Lords Sitting of 16 June 1999

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon.

Child Maintenance:Parental Responsibility
Lord Northbourne Lord Northbourne asked Her Majesty's Government:
Whether a parent with parental responsibility for a child aged 16 or 17 who is no longer living at home is liable in law to provide for board and lodging for that child.
The Lord Chancellor (Lord Irvine of Lairg):My Lords, as I have said before, the noble Lord is a champion of the family and in particular disadvantaged families and children. However, the short answer to his Question is "No". There is no specific statutory obligation on a parent to provide board and lodging for a child who has reached 16 or otherwise to provide for the child's maintenance.
Lord Northbourne:My Lords, I am extremely grateful to the noble and learned Lord for that clear Answer. Does the noble and learned Lord agree that this is a most unsatisfactory position in so far as young people aged 16 and 17 may have no form of support although they have the possibility of access to training? Training courses often last only six months and the period from the 16th to the 18th birthday is 24 months.
Does the noble and learned Lord agree that it is time for the Government to make it absolutely clear that parents are responsible for the support and maintenance of their 16 and 17 year-old children subject always to a safety net of government support if they are unable to do so?
The Lord Chancellor:My Lords, ministerial responsibility for the Children Act 1989 is divided between the Lord Chancellor in the private law sphere and the Secretary of State for Health in the public law sphere. The provisions on parental responsibility fall within my ministerial responsibility. But any amendment to the definition would also affect local authorities. They share responsibility with the parents of a child who is in public care. However, in the light of the points that the noble Lord makes, not merely as regards this Question but on previous occasions in your Lordships' House, I can say that for my own part I am minded to consider a review of the law on the specific and important point that he raises. However, I would first have to enter into discussions with my ministerial colleagues, and that I undertake to do.
Lord Borrie:My Lords, am I right in thinking that if we were talking about Scotland, the noble and learned
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Lord's answer would have been "Yes", rather than "No"? Does the noble and learned Lord agree that it would be better if English law were to follow Scottish law in this respect?
The Lord Chancellor:My Lords, under Scottish statute law a child has the right to aliment. which is Scots for maintenance, from both father and mother, and for the purposes of the relevant statutory provision in Scotland that includes a person under the age of 18. So the answer to the noble Lord, Lord Borrie, is: yes, under Scots law.
The grant of aliment is, however, discretionary and the court takes into account the needs of the child and the means of the parent. Too much must not be expected beneficially to result from a new statutory duty. However, in the light of today's discussion, I have indicated that I am minded to consider and recommend a review, and that one of the considerations in the review would be whether the Scots statutory obligation, or some variant of it, might be adopted in England.
Earl Russell:My Lords, if the parents are not responsible for the provision of aliment for 16 and 17 year-olds in England, who is?
The Lord Chancellor:My Lords, a local authority has a duty to provide accommodation for any child in need within its area who has reached the age of 16 and whose welfare the authority considers likely to be seriously prejudiced if it does not provide the child with accommodation. I could elaborate on the definition of need, but it is complex statutorily, and I shall. write to the noble Lord.
The local authority also has a discretionary power, but not a duty, to assist a care leaver between the ages of 16 and 21. Those provisions, however, would also fall to be considered under any review.
Baroness Young:My Lords, I welcome what the noble and learned Lord said about looking again at the present provision. I think that he will agree that it is extremely unsatisfactory. A number of departments are involved and therefore it is a complicated administrative arrangement. Will the noble and learned Lord consider not only the important point raised by the noble Lord, Lord Northbourne, but also the difficulty that many students experience when their parents fail to contribute the part of the maintenance grant which they should, and those young people are unable to support themselves?
The Lord Chancellor:My Lords, I have already indicated that I am minded to consider a review, which I should have to recommend to my Cabinet colleagues, of this area of the law. I refer to support for children between the ages of 16 and 17 living away from home, as focused on by the noble Lord, Lord Northbourne. I have no doubt that the review would extend to the issue raised by the noble Baroness.
However, expectations in this area must be managed. We must not exaggerate the effects of a statutory duty. Some parents may not be in a position to maintain the child. Parents and children may have no contact with

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one another and they would be unaware of their whereabouts. A parent may be in prison or abroad. Other parents may be ill or unable to exercise their parental responsibility. Therefore, we must not look for too much from a statutory obligation on parents, but in my judgment it is well worthy of consideration.
The Earl of Halsbury:My Lords, I am a little confused as regards the syntax of the Question. I do not know whether it is a confusion in the law. Is it right that a child cannot be 16 or 17, but he can be under 17?
The Lord Chancellor:My Lords, I dare say that that is right, but I do not believe that anyone is confused by the terms of the noble Lord's Question.
The Earl of Listowel:My Lords, when at Monday's conference on youth homelessness, the Director of Shelter says that he is absolutely confident that the Minister for Housing is determined to address the problem, and when the leader of the national development unit of Centrepoint says that he has seen a sea change in the Home Office since the arrival of the new Minister, is the noble and learned Lord proud? Do his colleagues plan to take off their suits and put on their jeans, go out to meet the young people with mental health problems and problems with drug addiction and alcohol, and talk to them about their experience so that they will be fully informed about this parlous situation for many young people?
The Lord Chancellor:My Lords, I believe that full information is already available within government about these tragic problems. We certainly intend to maintain and enhance our information on these subjects and address solutions. The Government's record thus far in relation to rough sleepers, for example, is very good. All these matters are under consideration.

Income Support and Rent
2.45 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
Whether they remain committed to the principle of the Social Security Act 1986 that income support is not meant to cover rent.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham):My Lords, we are reviewing housing policy and housing support and aim to publish a housing Green Paper by the end of the year. We remain committed to the principle that the benefit system should help people on low incomes to afford decent housing at reasonable rents.
Earl Russell:My Lords, I thank the Minister for that Answer. She is probably familiar with the Centrepoint survey of the effect of the single room rent in Devon. Is she aware that the findings of that survey are those of a vast body of research that, where limits are placed on
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housing benefit, the landlord does not reduce the rent, but either stops letting to tenants, or goes out of the private rented market, or requires tenants to pay the rent out of income support? Do the Government learn anything about the nature of the market from that information?
Baroness Hollis of Heigham:My Lords, I entirely accept the noble Earl's analysis. Like him, I was warning the then government of the implications of the deregulation of private rents that occurred in the late 1980s. No doubt, the then government had the wistful hope that landlords might invest in their properties. Instead, all they did was pocket the profits. The problem that we now face is that about two-thirds of all private tenants do not receive housing benefit that fully covers their rent. If it did, we would sustain landlords in being able to ask for any rent they chose, as they have been doing since the late 1980s.
The noble Earl's point about the single reference rent is right and we are examining that as part of the housing review.
Baroness Gardner of Parkes:My Lords, will housing benefit in general be considered in the review? Is the noble Baroness aware that in central London many people receive housing benefit of many hundreds of pounds a week? Does she not believe that it is time to consider a ceiling on the amount of benefit?
Baroness Hollis of Heigham:My Lords, we do have a ceiling on housing benefit. Either the rent officer must determine what is a reasonable rent or it must be determined by reference to the local reference rent. The noble Baroness is right that there is a huge disparity in rents between, say, London and the north-west and north-east where 20 to 25 per cent of rented stock is difficult to let. One of the difficulties in finding an adequate response to housing benefit is precisely to take into account those regional variations. But, yes, we need to review housing benefit.
Lord Dholakia:My Lords, does the Minister accept the findings of the National Audit Office that 30 per cent of the cases classified as fraud are wrongly classified?
Baroness Hollis of Heigham: My Lords, yes, that may well be so. As regards housing benefit, there are many mistakes on both sides. As noble Lords will know from press reports and so forth, in a few cases there is systematic abuse of the housing benefit system by landlords who claim for fictitious tenants. The payment of housing benefit is directed to the landlord rather than to the tenant, and when the tenant moves on often the landlord continues to pocket the cheque. Every pound that is spent fraudulently, particularly to landlords, is a pound not available for housing benefit to other needy families.
Lord Evans of Parkside:My Lords, does my noble friend agree that in too many local authorities an applicant for housing benefit often enters a bureaucratic nightmare? Will the review look at the performance of

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local authorities and ensure that every local authority is encouraged to streamline the process of accepting, receiving and dealing with applications for housing benefit?
Baroness Hollis of Heigham:My Lords, my noble friend makes an important point. That was one of the serious criticisms of the administration of housing benefit raised by the latest NACAB report entitled Falling Short. We take that on board. The NACAB solution is to transfer housing benefit to the Benefits Agency. We believe that the right solution is to achieve best practice among local authorities. We are sending out guidance and working with local authorities to achieve what my noble friend suggests.
Lord Higgins:My Lords, while the review is welcome, it will clearly be some time after the Green Paper before any legislation is brought forward. Arising from the point just made by the noble Lord, Lord Evans, in relation to delays, in advance of the review could we not eliminate one or other of the two forms which are required at present: one goes to the Benefits Agency and the other to local authorities? It does not seem to me to need too much of a review to simplify the form filling which I know from my own constituency experience causes problems.
Baroness Hollis of Heigham:My Lords, that is an entirely fair point. In the pilot areas for the single work-focus gateway, we are looking at the matter to which the noble Lord referred; namely, that one sort of information comes from the applicant which can then be shared by local authorities and the DSS If we go down that road, I hope that I shall not be criticised by the noble Lord for sharing information with other authorities which did not originally collect it.

European Elections: Polling Figures
2.51 p.m.
The Earl of Northesk The Earl of Northesk asked Her Majesty's Government:
Whether, in the light of the turn-out in the European elections, they will institute an inquiry into the operation of the closed list system of election.
The Minister of State, Home Office (Lord Williams of Mostyn):My Lords, as my right honourable friend the Home Secretary said in another place on Monday, we shall be conducting a review of the electoral arrangements, as we do after every election. That review will cover all aspects of last Thursday's elections.
The Earl of Northesk:My Lords, I thank the Minister for that reply. Does the noble Lord accept that one of the arguments advanced by the Government in previous debates was that the use of PR and the closed list should be accepted by the party on these Benches because it would work to our electoral advantage? However, is it not as a result of that attempted spin that
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use of the system has saved the Government and the Liberal Democrat Party from an even more crushing defeat than they would have suffered had first-past-the-post still been in place?
Lord Williams of Mostyn:My Lords, even at the time of the discussions in your Lordship:;' House, I marvelled at the selflessness of Her Majesty's Government, and events have proved me to be right.
Lord Shore of Stepney:My Lords, does my noble friend recall that this House turned down the closed list system not once but five times? That is an unusual situation but for once this place was right and the Commons got it wrong. When he examines the matter, as I hope he will, will he bear in mind also that the mass abstention of the British people reflects something far deeper than even their distaste for the system of election; that is, their profound distrust and lack of respect and affection for the European Parliament and the other associated institutions?
Lord Williams of Mostyn:My Lords, I well remember the largely repetitive discussions we had on a number of occasions. My noble friend is right. The system was turned down five times in this House. But the purpose of the new regimes in Scotland, Wales and in the context of the European parliamentary elections has been to ensure a more proportionate and inclusive result. If one bears in mind what happened in Wales and Scotland, the Conservative Party did benefit. As I said on many occasions, we knew that that was likely to happen. We wanted to have inclusive assemblies in consequence.
Lord McNally:My Lords, is the Minister aware that on these Benches we should welcome a government-funded inquiry into low turn-out at all kinds of elections? I remind the Minister that on the same day as the European elections a parliamentary by-election was held by first-past-the-post with another deplorable turnout. However, will the Minister take note also of the point raised by the noble Earl, Lord Northesk, that, if the European elections had been held by first-past-the-post, there would have been 66 Conservatives going to Strasbourg? God only knows what members of the Flat Earth Party, xenophobes and others would have gone in that bloated and distorted delegation. Instead, is the Minister aware that there will be 13 more Labour MEPs than would have otherwise been the case and 10 Liberal Democrat MEPs, including my noble friends Lady Nicholson of Winterbourne and Lady Ludford? To adopt the cry of the noble Baroness, Lady Thatcher, is that not cause for us to rejoice, rejoice?
Lord Williams of Mostyn:My Lords, I cannot for the life of me understand why the noble Lord draws a distinction between the Conservative Party and the Flat Earth Party. If first-past-the-post had produced the deplorable consequences which the noble Lord identified, it seems to have been a blessing that we

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did not use first-past-the-post. The truth is that the by-election, which was the result of the death of my colleague Derek Fatchett, had a very poor turn-out. In my opinion, that has nothing to do with first-past-the-post or any other system. In many ways, a large number of people in this country have had rather too much of elections. That is a purely personal view. It may be that we should do away with elections altogether as a significant element of your Lordships' House believes.
Lord Cope of Berkeley:My Lords, whether that was a prediction for the House of Lords Bill, we shall have to wait and see. Has not the low turn-out shown convincingly, among other things, that the British people prefer to vote for people rather than parties? However, is it not the case that the British people have very wisely elected my noble friends Lord Inglewood, Lord Bethell and Lord Stockton to the European Parliament? I am sure they will serve with distinction.
Have not the Liberal Democrats every reason to be satisfied with PR? After all, if it had been a general election, they would have only one Liberal Democrat MP south of Inverness?
Lord Williams of Mostyn:My Lords, I shall answer the question, if your Lordships wish. By and large, as a party, I agree that the Liberal Democrats are self-satisfied, if I heard the question properly. It is not quite as simple as the noble Lord proposed. It was a vote for an individual in the Leeds by-election and the turn-out was very low. Historically, and lamentably, local election turn-outs are very low in this country. If my recollection is correct, in the United States, which has a democratic system, the turn-out for presidential elections is often less than 50 per cent. There are important questions here about whether the menu—and I put that generally—which we offer to the electorate in different contexts and different sorts of elections is sufficiently interesting and important to them. Recent experience shows that we have not got it entirely right. That is not solely a governmental responsibility. It is a matter of important political consequence.
Lord Merlyn-Rees:My Lords, is my noble friend aware that I represented an inner-city area of Leeds for 30 years? I lived in that area. I did not just visit it on polling day. Is he aware that in the by-election which took place last week, which was largely in the area I represented, there was the factor of the list system used for the European elections on the same day? As my noble friend pointed out, the turn-out for first-past-the-post poll was equally low. There are many reasons for the problem of low polls. One is a hearty dislike of politicians, whether they take the name of a party or call themselves "independent." My friends tell me that, sometimes, to call oneself "independent" makes it worse. It is important that we should be concerned about these issues, and not just on polling day. There are real problems in these areas
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that have to be faced, and nobody cares. Doctors come in like missionaries; teachers do not live in the area. With the best of intentions, they are good people but there is something radically wrong.
The political system, and your Lordships' House in particular, is supposed to pick up problems when they arise. How often does this House concern itself with the inner-city areas except by remote control? If people bother to watch, the laughter heard today would not appeal and would add to the dislike of politicians.
Lord Williams of Mostyn:My Lords, I do not think that what the noble Lord says is different from what I said earlier. Low turn-outs act as a reproach and cause us to question whether we have got right the electoral arrangements. It causes us to ask, "Have we got the questions right?", "Are referendums run properly?", and "Do we need as many elections as we have?" These are all important political questions. They are not necessarily limited to, although they do include, the causes indicated by my noble friend. We need to look carefully at how we educate children at school. I pay tribute, for instance, to the work done by the Citizenship Foundation with which, to my certain knowledge, the noble Lord, Lord Phillips of Sudbury, has been engaged for many years. It is not as simple as saying that people will not turn out for people who do not live in the constituency. Occasionally, people do become tired of elected politicians. They never become tired of non-elected hereditaries.
Lord Renton:My Lords, was not the result a great disappointment to the Government and the Labour Party? Would not the abandonment of the closed list system be more democratic, give greater freedom of choice to the voters and be more satisfactory to the Government and the Labour Party?
Lord Williams of Mostyn:My Lords, as I indicated earlier, we are holding a review about this election. The June survey to be conducted by the Office for National Statistics will study the matter. Home Office officials will liaise closely—I hope the noble Lord will think that helpful—with all political parties and electoral administrators. We shall have the assistance of professional polling organisations to see what lessons may be learnt. For my part, I believe there are lessons to be learnt. We need to wait for the research to establish the answers.
The Earl of Carlisle:My Lords, does the Minister not agree that the closed list system was a factor in the low turn-out? Does he recall that on 12th November he repeated in this place the promise of the Home Secretary that there would be a review? Will the Government publish the review when it is completed in six months' time? Can the Minister assure us that this House will debate the matter?
Lord Williams of Mostyn:My Lords, I recall the undertaking. I referred to it as being the object of what my right honourable friend the Home Secretary said on Monday. Certainly, I believe that the results of the

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review should be published. As the noble Earl will accept, the question of whether this House debates the matter is for the usual channels. In my opinion, the greater the publicity given to the findings, the better.
Lord Jenkins of Putney:My Lords, is it not the case that those of us who have discussed this matter among ourselves are widely of the opinion that people simply do not like voting for lists of people they do not know? The view is widespread. I hope it will be taken into consideration in the review which my noble friend says will take place. I sympathise strongly with that view. People dislike the idea of being presented with a list which they have had no hand in forming and being required to vote for a group of people they have not met and are unlikely to meet. It is very unpopular. I hope that that view will be given proper consideration.
Lord Williams of Mostyn:My Lords, I am happy to reiterate that we shall be carrying out the review. I expect that one of the questions will focus upon the point raised by the noble Lord, Lord Jenkins. I recognise that, certainly within your Lordships' House, that view has substantial support and favour. Whether it is right, we shall have to wait and see.
Lord Harris of Haringey:My Lords, have not there been too many reviews by Home Office officials of the mechanics of the electoral system? Surely, it is now time that steps were taken—perhaps the ministerial boot might be helpful in making something happen—to bring forward proposals for a rolling register so as to improve the quality of the register and produce pilot schemes for electronic voting, voting on days other than Thursdays and at different times, and for telephone voting.
Lord Williams of Mostyn:My Lords, that is already in hand. There is a working party on electoral procedures. It is chaired by my honourable friend Mr George Howarth at the Home Office. It is looking at ways to modernise electoral procedures including the introduction of a system of rolling electoral registration and the piloting of innovations such as weekend and electronic voting. If I remember rightly, the working party started work in January 1998 and has already had eight meetings. So the work is well in hand.
Lord Stoddart of Swindon:My Lords, does it not ill behove the noble Lord, Lord McNally, to talk about xenophobes and "flat earthers" when the electorate showed quite clearly on Thursday that they do not believe in Liberal Party policy but are demanding that this country should be governed by its own elected government and parliament? They showed that they do not want a single currency or a European army. Indeed, they made that so clear that they virtually wiped out the Liberal Party in the south west. Will the Government take this question seriously and reconsider a voting system, especially before there is any chance of repeating it in a general election, which loses for Labour the Rhondda, Islwyn and Llanelli all at the same time? That cannot be good for the Labour Party.
Lord Williams of Mostyn:My Lords, I can agree with the last proposition. I did not think that when the
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noble Lord, Lord McNally, spoke of "flat earthers" and xenophobia he was using them as terms of abuse but that he was intending to be descriptive. I repeat, I think for the fifth time, that the review promised by Jack Straw will occur. When those results are available, as far as I am concerned they will be published.

House of Lords Offices: Select Committee Report
3.07 p.m.
The Chairman of Committees (Lord Boston of Faversham):My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Second Report from the Select Committee be agreed to (HL Paper 65).—(The Chairman of Committees.)
Following is the report referred to:
1. Record Copies of Acts
The Committee recommends that the record copies of Acts of Parliament, kept in the House of Lords Record Office, should be printed on archival paper instead of vellum, with effect from the first Act of the year 2000. With the agreement of the Master of the Rolls and the Keeper of the Public Records, the production of the second record copy of each Act for the Public Record Office should cease.
When the Parliament Rolls of Acts of Parliament were discontinued in 1849, it was resolved by both Houses that two copies of every Act, whether Public or Private, should be printed in vellum, one to be stored in the Record Tower (now the House of Lords Record Office) and the other with the Master of the Rolls (now the Public Record Office). The former copy is authenticated by the Clerk of the Parliaments as the official authority for the published text of an Act. In 1956 vellum was replaced by archival paper for Private Acts. The increasing scarcity and expense of vellum and the printing restraints which it imposes have now led to the proposal that Public Acts should be similarly treated.
On the advice of conservation experts at the British Library, archival paper has been identified with a proven life expectancy of 250 years and a probable life expectancy exceeding 500 years in good archival conditions. It is superior to vellum for print quality, is less bulky, and avoids the use of animal products. The value of the potential saving is about £30,000 a year.
Resolutions of both Houses would be needed to give effect to this recommendation. The Committee has been informed that a comparable recommendation is being made by the Administration Committee of the House of Commons.
2. Smoking in the House of Lords
Following the Report of the Informal Group on Smoking (copies of which are available in the Printed Paper Office and the Library of the House), the Committee makes the following recommendations:

(i) Smoking should be banned in lavatories and telephone kiosks;

(ii) Smoking should be banned in Committee rooms, unless, at a private meeting of a Committee, that Committee specifically gives permission at the time.

3. Lords Reimbursement Allowances
The Committee was informed that from 1st April 1999 the motor mileage allowance had been increased by 1.1 pence to 51.2 pence for the first 20,000 miles for the period to 31st March 2000 Further mileage in this period would be payable at a rate of 23.6 pence per mile.

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The Committee was further informed that from 1st April 1999 the bicycle allowance had been increased by 0.1 pence to 6.5 pence per mile.
4. House of Lords Families Room
The Committee welcomes the provision of a room for the use of immediate family members of Peers. The Room is not intended to be used as a work or meeting room. It is to be a no smoking area.
Lord Cocks of Hartcliffe:My Lords, perhaps I may briefly return to the theme I have pressed before; that is that there is not enough information in these reports to encourage us to make decisions about passing them on. Your Lordships may recall that I have raised in the past the question of lack of information about the car park and the £2.5 million. I shall not embarrass the House by detailing the quite spontaneous public support I had from all quarters in correspondence and calls about this matter. Indeed, I believe I showed great restraint. A number of messages were given to me to pass on to the House authorities and I felt that they would be much better without them. We do not receive enough information.
Previously we discussed the Offices Report on 17th December. That was simply the membership of the various sub-committees. May 25th is the latest report and there is not a great deal in it. However, when I look at the minutes of the meeting, which is the substance of the report, I find that the first item is:
"Report from the Administration Works Sub-Committee enclosed".
It says that the sub-committee approved the three-year programme of works for the period beginning April 2000. It does not say what happened to the report; what the committee did with it and what it was told about it. But there must be an enormous amount of money involved in this. We can see the work going on all the time. But because it is a rolling programme it is difficult at any stage to see where we are going. We are being asked to approve matters time after time without proper detail. When trouble arises and extravagance is exposed, we are told that the House approved it on a specific date. It is not fair to the House and I shall be grateful for the Lord Chairman's comments.
The Chairman of Committees:My Lords, I shall certainly bear in mind what the noble Lord, Lord Cocks of Hartcliffe, said. One of the considerations when putting forward a report from the Offices Committee is not to burden your Lordships unduly with a great deal of material and to concentrate on the essential matters. In any event, it is open to noble Lords in all parts of your Lordships' House to raise matters in other ways quite apart from when we discuss reports from committees.
The issue of car parks does not arise in this report and therefore does not fall to be considered on this occasion. The works programme is of course thoroughly considered in your Lordships' committees, but I must remind your Lordships that it was as a result of the Ibbs review some years ago that specific responsibility for executive action in relation to financial matters was placed on the Finance and Staff Sub-Committee of the Offices Committee. That needs to be borne in mind.
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In conclusion, bearing in mind the need for reasonable brevity so as not to overburden your Lordships' House, I will certainly take into account what the noble Lord said and if it seems appropriate to add one or two matters, I shall invite the committee to do so.
On Question, Motion agreed to.

Employment Relations Bill
3.12 p.m.
The Minister of State, Department of Trade and Industry (Lord Simon of Highbury):My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Simon of Highbury.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 3 [Blacklists]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 234:
Page 2, line 18, at end insert—
("() Regulations under this section creating an offence may not provide for it to be punishable—

(a) by imprisonment,

(b) by a fine in excess of level 5 on the standard scale in the case of an offence triable only summarily, or

(c) by a fine in excess of the statutory maximum in the case of summary conviction for an offence triable either way.")

The noble Lord said: In moving Amendment No. 234, I shall speak also to Amendment No. 280 which is grouped with it. I shall then afford the noble Baroness, Lady Miller of Hendon, an opportunity to speak to her amendments to our amendment before I respond to what she says.
Clause 3 gives the Secretary of State the power to introduce regulations to prohibit the blacklisting of trade union members and activists. The Delegated Powers and Deregulation Committee made a number of observations about this clause. In particular, it asked that we should set down in the Bill the maximum limit for penalties regarding any criminal offences which the regulations might create. Amendment No. 234 sets down the Government's proposals for such penalties. They are based on the equivalent criminal sanctions in the Data Protection Act 1998.
The penalties are proportionate to the nature of the offences. They will not involve imprisonment. That would be too strong a penalty for an offence of this nature. Instead the amendment sets maxima for the fines that can be imposed. Those are the same as those provided for by the related legislation of the 1998 Data Protection Act.
Amendment No. 280 responds to a similar recommendation in the committee's report dealing with the power to create criminal offences under Clause 17, which deals with discrimination against part-time

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workers. Again, the committee recommended that the maximum penalty for any offence created under order-making power in Clause 17 should be specified on the face of the Bill. Again the Government propose to give effect to that recommendation by means of this amendment.
Any offences so created will only be for summary trial and will only be punishable by a fine up to level 5 on the standard scale; in other words, £5,000. That will be in line with offences under the Disability Discrimination Act 1995. We expect that the power to create offences will be used sparingly, if at all. The Government are of the opinion that, given the disability precedent, this would be an appropriate maximum penalty for any offence created under this power. I beg to move.
Baroness Miller of Hendon Baroness Miller of Hendon moved, as an amendment to Amendment No. 234, Amendment No. 234A:
Line 5, leave out ("5") and insert ("4")
The noble Baroness said: In moving Amendment No. 234A, I should like to speak also to Amendments Nos. 234B and 280A which are amendments to Amendment No. 234 to which the Minister has just spoken.
As we have heard, both the government amendments are to the same effect though slightly differently worded. They both provide for penalties in the form of fines for offences under Section 3. The insertion of a penalty on the face of the Bill was at the suggestion of the scrutiny committee, to which the Government rightly acquiesced. However, the level proposed is the maximum permitted. In their haste to table their last-minute amendments in time for your Lordships' Committee, they may not have considered totally the implications of the level they proposed.
The level of the fines imposed is at level 5. At current rates, as the Minister said, that is up to £5,000. That is the same level as for driving while disqualified, driving with excess alcohol, stealing, possession of drugs, criminal damage, violent disorder and causing grievous bodily harm. I do not detract in any way from the seriousness of blacklisting. Nor has anybody accused me of being soft on crime, especially not when I sat in the magistrates' court. Indeed, in the early clays of opening my businesses in Germany and in Australia I was subjected to attempts by competitors to have me boycotted by suppliers. Although I defeated the attempts, it would have been a lot easier if there had been redress available such as is now proposed.
However, I feel that the maximum level of fine proposed is too high, considering the other offences in the same bracket I mentioned. Level 4—a fine up to £2,500—would be a sufficient deterrent considering that the perpetrator will end up with a criminal record. Looking at the other offences dealt with at level 5, the fine would be disproportionate. Proportionality is now supposed to be the criterion for criminal sanctions.
Finally, I turn to the second part of the amendment to Amendment No. 234, which is the deletion of paragraph (c). That may be a mistake by the draftsman. It repeats
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paragraph (b) because I understand the statutory maximum in case of summary conviction in cases triable either way in any event is level 5. However, as the Government omitted that subparagraph from Amendment No. 280, I assume that they noticed it and can probably manage without it in Amendment No. 234. I beg to move.
Lord McCarthy:I wish to ask two questions of the Government and one of the noble Baroness, Lady Miller. First, if we cannot send the offenders to prison, what happens if they persistently do not pay? Secondly, what is the statutory maximum? I do not believe the Minister told us. The provision says,
"by a fine in excess of the statutory maximum".
He told us that level 5 was £5,000. What is the statutory maximum? Finally, the noble Baroness, Lady Miller, did not tell us what level 4 was.
Lord Monkswell:Perhaps I can speak in this debate, first, to correct the noble Baroness, Lady Mill I believe she said that the maximum penalty for GBH was a £5,000 fine. I can assure the Committee that one can actually go to prison for GBH, so that needs to he corrected.
My noble friend also raised the question about imprisonment. We are talking about two separate categories. One is in regard to Clause 3 where we are talking about blacklisting. We probably all recognise that the risk of blacklisting will probably not come from a company; it will come from a rich individual who has some curious views on industrial relations and the way to help them, which would be counter-productive to the good climate of industrial relations we are trying to engender. The idea of levying a £5,000 fine on a rich individual who happens to hold some curious views is risible.
I hope that the Government will reconsider the matter and insert the possibility of a term of imprisonment at the next stage. It does not have to be a very long term because the fact of someone being sent to prison is a significant marker in society. It would be a restraint to any individual who intended to set up a blacklisting organisation.
Amendment No. 280 is concerned with discrimination against part-time workers by a company or groups of companies. If the discrimination continues for a significant period of time, if companies underpay their part-time workers and do not give them pension provisions, there can be a lasting economic effect, beyond retirement. Again, this is a significant problem, and I ask the Government to reconsider the option of a limited term of imprisonment as a salutary marker.
The Government were right to respond positively to the recommendation of the Delegated Powers and Scrutiny Committee by including the limits to penalties. Bearing in mind that this matter has only arisen since the report by the Delegated Powers Scrutiny Committee, have the Government been in consultation with the

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TUC, with the employers' organisations and the Institute of Personnel Development to ascertain their views on the penalties that could be included in the Bill?
Lord McIntosh of Haringey:The noble Baroness, Lady Miller, in introducing the amendment, appeared to think that the Government have considered these matters in haste. I can assure the noble Baroness that we had time to give very full consideration to the penalties which should be on the face of the Bill after receiving the report of the Deregulation and Delegated Powers Committee. We did so by analogy with the most appropriate other offences. While blacklisting, however deplorable it may be, is presumably not a violent offence, the noble Baroness gave analogies of other violent offences which attract fines up to the level 5 maximum as an argument against the decision we have made. We have based our proposals in Amendment No. 234 on the Data Protection Act, 1998. There are strong similarities between the two Acts: both relate to the processing and misuse of data; both provide protection to individuals against abuses which can arise when information about them is compiled by third parties. That is why we thought that the analogy with the Data Protection Act was the correct analogy.
In reply to the point made by my noble friend Lord McCarthy, the figures that have been quoted are for £5,000 at level 5 and for £2,500 at level 4, which are the statutory maximum penalties. They can be changed by legislation and uprated in line with inflation.
We have given all the consideration that is necessary to reach a proper conclusion. We have continuously consulted the CBI and the TUC throughout the preparation of the Bill. We have raised matters with them and they have raised matters with us, and there has been no problem about consultation. I am not sure whether we have specifically consulted the Institute for Personnel Development, but I am sure that our consultations were wide enough to include that organisation if it had been felt appropriate.
In response to the question of the noble Lord, Lord McCarthy, about what happens if the fine is not paid, I give the standard answer which applies in one case in the law of England and Wales and in the other case in the law of Scotland. In England and Wales the court may order the sum owed to be recovered from the offender's assets by means of constraint. Ultimately, in England and Wales, someone who deliberately fails to pay a fine may be imprisoned for a failure to pay rather than for the original offence. My noble friend Lord Monkswell thought that we were not being fierce enough and that we should be prepared to send people to prison. However, these are criminal offences and appear on somebody's record, and we should not underestimate the seriousness of that matter.
In regard to Amendment No. 280A, we have looked for the most appropriate analogy, which we have decided is discrimination as defined in the Disability Discrimination Act 1995. Unless noble Lords can suggest any closer analogies, I believe that the Government have come to the right conclusion both in
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terms of the severity of the penalties and in answering the recommendation of the Delegated Powers Committee.
Amendment No. 234B appears to be aimed at ensuring that criminal offences created under the blacklisting regulations cannot be triable either way. I assure the noble Baroness that the difference between Amendment No. 234 and Amendment 280 is deliberate. We do not agree with her that there should be no possibility of trial by jury under any circumstances. She said that she agrees with the Government that blacklisting is a serious matter because it has grave consequences for the blacklisted individual and for the reputation and standing of organisations accused of compiling blacklists. We take the view that we should not rule out the possibility of cases being tried before a jury, and that defendants should not be denied that right.
In the light of what I have said about the level of penalties and the need, where appropriate, for the opportunity of trial by jury, I hope that the noble Baroness will not press her amendments.
Baroness Miller of Hendon:I have listened very carefully to the Minister and I agree with him in relation to Amendments Nos. 234A and 280A. I will read what he said about Amendment No. 234B. I beg leave to withdraw the amendment.
Amendment No. 234A, as an amendment to Amendment No. 234, by leave, withdrawn.
[Amendment No. 234B, as an amendment to Amendment No. 234, not moved.]
On Question, Amendment No. 234 agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey:moved Amendment No. 235.
Page 2. line 18, at end insert—
("() In this section "list" includes any index or other set of items whether recorded electronically or by any other means.")
The noble Lord said: When we last discussed this part of the Bill on 7th June we amicably agreed to separate Amendments Nos. 235 and 235A from the earlier grouping, I think because the noble Baroness could not find her notes. However, I am sure she has them in front of her now.
Amendment No. 235 is clarificatory. It provides a fuller definition for the type of list that can be prohibited by regulation. Information can be stored and circulated in many ways these days, and paper records are becoming less and less important, although the amount of paper used does not seem to be diminishing. Electronic and digital technologies have created many more means of conveying information. We want to ensure that the clause reflects the multimedia age and is elastic enough to cope with the future development of information technology. The amendment is phrased in a way to capture a wide range of possibilities. Perhaps the noble Baroness would care to speak to Amendment No. 235A before I make any comments on that amendment. I beg to move.
3.30 p.m.
Baroness Miller of Hendon:Before I speak to my amendment, I have to say that the Minister was extremely courteous last time. He is absolutely right. I pretended one thing. The truth was that I could not find the wretched notes.
Clause 3 prohibits the blacklisting of workers by their employers in retaliation for their engaging in trade union activities. We have already indicated our general acceptance of this provision. However, we believe that there is another side to the coin: it is the process that the unions call "blacking", which is short for blacklisted. Apart from the strike on an employer's premises, a union engaged in a dispute may proclaim goods or services made or provided by that employer as "black". Members of the union in dispute and members of other unions are often encouraged not to handle them. For example, goods manufactured before the dispute begins may get held up in the docks or at the employer's warehouse; retail shops carrying those goods may be picketed; and firms who supply goods and services to the business in dispute may also find themselves picketed or their customers intimidated by aggressive leafleters, or their own businesses threatened with blacking if they do not desist from dealing with the firm involved in the dispute.
Blacking has been extended to disputes in which the union itself is not even involved but is acting in support of a foreign union by refusing to handle goods coming from abroad. This blacking does not always end when the dispute is settled, as almost inevitably is the case, by agreement between the parties. The blacking, despite the unusual "no reprisals" clause in a settlement, is often only observed by the employer. Goods made by an employer during a strike with the assistance of non-union labour, or by another firm, may continue to be blacked indefinitely. This amendment would prohibit those activities. The proposals are reciprocal to the anti-blacklisting provisions that the Government have introduced into the Bill as a criminal offence.
The Bill began life as the White Paper, Fairness at Work. The Minister's response to this amendment will be a clear measure of how seriously the Government take their claim that the Bill is a "measure for partnership." Many provisions in the Bill lean over backwards to be fair to employees. However, as I see it, there are not quite so many which favour employers or which are even-handed. If, as we all agree, there should be no blacklisting of employees involved in a dispute, or those who engage in legitimate union activities, then similar economic activities against employers should also be banned.
As a result of the trade union legislation introduced by the previous government, union rights and privileges are protected as well as being regulated. That is why the Labour Party manifesto said:
"The key elements of the trade union legislation of the 1980s will stay—on ballots, picketing, and industrial action".
Blacking is no less industrial action than mass picketing. We now have industrial tribunals with wide powers to protect and enforce employees' rights. There can be no justification for what can be described as "overkill"
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when a union tries to pursue a claim. If the Government will not accept this amendment. I am sure they will tell us why. Perhaps they will also tell us whether they have an alternative provision which would give a measure of even-handedness and justice to employers. I believe that the purpose of my amendment can be summarised in two words: fair's fair. I beg to move.
Lord McIntosh of Haringey:I am afraid that the noble Baroness has misunderstood the role of the blacklisting amendments in this legislation. She made a delightful speech; indeed, it took me back to the great days of, "I'm all right Jack", Red Robbo, and so on. It was nostalgic in the extreme. However, I believe that the noble Baroness misunderstands the reason why we have the blacklisting amendments in the Bill and why we have not interfered with so much of the legislation of the past 20 years—a good deal of it passed by the previous government—which deals with industrial action. We have had to introduce the amendments on blacklisting because the blacklisting of individuals is the issue here, an issue inadequately provided for in legislation.
In seeking to prohibit lists of employers, the noble Baroness is going back into the whole area of legislation about industrial action, which covers both employers and unions. If the noble Baroness is seeking an analogy of fairness between both sides on the industrial/employment relations front, she should be looking at the legislation which covers employers and unions rather than comparing the legislation on employers with the proposed legislation here about individuals. The legislation on industrial action is very detailed and contains many protections, as I believe the noble Baroness acknowledges, for employers and unions alike. We have made it very clear that we will keep the key elements of the law in this area. The balance will still need to be held, notice will still need to be given, and secondary action will remain unlawful.
As our proposals in this area make clear, we are committed to providing a fair balance between the interests and freedoms of individuals and their employers. Our proposals are aimed at modernising the law and redressing the current imbalance that exists in relation to individuals. I am afraid that the noble Baroness's amendment could tilt the balance back again. I am not convinced that this is a major problem. I believe that the analogy which the noble Baroness draws is a false one. I am confirmed in my view that this is not a major problem by the fact that we have not received any representations from employers to amend the law in the way proposed. In those circumstances, I suggest that the legislation of the previous government on secondary action already achieves the protection that the noble Baroness is seeking and that her amendment is both unnecessary and inappropriate.
Lord McCarthy:If a union was in the course of an industrial dispute, as my noble friend the Minister said, surely to engage in the activities set out in paragraphs (a), (b) and (c) would be secondary action. Indeed. if it were secondary action, it would be unlawful under the terms of the 1992 Act. I do not know what the noble

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Baroness is complaining about, unless she is talking about individuals. However, if this were to be done collectively as part of a dispute, the noble Baroness must admit that it would be secondary action and, therefore, unlawful.
Baroness Miller of Hendon:I heard very clearly what the Minister said: he liked my speech but saw no need for it. Perhaps he is right. I certainly think about things in the context of "fair's fair". However, I shall take the matter away and read most carefully in Hansard what the Minister said.
On Question, amendment agreed to.
[Amendment No. 235A not moved.]
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Schedule 3 [Ballots and notices]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 236:
Page 59, line 36, after ("possession") insert ("or which is ascertainable by it after reasonable enquiries")
The noble Baroness said: In moving this amendment, I shall speak also to Amendments Nos. 238, 241, 243 and 245. All these amendments affect Schedule 3. This is a small group of amendments relating to information to be supplied to employers in relation to ballots conducted under the Bill, plus one item relating to information which should be given to employees. None of them reduces the amount of information to be provided; on the contrary, the amendments call for the information to be fuller, clearer or more explicit. I shall take each of the points item by item. Paragraphs 3(2) and 9(2) reduce the liability of the union to provide detailed information about employees entitled to take part in a ballot. Instead, the union has only to give such information as is in the union's possession. We believe that that makes life too easy and that it provides a simple excuse for the union not to be too diligent in supplying the information that the employer needs and is entitled to have.
Amendments Nos. 236 and 243 require the union to make reasonable inquiries to find any information which it does not have. I personally do not believe that this puts any undue burdens on the unions. Similarly, Amendments Nos. 238 and 245 would substitute new sub-paragraphs for those printed in the Bill. The Bill qualifies the obligation to provide information by saying that the rules apply,
"if the union possesses information as to the number, category or work-place of the employees concerned",
and so on. The amendments would oblige unions to provide the information without the excuse of saying that they do not know. I find it totally inconceivable that a union claiming to represent a group of workers can do so without knowing how many there are, what they work at, or where they work. The amendments prevent obstruction by the unions. If they are genuinely launching a ballot without knowing who they are representing, then, in my view, the very least the unions must do is bestir themselves and find out. Having done
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so, they should then pass that information on to the employer. It is axiomatic in English law that a person involved in a dispute should know in advance the case against him; and, indeed, that he should know who is making the claim.
Amendment No. 241 deals with information to be given to an employee in connection with a strike ballot. The information will be required by the Act to be printed on the ballot paper. I wish to read a slightly shortened version of the text which appears in full on page 60, lines 18 to 21 of the Bill,
"if you are dismissed for taking part in strike or other industrial action which is called officially…the dismissal will be unfair if it takes place fewer than eight weeks after you started taking part".
The text continues,
"and may be unfair if it takes place later".
There is an omission which makes this particular phrase misleading and may encourage a worker to continue in a prolonged strike and expose himself to dismissal. It is no use arguing that the words "may be unfair" should alert the worker to the fact that it could equally be fair. With no disrespect to anyone, the majority of the workers receiving the ballot paper will neither be professors of semantics nor Chancery lawyers.
If the notices are intended to tell the workers their rights they should be clear and unambiguous. They should not contain theoretical fine print, or in this case require the worker to have to read between the lines. Amendment No. 241 simply alters the notice to read,
"and may be fair or unfair if it takes place later".
I would like to assume that the Government will accept all five of these amendments—perhaps I hope that in vain—in the interests of full information being available to everyone involved in a ballot. I beg to move.
Lord Wedderburn of Charlton:My noble friends and I have tabled an amendment to the same schedule as the amendment we are discussing but which in no other way supports the noble Baroness in what she has just said. I hope that my noble friend will resist these amendments. However, as I have an amendment in the group we are discussing it behoves me to explain the seemingly small change that we called for in Amendments Nos. 237 and 244 as regards the notices to be given by the trade union.
This is an area of great practical importance because the legislation of the 1980s left us with a provision to give notice to the employer, first, of the strike ballot paper, and secondly, of the forthcoming action if there was a majority in the ballot. However, in both those cases among the matters which had to be revealed was a description of all the employees in the union who were included in the industrial action. The relevant words are printed rather usefully on page 59 of the Bill in Schedule 3; namely, that among other things, the union must describe the employees entitled to vote. The union must state who those workers are to enable the employer readily to define them. That phrase gave rise to great ill will. It was interpreted by some people and some employers to mean that the union must give names or even names and addresses in respect of the two sets of notices.

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Recently the Government made it plain that they did not want to have such an obviously discriminatory provision. There were cases where workers' names had to be revealed in the sense that they could only readily be described if some identification were made which made it clear who they were. Whether one regards the right to take industrial action as a right or as a liberty, it is rather unattractive to add to it the requirement that the union has to give suitable and sufficient description of those concerned which in many cases will enable them to be identified.
We strongly support the Bill in respect of paragraph 3 on page 59 of the Bill and the other notice provision because that provision is now knocked out. However, in its place comes what I can regard only as a quite extraordinary provision; namely, that the union must give vital information, including that which would help the employer "to make plans". If one is to talk about employers, unions and employees as partners, one has to rub one's eyes to believe that when the partnership is in trouble such that one side or the other is party to a dispute, the law will say to one of them, and one only, "You must give to the other partner the information which is required to help him to make plans". Perhaps I should express that in a different way. The Bill as it stands means that in a trade dispute the union must give to the employer information to help him to make plans. In the middle of a dispute situation where notices are to be given by one side or the other, the employer can make his plans not only on the basis of information which he can normally obtain but also on the basis of what the union must give to him. That is not as bad as requiring identification of individuals among the workforce as it will not make any kind of discrimination so easy. However, from the point of view of the union and the majority of the employees it is surely quite absurd to require them unilaterally to give to the employer the information which will help him to "make plans.' in the context of a dispute.
Our real objective in the amendment I am proposing is to ask my noble friend to look again at the wording of the provision. If the provision comprises making plans about a particular matter there may be a justification for it. But this is a case of making plans generally in the context of a dispute where both parties are otherwise acting lawfully. However, one of them must give specific and unrivalled information to the other. I speak to Amendment No. 237 and to Amendment No. 244 in the hope that my noble friend will reconsider the matter as I believe the wording I propose is similar to the wording that it seeks to replace. People used to say that the requirement concerning names and addresses would never happen and that an employer would not demand them. Most employers did not demand them but there were cases where that provision gave rise to extreme ill will. I believe that if this provision is not at least rephrased it will give rise to disputes which need never occur.
3.45 p.m.
Lord McIntosh of Haringey: I am grateful to the Committee for agreeing to discuss these amendments
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to Schedule 3 together. They are not of course the same and they certainly do not go in the same direction but it is useful to consider the whole issue at one time.
I start with Amendments Nos. 238 and 245. The Bill specifies that if the union possesses the information the notices should include at a minimum a description of the number of employees involved, the broad kinds of job they perform and their workplace. The unions will be required to describe as accurately as they possibly can the broad occupational characteristics of their members, their workplace, location and the number of their members involved. But, inevitably, the unions will be limited by the information at their disposal. There may be rare occasions when they will be unable to provide in full the details required by the notice provision. These amendments seek to require unions to provide the information regardless of whether or not it is in their possession.
In most cases, unions should have the necessary information to hand. In the rare cases where they may not, the amendments would, inevitably, require unions to undertake special exercises to collect the information. We have repeatedly said that we will retain the key elements of the law on industrial action—including the requirement on unions to give the employers concerned advance notice of both the ballot and of any official industrial action which may result. I hope that, on reflection, the noble Baroness will agree that it would not be right to require unions to undertake special exercises to collect information in addition to those obligations.
My hope is immediately dashed when I look at Amendments Nos. 236 and 243. These amendments seek to require the unions to make additional enquiries to collect information for the notice other than that already in their possession. We do not want to require unions to do that. We want to reform the law on industrial action ballots in order to reduce the very large administrative burdens on unions. The amendments would serve only to provide additional burdens on unions which would delay or frustrate the organisation of the industrial action.
As the noble Baroness will recognise, that does not mean that we are in favour of industrial action. All are agreed that industrial action is a last resort. But if there is one thing worse than industrial action which takes place according to efficient procedures and as soon as it can once those procedures are gone through, it is industrial action which is threatened and delayed because of administrative procedures and the need to obtain additional information.
The amendments are unnecessary. In general, the notice provisions will mean that employers will receive much the same information as they do now, short of naming the members involved. In all circumstances employers will be able to communicate with their workers by issuing a general letter to all those potentially involved. I hope that the noble Baroness will, on reflection, consider that that is sufficient and IA ill not press the amendments.

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Before dealing with my noble friend's amendment, perhaps I may turn to Amendment No. 241, which deals with the wording of the statutory statement which all voting papers must contain—the "health warning", as the noble Baroness quite rightly referred to it.
There is general agreement that the existing wording is inadequate because it fails to reflect the new protections against the unfair dismissal of strikers contained in Schedule 5 to the Bill. We have come forward with proposals in paragraph 5 of Schedule 3 which add new wording to the health warning describing the new protections. The wording is intentionally short. A voting paper is not the place to write a detailed account of the new protections. If it contained such an account, people would not read it. Our proposed wording gives an accurate summary of the main protections against dismissal. The amendment seeks to add further wording. I know that it is only two words but, nevertheless, the amendment seeks to draw particular attention to the possibility that dismissal after the first eight weeks of a strike could be fair.
The amendment is unnecessary. Under our proposals the health warning would state that dismissal in this period "may be unfair". I hope that the noble Baroness will concede that the wording already conveys the notion that dismissals could be fair or unfair. That is why we say "may be unfair". I know that the noble Baroness anticipated this argument, but it is still correct. There is no need to complicate the statement by adding the further wording she proposes.
I shall now turn to Amendments Nos. 237 and 244. The fact that these amendments have been grouped does not imply any support for the Opposition amendments. I am glad to have my noble friend's welcome for the changes proposed in the Bill. I agree with him in his criticisms of the previous wording.
The Government believe that the notices are useful to employers, enabling them to act responsibly when faced with the threat of industrial action. However, they are not designed to provide the employer with the information for its own sake. Nor are they designed to enable an employer to victimise the individual employees concerned. The Bill explicitly defines the purpose of the notices. They are to enable the employer to put his side of the argument to his workforce, for them to take into account when participating in the ballot or responding to the union's call to take action; and they are to help the employer to make plans to minimise the adverse effects of possible industrial action on his organisation, on his customers and on the general public. These are sensible objectives and are two justifiable reasons why employers need this information. However, the amendments would seek to remove the latter purpose—that is, the purpose of making plans—from the face of the Bill.
I am sure that my noble friend had in mind the scope of information that unions will be asked to provide in order to enable an employer to make plans but—unless the Committee were unwise enough to accept the Opposition amendment—all the union has to do is to provide information in its possession. There is nothing sinister about this.
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Let me give as an example the case of a further education college. My noble friend will know the case of Blackpool and Fylde College v. NATFHE. I seldom get an opportunity to quote cases against him. I choose this case because it concerned a college which confirmed that the current law requires the union to provide names. The management knows that a number of lecturers will be called out on strike on a certain day. Unless the union provides the information, the management has no way of knowing which lecturers or where. So they cannot warn students whose classes will be cancelled. But unless the union tell the management, "We are calling out 50 lecturers in the English department and 30 in chemistry" or "There will be 200 lecturers at site A and 100 at site B", the college cannot give its students some warning of the scale of the action.
Perhaps I may give another example—the London Underground. If a union in calling a strike intends to target, say, the Central Line, it is only fair that it should tell London Underground that that is what it is going to do in order that the public using the line can be warned and have the chance to make other arrangements, while users of other lines should know that they will not be affected. Businesses and all organisations depend on their customers, the users of their services. It is in the interest of workers as well as that of management that customers are given as much warning as possible of the likely effects of industrial action. Otherwise they will take their custom elsewhere and they will not come back. The public reaction to a number of public transport strikes is evidence of that.
It may be that this information will reduce the impact of industrial action. I hope that all unions have moved beyond trying to make industrial action as damaging as possible, regardless of the effect on the long-term survival of the business. We are trying to promote a long-term partnership approach. During a short-term dispute, it is important not to lose sight of the overriding common interest of workers and employers in the success of the business.
No additional kind of information will be required to be provided; only that information already in the possession of the unions. We will not place any further burden on unions by requiring them to collect information they do not already hold; and employers cannot insist on receiving information which the unions do not have. The changes we are proposing—including the ability to make plans—are in the interests of employers, unions and workers. They give greater clarity about the nature and purpose of the information to be provided by the unions and they protect workers from having their union membership disclosed to their employer against their will. I believe that we have reached the right balance. In those circumstances, I hope that the noble Lords who have tabled these amendments will either withdraw them or not move them.
4 p.m.
Lord Monkswell: My noble friend talks in terms of the unions having to give virtually all the information that they have to employers to reduce the impact of a dispute on the employer. What is the quid pro quo? Will

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there be a similar requirement on the employer to provide all the information that the employer has to the union in order to ensure that there is a balance?
My noble friend gave the unfortunate impression in speaking to these amendments that industrial disputes are solely caused by unions. That is not the case. I know of a high-profile national dispute that was engendered by the employers in order to discontinue the production of goods with which there was a problem. The employer engineered a strike in order to stop production, effectively at no cost to itself. I was slightly concerned at the tone of my noble friend's remarks and his suggestion that the cause of industrial disputes lies solely with the trade unions. That is one of my reasons for asking that question.
There is a more significant reason. If trade unions and workers are prevented from having an effect on employers if they are engaged in a dispute they will find some other way of impacting on employers. These are practical issues relating to day-to-day industrial relations. They need to he taken on board. I revert to my original question. Is there a quid pro quo? Will employers have to provide unions with all the information that they have in order to balance the requirement on unions to provide all their information?
Lord McIntosh of Haringey: In the course of a short speech my noble friend has managed to impute to me words that I certainly did not say and motives that I certainly do not have. First, he said that the Bill states that unions have to give all the information in their possession to the employers. That is not what the Bill states, and it is not what I said. The Bill spells out very clearly the information that has to be provided. It is information that is in the possession of the unions. It cannot include the names and addresses of those who will be involved in the proposed industrial action, and it is defined by the purpose for which it is to be used.
My noble friend went on to suggest that I implied—he does not think that I said—that all strikes are caused by unions and not by employers. I am aware of the word "lock-out" as well as he is. I am aware that there are, and have been, employers who choose to provoke strikes in order to promote their own interests. The law as proposed in the Bill is deliberately and conscientiously even-handed. It has been, as my noble friend knows well, the result of consultation with the TUC as well as the CBI.
My noble friend returned to his first question: what is the quid pro quo? There is already a reciprocal duty, in so far as employers are obliged to disclose information, to recognise unions for the purposes of collective bargaining.
Lord McCarthy: I must stress that we are trying to help. At the same time we are trying to understand. I am not sure that I do understand. Perhaps I may turn the Minister's attention to paragraph 3(2) of Schedule 3 to the Bill. The Government are amending the situation in which in the past an employer could ask for names.
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As I understand it, the Government want to end that situation. It is stated on the face of the Bill:
"In subsection (2)(c) (notice of ballot must describe employees entitled to vote) for 'describing (so that he can readily ascertain them)"—
that is the present situation—
"the employees of the employer' substitute 'containing such information"—
these are the new words—
"in the union's possession as would help the employer to make plans".
I had assumed that the kind of information that would now have to be supplied to enable the employer to make plans, whatever it might be, would not include names or information that would enable the employer to ascertain names. That was the point of the amendment to the Bi11.
But I understood the Minister to indicate in the examples he gave that it might be possible, under the provision of "making plans", for an employer to demand names or information through which he could readily ascertain names. If that is the case, I do not see that the amendment does anything. That cannot be the case, can it?
Lord McIntosh of Haringey: No. I made it entirely clear that there are no circumstances under which a union can be required to give names and addresses.
Baroness Miller of Hendon: I understand what the Minister is saying in regard to Amendments Nos. 236, 238, 243 and 245. I still feel that it is inconceivable that a union would act for employees in the matter of a ballot without knowing for whom it was being done. However, I shall leave that aside for the present.
I am absolutely amazed at Amendment No. 241. I was delighted to hear the Minister agree that the wording was not correct. However, I knew that he would say that "may be unfair" meant that it also "may be fair". I anticipated his remarks. But since the Minister and the Government are concerned that the matter should be clear—which is why they redrafied this section—I cannot see why, even in this small part, the words cannot be "fair or unfair". That would indicate exactly the meaning given by the Minister. However, I shall not press for a Division. As I plead every time, I should like the Government at least to find one small part that makes all the hours that I spend on these speeches worth while. Since the Minister says that "may be unfair" also means "may be fair or unfair", why he cannot simply give in and say, "You can have it, because that is what it means", I know not—which makes me wonder if that really is what it means. But at this stage—
Lord McIntosh of Haringey: Let me look again at that issue before Report stage, without any commitment.
Baroness Miller of Hendon: That is most generous of the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 237 and 238 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 238A:
Page 60, leave out lines 13 and 14 and insert—
(""(2A) For the purposes of subsection (2), the union may state on the ballot paper that relevant action is industrial action short of a strike.
(2B) In subsection (2A) "relevant action" means an overtime ban, a ban on contingency or contact arrangements, a call-out ban, and forms of discontinuous action within subsection (6) of section 234A below.").
The noble Lord said: This is a substantial amendment. The Committee will see in Schedule 3 that the issue addressed by this amendment, and now Amendment No. 242, goes to the central features attending the legality of official industrial action. It is spelt out in paragraph 5 on page 60 that,
"For the purposes of subsection (2) an overtime ban and a call-out ban constitute industrial action short of a strike".
It is important for the Committee to note that this is a statutory prescription as to the character of two types of industrial action which would not normally be regarded as full strike action—but only two.
In order to have industrial action which is legally acceptable, the union is required to put to the members involved either or both of two permitted questions; namely, whether they will strike or whether they will register a view regarding industrial action short of a strike. Many people think that action short of a strike is either a go-slow or an overtime ban or other action of that kind. I must make it clear to the Minister that much of this is not the Government's fault. This has long been a problem, but we submit that it is made worse by the part of the Bill to which I have referred. To explain why, the union must get the voting question right. Members are asked whether they want to take strike action or industrial action short of a strike. If the majority vote for action on one of the questions but the union calls for action on another, the legality is lost. These are very severe limits on the British so-called right to strike. On this technicality (as most people see it) many cases have been taken to court, many by employers who are the obvious plaintiff. To be even remotely fair, the law must give the union and employer a clear definition, as far as possible, of what is a strike and what is action short of a strike.
There are a number of difficulties, three of which I mention. First, the formula as to what is a strike and what is industrial action short of a strike applies not only here but also to a situation in which the employer faces a claim that dismissals in a dispute are improper because they have occurred in the course of industrial action. We come to that in Schedule 5. A strike is defined in Section 246 of the Trade Union and Labour Relations (Consolidation) Act 1992 as,
"any concerted stoppage of work".
That is about the least helpful definition that anyone has ever put in a statute about labour law. It does not even say what the purpose is. Students are always quick to note that a concerted stoppage of work would cover those who went off to a football match. Obviously, by implication it means that there is some kind of dispute by virtue of which the stoppage takes place. But the statute does not say so. A stoppage of work can include
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a stoppage of two minutes, two weeks or two years; it leaves it open to a total stoppage, a go-slow or an overtime ban.
The Court of Appeal faced this problem squarely for the first time in December 1998 in an action in which a rail company, Connex South East, sought an injunction against the National Union of Rail, Maritime and Transport Workers. The case is to be found in Industrial Relations Law Reports [1999]. A new judicial answer was given to the problem. A ballot was taken of some 230 conductors employed by Connex who were asked, "Are you prepared to take strike action?" After that, having gained a majority in the ballot, the union called on members to impose a ban on overtime and rest-day working. Most people thought that perhaps the court would regard that as industrial action short of a strike and therefore that the strike did not count because members had taken part in action short of a strike. Not a bit of it.
Noble Lords may well be surprised that I rather approve of this decision. Connex, which, in hours, went to the High Court, as our procedures allow, and then to the Court of Appeal, had its claim for an injunction turned down. The Court of Appeal said that the definition of a strike—a concerted stoppage of work—left open the possibility of the union imposing an overtime ban from the very beginning. Whereas that might look like an inconsistency, here it was not. The concept of industrial action short of a strike might therefore have a different customary meaning in various industrial sectors. Worse, even at this point the Bill makes the 1992 Act appear self-contradictory. Section 246 of the Act defines "strike" in the way that I have outlined, but the Bill now by law insists on a special meaning according to the provisions in Schedule 3 which it has never had before.
What is more, if your Lordships look at the provision in respect of a strike and industrial action short of a strike, you will see that it now says that an overtime ban and call-out ban constitute industrial action short of a strike. I make no complaint about the Bill overturning a decision of the Court of Appeal. Very often one feels that the sooner it is done the better, but in this particular case one cannot but feel that the provisions on overtime and call-out bans and their mandatory status as industrial action short of a strike relate to the decision of the Court of Appeal in the Connex case that such bans are to be looked at in this context, if it allows, as strike action.
This becomes a little more complex. I seek to avoid some of the complexities. The Bill will make obligatory under terms of employment what may not be, in any sensible terms, a contract of employment and therefore a breach, as was said in the Connex case. The Connex case looked at whether those workers should have been working an overtime ban and said that they had and that went to feed the notion that it was a strike.
By this time the law has turned so many circles that one hesitates to add more, but there are more. In the words of one of the judges of the Court of Appeal, to regard an overtime ban as a refusal to work certain periods of time required under a contract of work makes the Bill rather odd. If that is the normal case for workers

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of this union, then why should the Bill suddenly say that an overtime ban constitutes industrial action short of a strike?
What is more, not only is it a question which the union must put, even if it and its members believe that what they are doing is taking strike action in the linguistics and semantics of that particular area, but the reported judgments also suggest that whether it is a strike or industrial action short of a strike is a matter to be determined in the context of the bodies concerned: the employer perhaps; the union certainly; the employees who are members of the union, and so on.
What the Bill seeks to do is to remove the decision in Connex, which is a perfectly proper thing for a legislature to do, in regard to Section 229 voting papers. There is the subsidiary point that the Bill changes matters only in respect of voting papers. There are other issues, such as the unfair dismissal of a group of workers who take action, where a different meaning may be given, although I cannot easily see a court saying that it should be. However, it is definitely limited to notices and ballot papers for the purposes of the industrial action.
The Committee may believe that this is a matter of interest to employers, workers and present and former trade union leaders, who are now represented in this House, although not as well as they should be. Now that the issue has been raised and there are at least four sets of contradictions arising from various legal statements, would it not be a good idea to take the opportunity at Report stage to make sense of this area of the law? People's rights depends upon this. I refer not only to the rights of employees and trade unions but also rights of employers in the context of unfair dismissal.
In trying to cut down the matter it is in no one's interest to do less than justice to the extraordinary state of the law. I note that my noble friend has an interest at least. It is no radical ambition to ask the Government to look again at this matter, which is an amendment to the existing law—that is to say, paragraph 5(2)(2A). I would like to know why that was included. Why did the Government suddenly decide on all overtime matters, whether or not they were contractual? The Government know as well as I that some workers are on contractual overtime and some are on voluntary overtime. There are different parts of the spectrum in between. Why did they suddenly launch this bombshell? Why was it kept to overtime and call-out bans? Our amendment suggests a few others. But, if a proper job were to be done, our amendment would have to be reworded and cover a much greater area.
But there is a matter which is much more important than that. Have the Government understood the difficulties which employers, trade unions and employees will be in? If a union has always talked about an overtime ban as a right to strike, which was the case in Connex, why should it be prevented? It is in no one's interests for it to be prevented from giving to the members a ballot paper which says that, our action has been a strike and everyone knows about overtime bans. But the Bill says that one cannot say that. Not only cannot one do it, but one cannot say it without losing
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all one's rights in industrial action of an official kind. I plead with the Minister to take us at least one-tenth of the way and say that a small area of this amendment will be looked on with favour. I beg to move.
Lord McIntosh of Haringey: As always, I Lim grateful to my noble friend for his critique of the previous legislation which this legislation seeks to amend. When he used the phrase "concerted stoppage of work" and said that it could last for two minutes, two days or two months, I was tempted to ask him whether the two minutes' silence on Armistice Day would count as a concerted stoppage of work for the purposes of the legislation. I shall not ask for an answer because I sure that he would have to charge me.
I remind the Committee that we are dealing with a voting paper. That is what this part of the legislation is about. We should not go wider than the issue of what should appear on it. The Government propose to amend Section 229 of the 1992 Act which sets the legal framework within which unions must operate when designing the voting papers that they use in industrial action ballots. It provides that the union must describe the proposed industrial action on ballot papers as either a strike or action short of a strike. Clearly, it is important to have that distinction from the point of view of being sure that those being asked to vote know how serious is the issue. Despite the final words of my noble friend, it is not important in terms of rights being lost. I here are no rights being lost as to whether it is a strike or action short of a strike.
Lord Wedderburn of Charlton: Whether or not one calls it a right is a matter of taste. But if one asks the wrong question and the court says that one has asked one kind of question instead of another, then one loses one's "right" to pursue an industrial dispute.
Lord McIntosh of Haringey: I thought that the noble Lord was suggesting that there were more rights for action short of a strike than for a strike itself. If there is a misdescription, then it is clearly important that the union should get it right, and that is our intention in this legislation.
We recognise that the term "strike" can be used in a variety of ways. Some occupations and industries give it one meaning and in others it is used differently. But we believe that most workers and employers are likely to consider that a strike is occurring when it involves the withdrawal of labour during normal working hours. That is the basis on which we have framed Schedule 3 and on which we have said that overtime and call-out bans constitute action short of a strike. I shall return to the Connex case in a moment when discussing Amendment No. 242. That is the definition of the term that we shall use to assess the amendments which my noble friend has tabled.
I begin with Amendment No. 238A. My first worry about it is that it says,
"the union may state on the ballot paper that relevant action is industrial action short of a strike".

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It does not say that it has to mention one or the other. The second problem is the phrase "contingency or contact arrangements". My noble friend's knowledge of employer relations is far greater than mine. I am not familiar with the phrase and I do not really know what it means.
Lord Wedderburn of Charlton: I am very grateful to my noble friend. We can deal with the matter very quickly without going into all the details. They are phrases used in unreported decisions which are in the Connex judgment.
Lord McIntosh of Haringey: I am grateful to my noble friend for that. As it is unreported it means that I do not know about it. I might even have a justification for not knowing.
The effect of the amendment is to give unions the discretion to describe a wide range of potential forms of action as "action short of a strike". In effect, only an all-out strike would have to be categorised as a strike. The intention of the amendment is to require a form of action to be described as "action short of a strike", but that is not what it says. Two kinds of problems arise. First, it seems to give the unions the discretion of describing the actions as a strike or action short of a strike. It could describe an overtime ban as a strike on one occasion, but action short of a strike in an identical case. That would create confusion for both employers and union members. There would be no consistency and people simply would not know what they were voting for.
Secondly—and this applies whatever the intention of the amendment—I am unhappy about the categorisation of all discontinuous industrial action as action short of a strike. It would mean that a strike on certain days of the week need not be described as a strike on the ballot paper. I doubt whether many workers would share that understanding of the meaning of a strike. For them, any non-attendance at work during normal working hours would be seen as a strike. So describing it as action short of a strike, which would be permitted by the amendment, would be seriously misleading and would potentially subvert the purpose of the ballot.
The current wording of the schedule is the right way ahead. It clarifies the status of overtime bans and call-out bans. It ensures that the various forms of industrial action are categorised on ballot papers in ways which most union members would readily understand.
I turn now to Amendment No. 242. In introducing both these amendments my noble friend referred to the judgment of the High Court in Connex v. RMT. That was clearly an important ruling and it helped to remove the uncertainty about the status of overtime bans. As my noble friend reminded the Committee, the court ruled that overtime bans should be treated as strikes.
We studied the High Court judgment when the schedule was drafted. We took the view that although the judgment had largely removed the uncertain status of overtime bans, it had nonetheless placed the bans in a category which would make less sense to those voting
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in industrial action ballots. Overtime bans are outside normal working hours and selective in their effect. Most workers would not normally classify such bans as strikes. Indeed, the Court of Appeal accepted that that was the case. Workers tend to see strikes as events which affect normal working in a non-selective way. We therefore decided to classify overtime bans as "action short of a strike", thus ensuring that the law reflected the general understanding of the term. I believe that that will limit the potential for misunderstanding among union members.
However, there is potentially a tension between the wording in Section 246 and the definition of an overtime ban as "action short of a strike" for the purposes of Section 229. Amendment No. 242 seeks to remove that possible tension. As such, it serves a useful purpose and I am grateful to my noble friend for bringing it to my attention.
We are not entirely sure that the exact wording of the amendment is ideal and would like to consider the matter further. Nevertheless, my noble friend has skilfully drawn an important issue to our attention and I assure the Committee that the Government will return on Report with an amendment of their own to deal with this matter. On that basis, I hope that my noble friend will not press his amendment.
4.30 p.m.
Lord Wedderburn of Charlton: In view of his last remarks, I am sure that my noble friend will expect me to say a few words. We are grateful to my noble friend for reconsidering the definition. That is what Amendment No. 242 seeks to achieve.
Perhaps I may make a twofold prediction. First, if one changes the definition by reference to Section 229, it will be found necessary to refer to the main section with regard to what the ballot paper must provide. In doing that—this is my second point—I predict that the Government will be driven to certain results if they do not want certain provisions on the statute book, although I add that these are not necessarily worse than those which preceded them. Those earlier provisions were characterised by hostility to workers.
In trying to find a new definition, I predict that the Government will find that they really should seize the moment. There are very few moments when such a question may be raised. It has been raised by the Connex case. Indeed, the Government raised it in paragraph 5(2). I did not raise it; the Government did. If they are raising the issue, surely they are obliged to look again at the usage of the terms "strike" and "industrial action short of a strike". Even if their conclusion goes against me, I ask them to do that. I beg leave to—
Lord McIntosh of Haringey: Before my noble friend withdraws the amendment, I have already said that I should like to meet him to discuss the matter between now and Report. I hope that he will put this on the agenda.
Lord Wedderburn of Charlton: I should be delighted. It is always a delight to meet my noble friend

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and it will be even better with the agenda with which I shall provide him! I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 239 and 240 had been withdrawn from the Marshalled List.]
[Amendments Nos. 241 to 245 not moved.] Schedule 3 agreed to.
Clause 5 [Training]:
Baroness Miller of Hendon Baroness Miller of Hendon had given notice of her intention to move Amendment No. 245A:
Page 2, line 36, after ("must") insert ("if required to by the decision of the Central Arbitration Committee")
The noble Baroness said: Purely in response to the Minister's generosity, I do not intend to move this amendment or the other two amendments in the group. I know that he has undertaken only to "consider" Amendment No. 241, but I shall take away these three amendments in the same spirit and shall reconsider them at home.
[Amendment No. 245A not moved.]
[Amendments Nos. 245B and 245C not moved.]
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7 [Maternity and parental leave]:
On Question, Whether Clause 7 shall stand part of the B ill?
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): Clauses 7 to 9 bring into effect Parts I to III of Schedule 4, concerning maternity and parental leave and time off for domestic incidents, together with the consequential amendments. I shall cover these in more detail when we come to Schedule 4. I commend the provisions to the Committee.
Clause 7 agreed to.
Clauses 8 and 9 agreed to.
Schedule 4 [Leave for Family and Domestic Reasons]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 246:
Page 62, line 40, leave out ("permit") and insert ("require")
The noble Baroness said: This is a minor amendment to avoid a possible over-reaction to what may be a very commonplace situation. The Bill states that an employer shall not permit an employee to work during a compulsory maternity leave period. This simple amendment alters the wording to, "An employer shall not require an employee to work during a compulsory maternity leave period". As the late Professor Joad used to say, it all depends on what you mean by "work".
If an employer telephones a secretary and asks, "Where is the Bloggins file?", technically when she replies, that is working. There is much non-arduous work, especially of a clerical nature, that can be done at home these days, in the employee's own time and at the employee's own convenience. I do not categorise as non-arduous the
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drafting of amendments to Bills or of the speaking; notes to deal with them! If the secretary can assist her employer, especially if it is a small firm which cannot afford a temporary replacement, by doing some word-processing, or if a book-keeper can just as easily do the weekly wages at home on the dining-room table, or if a sales person can maintain her all-important personal contact with her customers during her absence from the office, why not allow her to do so, if and providing she wants to do so? I stress, if she is willing to do so.
I am sure that the Government will argue that that absolute prohibition will prevent pressure being placed on an employee to do some work. However, I do not believe that that is a valid argument. The revised wording is absolutely clear. If an employer asks an employee to help him out with some task or other, the employee is absolutely entitled to refuse. The employer cannot, under the amendment, require her to do so. However, it is absurd that the making of a simple telephone call asking the employee where the keys of the stationer,' cupboard are means that the employer is committing an offence under these provisions, rendering him liable to a fine of up to £5,000.
Once the right to maternity leave is incorporated into our law and into the relationship between employer and employee, I do not dispute the need to protect employees from exploitation or from being subjected to pressures by an employer to avoid or evade it. However, I think that in the clause as presently drafted the Government are using a shotgun and are taking no regard of what the employee may think is reasonable or proper. I beg to move.
Lord McCarthy: I hope that the Government will resist this amendment. If it were accepted, it might reasonably be called the "It's up to you" amendment. if the law states that an employer shall not permit an employee to do something, it is the responsibility of the employer to ensure that it does not happen, and if it does happen, that is the employer's responsibility. An employer cannot say to an employee, "It's up to you. If you would like to help me and to be co-operative, you will come in on Sunday". That is not what the noble Baroness wants. She wants the Bill to state that an employer "shall not require". In other words, the employer can say, "I don't require you to do this, but it would be very nice if you did". That is the same as saying, "It' s up to you". Those who know anything about the balance of power between, for example, employers and their secretaries know exactly what pressures employers put on secretaries when they say, "It's up to you". So I sincerely hope, if this is to mean anything, that the Government will not accept the amendment.
The Earl of Mar and Kellie: My Amendment No. 246A is grouped with these amendments. The amendment sets out to define what is meant by the word "remuneration". It would include childcare vouchers, luncheon vouchers and holiday stamps. This amendment has been suggested to me by the Law Society of Scotland. It is a probing amendment and has the aim of soiling out the ambiguity over which employee benefits constitute

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pay and which do not. Absolute parity on this issue will be essential for those who have to implement the provisions of this Bill when enacted.
Lord Sainsbury of Turville: These amendments relate to different aspects of maternity provision and so I will take each of them in turn. Amendment No. 246 relates to compulsory maternity leave. I am somewhat surprised by the concern which this provision has generated both here and in the other place. The compulsory maternity leave provision was put in place by the previous administration to give effect to the Pregnant Workers Directive which required member states to introduce a period of compulsory leave for women around the time of childbirth.
In 1994, when the directive was implemented, this requirement was translated into a ban on women working during the two weeks following the birth, coinciding with the period when most women would be on maternity leave. I doubt whether many women are keen to return to work within two weeks of having a baby, but if the onus is on the employer to ensure that the employee does not return to work within this period, the employee cannot be pressurised to return to work immediately after childbirth and cannot be forced to bear any additional strain of having to assert her rights at such a busy and stressful time.
We do not intend to change this safeguard. It is a health and safety provision, applicable in circumstances where there is a real risk to women's health. We believe it is entirely right that women should be afforded the maximum protection during this time.
Amendment No. 246A seeks to ensure that a partial definition of "remuneration" is included in the Bill itself. The right to remuneration is the element of a woman's terms and conditions of employment which will continue during ordinary and additional maternity leave only if her contract provides for it to continue during this period. It is generally regarded as the monetary element of a woman's wages or salary, the element which is normally replaced by statutory maternity pay or maternity allowance.
The definition of "remuneration" is not easy, especially given the wide variety of remunerative benefits available to the workforce in a modern economy. The amendment lists three possibilities: childcare vouchers, luncheon vouchers and holiday stamps. I am sure that others would suggest more along similar lines, and we would be very reluctant to put such a precise definition on it at this stage, if at all. However, we are committed to consulting on this issue and will be in a better position to judge what the definition should be at the end of the consultation period. I hope I have clarified our thinking on these two issues, and in doing so, I hope I have persuaded the noble Baroness and the noble Earl to withdraw their respective amendments.
Baroness Miller of Hendon: I will accept the Minister's suggestion, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 246A not moved.]
4.45 p.m.
Lord Meston Lord Meston moved Amendment No. 247:
Page 64, line 17, at end insert—
("() The Secretary of State shall make regulations entitling an employee to leave when a child is lawfully placed with that employee for adoption for periods and on terms and conditions (including remuneration) equivalent to those to which an employee would be entitled in the event of maternity.")
The noble Lord said: In paragraph 5.23 of the White Paper, Fairness at Work, the Government recognised that parents who adopt a child have no statutory right to take leave from work. They also recognised that adoption is valuable for society and also that adoptive parents have as much need as others to spend time with their children. In the same paragraph, however, they went on to say that the Government did not intend that adoptive mothers should have the same maternity rights as birth mothers. Other countries in Europe do provide paid leave for adopters and indeed a few firms in this country also do so. Presumably those employers who allow paid adoption leave recognise the importance of retaining staff who want to take time off for adoption purposes and recognise that only very few will wish to take advantage of the benefit offered.
They must also be taken to recognise the wider social value of adoption to the community, not to mention the cost benefits of taking children out of care and into permanent families. Apparently the Government's reason for distinguishing between maternity provision and adoption is simply that maternity provision exists to protect the health and safety of mothers and babies, which does not apply in respect of adoption. While it is true that there are health considerations underpinning maternity rights and benefits, that is a limited and insufficient justification, I suggest, for excluding adopters' equivalent rights. By the use of the word "equivalent", I do not argue for identical rights, but prospective adopters should not be discriminated against. Both natural and adoptive parents have to give that most valuable of all commodities to the children for whom they become responsible; namely, time.
The process of adoption is hazardous and demanding, even though the hazards and demands are not the same as those of maternity and natural parenthood. A successful adoption requires skilled preparation and prospective adopters have to go through rigorous procedures. Even if the adoption is uncontested, there is the requirement for a child to be placed with them for a minimum of 13 weeks. They are scrutinised, assessed and reported upon by specialist social workers and the child's guardian.
At the end of this process and transition period, they have to attend a court hearing. They may then need post-adoption support. Above all, they have to bond with the child and to settle and integrate him or her fully into their own household and family. There may be residual difficulties with the child's natural parents to contend with. In every case the adopters will have to devote time and energy to meeting a child's individual needs and to forming the attachment which is needed to make the placement work. If it does not work, not only are the adopters profoundly disappointed but the child is let down yet again.
In this country there is a serious shortage of families willing and able to adopt. particularly those able to take on the children who are most in need of a stable placement within an adoptive family. They make considerable sacrifices to enter a long-term commitment with sometimes damaged children who have been let down by other adults, who all too often have been moved around within the childcare system. Some adopters do not always take on just a single child but may be prepared to take on siblings M order to give them a chance of being brought up together. The child or children they take on may have been abused and neglected, and will almost always be insecure after disruptive lives that most of us can only try to imagine.
It will help to encourage prospective adopters if those who are employed know that, apart from other sacrifices they may willingly make, they will not have to risk financial stress at an anxious time for the prospective adopters and at a critical time for the child concerned.
Adoption, as distinct from fostering, does not produce an automatic financial allowance. Suitable adopters are a precious and scarce resource. At present the adoption rate is falling and too many children remain in homes until released before they are adults, deprived of the family security which adoption would have provided.
This whole area of the Bill proceeds on the basis that loyalty to an employer need not conflict with loyalty to the family, while recognising that each can make demands on time and energy which have to be balanced and reconciled. Even if the adoption rate picks up, the proposal in this amendment will not affect many employers or employees. Those who would need or wish to take advantage of it will be far fewer than those who will claim the improved maternity rights given by the Bill. Those employees who make these sacrifices and commitments should not have to do so on unpaid leave or at the risk of losing their job. This amendment, or something like it, could do a great deal of good at minimal cost. The Government expressly claim to support families. By accepting the thrust of this amendment they will justify their claim. I beg to move.
Lord Sainsbury of Turville: I believe that adoption is valuable to society, and adoptive parents and their children of course need time to bond and adapt to their new circumstances. I recognise the situation the noble Lord describes, but we come from a slightly different direction.
The Bill marks a significant step forward by making it possible to establish for the first time a statutory right to parental leave for adoptive parents. The noble Lord suggests that natural and adoptive parents should be given parity in terms of maternity leave and pay. The maternity rights are designed to meet the specific needs of new and expectant mothers; they are special provisions, predicated on health and safety considerations specific to women who are about to give or have just given birth and for that reason are permitted under European equal treatment law.
The health and safety rationale does not apply in the case of adoption. Extending the rights beyond pregnant women, however deserving the case of an adoptive
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mother of a young baby, could be discriminatory if men were excluded, and to cover fathers as well could raise other issues. I think that that highlights that the two situations are not directly comparable. I ask the noble Lord to withdraw the amendment. Meanwhile, we shall continue with our consultation on the parental leave regulations which we can tailor to the special circumstances of adoption which he mentioned.
Lord Meston: I am glad to hear the Government reiterate the recognition that adoption is extremely valuable and that time is needed for a successful adoption. I also accept that the parental leave provisions give some opportunity which does not exist at present. But parental leave, as I understand it, is not to be paid leave.
I sought to suggest that the health and safety rationale which underlies maternity leave—I do not pretend that it is comparable with the requirements for adoption—nevertheless is an insufficient reason for discriminating against those who wish to adopt. I do not seek to repeat those reasons.
In opposing the amendment I suggest that the Government underestimate the difficulties facing adopters and the value of adoption at this time when more and more children are being retained in the care system. Looked at from the point of view of the wider good of society, this amendment, or something like it, should be given serious consideration. I do not propose to press the amendment at this stage, but reserve my position for later stages of the Bill. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 248:
Page 64, line 23, at end insert ("who is related to the employee as either a natural or adopted child or grandchild or stepchild or whom the employee has been appointed to foster or of whom the employee is otherwise in loco parentis,")
The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 249, 250 and.51A to 254. This group of amendments relates to that part of Schedule 4, principally paragraph 76, dealing with parental leave, which the Government describe in the notes as "new". That is why it requires some tidying up.
The amendments can be explained simply. Amendment No. 248 inserts a definition at the end of paragraph 76(1)(b) of what constitutes a child. It includes a child who is related to the employee in very broad terms: a natural or adopted child; a grandchild or a stepchild; a child whom the employee has been appointed to foster; a child to whom the employee is in loco parentis. Those definitions cover every item which could come within any reasonable definition of a child. The last one, someone to whom the employee is in loco parentis, would take care of special cases coming within a well defined legal concept. It ensures that an employee cannot take advantage of the limitless definition contained in the Bill as drafted. For example, temporarily looking after a sister's child while she goes off on holiday, or a next-door neighbour's child while

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she is in hospital, may be commendable and neighbourly but not at the employer's expense and inconvenience and possibly to the detriment of his business.
Amendment No. 249 makes clear that the parental leave is unpaid. This follows the assurance from the Government in the Explanatory Notes, on page 39 at paragraph 160, that,
"the employment contract will continue in existence during parental leave and the terms and conditions of employment, other than remuneration, continue to apply".
That is stated in the notes. The amendment clarifies the provision in the Bill.
Amendment No. 250 alters sub-paragraph (4). Paragraph 76 states that the Secretary of State shall make regulations regarding the operation of parental leave. Paragraph 76(2) states that the regulations "shall" include provision about entitlement to parental leave and when it may be taken. Paragraph 76(3) states that the regulations "shall" contain certain provisions in the employee's interests. The word "shall" appears in all three cases. However, when we turn to the important sub-paragraph dealing with when the leave may be taken, it is entirely permissive as to whether there is reference to the child's age or on what date or event the entitlement starts. I believe that it is pointless to allow the starting date to be left up in the air. Unless the age or event is specified, someone could claim leave when their child is already in full-time schooling, or later. I shall return to that possibility later. As the earlier parts of the paragraph are mandatory, I believe that the short descriptive paragraph must be consistent, and likewise must be mandatory.
Amendment No. 251A has been slightly altered since it was first tabled as Amendment No. 251. It originally stated:
"not extending beyond school leaving age".
That was due to a slip of the pen (or perhaps more accurately a slip of the keyboard) for which I apologise. The amendment now reads,
"not extending beyond the child's 5th birthday unless the child has special needs".
Clearly, unless we put some cap on the closing date for parental leave, we may find that people try it on and attempt to take leave when the child is quite old enough to look after himself or herself to a certain extent. Why should an employer be burdened with parental leave when, for example, the child is 10 years old? The directive on parental leave puts a cap at the age of eight years. There is no reason why the Government should not follow suit unless they are planning to do even more gold plating—to which we shall come later.
I believe that it would be safer if the Secretary of State had some constraint in the Bill. In paragraph 159 of the Explanatory Notes the Government claim that sub-paragraphs (2)(b) and (4) will,
"enable the regulations to set the maximum age … in respect of [when] parental leave may be taken".
Why should the Secretary of State not bite the bullet and tell us now what he may have in mind?
Paragraph 159 of the Explanatory Notes states that the maximum age,
"could be below 8 years, the upper limit specified in the Parental Leave Directive".
The phrase is "could be" rather than "will be." Since the Government appear to indicate that they might go for an age lower than eight, I take the liberty of suggesting a figure. That is why I propose the age of five. I think that eight is more in line with the school starting age for children on the Continent. If it is reduced in that way, I believe that it would reduce the burden on small and medium-sized enterprises.
Amendment No. 252 alters sub-paragraph (5)(e) so that as well as specifying the minimum period of parental leave, the regulation should specify the maximum. There can be no case for an open-ended entitlement. The Committee will have noted that sub-paragraph (5) is permissive. The Secretary of State may refer to various qualifying matters relating to parental leave, so there is no obligation on the Secretary of State to stipulate a minimum period of leave. However, if he does so, he should also specify the maximum. Fair is fair, as I said on earlier amendments, especially when the Government have claimed that they will be even-handed.
Amendment No. 253 is self-explanatory. When making his regulations, the Secretary of State should have regard to the needs of the employer and his business as well as to the wishes of the employee. That is no more than is allowed in the directive, as I shall mention on a later amendment. There is no reason why the Secretary of State should tie his hands or deprive himself of the right to take a very relevant factor into consideration when the directive unequivocally gives him some direction.
Finally, in this group, Amendment No. 254 modifies paragraph 79(1)(b), which empowers the Secretary of State to require employers to keep records. It does not say records about what, but I have to assume that it means when an employee has taken parental leave. I have proposed that records maintained for tax and other statutory purposes may be made use of. They may not be entirely sufficient on their own, which is why in my amendment I have simply stated "made use of'.
What we do not want is to have a requirement for another lot of form filling to be imposed on businesses, which is often a burdensome requirement for very small businesses. When I proposed a similar provision in the National Minimum Wage Bill as it passed through your Lordships' House, it was vigorously shot down by the Minister in charge. but, nevertheless, the regulations made under that Act specify that tax records may be used for the purposes of establishing the hours worked and the wages paid.
It is clear that the Government will follow the course proposed in the amendment sooner or later, so I believe that they could save a lot of time and make the change now. I beg to move.
5 p.m.
Lord Tebbit: I am minded to support my noble friend in these amendments. I do not wish to waste the time of the Committee by reiterating the arguments she made, but I wish to raise two issues which do not appear to he clear. I say "appear to be clear" because the Bill is enormously complex. That is because it is an intrusive Bill and many Members of both sides of the Committee believe that there is a degree of complexity, perhaps driven by the draftsmen and the lawyers, to bottle up every conceivable variation of circumstance and noble purpose. But, of course, they will fail. Sooner or later, someone will find something in this.
My question relates to the leave, which I understand is to be unpaid. How does it affect the employer's liability to contribute to pension schemes? Does the employer have to continue to make contributions? Where the employee's leave is unpaid, is he eventually at a disadvantage in the pension scheme if he does not make the contribution, despite the fact that he is not being paid during the period off work? How does it affect the entitlement to annual bonuses? Is it to be expected that the employer will be under some obligation to pay a full annual bonus to those who are taking leave under the provision of this Bill, which is unpaid? It would be helpful if the Minister could give us. as best he can, the answers to those questions.
Lord Sainsbury of Turville: This group of amendments focuses on the details of parental leave. I am pleased to have an opportunity to set out our thinking on these issues.
Of course, there is always a balance to be struck between clarity, for which we are striving, and covering the aspects in proper detail. In this regard, we have tried to meet the issue by establishing the principle and covering the more detailed aspects in regulations. However, I agree that it is always necessary to try to hold that balance.
I know that the noble Baroness raised many of these points out of her concern for the regulatory impact upon business. I can assure her that we take these matters seriously. My right honourable friend the Secretary of State for Trade and Industry has decided to take a new approach with the parental leave regulations. He intends to operate with a light touch and to place emphasis on encouraging employers and employees to agree between themselves the arrangements which best suit them.
The Bill reflects this approach by providing for collective and workforce agreements to "opt out" of the details of the regulations. Our intention is to set out the basic right to parental leave in the regulations and to provide a fall-back arrangement which will automatically take effect if employers and employees cannot agree on, or do not wish to make, their own arrangements. This approach has gained the support of both sides of industry. We shall be consulting further on the details of the fall-back scheme.
I now turn to some of the detail raised. What should be covered is a key question. Amendment No. 248 suggests that natural and adopted children, grandchildren, stepchildren, foster children and children
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placed with other adults who are in loco parentis could and should benefit from those responsible for them being able to qualify to take parental leave. In doing so, it highlights the various family circumstances in which children grow up and underlines just how important parental leave could be to a large slice of the workforce involved in bringing up the next generation.
We are considering these matters very carefully. Our intention is to cover those responsible for caring for a child and for the Secretary of State to use the power set out in the Bill to specify what counts as such responsibility in the regulations. We need to arrive at a definition which is effective, but simple for employers to operate.
Amendment No. 249 is concerned to ensure that employers are free of any doubts that parental leave is to be unpaid. We are absolutely clear, and have been from the outset, that there will be no requirement for employers to pay parental leave. The Bill provides for that.
Unlike new Sections 71 and 73 of the Employment Rights Act, which appear in Chapter I of Schedule 4 to the Bill and relate to maternity leave, new Section 76, relating to parental leave, does not itself confer a right to leave. It provides for the Secretary of State to make regulations which will in turn provide for a right to parental level.
New Section 77, which appears on page 65 of the Bill, requires that these regulations should provide for an employee's terms and conditions of employment to continue to apply while the employee is on parental leave, although only to such extent as may be prescribed in the regulations. That covers the point raised by the noble Lord, Lord Tebbit, as to the balance between remuneration and other aspects of terms and conditions which will there be specified.
Further down the page, subsection (2)(b) of new Section 77 states that the terms and conditions that are to continue—except to the extent that regulations do not exclude this—do not include terms and conditions about remuneration. Accordingly, there is no provision for employees to continue to be paid during parental leave. Any requirement for employers to provide paid parental leave would require new primary legislation.
Broadly speaking, Amendments Nos. 250, 250A and 252 deal with matters relating to how and when parental leave should be taken, and I will cover them together. The Bill enables regulations to be made setting out how and when parental leave can be taken. For example, we can provide for parental leave to be taken before the child reaches a certain age, for it to be taken flexibly or in blocks, spread out over a period of time or concentrated in a shorter spell, the intention being to arrive at a scheme which will be manageable for employers while still giving sufficient flexibility to employees. There is power in the Bill for regulations to allocate the amount of parental leave which can be taken to a given period and to require it to be taken as a single block.
I am aware that some employers do not want leave to be taken in dribs and drabs of a day or two at a time. Others would have difficulties if a key employee wished to take

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the whole three months at once. The important thing is that employers will have freedom to come to agreements with the workforce about these matters, either through collective, workforce or individual agreements.
On the specific matters raised by these amendments, our current thinking is to link entitlement to parental leave to the child's age or to a specific period of time starting, for example, from the adoption of a child. We do not envisage going wider than the criteria in subsection (4) of new Section 76 which Amendment No. 250 seeks to make mandatory. However, we believe that it is undesirable to rule out any option of doing so when we have not yet consulted on our proposals.
The Bill also allows for different provision to be made in different cases and we have been consulting the relevant agencies about the merits and drawbacks of varying the provisions in circumstances such as adoption or where there are special needs.
Amendment No. 252 would allow the regulations to prescribe a maximum period which may be taken as part of a period of parental leave. I have reflected upon that and consider that it could give us some useful additional options when drawing up the regulations. However, as drafted, it would require the regulations to set both minimum and maximum periods, which may not be desirable. We should at least consult on that. I hope that the noble Baroness will withdraw her amendment. This is the moment she has been waiting for. We accept the amendment in principle. The noble Baroness may miss her great moment if she is not careful. While she was talking, I was in principle accepting the point about the maximum. However, I made the point that we need to consult on the matter. On that basis, I hope that the noble Baroness will enjoy the moment and will withdraw her amendment so that the Government can bring forward a revised version on Report.
Amendments Nos. 253 and 254 seek to ensure that, in drawing up the regulations, we take account of the needs of business and, in particular, minimise the burden of record-keeping. The amendments set out important and sensible principles and I have described what our approach is to be.
Of course, we need to produce a set of fall-back regulations which are workable for both employers and employees. That is why we have worked closely with employers, including small employers, from the very beginning. The White Paper specifically sought views on the particular difficulties which small employers may face and how to alleviate them. Ministers have met representative employer organisations and will take careful account of their views. Employers have told us that they want record-keeping requirements to be kept to a minimum and we agree that it is a matter of good practice and common sense for them to draw on existing records where possible.
In particular, there are a number of provisions which will take account of the needs of business. For example, employers will be able to postpone parental leave where there are operational or business reasons for doing so. We shall ensure that the notice periods are adequate for the amount of leave requested; we shall aim to ensure that
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record-keeping requirements, if any, are not unduly burdensome; and employers and employees will be able to make arrangements which are particularly suited to their circumstances.
We are giving a great deal of thought to the wide range of views on those issues. We shall use the scope provided in the Bill to produce a fall-back scheme which is simple, flexible and workable for both employers and employees and which can be followed where they do not agree different arrangements. We shall consult on our proposals. In the meantime, I hope that the noble Baroness will agree to withdraw the amendment.
Baroness Miller of Hendon: I am indebted to my noble friend Lord Tebbit for tapping me on the shoulder at the appropriate moment so that I did not miss the very good news about Amendment No. 252. I have had two good pieces of news today, although I know that one of those is not necessarily set in stone. That is too much for me to ignore.
I shall read carefully what the Minister said about Amendment No. 249. If I understood him correctly, it appears that there may not be a problem. The Bill may already provide that it is "unpaid." In view of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments No. 249 to 250 not moved.]
[Amendment No. 251 had been withdrawn from the Marshalled List.]
[Amendments Nos. 251A to 255 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon had given notice of her intention to move Amendment No. 256:
Page 67, line 18, leave out from ("hours") to end of line 19 and insert ("on grounds of force majeur for urgent family reasons in case of sickness or accident making the immediate presence of the worker indispensable")
The noble Baroness said: I am slightly confused. In the circumstances, as my notes are together. I shall not move this amendment. I may return on Report to some of the amendments which have not been moved.
[Amendment No. 256 not moved.]
[Amendments Nos. 257 to 258A not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 258B:
Page 70, line 5, leave out paragraphs 12 and 13 and insert—
("12. In section 88(1)(c) (notice period: employment with normal working hours) after "childbirth" insert "or on parental leave".
13. In section 89(3)(b) (notice period: employment without normal working hours) after "childbirth" insert "or on parental leave".")
The noble Lord said: I hope that by making that small concession we have not totally upset the noble Baroness's afternoon. However, we are grateful for the speed with which we have dealt with those amendments.
This group of amendments deals with some small technical but complex changes to the Bill. The first amendment in the group remedies a small defect in the current drafting. Under existing provisions, an employee who has given notice while on maternity leave is entitled to be paid during the minimum statutory notice period,

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whether or not she was otherwise being paid while on leave and whether the maternity leave itself was statutory or contractual. That is in line with the treatment of notice in other cases where an employee may be on unpaid leave, such as sick leave. It ensures a minimum level of protection for an employee whose job is terminating and so underlines the purpose of the statutory notice provisions.
In line with that purpose, in Part III, paragraphs 12 and 14 of Schedule 4 are intended to extend the protection to employees who may be absent on parental leave during a notice period. In doing so, however, they have inadvertently narrowed the protection to those on statutory, as opposed to contractual, maternity leave. The amendment rectifies that defect.
Amendments Nos. 259 and 298 are related, so for simplicity I shall take them together. These are small technical amendments which take into account an amendment made to the Employment Rights Act 1996 by the Employment Rights (Dispute Resolution) Act 1998 which we had missed. Paragraph 21(2) of Schedule 1 to the 1998 Act inserted into Section 1 18(1)(b) of the 1996 Act a reference to a new Section 127A. This amendment takes account of that insertion in removing from Section 118(1)(b) the reference to Section 127, which the Bill repeals.
Section 127 deals with compensation due where a woman who qualifies for the statutory right to return during the period of 29 weeks after the end of her maternity leave is unfairly dismissed at or after the end of her maternity leave. The section is being repealed in consequence of the repeal of the other provisions of the Employment Rights Act relating to the right to return.
Amendments Nos. 260 and 299 are also related. Paragraph 46 of Schedule 4 provides for the omission of Section 227(4)(a) of the Employment Rights Act 1996 and the word "but" immediately following it. However, that is already achieved by means of Clause 31(1)(a) and so is unnecessary. Amendment No. 260 therefore omits paragraph 46 from the Bill.
As regards Amendment No. 299, the previous amendment left out paragraph 46 from Schedule 4 to the Bill because Clause 31(1)(a) already achieves the same effect. Lines 13 and 14 of page 90 of the Bill reflect paragraph 46 of Schedule 4 and are also unnecessary, hence Amendment No. 299 to remove them. Amendment No. 260A removes an inconsistency in the Bill. The Government gave an assurance in the other place that the regulations would be subject to the affirmative resolution procedure to allow further opportunity for proper scrutiny and debate, and the Bill was amended accordingly. However, the powers relating to detriment and dismissal remain exercisable subject to the negative resolution procedure. By making these powers also subject to the affirmative resolution procedure, we are ensuring that all the powers relating to family leave can be exercised in a single instrument so that users of the regulations can find them all in one place.
I commend the amendment to the House on the grounds that it aids both consistency and simplicity. I beg to move.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 259:
Page 71, line 8, leave out from ("general)") to end of line 9 and insert ("omit ", 127"")
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 260 and 260A:
Page 72, line 25, leave out paragraph 46
Page 72, line 29, leave out paragraph 48 and insert—
("48.—(l) Section 236 (orders and regulations) shall be amended as follows.
(2) In subsection (2)(a) after "order" insert "or regulations".
(3) In subsection (3)—

(a) after "and no order" insert "or regulations",

(b) for "72(3), 73(5), 79(3)," substitute "47C, 57A. 57C, 71, 72, 73, 76, 81, 99,", and

(c) for "or order" substitute ", order or regulations"")

On Question, amendments agreed to.
Schedule 4, as amended, agreed to.
Clause 10 [Right to be accompanied]:
Lord Meston Lord Meston moved Amendment No. 261:
Page 5, line 11, at end insert (", and
(d) is to he permitted to take a written record of the hearing")
The noble Lord said: This is the beginning of a large group of amendments. I therefore wish to speak first to Amendment No. 261. Clause 10 provides for a worker's right to be accompanied in certain circumstances. The limits of that right will be discussed in relation to other amendments.
Clause 10(2) specifies that a person accompanying may address the disciplinary or grievance hearing and that he or she may confer with the worker during that hearing. The amendment modestly proposes that it should also be expressly stated that the companion may take a written record. The amendment is the product of too many hours in employment tribunals arguing about or seeking to establish what was or was not said during a disciplinary or grievance hearing.
These hearings can turn out to be of considerable significance in subsequent proceedings. Given the fallibility of human memory, there is no substitute for a good contemporaneous record. I recall one case in which a line manager would not allow an employee to take any sort of note of a critical meeting. I recall many more in which the employers had someone present taking a record which was later typed up and, later still, sent to the employee for agreement or comment even though that note was plainly inadequate. For example, a disciplinary hearing which lasted for well over an hour was reduced to a few short, inaccurate paragraphs. Yet that may be the only written record for appeal or tribunal proceedings which may take place months or even years later. The amendment would therefore add the taking of a written record to the list of the minimum things the worker's companion may do.
Perhaps I may speak also to Amendment No. 266 within this group which stands in my name. The amendment provides that:
"The provisions of sections 10 to 12 of this Act are without prejudice to the ability of an employment tribunal when appropriate in the circumstances of a case to hold that a worker has been unfairly treated—

(a) if he was not permitted to be accompanied at any hearing by some other suitable person (whether or not a person mentioned in section 10(3)); or

(b) if his employer failed to provide any, or any sufficient, disciplinary or grievance procedure."

Clause 10 is based on a number of assumptions which do not always apply in practice. First, it assumes that there is a disciplinary or grievance procedure established or adopted within the meaning of Clause 13(4). Secondly, it assumes that there is a union official or fellow worker who is willing and able to accompany the employee. Thirdly, it assumes that an official or fellow worker is the appropriate person to be there in the circumstances.
The new clause may be misunderstood as suggesting that in other situations it will not be necessary, or even desirable, for employers in the interests of fairness to allow other people to accompany the employee. In reality there may be situations in which the employee wishes or prefers to have present an interpreter, a relative or some other outside adviser. To give examples, in a non-disciplinary context when a dismissal on health grounds is being considered there may be a medical adviser who could be there. A disabled employee may want a carer to be there. Another employee may need to discuss or explain personal difficulties and he or she may reasonably not want those known about by other colleagues, but instead may want the moral support or practical assistance of a close friend or relation.
In other cases, if a disciplinary charge involves an allegation of criminal behaviour, a legal adviser may be appropriate. Even in the non-disciplinary context of potential redundancy, a legal or other adviser may be appropriate. I particularly remember a tribunal case involving a large employer intending redundancies who interviewed the potential candidates for redundancy. What the employees did not know was that the employers had a team of lawyers listening in the next room and, from time to time, one of the employment team would go outside and take advice. There may not be anything particularly sinister in that but it did not seem fair or open towards those whose jobs were in jeopardy.
The purpose of the amendment is to emphasise that there may be other situations outside the limits defined in Clause 10 and 13 in which it would be fair to permit the employee to be accompanied.
I recognise that the government amendment, Amendment No. 267, makes some changes to Clause 13. However, the word "directly" remains in the clause and I wonder what that word adds. I should also like to ask, if I may anticipate Amendment No. 267, whether internal appeals, after the initial disciplinary hearing, are
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covered by the new wording. If so, would it not be better to say so clearly, and if they are not intended to be covered, why not?
I am also conscious that Amendment No. 266A, tabled by my noble friend Lord Mar and Kellie, also proposes a different version of Clause 13(4). In that context and in anticipation of what the Government might say, perhaps I may ask the Government: what is the basis for restricting the subject matter of a grievance as presently defined in Clause 13 to the performance of a duty by the employer to the employee? That is likely, in many cases, to be the problem, but the grievance will inevitably be defined by the aggrieved employee. It may not strictly concern the performance of a duty, especially if that phrase is to be narrowly construed. It may often concern the way in which the employer exercises a discretion. such as a grading, promotion or a location. Surely it would be sufficient to limit it to any grievance relating to the employment. Having said that, relative to several amendments, I beg to move.
5.30 p.m.
Baroness Miller of Hendon: I should like to speak to Amendments Nos. 262 to 265 and Amendment Nos. 268 and 269 in the same group. The first four amendments relate to the same subject; namely, the right of an employee to be accompanied at a grievance or disciplinary hearing. Clearly, that is only right and proper. However, the provisions of the Bill produce a number of undesirable situations. A number of lobbying briefs I have received from employers' organisations show a considerable concern on the employers' side—not that their employees should be accompanied, but that they should be accompanied by a person with some trade union status or a colleague from the same firm.
Amendment No. 262 stipulates that the trade union official who may accompany the employee shall be a full-time union official. That does not exclude a shop steward employed by the same employer, who will be qualified as,
"another of the employer's workers",
under subsection 3(b). The Bill as drawn enables a shop steward employed by one employer to accompany an employee employed by another employer. It is then not too much of a stretch of the imagination to find a shop steward who has gained a reputation as a successful advocate on behalf of employees being in constant demand to represent other employees. One might ask: what is wrong with that? Perhaps the employer of that shop steward will find himself constantly having to give him time off as a travelling advocate. As the Bill is currently drafted, that shop steward (or other person) may not suffer any detriment or be dismissed on account of his frequent absences from his workplace. That is a consequence of the wording,
"whether of the same employer or not",
which Amendments Nos. 264 and 265 seek to rectify. Otherwise an employer will find himself having to subsidise this travelling advocate and possibly having to employ someone else in his place.

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In fact, the provision about not suffering any detriment contained in Clause 12(1)(a) is in direct contradiction to what the Government said in paragraph 184 of the Explanatory Notes, which says,
"An employer will not, however, be required to pay his employee for time taken off to accompany another employer's worker".
The Government have not implemented that promise. As drafted, the Bill would prevent the uninvolved third party employer from docking the advocate's pay for time taken off. My two amendments rectify that position.
Amendment No. 263 inserts another paragraph at the end of Clause 10(3). It provides that the union official shall be a member of a union actually recognised by the employer, if there is such a union. It deals with the problem which arises if the employer has recognised one union and then another union tries to get in on the act. The broad definition of,
"an official of a trade union",
contained in Clause 10(3)(a) would pennit one union to attempt to intervene in a matter affecting a member of another union. That kind of attempted poaching can cause all sorts of inter-union strife, as we used to see in the past. We would not want the employer to be caught in the cross-fire.
I understand that a number of unions are equally concerned about this potential disruption to existing employer-employee relations and arrangements where an employer has reached a single union agreement giving a trade union exclusive individual and collective representation rights within what is called a "bargaining unit", as provided for by the Trade Union and Labour Relations (Consolidation) Act 1992.
I anticipate that the Minister may ask who may accompany an employee if no trade union official is available within the same workplace and there is no union recognised by the employer. In that case any union may he utilised by the employee. That is the difference. There is no reason why the employee should be left without an adviser if that is what he wants, but it means a totally uninvolved employer—an innocent bystander—would be drawn into a dispute involving another firm and possibly a competitor. The Bill provides for employees not to suffer detriment as a result of a grievance hearing, but in this Bill there is nothing to prevent an employer not involved in the dispute from suffering a detriment. That is another example of the imbalance of the Bill to which I have referred many times.
Before I speak to Amendments Nos. 268 and 270 I should like to comment on Amendment No. 261 moved by the noble Lord, Lord Meston. I support his amendment. The employer can have whomsoever he wishes with him and may even have a tape recording of the meeting. Obviously, therefore, the employee's representative must not be inhibited over any reasonable steps taken on behalf of the employee.
The Government's Amendment No. 267 is practically the same as our Amendment No. 268. They simply seek to ensure that the proceedings involving an employee at which he seeks to exercise his right to be accompanied at proceedings relate to a serious matter and not to some
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trivial matter. I can certainly accept the Government's amendment, but for one fact. There is a reference to "a" worker and not to "the" employer, even though that distinction appeared in the original clause. I should like to be assured that we are not talking about the possibility of a formal hearing being demanded by one worker on behalf of another who may not even want to complain.
Amendment No. 269 is reciprocal to the Government's Amendment No. 267. If there is to be a hearing about some grievance of the employee against the employer, it has to be clear that it shall be in respect of some serious matter and not something petty. We and the Government both agree about the issues covered by Amendments Nos. 267 and 268. That being so I trust that the Government have no difficulty at all with Amendment No. 269. We have no objection to Amendment No. 270.
Lord Gladwin of Clee: Clause 10 of the Bill seeks to put into statute part of the ACAS recommendations that have been used for a number of years. The Code of Practice: Disciplinary Practice etc (1977) states that, "Disciplinary procedures should", and lists a number of issues. The one to which I want to draw attention is (g), which states,
"Give individuals the right to be accompanied by a trade union representative or by a fellow employee of their choice".
Reference was made to that when the Bill was being debated on 9th February in another place when the Secretary of State, Mr. Stephen Byers, said,
"All individuals—regardless of the size of organisation for which they work—will be able to have someone of their choice represent them at a grievance or disciplinary hearing".—(official Report, Commons, 9/2/99; col. 132.)
My concern with these amendments is that they seek to restrict that right. Amendment No. 262, as the noble Baroness explained, seeks to insert the words,
"who is a full time paid official of a union".
Amendment No. 263 further restricts it by saying that if the company recognises a union, then the full-time paid official must be employed by that trade union. Amendments Nos. 264 and 265 seek to take away the possibility of other employees representing someone who is in the middle of either a grievance procedure or a disciplinary procedure.
An employee who is subject to a disciplinary procedure or is pursuing a grievance will need the most effective representation that he or she can obtain, particularly if it is a disciplinary issue where hi s or her livelihood is at stake. It is not necessarily a full-time paid official who will be the best person to represent that employee. In my experience it is often the local branch secretary or a lay official of the trade union who is far better equipped to represent an employee who is subject to a disciplinary procedure.
Many trade unions have very few full-time paid officials. They depend upon their lay elected officials to represent their membership when they go through either disciplinary or grievance procedures. Also, speed is important, particularly if it is a disciplinary process. I am bound to say that the availability of full-time officials is sometimes not immediate and so one has to

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rely upon lay officials. There are circumstances where neither a fellow worker nor a full-time official would be the most appropriate person to represent an employee who was subject to disciplinary action or who was pursuing a grievance.
I can think of a number of circumstances, which are quite usual these days, where a manufacturer has a number of contractors on site who are there virtually permanently. The employee is often not represented, but he wants speedy assistance and will often go to the shop steward, the convenor, of the host site.
My objection to the amendments is that they restrain the right of an employee to be accompanied and represented at disciplinary and grievance procedures.
Lord Tebbit: I find myself in the slightly odd position of having to agree with an amendment put forward by the Liberal Benches. However, we have had a few concessions from the Government Front Bench, which makes it a kind of holiday, so we may as well double it. I support the sentiment behind Amendment No. 261, although I have some concerns about it.
I recollect saying when I was a lay official in my trade union, in a moment of irritation when we came to consideration of the minutes of the previous meeting which had been provided by the employer's secretariat, that the minutes of a meeting should represent the lies which were actually told and not the lies which people subsequently wished they had told. I carried that thinking through to my days as a Minister. I would frequently insist, before people left my office after a difficult meeting at which we thought conclusions had been reached, that the conclusions should be written down in an aide mémoire, and that we should all read them and agree that that is what we thought we had agreed before the meeting finally broke up. It is important for the avoidance of unnecessary future disputes.
Amendment No. 261 only refers to a written record of the hearing, and it might be implied that Parliament did not intend it to cover an electronic recording of the hearing. I should like to hear from the Minister whether that is likely. I have always found that lawyers say that if you include one bit of detail, there is an implication that the other bits, which might have been there but were not, are specifically excluded.
I also agree with the intention behind the other amendments, but I hope that they cannot be held to exclude a lay member of a union accompanying the person who is the subject of the disciplinary action.
I am still a member of the British Airline Pilots' Union. That union has very few paid officials. Most of the work is done, and done in my view much better, by lay members. I would not want to see in the legislation a situation whereby they were not allowed to represent and support a member who is appearing in disciplinary proceedings.
As I listened to noble Lords, it went through my mind that we should thank the Lord that the Government are not putting into law the marriage service. My goodness; just imagine the length of the schedules, the
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amendments and the discussions as to the meanings! Indeed, it has worked rather well on the whole, and I do not think it would have worked any better if it had had 75 pages of legal jargon stuck on the end of it; nor will the Bill.
Lord McCarthy: It may be working very well, but it is being used less and less.
I hope that the Government will accept Amendment No. 261. As the noble Lord, Lord Meston, stated, frequently there is no agreed record of tribunal proceedings and no right of the representative of the employee to compile an independent record. The noble Lord, Lord Gladwin, read from a 1976 document, but that does not state that an individual worker has a right to a representative and that that representative has a right to write, nor is it found in a more recent publication, the employment handbook of ACAS. Most people with any real experience and feel for this subject would never deny the right of a worker to have a representative, nor would they deny the right of that representative to write and give their account. Perhaps the authors of these handbooks assumed that it was a natural thing. It is time that it was put into the law, and I hope that the Government will do that today.
Baroness Gardner of Parkes: I have sat for 20 years in an industrial tribunal. In theory, I agree that it is a good idea that the representative should take a note. I agree with the noble Lord, Lord Meston, that it would be helpful to the tribunal to have those notes.
However, a major problem is that if someone is slowly and laboriously scribbling away it will inhibit the proceedings and the flow and interchange. The noble Baroness, Lady Miller, suggested a tape recording which could later be transcribed. That is a good idea. In a number of hearings, verbatim reports have been prepared from tape recordings and there has been no argument about it. Where, however, people have different notes, very often those notes do not agree.
In my capacity as chairman of a charity, a case was brought against the charity which was very interesting because it was a very different experience from sitting and hearing cases. In that instance the employee flatly refused to sign any text of any meeting that we produced. She was very much a loner and refused to have anyone with her. We asked her to sign the note to say not that she agreed with it but that it was a correct record of the meeting. She would not sign anything because someone had told her not to sign anything. It was an impossible situation.
The most difficult situation occurs before commencement of the disciplinary or grievance procedure, for example when someone is called in for a general discussion about their affairs and is asked if they would like to bring someone with them. They automatically think that it must be really serious. Very often, what begins as a consultation between the two parties progresses to either a grievance or a disciplinary procedure. In those circumstances the meeting should be suspended and the resources that are set out here should

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be offered. The transition between a general discussion on employment and the formal procedure is not fully covered in the Bill.
No matter how much detail you put down to cover these things, they never quite work in the way intended. Although every detail is here, there will still be something which will be defective. I would be worried about people taking notes in such a slow and laborious way because it would hold up proceedings. That is why I was hoping that there might be some agreement for having tape recordings, which could be transcribed later.
Lord Wedderburn of Charlton: Underneath many of the comments made by Members of the Committee is the question whether there must be a grievance or disciplinary procedure. As I understand it, the Bill does not go that far. Nevertheless, because we discussed this last year during the proceedings on the previous Bill on dispute resolution, the noble Lord, Lord Meston, will know that there is authority in the courts. I believe that the latest effusion was in 1995. However, it is possible that the Minister has some other authority or that he wants to get rid of it. I have in mind the case of Goold v. McConnell. According to the head-note, the Employment Appeal Tribunal held that the authority was,
"an implied term in a contract of employment that the employers will reasonably and promptly afford a reasonable opportunity to their employees to obtain redress of any grievance".
There are also remarks about disciplinary procedures, but the case is not concerned with them directly. However, if that be right and, if, in a general sense, there is an implied term that the employee has a right to a grievance procedure, it is likely that the courts will go a little further. Indeed, at the end, the judgment says:
"The breach [of the contract] is the failure to provide or operate a proper procedure",
and that was a continuing breach. There is talk about proper procedure and, obviously, in the next case one might predict that the nature of a proper procedure would be looked at by the court and that questions such as keeping a record would have some impact in that respect. I can imagine a case where a number of the elements of a grievance procedure addressed today might be taken further as a matter of implication in the contract of employment.
I am neither advocating nor speaking against this at the moment. I simply ask the question: will the new Bill operate side by side in the perspective of the Government, and indeed of other noble Lords who have spoken, with a set of clauses which assume that there is some kind of grievance procedure? Perhaps I may express an opinion and say that I do not believe that that is the most sensible way to proceed. We would perhaps have fewer clauses and paragraphs if we had a short section in the Bill which stated that there should be such procedures. Of course, that is a personal view, which the Government may well have considered and rejected. However, if they had rejected it, did they want in any way to obstruct the precedents, which are now bound to follow the Goold case of 1995?
The Earl of Mar and Kellie: As the last two speakers both touched on the substance of Amendment
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No. 266A, which is tabled in my name, perhaps I ought to speak to it now. This is another amendment brought forward by the Law Society of Scotland and it has been trailed, with approval, by my noble friend Lord Meston.
The amendment sets out to clarify and extend what the Bill implies about disciplinary and grievance hearings. As presently drafted, the Bill would allow an employer who does not have a disciplinary or grievance procedure, or an employer with an informal procedure, to avoid responsibility under Clause 10. The amendment redrafts the Bill so that art employer who invites an employee to a meeting or to a hearing with the purpose of resolving a grievance or adopting a disciplinary procedure qualifies for Clause 10 purposes, irrespective of how the meeting was formally described. I believe that there is ambiguity here which needs to be removed from the Bill.
Lord Simon of Highbury: I should like to begin by thanking all Members of the Committee for agreeing to the grouping of these amendments, which has been most helpful. The right to be accompanied, a most important individual right, is tackled through Clauses 10, 11, 12 and 13, and we have been able to link all the issues involved.
However, perhaps I may make two or three points in introduction to the issue of the right to be accompanied. As noble Lords on both sides of the Chamber have stated, this is a crucial individual right and I am not suggesting in any way—nor, indeed, are the Government—that procedures within companies do not exist. In fact, about 90 per cent of companies do have procedures for grievances and disciplinary matters which permit accompaniment at hearings. We are talking about the minority which do not and the fairness of that position.
I should also mention that there is a very good provision already included in the ACAS code of practice on disciplinary practice and procedures in employment. I believe that the code works well for both employers and employees. It is a good balance and it is easy to follow. The effect of the clause is to give the code the force of law and extend it to cover grievances about serious issues. Although I am not strong on case law, I should like to point out to my noble friend Lord Wedderburn that I believe the code of practice runs in parallel with the Bill so that procedures exist which are parallel to the legal structures for actually sorting out matters, if I may put it in layman's terms. However, we may return to that debate.
I should also like to point out to the noble Baroness, Lady Miller, that we have taken care in these clauses to avoid imposing unnecessary burdens on employers. We are certainly not going to permit trivial or minor issues to come under the scope of the new right. Moreover, I should like to make it clear that there is no obligation on chosen individuals who are trade union representatives to accompany workers to disciplinary or grievance hearings. However, those who choose to do so and who are employed by the same person as the worker who is to be accompanied will have the right to be paid for time off in line with the existing provisions of the 1992 Act. There is no right to paid time off if the

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accompanying person is employed by another employer. That is absolutely clear. We are staying with the terms of the 1992 Act, with which Members of the Committee are very familiar.
Perhaps I may speak, first, to Amendments Nos. 261 to 266. Amendment No. 261, which was moved by the noble Lord, Lord Meston, seeks to add to the permitted functions of the accompanying person set out in Clause 10(3); in effect, to permit the accompanying person to take a note of the hearing. That was supported by the noble Lord, Lord Tebbit, and by the noble Baroness, Lady Miller.
I can see that the Committee is anxious to ensure that the rights and responsibilities of individuals are made clear. There is nothing on the face of the Bill to prevent either party to a hearing from taking a written note of the proceedings. To do so is good practice. I dare say that there are cases where the record is neither totally honest nor totally complete but that is a matter of good or bad practice, if I may say so. We believe that the taking of a written record is a good practice. I dare say that it is practised at the majority of hearings already. We want to encourage the practice. However, I am sure the Committee will agree that the correct place to foster such practice is not on the face of the Bill but in the code of practice on this right. I refer to electronic recordings in this regard. The amendment, as drafted, would not cover that situation and that would entail us in a discussion of what exactly comprises a record. I do not believe it is right to discuss that on the face of the Bill although I readily concede that the objective that is proposed is a good one. We shall include it in the code of practice and give the appropriate advice. I hope that the noble Lord will agree that this is the best way forward and, on that basis, will withdraw the amendment.
I turn to Amendments Nos. 262 and 263 in the name of the noble Baroness, Lady Miller. The remaining amendments in this group seek to curtail the right of individual workers to exercise their right to be accompanied by their chosen companion—the word "chosen" is important—in matters serious enough to affect their livelihood. Under our proposals a worker can be accompanied by a fellow employee or a trade union representative employed by another organisation. As the noble Baroness made clear, Amendment No. 262 seeks to limit these outside trade union representatives to full-time officials only. The amendment, however, permits legal representation.
This issue has been debated in another place. I am glad of the support of the noble Lord, Lord Gladwin, and other colleagues. It remains the Government's view that such an amendment seeks to curtail a worker's right to be accompanied by his or her chosen companion. Few trade unions will have the resources to assign a full-time official to accompany every worker who wishes to be accompanied. Therefore, if there is no local lay representation—the noble Lord, Lord Tebbit, made a strong point with regard to lay representation—a union member would be unable to draw on the services of his union to help him. Both the employer and the worker stand to lose as a result because—as I think the noble
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Lord, Lord Tebbit, implied—they would lose the experience and expertise that a union representative would normally bring to a hearing. It is important that that flexibility is conserved.
I know that the noble Baroness will probably say that she had a choice in mind; namely, a lawyer. While we are keen to provide good work for lawyers and to establish the right representative to accompany a worker in the situations we are discussing, I am worried about an increasing tempo of legalism in this area. We are trying to keep the matter as open and as flexible as possible. I know that it could be in the worker's interest to be accompanied by a lawyer but—
6 p.m.
Baroness Miller of Hendon: There is no mention of a lawyer. Amendment No. 262 states,
"who is a full time paid official of a union".
Lord Simon of Highbury: We are discussing Amendment No. 263.
Baroness Miller of Hendon: I refer to Amendment No. 262.
Lord Simon of Highbury: I beg the pardon of the noble Baroness if I have the wrong amendment.
Baroness Miller of Hendon: There was an amendment on the matter which was withdrawn. There is nothing about a legal representative.
Lord Simon of Highbury: That just shows how much I was "scarred" by the thought of having legal representation when that was unnecessary. I am extremely pleased that the noble Baroness has put me right.
Lord Wedderburn of Charlton: Does my noble friend agree that such research as has been carried out shows that involving a lawyer in a procedure does not increase the amount of legalism? On the contrary it is lay people in many cases who are suggested as being the culprits—if they are culprits—in these situations.
Lord Simon of Highbury: I am now disinclined to give an opinion because I was talking to an amendment that has been withdrawn. Perhaps this is a rabbit hole down which I should not go at the current time. However, I shall be happy to debate it at a later stage.
Lord Meston: Before the noble Lord continues I should say that in a sense I partly jumped on the bandwagon when I suggested that there were a few circumstances in which a lawyer might be appropriate, particularly where the employee concerned is charged with a serious criminal matter which is dealt with, first, in the employment context but is likely to proceed to a criminal court. In those limited circumstances there may

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be scope for him or her to be accompanied by a lawyer rather than someone else. I hasten to say that I do not seek extra work for my profession.
Lord Simon of Highbury: I thank the noble Lord for those comments. I think we can all agree that none of us wants lawyers to become involved unless that is absolutely de rigueur.
Noble Lords: Oh!
Lord Simon of Highbury: I am sorry; I withdraw that remark. Before I completely alienate a whole sector of this great community, I pass hastily on to Amendment No. 263. In tabling Amendment No. 263 I believe that the noble Baroness seeks to place further constraints on the category of permissible trade union representative. The amendment seeks to limit representation to a union recognised by the employer pursuant to this Bill; that is, under Schedule 1.
The amendment would deny many union members the right to be accompanied by an official of their own union and probably by any union official. One of the employment relations changes introduced by the previous government, which we have not sought to amend or repeal, is the right to belong to a union of one's choice. Members of the Committee opposite will know that simple membership of a union confers certain rights and services. Therefore, the right for individual workers to be accompanied in disciplinary and grievance hearings by a fellow employee or trade union representative of their choice underlines an important aspect of union membership.
It is frankly a little odd for the party opposite to seek to undermine that legislation—legislation with which this Government fully agree—by saying that where a worker is a member of a union, which is not the recognised union, that worker may not be accompanied by a representative of his or her own union. It is not realistic to expect that worker to be accompanied by an official of another union. The worker may not wish that official to accompany him or her and the recognised union may be unwilling to support workers who are not its members. Therefore, the net effect of the amendment is to take away potential support. The amendment seeks to limit the category of union membership available in terms of support in these circumstances.
Lord Tebbit: I am grateful to the Minister for his comments. In many ways I am inclined to agree with much of his argument, particularly that part which he does not wish to pursue which may tread on the corns of those in the legal profession. However, that is another matter.
As regards the matter we are discussing now, a number of employers now have single union agreements. They have been encouraged so to do by governments. What happens if there is a single union agreement and an employee wants to bring in someone from an outside union? Is that conducive to good industrial relations? I should have thought it was likely to cause dissent and concern.
Lord Simon of Highbury: The right we are trying to enshrine in the Bill is the choice of the employee. Normally, if a single union plant is involved, I imagine the employee would choose one of his own union members and that person would be a fellow employee or a full-time union official. However, I do not think that we should remove that choice. The matter is in the eye of the beholder. I think back to the complexity of the noble Lord's earlier argument and how he approved of the current form of the Marriage Act. It is a wonderful Act but I believe that there is still some concern about whether the word "obey" comprises a stand part clause. All of us will view the word!, that are used in different ways.
Lord Tebbit: This is another consequence of a Bill which intrudes so deeply into the workplace in legislative form. We may be setting up here something which is in conflict with what has previously been regarded as a rather good way of managing industrial relations; namely, to have a single union representing all members of the staff. I draw that danger to the attention of the Minister. I do not expect him to say that the Government have thought of a way round that, but I think there is a problem here.
Lord Simon of Highbury: We shall consider that point. However, essentially this is a hypothetical case and we must think about what happens in practice. I hope that codes of practice, good practice and the partnership between employers and unions, particularly in single union plants, will enable people to resolve these problems efficiently.
I turn to Amendments Nos. 264 and 265. The noble Baroness continues to direct her attention to the matter of the trade union representative and how to confine that, as it were. It is often the case that a worker's trade union representative is not employed by the same employer as the workers he represents even though there are single union plants in many areas.
Union branch structures are often very complex, covering more than one employer. So are corporate structures. Many employers can work from tie same premises as separate employer divisions of a particular company. It is therefore possible that a worker and his lay representative do not have a common employer. As I said earlier in the debate, the lay representative—perhaps a branch secretary—may be the obvious and best choice as the accompanying person, as the noble Lord, Lord Tebbit, underlined in his valuable contribution. The Bill enables such individuals to perform this function if they wish without fear of detriment or victimisation.
These amendments seek to remove the certainty of such protection. In effect, Amendment No. 26.4 opens the way for employers to penalise workers who help others in exercising a statutory right. Rather more difficulty attends Amendment No. 265 because it opens the way for employers to dismiss such workers. Both amendments allow employers to penalise individuals for carrying out their legitimate trade union functions.
Both amendments reduce the likelihood of workers being accompanied by experienced trade union officials. In our view, that is not likely to help either the

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employers or the employees and is likely to lead to more cases going to tribunals. I urge the noble Baroness to consider that matter and to withdraw her two amendments.
Perhaps I may now turn to the amendment of the noble Lord, Lord Meston, Amendment No. 266. This amendment would insert a new clause into the Bill after Clause 12. The clause would enable employment tribunals to hold that a worker has been unfairly treated if he was not permitted to be accompanied at any hearing by some other suitable person, regardless of whether he falls within the provisions of Clause 10(3) as written. The clause will also allow a tribunal to deem that a worker has been unfairly treated if his employer failed to provide any disciplinary or grievance procedure.
Although I believe the amendment has a supportive intent, I fear that far from supplementing and clarifying the provisions on the right to be accompanied, a clause of this kind would at best cast doubt on the clear existing provisions of Clauses 10 to 13; at worst it would probably present tribunals with a very real interpretative problem. The amendment is widely drafted and can have only one effect, which is to contradict the provisions of Clauses 10 to 12 by forcing every employer to establish a grievance and disciplinary procedure and to allow accompaniment at any hearing, whether or not the matter related to employment and regardless of how minor or trivial. It would also give power to tribunals to ignore the provisions of Clauses 10 to 13 and to decide on a case-by-case basis whether accompaniment should have been permissible.
Far from having a clear guide to their obligations under law, employers, workers and tribunals would be placed in a state of some confusion. That is undesirable as an outcome. At present the core aspects of the right to be accompanied are very clearly defined on the face of the Bill. The Government have made clear, both here and in another place, their intention to supplement the Bill's provisions in this area with a code of practice.
It is not the Government's intention to force employers to establish procedures. Neither this Bill nor the Employment Rights Act require an employer to have a disciplinary or grievance procedure—although, in a company with more than 20 employees, the latter requires that the employees have the right to be informed of any disciplinary rules and procedures in their initial statement of employment particulars. But there is no necessity to have an official procedure. Nor does the legislation require an employer who has a procedure to follow it and to invite workers to hearings.
If the noble Lord's concern is that employers who do not adopt procedures will be able to treat their workers unfairly and get away with it, I can assure him that his concern is unfounded. I am sure that the noble Lord is aware that tribunals take a very dim view of employers who do not try to resolve disputes internally. Employers who do not operate any procedures—I have said already that, from our consultations, we believe that 90 per cent do—may be much more vulnerable to claims of unfair dismissal and the infringement of other employment rights. Happily, most employers operate grievance and
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disciplinary procedures. Both sides of the House agree that that is very good employment practice. In framing this legislation, it is the Government's intention to build on good practice.
The effect of the Bill as currently drafted will be to encourage the further expansion of written procedures, but I am not sure that we will go as far as the breadth of this amendment. I hope that having heard my reply, the noble Lord will agree to withdraw it.
Perhaps I may now turn to Amendments Nos. 266A, 267, 268 and 269, which are concerned with the subject matter of disciplinary and grievance hearings. I will deal first with the amendment tabled by the noble Earl, Lord Mar and Kellie. This amendment has one simple aim: to ensure that the right to be accompanied applies to all disciplinary and grievance hearings without limitation. The result would be that precious few circumstances would be left where workers could not insist on accompaniment.
I do not know whether the noble Earl believes that workers should be able to insist on accompaniment at counselling interviews or exploratory meetings to discuss what are potential performance or disciplinary issues. We believe that that would cause disruption and inconvenience for managers. Having to permit and arrange accompaniment every time they wanted what I used to call the "Would you like to drop along to the study for a quiet word about this problem" meeting would make things a lot more difficult to organise. We all know that meetings along the lines of "A quite word" or "A word in your shell-like" are quite commonplace. I am sure we would all agree that it is a sensible way for managers, following ACAS advice, to deal with problems effectively at an early stage. I do not think that there is a need for the law to regulate every encounter.
The Bill achieves a sensible balance by ensuring that the right will apply only where a hearing could lead directly to an action taken against the worker. We have taken a similar approach in circumscribing the kinds of grievance that would fall within the scope of the right. We need to think through the consequences of widening it into more trivial or minor issues. I agree with the noble Lord, Lord Tebbit, that once we open up the definitions from the very tight ones in Clauses 10 to 13, a situation which is difficult to manage could develop.
It is not our intention to oblige employers to permit accompaniment hearings which do not form part of a procedure; we do not want a free accompaniment system; it is not our intention to permit accompaniment at hearings without the immediate threat of disciplinary action; nor is it our intention to permit accompaniment at grievance hearings where no statutory or contractual duty exists. Therefore, having framed it in as tightly and balanced a way between employers and employees as we can, I would ask the noble Lord to reconsider the matter and withdraw his amendment.
Perhaps I may turn now to Amendment No. 267, which I will move subsequently. The Government's point was made earlier when it was mentioned en passant by the noble Lord, Lord Meston, when he was speaking to Amendment No. 261. The Government have looked again at the wording of subsection (4)(a) of the

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clause which sets out the disciplinary hearings to which the right is to apply. We now come to the point of "directly" and "appeal". The right is to apply to hearings which,
"could result directly in the employer administering a formal warning to a worker or taking some other action in respect of him".
The Government are concerned that that wording might not permit a worker to be accompanied to appeal hearings. At the very least, we believe that it would open the way in its current form for lawyers to argue that it did not in certain circumstances allow appeal to be valid. The Committee is aware that appeals often occur after the disciplinary action has already been taken against a worker, and the appeal concerns upholding the decision to discipline the worker.
In those circumstances, it does not necessarily follow that the action will be taken as a direct result of the appeal hearing. Consequently, disputes might arise as to whether the appeal hearing met the criteria laid down in subsection (4)(a), and hence our changing of the clause to remove what I believe is an unwelcome ambiguity from the face of the Bill. For that reason I shall subsequently move the amendment.
I now turn to Amendments Nos. 268 and 269. They relate respectively to the meanings given by the Bill to disciplinary and grievance hearings. The rights will apply taking account of Amendment No. 267, to disciplinary hearings. That is the point of the words,
"confirmation of a warning issued or some other action taken".
That wording is clear and precise. It ensures that the right extends only as far as oral hearings in the course of disciplinary procedures at which the individual worker is required to be present and which could result in action being taken against the worker. In other words, counselling interviews and exploratory talks are excluded, as are trivial matters. I think it can be said that this amendment now handles the position of appeal and that it speaks in many ways to the issues put to me by the noble Baroness, Lady Miller, relative to her own submission on that point.
I turn briefly to Amendment No. 269. I am sure that it was the noble Baroness's intention in tabling such an amendment to add to the clarity of the face of the Bill by expanding on the form of words in subsection (4)(b). No doubt the noble Baroness believes that the existing wording is too wide and too vague and wishes to narrow the scope of the right considerably.
The form of words that we have used on the face of the Bill ensures that the right to be accompanied at a grievance hearing applies only to legal duties owed by an employer to his workers; that is, to his statutory, contractual or other legal duties, including potentially tortious duties. It does not involve any loose or informal obligation that the employee might feel is owed to him, such as the use of a particular space in the company car park—although in my experience that takes up a great deal of time. I believe that our wording achieves that purpose. I hope that the noble Baroness will be happy that our redefinition covers Amendments Nos. 268 and 269.
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That brings me finally to Amendment No. 270, which is concerned with contracting out of the rights conferred by Clauses 10 to 13 of the Bill. We have had many discussions on the issues. I am sure that we are all agreed that the right to be accompanied is a very important individual right. Indeed, my noble friend Lard Monkswell underlined that at Second Reading, when he referred to Clauses 10 to 13 as, "the parts of the Bill that will bite most effectively". I am grateful for his support in those terms.
But it is precisely because of the importance of this right to individuals that the Government consider it necessary to protect the right from restrictions on contracting out. The right to be accompanied is one of the few stand-alone rights in the Bill. In other words, unlike the majority of the Bill's provisions, Clauses 10 to 13 do not amend either the 1992 or the 1996 Act. Both Acts contain sections which effectively prohibit persons from opting out of their provisions or from waiving their rights to bring proceedings thereunder. The Government believe that it would be wholly undesirable to leave this key right unprotected from such restrictions on contracting out. We must ensure that individuals, especially the vulnerable, do not inadvertently or by coercion sign away their rights under these clauses.
The purpose of Amendment No. 270 is to close off that possibility. It does so by inserting a new clause into the Bill to ensure that this key individual right attracts the appropriate protections. The new clause achieves that by tying Clauses 10 to 13 of the Bill to the provision in the Employment Rights Act 1996 which limits the ability to contract out. I beg to move.
Lord Gladwin of Clee: Before my noble friend sits down, will he clarify a remark that he made? I understood him to say that 90 per cent of employers had disciplinary and grievance procedures, and that that had been established by consultation. I am bound to say that, given the experience that the noble Baroness, Lady Gardner of Parkes, and I have had on employment tribunals, on the Employment Appeal Tribunal and in industry, it is a very surprising figure. I am interested to know where it came from.
Lord Simon of Highbury: I thank my noble friend for his interest. First, I hope that Hansard will be right, in that I said 90 per cent of firms have established procedures. We have discovered that through consultation—not by consultation. In other words, the procedures are not achieved by the process of consultation; they may be, but that is not what I said. We believe, through consultation—talking to the CBI, looking at surveys, talking to union representation—that the level is something like 90 per cent representation of those procedures within companies. But if there is an element of doubt in my noble friend's mind, I am happy to give him the basis on which I made that statement. I have usually learnt to trust my officials when I speak at this Dispatch Box and I am not going to desert them now.
Lord McCarthy: Before the Minister sits down, the Government have said several times during the course

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of the passage of the Bill that there will be a code of practice. What kind of code will it be? There is the 1977 code of practice on discipline, and there is the 1987 ACAS advisory handbook, Discipline at Work. Will the code of practice cover the whole of discipline, both in this Bill and in other legislation; will it replace the 1977 code; or what?
Lord Simon of Highbury: The intention is to enhance the existing ACAS code on disciplinary matters.
Lord Meston: It is my intention to withdraw the amendment. We have had a useful debate on the rather slender back of Amendment No. 261. In the course of that debate, I have obtained a remarkable achievement in securing the support not only of the noble Lord, Lord Tebbit, and the noble Baroness, Lady Miller, but also the noble Lord, Lord McCarthy, altogether.
The amendment was based on a practical consideration, as the noble Lord, Lord Tebbit, identified; namely, that if it is at all possible there should be a prompt, accurate, agreed note of what takes place during these important hearings. I should not wish to stop electronic tape recordings being used as a matter of good practice. The purpose of the amendment is to suggest a minimum rather than a limiting factor. Of course, that will not rule out, as the noble Baroness, Lady Gardner of Parkes, said, the sort of squabbles with which she and I are all too familiar, even if there is a tape recording. I have taken part in a case in which the authenticity of a tape recording was the subject of lengthy squabbles. The Minister said that there is nothing to prevent a note being taken, but there is nothing to permit a note being taken either. It is important that it is laid down either on the face of the statute or in guidance.
The noble Lord, Lord Tebbit, suggested that it is possible to legislate too much and that the Marriage Act would be overburdened by too much prescriptive legislation. I spent a great deal of my professional life considering the validity of marriages. The noble Lord is right that one can legislate too much. The English Marriage Act provides that a man may not marry his grandmother; the Scottish Marriage Act provides that a man may not marry his great-grandmother, which suggests that perhaps the Scots are either very cautious or adventurous. I am not sure which.
My amendment was not in any way intended to constrain the important new provisions in Clauses 10 and 13. The noble Lord, Lord Gladwin, spoke about amendments to constrain. I hope that he did not include my amendment in his remarks.
As to Amendment No. 266, I understood, as I believe did the noble Lord, Lord Wedderburn, that the provisions were intended to give only partial statutory effect to the case of Goold. As the Minister said, the right to be accompanied can be absolutely crucial. I did not intend in Amendment No. 266 to cast any doubt on the utility of Clauses 10 and 13 or to force employers to have a procedure where one does not exist, although we all agree that it is good practice to have it. Towards the end of his remarks the Minister said what I thought
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he would say; namely, that in effect Amendment No. 266 was unnecessary. On that basis, I certainly do not intend to press it. However, I suggest that, although the Government have sought to improve Clause 13 and its width of application to disciplinary proceedings, there is still a case for some extension of the scope of the grievance hearings to be covered. That is perhaps something to which we need to return at a later stage. Meanwhile, I beg leave to withdraw Amendment No. 261.
Amendment, by leave, withdrawn.
[Amendments Nos. 262 and 263 not moved.]
Clause 10 agreed to.
Clause 11 agreed to.
Clause 12 [Detriment and dismissal]:
[Amendments Nos. 264 and 265 not moved.]
Clause 12 agreed to.
[Amendment No. 266 not moved.]
Clause 13 [Interpretation]:
[Amendment No. 266A not moved.]
6.30 p.m.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 267:
Page 7, leave out lines 40 and 41 and insert ("administration of a formal warning to a worker by the employer, the taking of some other action in respect of a worker by the employer or the confirmation of a warning issued or some other action taken, or")
On Question, amendment agreed to.
[Amendments Nos. 268 and 269 not moved.]
Clause 13, as amended, agreed to.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 270:
After Clause 13, insert the following new clause—

Employment Relations Bill

  CONTRACTING OUT AND CONCILIATION
  (". Sections 10 to 13 of this Act shall be treated as provisions of Part V of the Employment Rights Act 1996 for the purposes of—

  (a) section 203(1), (2)(e) and (f), (3) and (4) of that Act (restrictions on contracting out), and

  (b) section 18(1)(d) of the Employment Tribunals Act 1996 (conciliation).")

  On Question, amendment agreed to.
  Lord Razzall Lord Razzall moved Amendment No. 271:
  After Clause 13, insert the following new clause—

  DISCRIMINATION IN THE WORK-PLACE ON GROUNDS OF AGE
  (".—(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 age.
  (2) In subsection (1) "employment matter" includes—

  (a) the offer or refusal of employment;

  (b) the termination of employment;

  (c) terms and conditions of employment;

  (d) the provision of training or skills development opportunities;

  (e) promotion and career progression.

  (3) Regulations under subsection (1) may—

  (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;

  (b) confer jurisdiction (including exclusive jurisdiction) on employment tribunals and on the Employment Appeal Tribunal in relation to cases brought under this section;

  (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;

  (d) specify exceptional circumstances in which, in any proceedings arising under this section, it would be a defence for an employer to show, having regard to the nature and commercial viability of the business or undertaking in question, that—

  (i) it was reasonable for him, in deciding to treat one employee differently from another in relation to an employment matter, to take account of the respective ages of the relevant employees, or

  (ii) age was not a significant factor in any decision to treat one employee differently from another in relation to an employment matter.

  (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: Noble Lords will be aware from the behaviour on these Benches on the first day of the Committee stage and today that, by and large, the Liberal Democrats support the Bill and its purposes. Apart from the occasional interjection, which is intended to help, we have not chosen to replicate or duplicate the arguments advanced by the Government because, by and large, we agree with them. However, Amendment No. 271 reflects the first of three amendments that go to what we regard as a fundamental flaw in the Bill; namely, the failure to take the opportunity to do something about discrimination in the workplace.
  By way of introduction, I refer noble Lords on the government side to what I believe is mandatory reading; namely, the Labour Party manifesto in the 1997 election. Page 35 speaks in glowing terms of the equal rights of the citizen and states:
  "We will seek to end unjustifiable discrimination wherever it exists".
  The first area of unjustifiable discrimination which we anticipated the Government would seek to end is age discrimination in the workplace. I shall not bore the Committee by rehearsing examples of significant age discrimination. I believe it is common ground on all sides of the Committee that age discrimination exists as a serious problem in the workplace in regard to both existing and prospective employees who seek jobs. For the record, I commend to any noble Lords who are uncertain about the subject the work of Professor Smithers at the University of Liverpool, which demonstrates entirely effectively that age discrimination is a significant problem in the workplace for existing and prospective employees.
  We on this side of the Committee are somewhat surprised that the Government have failed to take the opportunity afforded by this Bill to legislate against age discrimination. I refer particularly to a speech made by Mr McCartney, a shadow Minister in another place, on a Bill introduced by the Tory government in 1996:
  "The Labour Party's position is quite clear … an incoming Labour Government will introduce comprehensive legislation to make age discrimination in employment illegal".—[Official Report, Commons, 9/2/96; col. 618.]
  Listening to noble Lords opposite, I had understood that this Bill was their flagship legislation in which they intended to deal with the remaining questions in their mind in the field of employment legislation. I repeat the words of Mr McCartney in 1996:
  "The Labour Party's position is quite clear … an incoming Labour Government will introduce comprehensive legislation to make age discrimination in employment illegal".
  No doubt the answer of the Government is that they have changed their minds and want to introduce the new voluntary code of practice to tackle age discrimination at work which they announced just in time for the Committee stage of this Bill on 14th June. I do not believe that any member of the Committee wants that voluntary code of practice to fail. We all hope that the code which has been negotiated and discussed with the relevant representative bodies, such as the TUC and others, will work. But if the code does not work we want the Government to have the legislative framework in place so that they can legislate to ensure that age discrimination, if it is not dealt with voluntarily over the next year or two, is covered by legislation in the form of the regulations provided for in the amendment. That can be done without the necessity to come hack to Parliament and find the legislative time for primary legislation. On that basis, I beg to move.
  Baroness Gardner of Parkes: Can the noble Lord who is to respond to this amendment or the noble Lord who moved it make clear whether employers would still retain an official retirement age? Is it the intention to outlaw it so that one can simply go on for ever? This is a very important matter in terms of pension schemes and so on.
  Lord Monson: I congratulate the supporters of these three amendments on being both principled and consistent. So often in the past, "anti-discrimination" legislation and proposed legislation has been highly selective and thus inconsistent. Having said that, even if one endorses the coercion inherent in such legislation, which I have never done, surely inserting clauses like this into the Bill, giving the Secretary of State Henry VIII powers incapable of amendment, is not the right way to go about introducing legislation of such importance. Among other things it would lead to a massive extension of the alarming litigation culture which is doing so much harm to this country.
  I was very pleased to hear the Minister, the noble Lord, Lord Simon, say just over half an hour ago that he opposed the introduction of excessive legalism into the Bill. I endorse that. Each of these proposals, if

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  pursued, deserves a separate Bill to allow both Houses of Parliament the maximum opportunity for detailed discussion and amendment.
  Lord Meston: I speak briefly in support of this amendment. Older employees are vulnerable to discrimination by being denied opportunities, denied promotion or through selection for redundancy. It is clear that age discrimination in employment takes place as the Government's own consultation report last year accepted. Unlike Australia and the United States, we do not have specific age discrimination legislation and so we oblige the older worker to resort to the less straightforward provisions of sex discrimination or the unfair dismissal statutes.
  As my noble friend said, it is generally perceived that the Government have now watered down their commitment to outlawing age discrimination, simply encouraging employers with a voluntary code without any clear legal status. It is on that basis that I support Amendment No. 271. I take up the point very properly raised by the noble Baroness, Lady Gardner of Parkes. It is generally understood that no legislative provision for age discrimination could or should override a proper retirement age.
  Lord McCarthy: I support the amendment particularly since it does not merely say whether and in what way action should be taken against non-discrimination, but it specifies in some detail the exceptional circumstances. I refer to subsection (3)(d) which states,
  "in any proceedings arising under this section, it would be a defence for an employer to show".
  It then spells out what the circumstances would be. That is done quite broadly in ways which are similar to exceptions set out in sex and race discrimination; and in the case of sex discrimination, single-sex accommodation and establishments including decency, privacy and so forth. The same applies to race. It is a very reasonable and well thought-out amendment.
  I make this point, although it refers to an amendment which has not yet been moved. It contrasts with the amendment as regards discrimination in the workplace on grounds of sexual orientation. There is an even wider discrimination in the workplace with a general prohibition where there are no specifications concerning exceptions at all.
  6.45 p.m.
  Lord Sainsbury of Turville: I wish to underline that the Government's position on discrimination is clear. We said in our manifesto:
  "We will seek to end unjustifiable discrimination wherever it exists".
  We shall deliver on that part of our manifesto, as on all the others. I therefore have considerable sympathy with the concerns which have led to this amendment, along with the proposed Amendments Nos. 272 and 273.
  That said, for reasons I am about to explain, I ask the Committee to reject these new clauses. As regards Amendment No. 271, the Government believe that
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  unfair age discrimination in employment is bad for the individual, bad for business and bad for the country. Promoting age diversity and tackling age discrimination in employment 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 is one of how best to achieve that goal.
  The use of legislation has not proven itself to be the best way forward in this complex area. One has only to consider the position on jobs. France and Spain, for instance, both have age discrimination legislation but their older worker employment rate is lower than in this country. In Canada, which also has legislation in this area, the economic inactivity rate among 55 to 64 year-olds is higher than in this country.
  It became clear during a year-long consultation carried out by my honourable friend the Minister for Employment that effective legislation covering age discrimination raised very complex issues, not least that raised here of whether the retirement age itself is discriminatory. On the basis of listening when one has consultation, the Government are taking a measured approach, taking forward a range of initiatives that will help older people and bring about cultural change and using the lessons learned from those initiatives to inform future plans.
  We need to change attitudes. Employers need to believe that people can and do add value to their business regardless of age. The results of the consultation published last year pointed to a non-statutory code of practice as being the best way to encourage the process of change. The Government have been working to develop a draft code with some key partners, including the TUC, the 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. Members of the Committee will be aware that the code was issued last Monday. A copy is in the Library. We believe that the code will bring real benefits in promoting good recruitment and employment practices irrespective of age. It will cover all aspects of employment practice from recruitment through training and promotion to redundancy and retirement. It will be backed with more detailed guidance and illustrative case studies.
  The effectiveness of the code will be fully evaluated by February 2001. The groundwork that will be necessary is being put in place. We have commissioned an independent organisation to carry out the necessary large-scale research project. The results of this evaluation will help inform future plans for legislation. This will include the approach the Government take to proposals for EU directives or regulations under Article 13 of the Treaty of Amsterdam. The treaty, which recently came into force, allows the European Commission to bring forward proposals to counter discrimination on a wide range of grounds including age and sexual orientation. I shall come to the latter when responding to Amendment No. 272.
  In carrying out the evaluation we shall look in detail at employer policies and practices in recruitment and employment and the impact that these have on age

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  diversity in the workforce. In order to provide a base line against which to measure changes in attitudes, practices and policies, an initial survey of employers and older people is also being carried out prior to the publication of the final version of the code. In addition, we shall publish each June key indicators showing the position of older workers in the labour market.
  I hope that I have managed to reassure the Committee that the Government are far from inactive in this area and that they share the commitment of noble Lords to action against unjustified age discrimination in the workplace. Where we differ is over the means. We do not believe that the time is right for a legislative measure such as that proposed. I hope that I have satisfied the Committee with my description of what the Government are doing in this area and that therefore the amendment will he withdrawn.
  Lord Razzall: As the Government have only recently changed their mind from the position that they took only two years ago when in opposition, I had not anticipated that in the first round of the discussion. I would be able to persuade them to change their mind again. On that basis, and with the intention of referring to it at a later stage, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Razzall Lord Razzall moved Amendment No. 272:
  After Clause 13, 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 (I) "employment matter" includes—

  (a) the offer or refusal of employment;

  (b) the termination of employment;

  (c) terms and conditions of employment;

  (d) the provision of training or skills development opportunities;

  (e) promotion and career progression.

  (3) Regulations under subsection (1) may—

  (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;

  (b) confer jurisdiction (including exclusive jurisdiction) on employment tribunals and on the Employment Appeal Tribunal in relation to cases brought under this section;

  (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: As was indicated earlier, this is the second of the anti-discrimination measures that I am proposing should be inserted into the Bill by way of amendment. The position with regard to discrimination on the ground of sexual orientation, which this amendment is designed to cover, is somewhat different
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  from the position that we covered on the previous amendment which dealt with discrimination on the ground of age.
  In these days of quite extensive anti-discrimination legislation, it would probably come as a surprise to many people to know that as the law currently stands neither lesbians nor gay men have protection in the workplace in any of the following areas. To decide not to appoint someone because of their sexuality is not currently unlawful. To treat someone less favourably in the workplace because of their sexuality is not currently unlawful. To harass someone in the workplace because of their sexuality is not unlawful. To pay someone less because of their sexuality is not unlawful, and it is not per se unlawful to dismiss someone because of their sexuality. I suspect that Members of the Committee would regard that as a surprising state of affairs in the current context of our anti-discrimination legislation in other areas.
  The Government's position on this is fairly straightforward. In June 1998 when we considered the Bill on sexual orientation and discrimination—that Bill did not become law because although passed in this House it did not have time to complete its passage through another place—speaking for the Government, the noble Baroness, Lady Blackstone, stated:
  "At this stage … promise that the Government are committed to giving serious consideration to the issues raised by this Bill".—[Official Report, 5/6/99; col. 657.]
  I do not want to detain the Committee long on this amendment because at Second Reading the Minister explained that this was not a matter for the DTI. which is sponsoring the Bill, and that another department, the Department for Education and Employment, would be dealing with these issues. I regard that as slightly strange given that we are led to believe that this is a period of "joined up" government, to adopt the phrase used by several noble Lords and Ministers. Nevertheless, I look forward to the Minister's reply and to hearing when we can expect at the very least a voluntary code of practice to bring this into line with the anti-age discrimination code which is already in place. I should like to know what action the Government propose to take. For all the same reasons that the previous amendment was moved and could be justified, I should have thought that there is a case for putting on the statute book the power for the Government to legislate in this area if a voluntary code of practice does not prove to be sufficient.
  On the point raised by the noble Lord, Lord McCarthy, there is a distinct difference between the difficult areas of age discrimination and the necessity to include the defence for which we provided in the previous amendment and the question of legislation on the ground of sexual orientation where the issues are likely to be much more clear cut and the protection need not therefore be provided for employers. I beg to move.
  Baroness Young: I wonder whether the noble Lord intends his amendment to apply to two areas. I refer to the Armed Services and to the whole of the education service. A number of people, particularly in education, would be concerned if the provisions of the amendment applied to schools, given that that might affect very

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  small children and children up to the compulsory school leaving age. It would be helpful to have this point clarified and to hear the Government's view on both matters.
  Lord Sainsbury of Turville: I am very well aware that in comparison with measures to prohibit discrimination on grounds of sex, race and disability, there is a gap in the protection that we offer some individuals. The Government deplores discrimination on the basis of sexual orientation and the treatment which some gay men and lesbians experience.
  That said, we do not believe that this Bill is the appropriate vehicle for this large new topic. It would be a radical step away from the intentions which we set out and on which we consulted in the Fairness at Work White Paper, and would clearly require extensive consultations in its own right. As has been said, the amendment raises substantial issues in several areas which require careful consultation, particularly with regard to the Armed Services and education.
  We shall want to consider the issue further in the context of wider European developments. I have already referred to new Article 13 in the Amsterdam Treaty. Now that the new treaty is in force, the Commission is able to bring forward recommendations and we expect it to take a positive interest in doing so. It may address the problems which concern the noble Lords, Lord Razzall and Lord Meston, the noble Viscount, Lord Thurso, the noble Baroness, Lady Turner, and the Government, although clearly we cannot commit ourselves at this stage to accepting each and every measure that the Commission may propose.
  As noble Lords are aware, the Equal Opportunities Commission formally presented to the Government last November its recommendations following a review of sex equality legislation. Those 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 leads on the policy, are carefully considering this and the EOC's other recommendations. We strive to achieve joined-up government, but that is no reason to have a confusion of responsibilities with regard to which department leads on such legislation.
  We are also considering the suggestion from the Better Regulation Task Force 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.
  I have shown that it is too early to be clear whether a legislative measure would be the appropriate way to proceed. However, I reassure the Committee that we want to be sure that in removing injustice, we are doing so thoughtfully and in full knowledge of the impact of the legislation. That would require full consultation with many relevant parties such as industry, the forces and the Churches.
  For that reason, I regret that the Government cannot support the new clause. I hope that those proposing the amendment are reassured of our commitment to act in
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  this area. Our differences are over the means rather than the objectives. I trust that the amendment will be withdrawn.
  Earl Ferrers: I am glad that the Minister said that there were problems with this amendment. I do not think that he need regret too much the fact that he is unable to accept it. I am glad that he referred to education, following the comment made by my noble friend Lady Young. Perhaps I may declare an interest as a Fellow of Winchester College, which is a single-sex school. If someone applied to be a master there and the headmaster was obliged not to refuse that applicant on the ground that he was a homosexual, the position would be intolerable. Although it may be perfectly reasonable to protect those of different sexual orientations, it is essential to protect young people, particularly at school. Therefore, I hope that the Minister will not forget that matter when he considers this in greater detail.
  Lord Sainsbury of Turville: I hope that I made it clear that before we proceed on this, we shall consider carefully all the important issues which the amendment raises.
  Lord Razzall: I think that there has been some misunderstanding on the part of the noble Baroness, Lady Young, and the noble Earl in relation to the purpose of this new clause. In moving the amendment, it was never my intention (or that of my supporters) to suggest that the issues raised by the noble Baroness and the noble Earl were not matters on which the Government should consult extensively before bringing forward legislation in the form of the regulations provided for by my amendment. There was no doubt at all about the fact that that must take place. The issues raised by the noble Baroness and the noble Earl are clearly complex and need to be subject to consultation.
  If, following the passage of this comprehensive Bill, it is thought necessary, rather than relying simply on voluntary codes of practice, to introduce regulations to deal with these complex issues, the Government should take the necessary powers. However, on the basis of the progress that I think we have made in discussion with the Minister, I am happy to beg leave to withdraw the amendment at this stage—
  Earl Ferrers: Before the amendment is withdrawn, the noble Lord said that these are complex issues; but some of them are absolutely straightforward and simple.
  Amendment, by leave, withdrawn.
  7 p.m.
  Lord Razzall Lord Razzall moved Amendment No. 273:
  After Clause 13, insert the following new clause—

  DISCRIMINATION IN THE WORK-PLACE (GENERAL PROHIBITION)
  ("—(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 specified in the regulations.
  (2) In subsection (1) "employment matter" includes—

  (a) the offer or refusal of employment;

  (b) the termination of employment;

  (c) terms and conditions of employment;

  (d) the provision of training or skills development opportunities;

  (e) promotion and career progression.

  (3) Regulations under subsection (1) may—

  (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;

  (b) confer jurisdiction (including exclusive jurisdiction) on employment tribunals and on the Employment Appeal Tribunal in relation to cases brought under this section;

  (c) provide for penalties to be imposed or, as the case may he, 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: This is the third and final amendment we are proposing from these Benches, very much along the lines of the other two amendments. I do not want to delay the Committee. I make one very simple point on the case as to why we believe legislative power should be taken by the Government at this stage. I have set out the two examples of age discrimination and sexual orientation.
  I say in reply to the Government's likely response that I would anticipate that were legislation in any of these areas to be brought before the Committee for approval as primary legislation, there would be one short clause to say that the Government should take power to legislate in the following areas in accordance with Schedule 1. Schedule 1 would set out a resolution of the kind I am suggesting here. I doubt whether those who argue that primary legislation would need to be brought back to the House would actually get any primary legislation different from the clause I am suggesting here. On that basis, I beg to move the amendment.
  Lord Sainsbury of Turville: I shall be brief. The amendment urges the Government to take a power to prohibit discrimination on the basis of whatever grounds the Secretary of State may specify in regulations. It is puzzling to have such a broad and unfocused power proposed, particularly when the Government have been criticised for taking much more specific powers where we were clear about what they would be used for.
  As noble Lords will know, discrimination in employment—this is to repeat a point—is largely a matter for my right honourable friend the Secretary of State for Education and Employment. However, the DTI has responsibility for some aspects; for example, discrimination on the grounds of trade union membership or non-membership. If noble Lords have in mind further specific situations where there is clear evidence that individuals are suffering unjustified discrimination in employment, the Government of course would he happy to consider them. We would not wish to have such sweeping powers as are proposed in the amendment.
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  If there are specific problems of discrimination, for example, on grounds of age, sexual orientation or protection for whistle-blowers, we should debate them, discuss the policy options and then decide whether to act and, if so, how. Legislation is not the only option. as we have shown on age discrimination, but it may he appropriate, as on whistle-blowers. However, it would be wrong to take powers without having the slightest idea about how they might be used. I do not think that would be a good precedent; I hope therefore that the amendment will be withdrawn.
  Lord Monson: Before the noble Lord sits down, I wonder whether I might try to help solve the puzzlement which he refers to. It has been established statistically that good-looking people, be they male or female, have much better employment prospects and have much higher lifetime salaries than those who are physically less favoured. This is a fact, established, I understand, both in the United States and in this country. I suspect that that is probably one of the discriminatory aspects which the noble Lord, Lord Razzall, had in mind.
  Lord Razzall: That is undoubtedly the case, as everybody looking around this Chamber would testify. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 14 agreed to.
  Schedule 5 [Unfair Dismissal of Striking Workers]:
  [Amendment No. 274 not moved.]
  Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 275:
  Page 73, line 40, at end insert—
  ("() It shall be for the employer to prove that the dismissal is not unfair by virtue of the reasons set out in subsection (4), (5) or (6).").
  The noble Lord said: There are various ways of protecting workers against dismissal. There is of course no more serious fate that can overcome someone than to be improperly dismissed. Two of those ways may be said to be the following. The first concerns a law which permits the employer to dismiss an employee by reason of the employee taking industrial action. The Committee will remember that we had some discussion about the nature of different forms of industrial action on an earlier amendment. I mentioned dismissal where the worker is taking part in industrial action as being a further area which needed definition and consideration.
  In the area of dismissal for industrial action a legal system may look at it by saying that the employer may dismiss an employee by reason of the activity of the employee, either for industrial action generally or in some cases for out-and-out strike action, or a mixture of these. That I would call the subjective procedure. Alternatively, there is the objective procedure where an employee may be dismissed at the time of taking industrial action. Curiously enough, our system, looked at as a whole, has permitted the employer to dismiss, or rather to find that the industrial tribunal, or the employment tribunal as I must now call it, has no

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  jurisdiction in the matter if the employee is dismissed at the time of the industrial action, where he is one of a minority, or not the whole number, with his colleagues, in taking the action.
  There is a case for an objective test; that is to say, where the employee is taking industrial action at the time the employer is found to commit a wrong or, in our system, to make an unfair dismissal. I would point out that despite the increase in the limits of the compensation that can be claimed, this is not a very strong remedy. The remedy, other than a very large amount of compensation, does not usually compare with the loss of the job where the unfair dismissal has occurred.
  Many commentators have argued that the subjective test produces great difficulty for the employee. This is not a case which can be compared with dismissal for maternity or pregnancy reasons, and so on. I make no attempt at trying to compare those dismissal grounds. But where a dismissal has taken place and the test is whether or not the employer can be shown to have dismissed an employee by reason of participation in industrial action, the employee is in very great difficulty. The cases which illustrate the situation very clearly—for once, I shall not cite them to your Lordships—are those in which it is alleged that the employer has dismissed the employee by reason of participation in trade union matters. That would be much improved by this Bill.
  However, in the cases that have occurred, until now it has been shown to be difficult for the employee to know what the employer's reason is. Therefore the objective test, whether or not the employer has dismissed the employee during the course of industrial action, in participation of which the complainant stands, is one which is simpler. In effect it puts a very heavy burden on the employer. Nevertheless it can be found in a number of western European systems.
  Weighing the matter in the way I have described, my noble friends and I felt that it would be absurd to seek to shift from the subjective system to the objective system. Goodness knows what agreements and deals that would cause to be upset. Also, it would hardly be a sensible amendment to the Bill because the Bill is based upon the subjective system: where the employer dismisses by reason of the industrial action. I shall not read to the Committee the remainder of the section. That is the nub of the matter. We did not think it right to move amendments to change that.
  However, we believe that we should find a reasonable balance between the two systems. I assert that industrial action is a right of workers provided they go through the necessary procedures. But, given that, a half-way balance should be found. That half-way balance would be to put the burden of proof on the employer that the dismissal was not unfair in terms of sub-paragraphs (4), (5) and (6). Sub-paragraph (4) applies to the first eight weeks. It would not be that onerous a proof. But if he wishes to prove that the dismissal was not by virtue of industrial action taken by the employee, he can prove that. The employer will have all the facts within his knowledge.
  I do not whether I am attracting the support of the noble Baroness, Lady Miller of Hendon. I do not aim my argument at her. She will have considered whether she supports the amendment. As usual, I aim my rather slender argument at my noble friends on the Front Bench. What is the argument for not putting the burden of proof on the employer? It is a half-way house system. If the employer is clear that he has not dismissed by reason of industrial action, why will he not give evidence to show that? That is easy for him; it is not difficult. It is difficult for the employee who is dismissed to do so.
  The strength of my argument to my noble friends on the Front Bench is that the burden of proving the reason for his action is put upon he who should prove the matter. If the employer cannot do that, it is clear that the employee should be able to convince the employment tribunal of the first part of his case.
  I hope that my noble friends on the Front Bench—I say this in comradely friendship—will not simply read me a transcript which was organised before my argument was put. I see my noble friend looks confident that his transcript will meet the arguments I have put forward. There is a case here. The provision will stop injustice to employees who have been dismissed during the course of industrial action, or afterwards by victimisation. The employer will be guilty of unfair dismissal only when he cannot show clearly on the burden of proof that that was not the reason for his action. I beg to move.
  7.15 p.m.
  Lord McIntosh of Haringey: My noble friend has given me a difficult task. He has told me that I cannot read my speaking notes. However, he has helped by saying that his arguments are slender. I shall have to steer a path between those as best I can.
  This is the first amendment to be debated on Schedule 5. I think that it is necessary to remind the Committee that the proposed amendment refers to dismissal after the period of eight weeks into industrial action. The Bill provides that dismissal within the first eight weeks of industrial action is automatically unfair dismissal. Therefore we must consider the situation after eight weeks in that light.
  Our proposals give employees the right to claim unfair dismissal if they are dismissed after the first eight weeks of industrial action and the employer has failed to take reasonable procedural steps to resolve the dispute.
  As with most unfair dismissal claims the tribunal will be asked to determine whether in the circumstances the employer acted reasonably. In his amendment my noble friend seeks to place the burden of proof on employers to show that the dismissal of strikers is fair if taking place after the first eight weeks. It will be the responsibility of the tribunal to make the finding having heard all the evidence and having considered all the circumstances. The amendment seeks to place the burden of proof on the employer. But—I believe that this is the crux of the matter for my noble friend—the way in which the Bill has been drafted means that the new Section 238A will be construed as one with Part X

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  of the Employment Rights Act, including Section 98 which places the burden on the employer to show the reason for dismissal and that the reason was a permissible one. It will be for the tribunal to determine whether that reason was the true one and whether his action was reasonable. It will also be for the tribunal to decide whether the employer took all reasonable steps. The Government consider it unnecessary and inappropriate to make special provision for these purposes.
  In assessing whether employers have taken sufficient action to resolve a dispute, the tribunal will be asked to consider whether respect was shown for dispute procedures, whether reasonable steps were followed to reopen negotiations after the action began, and whether reasonable steps had been taken to involve ACAS or other third parties in helping to resolve the dispute through conciliation or mediation. The tribunals will be able to draw on direct hard evidence of the behaviour of the parties before reaching a decision. There should be relatively little difficulty for the tribunal to establish what steps have or have not taken place. What is more, the legislation has been drafted to ensure that the onus is placed on the behaviour of both parties. I am sure that noble Lords on both sides of the Committee will agree that that is the right approach. If dismissals are to be avoided, and clearly they should be the last resort, both sides must be encouraged to find a settlement. The legislation specifically states that tribunals must equally take into particular account whether the union has made or accepted overtures to resolve the dispute.
  In view of the way in which this legislation is read in with the Employment Rights Act, I hope that my noble friend will not think it appropriate to press his amendment.
  Lord Wedderburn of Charlton: My noble friend knows well that it is not our intention to press any of the amendments that we move today. On the other hand, I was a little unhappy about the nature of his argument—I shall not call it slender. Of course I agree that new Section 238A forms part of Part X of the Employment Rights Act. It is true that the employment tribunals must look for the true reason of the dismissal. There will be conciliation, I agree. There will be a situation where legal dismissal is the last resort. Those points which he made, with respect, do not go to my amendment.
  However, when my noble friend says that the employment tribunals will have little difficulty in deciding the matter, that raises the crucial issue. Most people who have been to a tribunal or any other court know that the case is often won or lost, first, according to where the burden of proof lies in fact and in law; and, secondly, how easy it will be to obtain facts for the complainant before the tribunal or court so that it can make its decision on the full argument.
  There is no full discovery procedure and even if there were, I would not change my argument. It rests on a simple point which my noble friend, with great respect, did not meet. It is very different when a complainant asks a tribunal for a remedy against a defendant whose reason you have to prove. Let us take my noble friend
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  as the complainant who has to prove to the tribunal that my noble friend on his right, who was his employer, had got rid of him by reason of any situation you like. Certainly, where he got rid of him by reason of industrial action my noble friend will not know where to turn, although he will be quite certain that he was pushed. He will talk to his colleagues in the shop who will know that he was pushed out. If he is a militant, it is highly likely that he will be pushed out.
  How will the complainant prove that? It is rare for the subjective test to be easily proved in a case where the defendant does not have to go to the burden of proof. I appreciate that it is difficult for my noble friend to take all these matters away and come back on Report when we shall hear many new things, but I ask him to look at this again. It goes to the matter of justice by complainants who are forced to prove someone else's reason.
  When it is a serious matter, such as the loss of a job, surely it should be the other way around. The employer can say that he was dismissed because he was slow at the work and he can show that. He may say, "He was no good at this, that and the other". That is the end of the case under my amendment, as under any other. But where it is a question of the complainant needing to show that he was dismissed by reason of the industrial action, surely we should shift the normal burden. For now, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Schedule 5 agreed to.
  Clause 15 [Collective agreements: detriment and dismissal]:
  Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 276:
  Page 8, line 20, at end insert—
  ("(4) The payment of higher wages or higher rates of pay or overtime or the payment of any signing on or other bonuses or the provision of other benefits having a monetary value to other workers employed by the same employer shall not constitute a detriment to any worker not receiving the same or similar payments or benefits within the meaning of subsection (1)(a) of this section so long as—

  (a) there is no inhibition in the contract of employment of the worker receiving the same from being the member of any trade union, and

  (b) the said payments of higher wages or rates of pay or overtime or bonuses or the provision of other benefits are in accordance with the terms of a contract of employment and reasonably relate to services provided by the worker under that contract,

  and paragraph 4 of Schedule 2 to this Act and sections 146 and 148(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 shall be construed accordingly.")
  The noble Baroness said: This amendment is designed to implement statements made by the Government in paragraph 4.20 of their White Paper, Fairness at Work, reinforced by Annex 1, paragraph 8, of the same White Paper, both of which I should like to quote. In paragraph 4.20, the Government state:
  "As under existing law, individual employees will continue to have the right, should they wish, to agree terms with their employer.".
  That seems plain enough. But just to make it clearer, the Government state in Annex 1:
  "The terms of agreements resulting from collective bargaining are normally incorporated into individual employees' contracts either explicitly or by custom and practice and thus set the minimum terms and conditions for all employees in the bargaining unit".
  The minimum terms, my Lords.
  The annex goes on:
  "Under the existing law an employee and an employer can agree different terms if they wish. Since the current law works well, the Government sees no reason to change it".
  That is equally plain, but changing the law is precisely what Clause 15 is intended to do, as the Government admit in paragraphs 110 and 111 of the Explanatory Notes.
  The issue in this clause arises from the landmark 1995 decision by noble and learned Members of your Lordships' House in the cases of Associated Newspapers Limited v. Wilson and Associated British Ports v. Palmer and Others. A decision of the Court of Appeal was overruled by their Lordships, who held that not paying the same wages to an employee who declined to sign an individual contract was not action against those who did. In other words, not doing something was not action.
  Their Lordships ruled that not doing something was an omission which was not prohibited by the Employment Protection (Consolidation) Act 1978, as amended. In paragraphs 4.24 and 4.25 of the White Paper, contradicting what they had said only four paragraphs previously about the rights of employers and employees to agree their own terms, and in contradiction of the statement in Annex 1 which I have quoted, the Government stated:
  "The Government therefore propose to make it unlawful to discriminate by omission on the grounds of trade union membership, non-membership or activities.".
  The White Paper, at paragraph 4.25, makes it clear that the intention would be to overrule or reverse the law as determined by this House and the two cases to which I have referred. Paragraphs 110 and 112 of the Explanatory Notes make it equally clear that that is the intention. Clause 15(1) as drafted does not spell out in precise words what the Government are getting at. And the Secretary of State is seeking powers in subsection (2)(a) to make regulations in what the Bill refers to as "specified classes of cases" without openly saying what the Government currently have in mind.
  During the Second Reading in your Lordships' House on 10th May, the noble Lord, Lord McIntosh of Haringey, when winding up for the Government, said that,
  "employers and employees will remain free as they are now,
  and I emphasise the words "free as they are now",
  "to conclude individual contracts if they wish to, even where collective bargaining arrangements exist. We have no intention of changing that and the Bill does not do so.".—[Official Report, 10/5/99; col. 1045.]
  That is exactly what the Bill does do. As the law currently stands, following the two rulings in the Associated Newspapers and Associated British Ports
  356
  cases, an employer is permitted to give an inducement to an employee not to sign a collective agreement because that is not a positive detriment against an employee who will not enter into a personal contract.
  As the Bill stands, an employee who does not receive the inducement because he does not sign a personal contract could now claim that he has suffered a detriment. That is despite the fact that the employee who does not accept the collective agreement will also be offering something in return, apart from not signing the collective agreement. He might be willing to work more flexible hours, to have more flexible working arrangements, more flexibility in multi-tasking or whatever. The Government are now proposing that the signatories to the collective agreement shall receive the extra benefits in return for nothing.
  In Committee in the other place, the Minister for Small Firms, Trade and Industry, admitted talking about an employee who had refused to sign a personal contract, stating:
  "The employee may … think that it is unreasonable of the employer to … give the employee a pay rise, but that is the employer's right.".
  We agree with that. An employer and an employee should always be free to make their own bargain. Where there is a collective agreement affecting the firm, as the Government state in the White Paper, those should be the minimum terms. We believe that an employer should be fully entitled to pay more to employees who do what an employer considers to be more valuable to him.
  The Minister in the other place agreed that the Government would look at the clause again. As they have not done so, we have tabled the amendment to clarify the point beyond any possible ambiguity. I invite Members of the Committee to look at my carefully drafted amendment. It relates only to a benefit in the form of extra money—and just money. It makes clear that a different rate of pay between those who sign an individual contract as distinct from a collective one, and those who decline to sign such a personal contract, is not to be treated as a detriment.
  There are two important conditions. The first is that the individual contract must not inhibit the worker from nevertheless joining the union, and, secondly, that the additional payments and benefits shall be a contractual right of the employee and not merely something at the discretion of the employer. The noble and learned Lord, Lord Bridge of Harwich, pointed out in the lead judgment in two cases that a union is able to offer its members what he described as,
  "other and important valuable services",
  apart from the collective negotiating facilities over their terms and conditions of employment. Indeed, they can and do. In return for a small weekly subscription, some unions offer cheaper car, holiday and medical insurance, cheaper mortgages, representations in disputes with their employer and discounts on a whole range of goods and services.
  This amendment does not prevent the employee from enjoying those and any other benefits as a member of any union which he chooses. But the point is that in a Bill which the Secretary of State described in the other

  357
  place at col. 130 on 9th February 1999 as containing measures for a partnership based on rights matched by responsibilities, it must be right that if unions are entitled to offer workers all sorts of inducements to join a union, then an employer should be entitled to offer employees an inducement to accept different terms of employment from that negotiated in the collective agreement.
  That is especially so when those different terms will be such as to enable the employer to receive greater benefits from the efforts of the worker. As I said, those may be in the form of multi-skilling, flexibility over duties, hours of work and so on. What the amendment does not do, apart from not preventing an employee from being a member of the union, is that it does not permit an employer to refuse to promote the dissenting worker on those grounds; it does not permit an employer to give the dissenting employee all the worst tasks or worst places of work in the premises. It does not permit the employer to harass or wrongly dismiss the dissenting worker. It does not permit the employer to take any other sanctions against the dissenting worker. All those wrongful things, and any others that he can think of, can be legislated against by the Secretary of State under paragraph 2. It does not permit the employer to give and withhold any extra contractual benefits capriciously or arbitrarily. There is to be no discretion. There can be no question of the worker being forced to sign an individual contract, which is what the noble Lord, Lord McIntosh, suggested might happen. He is not forced to take the inducement of extra money in his pocket. The worker who enters into an individual contract is to receive that as part of his contractual rights.
  The amendment merely entitled the employer to continue to pay the dissenting worker the wages that the union had already negotiated as being fair and reasonable for the job. The clause as drawn is intended to do the opposite of what the Government paid lip service to in part of the White Paper and in the ministerial speeches to both Houses, which I have quoted; namely, the freedom of employer and employee to negotiate between themselves whatever terms they think fit.
  It has another sinister effect. By compelling an employee to accept a collective bargain against his will and in that way increase the power of the union over him, the Government are attempting to reintroduce the closed shop by the back door. I repeat that this would reintroduce the closed shop by the back door. That is something which the Labour Party promised it would not do. This amendment simply ensures that workers enjoy one of the most fundamental of employment rights; namely, to negotiate their own individual pay if they can strike a better bargain with their employer, possibly by being more flexible than an entrenched egalitarian position of a union. I beg to move.
  7.30 p.m.
  Lord Crickhowell: My name is to the amendment. I do riot intend to repeat what I said on Second
  358
  Reading or the interest that I declared then. I thought I had then received an encouraging response from the noble Lord, Lord McIntosh, and I hope that I shall hear an encouraging response to the amendment.
  The simple point I want to make is that we are talking about the good industrial relations which have existed in the ports industry over the past eight or nine years, in marked contrast to the shambles which existed before then. Those relations are good and are a transformation from the past. I hope that by their response to the amendment, the Government will ensure that those good industrial relations can continue.
  Lord McIntosh of Haringey: I sincerely congratulate the noble Baroness both on the care which she has clearly taken in drafting the amendment and on the evident passion with which she moved it.
  I think that I can assure her that we can achieve substantially the objectives which she wishes to achieve. As my noble friend Lord Simon explained in his letter of 10th May, in response to the Select Committee on Delegated Powers and Deregulation, the Government hoped to replace the power in Clause 15 with a substantive provision and we hoped to bring forward an amendment in Committee. The noble Baroness referred to that in her speech. I am sorry that we have not been able to do so, but I am confident that we shall be able to produce an amendment on Report which will, in a sense, go further than that of the noble Baroness because, instead of adding to the regulatory power, which is what her amendment does, it will produce a substantive content in Clause 15 instead of a purely regulatory power.
  I assure the noble Baroness that our substantive proposal will address the point that she is getting at with this amendment. I should like to be clear on this point. I can give her more information about what our amendment will provide than we have been able to give in the past when we have given only indications. Workers should be protected against detriment or dismissal for refusing to give up the terms of the collective agreement which applied to them. That has not changed. But as I made clear on Second Reading, the existing law allows employers and employees to conclude contracts on terms which differ from collective agreements. I do not have the attention of the noble Baroness.
  Baroness Miller of Hendon: The Minister should know and be certain that I am listening to every word that he says.
  Lord McIntosh of Haringey: In the White Paper, we promised that that would continue. Obviously, in order to do so, we must be clear that the fact that one worker benefits from better terms under an individual contract does not constitute detriment for those who remain covered by the collective agreement. However, it will not be permissible for employers to offer better terms on condition that workers leave or do not join

  359
  a trade union. That would be contrary not only to this Government's intention but contrary also to Section 146 of the 1992 Act.
  The noble Baroness referred to the Wilson and Palmer case. There is the possibility of some misunderstanding in that regard. The majority of the Judicial Committee said that offering different terms did not constitute discrimination on grounds of TU membership in the cases of Wilson and Palmer. The employer's intention was to change bargaining arrangements and not to deter trade union membership. The noble Baroness must not confuse those two issues. We are ensuring that an omission intended to deter trade union membership will be unlawful, but we shall maintain the right to change bargaining arrangements where there is no intention to prevent or deter union membership.
  I repeat our apologies that we have not been able to produce the substantive amendment which we wished to introduce in Committee. I wish to respond also to the noble Baroness's claim that we are introducing the closed shop by the back door. That simply is not the case. The closed shop is about compelling people to be union members. Nothing in this Bill affects the right of people to choose whether or not to join a union. Many non-members of unions are covered by collective agreements now. Equally, many trade unionists currently work in places where there is no collective bargaining. I think it could be said that most members of the Government are in that position. No doubt that will continue to be the case. Recognition has nothing to do with the closed shop.
  Despite those two misunderstandings between us, I hope that with the assurances and details I have given about the substantive amendment which we propose to introduce on Report, the noble Baroness will realise that we intend to introduce something which is along the lines of what the noble Baroness wants, but it will be more effective by being on the face of the Bill rather than by being a constraint in regulations. On that basis, I hope that the noble Baroness will feel able to withdraw the amendment.
  Lord McCarthy: Before the noble Lord sits down, I wonder whether he realises how much he is worrying some of us? The amendment moved by the noble Baroness would reinforce all the discriminatory aspects of the Ullswater amendment. It would make it even simpler for employers not to make threats but to offer bribes, the object of which is to induce people to leave the union and to fragment recognition and collective bargaining. That was the object of the Ullswater amendment and it is the object of this amendment. If the Government say at this point that they want to go even further, I am very worried.
  Lord McIntosh of Haringey: I make it clear that I have not announced a change of policy; I have spelt out in more detail what has already been said by Michael Wills in another place and what I said at an earlier stage of the Bill. We have always said that there is a role for individual contracts but that the use
  360
  of individual contracts or discriminatory provisions in contracts either to discourage trade union membership or to make trade union membership impossible was not acceptable. There is no change in policy here. We are spelling out in a little detail, but not of course the full detail, the way in which we propose to fulfil the undertakings we made at earlier stages of the Bill.
  Baroness Miller of Hendon: I repeat that I believe this to be a closed shop through the back door, simply because all that is left for employers and employees to negotiate, apart from union rights, is the matter of extra pay, flexible hours and so on. If that is taken away, there is no purpose at all. There would be no reason why anybody should negotiate with an employer because there would be nothing to achieve.
  I listened carefully to what the Minister said. I accept that the Government would have come back with something but have not been able to do so. Knowing how passionately I felt about the matter, I believe they should have dealt with it quicker. However, bearing in mind the comments of the noble Lord, Lord McCarthy, I believe that it may not come back in a way that would be suitable for us. I feel I must test the opinion of the House. It is always open to the Government, if they feel they can bring back something better, to deal with it in that way.
  7.42 p.m.
  On Question, Whether the said amendment (No. 276) shall be agreed to?
  Their Lordships divided: Contents, 98; Not-Contents, 78.

  Division No. 1

  CONTENTS

  Aldington, L.

  Effingham, E.

  Anelay of St. Johns, B.

  Elliott of Morpeth, L.

  Annaly, L.

  Elton, L.

  Arran, E

  Ferrers, E.

  Astor, V.

  Fookes. B.

  Astor of Hever, L.

  Gardner of Parkes, B.

  Attlee, E.

  Garel-Jones, L.

  Bathurst, E.

  Geddes, L.

  Berners, B.

  Glenarthur, L.

  Biffen, L.

  Glentoran, L.

  Blaker, L.

  Harding of Petherton, L.

  Blatch, B.

  Harmar-Nicholls, L.

  Brabazon of Tara, L.

  Hayhoe, L.

  Bridgeman, V.

  Henley, h. [Teller]

  Burnham, J. [Teller.]

  Higgins, L.

  Byford, B.

  Hogg, B.

  Cadman, L.

  HolmPatrick, L.

  Carnegy of Lour, B.

  Home, E.

  Carnock, L.

  Howe, E.

  Clark of Kempston, L.

  Howell of Guildford, L.

  Coleraine, L.

  Kimball, L.

  Cope of Berkeley, L.

  Kingsland, L.

  Courtown, E.

  Lauderdale, E.

  Cranborne, V.

  Leigh, L.

  Crickhowell, L.

  Liverpool, E.

  Cross, V.

  Luke, L.

  Dartmouth, E.

  Lyell, L.

  Dean of Harptree, L.

  Mackay of Drumadoon, L.

  Denham, L.

  Mancroft, L.

  Dixon-Smith, L.

  Massereene and Ferrard, V

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  Mayhew of Twysden, L.

  Roberts of Conwy, L.

  Mersey, V.

  Rotherwick, L.

  Miller of Hendon, B.

  Rowallan, L.

  Monro of Langholm, L.

  Ryder of Wensum, L.

  Montagu of Beaulieu, L.

  St John of Fawsley, L.

  Monteagle of Brandon, L.

  Saltoun of Abemethy, Ly

  Montgomery of Alamein, V.

  Seccombe, B.

  Mowbray and Stourton, L.

  Sharples, B.

  Munster, E.

  Shrewsbury, E.

  Murton of Lindisfarne, L.

  Stewartby, L.

  Naseby, L.

  Strathclyde. L.

  Northbrook, L.

  Tebbit, L.

  Northesk, E.

  Thomas of Gwydir, L.

  Norton of Louth, L.

  Torrington, V.

  Nunburnholme, L.

  Tugendhat, L.

  O'Cathain, B.

  Westbury, L.

  Onslow of Woking, L.

  Wise, L.

  Rawlings, B.

  Wynford, L

  Renton, L.

  Young, B.

  NOT-CONTENTS

  Acton, L.

  Hilton of Eggardon, B.

  Ahmed, L.

  Hughes of Woodside, L.

  Allenby of Megiddo, V.

  Hunt of Kings Heath, L.

  Alli, L.

  Islwyn, L.

  Amos, B.

  Janner of Braunstone, L.

  Archer of Sandwell, L.

  Kennet, L.

  Bach, L.

  Lockwood, B.

  Barnett, L.

  Lofthouse of Pontefract, L.

  Bassam of Brighton, L.

  McCarthy, L.

  Blease, L.

  McIntosh of Haringey, L. [Teller]

  Bragg, L.

  Mackenzie of Framwellgate, L.

  Brookman, L.

  McNair, L.

  Burlison, L.

  Mar and Kellie, E.

  Carlisle, E.

  Meston, L.

  Carter, L. [Teller.]

  Milner of Leeds, L.

  Clarke of Hampstead, L.

  Mishcon, L.

  Clinton-Davis, L.

  Monkswell, L.

  Crawley, B.

  Morris of Castle Morris, L.

  Davies of Coity. L.

  Pitkeathley, B.

  Davies of Oldham, L.

  Ponsonby of Shulbrede, L.

  Desai, L.

  Ramsay of Cartvale, B.

  Dholakia, L.

  Razzall, L.

  Dixon, L.

  Rendell of Babergh, B.

  Dormand of Easington, L.

  Rogers of Riverside, L.

  Dubs, L.

  Sainsbury of Turville, L.

  Evans of Parkside, L.

  Scotland of Asthal, B.

  Evans of Watford, L.

  Sewel, L.

  Farrington of Ribbleton, B

  Shore of Stepney, L.

  Gladwin of Clee, L.

  Simon, V.

  Goodhart, L.

  Simon of Highbury, L.

  Goudie, B.

  Strabolgi, L.

  Gould of Potternewton, B.

  Symons of Vernham Dean, B.

  Grenfell, L.

  Taylor of Blackburn, L.

  Hacking, L.

  Thurso, V.

  Hampton, L.

  Tordoff, L.

  Hardy of Wath, L.

  Walpole, L

  Harris of Greenwich, L.

  Wedderburn of Charlton, L.

  Harris of Haringey, L.

  Whitty, L.

  Haskel, L.

  Williams of Mostyn, L.

  Resolved in the affirmative, and amendment agreed to accordingly.
  Clause 15, as amended, agreed to.
  Baroness Ramsay of Cartvale: My Lords, I beg to move that the House be now resumed. In moving this Motion I suggest that the Committee stage on this Bill be resumed not before 8.50 p.m.
  Moved accordingly, and, on Question, Motion agreed to.
  House resumed.

Tourism and the Working Time Directive
7.52 p.m.
Lord Cadman Lord Cadman rose to ask Her Majesty's Government what is their assessment of the effect of the introduction of the Working Time Directive on the well-being of the tourist industry.
The noble Lord said: My Lords, at the outset let me thank all noble Lords who are to take part in this debate this evening, as I shall not have an opportunity to do so at the end. Also, I thank the Minister in advance for his reply, which I am sure will be both informative and sympathetic.
The tourist industry generates expenditure of £53 million a year and accounts for some 5 per cent of our gross domestic product. It is our largest invisible export and provides employment for 1.75 million people. In an era of declining manpower needs, both in manufacturing and agriculture, it is tourism, especially in rural areas, which has been the greatest provider of alternative employment. The industry depends on an infrastructure of a range of accommodation to cater for all tastes and pockets.
One specific sector with which I am closely involved caters for touring caravans. My involvement is that I am both a practitioner and a member of the Caravan Club. I am also a member of the council of that club. which is the largest user group of touring caravans in the United Kingdom and probably in the world. As such the club owns and operates the largest network of sites—203 of them—for touring caravans in this country. Operating a site network is a manpower intensive business. Indeed, for the club's network it is necessary to employ a total of 640 people on a variety of contracts to meet all needs throughout the season for warden service.
The usage of sites is a succession of unpredictable peaks and troughs because touring caravanners enjoy the ability to react flexibly to short-notice, to changes in the weather and the occurrence of events and sporting fixtures among other things, for which they will use their caravans as a base. Therefore sites are manned to cover all possible peaks, including the likelihood of people travelling through the night and arriving at all hours. This element includes the important group of caravan as who are incoming tourists from overseas. They arrive by ferry, often in the middle of the night and then drive to a site relatively close to the ferry port where they will start their holiday.
The warden workforce, prior to 1999, was happy to live in their caravans, on their sites, throughout the season, being available to members when required, including for emergencies during the night and taking their own free time when slack periods happened to occur. However, with the imposition of the Working Time Directive, that approach is no longer possible. The club is required to prescribe working hours to the wardens to ensure that the maximum is not exceeded over the reference period allowed. While it is true that some individuals might opt out of the working time directive, that cannot be relied upon and contracts have to be drawn up that recognise that all wardens have

363
statutory rights covering maximum hours, rest time during the day, rest days during the week and paid holidays.
The matter cannot be divorced from the associated legislation to impose a national minimum wage. Wardens might be prepared to forego their rights under the Working Time Directive, but none can opt out of the minimum wage. And of course, stipulating the minimum at which the least onerous job must be paid forces up the rate at which those with greater experience and those with greater responsibility must be paid.
The Caravan Club has found that if it was to provide in 1999 the same level of service at its sites as in 1998, it would involve employing more people to cover the hours and paying many of them at higher rates. The result would have been a 60 per cent increase in the wardens' salary bill alone. That was unacceptable, so a compromise solution has been adopted whereby the level of service on sites has been degraded by ordering wardens to institute practices which mean that no service of any sort is available at certain times. Even so the salary bill has increased by 30 per cent—£600,000 a year. That increase has not been passed on in increased site fees in 1999 and so the site network will run at a loss. Clearly, that must be rectified for future years and the club will be providing a lower quality service at greater cost. That is not a recipe for success in a service industry such as tourism.
The customers of the tourist industry who sustain economies of so many rural areas use discretionary money. The facts of life in 1999 are that people have less money to spend at their own discretion, especially those likely to come to the UK from overseas. My noble friend Lady Anerley of St. Johns, in a debate on 12th May last, made reference to the British Activity Holiday Association, which also has resident staff, but as part of its community. There are many such organisations. I wonder whether the Government realise how many problems are being caused to these bodies in trying to cope with the introduction of this directive.
The industry is having to deal with other directives, such as parental leave, part-time workers and works councils. To those in due course will be added the minimum wage regulations, the provisions of the Employment Relations Bill and, in the case of the hospitality industry—an important part of tourism—the impending Food Standards Bill. The regulations are seen by many in the hospitality industry as unhelpful and expensive to implement. Far from providing protection in employment, which seems to have been the Government's reason for their introduction, the result has been bureaucratic complication and expense. Remember the previous government negotiated an opt-out, so this is not something imposed on us by Brussels.
The British Hospitality Association has seen fit to offer its members—300,000 establishments—a 60-page pack to help them through the implementation of the directive. Perhaps the Minister would like to comment on the user-friendliness of it all.
To what extent will the devolved administrations in Wales, Scotland and Northern Ireland be able to assist those members of the tourist industry in their areas, bearing in mind that they are taking up many of the regional functions of the English Tourist Board?
All of this is in stark contrast with the practice abroad where tourism, despite the adoption of additional working and wage regulation, seems to be much better protected from the worst aspects of such directives by the various agencies set up by the other member states.
The directive seems to pile complicated problems on to possibly fragile businesses that they could well do without. That view was confirmed in an article in the Daily Telegraph business section on 10th June which highlighted the widespread ignorance of what the directive is about; the need for both employers and employees to keep better records and look forward to increased litigation in the future. That is hardly an exciting prospect for future industrial relations.
This centrally driven burden of unnecessary regulations is being imposed on the tourist industry to its detriment. Prescribing working hours contractually to ensure that maxima are not exceeded and wage bills are contained, in an industry where peaks and troughs of activity cannot be forecast, is not a sensible management practice. The working time directive, associated with the national minimum wage, is inimicable to the best interests of the tourist industry and certainly to the sector in which I am involved.
8.3 p.m.
Lord Haskel: My Lords, on the bicentenary of the French Revolution I happened to be on business in Beijing. At a reception, a very senior Chinese official was asked what had been the effect on China of the French Revolution. He thought for a few moments, and then he said: "I think it is too early to say."
I think it is too early say what the effect of the Working Time Directive has been on tourism. I do not think that in one season its intricacies and flexibilities have been fully understood or experienced by British business. However, I am grateful to the noble Lord, Lord Cadman, for providing me with this opportunity to say something about the tourism industry.
I live in Richmond, Surrey, and my local FE college, Richmond College, is one of our leading establishments for training people for the tourism industry. It seems that there are two parts to the industry: the hospitality side and the travel and tourism side. The head of the department, Mr Alan Crossthwaite, tells me that there are plenty of people who want to join the travel and tourism course, but that it is a struggle to find people for the hospitality and catering courses.
He explains this as a matter of image. Travel and tourism has an exciting and progressive image, whereas hospitality seems to be a poor relation. The hospitality sector has an image of working long hours, with a reputation for low starting pay and the lack of a proper career structure. But this is changing with more and more companies introducing straight shift work into the kitchen and hotel so that people can work regular 40 to

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45 hour weeks. Obviously, not enough information is provided to schools and colleges for students to make an informed choice.
New hotels are opening all the time and the tourism industry is expanding. There are no problems in placing qualified students; indeed, the opposite is the case. Some are tempted to take up full-time work before they are qualified because there is such a demand for their skills.
It is becoming a more skilled industry. There are important skills to be learned in hospitality and service, skills to enable the industry to increase productivity. Things do not stand still. With these additional regulations comes the new technology, the new equipment and ways of increasing people's productivity. People in every industry are having to adapt in this way; that is what competitiveness is all about.
As it becomes a more skilled industry, so the old practices become more outdated. Surely, tipping is one of these outdated practices? The tipping system must deter some recruits. Apart from here and the United States, most countries seem to have got rid of tipping, and in my view quite rightly. As the industry becomes more skilled, so people's pay should become less dependent on the idiosyncrasies of tipping. I think it is demeaning that a skilled person should have to depend on tips.
Therefore, I do not think that the, problem is the Working Time Directive. If I may say so, it may just be a little bit of anti-European prejudice. The problems for the industry date from well before the introduction of the Working Time Directive. Instead of blaming the directive, has the noble Lord considered how tourism can benefit from the New Deal? How effective has the industry been in persuading personal advisers and employment service staff working with New Dealers that there are interesting, exciting and rewarding possibilities for work in the tourism and hospitality industry?
All industries are competing to attract young people. They have to make themselves attractive to young people in schools and colleges. They have to offer reasonable starting pay and good career prospects. The hospitality and tourism industry has to make itself attractive to those who like working with people or who are keen on developing their social skills. Schools should also emphasise these features and the fact that hospitality can be as exciting and as varied as travel and tourism or any other industry.
The noble Lord, Lord Cadman, told us how important the tourism industry is, and he is right; it is important to the nation's economy that it should be successful. However, I say to the noble Lord that the problem is not the Working Time Directive; the industry should look to the way it is organised so that it can then solve its own problems by making itself much more attractive and competitive and offering better prospects to today's young people.
8.7 p.m.
The Earl of Stair: My Lords, the noble Lord, Lord Cadman, has brought before noble Lords a very important question. I must first declare an interest in that
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I run a small tourist enterprise in south west Scotland, and it gives me great pleasure to be able to speak on this subject, which is a matter reserved from the devolved Parliament.
The directive is aimed at protecting the rights of all workers. It does not, however, specify between temporary or seasonal workers and those that are employed full-time.
With the ongoing agricultural crisis and with no obvious sign of improvement, the noble Lord, Lord Cadman, highlighted how the tourist industry is becoming increasingly more vital to rural areas in the United Kingdom.
The working time directive is in principle, like the minimum wage, not a bad thing. I support any legislation that will help to protect exploited workers. However, this directive has, I believe, been badly handled by both recent governments. There was initially plenty of time for the last government to sensibly prepare for this directive to be implemented. It could have been properly discussed and all businesses could have planned for its implementation. The approaching general election gave the prospective Labour Government the opportunity to play the manifesto card yet again, promising to implement the minimum wage and the Working Time Directive as soon as possible.
The directive was implemented at very great speed, with plenty of good intentions, but sadly with not enough attention to detail. It was originally put before Parliament on 30th July and was due to be implemented after the recess at the beginning of October.
The directive can be easily implemented by tourist enterprises that are open for the majority of the year because they operate in similar ways to standard businesses. The enterprises that are particularly affected are small tourist businesses which rely on seasonal help and which are open only for a short time of the year but for more than the 13 weeks at which the entitlement to holiday pay cuts in. Because these enterprises are only seasonal, there is plenty of time for workers to take holiday when required. The directive is designed to protect the rights of full-time workers to ensure that they are able to take their full entitlement to holiday in a full year.
The directive is aimed at protecting the rights of the worker, not the employee, and is therefore trying to cover a very wide field of employment in one sweep.
The record-keeping that is now required, followed by the calculating and paying of holiday entitlement, will create an extra burden for many, often niche, enterprises, as well as increasing their overheads through extra administration costs, the result of which can only lead to less profitability and consequently put pressure on the viability of the smaller enterprise. For example, this year a seasonal enterprise open for approximately six months is likely to have its overheads increased by approximately 6 per cent, in a season which is already showing every indication of being worse even than last year.

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As we are rapidly approaching the end of the first year of the effectiveness of this directive, can the Minister give an assurance that the Government will review the working time directive in the light of the effects on particularly small rural tourist enterprises?
8.10 p.m.
Viscount Montgomery of Alamein: My Lords, both the noble Earl, Lord Stair, and my noble friend Lord Cadman spoke with authority about an industry with which they are directly involved. I approach this from a slightly different angle—with a non-pecuniary interest—in that I am the honorary patron of the Restaurant Association. The noble Lord, Lord McIntosh, will remember that I have spoken about this industry on a number of occasions and he has always been extremely helpful.
The restaurant business is a very large one; indeed, there are something like 100,000 establishments now in this country, of which more than 90 per cent—about 93,000—are businesses which employ fewer than 10 people. So they are essentially very small businesses. Interestingly enough, within those small businesses there is a huge number of part-time workers. The 1998 Labour Force Survey revealed that 60 per cent of restaurant employees work part time. It is a service industry and such small industries, as the noble Lord, Lord Haskel, said, can easily become overburdened with legislation, of which there has been a large amount lately. They also become burdened with bureaucracy which they find difficult to deal with.
As these impositions come forth from government, they impose a burden on the industry and reduce its flexibility. Essentially, service industries have to be intensely flexible. If employers in the restaurant trade are required to extend benefits, incentives, health schemes, and so on, to part-time employees, they will find it very difficult and may well decide that they have to reduce employment; and that would have exactly the reverse effect of what the Government are trying to achieve.
The noble Lord, Lord Haskel, referred to skills. He is quite right to say that the college to which he referred has done a great job in introducing people into an important industry and training them for careers. He is equally right to talk about tipping, although that is a slightly different issue and one which I have brought before the House on various occasions. I did so particularly during the time of the previous government, but we were not able to make any progress on the subject. So that is another issue to which we need to return on another occasion. The fact is that skill shortages do exist in this industry. If greater burdens are placed on the industry and if those burdens become more complicated, it will be very difficult for progress to be made.
I know that the noble Lord, Lord McIntosh, is well aware of the fact that this is an industry in which there are huge employment opportunities. These are particularly available to part-time workers and I understand that the Government are very keen to
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encourage part-time workers. The problem is that the tone of the report which has been issued is rather heavy-handed. I feel that it would perhaps have been more acceptable generally within the industry if it had had a somewhat lighter touch. Therefore, I look to the Government to try to be more flexible in the way that they approach these impositions. Perhaps they could have more detailed consultations and listen more carefully to what the industry has to say on this matter. The people who work in it are very articulate and have a great opportunity to provide information on a wide front. I believe that that would be helpful to the Government in coming to conclusions about the imposition of additional burdens on a industry in which the employment opportunities are so great; in which the career possibilities are enormous; and in which there is much social mobility, with people starting from very small beginnings and becoming very successful. It is an industry in which all you need is talent and drive to succeed. That is something which the Government should be encouraging, rather than imposing burdens which may make it difficult for this to happen.
8.15 p.m.
Viscount Thurso: My Lords, perhaps I may begin by congratulating noble Lords on the brevity and lucidity with which they have contributed to the debate. The Minister and I are sharing in the proceedings on the legislation both before and after the debate and we may yet be able to snatch a sandwich. We are indeed grateful.
I declare my interests in the hospitality and tourism industry. I am patron of the HCIMA, as well as being a fellow. I am also the patron of the Academy of Food and Wine Service, and I have served on committees with the British Hospitality Association. I know that the noble Lord, Lord Cadman, received some briefing from the association because it kindly sent me a copy. In addition, I am of course working in the industry.
I thank the noble Lord, Lord Cadman, for bringing forward this short debate. He has cast a rather wide net because he threw in the minimum wage, the employment Bill that we are currently discussing, together with various other things. He has chosen a very interesting word in the title of the Question which refers to the "well-being" of the tourist industry. It does not refer to the profitability, the cost, or anything else; it concentrates on the well-being of the industry. Indeed, we could have a short debate discussing what he actually means by that.
Perhaps I may correct the noble Lord on one small piece of history, as I understand it. Perhaps the Minister will be able to confirm this. The noble Lord stated that the previous government had negotiated an opt-out. So far as I am aware, that is not the case. There was an EU directive concerning health and safety which the previous administration refused to accept. The European Court of Justice ruled that the previous government were not correct, and the directive was sent back to this country to be implemented. Therefore, so far as I understand it, in implementing the Working Time Directive the current Government are merely doing something that the previous government would have been obliged to do had they not lost office.

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It seems to me that there are two broad matters to consider—the principles and the practicalities. Perhaps I may, first, briefly address the principles. Essentially, as I understand the argument, if you cannot operate without making people work more than 48 hours a week or paying them less than £3.60 an hour, your business will not work. I have fought my entire management life in the tourist industry on the basis that we should have quality employees and that those employees should have a right to decent working conditions and a decent wage.
Over many years, we have demonstrated in our industry that we are not in a position to deliver that collectively. I have always believed that the reason for that is that the fragmented nature of our industry makes it impossible for the workforce to organise in a collective manner in such a way as to enable it to obtain a reasonable wage; and that has rebounded on us. As the noble Lord, Lord Haskel, pointed out, we have a reputation for poor pay and poor conditions, which is thoroughly undeserved today. In our industry these days we offer pay and conditions that are equal to those in many other industries. Therefore, whenever I can, I shout loud to try to persuade people to go into our industry. I certainly say to them that they will be as well paid and as well looked after as in any other industry. I reject the idea that the only way in which our industry can survive is by offering poor pay and conditions.
However, having said that, there are clearly difficulties when it comes to the practicalities. As the noble Earl, Lord Stair, said, it is a question of attention to detail. As I wish to be even-handed, I shall give two examples. First, I refer to my own business, Champneys, where I rushed to implement the Working Time Directive as soon as I possibly could, having already implemented the minimum wage two years before it became law. We carried out an audit and to my horror I discovered that my chefs were being paid for a certain number of hours but were working a great deal more. Apparently someone had decided that that was the only way to implement the measure. Therefore, although I thought I was a good employer who was doing everything properly, I was in practice not doing everything right. It is interesting to note that in putting the situation right we discovered that, with a little organisation, we could implement the measure with the same number of people. I mentioned this to the BHA when I telephoned it in order to obtain its brief on the matter. The gentleman I spoke to told me that I was not alone as regards my experience. He told me that there is an extremely well known London five star hotel where the head chef told the general manager that if the measure was implemented in law he would need five more chefs in the kitchen. As one can imagine, the general manager decided to consider the matter further. By applying some sensible process engineering, it was discovered not only that there was not the need for five extra chefs but that the number could be reduced by two. Therefore, in that instance, the Working Time Directive cut employment.
I come here this evening after speaking at the Institute of Management Services of which I am also patron. We launched today an index for measuring productivity in the service sector. There is an interesting lesson to be
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learnt here; namely, that if we learn how to be more productive we can satisfy both sides of the equation. We can pay more and maintain our service standards. Certainly, the detail of the statutory instrument is extremely complicated. Schedule 1 on workforce agreements is an absolute minefield. I have great sympathy with people who are trying to plough through it. The BHA issued a 60-page booklet on the matter. I believe that there are four cases currently going through the courts to test various areas of the law. The noble Lord, Lord Haskel, made the best comment when he said that it is simply too early to make a judgment on the measure. If we were debating this subject a year down the track, it would have far more relevance. We would know the results of some of the court cases and the industry would have had more experience of implementing the measure and would be able to demonstrate where the true problems lie.
I ask the Government to consider carefully the genuine problems that exist. Bigger businesses., such as mine can usually survive, but smaller businesses with fewer employees may experience difficulties, not with the principle of the legislation—that is, that people should not be made to work excessive hours—but with its implementation. Some of the detail of the legislation has led to grave difficulties. I hope that the Government will listen sympathetically to what the industry has to say. We need to find solutions to help the industry to comply with the detail of the measure without violating its principles. I certainly support those principles strongly, as I am sure do the Government.
8.22 p.m.
Lord Luke: My Lords, I thank my noble friend Lord Cadman for introducing this debate and for giving us the opportunity to discuss this important matter. I also thank him for giving us such an interesting insight into caravanning and its apparently many problems.
The tourism industry in Britain is the fifth largest in the country and accounts for some £53 billion a year, as my noble friend Lord Cadman said. It accounts for 5 per cent of our gross domestic product and 8 per cent of all consumer spending. It employs some 1¾ million people which is 7 per cent of the total workforce. In recent years it has been responsible for one in six of all new jobs. It comprises some 150,000 businesses of which the great majority are small. Yet the industry has the potential to create even more jobs, generate even more wealth and provide the means and will to rejuvenate run-down areas and resorts. Unfortunately, this potential has been seriously threatened by the raft of new regulations introduced by this Government. As my noble friend and other noble Lords have pointed out, the Working Time Directive seriously affects the well-being of the tourism industry. In the Government's strategy document Tomorrow's Tourism it is recognised that,
"Poor regulation is particularly damaging for small businesses, who have fewer staff to implement, and are less able to absorb the costs of regulation".
The noble Viscount, Lord Thurso, mentioned that point.

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Despite this, the Government have introduced no fewer than 2,400 new regulations across commerce and industry since 1st May 1997, many of which bear hardest on the tourism industry which we are discussing tonight. The number of regulations is significant. However, it is not just a matter of the overall number but also of their nature and impact. Those introduced by the Government have already had a measurable adverse impact on the tourism industry. One has only to talk to people running tourism businesses to know that.
It is indeed serious for tourism that the Working Time Directive has been introduced. Tourism, almost above any other industry, needs a flexible labour force, as my noble friend Lord Montgomery said. Large businesses can absorb extra costs. However, they do not want to do so as the measure will cost them many millions of pounds. The measure will result in fewer jobs—as the noble Viscount, Lord Thurso said—but the larger businesses can accommodate those costs. However, as I have said before, the majority of the industry is made up of small businesses which are not in a position to afford the extra costs of bureaucracy. The fixed on-costs of compliance in terms of extra clerical work, computer systems and so on are much the same whether a business is turning over £50 million or £500,000, but the burden is correspondingly greater on smaller businesses.
The Working Time Directive is having a particular impact on the way in which businesses can manage shift patterns for employees such as night porters in hotels. The compliance costs are significant. Most often the directive concentrates on the 48 hour maximum, but the real problem lies in the rigid shift patterns and break requirements that the directive imposes. This industry often operates on a 24 hours per day basis. The Working Time Directive approaches issues from the point of view of what is needed for those who work on a production line in a factory. It ignores the reality of work practices for the majority of people in the United Kingdom working in a modern, diverse economy.
An additional problem is identified in issue 99 of the journal of the Tourism Society. The directive itself appears to be flawed. A solicitor writing in the journal points out that even though the regulations became United Kingdom law on 1st October 1998,
"there are all sorts of grey areas on which we will have to wait for decisions from the courts and industrial tribunals before knowing whether the regulations apply. Key unknowns are, for example, whether employees are working if they are on call, or where a large part of their job involves attending industry functions. Do the regulations apply to workers abroad, such as holiday representatives or employees who travel a lot with their work? There are several categories of employees within the tourism and travel sector such as: air, rail, road and sea transport, to whom the regulations do not apply. Anyone whose job involves travel, such as a pilot or cruise manager, is not covered by the regulations. However, anyone based at an airport, harbour or railway station is subject to them-a curious and illogical distinction: it will be interesting to see how it works in practice".
It is unfair, damaging and derogatory to the tourism industry to have to be taken to court and tribunals to discover what the working time regulations really mean. The tourism industry does not normally whinge; it gets on with its job. It copes with its extra burdens and it
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plans for the future. However, it is deeply concerned about the impact of the Working Time Directive on its future.
The Minister for Tourism said in another place on 5th May that the issue will be considered at the tourism summit. However, this will not be held for another year and the industry is suffering now. What will the Government do to change the operation of the Working Time Directive so that its impact on the tourism industry is not so damaging?
8.30 p.m.
Lord McIntosh of Haringey: My Lords, the Government, too, are grateful to the noble Lord, Lord Cadman, for introducing the debate. It gives us an opportunity to say something about the progress of the Working Time Directive in general in addition to how it applies to the tourism industry.
I agree with the noble Lords, Lord Cadman and Lord Luke, about the importance of the tourism industry to our economy and to our labour force. In particular, I agree with the noble Viscount, Lord Montgomery, about the career opportunities available in the tourism industry and the proportion of jobs created within the tourism and hospitality industries in the past few years.
The noble Lord, Lord Luke, referred to the Government's Tomorrow's Tourism strategy. It was of course published by the Government earlier this year. It is a strategy developed in close collaboration with a very wide range of leading people in the tourism industry, who share responsibility for it and the views expressed in it. Tomorrow's Tourism states very clearly that the tourism industry needs a well-trained, well-motivated, well-rewarded workforce. My noble friend Lord Haskel and the noble Viscount, Lord Montgomery, have referred to the issue of training; the noble Viscount, Lord Thurso, referred to the issue of rewards; and motivation in the tourism industry was a theme which was, if not bubbling to the surface, apparent throughout the debate.
We must have that sort of workforce to contribute towards creating more satisfied customers and more profitable tourism businesses. Having said that, like other noble Lords, I rather like the phrase of the noble Lord, Lord Cadman, who referred to the "well-being" of the tourism industry. That is a proper way to look at it; it clearly shows concern not only for those who work in the tourism industry but who benefit from its services—in other words, the customers. In turn this will make Britain more attractive and competitive as an inward and domestic tourist destination. So let us all be in accord about the importance of the tourism industry.
I shall now turn to the Working Time Directive in particular. My noble friend Lord Haskel said that it is too early to say after one season. But, as the noble Viscount, Lord Thurso, reminded us, we have not yet had one season. It only came into force in October of last year and the full tourist season is yet to be completed—I nearly said endured. In saying that it was too early to say, my noble friend reminded me of the Oxford college bursar who criticised his college's investment policy on the grounds that the last 200 years had been wholly exceptional.

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Perhaps I may remind your Lordships of the status of the Working Time Directive. The noble Lord, Lord Cadman, said that it was an opt-out; the noble Viscount, Lord Thurso, rightly told the House that it was not an opt-out; it is a treaty obligation and, as we know, we ate two years late in implementing rt. We had some difficulty in getting away with delaying it for that time. It should have been implemented by the previous Government.
Having said that, it is important that when we are talking about regulations—and I hear the noble Lord, Lord Luke, repeating the canard about 2.400 regulations, which is actually a reduction on the annual figure of the previous Government—we recognise that the issue is the quality, not the number.
Noble Lords should have paid attention to the speech of the Secretary of State for Trade and Industry, Stephen Byers, to the British Chambers of Commerce in Glasgow on 3rd June. He said that we have got things wrong with the Working Time Directive to a significant extent. We could have done better, particularly with the guidance that we gave and the explanations that we issued. We have been listening carefully to what business has had to say about the complexity of the working time regulations. We recognise what the noble Lord, Lord Cadman, said, that the worker friendliness of the regulations is not at all what it should be.
In the next few weeks we will be publishing revised and improved guidance on the regulations and we will ensure that it is in plain English. It will be in the form of what is described as "frequently asked questions". Those familiar with the Internet will know that "FAQ" is a common way of introducing people to new subjects on the Internet. That is the way we plan to approach the matter.
The noble Earl, Lord Stair, referred to the difficulty of record keeping. For the vast majority of British businesses their existing documentation and systems already meet the record-keeping requirements of the regulations. I know that tourism-related employers have expressed concern about this matter, but the majority of businesses are doing enough already. If the regulations did not make that clear, so much the worse for the regulations. The directive does not require elaborate new record keeping.
The new guidance will also clarify some of the other grey areas that have been referred to. It will answer the questions that have been asked most frequently since the regulations came into force. For example, it will include a sample assessment questionnaire for night workers, plus additional guidance on who is covered by the regulations and what is meant by "working time". It will cover the issues referred to in the debate about the definition of work and the coverage of the directive. There are particular problems with transport industries associated with tourism.
The debate gives me an opportunity to explain rather more fully the extent to which there are flexibilities in the directive and in the regulations which can be
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beneficial to employers in the tourism industry. The noble Earl, Lord Stair, asked me to give a commitment to review; I can certainly give that. However, before I do that, I should say rather more about the flexibilities incorporated into the directive and the regulations.
The Government's aim is that workers should not be required to work more than an average of 48 hours per week over a 17 week period. That is not every week but over a 17 week period. In many tourism industries a 17 week period of continuous work is a long period. Those who wish to work more should not be prevented from doing so. An individual worker may choose to agree to work more than a 48 hour average weekly limit. I should imagine that a seasonal worker, such as someone who runs a caravan park, might well agree to that on the basis that he will take his well-earned rest outside of the season. I am sure that happens all the time. I have a cousin whose only occupation is a fire watcher on top of a mountain in Oregon. He works virtually 24 hours a day for four months in the year; then he does not work for the rest of the year. It is a reasonable deal which would be allowed for under the Working Time Directive.
The additional guidance, which the Government will publish soon, will contain sample opt-out forms. In addition there are a number of flexibilities available where there is a "foreseeable surge of activity". The noble Lord, Lord Cadman, referred to "unforeseeable" surges but a lot of the seasonality of tourism is foreseeable. Tourism, where the pattern of activity is often seasonal, is specifically suggested in the directive as an example of this. The noble Earl, Lord Stair, appeared to think that that was not the case. In such circumstances, the reference period, where the average 48-hour limit has been complied with, can be extended to 26 weeks instead of 17 weeks. It may be extended to up to 52 weeks, as in the example of my cousin, by a collective or workforce agreement. In addition, workers' entitlements in relation to night work limits, rest periods between each working day and in-work rest breaks, all of which have been contentious, may he modified under these circumstances.
I do not think that it is widely known how far the flexibilities within the Working Time Directive can work to reduce or eliminate problems in the tourism industry. I do not think it is realised how well the Working Time Directive goes with the tourism strategy set out in Tomorrow's Tourism. Our approach to the Working Time Directive is entirely consistent with Tomorrow's Tourism. We seek to prevent the exploitation of workers without imposing unnecessary or excessive new burdens on business. That is good for all of us.
Baroness Amos: My Lords, I beg to move that the House do now adjourn during pleasure until 8.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.40 to 8.50 p.m.]

Employment Relations Bill
House again in Committee.
Clause 16 [Agreement to exclude dismissal rights]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 277:
Page 9, line 11, at end insert—
(" (6) Section 197(1) of the Employment Rights Act 1996 does not prevent Part X of that Act from applying to a dismissal which is regarded as unfair by virtue of section 99 or 104 of that Act (pregnancy and childbirth, and assertion of statutory right).")
The noble Lord said: In moving Amendment No. 277 I should like to speak also to Amendments Nos. 300 and 301.
Clause 16 will ensure that employees on fixed-term contracts will no longer be able to sign away their rights to unfair dismissal protection at the end of the contract. Our Amendment No. 277 to the clause addresses an omission in the current provisions, and has an effect upon waiver clauses already agreed before the Act comes into force. The amendments to Schedule 8 (Amendments Nos. 300 and 301) are consequential on the abolition of dismissal waivers.
We shall deal with other transitional arrangements in the commencement order for the clause. We intend to ensure that waivers agreed prior to abolition do not extend beyond their originally envisaged term, or any extension of the term already entered into by the time the clause is brought into force. Some employees could otherwise be locked into waiver clauses, perhaps for many years after their abolition, by the repeated extension of a fixed-term contract containing a waiver entered into beforehand.
The Employment Rights Act 1996 provides that fixed-term employees who have waived their right to claim unfair dismissal are nevertheless protected, in the majority of cases, if they are dismissed for specified reasons which are regarded as automatically unfair. This is achieved either by disapplying the waiver provisions or by enabling employees to complain that they have suffered a detriment if they are dismissed for these reasons, although for other purposes detriment does not include dismissal.
However, there are no such arrangements in connection with two of the reasons for dismissal which are regarded as automatically unfair. These are the reasons set out in Sections 99 and 104 of the 1996 Act which protect employees against dismissal on grounds of pregnancy or maternity, or because they have asserted a statutory employment right. This is a defect in the legislation. The result is that employees who have entered into unfair dismissal waivers cannot seek redress if their fixed-term contracts are not renewed for these reasons. With the abolition of unfair dismissal waivers this will generally cease to matter, since in future employees will not be able to waive their rights, whatever the reason for their dismissal. However, employees who have already entered into waivers before the abolition is brought into force will remain at a potential disadvantage unless specific provision is made for them.
The amendment to Clause 16, therefore, disapplies the waiver provisions as far as concerns the reasons set out in Sections 99 and 104 of the 1996 Act. It will ensure that employees who have entered into waivers before abolition will nevertheless be entitled, after that date, to bring a claim for unfair dismissal if their contracts are not renewed on grounds of pregnancy or maternity or because they have asserted a statutory employment right. It is clearly right that they should be protected in this way, and I urge the Committee to rectify the defect in current legislation by accepting these amendments. I beg to move.
The Earl of Mar and Kellie: Amendment No. 277A, which stands in my name, is part of this group of amendments. Its provenance is the Law Society of Scotland. The amendment removes any doubt about whether the effect of the clause is retrospective. Contracts entered into before the commencement of this Act would not be affected if this amendment were accepted. Parliament should not retrospectively alter contracts negotiated and entered into freely by two consenting parties. The amendment will ensure that the new provisions will apply only to new contracts negotiated after commencement. Only after commencement can negotiations take full account of the current law.
Lord Birkett: My Amendment No. 277B also falls within this group of amendments. It arises out of concerns that I expressed at Second Reading, which I shall not weary the Committee by repeating tonight. I simply remind noble Lords that they relate to the theatre, in particular long-running shows often, but by no means exclusively, in the West End. Musicals can. and happily often do, run for years. To ensure the freshness of those shows the management usually gives fixed-term contracts of a year or so. Those contracts contain precisely the waiver referred to a moment ago by the noble Lord, Lord Sainsbury. By that waiver the employee, the stage performer, agrees not to claim unfair dismissal in the event of his contract not being renewed for a further period. Sometimes those contracts are renewed but by no means exclusively.
This arrangement is entered into quite freely with the agreement of unions, management and the performers themselves, and it works very well. But the Bill as now drafted would make such a waiver clause impossible. At Second Reading the noble Lord, Lord McIntosh, gave it as his opinion that the mere failure of management to renew a contract at the end of a fixed-term contract could not of itself be construed as unfair dismissal. Although I absolutely agree with that opinion, which has the uncommon virtue of common sense, the noble Lord's words cannot be construed as having any legal force. In case anything should go wrong I have tabled this amendment which, stated simply, gives the Secretary of State power to alter the situation should he think it beneficial to do so.
Regardless of how the Committee views the amendment itself, I should like to make two tiny points before sitting down. In many industries, including the

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theatre, it is very sensible in complicated and small matters of this kind for the profession concerned to make very clear its policies, procedures and practices for the benefit of employers, employees and unions. It is very important that those matters are set out more clearly than they have been in the past.
The second matter which I believe will be very important after the passing of this Bill is that wherever there are conciliation procedures already in place within an industry it is very important that those, as it were, domestic procedures should be followed through before cases come to official tribunals. Both those matters will help the situation in the future considerably.
9 p.m.
Lord Meston: I support the noble Lord, Lord Birkett, in what I suppose he might call "The Mousetrap" amendment or the "Les Miserables" amendment. The existing provisions of Section 197, which the Bill will remove, have been described as an uneasy compromise between the need to prevent abuse of the fixed-term contract to avoid legislative protection and the legitimate need for short-term employment and flexibility.
The trouble is that our law does not distinguish between those situations in which the employer has a genuine and good reason for offering short-term contracts and those who may wish to exploit the potential for abuse by keeping a workforce without statutory protection through repeated extensions of short-term contracts with waiver clauses. That is the potential abuse which the Court of Appeal has identified and which the Government are alive to and wish to remove.
In fact there are two real mischiefs. First, the employer and the employee contract out of the protection which Parliament intended most employees to have. Secondly, where in reality the employment relationship will be continued by renewal at the end of the fixed period, the ability to contract out of statutory rights by waiver and to offer a new contract to the same person gives that employer a lever which can be unfairly used and which can create stressful uncertainty in the mind of the employee. Those are the two mischiefs and I fully understand why the Government wish to deal with them.
I agree with the noble Lord, Lord Birkett, that there may be cases where the genuine fixed-term arrangement is justified. That is certainly recognised in continental jurisdictions. Therefore, it may be that something along the lines of the noble Lord's amendment should be considered. Most of the case law in this area has been generated for some reason by the BBC. We do not know why, but it appears that the BBC favours that particular contractual arrangement and then—dare I say it?—gets it wrong and ends up in court. There are also academic bodies and even, I believe, government departments which in the past favoured these arrangements, and possibly for perfectly good reasons.
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While I entirely support the general thrust of getting rid of Section 197 as it stands, there may be an argument for preserving some sort of discretion to allow it in entirely appropriate situations such as the noble Lord, Lord Birkett, suggests.
Lord Sainsbury of Turville: I shall deal first of all with Amendment No. 277A. We intend to ensure, in the commencement order for Clause 16, that it does not apply to waivers entered into before commencement. This is the effect sought by the noble Earl's amendment. Therefore, I invite him to withdraw it.
Amendment No. 277B would introduce powers to specify classes of employment in respect of which unfair dismissal waivers could be agreed. As my noble friend Lord McIntosh explained at Second Reading, the abolition of unfair dismissal waivers will restore a fundamental right to fixed-term employees. I firmly believe that all such employees are entitled to that right. The amendment suggests that waivers can be of mutual benefit to employers and employees. That is not my view. I do not believe it is ever of benefit to employees to be asked to give up the right to seek redress if they are treated unfairly. I see no case for allowing waivers to continue in any field and the power sought by the amendment is therefore unnecessary.
Of course, the Government have no wish to harm the theatre industry. On the contrary, we want to see it continue its great success and the enormous contribution it makes to the economy and to the national culture. But we do not consider that there is any danger of that from Clause 16. We do not consider that there would be any harm. Theatrical employees clearly have just as much right not to be dismissed unfairly as employees in other fields. If their employers are concerned that they may find themselves in difficulties if they decide to dismiss them when their fixed-term contracts expire, the remedy is in their own hands. The abolition of waivers will not prevent them from not renewing the fixed contracts of employees. It will simply mean that they must be carried out for a fair reason and in a fair manner. On that basis I see no reason why "The Mousetrap" should not continue indefinitely and give pleasure to our grandchildren in the future and be renewed constantly with new people. That process simply has to be done in a fair and reasoned manner. I believe that policies and procedures could be developed to make certain that that is done properly and, therefore, employment tribunals will not have to be significantly involved.
That is something which the law requires of all employers. If one begins to make exceptions many more exceptions could be made for similar kinds of arguments which ultimately do not stand up. I am sure that the noble Lord does not wish to suggest that theatrical employers should be free to act less fairly than others. I urge him to withdraw his amendment.
On Question, amendment agreed to.
[Amendments Nos. 277A and 277B not moved.]
Clause 16, as amended, agreed to.
Clause 17 [Part-time work: discrimination]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 278:
Page 9, line 15, at end insert ("unless such unfavourable treatment is reasonably justified.")
The noble Baroness said: In moving this amendment I shall speak to Amendments Nos. 279 and 281 to 283. As regards Amendment No. 278, I would not like it to be thought that I am in favour of anybody being treated unfavourably. But under this Government's egalitarian philosophy, as contained in the Bill—for example, in the provisions in Clause 15—any distinction between one employee and another is regarded as a detriment even if there are valid reasons for that distinction.
In this clause, the Government propose to give the Secretary of State powers to make regulations to secure that part-time workers should not be treated less favourably than full-time workers. However, although subsection (2)(c) states that the Secretary of State may specify whether circumstances do or do not constitute less favourable treatment, we believe that that is a bit vague and that it is a blank cheque. We agree that there can be circumstances where less favourable treatment may be justified. It seems that the Government, by the wording of paragraph (c), concede that that is correct. However, nowhere in that enabling paragraph is there any requirement for the concept of reasonableness to be inserted. In various Bills, the Government seem to resist that concept, but in this case it is essential. This clause enables the Secretary of State to create new criminal offences.
At this time of night I do not want to get into discussions about when it may be reasonable for an employee to be treated unfavourably compared with another. Each case must depend on individual circumstances. That is why a test of reasonable justification is required.
The Secretary of State will obviously have to decide his detailed exemptions for himself. I cannot think of examples at this stage although I could, if pressed. Indeed, I could give a very simple example from my former business. Because of a lack of public transport on the industrial estate on which my factory was based, the manager used to pick up and deliver employees to and from the main road at the beginning and the end of the day in my minibus. There was no possibility of doing that during the middle of the day because he was far too busy. If we had had a part-time worker who had to cover the half-mile each way on foot, that might have been regarded by some official as "unfavourable treatment" compared with that given to other employees.
There is a danger in legislating in a way that makes it more expensive and more difficult to employ part-time workers. Employers simply use more full-timers. "What is wrong with that?", some of your Lordships may ask. The result would be that many working mothers and many disabled people would find it that much harder to be self-supporting and to have the dignity of working. If the Government make it much too hard to employ part-time workers, they will damage the very people whom this Bill is trying to help and protect.
Amendment No. 279 is necessary because it creates an absolute criminal liability on someone who may innocently commit an act which regulations made under this Bill will criminalise. A junior employee may very well technically "aid" the commission of an offence simply by doing something he is instructed to do, which on the face of it is perfectly normal but which under some subjective test is later deemed to be "less favourable" to a colleague.
Once again, I find it hard to give an example, but I cannot imagine why the Government seek to introduce into the relationship of employer and employee the concept of criminal liability with regard to matters that ought to be dealt with by the civil courts or the employment tribunals. In my view, it is just intimidation of employers and does nothing to further "employment relations", which is what this Bill is supposed to be about. However, if the magistrates' courts are to be involved, the least that can be done is to permit the defences that are available for many other, far more serious, offences. I refer to the concept of a guilty mind, or mens rea as it was called before the recent abolition of legal Latin.
Amendments Nos. 281 and 283 are identical and relate to the regulation-making powers conferred on the Secretary of State under Clauses 17 and 20. Clause 17 deals with discrimination in the case of part-time workers. Clause 20 is a very wide-ranging power to confer rights on,
"any individuals who are of a specified description".
Under Clause 20, the Secretary of State can deem that an individual is a party to a worker's contract, who the employer is deemed to be, and, having done all that, he can modify it as regards any individuals.
Rightly—I give them full credit for having done so—the Government have made the regulations under the two clauses subject to positive resolution of both Houses. However, I do not think that that goes quite far enough. The regulations under both clauses are so far-reaching, give such extensive and so far unspecified powers, and may affect so many persons—employees and employers alike—that it is vital that no regulation is even drafted before the Government have consulted widely. In some ways, that will assist the Secretary of State to convince Parliament to approve the regulations.
Amendment No. 282 is an administrative amendment, affecting part-time workers. Such workers are often those most in need of work. I refer, for example, to single parents; to older workers who may not want, cannot obtain, or may not be able to undertake, full-time work; and to disabled persons who are not physically able to work full time. We suspect that over-regulation of this sector of employment may very well make it uneconomic for employers to take on part-time workers. The same would apply to over-bureaucratic regulation. An employer may decide that, taking everything into consideration, including the national minimum wage and the working time directive, it is in his own interests to employ a full-time worker.
The purpose of the amendment is to point out to the Government that we are worried that the regulations may very well destroy jobs. If the Government are

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confident that we are wrong, they should be prepared to prove it by publishing a report on the effect of Clause 17 after its first two years of operation. I beg to move.
9.15 p.m.
Lord Sainsbury of Turville: Perhaps I may deal with Amendments Nos. 278, 279, 281, 282 and 283. As your Lordships will be aware, the provisions in this clause provide a power under which the Government intend to fulfil their obligations under the part-time work directive. The directive sends a powerful message that part-time work is not second-class work. Rather it is a valuable tool in the labour market which can be of enormous benefit both to businesses and their employees. As such, part-time workers have a right to be treated on the same basis as others. They should not suffer worse treatment simply because they work fewer hours.
That is the fundamental principle lying behind the clause and the directive. However, it does not mean equal treatment whatever the circumstances. The directive recognises that there may be objective justification for different treatment just as, for example, employers may be able to justify a requirement which impacts more heavily on women than on men if there is good reason for the requirement which is unrelated to the employee's sex.
The clause also recognises the need to provide for such justification. In particular, the powers in Clause 18(1) allow for regulations to be made to provide for no less favourable treatment for such purposes and to such an extent as the regulations may specify. This power will be used to ensure that those who have objective justification for offering different terms and conditions to full and part-time workers will be able to do so. I am therefore entirely sympathetic with the principles behind the amendment, but it is unnecessary since the ability to justify differential treatment will be spelt out in the regulations.
It may also be misleading. The wording in the directive allows for objective justification. While this will most likely be reasonable as well, there is a clear definition in European law of what constitutes objective justification. To use a different phrase in the Bill, as the amendment proposes, could lead to confusion as to employers' obligations. We shall be consulting fully on the regulations, and this will provide an opportunity for those who may be affected by them to comment on the provisions. I can assure your Lordships that the debate we are having today will inform the drafting of the regulations.
We are not legislating to require employers to offer part-time work. We wish to encourage that, but the statute will not require employers to find part-time jobs where it is not an economic viability. It will simply require that where such jobs exist the employees should have no less favourable treatment than colleagues doing equivalent work full-time. As I said, the regulations will allow employers to justify any less favourable treatment if that can be done objectively.
Before looking at Amendment No. 279, I should make it clear that if we use the power to create a criminal liability at all we envisage a very limited use,
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reflecting the provisions of the Disability Discrimination Act 1995. Under that Act, someone who knowingly aids an unlawful or discriminatory act will be treated as himself discriminating unlawfully unless he reasonably relied on a false or misleading statement by another person that the discriminatory act would not be unlawful. The person who made that false or misleading statement will be committing a criminal offence if he or she knowingly or recklessly made it.
Your Lordships will see that the criminal offence is very narrowly defined. It is not intended to use the powers in Clause 17 to create extensive criminal offences. However, to avoid any confusion we intend to have all the data on the operation of any offences, including any necessary definitions, together in the regulations. The draft regulations will be subject to wide consultation, and so it is not possible at this stage to say exactly how this or any other power would be used. However, I can assure the Committee that the regulations will reflect the spirit of this amendment; namely, that the power to create offences will be used sparingly and with restraint.
Turning to Amendment No. 281, the Government recognise the importance of consulting widely on the details of the regulations that we are proposing in the clause. It is an important general principle that the people who are affected by regulations should have a chance to comment on what the Government are proposing. As I have mentioned, the Government intend to consult widely on the detail of the regulations. The directive does not have to be implemented until 7th April 2000 and so there will be time available for full consultation to take place. We shall want to hear from all interested parties. I can assure noble Lords that all views expressed in this House on the subject will he taken into account. It is quite unnecessary to make this a legal requirement. We are committed to the procedure and will carry it out.
Furthermore, the amendment would impose a requirement to consult before any revisions to the regulations were made. In most cases the Government will want to do so. But there could be occasions when the Government needed to make rapid and purely technical revisions, for example, to close a loophole which had been discovered and which prevented the regulations fulfilling the purpose that Parliament intended. In that case there would be neither the time nor the need for consultation. In order to maintain this flexibility for government, I must oppose the amendment. However, all regulations under this power will be subject to affirmative resolution, as has been made clear, and your Lordships will have the opportunity to scrutinise them properly.
These comments apply equally to Amendment No. 283, and I must oppose it also as unnecessary arid inappropriate. However, I am happy to reaffirm the commitment given in another place that the Government will carry out full public consultation on detailed proposals before exercising this new power. Again, arty order will be subject to affirmative resolution.
Amendment No. 282 would commit the Secretary of State to reporting on the impact of the regulations on the level of part-time working in the economy. Although

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I agree that in general there should be an effective monitoring of all legislation, there are a number of reasons why the amendment is unnecessary and indeed ineffective in this case. First, this measure is not solely concerned with increasing the number of part-time jobs. At least as important will be the effect it has on the status of part-time work and hence the quality of the available jobs. It also aims to open up the wider range of part-time opportunities, especially in areas which may be thought currently to be unsuitable for part-time work. A simple measure of the level of part-time work will not pick up those important changes and so will underestimate the effect of the regulations.
Secondly, we are not aiming at a quick fix with the provision. With these regulations we are aiming for a long-term effect on workplace culture and on perceptions of part-time work. There is unlikely to be concrete evidence of significant change within the first two years, and it would not be worth conducting a study so soon.
Thirdly, as anyone who has worked in the retail trade will know, there has been a long-term trend towards an increase in the level of part-time work in the economy, but the rate of growth has not been constant. Also, over recent years the workplace culture has been changing, for example, as employers recognise that they may be unlawfully discriminating on grounds of sex if they discriminate against part-time workers. Thus we do not expect the regulations to cause a revolutionary change, but rather to reinforce existing trends and provide clarity for workers and employers.
It is almost inevitable that the level of part-time work in the economy will change in the future regardless of government action. However, it would be difficult to untangle the effects of all the factors I have mentioned and to establish accurately to what extent any change was due to the regulations or to other economic and social factors.
Having said that, I assure noble Lords that the Government have every intention of monitoring the effects of the legislation they put in place. We shall be keen to review the success of part-time work provisions but we shall take a wider view than the amendment contemplates. Part-time work is already regularly monitored in statistical surveys and we shall consider carefully what else needs to be done to assess the wider effects of the new legislation.
This amendment would add nothing to the Bill and would involve government researchers in work which would not give us any useful information. I hope the noble Baroness will be convinced by the assurance I have given in discussing the amendments and so will be persuaded to withdraw them.
Baroness Miller of Hendon: I took comfort from the Minister's assurances that my amendments were unnecessary. I shall read carefully what he said. I was somewhat more perturbed when he said he thought some would be ineffective. However, at this stage, I accept what he says in good faith and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 279 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 280:
Page 10, line 17, at end insert—
("() Regulations under this section which create an offence—

(a) shall provide for it to be triable summarily only, and

(b) may not provide for it to be punishable by imprisonment or by a fine in excess of level 5 on the standard scale.")

The noble Lord said: This amendment was spoken to with Amendment No. 234. I beg to move.
[Amendment No. 280A, as an amendment to Amendment No. 280, not moved.]
On Question, Amendment No. 280 agreed to.
[Amendments Nos. 281 and 282 not moved.]
Clause 17, as amended, agreed to.
Clauses 18 and 19 agreed to.
Clause 20 [Power to confer rights on individuals]:
[Amendments Nos. 282A and 283 not moved.]
Clause 20 agreed to.
Lord Meston Lord Meston moved Amendment No. 284:
After Clause 20, insert the following new clause—

Employment Relations Bill

  EMPLOYMENT OUTSIDE GREAT BRITAIN
  (". For section 196(2) of the Employment Rights Act 1996 there shall be substituted—
  "(2) The provisions to which this subsection applies do not apply to employment where the employee does his work for the relevant employer wholly or mainly outside Great Britain.".").
  The noble Lord said: This is a somewhat technical amendment prompted by the recently reported decision of the Court of Appeal in Carver v. Saudi Arabian Airlines. The existing Section 196 of the 1996 Act excludes the unfair dismissal jurisdiction where under the employee's contract of employment he ordinarily works outside Great Britain.
  That phraseology is to be compared with our discrimination legislation, which does not refer to the contract but rather lays down the test of whether the employee does his work mainly or wholly outside Great Britain. The problems which are occasionally caused by Section 196 derive from the first case to reach the Court of Appeal, back in 1977, which decided that great importance should be attached to the words "under the contract": one has to look at the contract and not at what happens later.
  Despite the efforts of the late Lord Denning in another case shortly after that first decision to alter what has become known as "the contract test" to a function test, the Court of Appeal has recently confirmed that it is bound by the contract test. So in the case of Carver, the appellant, who had been based in London for some considerable time, was deprived of protection from unfair dismissal.
  I suggest that there are a number of reasons for altering the statutory wording, as is proposed in the amendment. First, it is rather artificial to emphasise the contract of employment if that means having to disregard what actually happens to the employee later on.
  Secondly, there is scope for abuse. An astute multinational employer could summon prospective employees to, say, Denver, or some other exotic location outside this country, in order to sign the contract and to receive some initial training. However, the company could ensure that the contract provided for the employees to work in Denver or elsewhere as it may direct and then send them all back to London to work. The probable result of the contract test is that unfair dismissal jurisdiction is excluded.
  Thirdly, as the Carver case demonstrates, there can also be the peculiar result that the same employee who is deprived of unfair dismissal claims may have rights under the discrimination statutes because of the slightly different wording.
  Finally, in addition to introducing some desirable consistency between the different statutes, the wording proposed in the amendment is workable as a simple mathematical test which cannot be manipulated by clever contractual subtleties. In Clause 16, the Government have stood firm and decided that the ability to contract out of the unfair dismissal jurisdiction should be removed. It is in the same spirit that I beg to move this amendment.
  Lord Simon of Highbury: This is an interesting proposal about the application of certain employment rights in the Employment Rights Act: to employment outside Great Britain. I am most grateful to the noble Lord, Lord Meston, not only for raising it but for writing to me about his concerns in putting forward the amendment.
  I understand his concern that the Act as currently worded does not adequately protect certain individuals whose contracts require them to work abroad, even though they work almost entirely in the UK. I understand that the recent Appeal Court ruling in Carver (née Mascarenhas) v. Saudi Arabian Airlines illustrates the point in question.
  Not wanting to detain the Committee on the details of the case, I confine myself to saying that it has some unusual features. The amendment put forward in its wake would perhaps provide some additional employment protection to a small group of people. However, I am not totally convinced that it is necessary. Clearly, Mrs. Carver had ample redress for her plight, as the noble Lord explained, through the Sex Discrimination Act.
  That may be an unusual feature. I appreciate that there will not always be a sex discrimination angle to such cases. I am willing to look at the workings of Section 196 of the Employment Rights Act and the application of certain employment rights to employees with employment outside Great Britain. If noble Lords will allow me, I shall come back to them on Report on this issue and I shall keep in contact with them in the meantime as to how we are developing our thoughts.
  9.30 p.m.
  Lord Meston: I am most grateful to the Minister for that indication. In the same spirit, I shall not detain the Committee further. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 21 agreed to.
  Clause 22 [CAC: proceedings]:
  [Amendment No. 285 not moved.]
  Clause 22 agreed to.
  Clauses 23 to 25 agreed to.
  Schedule 6 [The Certification Officer]:
  [Amendments Nos. 286 to 288 not moved.]
  Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 289:
  Page 85, line 39, at end insert—
  ("23. After section 256 there shall be inserted—
  "Vexatious litigants.
  256A.—(1) The Certification Officer may refuse to entertain application or complaint made to him under a provision of Chapters III to VII of Part I by a vexatious litigant.
  (2) The Certification Officer must give reasons for such a refusal.
  (3) Subsection (1) does not apply to an application under section 41.
  (4) For the purposes of subsection (1) a vexatious litigant is a person who is the subject of—

  (a) an order which is made under section 33(1) of the Employment Tribunals Act 1996 and which remains in force,

  (b) a civil proceedings order or an all proceedings order which is made under section 42(1) of the Supreme Court Act 1981 and which remains in force.

  (c) an order which is made under section 1 of the Vexatious Actions (Scotland) Act 1898, or

  (d) an order which is made under section 32 of the Judicature (Northern Ireland) Act 1978.

  Vexatious litigants: applications disregarded.
  256B.—(1) For the purposes of a relevant enactment an application to the Certification Officer shall be disregarded if—

  (a) it was made under a provision mentioned in the relevant enactment, and

  (b) it was refused by the Certification Officer under section 256A(1).

  (2) The relevant enactments are sections 26(8), 31(7), 45C(58), 56(8), 72A(10), 81(8) and 108A(13).").
  The noble Lord said: I shall speak briefly to Amendment No. 289. It has in common with Amendment No. 286, which was not moved, a shared objective to provide some protection for the certification officer against vexatious litigation. I imagine that the noble Baroness opposite has not moved her amendment because the issues in it are covered by this amendment. Therefore, I shall briefly explain the amendment.
  Amendment No. 289 inserts another safeguard to provide some protection for the certification officer against persistent and vexatious litigants. At present, people who are declared vexatious litigants by the courts or by the Employment Appeal Tribunal cannot take a case to the courts or tribunals unless they obtain special leave to do so. That protection does not apply to the certification officer. In other words, at present there is

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  nothing to stop vexatious litigants from making complaints to the certification officer which he must determine.
  Amendment No. 289 closes that loophole in relation to all the certification officer's complaints jurisdictions. It allows the certification officer to refuse to determine a complaint brought by a vexatious litigant, although it does not compel him to do so. When he refuses a case, he must give reasons to the individual. That seems fair and means that the certification officer must give some limited consideration to those applications.
  Provisions contained in the schedule prevent a person from applying to the courts if he has applied already to the certification officer on the same matter. We feel that they should not apply where the certification officer refuses to entertain an application from a vexatious litigant. That will ensure that vexatious litigants can go on to seek special leave from the courts to have their cases heard by them if the certification officer turns them down. Again, that seems fair and proper in the circumstances.
  Our proposals comply fully with the European Convention on Human Rights. They do not close off all possibility that vexatious litigants can have their cases heard by the certification officer or the courts. If there are good grounds for the case to be heard, then the case can proceed.
  I should add that the amendment does not give the certification officer the power to declare individuals to be vexatious litigants. That is a powerful sanction when it is applied. The certification officer has a very specialised role. He has no existing powers to impose penalties on individual union members. It would sit uneasily with his important but limited role if he were to have a wider power to declare individuals to be vexatious litigants. I beg to move.
  On Question, amendment agreed to.
  Schedule 6, as amended, agreed to.
  Clause 26 [Partnerships at work]:
  Lord Tebbit Lord Tebbit moved Amendment No. 290:
  Page 13, line 43, at end insert—
  ("() For the purposes of this section, "employees' representative" or "employers' representative" shall not include any trade union, trade association or political party.")
  The noble Lord said: I hope I shall not detain the Committee long with these amendments. I should like to explain, lest it be not clear, the purpose of the amendments. Amendment No. 290 would provide that neither trades unions nor employers' organisations should qualify to receive moneys under this part of the Bill. Amendment No. 291 would limit expenditure to £100,000 per year except by the consent of Parliament. I notice that it has been announced by the Secretary of State that the sum of £5 million is to be made available in total.
  Amendment No. 292 would require recipients to provide proper accounts of how any money which they had received had been spent. Amendment No. 293
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  would require the Secretary of State to report to Parliament on the use of the money and who had received it.
  For much of today we have been appealing to what one might describe as the industrialist and employers' wing of New Labour to ask them to consider some of these amendments in the light of their own experience as employers and industrialists. I think that these amendments appeal to what one would call "the Treasury wing" in that they are primarily concerned with the proper use and accountability of public money.
  It seems to me that "partnerships" is the in-word for what we are dealing with in much of the Bill, particularly in relation to these amendments. However, "partnership" does not have the meaning we normally give the word. It does not mean an arrangement in which people come together and share joint responsibility for the costs involved and the consequences of what is agreed.
  These partnerships are ones which would put legal obligations not upon trades unions but only upon employers, and by statute rather than agreement. So, "partnership" is the wrong word. We are talking about contractual undertakings which are binding as usual in this world of industrial relations upon only one side.
  Nonetheless we have to face the size of the Government's majority and the reality of it. However, I would state in passing that New Labour really does seem to have made some changes in this world. In the days of Old Labour it was Conservatives who lost amendments during Ascot week. Now it appears that it is New Labour who cannot maintain a House in a majority during Ascot week. That is probably welcome. It shows a degree of social change which I am sure we would all welcome. However, I think we will be lucky not to have some of these amendments turned over again in the other place after Ascot week.
  We have to try to take Ministers at their word, that the Bill is designed to lower costs, reduce regulation and make industry and commerce more competitive. In the press release issued by the DTI on 24th May (P/99/438), I notice the words:
  "Light touch regulation will help artnerships,—Byers".
  It goes on to explain—I think we will all smile at this:
  "That is why, in implementing our plans, we shall introduce light-touch regulation to enforce the entitlements we are providing".
  It is a light touch of enforcement, but enforcement nonetheless. It continues:
  "Instead of detailed and prescriptive regulation"—
  I thought we had quite a lot of detailed and prescriptive regulation here in the Bill this evening—
  "we shall look for agreement achieved through a genuine partnership".
  So it continues. But, if public money is to be handed out, we have a duty to see that it is used properly, for the purposes which Parliament intended, and that it is properly accounted for. Hence these amendments.
  I notice in the same press release in the Notes for Editors that the point is made that the matching funds of at least 50 per cent from non-public sector sources will be required for successful projects. I believe they

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  mean for successful applications to finance a project rather than for successful projects. The noble Lord, Lord McIntosh, shakes his head, but I like press releases to say what they mean and not confuse matters.
  We have to ask ourselves why that is a requirement. The requirement is there essentially to ensure that there is additionality; that this money does not come 100 per cent from public sources, but that we expect other sources of finance will be perhaps from employers, trade unions, in some circumstances perhaps from academic institutions or the like. If that is so, then we have to ask why it should go to organisations which are essentially rich. On the whole, the employers likely to seek this money will be organisations which, if they thought the project was worthwhile, would finance it themselves. Certainly the same is true of trade unions, which are, in general terms, also rich.
  I might say in passing that I hope the Minister, when he responds to this debate, will tell us a little more about the restriction that the money should come from non-public sector sources. Does that exclude money from a public sector employer such as, for example, London Transport—while it remains in the public sector, which I understand may not be for much longer? We still have some nationalised industries about, though probably not for much longer. Will they be regarded as employers, or will they be regarded as public sector financiers in the terms of this Bill? If we are to seek additionality, then we should not give this money to rich organisations.
  I note also from the Notes to Editors—it is an intriguing press release in that the most interesting bits are the Notes to Editors and not what the Minister actually said—that the point is made that in order to demonstrate additionality it has to be established that these projects would not go ahead or would go ahead more slowly on a smaller scale without support from the fund.
  There is also an interesting section under the heading, "How will bids be assessed?". There are some sensible points made in that regard, but there is nothing in the press release as to how they will be reviewed; how it will be decided whether or not they have been successful and what lessons should be drawn. If we are to be able to assess whether or not these projects have been successful in their use of public money, the key elements are that proper accounts should be kept; that those accounts should in some way be presented to Parliament; and that at all times we should restrict the amount of money until we are sure that the projects are having the effects which were intended. To that extent these amendments are not intended to obstruct the purpose of the Bill, but rather to reinforce it. I hope they will be viewed in that light. I beg to move.
  Lord McCarthy: While I support much of what was said by the noble Lord, Lord Tebbit, my main problem—I am sure he will agree that we take this series of proposals as one—relates to Amendment No. 290 which affects Amendment No. 261. I understand the noble Lord is not against giving employers money, or
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  employees. In fact, he would not have tabled the amendment if the clause had read:
  "The Secretary of State may spend money or provide money to other persons for the purpose of encouraging and helping employers … and employees … to improve the way they work together".
  He simply does not want to give money to "their representatives". He has not explained why that should be. Managers, after all, are the representatives of employers. He is saying he does not mind giving money to Rupert Murdoch, but not to his managers. The case with trade unions is different: representatives need not be employees, but they might very well be. He is saying that you cannot give money to lay representatives who are employees. It is an odd breakdown.
  It all turns on one's view of partnership. If 'the noble Lord thinks that it has a representative element, or if he thinks it is about collective bargaining, which I know he does not like to think about and certainly not this late at night, or if he is thinking about representing the views of Rupert Murdoch and the views of the union membership collectively, then these people would be required. However, I cannot go along with this rather strange amendment.
  Lord Tebbit: Perhaps I can help the noble Lord. I would not be particularly anxious for Rupert Murdoch to be the personal beneficiary of this money. It would probably be quite difficult to demonstrate additionality, even in the sum of £5 million in his case. I would object if it were to go to the newspaper proprietors' association, the collective of newspaper proprietors.
  I have no worries about the money going to organisations of workers, as long as they do not fulfil the function of a trade union which, to my mind, is a similar function to that fulfilled by collectives of employers, for example the Engineering Employers' Federation. I do not object to the money going to organisations of workers, but it should not go to wealthy collectives.
  Lord McIntosh of Haringey: I always enjoy listening to the noble Lord, Lord Tebbit, in his jocular mood. He enjoys taking this kind of stance in the House. Then, when you read what he says in the News of the World on Sunday, you realise that behind his remarks is seething indignation against all the things that he is prepared to laugh about when he is in your Lordships' Chamber.
  The noble Lord has done his homework. He has read the press release and the note to editors issued on 24th May when the Prime Minister and the Secretary of State for Trade an Industry spoke at the TUC partnership conference. I suspect, knowing him, that he has probably done his homework and read the speeches as well, but I doubt whether he has really understood what is behind the partnership fund that is set up by Clause 26.
  As I said at Second Reading, we do not need statutory authority for this partnership fund because the £5 million is being found from DTI resources and it can be spent at executive discretion, subject to scrutiny by Parliament in the normal way, particularly by Select Committees and the National Audit Office. However,

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  we have chosen not to do that; we have chosen to seek statutory authority for it because we believe that the partnership principle pervades this legislation. I do not expect the noble Lord to agree with me. He is deeply cynical about these things and, with his history, I can understand it.
  We wanted to show that not only were we prepared to put legislative provisions in the Bill to encourage partnership by making sure that neither one side nor the other could indulge in exploitation, but that we were positively encouraging partnership by putting a small amount of taxpayers' money, not government money, to encourage partnership schemes and initiatives in order to progress the thinking of the Government and, in general, the employers and trade unions. The noble Lord seems to think that this research fund would impose legal obligations on employers only and that it would produce statutory results. That is not the way I see it; indeed, it is not the way the Prime Minister or the Secretary of State saw it. We are using a statutory method for declaratory purposes, if you like, to do something which is certainly non-statutory and which would, in our view, contribute to the cause of partnership in industry.
  I do not need to repeat what the Secretary of State and the Prime Minister have said or what the noble Lord, Lord Tebbit, repeated to the Committee. He has rightly said that there is a fund of £5 million over five years; that there is a limit of £50,000 on any one project; and that 50 per cent matching funding is required for any one project. He also rightly advocated proper financial scrutiny and control over any expenditure under this heading.
  I turn now to deal with the noble Lord's amendments. The partnership fund which we intend to set up under this authority will be designed to promote new partnerships at work and develop a new non-confrontational approach to employment relations. Amendment No. 290 would exclude trade unions and trade associations. The amendment refers to trade associations, but the noble Lord referred to employer organisations. I take it that there is no difference in his mind in that respect, although there is in mine. That would completely undermine the purpose. If you cannot have employers involved in these projects and if you cannot have organised employees involved in them, who is left? Who will actually be involved?
  The amendment also refers to political parties. Of course, there is no question of providing funding for political parties or for anyone else for political purposes. Amendment No. 291 would restrict the funding to £100,000 a year without a resolution of both Houses. Parliament is already burdened with secondary legislation requiring either negative or affirmative approval. Therefore, we would be seeking parliamentary authority for relatively small amounts of money.
  The sum of £5 million has been allocated from within the existing budget of the Department of Trade and Industry. It is an appropriate sum of money which will ensure that the fund can make a real contribution to developing partnerships based on employment relations in the United Kingdom. We will of course be putting
  392
  into place clear rules and criteria governing the operation of the fund in order to ensure value for money. Recipients of funding will be required to demonstrate that their project offers value for money. The department will monitor and evaluate all funded projects. That does not just mean monitoring them as they proceed but evaluating whether they have achieved their objectives—a very proper consideration and one to which the noble Lord referred.
  The department will also require recipients of funding to provide all the information necessary. Any scheme that is set up will have terms and conditions attached to any offer of grant, which will include the requirement to provide all appropriate monitoring and financial information. Requiring this information to be audited in every case by an external accountant qualified to do so, pursuant to the Companies Act 1985, as required by the amendment, would be disproportionate and burdensome.
  The proposal for a new subsection (5) is disproportionate. The offer of any grant under the partnership fund will include standard procedures for ceasing to pay and for clawing back the money if conditions have been breached or if it has been used in contravention of the conditions of the programme. We will ensure that there is full financial accountability in the case of the partnership fund and any subsequent programmes. The department publishes each year its expenditure in its expenditure plans report. An annual report will also be published in respect of the partnership fund. I can assure the noble Lord that that will include the results of monitoring and evaluation.
  There is no reason to include a provision for an annual report and, as I have indicated, there is no reason to impose the particular restrictions on the fund which these four amendments would introduce. However, I understand that the noble Lord's objection to the fund is much more fundamental. As far as he is concerned, it is an issue of confidence. I do not hope to gain his confidence but I hope to gain his recognition that his amendments are undesirable.
  Lord Tebbit: I am grateful, as always, to the noble Lord who has responded to my amendments in a most excellent and constructive way in so far as he is able to do so. I think I must be getting naive in my old age because I had not realised from reading the press release that this was not new money. I suspect that it was not the intention that those who read the press release should realise that it was not new money. It is just another little bit carved off the DTI's money which has already been allocated to this matter. It has either been taken from some other programme or it is money that the department had spare. In my day at the DTI we did not have spare money. We were rather parsimonious. However, that is another matter.
  Lord McIntosh of Haringey: I remind the noble Lord that during the first two years of the Labour Government—or, as he would describe it, the New Labour Government—we have operated under the revenue budgets inherited from the previous

  393
  government. If there is anything to spare, it has come from the allocation that the previous government provided.
  Lord Tebbit: I accept entirely the tribute which the noble Lord pays to the generosity of funding on the part of the previous administration. However, although the global sums are the same, the purposes for which they are used may not be. However, we shall not argue one way or the other about the odd £5 million in what is a quite substantial budget.
  The noble Lord may have misunderstood my remarks about partnerships. They were not particularly directed to partnerships in the sense in which they are referred to in this section of the legislation. I can see that there is a case for both sides of industry—if we may use that expression—coming together and coming together with outside bodies (possibly academic and research bodies) to carry out work in this area to see whether we can increase the efficiency of the use of labour in British industry. I spoke in a rather more general manner, in what one might call a Second Reading manner. It was certainly not my intention—nor do I believe it would be the effect of the amendments—to disqualify employers as such from participating in the scheme. It is organisations of employers—not Joe Bloggs Engineering Limited—such as the Engineering Employers Federation that I wanted to cut out. I may differ slightly from the noble Lord in that I regard those collectives of employers as being the equivalent of the collectives of employees; that is, the trades unions. We may differ slightly as regards how we look at these matters. However, I shall read carefully in the Official Report what the Minister said before deciding whether to bring back these amendments at Report stage. In the meantime I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 291 to 293 not moved.]
  Clause 26 agreed to.
  Clause 27 agreed to.
  10 p.m.
  Schedule 7 [Employment Agencies]:
  Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 294:
  Page 86, line 11, at end insert—
  ("Provided that regulations made under this section shall only be made with the purpose of protecting employees' rights and not otherwise to interfere with the commercial relationship between such agencies or businesses and employers.'"')
  The noble Baroness said: The amendment deals with a matter of considerable importance. seeks to limit the extent of the regulations that the Government are considering making to govern employment agencies business. The amendment was drafted before the publication of the Green Paper, The Regulation of the Private Recruitment Industry. The draft regulations now revealed are possibly worse than was previously rumoured. If carried into effect, they will tear the heart out of the industry and will damage it beyond the possibility of continuing as a viable operation. This
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  possibly will come as no surprise and will not be regretted by many on the Benches opposite. As long ago as 1983 the Labour Party published an election manifesto which was so left wing that it was described by the right honourable Member for Manchester Gorton, a senior member of the party, as "the longest suicide note in history." That suicide note said:
  "We will take urgent steps to abolish private employment agencies".
  Those urgent steps were high on the list of priorities had the electorate been so misguided as to return the Labour Party to power.
  What was the reason for that manifesto objective? Unashamedly, it was,
  "to ensure that the Manpower Services Commission developed a national job centre network".
  That would have been nationalisation through the back door. In that case it would have been nationalisation without compensation. I hope—no doubt the Minister will reassure us—that new Labour has foresworn that ambition. I am prepared to assume that it has simply not understood the destructive nature of its proposals.
  If it claims that it does not know, 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. It is difficult, if not impossible, in practice to amend regulations after they are laid before Parliament, even under the positive resolution procedure. It is therefore essential that Parliament draws a demarcation line limiting the parameters of those regulations before the government's views become absolutely set in concrete.
  There are three major areas where the industry has major concerns that the regulations the Government propose would be totally destructive to the industry. At the same time the regulations will do nothing to improve the employment prospects of those employed directly by agencies or who normally expect to obtain work through them. On the contrary. They will also do nothing to help employers to find temporary or permanent staff. On the contrary.
  I accept that some of the Government's proposals are for increased clarity, promotion of flexibility in the labour market, protection of employment agencies' clients, the curbing of payment abuses and the safeguarding of clients' money. To those objectives the Opposition obviously subscribe. I have also had a letter from one of the leading employment agencies in the country assuring me that not only does it support the general direction of these objectives but that it and the majority of the industry already voluntarily meet the standards the Government are seeking.
  As I said, there are three major areas in the draft regulations which cause the industry major concern. The first concern relates to the process of what is called "Temp to permanent", where a temporary worker gets on so well with the hiring firm that it offers him or her a permanent job. Agency contracts provide that in such circumstances it should be paid the usual finder's commission for introducing new staff. The Government's argument against this is that some employers do not like paying the commission. Who does

  395
  like paying bills? But without this right to be paid for temporary staff who move to permanent status, the employers would poach the temps for nothing. Approximately 50 per cent of temporary workers find permanent work through temporary employment. That is why the proposed regulation on its own would be very destructive for the industry. The high percentage of temporary workers who find permanent jobs makes nonsense of the argument that it somehow puts temporary workers at some disadvantage in the labour market. If it did, there would not be so many of them converting to full-time employment. Again I say, on the contrary.
  The second destructive proposal in the draft regulations is that the production of time-sheets by the worker as a condition of the worker being paid is, in future, to be prohibited. This is unnecessary nannying. In my time I have employed dozens of temps. At the end of the week they produce a time-sheet to confirm that they have attended from, say, nine to five on five days. How else will the agency know what to pay the temp, who is usually paid on an hourly basis? How will the agency refute an argument from an employer that the temp did not show up until 10 a.m., or went home early, or did not come in at all? In what way is a timesheet any different from the clocking-in system used in many factories? The prohibition of this common-or-garden device used throughout industry will leave the agencies open to abuse and fraud and is equally destructive of the viability of their industry.
  The third major problem that the Government are causing the industry, for the benefit of no one except, in this case, possibly the Treasury, is a complicated one. Draft Regulation 7 requires agencies to supply temporary workers only as a contractor, not as an agency. There may be some advantage in doing that, so as to make sure that the agency takes responsibility for the health and safety of the temporary workers that it supplies. But the regulation will also have an uncalled-for effect. It means that the agency would have to charge VAT on the whole of the sum billed to the employer instead of only on its commission. The wages of the worker are of course exempt from VAT.
  Many employers will not be affected by the requirement as they will offset the VAT against their own liability. However, there are many VAT-exempt organisations which rely on temporary workers: schools, hospitals and some charities. This additional cost to tax-exempt organisations inevitably means that they will employ fewer temps and reduce job opportunities to many people who need to work as temps or part-time for a variety of personal reasons. The protection of temporary workers as regards health and safety can be achieved by a more carefully drafted and specifically targeted regulation stating explicitly what is meant.
  I am sorry to have burdened the Committee with points that might have been made when the regulations become final. They may yet need to be repeated. However, I believe that these problems need to be nipped in the bud now, before it is too late and the Secretary of State's mind becomes set, notwithstanding the consultation.
  I referred to my understanding of the standards that the Government are trying to achieve—strangely, not by what should have been a Bill on its own, but by the regulations authorised by another Bill. In reaching those standards, what the Government must not do is over-regulate.
  As recently as 3rd June, the Secretary of State, in a speech to the British Chambers of Commerce, recognised that the burden of regulation falls most heavily on small business. Not all employment agencies are small, but many of them are. The Secretary of State admitted that there had been a tendency to introduce overly detailed and prescriptive regulations which were often far from user friendly. He also said that Whitehall had paid too little attention to the cumulative effect and burden of regulation. I agree with the Secretary of State in all of those remarks. This is not a political point. Every government have been guilty in this respect, and every Secretary of State has promised to do something about it—usually without any success at all. I wish the present Secretary of State luck.
  To help him in that objective, I have proposed an amendment that will ensure that in producing his regulations under the present Act he does not, by over-regulation, do incalculable damage to an important industry which provides a vital service to employers and workers alike. I beg to move.
  Lord Tebbit: Although I agree with much of what my noble friend said, I hope that she will not at this time press these amendments to a Division. If we could hold back the process just a little, it would be enormously helpful. It was announced in the recent Honours List that Sir Dennis Stevenson would become a life Peer. As I understand it, he will probably sit on the Government Benches. He will be a most useful ally to my noble friend in dealing with matters concerning employment agencies, as he will probably know more about the subject than any other Member of the House. It would be helpful to await his wisdom.
  Lord Simon of Highbury: My Lords, I am delighted to hear that preview of yet another star being recruited to our Benches. That is very good news for all of us. More power to their elbow, say I. However, I cannot agree that the noble Baroness's amendment will leave us in a good position to look at this important question. I follow much more the view of the noble Lord, Lord Tebbit, that it would be wise, not merely to hear from a further good mind on the subject than those already available in this place, but to take time for the consultations. They will attempt to distinguish, in examining this case, between good and bad regulation. The noble Baroness is often inclined to regard regulation as a burden on small industry, as if we can make regulation go away. We cannot. What we must do is ensure that it is good and effective for the purposes that government choose.
  What the amendment seeks to do in its one-sidedness is to limit the scope of the Government to make very important changes to modernise and improve the regulatory framework governing the private recruitment

  397
  industry, which is a very important one. We have set out our proposals in the consultation document and shall consider the results of that very carefully.
  But the amendment that has been tabled provides that regulations made under Section 5 of the Employment Agencies Act,
  "shall only he made with the purpose of protecting employees' rights and not otherwise to interfere with the commercial relationship between such agencies or businesses and employers".
  It is very important that we import certain wider safeguards into the relationship. Those who look for temporary employees, for example doctors or lorry drivers, have the right to know that the bureau supplying them has checked their qualifications. That is part of the commercial relationship which would not be covered by this amendment. Certainly, that is one matter that the regulatory process should examine and ensure.
  If we use this regulatory process it also allows us to improve some very bad practices that have grown up in the 22 or 23 years during which the current law governing employment agencies has remained unchanged. Certainly, the market-place during that time has changed in many ways due to measures, some good and some bad, implemented by the previous government. There is a requirement for change; one cannot say that the market is static.
  I shall not go through a whole list of these matters because that is what the consultation is about, but I wish to deal briefly with the term "temp to perm" fees so that there is no misunderstanding. As the noble Baroness said, these are the fees that the hirer must pay to a bureau if he decides to take on a temporary worker permanently rather than continue to hire him through the bureau. Clearly, it is the case that these fees are being used to deter hirers from engaging permanently the temporary staff supplied to them. Whatever statistics the noble Baroness quotes, we want to convert more people from temporary to permanent employment if possible, assuming that is their wish.
  Some in the industry admit that they use "temp to perm" fees to stall that process. The existing measures to ensure that workers are not prevented from working for other employers are being undermined by terms in the contract issued to hirers which provide for huge transfer fees to be paid in those circumstances. What we are looking at in draft regulation 8 in the consultation document is not a proposal to control the level of fees but to restrict the circumstances in which fees may be charged so that they are not used to restrict workers' ability to take jobs. After all, in a well functioning labour market employers and work-seekers require to be able to contract with whom they choose. Draft regulation 8 provides that "temp to perm" fees should be limited to cases where workers are subject to a current contract with the bureau under which the latter undertakes to find work for those workers.
  The proposals allow the bureau to protect its legitimate interests while ensuring that "temp to perm" charges are not used to limit labour market flexibility or act against the interests of workers and hirers. I submit that that will basically enhance flexibility in the labour market, which is one of the matters that the Benches
  398
  Opposite—certainly the noble Lord, Lord Tebbit—always tell us that we must do. We must have more flexible labour markets, as we tell our European colleagues all the time. The regulation seeks to create greater fluidity in the market-place. I believe that the amendment moved by the noble Baroness would stop that. That is why I wanted to make that point very strongly.
  I turn briefly to Amendments Nos. 29.5 and 296. I do not wish to ignore the points made on VAT, which I am sure that the Treasury will be looking at carefully, as will the employers. Nor do I wish to duck the issue of timesheets. But those are matters on which I am sure we shall obtain good answers from industry in due course. There is no need to give the final answers at this stage.
  As regards the two amendments, my right honourable friend the Secretary of State for Trade and Industry. during Report Stage of the Bill in another place, said, in response to an Opposition amendment, that Le would consider making regulations under the Employment Agencies Act 1973 subject to the affirmative resolution procedure.
  Members of this House will know that the Select Committee on Delegated Powers and Deregulation recommended that this should be done. The Government indicated in their response to the committee's report that it concurred with its recommendation. Amendment No. 295 before the Committee this evening takes forward that commitment and makes regulations under Sections 5 and 6 of the 1973 Act subject to the affirmative procedure.
  Amendment No. 296 alters Section 13(7)(i) of the 1973 Act. A lacuna in the wording of that section provides that orders cannot be made to exempt particular bodies in respect of part only of their activities. If they are exempted they must be exempted entirely. That was subject to comment by the Joint Committee on Statutory Instruments in 1984. The purpose of this amendment is to allow orders which will, for example, enable membership societies to be exempted in so far as they provide services to their members, but to remain subject to the legislation as regards services provided to non-members. I commend Amendments Nos. 295 and 296 to the Committee. I urge the noble Baroness to consider flexibility in the labour market and to withdraw her Amendment No. 294. I hope that that concludes dealing with employment agencies for the moment.
  10.15 p.m.
  Lord Tebbit: Perhaps I may intervene again very briefly. The Minister has left me rather less happy than I might have been. Over the years I have frequently used temporary staff from employment agencies. Wearing that hat I have found pretty unpleasant the charges which I have listed made for persons supplied as temps. However, if I put on a different hat, which I wore at one time during my involvement with an employment agency, it seems clear to me that temporary staff are an asset of the agency. To say that they are unable to charge when they lose such an asset and the revenue stream attached to it, having found an employee for an employer, seems a little hard.

  399
  I appreciate, as the Minister said, that it does not apply where the agency guaranteed work on a full-time basis. But in all reason the burden on agencies, particularly some of the smaller ones, would virtually put them out of business. It is not an easy matter. As an employer of agency staff from time to time I believe that some of the agencies make an excessively high barrier. I understand that the Government would not wish to regulate the size of the fee but making it impossible for an agency, particularly a small one, to charge a fee of that kind would result in the elimination of a number of small agencies. It would probably not unduly damage the Manpowers of this world, but I believe that small specialist agencies would be extremely hurt. I hope that the Minister will look again at what he has said and reconsider it.
  Lord Simon of Highbury: My Lords, the appropriate answer at this stage is that I have no doubt that the position which the noble Lord has made clear to us will also be made clear by the agencies as we go through the consultation process. We have already made the points that I have tried to make this evening. They are contained in the draft regulations about which we are consulting. I am sure that this point will reappear. I take note of what has been said. We shall consider it seriously as we go along as it is a good and clear point.
  Baroness Miller of Hendon: My Lords, the Minister is always extremely courteous when he replies to me, as indeed are both the noble Lords, Lord McIntosh and Lord Sainsbury. They have all treated my amendments with great courtesy, which I very much appreciate. However, notwithstanding that, and even notwithstanding the earlier intervention by my noble friend Lord Tebbit, for whom I have the highest regard especially in the whole area of industrial relations, I must point out that I have been lobbied extremely hard by the employment agencies. For the three reasons that I have given, they have told me that this provision will put them out of business. I am concerned to ensure that that does not happen. Only as recently as yesterday morning, I was asked to table an amendment to delete the whole of Schedule 7. That is how strongly the employment agencies felt about this. Noble Lords opposite will understand that I am not taking this view lightly.
  The Minister referred to losing flexibility in the job market. I do not think that that would be the result of my amendment. It states that the regulations shall be made only with the purpose of protecting employees' rights. It does not state anything else. Over half of temporary workers take up full-time employment. The Government's provisions would tear the heart out of the whole business of supplying temporary staff. In those circumstances and despite the great courtesy shown it to me by all the Ministers opposite, I feel that I must test the opinion of the Committee.
  10.21 p.m.
  On Question, Whether the said amendment (No. 294) shall be agreed to?
  Their Lordships divided: Contents, 28; Not-Contents, 51.

  Division No. 2

  CONTENTS

  Anelay of St.Johns, B.

  Kingsland, L.

  Annaly, L.

  Luke, L.

  Arran, E.

  Mackay of Drumadoon, L.

  Attlee, E.

  Miller of Hendon, B.

  Berners, B.

  Northbrook, L.

  Blatch, B.

  Northesk, E.

  Bridgeman, V.

  Norton of Louth, L.

  Dean of Harptree, L.

  Parkinson, L.

  Fookes, B.

  Roberts of Conwy, L.

  Glentoran, L.

  Rowallan, L.

  Harmar-Nicholls, L.

  Seccombe, B. [Teller.]

  Harris of Peckham, L.

  Tebbit, L.

  Henley, L. [Teller.]

  Torrington, V.

  Home, E.

  Wynford, L.

  NOT-CONTENTS

  Acton, L.

  Hoyle, L.

  Alli, L.

  Hunt of Kings Heath, L.

  Amos, B.

  Lockwood, B.

  Archer of Sandwell, L.

  Lofthouse of Pontefract, L.

  Bach, L.

  McCarthy, L.

  Bassam of Brighton, L.

  McIntosh of Haringey, L. [Teller.]

  Burlison, L.

  Carter, L. [Teller.]

  McNair, L.

  Clarke of Hampstead, L.

  Maddock, B.

  Clinton-Davis, L.

  Monkswell, L.

  Crawley, B.

  Morris of Castle Morris, L.

  Davies of Coity, L.

  Peston, L.

  Davies of Oldham, L.

  Pitkeathley, B.

  Desai, L.

  Ramsay of Cartvale, B.

  Dixon, L.

  Rendell of Babergh, B.

  Dormand of Easington, L.

  Sainsbury of Turville, L.

  Dubs, L.

  Scotland of Asthal, B.

  Evans of Parkside, L.

  Sewel, L.

  Farrington of Ribbleton, B.

  Simon, V.

  Goudie, B.

  Simon of Highbury, L.

  Gould of Potternewton, B.

  Stoddart of Swindon, L.

  Grenfell, L.

  Symons of Vernham Dean, B

  Hacking, L.

  Thurso, V.

  Harris of Haringey, L.

  Wedderburn of Charlton, L.

  Hilton of Eggardon, B.

  Whitty, L.

  Hollis of Heigham, B.

  Williams of Mostyn, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  10.31 p.m.
  Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 295:
  Page 88, line 33, at end insert—
  ("Regulations and orders
  . For section 12(5) (regulations and orders: procedure) there shall be substituted—
  "(5) Regulations under section 5(1) or 6(1) of this Act shall not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.
  (6) Regulations under section 13(7)(i) of this Act or an order under section 14(3) shall be subject to annulment in pursuance of a resolution of either House of Parliament." ")
  On Question, amendment agreed to.
  Lord Simon of Highbury Lord Simon of Highbury moved Amendment No, 296:
  Page 88, line 36, at end insert—
  ("Exemptions
  . For section 13(7)(i) there shall be substituted—
  "(i) any prescribed business or service, or prescribed class of business or service or business or service carried on or provided by prescribed persons or classes of person." ").
  On Question, amendment agreed to.
  Schedule 7, as amended, agreed to.
  Clause 28 [Unfair dismissal: special and additional awards]:
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 297:
  Page 14, line 12, at end insert—
  ("(3) In section 14 of the Employment Rights (Dispute Resolution) Act 1998—

  (a) subsection (1) shall cease to have effect, and

  (b) in subsection (2) for "that Act" substitute "the Employment Rights Act 1996."")

  The noble Lord said: Amendment No. 297 repeals Section 14(1) of the Employment Rights (Dispute Resolution) Act 1998. This is necessary because Section 14(1) amends Section 117(6) of the Employment Rights Act 1996 but that section is being repealed by Schedule 8 to this Act as a result of the rationalisation of the existing system of special and additional awards provided by Schedule 8. Because Section 14(1) is being repealed, this amendment substitutes the words "the Employment Rights Act 1996" for the words "that Act in Section 14(2) of the dispute resolution Act.
  Amendment No. 302 reflects Amendment No. 297. It repeals Section 14(1) of the Employment Rights (Dispute Resolution) Act 1998 which is made redundant by this Bill. I beg to move.
  On Question, amendment agreed to.
  Clause 28, as amended, agreed to.
  Clauses 29 to 32 agreed to.
  10.35 p.m.
  Lord Simon of Highbury Lord Simon of Highbury had given notice of his intention to move Amendment No. 297ZA:
  After Clause 32, 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 regulations may 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).")
  Lord Sainsbury of Turville: I shall not move Amendment No. 297ZA standing in the name of my noble friend Lord Simon. As the Committee will be
  402
  aware, the Government have received a request from the noble Lord, Lord Alexander, on behalf of the Delegated Powers and Deregulation Committee not to move the amendment at this stage. This is in order to enable the committee to consider the amendment at its meeting next week so that its comments may inform your Lordships' debate.
  We are pleased to accede to the noble Lord's request. The Government will be submitting a supplementary memorandum to the committee, copies of which will of course be placed in the Library. We shall return to the matter on Report with the benefit of the committee's comments.
  [Amendment No. 297ZA not moved.]
  Clause 33 [Orders and regulations]:
  Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 297A:
  Page 16, line 3, at end insert—
  ("(3) Where regulations are made or are laid before Parliament for approval under this Act for the purpose of implementing any European Union Directive in United Kingdom law, the Secretary of State shall simultaneously in each case publish a statement seeing out where those regulations go beyond the minimum requirement of the directive.
  (4) A statement under subsection (3) shall also give estimates of—

  (a) the cost to business which will arise from the regulations, and

  (b) the cost which would have arisen from implementing the minimum standards permissible under the directive.")

  The noble Baroness said: I shall speak to these amendments briefly. Where the Secretary of State makes regulations because of any fee directive, Amendment No. 297A requires him, first, to make clear to Parliament the way in which any regulation goes beyond the requirements of the directive. We have already seen an example of gold plating in the parental leave regulations which have gone far beyond what the directive requires.
  This amendment will make the Minister think twice before imposing additional burdens on British business that are not suffered by our competitors in the EU. It will also be clear notice to Parliament about what the Secretary of State has done.
  Amendment No. 297B has its inspiration from a speech to the British Chamber of Commerce on 3rd June by the Secretary of State. He said that he might be sunsetting some future regulations. I remember a story that London taxi drivers were, at one time, required to keep a bale of hay in the backs of their cabs for their horses, because someone forgot to repeal the order when motor cabs replaced the Hansom cab.
  I do not know whether the story is true or apocryphal, but it is a good illustration of the need for sunset clauses. I want to take an early opportunity to assist the Secretary of State in his commendable project of constantly keeping regulations under review. This is a probing amendment, but I invite the Secretary of State to demonstrate his seriousness by accepting it. It sunsets all the regulations made under this Bill after five years unless renewed; just as he was proposing.
  Amendment No. 297C requires the Secretary of State to publish a detailed report to Parliament of the workings of this Bill. If it is the success he claims it will be, he will doubtless want to trumpet it from the top of the Clock Tower. If things go wrong, he should be prepared to admit it.
  As I pointed out to his predecessor in connection with the National Minimum Wage Act, the alternative will be to extract the same information from him by a series of questions, so I hope that he will agree to provide the information as part of this very important Bill. I beg to move.
  Lord McIntosh of Haringey: The Government are very sympathetic to the thinking behind the amendments. We share the concern to avoid unnecessary burdens on business. As regards Amendment No. 297A, we are committed to ensuring that there is a rigorous and thorough assessment of the risks, costs and benefits of any new proposals. We consider a range of policy options in order to identify the best course of action. When we are implementing an EC directive, we examine options which go no further than the terms of the directive, but we also examine options which go further since they might provide better value for money.
  We ensure that details of the costs and benefits are set out in the regulatory impact assessment. In respect of this Bill, the RIA gave an analysis of the reasons for and the costs of increasing the current period of statutory maternity leave from 14 to 18 weeks. The increase which went beyond the requirements of the EC directive was widely welcomed in the consultation. It reduces the confusion which many employers and workers experience as a result of the discrepancy between the current 14 weeks and maternity leave right and the 18-week maternity benefit period. Amendment No. 297A simply calls for a regulatory impact assessment which focuses in a blinkered manner on costs alone. Our regulatory assessment covers costs and benefits and we think it is preferable to the amendment.
  Amendment No. 297B is about sunset clauses. As the noble Baroness recognised, Stephen Byers told the British chambers of commerce in Glasgow on 3rd June that he is attracted by the idea. We have sympathy with it in principle. In practice, this particular amendment causes us some difficulties. There is not a one-size-fits-all approach. We need to consider each regulation case by case. It may be relevant when there is a particular problem which is of short duration. But the problem here, in particular, is that it is implementing an EC directive, which is a continuing obligation. We should be in breach of the directive if we were to allow our implementing of regulations to lapse in accordance with a sunset provision of the type which is proposed here.
  Amendment No. 297C addresses a serious point. We need to have a thorough cost-benefit analysis. It is clearly no less important that we should be aware of the impact which legislation has once it is in place. That is why the regulatory impact is supposed to examine ways of monitoring the impact of regulation.
  404
  It may help the Committee if I recall the ways in which the RIA said that the impact should be monitored and evaluated. We shall monitor and evaluate the take up of parental leave and changes in maternity rights. The Employment Tribunal Service will continue to monitor the numbers of applications made, the outcomes and awards. ACAS and CAC will monitor the number of requests for their involvement in trade union recognition matters. The CAC will monitor the number of applications under the statutory recognition procedure.
  In addition, we shall consider the case for a further round of the regular Workplace Employee Relations Survey, which I personally welcome greatly since I was involved with the design of the first one a number of years ago. We shall certainly trace changes resulting from that and other employment regulation. That is a more flexible and yet effective approach from that proposed in the amendments.
  Baroness Miller of Hendon: I am grateful to the Minister for the courteous, helpful and understanding way in which he answered this group of amendments. We are not too far apart. As regards the point made about gold-plating, I had tabled many amendments which gave examples of that. However, I did not move them this evening. Therefore, I shall return to them on Report. That will give me an opportunity to deal in more detail with that matter and will no doubt give the Minister the opportunity to tell me why he thinks I am wrong. But, for now, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 297B not moved.]
  Clause 33 agreed to.
  [Amendment No. 297C not moved.]
  Clauses 34 and 35 agreed to.
  Schedule 8 [Repeals]:
  Lord Simon of Highbury Lord Simon of Highbury moved Amendments Nos. 298 to 302:
  Page 89, line 30, at end insert—

  ("In section 118(1)(b), the word ", 127".")

  Page 90, leave out lines 13 and 14
  Page 90, line 24, at end insert—

  ("1992 c. 52.

  Trade Union and Labour Relations (Consolidation) Act 1992.

  In Schedule A1, paragraph 122.")

  Page 91, line 3, at end insert—

  ("1999 c. 00

  Employment Relations Act 1999.

  Section 16(6).")

  Page 94, line 17, at end insert—

  ("1998 c. 8.

  Employment Rights (Dispute Resolution) Act 1998.

  Section 14(1).")

  On Question, amendments agreed to.
  Schedule 8, as amended, agreed to.
  Clause 36 agreed to.
  [Amendment No. 302A not moved.]
  Clause 37 [Extent.]
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 303:
  Page 16. line 17, at beginning insert—
  ("(1) Any amendment or repeal in this Act has the same extent as the provision amended or repealed.
  (2) Subject to subsection (1),")
  The noble Lord said: I should like to move Amendment No. 303 and speak also to Amendment No. 304. These are technical amendments dealing with Northern Ireland. Amendment No. 303 ensures that where the Bill amends or repeals part of employment legislation which applies exceptionally to Northern Ireland, the amendments and repeals will apply to Northern Ireland.
  The subject matter of the Bill is intended to be a transferred matter under the Northern Ireland Act. We had been assuming that devolution in Northern Ireland would have occurred by the time of Royal Assent and it would have fallen to the Northern Ireland Assembly to decide the extent to which measures equivalent should be put into effect. It seems likely that the Bill will be granted Royal Assent before devolution in Northern Ireland and we have sought to ensure that if devolution has not occurred, the provisions in the Bill can be achieved within a similar timescale to the rest of the United Kingdom. I beg to move.
  On Question, amendment agreed to.
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 304:
  Page 16, line 17, at end insert—
  ("() An Order in Council under paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which contains a statement that it is made only for purposes corresponding to any of the purposes of this Act—

  (a) shall not be subject to paragraph 1(4) and (5) of that Schedule (affirmative resolution of both Houses of Parliament), but

  (b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.")

  On Question, amendment agreed to.
  Clause 37, as amended, agreed to.
  Clause 38 agreed to.
  House resumed: Bill reported with amendments.

HFC Bank Bill
Bill reported from the Unopposed Bill Committee without amendment.
House adjourned at fourteen minutes before eleven o'clock.