handicapped people could lose their jobs due to the rigid application of the national minimum wage rules.

There is much more that I could say in speaking to the amendment. But it is late. I believe that I have made my point. I urge all three Ministers on the Front Bench opposite to obtain a copy of that Sunday Telegraph. It would make excellent weekend reading. At this stage, I should be happy to hear the Minister's response.

8.15 p.m.

Lord Sainsbury of Turville

My Lords, first, in relation to Amendment No. 127, I assure the House and noble Lords who have spoken that we see this as a specific and tightly constrained provision to deal with a small group of 1,000 individuals in particular circumstances. That is extremely important.

We are delighted to be able to deal with this problem in a common-sense way and meet the needs of the right reverend Prelate the Bishop of Ely. Perhaps I may say on behalf of the whole House that we shall miss his wise advice and we wish him well in retirement.

Turning to Amendment No. 127A, perhaps I may promptly prove that we do see this as a tightly constrained amendment. I shall of course steel myself and read the article in the Sunday Telegraph. However, I had hoped that one extremely small, fully justified and tightly drawn amendment for intentional communities would not lead to a call from the Opposition for a larger amendment and one which rests on extremely shaky grounds.

I am aware that the amendment was also tabled and debated when the National Minimum Wage Bill was in this House. The Government's position has not changed since then. Neither has the advice of the Low Pay Commission, nor indeed the views of the majority of organisations representing disabled workers and their employers.

The position is this. There can be no question of discriminating on grounds of ability when it comes to the right to the national minimum wage. I believe that it is morally wrong to differentiate in this way. I do not imply, of course, that the noble Baroness seeks to discriminate unfairly. I know that the amendment was tabled with the best of intentions. But a statutory minimum wage is there to protect the weakest and most vulnerable from exploitation. And those who have a disability are often (though by no means always) in this category as workers.

Perhaps noble Lords will allow me to quote from the Association for Supported Employment, which is widely regarded as one of the foremost groups representing disabled workers. The association stated in a letter about this issue to Margaret Hodge at the DfEE that its members, unreservedly support the national minimum wage", and that, people with a disability should not be made exempt from the national minimum wage". There is no escaping the complexity of the issue as it relates to benefits and employment programmes. Of course this department is working closely with Ministers at the DfEE, the DSS and the Department of Health to examine the impact of the minimum wage law on the overall package of work-related and disability benefits for people in this position.

Indeed, the House may wish to be aware that the Department of Social Security has already increased the earnings limit for those carrying out therapeutic work to take into account their increased earnings as a result of the national minimum wage so that they will not suffer any loss in the hours that they can work while claiming incapacity benefit.

But so far as changes to the National Minimum Wage Act are concerned, I stress again that exemptions are not the answer. I leave the last word with the Low Pay Commission. Having taken evidence from numerous organisations in this area, the commission concluded that, there are compelling arguments for treating disabled workers in the same way as other workers". I hope that the noble Baroness will not press her amendment.

On Question, amendment agreed to.

[Amendment No. 127A not moved.]

Lord Simon of Highbury moved Amendment No. 128: After Clause 24, insert the following new clause—

ACAS: REPORTS

(" .—(1) In section 253(1) of the Trade Union and Labour Relations (Consolidation)) Act 1992 (ACAS: annual report) for "calendar year" there shall be substituted "financial year".

(2) In section 265(1) of that Act (ACAS: report about CAC) for "calendar year" there shall be substituted "financial year".")

The noble Lord said: My Lords, perhaps I may speak to government Amendments Nos. 128 and 133 together. Both amendments deal with our proposals to amend the period of the reporting cycles for ACAS, the CAC and the certification officer respectively.

Under the Trade Union and Labour Relations (Consolidation) Act 1992, the annual reports of ACAS, the CAC and the Certification Officer are required to be produced on a calendar year basis; however, the accounts of the three bodies are required to be produced on a financial year basis. The ACAS council has indicated that it would be helpful to it to produce its annual report on a financial basis. This would enable it to follow current Treasury guidance. The quinquennial review currently being undertaken on ACAS has also indicated that this would be a sensible measure to adopt. The Government fully agree with ACAS and the quinquennial review that this is therefore a sensible policy step to take. It is fully consistent with open government requirements. In changing the period of the ACAS reporting cycle, it is of course eminently sensible to change the reporting cycles of the CAC and the certification officer on a similar basis. I urge noble Lords to accept the amendment. I beg to move.

On Question, amendment agreed to.

Schedule 6 [The Certification Officer]:

Baroness Miller of Hendon moved Amendment No. 129: Page 82, line 30, at end insert— ("() It shall be lawful for the court or certification officer to declare an application by the same person alleging any similar or related failure described in this section to be vexatious so long as in the individual matter the declaration does not infringe the European Convention on Human Rights."")

The noble Baroness said: My Lords, this amendment is to deal with the problem of a vexatious applicant, colloquially a serial complainer. It is someone who launches complaint proceedings on some grounds or other that are dismissed. He then launches another claim on the same or possibly similar grounds that might well have been raised in the first case. "If at first you don't succeed, try, try, try again." That is not a fanciful scenario. In another context I imagine that most employment panels can tell stories of their regular customers.

The High Court has power to debar a vexatious litigant. Now that employment tribunals, the CAC and certification officers are taking on so much more work of a quasi-judicial nature, it is essential that they should have the power to make things difficult for the persistent claimant who persistently fails to justify his claims.

This clause meets some part of the problem by making the remedy available to the certification officer so that he at least can quickly dispose of vexatious claims. There is one necessary qualification. Debarring an application for being vexatious is not to take place if, in the particular circumstances of the case, it would infringe the European Convention on Human Rights. The convention permits debarring steps in appropriate cases. If such procedure is appropriate to the ordinary civil courts, there is no reason why it should not be available to the certification officer. I beg to move.

Lord Simon of Highbury

My Lords, as the noble Baroness made clear, this amendment deals with vexatious litigants, serial complainers. It was, of course, discussed at length during Committee stage when the Government introduced an amendment to enable the certification officer to refuse to hear complaints by individuals who have been declared vexatious by the courts. The purpose was to ensure that, so far as possible, the certification officer is not distracted by unnecessary cases. This is now set out in paragraph 23 of Schedule 6.

The noble Baroness tabled a similar amendment at Committee stage, although she subsequently was kind enough not to move it. Then, as now, there was much common ground between us in terms of our objectives. We both want to see a safeguard inserted to provide some protection for the CO. The difference is that our provisions cover all the CO's complaints jurisdictions whereas this amendment deals with only one of those jurisdictions: complaints about access to a union's accounting records. This does not sit well with the existing law on the treatment of vexatious litigants.

The noble Baroness also seeks to give the CO a power to declare people to be vexatious litigants. We consider this to be a powerful sanction. The CO has a very specialised role which does not include powers to impose penalties on individual union members. It would be inappropriate, in our view, for the CO to be given a wider power to declare individuals vexatious litigants.

The amendment refers to the European Convention on Human Rights. Denying individuals access to the courts or the certification officer is a very serious matter. It clearly raises human rights issues, as the noble Baroness rightly said. We have deliberately framed our proposals to ensure they provide some basic safeguards to vexatious litigants. For example, the certification officer will be obliged to consider all applications made by these individuals. He cannot just ignore them. If he feels the vexatious litigant has a proper case, then he can hear it. Likewise, our proposals allow for the vexatious litigant to apply to the courts for his case to be heard, if the certification officer refuses to determine an application.

In view of this explanation, I hope the noble Baroness can withdraw her amendment and instead lend her support to the government provisions in this area, to which I shall speak on the following three amendments.

Baroness Miller of Hendon

My Lords, I am pleased to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Simon of Highbury moved Amendments Nos. 130 to 132: Page 88, line 30, at end insert— ("(3A) A person may not apply under subsection (1) in relation to a claim if he is entitled to apply under section 80 in relation to the claim.") Page 91, line 43, leave out ("VII") and insert ("VIIA") Page 91, line 46, after ("apply") insert ("to a complaint under section 37E(1)(b) or")

The noble Lord said: My Lords, I wish to thank the noble Baroness for easing the passage to government Amendments Nos. 130, 131 and 132 together. They are technical amendments intended to remove inconsistencies in the Bill concerning Schedule 6 and the certification officer.

I begin with Amendments Nos. 130 and 131. As I have already noted, the Government introduced an amendment in Committee to enable the certification officer to refuse to hear complaints by individuals who had been declared vexatious by the courts. In drafting the schedule, only applications made under Section 41 of the Trade Union and Labour Relations (Consolidation) Act 1992 were exempt from the vexatious litigants provisions. After further reflection, another exemption from the provisions has been identified.

Under Section 37E(1)(b) of the 1992 Act, the certification officer, on receiving a complaint from a trade union member regarding the financial affairs of a union, must consider exercising the powers given to him under Sections 37A and 37B of the 1992 Act. These powers enable the certification officer to call upon a trade union to produce records relating to its financial affairs where the CO thinks there is good reason for the union to do so. Likewise, the CO has the authority to appoint inspectors to investigate the financial affairs of trade unions in certain circumstances.

The CO does not actually determine complaints under these sections. His role is regulatory rather than quasi-judicial. As a result of his own inquiries or the findings of the inspectors, he might, in appropriate circumstances, decide to prosecute for offences falling within his competence or refer the matter to other agencies, like the police. In this sense, he is not dealing with union members as litigants but as individuals who have provided him with information in his regulatory capacity. It would therefore be inappropriate to include such provisions which deal with the treatment of vexatious litigants.

There is another reason why this section should be excluded from the vexatious litigants part of the schedule. If the CO takes the decision not to exercise the powers given to him under Sections 37A and 37B, he must inform the union member of his decision. However, he is not required to give reasons for refusing to exercise the powers, though he may choose to do so.

Conversely, under the vexatious litigants provisions newly added to the Bill in paragraph 23 of the schedule, the CO will always be required to give reasons for refusing the application.

As the schedule is currently drafted, Section 37E(1)(b) of the 1992 Act falls within the vexatious litigants provisions. Consequently, if a union member were to take a complaint to the CO under Section 37E(1)(b) and if the CO decided not to exercise his power, there would be no requirement on the CO to give reasons for the refusal if the complainant has not been declared vexatious. Perversely, if the complainant has been declared a vexatious litigant, the CO would be required to give reasons for the refusal. This would obviously create an illogical situation for the certification officer and highlights the contradictory nature of the provisions already existing under Section 37E(1)(b) and those contained under paragraph 23 of Schedule 6.

Amendment No. 130 therefore removes complaints referred to the certification officer under Section 37E(1)(b) from the new vexatious litigant provisions.

I turn now to Amendment No. 131 which also relates to the vexatious litigant provisions. As I have already noted, paragraph 23 of Schedule 6 gives the CO the power not to entertain a complaint from a vexatious person. However, in drafting the provisions we inadvertently failed to extend that power to cover complaints heard under the new Part VIIA of the 1992 Act. Paragraph 19 of Schedule 6 adds a new Chapter VIIA of the 1992 Act to establish an entitlement for trade union members to complain to the CO about certain alleged breaches of the rules of their trade unions. It was always intended that breaches of union rules should fall under the vexatious litigant provisions, and Amendment No. 131 remedies this drafting error.

I turn to Amendment No. 132, which is the final Government amendment to Schedule 6. Schedule 6 establishes an entitlement for trade union members to complain to the certification officer about certain alleged breaches of the rules of their unions, including rules relating to the balloting of members on any issue other than industrial action. Under the current law, trade union members must generally apply to the court about such breaches. However, in drafting the schedule we overlooked the point that the certification officer already has jurisdiction to hear cases of breaches of rules in respect of political fund ballots. Section 80 of the Trade Union and Labour Relations (Consolidation) Act 1992 gives the certification officer power to hear complaints about breaches of a union's rules relating to a political fund ballot.

What is more, the procedural requirements under Section 80 of the 1992 Act are different from those which are to apply under the new provisions. It would therefore be undesirable if the same complaint could be heard under two separate jurisdictions and under two different procedures. This minor amendment, therefore, ensures that complaints about breaches of a union's political fund ballot rules cart be made to the certification officer only under Section 80 of the 1992 Act and not under the new provisions outlined in Schedule 6. The Section 80 procedures have worked well in practice and have not placed excessive administrative burdens on the certification officer. I urge the House to accept the amendments. I beg to move.

On Question, amendments agreed to.

8.30 p.m.

Lord Simon of Highbury moved Amendment No. 133: Page 92, line 20, at end insert—

("Annual report by Certification Officer

. In section 258(1) (Certification Officer: annual report) for "calendar year" there shall be substituted "financial year".")

On Question, amendment agreed to.

Clause 27 [Partnerships at work]:

[Amendments Nos. 134 to 137 not moved.]

Lord Simon of Highbury moved Amendment No. 138: After Clause 28, insert the following new clause—

EMPLOYMENT RIGHTS: EMPLOYMENT OUTSIDE GREAT BRITAIN

(" .—(1) In section 285(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (employment outside Great Britain) for "Chapter 11 (procedure for handing redundancies)" there shall be substituted "sections 193 and:94 (duty to notify Secretary of State of certain redundancies)".

(2) After section 287(3) of that Act (offshore employment) there shall be inserted—

"(3A) An Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.".

(3) Section 196 of the Employment Rights Act 1996 (employment outside Great Britain) shall cease to have effect; and in section 5(1) for "sections 196 and" there shall be substituted "section".

(4) After section 199(6) of that Act (mariners) there shall be inserted—

"(7) The provisions mentioned in subsection (8) do not apply to employment on board a ship registered in the United Kingdom if—

1. (a) the ship is registered at a port outside Great Britain,
2. (b) under his contract of employment the person employed works wholly outside Great Britain, or
3. (c) the person employed is not ordinarily resident in Great Britain.

(8) The provisions are—

1. (a) sections 8 to 10,
2. (b) Parts II, III and V,
3. (c) Part VI, apart from sections 58 to 60,
4. (d) Parts VII and VIII,
5. (e) sections 92 and 93, and
6. (f) Part X.".").

On Question, amendment agreed to.

Schedule 7 [Employment Agencies]:

Baroness Miller of Hendon moved Amendment No. 139: Page 92, line 35, at beginning insert ("subject to subsections (1B) to (1E) below,")

The noble Baroness said: My Lords, in moving Amendment No. 139 I should like to speak also to Amendment No. 140. I crave the indulgence of the House in this matter. My notes on these amendments are somewhat lengthy, but I feel so strongly about this matter that I cannot omit any part of them. I shall speak rather quickly so that I do not take up too much of your Lordships' time.

Amendment No. 139 is just a paving amendment to make way for Amendment No. 140 which is the substantive provision. Under the Employment Agencies Act, which has operated perfectly satisfactorily since 1973, the Secretary of State has power to make general regulations. Paragraph 2(2) of Schedule 7 introduces a new regulation which gives the Secretary of State power to restrict or regulate, the charging of fees by persons carrying on such [employment) agencies and businesses".

It is no exaggeration to say that on an ordinary interpretation of those words that draconian power would enable the Secretary of State to put employment agencies out of business by making it totally uneconomic for them to trade either by stipulating unreasonably low fees or even prohibiting the charging of any fees at all in certain circumstances. In case it be thought that this is too fanciful an interpretation. I read a shortened extract from paragraph 266 of the Explanatory Notes: Examples of matters on which regulations may be made include … restricting the ability of … employment agencies to impose terms on employers which seek to prevent or discourage … them dealing … with workers supplied to them. Where businesses seek to impose charges in any of these circumstances regulations might limit the size of those charges … or prohibit them altogether".

That is the whole point. The object of the 15 words in this sub-paragraph is hidden among the 15 lines of the Explanatory Notes.

At a meeting with the noble Lord, Lord Simon, last Monday, for which I thank him, he assured me that the Government's objective was not to ban charging for temp to permanent engagements but merely to regulate the fees. But that is not what the clause says, and that is not what the Explanatory Notes say it says. At the very least, it seems to me that this may be New Labour taking the first step on the road to price controls.

The Government want to ban employment agencies from conducting simple, straightforward, everyday transactions with employers that have been carried on with their willing clients for years, even decades. That simple transaction goes like this. An agency sends an employer a temporary worker in return for a fee which includes the worker's wages, tax and national insurance that the agency pays, as well as the agency's charge or commission. The most common kind of temp is a secretary or clerical worker. The employer decides that she entirely fits into his business and he invites her to take a permanent job with him, which she accepts.

The agency has a clause in its contract with the employer that in this very common situation the employer will pay the agency the commission that it usually charges for the finding of permanent employees. One may ask: what is wrong with that? I confess that I do not know. There may be all kinds of reasons put forward. One is that somehow it would put the employee at a disadvantage because the employer for whom she had been temping might be inhibited from offering her a job because he would be liable to pay a commission. I believe that that is absolute nonsense. The very fact that this is a regular, indeed daily, type of transaction proves that it does not inhibit workers from finding permanent jobs that way.

Employers who look for permanent workers have to get them from somewhere. If they do not pay a commission to an agency for the promotion of a temp to a permanent employee they will pay it to an agency for finding a total stranger; or else the employer will have to spend time and trouble, and quite a lot of money, advertising and interviewing prospects on their own, including any number of unsuitable people whom the agency would have weeded out in advance. That is one of the services that an agency provides to its clients.

Together with many other employers, I have found excellent permanent employees from among temps who have worked for me, and I have been more than pleased to pay the commission. In effect, temp to permanent arrangements are often trial engagements on both sides. I always asked my temps why they did not take a permanent job rather than face the uncertainty of blank periods and constant changes of employers while temping. The fact is that temps work in that capacity for a variety of reasons. Some like the variety of work that temping gives them; most do not want a permanent job but to work as and when it suits them; others want the flexible hours that such work provides or to use temping as a means of finding a permanent job by trying out potential employers themselves. Far from putting a temporary employee at a disadvantage, it gives them the opportunity to find an employer and a job that suits them. Perhaps it is the workers who do not find jobs via the temporary worker route who are adversely affected.

The other untenable reason proffered by the Government for seeking these powers is that a poor ignorant employer may not realise that by hiring a temp and then converting him or her into a permanent employee will cost him a fee. I would have thought that even someone newly arrived from the planet Zorg would realise that you do not get something for nothing, or that you can in effect poach somebody else's employee with impunity and without paying a fee—apart from the fact that this potential liability is invariably spelled out in the agreement with the agency. Failure to read an agreement that one signs is no excuse, but in order to ensure that there is no possible misunderstanding most agencies specifically refer to the condition in a covering letter.

At Committee stage I proposed a very simple amendment that called on the Government not to make any order which interfered with the commercial arrangements between what might be described as consenting adults—the agency and its client—so long as they did not interfere with an employee's rights. The Government rejected it out of hand.

In order to meet the Government's specious and totally flawed argument against my very simple amendment, I now propose a much more elaborate one which takes into account what the Minister told me then. It requires the contract with the employer and the contract with the worker to state clearly that a fee will be charged to the employer, not to the worker, if the worker takes permanent employment with the business for which he or she has worked on a temporary basis. The clarity is achieved by the words being spelt out in prominent characters in the two contracts, being surrounded by a printed box and being initialled by the employer and the worker.

To anticipate a possible objection from the Government, I have also made it quite clear that an employee may not suffer detriment by refusing to acknowledge the potential arrangement, which will not be of any effect in any case if he or she does not convert a temporary job into a permanent one. There is no cause for the provision tucked away in Schedule 7. It is not merely an exercise in nannyism, to protect employees from possible exploitation or to protect unwary employers from a hidden, unexpected liability. The Unfair Terms and Conditions Act would do that. It is not in response to any public outcry about an injustice to either employers or employees. In fact, the Government have at no stage in this legislation, particularly before your Lordships, produced the slightest evidence of any abuse or of any real public demand for it.

The noble Lord, Lord Simon of Highbury, told the Committee: Some in the industry admit that they use "temp to perm" fees to stall that process".

With the greatest respect, that is a totally misleading spin on whatever the Government say they have been told.

My noble friend Lord Tebbit, speaking on the same amendment, told the Committee on the basis of his former connection with an employment agency that, temporary staff are an asset of the agency".—[Official Report, 16/6/99; cols. 397–98]

What the agencies are doing when they charge a commission when one of their employees whose services they hire out as a temp is taken into permanent employment by one of their clients is to prevent blatant poaching by someone who has had that asset—the temp—on trust. It is also to ensure that when employers decide to keep a temp permanently they are compensated for the loss of revenue generated by the temp and the cost of finding a replacement.

Among those who have lobbied me on this subject is the Federation of Recruitment and Employment Services, a trade association representing over 50 per cent of the industry, with 5,500 offices in membership throughout the country. The industry has an annual turnover of a staggering £16 billion. Each week it finds temporary work for about 1 million people. Each year it finds permanent jobs for 450,000 people. Some 16 per cent of the industry's revenue comes from temporary to permanent fees. FRES estimates that about 170,000 of those for whom the agencies find permanent jobs—that is, just over a third—do so via the temp-to-permanent route. That belies the totally unsupported and specious suggestion that it somehow inhibits people from finding jobs or puts temps at some disadvantage. Many employers recruit staff exclusively by this means. Many disadvantaged people find that the temp-to-permanent route offers them the opportunity of a permanent job following rejection by employers on the grounds of age or recent illness and—reprehensibly and illegally—on the grounds of some disability. Recruitment agencies play an important part, not just in placing people in jobs, but in helping difficult candidates to find jobs.

The industry says it is difficult for it to understand the Government's attitude to it, especially on this issue, where everybody—employers and employees alike—is content with the system. I suspect what the problem may be. Although the agencies have not said this, I wonder whether in some of the deep recesses of old Labour—not on the Front Bench, I hasten to add, but perhaps behind—people are waiting to pounce and settle old scores. In 1983 the Labour Party's extreme Left-wing election manifesto—the noble Lord will not be surprised if I repeat it again—said: We will take urgent steps to abolish private employment agencies". "Urgent steps"! What was the reason for having that in the manifesto? Again I quote. It was to: ensure that the Manpower Services Commission develops a national job centre network".

That was nationalisation through the back-door, and in that case nationalisation without compensation. I know that the Minister will tell me that that is a great exaggeration, but that is exactly what I think it is. In Committee when I quoted the same words, I invited the noble Lord to assure us that New Labour had forsworn that ambition. Answer came there none then. Maybe tonight some answer will come.

I said in Committee that I was prepared to assume that the Government had simply not understood the destructive nature of these proposals. I again say that if they claim they do not know, then it is not for want of being warned by the: industry and my honourable friends in the other place, even in advance of the draft regulations. The fact is that their proposals will put the agencies out of business, or at least make their operations unviable, simply because they cannot recruit temporary workers only to lose them through the poaching that the Bill would encourage. The proposals will make it harder for thousands of people, many of them single mothers, to obtain temporary work. 'They will make it harder, if not impossible, for employers and temporary workers alike to find suitable staff and positions by a straightforward system under which employees are in effect working on a trial basis and at the same time can discover, while still being paid, whether they like the work, the employer and, equally important, their potential colleagues.

I repeat, this provision provides for no known need and removes no injustice or abuse. It is in this Bill for no good reason. If it is eventually passed, it will, I believe, also be found to infringe the article in the Treaty of Rome which prohibits any restriction on the free movement of labour, and it is entirely possible that the Government will find themselves dragged off, kicking and screaming, to the European Commission to be told once again that their conduct is illegal.

Noble Lords opposite, including the Ministers, know that I do everything that I can to save them from this fate. I therefore urge the Government to accept the modification to their proposed powers that this modest amendment calls for. I beg to move.

8.45 p.m.

Viscount Thurso

My Lords, I have had the great pleasure of taking part in most stages of the Bill—nearly all the Committee stage and all the Report stage from this Front Bench. Today, I believe, I have uttered only two sentences, so I ask your Lordships' indulgence if I now break my duck and go to three or four.

I have considerable sympathy with the noble Baroness, Lady Miller of Hendon, not because I am a director of a recruitment agency—we do not deal 'with any temporary staff at all; we are concerned purely with what is euphemistically called "executive search"—but because as an employer I have used temporary staff from time to time and some of those staff have become permanent members of our staff. On one occasion without my knowledge—I found out about it afterwards—somebody who had been working for us for some nine months took a permanent position. It was arranged by the person who employed him that he simply left for a week, left the agency and came to us a week later. We thereby rather neatly avoided paying a commission. I am not proud of that, but it is what happened.

I have great sympathy with the noble Baroness, Lady Miller, but I think she has attacked this matter from the wrong angle. I regard the key issue as being one of time. Clearly, if a temporary employee comes to work for a week or a month and then becomes permanent much of what the noble Baroness says is right. But where a temporary employee has worked for six or nine months I do not see why there should be the penalty of an extra commission. If the noble Baroness could have framed her amendment on the grounds of time it would have had much more chance of success than the way she has chosen.

Lord Blackwell

My Lords, I cannot add much to the arguments advanced by my noble friend Lady Miller, but when a government bring forward regulations the onus is on them to prove that the regulations are necessary and that they fully understand their implications. From all that has been said, I for one am not convinced that the regulations in this sense are necessary under this Bill.

Lord Simon of Highbury

My Lords, I wish it were as simple as to say that I would meet length with strength.

We had an opportunity in Committee to discuss a broader amendment put down by the noble Baroness, Lady Miller of Hendon, which sought to constrain generally the powers of the Secretary of State to regulate the conduct of employment agencies and business. Amendments Nos. 139 and 140, which she has put down now, cover the same ground, but they speak in particular to the issue of charging fees known as the "temp to perm" in our language.

I do not propose to go over all the ground again and I am sure that your Lordships will be pleased to hear that. Suffice it to say that the draft regulations published by the Department of Trade and Industry in May—to be made under the power which the amendments would qualify—do not seek to cap or limit the size of the fees at all. We are seeking only to ensure that bureaux do not use the fees as a means of deterring employers from taking temporary workers into permanent employment in circumstances where they are not themselves prepared to commit to finding work for the employees.

I would not want the House to take at face value, for example, the rather misleading paid advertising from the group mentioned by the noble Baroness, Lady Miller, which put the case for the agencies, so they thought. It appeared in the form of a news report in Monday's Evening Standard which wrongly claimed that we are seeking to abolish temp-to-perm fees. I make it clear again, for the record, that the Government's proposals will not abolish the fees. The proposals stem from the proposition that it is not right for a price to be put on a temporary worker's head that restricts the range of potential employers he can work for without him getting anything in return. The draft proposals in the consultation document do not cap or limit the size of fees. Bureaux will remain entirely free to protect their legitimate interests by charging temp-to-perm fees, provided that they have committed to provide work for the worker.

We have made it clear that we are open to alternative suggestions to the ones we have put forward in the draft regulations on which we are consulting, provided they meet concerns about the abuse of temp-to-perm fees. We will consider any such proposals carefully, but I am sure that the noble Baroness, Lady Miller, will appreciate that to accept her amendments would pre-empt the result of that consideration, and indeed the consultation exercise itself. Were she totally focused on my statement, she would understand why we are not prepared to accept the amendment until we have considered the consultation.

In addition, we have some doubts about the legal effect of the amendment. First, there could be uncertainty about what would be reasonable for charges. Secondly, regulating charges to employment agencies will not in fact cover charges by bureaux acting as employment businesses. Thirdly, no sanction is provided for breach of the provision that would make it unlawful for agencies to refuse to provide services to workers who do not agree with the fees being charged. Those are three technical points. Therefore, we should await the consultation and we should note that the Government are prepared to make the regulations subject to the affirmative resolution procedure. We also do not want to have the provisions on the face of the Bill because they affect a dynamic market place.

Far from spending more time on issues such as whether we are from the planet Zorg, I wish to stay firmly on the ground. Schedule 7, line 35, which is the offensive line in the view of the noble Baroness, Lady Miller, does not state that we wish to cap or affect the fees in limitation terms. If we had, we would have drafted it to read: restricting or regulating the level or amount of fees". The Bill actually says: restricting or regulating the charging of fees". That is a different issue to which I have already spoken. We will consult and, in the meantime and given what I have said, I would ask the noble Baroness, Lady Miller, to withdraw the amendment.

Baroness Miller of Hendon

My Lords, I have to tell the Minister that I did not see the advertisement in the press earlier in the week, so I do not know what it said. I have recently had a briefing from the group. The briefing that I had before, when I felt strongly about the issue, was from Adecco, and the Minister said that it had also briefed him. Given that it is one of the largest employment agencies in the world, certainly in this country, I thought that its view was necessary.

The Minister thought that I was not listening carefully to what he was saying. In fact, I was listening so well that I heard the slight rebuke in his voice. So that he does not think that I do not understand everything that he has said to me, I will read what he has said very carefully in case I missed some wonderful word of wisdom. I heard many words of wisdom from the Minister and I would not want him to think that I did not. I also heard what the noble Viscount, Lord Thurso, said about introducing a time-scale to the amendment.

I reserve the right to return to the subject, but in the circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 140 not moved.]

Lord Sainsbury of Turville moved Amendment No. 141: After Schedule 7, insert the following new schedule—

("NATIONAL SECURITY

1. The following shall be substituted for section 193 of the Employment Rights Act 1996 (national security)—

"National security.

193. Part IVA and section 47B of this Act do not apply in relation to employment for the purposes of—

1. (a) the Security Service,
2. (b) the Secret Intelligence Service, or
3. (c) the Government Communications Headquarters."

2. Section 4(7) of the Employment Tribunals Act 1996 (composition of tribunal: national security) shall cease to have effect.

3. The following shill be substituted for section 10 of that Act (national security, &c.)—

"National security.

10.—(l) If on complaint under—

1. (a) section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (detriment: trade union membership), or
2. (b) section 111 of the Employment Rights Act 1996 (unfair dismissal), it is shown that the action complained of was taken for the purpose of safeguarding national security, the employment tribunal shall dismiss the complaint.

(2) Employment tribunal procedure regulations may make provision about the composition of the tribunal (including provision disapplying or modifying section 4) for the purposes of proceedings in relation to which—

1. (a) a direction is given under subsection (3), or
2. (b) an order is made under subsection (4).

(3) A direction may be given under this subsection by a Minister of the Crown if—

1. (a) it relates to particular Crown employment proceedings, and
2. (b) the Minister considers it expedient in the interests of national security.

(4) An order may be made under this subsection by the President or a Regional Chairman in relation to particular proceedings if he considers it expedient in the interests of national security.

(5) Employment tribunal procedure regulations may make provision enabling a Minister of the Crown, if he considers it expedient in the interests of national security—

1. (a) to direct a tribunal to sit in private for all or part of particular Crown employment proceedings;
2. (b) to direct a tribunal to exclude the applicant from all or part of particular Crown employment proceedings;
3. (c) to direct a tribunal to exclude the applicant's representatives from all or part of particular Crown employment proceedings;
4. (d) to direct a tribunal to take steps to conceal the identity of a particular witless in particular Crown employment proceedings;
5. (e) to direct a tribunal to take steps to keep secret all or part of the reasons for its decision in particular Crown employment proceedings.

(6) Employment tribunal procedure regulations may enable a tribunal, if it considers it expedient in the interests of national security, to do anything of a kind which a tribunal can be required to do by direction under subsection (5)(a) to (e).

(7) In relation to cases where a person has been excluded by virtue of subsection (5)(b) or (c) or (6), employment tribunal procedure regulations may make provision—

1. (a) for the appointment by the Attorney General, or by the Advocate General for Scotland, of a person to represent the interests of the party;
2. (b) about the publication and registration of reasons for the tribunal's decision.

(8) Proceedings are Crown employment proceedings for the purposes of this section if the employment to which the complaint relates—

1. (a) is Crown employment, or
2. (b) is connected with the performance of functions on behalf of the Crown.

(9) The reference in subsection (4) to the President or a Regional Chairman is to a person appointed in accordance with regulations under section 1(1) as—

1. (a) a Regional Chairman,
2. (b) President of the Employment Tribunals (England and Wales), or
3. (c) President of the Employment Tribunals (Scotland).

Confidential information.

10A.—(1) Employment tribunal procedure regulations may enable an employment tribunal to sit in private for the purpose of hearing evidence from any person which in the opinion of the tribunal is likely to consist of—

1. (a) information which he could not disclose without contravening a prohibition imposed by or by virtue of any enactment,
2. (b) information which has been communicated to him in confidence or which he has otherwise obtained in consequence of the confidence reposed in him by another person, or
3. (c) information the disclosure of which would, for reasons other than its effect on negotiations with respect to any of the matters mentioned in section 178(2) of the Trade Union and Labour Relations (Consolidation) Act 1992, cause substantial injury to any undertaking of his or in which he works.

(2) The reference in subsection (1)(c) to any undertaking of a person or in which he works shall be construed—

1. (a) in relation to a person in Crown employment, as a reference to the national interest,
2. (b) in relation to a person who is a relevant member of the House of Lords staff, as a reference to the national interest or (if the case so requires) the interests of the House of Lords, and
1133
3. (c) in relation to a person who is a relevant member of the House of Commons staff, as a reference to the national interest or (if the case so requires) the interests of the House of Commons.

Restriction of publicity in cases involving national security.

10B.—(1) This section applies where a tribunal has been directed under section 10(5) or has determined under section 10(6)—

1. (a) to take steps to conceal the identity of a particular witness, or
2. (b) to take steps to keep secret all or part of the reasons for its decision.

(2) It is an offence to publish—

1. (a) anything likely to lead to the identification of the witness, or
2. (b) the reasons for the tribunal's decision or the part of its reasons which it is directed or has determined to keep secret.

(3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(4) Where a person is charged with an offence under this section it is a defence to prove that at the time of the alleged offence he was not aware, and neither suspected nor had reason to suspect, that the publication in question was of, or included, the matter in question.

(5) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of—

1. (a) a director, manager, secretary or other similar officer of the body corporate, or
2. (b) a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(6) A reference in this section to publication includes a reference to inclusion in a programme included in a programme service, within the meaning of the Broadcasting Act 1990."

4. Section 28(5) of the Employment Tribunals Act 1996 (composition of Appeal Tribunal: national security) shall cease to have effect.

5.—(1) Section 30 of that Act (Appeal Tribunal Procedure rules) shall be amended as follows.

(2) In subsection (2)(d) for "section 10" substitute "section 10A".

(3) After subsection (2) insert—

"(2A) Appeal Tribunal procedure rules may make provision of a kind which may be made by employment tribunal procedure regulations under section 10(2), (5), (6) and (7).

(2B) For the purposes of subsection (2A)—

1. (a) the reference in section 10(2) to section 4 shall be treated as a reference to section 28, and
2. (b) the reference in section 10(4) to the President or a Regional Chairman shall be treated as a reference to a judge of the Appeal Tribunal.

(2C) Section 10B shall have effect in relation to a direction to or determination of the Appeal Tribunal as it has effect in relation to a direction to or determination of an employment tribunal."

6. After section 69(2) of the Race Relations Act 1976 (evidence: Minister's certificate as to national security, & there shall be inserted—

"(2A) Subsection (2)(b) shall not have effect for the purposes of proceedings on a complaint under section 54."

7. Paragraph 4(1)(b) of Schedule 3 to the Disability Discrimination Act 1995 (evidence: Minister's certificate as to national security, &c.) shall cease to have effect.")

The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendments Nos. 145 and 148. I put forward this measure which is designed to allow, even in the most sensitive cases, staff of the security and intelligence agencies to present a complaint under employment legislation, including the Race Relations Act 1976 and the Disability Discrimination Act 1995, in as similar a way as possible to other employees.

Since 1996, there has been no general ban preventing access by staff of those agencies to employment tribunals. However, agency staff and other Crown servants may be excluded from certain rights conferred by employment legislation. The Secretary of State has power, for example, to exclude those in Crown employment on national security grounds from some of the rights given under the Employment Rights Act 1996 and to certify, with conclusive effect, that an act giving rise to a complaint of unfair dismissal was done on grounds of national security, with the effect that such an act is not unlawful. Government policy has been to exercise this power on a case-by-case basis, and only when national security considerations cannot be met by existing safeguards.

These issues have been raised in annual reports by the Intelligence Services Commissioner, Lord Justice Stuart Smith, and the statutory Intelligence and Security Committee. The Government are committed to establishing enhanced procedures for agency staff who feel that they have been unfairly dismissed.

The amendment contained in the new schedule introduces a more liberal regime while safeguarding national security interests. It removes the power of Ministers to remove rights under the Employment Rights Act 1996 from those in Crown employment. However, the rights introduced to the 1996 Act by the Public Interest Disclosure Act 1998, relating to whistleblowing, will continue to be excluded. The power contained in Section 10(5) of the Employment Tribunals Act 1996 allowing a Minister to issue conclusive certificates certifying that an act was done on grounds of national security will be repealed, as will the similar conclusive certificate powers contained in the Race Relations Act 1976 and the Disability Discrimination Act 1995.

Staff of the security and intelligence agencies and others in Crown employment will be able to present a complaint to an employment tribunal in the normal way. However, Ministers may direct that Crown employment proceedings be heard by a specially constituted employment tribunal where national security issues are concerned, and accordingly the amendment says that tribunal regulations may provide for such tribunals. We have in mind that senior chairmen and lay members will sit in these circumstances. As I said, Ministers will have this power of direction only in relation to Crown employment but the tribunal president, or a regional chairman will be able to order that a specially constituted tribunal should sit if they consider it expedient on grounds of national security.

The amendment also allows the tribunal regulations to make provision enabling a Minister of the Crown, in Crown employment cases, to direct a tribunal to use special procedures if he considers it expedient on grounds of national security. Tribunals will also be able to use the special procedures of their own motion on national security grounds. Under this provision, Ministers will be able to direct a tribunal to sit in private and to exclude an applicant and his representatives during all or part of particular proceedings, to conceal the identity of witnesses and to take steps to keep secret the reasons for its decision. It will be an offence to publish anything which is likely to identify such a witness or the reasons which are to be kept secret, and new Section 10B of the Employment Tribunals Act 1996 sets out the penalty for such an offence. Where the applicant or his representative are excluded from proceedings, the tribunal regulations will be able to provide that the Attorney-General, or the Advocate-General for Scotland, will be able to appoint a special advocate to act in the interests of the applicant. The regulations will also be able to provide that, where an applicant or his representative have been excluded, the tribunal will not be able to publish to the applicant any part of the written reasons which contains evidence given during the period of the exclusion. However, the applicant will be made aware that part of the reasons has been removed.

Similar provisions to those relating to employment tribunals so far as composition and special procedures are concerned will apply to the Employment Appeal Tribunal. The new paragraph 10A of the Employment Tribunals Act 1996 relating to confidential information is simply a re-enactment of what is currently Section 10(2)(b) and (3) of that Act. New Part 11 to Schedule 8 makes a number of repeals consequent upon the provisions I have just described.

This amendment significantly improves the right of access of employees of the intelligence and security agencies to employment tribunals and is a progressive measure in line with the Government's commitment to open government. I commend it to the House. I beg to move.

9 p.m.

Lord Brooke of Alverthorpe

My Lords, I spoke earlier on Amendment No. 120, which removed from the face of the Bill protection for people employed by the Security Service, the Secret Intelligence Service and GCHQ. Some of us were unhappy about that but we were comforted by the Minister's statement that further provisions would be tabled later. These amendments will provide for protection in front of industrial tribunals which hitherto has not been available, certainly not for the staff of GCHQ and those in the secret services. In general terms I welcome them. This is a move in the right direction, giving rights to people who hitherto have been denied what ordinary employees elsewhere have had. But the rights are heavily circumscribed by the requirements of national security.

While I welcome this move in the right direction, I am unhappy to be faced at such short notice with these lengthy amendments. I have an uneasy feeling about them. I hope that the Minister can set my unease to rest. Mention is made in the amendment of Crown employment in general. Mention is made of staff of the House of Lords. Mention is made also of staff of the House of Commons. As far as I am aware, under the previous Act such staff were fully entitled to refer to the tribunal. They did not have similar constraints laid on them as I perceive are now being laid down by the provision.

I may be entirely wrong. If I am, I hope that the Minister will put me right. I will then be able to sleep tonight when I go home. I have an uneasy feeling about this extensive amendment. I suspect that it comes in the main from the security services. They have a good record for presenting amendments late. They are invariably long and they are invariably all embracing from their point of view. I am a little uneasy about some of the later references to the way in which corporate bodies can be prosecuted. There is mention of the Broadcasting Act 1990. There is a whole range of issues here. It seems to smack to some extent of closing up on openness rather than freedom of information, which many of us are after.

I may be entirely wrong. It is a long amendment and I do not fully understand it. I give the amendment a general welcome but I hope that my noble friend can set my mind at rest that there is not an extension to other employees. But if I am right, I hope that there will be some reflection on these extensive amendments before we reach the next stage.

Lord Sainsbury of Turville

My Lords, perhaps I may reassure the House on this point. The new paragraph 10A of the Employment Tribunals Act 1996 relating to confidential information is simply a re-enactment of what is currently Section 10(2)(b) and (3) of that Act. That is the part which refers to the situation of the staff of the House of Commons and the staff of the House of Lords. We have simply repeated that. I would not want to hazard a guess as to why it was put in there in the first place. But it is there, and we are simply repeating it. I can assure my noble friend that the amendment represents a vast opening up of the rights of these staff to have their cases properly considered.

On Question, amendment agreed to.

Lord Sainsbury of Turville moved Amendment No. 142: After Clause 33, insert the following new clause—

TRANSFER OF UNDERTAKINGS

(" .—(1) This section applies where regulations under section 2(2) of the European Communities Act 1972 (general implementation of Treaties) make provision for the purpose of implementing, or for a purpose concerning, a Community obligation of the United Kingdom which relates to the treatment of employees on the transfer of an undertaking or business or part of an undertaking or business.

(2) The Secretary of State may by regulations make the same or similar provision in relation to the treatment of employees in circumstances other than those to which the Community obligation applies (including circumstances in which there is no transfer, or no transfer to which the Community obligation applies).

(3) Regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.")

The noble Lord said: My Lords, your Lordships may recall that at the Committee stage the Government sought to introduce a new clause relating to the transfer of undertakings, but ultimately declined to move the amendment as the Delegated Powers and Deregulation Committee had indicated that it wished to have an opportunity for prior consideration. We undertook to return to the matter on Report, and are now doing so. Perhaps I may take this opportunity to offer my sincere thanks to the Delegated Powers and Deregulation Committee for its considered and helpful comments on this matter. I am grateful, too, for the alacrity with which it produced its report. We have of course been very pleased to take on board the points it raised and trust that the revised version of the amendment now before the House will meet with its full approval. I hope it will be helpful to your Lordships if I explain the background to this.

The Transfer of Undertakings (Protection of Employment) Regulations 1981—commonly known as the TUPE regulations—implement the EC Acquired Rights Directive and safeguard employees' rights when the business in which they work changes hands between employers. The Government are committed to revising the regulations, which in their current form are operating less than effectively, leading to much unnecessary dispute and litigation. This will build on our success during the UK presidency last year in securing other member states' agreement to a revision of the directive itself.

Officials in my department are currently working up detailed proposals, in liaison with colleagues elsewhere in Whitehall and in informal discussions with the main employer and employee representative bodies and other outside interests, in line with social partnership principles. Our aim is to seek views on these proposals by way of a formal public consultation document to be published later in the year, accompanied by draft regulations, and to have the new requirements in place by next spring.

We have found a remarkable degree of consensus among the social partners and other interested parties as regards the main issues of substance to be addressed in the revision of the regulations. I pay tribute to the CBI, the TUC and other bodies—including the TUPE Forum, which represents all parties involved in public sector contracting—for the constructive approach they have taken on these issues and for the assistance they have given us in developing our proposals.

As this work has progressed, however, it has become clear to us that some of the changes we may decide to make could not be achieved under the existing powers in Section 2(2) of the European Communities Act 1972. In particular, extending the scope so as to give rights to individuals in situations where they would not have them under the directive could not be done under those existing powers. This limits the options available for tackling two major areas of uncertainty in the regulations: their application to contracting-out operations and their application to transfers involving public sector bodies. If we had to rely on the existing powers alone, this could prevent us from putting forward proposals to meet the widespread expectation, shared by employer and employee bodies alike, that the new regulations will apply comprehensively where changes occur in service contracting. Specifically, it could prevent our ensuring that the recontracting or bringing back in-house of a contracted-out service was covered in cases where the conditions in the directive were not met but where there was a wish to provide consistent treatment.

The existing powers would also be insufficient to allow us to apply the regulations to transfers of purely administrative functions between public administrative bodies, leaving it necessary for alternative administrative or legislative arrangements to be made in each case, as, indeed, has to be done at present. The amendment seeks to remove these technical obstacles so that we can be certain that we have sufficient powers to achieve what we are likely to be asked to achieve when we go out to formal public consultation.

I hope that I have succeeded in making clear what are some undoubtedly complex legal points. I commend the amendment to the House.

On Question, amendment agreed to.

Lord Sainsbury of Turville moved Amendment No. 143: After Clause 33, insert the following new clause—

MINIMUM WAGE: INFORMATION

(".—(1) Information obtained by a revenue official in the course of carrying out a function of the Commissioners of Inland Revenue may be—

1. (a) supplied by the Commissioners of Inland Revenue to the Secretary of State for any purpose relating to the National Minimum Wage Act 1998;
2. (b) supplied by the Secretary of State with the authority of the Commissioners of Inland Revenue to any person acting under section 13(1)(6) of that Act;
3. (c) supplied by the Secretary of State with the authority of the Commissioners of Inland Revenue to an officer acting for the purposes of any of the agricultural wages legislation.

(2) In this section—

• "revenue official" means an officer of the Commissioners of Inland Revenue appointed under section 4 of the Inland Revenue Regulation Act 1890 (appointment of collectors, officers and other persons), and
• "the agricultural wages legislation" has the same meaning as in section 16 of the National Minimum Wage Act 1998 (agricultural wages officers).")

The noble Lord said: My Lords, in moving Amendment No. 143, I shall speak also to Amendments Nos. 149 and 150. Amendment No. 143 will make enforcement of the minimum wage more effective while reducing the bureaucracy for business. As most noble Lords will know, the Inland Revenue has overall responsibility for enforcement of the national minimum wage. At present, if Revenue officers get information about someone paying below the national minimum wage while they are carrying out their tax and national insurance duties they cannot pass the information to their national minimum wage colleagues. It is not permitted, even if it might help them to identify employers paying below the national minimum wage.

This Bill offers us the opportunity to tidy up the matter in a way which allows the use of information so that Revenue officers can pass information obtained in respect of tax and national insurance contributions to their national minimum wage colleagues and others appointed under the National Minimum Wage Act where this would help them in their national minimum wage enforcement work. Of course, all other existing strict Revenue safeguards on the confidentiality and disclosure of information remain in place.

We are talking about commonsense arrangements to allow one part of a government department to exchange data with other parts of that department, and with other departments for national minimum wage purposes.

The clause simply allows our national minimum wage officers to access the Revenue's tax and national insurance contributions information to assist them in their national minimum wage enforcement work. It does not set a precedent for ever-widening exchange across government; it is limited and specific. It will mean the vast majority of employers are unlikely to be visited by national minimum wage officers. This is because we will only target those employers who are "high risk." This will be done by the use of a sophisticated risk assessment model. Using tax data will ensure those employers paying above national minimum wage are unlikely to receive a visit. The amendment allows for sensible administrative arrangements to be put in place. For example, the amendment will allow national minimum wage officers to be passed information held on Inland Revenue databases for tax and national insurance purposes when planning their targeted inspections of employers. And when the Revenue begin operating working families' tax credit in the autumn, there is clear scope for unearthing national minimum wage abuses through claims by workers for tax credits.

Employers, including the CBI, have always made clear they want the national minimum wage effectively enforced. The measure will ensure that this is achieved. It will also reduce bureaucracy for business. Noble Lords may be aware of the recent report by the Federation of Small Businesses which complained about the proliferation of different government inspectorates. This amendment is in the interests of good government, in the interests of low paid workers, and in the interests of legitimate businesses. I commend it to the House.

9.15 p.m.

Baroness Miller of Hendon

My Lords, the Minister said that these are sensible proposals that are good for the employees, employers, the collection systems and so on. I could not agree with him more. When the National Minimum Wage Bill came before your Lordships in 1998, we proposed of amendment to the effect that the records kept for the purposes of PAYE should be sufficient for the purposes of the Act. We also urged that if the Inland Revenue and the Benefits Agency were to be amalgamated this April they should be the enforcement body for the purposes of the national minimum wage. That amendment was rejected, and I cannot say that I do not approve of it now that it has been reintroduced in this form a year later.

I mentioned to the noble Lord, Lord McIntosh, that I was going to rub the Ministers' noses in it, and the noble Lord said that he expected no less. However, I will not do so at this late hour. I am sure that the Ministers know exactly how I feel. I am glad that they have seen the light at long last because this is a very important matter.

I believe that slipping this amendment into a totally unconnected Bill gives rise to a further important criticism. An ordinary member of the public—who does not have access to specialised text books that have full annotations and are updated throughout the year—will not know that the copy of the Act that he looks up somewhere or other is incomplete because this provision is not where he would expect it to be. That is no way to produce legislation. Therefore, even if I do not rub the noble Lords' noses in anything, it is right that I record a strong protest about this slipshod method of legislating.

On that happy note, I must mention one important reservation of which the noble Lord is already aware and to which he referred in introducing the amendments. We agree that the amendment is necessary in order to break down the Chinese wall between the Inland Revenue and those responsible for carrying out the enforcement functions of the National Minimum Wage Act 1998. However, the Inland Revenue could pass information to the Secretary of State who could then pass that information to anyone he appoints to enforce the Act or to anyone involved with agricultural wages legislation. Secrecy about a taxpayer's affairs is normally regarded as sacrosanct by the Inland Revenue.

I know that there are some exceptions, which are understood and accepted. However, we seek the Minister's assurance that this is an exception—I believe that he has said that. I realise that the Minister cannot tie the hands of Parliament in any way—and I do not ask him to do so. However, I would like the Minister to give your Lordships another unequivocal assurance that this clause will not be treated as a precedent. If the Government are minded to seek similar powers for any other purpose, they must do what they have done in this instance and introduce primary legislation.

Lord Brooke of Alverthorpe

My Lords, I welcome this amendment—and I assure the Minister that there is no sting in the tail of my welcome. He will be pleased to hear that.

The credit for this change does not go entirely to the Opposition. Those of us who have a civil service background pointed out the deficiencies of the changes through the TUC. As we near the end of this Session, it is proper to record that the TUC suggested that there could be a more sensible and cost-effective approach It was proposed that hundreds of tax officials should meet employers and examine pay-as-you-earn and national insurance records, yet they were prevented by the legislation from passing on information to their other colleagues who were considering the national minimum wage. We urged a change in that area, and I think that the TUC should be congratulated—especially in view of the fact that the Opposition have been congratulating themselves so much this evening.

This is the right thing to do and I trust that it will not set a precedent. It will ensure that the national minimum wage is implemented properly and complied with by employers throughout the country.

Lord Sainsbury of Turville

My Lords, I reiterate the point that I made earlier: this measure does not set a precedent for ever-widening changes across government. It is limited and specific. The noble Baroness made the point previously that records that are used for one purpose should be available to cover other purposes. We have never objected to that proposal; we think it is a very good idea. We thought only that her previous amendment was not necessary in order to achieve that aim.

On that basis, I am happy to say that the noble Baroness has played a part in this process. I assure her that this is a very specific and limited measure. I think that the whole House agrees that it is a sensible way to reduce bureaucracy.

On Question, amendment agreed to.

Lord Sainsbury of Turville moved Amendment No. 144: After Clause 33, insert the following new clause—

DISMISSAL OF SCHOOL STAFF

(".—(1) In paragraph 27(3)(b) of Schedule 16 to the School Standards and Framework Act 1998 (dismissal of staff: representations and appeal) for "for a period of two years or more (within the meaning of the Employment Rights Act 1996)" there shall be substituted ", within the meaning of the Employment Rights Act 1996, for a period at least as long as the period for the time being specified in section 108(1) of that Act (unfair dismissal: qualifying period)".

(2) In paragraph 24(4)(b) of Schedule 17 to the School Standards and Framework Act 1998 (dismissal of staff: representations and appeal) for "for a period of two years or more (within the meaning of the Employment Rights Act 1996)" there shall be substituted ", within the meaning of the Employment Rights Act 1996, for a period at least as long as the period for the time being specified in section 108(1) of that Act (unfair dismissal: qualifying period)".")

The noble Lord said: This technical amendment is needed to ensure that the provisions governing the dismissal of school staff on fixed-term contracts under Schedules 16 and 17 to the School Standards and Framework Act 1998 take account of recent reductions in the qualifying period for unfair dismissal. These provisions are due to commence on 1 September and provide for the proper treatment of staff on fixed-term contracts whose contracts will not be renewed. Under the Acts, school governing bodies will be required to hear representation of appeals before terminating the contracts of staff on fixed-term contracts where they have been employed for two years or more. This two-year period was the qualifying period for unfair dismissal current at the time the Act was passed. But the qualifying period in the Employment Rights Act was changed by order on 1st June from two years to one year. This amendment reflects that change.

The Government would always encourage the fair treatment of staff whatever their length of service but consider that statutory rights and proceedings in relation to unfair dismissal should be required only after one year's service.

By referring to the qualifying period that may be specified under the Employment Rights Act rather than an actual length of time, the amendment would ensure that the change on 1st June and any change to be made by a future order is accurately reflected in the dismissal provisions of the School Standards and Framework Act. I beg to move.

On Question, amendment agreed to.

Lord Sainsbury of Turville moved Amendment No. 145: After Clause 33, insert the following new clause—

NATIONAL SECURITY

(". Schedule (National security) shall have effect.")

On Question, amendment agreed to.

Schedule 8 [Repeals]:

Lord Sainsbury of Turville moved Amendments Nos. 146 to 148: Page 96, column 3, leave out lines 35 to 38 Page 100, line 14, at end insert—

("8A. EMPLOYMENT RIGHTS: EMPLOYMENT OUTSIDE GREAT BRITAIN

Chapter	Short title	Extent of repeal
1996 c. 18.	Employment Rights Act 1996.	Section 196. In section 199(6), the words "Section 196(6) does not apply to an employee, and". In section 201(3)(g), the word "196,", Section 204(2). In section 209(2)(g), the words "196(1) and". In section 209(5), the words ", 196(2), (3) and (5)".")

Page 101, line 22, at end insert—

("11. NATIONAL SECURITY

Chapter	Short title	Extent of repeal
1995 c. 50.	Disability Discrimination Act 1995	Paragraph 4(1)(b) of Schedule 3, and the word "or" immediately before it.
1996 c. 17.	Employment Tribunals Act 1996.	Section 4(7). Section 28(5).
1998 c. 23.	Public Interest Disclosure Act 1998.	Section 11.

On Question, amendment agreed to.

Clause 38 [Extent]:

Lord Sainsbury of Turville moved Amendments Nos. 149 and 150: Pare 17, line 22, leave out subsection (2) Page 17, line 30, at end insert— ("() Apart from section (Minimum wage: information) and subject to subsection (1), the preceding sections of this Act shall not extend to Northern Ireland.")

On Question, amendments agreed to.