HL Deb 21 May 1999 vol 601 cc624-6

4.47 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 28th April be approved [17th Report from the Joint Committee].

The noble Lord said: My Lords, on 10th May the House debated the Second Reading of the Employment Relations Bill which will implement the bulk of the Government's proposals set out in last year's Fairness at Work White Paper. This straightforward order concerns a remaining element of that package, one which is fundamental to the Government's aim of achieving a proper balance between employers' flexibility and employees' security. The order reduces the qualifying period for complaints of unfair dismissal from two years to one, taking it back to the period specified before the previous administration doubled it in 1985.

A year is a reasonable length of time for an employer to decide if a recruit is suitable for the job. It is not reasonable for employees to be left in a state of uncertainty about the security of their employment when they have been in the job for as long as two years. That view was shared by the great majority of respondents to our consultation, including the majority of employers and their representatives.

The regulatory impact assessment which accompanied this order pointed out that 90 per cent of companies already have written procedures. This order should encourage those without such procedures to consider introducing them. Although having procedures is not always a guarantee of fair treatment, it is certainly good practice, and employers who end up losing cases before a tribunal are most likely to be those without procedures. The reduction in the qualifying period will not only encourage employers to think more carefully about dismissing people; it may lead to improvements in recruitment procedures, too. This was a noticeable effect when unfair dismissal protection was first introduced. It is not a heavy burden for businesses to use proper recruitment and probation procedures and it repays them in terms of achieving more suitable and better skilled recruits. If the employee subsequently falls short of the required standard, the employer will remain free to dismiss, provided the treatment is fair.

This order will also reduce the length of service employees will need before they can request written reasons for dismissal. This is an important complement to the unfair dismissal qualifying period. It is important that employees know the reason for their dismissal in order to decide whether or not to make a claim of unfair dismissal. Giving a written statement of these reasons on request is a simple matter of good practice. It is very useful to employees, providing them with basic information which can help to resolve disputes and prevent unfounded tribunal claims. This measure will continue the Government's programme of combining flexibility in the labour market with security and minimum standards for employees. I trust that your Lordships will agree that this is a reasonable step to take and will approve the order. I beg to move.

Moved, That the draft order laid before the House on 28th April be approved [17th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Lord Razzall

My Lords, I do not want to detain your Lordships for very long, but I should like to make one brief comment. I welcome from these Benches the reduction of the relevant period from two years to one year. As the Minister will be aware, there is no particular magic in one year. From 1971 to 1975, the period was one year. From 1975 to 1979, it was six months. It then went up to one year/two years, for small and large businesses respectively.

There is significant evidence, as the Minister will be aware, particularly from the citizens advice bureaux, that quite a large proportion of the cases that come to them are from people who believe that they have been unfairly treated although they have had less than one year's employment. In the view of the citizens advice bureaux, quite a lot of those cases involve circumstances where, at the end of, let us say, three months the employee has been given a perfectly satisfactory interview with the employer, indicating that everything is going well. In those circumstances, I ask the Minister to confirm that the Government will keep this under review together with the question of whether the one-year provision will in due course be lowered to six months.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Lord for his comments. He is quite right that there is no particular magic in one year and in recalling that the period has varied considerably over the years. I have, indeed, had the benefit of a briefing from the National Association of Citizens' Advice Bureaux which I read with great care.

I take the point that a substantial part of its caseload on employment problems, which is of course only a part of its total case load, is concerned with unfair dismissal in cases involving less than one year's employment. The noble Lord makes the valid point that the common probationary period is three months. As an employer, I always used to have a three-month probationary period, and I never had any difficulty, even when the formal legal period was two years, in using the end of the three-month period and the review at that time to achieve a relatively amicable parting of the ways if the probationary period had not worked out.

The fundamental point is that good employers will avoid complaints of unfair dismissal anyway. If they have good procedures, as 90 per cent do, there will be no problem in working a one-year period. There is an additional advantage in a one-year period, given our commitment throughout the consultations before the Fairness at Work White Paper and the preparatory work for the Employment Relations Bill and given that the one-year period has been agreed both by employees' organisations and by the CBI and the Association of Conservative Trade Unionists. We like to operate by consensus as far as we can, but I certainly can confirm what the noble Lord, Lord Razzall, says, and that our minds are open to further review, not necessarily in the phrase that he used at the end of his speech, and that we intend to reduce the period as and when it may prove necessary.

On Question, Motion agreed to.