§ 3.25 p.m.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, I beg to move that this Bill be now read a second time.
I am very pleased to have the opportunity to introduce this Bill to the House. I believe that it is an extremely important piece of legislation and one which will make a significant contribution to our economic and social well-being. Perhaps I may explain, first, why I believe that to be so.
I shall start by putting the Bill into the context of the Government's overall strategy. We all agree, I am sure, that one role of government, and in particular of my department, is to do all that we can to increase the productivity of British businesses and in that way strengthen UK competitiveness. Many factors, of course, influence productivity. But a crucial factor, and one where this country has not always been successful, is that of the relationship between the management and the workforce.
The purpose of the Employment Bill is to ensure that this country has a modern labour market fit for the 21st century. The labour market operates, like all markets, in a regulatory framework. It is the job of government to create the right framework. That is one of the things that the Bill is about.
1326 In addition to the right regulatory framework, we also need to ensure that incentives exist to get people into the labour market in the first place. We need to ensure that people have the skills that they need to add real value, that those skills keep pace with the ever-changing world, and that people with skills stay in the labour market. We need to ensure that the market is flexible so that businesses can respond quickly and effectively to changing consumer demand and to the challenges of competitors. Most of all, as I have already mentioned, we need to encourage effective work organisation and good employment relations between employers and their employees.
Those are critical issues and the gains that we have already made since 1997 are very real. The national minimum wage, the New Deal and the working families' tax credit are proving to be very effective incentives in getting people into the labour market. Our focus on education and training and the reforms that we are making in those areas are helping to address the skills problem. The same is true of the family-friendly policies that we have introduced, especially those aimed at making it easier for mothers to come back to work if they choose to do so, thus ensuring that valuable skills do not disappear from the labour market. We have the most flexible labour market in Europe and this is paying off with our higher employment rates.
The minimum standards that we have introduced to protect the most vulnerable workers have helped to get us out of the downward spiral of low wages and long hours and to foster instead a workplace culture of high commitment and high trust, where skilled and motivated employees help their companies to compete on the basis of quality of output rather than purely on cost of input. The minimum wage, the working time regulations and the Employment Relations Act have all helped businesses down the path of more effective work organisation.
But significant problems remain. The Bill which I present to your Lordships today builds on our achievements and addresses the problems. It does so in specific ways which I shall now outline to the House. I begin, if I may, with Part 3 of the Bill, which deals with dispute resolution. This is probably the most contentious part of the Bill and addresses the historic UK problem of poor workplace relations.
We estimate that nearly 6 million ernployees do not have access to adequate grievance procedures at work and that around 3 million have no workplace procedures at all. Inevitably that means worse industrial relations and more employment tribunal hearings. Your Lordships have seen the results of the Survey of Employment Tribunal Applications. There may be some disagreement over the exact interpretation of the figures, but it is clear that a significant proportion of cases that come before tribunals—more than a third of cases in the period covered—are cases where no attempt has been made to resolve the dispute in the workplace before recourse to the tribunals. This must be wrong. It is in everyone's interest to try, where possible, to get these problems resolved at as early a stage as possible.
1327 Protracted disputes which end up at a tribunal are bad for the employee; they are stressful; the settlement is seldom particularly large; and statistics show that the person involved is likely to end up in a lower paid job or without a job as a result, regardless of whether the case was won or lost. They are also bad for the employer. The average cost of responding to a tribunal application is estimated at £2,000. A rough estimate of the total cost to business last year, when there were 130,000 tribunal cases, was about a quarter of a billion pounds.
Of course, there is a cost to the economy as a whole; not just the cost to the taxpayer of coping with the rapid increase in numbers of tribunals, but, more importantly, the cost to our productivity and competitiveness of a complete breakdown of the employment relationship from what may start off as a relatively minor in-work dispute. In such circumstances, recourse to a tribunal or court should be a last resort, something to be turned to only when there is no other way of solving the problem. That is what the Bill aims to achieve by introducing a statutory basic minimum procedure to be followed in grievance and discipline cases.
The impact of our new procedures on the outcome of cases—the balance, if you like, between the two sides in each case—should be neutral. By legislating for statutory workplace procedures, we are not making it easier or harder for workers or employers to win cases when they go to a tribunal. We are saying, rather, that there should be fewer cases altogether that need outside intervention, and that the way to achieve that is to follow three simple steps: first, to explain the matter in writing; secondly, to hold a meeting to discuss the matter; and, thirdly, to offer a further meeting on appeal.
That will work in a balanced way. An employee has a right to that procedure, but he or she also has a duty to use it. Employees will not be allowed to lodge certain cases with a tribunal—with some important exceptions—until they have followed at least the initial step. If at a tribunal either side is found to have failed to follow the procedures properly, either side can see the award adjusted by up to 50 per cent. I want to stress that that approach is not at the expense of one interest group over another. It is about more efficient work organisation and a reduction in litigation. That is why both the business community and the trade unions have welcomed the statutory basic procedures that we are introducing through Part 3 of this Bill.
I should mention the changes that we are making in Part 3 to unfair dismissal rules. They are important, but again I want to stress that they are balanced. On the one hand, we are making it automatically unfair to dismiss a worker if the employer has not followed the new statutory procedures. On the other hand, we are allowing tribunals to ignore procedural irregularities, over and above the statutory procedures, if it can be shown that they make no difference to the decision to dismiss, provided, of course, that the dismissal was fair 1328 in all other respects. Those are complex matters and I am sure that noble Lords will want to scrutinise them carefully during the Committee stage.
Of course, there will be cases that cannot be resolved in the workplace. For those cases the Government are determined to provide a modern, fair and efficient tribunal system. Tribunal reforms are dealt with in Part 2 of the Bill. The Government believe that while in recent times the tribunal system has coped admirably with a large increase in the number of cases, it needs to change to meet new demands and to reflect how much the world and especially the labour market are in a constant process of change.
For example, the Bill puts a new focus on settling cases amicably. It introduces a fixed period of conciliation during which parties can concentrate on trying to find a solution to their problem on which they can both agree with the expert help of ACAS. That will cut down on prolonged negotiations that do not get resolved until, sometimes quite literally, the parties are on the steps of the tribunal. We hope that that will allow ACAS to concentrate on claims that need the most help and that it will help to reduce wasted administrative effort by the Employment Tribunals Service.
The Bill also places a new focus on consistency. Over time the tribunal system has grown and changed, and those who work in it and use it are unanimous in supporting the new powers in the Bill for the presidents of the employment tribunals to issue practice directions.
There are minor changes to the costs regime in the employment tribunals. An award of costs is a very rare event in such tribunals. There are no provisions, as in the courts, for the loser to pay the costs of the winner. Employment tribunal costs awards can be made only when a party has brought a hopeless case that has no prospect of success. Equally, that applies to the claim that an applicant has brought and to the defence that a respondent makes to it, or where a party has behaved abusively or unreasonably in bringing or conducting a case.
Last year 130,000 claims were made and there were 247 awards of costs. All agree that such claims do not belong in the system and that the people who have had their time and effort wasted in fighting them deserve compensation. At the moment costs awards primarily cover legal fees, but we know that many parties, particularly many applicants, do not use legal help. The Bill changes the rules for awarding costs so that compensation can be paid for the time a party has spent on such cases. It will also allow costs orders to be made against a paid representative, which includes lawyers and employment consultants who charge for their services, but excludes trade union representatives, CAB and legal advice centre staff and other not-for-profit advisers.
The Bill makes similar changes regarding wasted costs in the Employment Appeals Tribunal. It gives the Secretary of State the power to prescribe a form to be used in instituting and responding to employment tribunal claims and allows tribunal claims to be 1329 determined in writing where both parties and the tribunal consider that that is right. It also clarifies the legislation governing pre-hearing reviews to allow for the striking out of weak cases at a pre-hearing stage.
These are not radical provisions. They will not change the world overnight. But we believe that they are sensible and modest proposals which will ensure that we have the right regulatory and enforcement framework to support our other changes. As with other provisions in the Bill, we have consulted widely on the proposals. We have listened to the views of the judiciary, user groups, trade unions, advisory bodies, employers, ACAS and others.
I should also mention the important work of the Employment Tribunals Systems Taskforce, chaired by Janet Gaymer. The taskforce is currently looking at how the employment tribunal system can be made more efficient and cost-effective for users and at the need for new investment against the background of sharply rising demand for their services. The taskforce will report in the spring.
I turn to Part 1 of the Bill, which introduces new rights for parents that will ensure that they can spend time with their children when it is most valuable, which is when they are young. We are fulfilling our commitment to introduce for the first time pay and leave rights for fathers and for adopting parents. In addition, the Government are extending maternity leave and simplifying the rules governing maternity leave and pay.
At this stage it makes sense also to mention Clause 47 on flexible working. That clause, the result of the valuable work of Professor Sir George Bain's taskforce on flexible working, gives employees the right to apply for flexible hours if they have children under six or disabled children under eighteen, and puts a duty on employers to consider such requests seriously. Of course, employers may turn down such requests, but the onus will be on them to explain clearly, in writing, why they are doing so. We want to get away from the knee-jerk reaction that says, "We cannot accommodate anything that deviates from our standard hours", without even thinking about why not. We want businesses to understand that they also have much to gain from more flexible working patterns for their employees.
It should, I trust, be self-evident that these new family-friendly measures will have a positive effect. Most obviously, they will be beneficial to working parents who are struggling to balance their work and family commitments. For the first time, fathers can take paid time off to be with their new-born children, over and above their contractual rights to paid holidays. Because the pay will be statutory, the cost will be borne principally by the state rather than by the employer. Adopters will at last have the right to paid time off, with adoption leave and pay available for the same periods as maternity leave and pay: 26 weeks' paid leave followed by 26 weeks' unpaid leave. Where couples adopt, one partner will also have the same right to paid paternity leave as other new parents.
1330 I think we would all agree that such recognition of the valuable role played by adoptive parents is long overdue.
So these measures benefit employees in a very direct way. But they will also benefit business and the labour market as a whole. To return to the themes I outlined at the start of this speech, these new family-friendly rights provide incentives for people to return to the labour market if they wish to do so, thus helping to retain skills in the labour market, and will encourage businesses to look at more flexible and more efficient ways of organising their work.
Finally, Part 4 also contains important new rights. It comprises a group of related but separate provisions which all contribute in their different ways to the overall objectives which I outlined at the start of my speech.
The introduction of an equal pay questionnaire will enable the facts of a case to be established early. It will encourage not only the collection of evidence but also the settlement of cases before they proceed to tribunal. This is about a basic issue of social justice. The absence of transparency on pay information contributes to, and perpetuates, the gender pay gap. It is also of course about creating a modern labour market—one where people are rewarded on the basis of the job that they do, not their gender.
Another long-standing problem in the workplace, as I mentioned, is the skill level of those in work. The Bill introduces a right to time off for union learning representatives. That will ensure that vulnerable groups of workers such as older men, people from ethnic minorities and part-timers who, at the moment, often miss out on training and development opportunities, are given support and encouragement from their representatives, who are very skilled at reaching precisely these groups.
Of course there is more than one way to address the problem of getting people into the labour market. The Bill also attacks the problem through the benefits system. This is not entirely a DTI Bill; it also contains provisions which are the responsibility of the Department for Work and Pensions. I have already mentioned statutory maternity pay in. Part I. In Part 4 we have included measures which ensure that partners of people receiving working age benefits will receive advice about finding work through work-focused interviews.
We have taken powers to allow us to use information collected by the Inland Revenue to help us evaluate the effectiveness of employment and training initiatives in moving people into sustainable work. That information will also be used in relation to paying and rewarding providers of employment training initiatives.
Finally, Part 4 also contains the important provisions on equal treatment for fixed-term employees. We are ensuring that people on fixed-term contracts cannot be treated less favourably than their colleagues on permanent contracts. We are outlawing the abusive use of consecutive fixed-term contracts. Fixed-term contracts have a legitimate and important 1331 role to play in a modern, flexible labour market. We want to ensure that they are used fairly to meet the needs of business and employees and not as a way of cutting costs to the detriment of the employee.
We have consulted widely on the provisions in the Bill. We have listened and we have responded to what we have heard. For example, we have designed the new paternity and adoption rights to mirror the simplified maternity provisions. Business representatives asked for that in their responses to our consultation and we listened to them.
This approach has allowed us to bring forward a Bill which has the broad support of both sides of industry. There are, of course, some dissenting voices, as with all legislation. But the range of organisations which support these measures is impressive and ranges right across the spectrum.
On the new statutory procedure for all employers, the British Chambers of Commerce said:It is in the best interests of employers to embrace these procedures, as it is they who often lose unfair dismissal cases because they have no procedures in place".The TUC said in its press notice that it,welcomes the Employment Bill plan for grievance and disciplinary procedures".John Monks went on to say that,much of this Bill can be warmly welcomed".The CBI spoke of its belief that,good internal procedures are important in the workplace and that all workplaces should be encouraged to have a basic minimum set of procedures for dealing with a disciplinary matter or employee complaints".Unison said:We welcome the announcement of the extension of maternity leave and pay. We also welcome the majority of proposals in this framework for simplifying maternity rights".I could give other examples, but I hope that these limited extracts are sufficient to show that this Bill is indeed a balanced package which is built on a general consensus about the right way to go forward.
I look forward to hearing noble Lords' thoughts and comments on the Bill. I am sure that when we come to scrutinise it in Committee there will be many valuable contributions made. I know that there are issues in this Bill which are of great concern to some Members, and that an enormous amount of expertise on these matters resides in this House. We have consulted widely on the Bill. We shall listen very carefully to any arguments put forward for change. The Bill is not a radical one but it has, I believe, the potential to have a significant and beneficial impact on employment relations in this country. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Sainsbury of Turville.)
§ 3.46 p.m.
§ Baroness Miller of Hendon
My Lords, here we go again. This is the third major Bill directly affecting employment that this Government have introduced in a period of less than five years in power, an average of one every 18 months. That is to say nothing of the 1332 hundreds of statutory instruments, orders and EU directives, often extra gold plated by Whitehall, that have descended on the shoulders of British industry and commerce.
However, I thank the Minister for his very full, clear and detailed explanation of the latest 60 pages, 55 clauses and 8 schedules of employment legislation, not a single hint of which was given in the Queen's Speech.
The Bill covers a wide range of issues that in many respects are unrelated. A number of them have important practical implications for all employers, large and small. But there is little in the Bill that could not have been included in the 1999 Employment Relations Bill. I suspect that we are being subjected to a kind of "salami" tactic whereby, drip by drip—or rather slice by slice—our employment law is being moulded into conformity with large parts of the EU. Indeed, the Minister for Employment Relations and the Regions admitted that even more employment legislation was in the pipeline when he told the other place on Report that,we are committed to reviewing the whole of the Employment Relations Act".—[Official Report, Commons, 12/2/02; col. 155.]At an earlier stage the Minister said that,we can use a provision in the Employment Relations Act 1999 to review the complicated worker-employee issue".—[Official Report, Commons, 27/11/01; col. 928.]I should be most grateful if the Minister could explain to me the difference between a worker and an employee. I remember very well, when we dealt with the National Minimum Wage Act, the Government refused to accept the word "employee" and insisted on the word "worker". In this Bill we also have the word "staf".
The Bill contains a plethora of new regulations which cover paternity, maternity and adoption rights and, of course, still more trade union rights. Many of those burdens on commerce start in Brussels. In the past few days we have seen a large kite flying over that city in the form of further so-called rights to be accorded temporary workers.
It is fair to say that we give a general welcome to Parts 1, 2 and 3 of the Bill, including the "family friendly" policies in the workplace. But we have some problems with Part 4. We are concerned that we know so little about the final shape of the legislation due to so much of it being contained in regulations yet to be published.
As my honourable friend the Member for Maldon and Chelmsford East said in response to the Government's task force report:We welcome measures to enable parents to maintain their place in employment … while spending time with their family…. It is also good news that the Government has ruled out an automatic right to work flexible hours which could have significantly added to the burdens on employers, particularly those in small firms".Since those remarks about flexible working hours were made by my honourable friend, the Government have introduced in the other place the new Clause 47 which contains 195 lines of legislation on this subject. There is also the wide-ranging regulation which proposed 1333 new Sections 80F, 80G and 801 to the Employment Rights Act 1996 authorise the Secretary of State to make. I venture to suggest that employers and employees, especially small employers and individual employees alike, will find the rules an administrative nightmare to understand and a fruitful field for litigation before tribunals, as well as a potential cause of jealousy and dissension among employees in the same workplace.
We support the requirement that employees should use internal grievance procedures before resorting to litigation. Let us not mince words, that is what is involved in employment tribunals. However, we are concerned that some of the new arrangements will create confusion and uncertainty for employers. That is because a number of workplace issues, such as ill-health and redundancy, fit neither the proposed grievance nor the disciplinary statutory procedures. I suspect that the complex procedures of Schedule 2 were introduced only after the Government decided to drop the idea of a deposit as an alternative means to inhibit frivolous claims. The procedure, having been somewhat hastily prepared, is also vague and may need better definition, especially as there is no guarantee that the employer will be all right, even if he follows procedure to the letter.
I am also given to understand that the proposed new ways of handling disputes, which may inhibit access to tribunals, causes concern to some Law Lords. I shall be interested to hear their views to discover whether that is the case during our consideration of the Bill. It is significant that the Government have watered down their initial proposals in that regard in the face of pressure from their own Back-Benchers and the unions. Not the least of those reversals is their backing off from the proposal to require applicants to industrial tribunals to pay a refundable deposit as a means of inhibiting hopeless or vindictive claims or those launched in the hope of persuading the employer to pay something because of their nuisance value.
The Government gave as the reason for changing their mind that the proposal,did not have widespread support".That was despite the fact that it was supported by the Federation of Small Businesses, the Institute of Directors and 80 per cent of those who responded to a Forum Business Survey. We may return to that question later, especially as the Government believe that dispute resolution will cost commerce up to £94 million a year in running costs alone.
Your Lordships may be interested to know that the growing number and cost of employment tribunal claims has been of concern to employers for a long time. The number of claims has risen from more than 29,000 in 1988–89 to more than 130,000 in 2000–01. That is due to changes in employment law introduced by the Government which have contributed to a compensation culture. It is not just the increase in workers' rights but the reduction in the qualifying period for unfair dismissal claims and the significant increase in compensation levels that lead employees to 1334 launch speculative claims, relying on the fact that, at the least, they have a nuisance value and, without the deposit to which I referred, they have nothing to lose.
It is surprising that, while Clause 22 provides for the Secretary of State to enable tribunals to make awards of costs and expenses against a party's representative because of the way in which the representative has conducted proceedings, the Government have set their face against penalising an unreasonable claimant for launching a wholly untenable claim. That may be an attempt to intimidate employers from being legally represented and to inhibit their representative's conduct of a case. In the High Court, an award by a trained and experienced judge of costs against lawyers is an absolute rarity.
The Government have stated that the aim of the Bill is,to deliver a balanced package of support for working parents at the same time as reducing red tape for employers and makmg it easier to settle disputes in the workplace".Well, if that balancing act can indeed be achieved, it will be a miracle. I am not sure that the Government think that we will achieve exactly that. I am glad to note that the two weeks' paternity leave will have to be taken in one block and around the time of the birth. because that entitlement will bear especially hard on small firms with only a few employees.
The Bill demonstrates some of the Government's weak submission to union demands to "gold plate" the already oppressive EU directives by giving identical pay and pension rights for employees on short and fixed-term contracts as are enjoyed by permanent workers. Let us consider what the honourable Member for Twickenham described in the other place as,the classic example of bad regulation".He was referring to the working time directive and pointed out that neither trade unions nor employers were consulted before the Department of Trade and Industry rushed in to produce what he rightly called,an enormously convoluted set of detailed regulations running to some 80 pages",whereas, as he rightly pointed out, in Holland one page had sufficed. In a phrase that I wish that I had thought of, he said that that was,gold plating on an epic scale".—[Official Report. Commons, 27/11/01; col. 885.]That sort of thing makes those of us on these Benches worry where the Bill, and especially the as yet unpublished secondary legislation, will lead us. We can find the threat of the Government's intention to indulge in ultra-gold plating in the note to Clause 45, where they admit their intention,to prevent pay and pensions discrimination against fixed term employees, in addition to implementing directive 1999/70/EC".That is in addition to the directive, so we get the directive and a little more as well. None of our EU competitors will be so burdened; we shall be alone.
The Bill requires that fixed term workers shall not be treated less favourably than other etnployees. There are several ways in which any disadvantage can be made up without the over-prescriptive regulations 1335 threatened by the Government. Why do they not say specifically what they intend in the Bill, rather than tucking away proposed secondary legislation in a note? We do not know what that legislation will provide.
The introduction of flexi-working has many advantages for individual employees but, as with everything, there is a downside. The burden of providing that facility to workers with children will fall on those workers in small businesses who do not have small children but who may care for others such as elderly parents. However, like the Confederation of British Industry, we are relieved that there will not be an automatic right to flexi-time and that the matter should be properly considered.
Every measure in the Bill will add to employers' costs. None will do major damage on its own, but cumulatively they may be devastating. Apart from the cost of running dispute resolution, to which I referred, flexible working is estimated to cost £286 million a year. I shall not take up your Lordships' time by detailing the almost £248 million that the Government admit could be the cost of implementing the Bill's other measures.
Our major objection to the Bill is that, not for the first time during the regime of this Government, we are presented with what is largely an enabling Bill. I know that I say that every time I come to the Dispatch Box. We will have to await the detail in the form of ministerial decrees—euphemistically called statutory instruments—which parliamentary procedure affords only minimal opportunity to scrutinise and, in practice, none to modify.
We shall wish to examine closely the provisions of Clause 42, which introduces the concept of equal pay questionnaires, as the Minister mentioned. They should not be used as fishing expeditions to obtain information not directly linked to an employee's pay claim. In addition, confidentiality and privacy issues are associated with disclosing information about the terms and conditions of employment of individual employees that should be dealt with in primary legislation, not left to regulations, especially as the human right to respect for that privacy will be breached.
I must also mention Clause 43, which introduces rights for what are called union learning representatives, the number of whom can be determined by the union without the employer's agreement, despite the fact that the employer must bear the cost of the time off. I can hope only that the learning representatives will not be a means for unions further to infiltrate the workplace. The present state of industrial relations, as most people probably realise, is rapidly accelerating back to how it was in the 1970s and early 1980s. I notice that noble Lords on the Benches opposite are smiling or even laughing at me: I am used to it, for they do it so often. I still say what I believe in and what I think is right.
1336 I can hope only that the learning representatives will not be a means for unions further—I beg your Lordships' pardon, I got so confused that I was going to repeat the same paragraph. I made my point sufficiently the first time, so I shall move on.
It is only right for me to mention that there are already 3,000 learning representatives. Where they have been established on a voluntary basis, there appears to be no problem, and they are welcome. However, the Bill would change a voluntary arrangement to a compulsory one. When my honourable friend asked the Secretary of State whether any employers' organisations supported the concept of learning representatives, the quick and simple answer was, "The Confederation of British Industry".
That was not correct. In fact, the CBI said:The CBI supports the concept of learning representatives—but the right to appoint union learning representatives without the employer's agreement is unacceptable—In particular, the CBI opposes the right for unions to determine the number of union learning representatives without the employer's agreement".Perhaps, the noble Lord, Lord Sainsbury of Turville, will now be able to answer that same question, but this time correctly. Have any employers' organisations unequivocally supported the concept of compulsory learning representatives, as set out in the Bill?
Mr John Monks, the general secretary of the TUC, recently said:The unions are back in business".There is nothing at all wrong with strong unions, except when their agenda is still the them-and-us approach of the bad old days. We have hatched a new brood of militant trade union leaders, such as those in the rail unions. The RMT has recently chosen Mr Bob Crow, an ex-communist and a disciple of Arthur Scargill. The present agenda of his union is not to secure better pay and conditions for his members but to obtain the immediate reinstatement of a comrade from the hard Left Socialist Alliance who, as a train driver, has been disciplined for a breach of safety requirements.
§ Lord Lea of Crondall
My Lords, can the noble Baroness inform the House whether the words "social partnership" have ever passed her lips?
§ Baroness Miller of Hendon
My Lords, they have indeed. I believe in social partnership; I do not believe in it when it has gone wrong.
Mr Crow's avowed long-term objective is to secure the re-nationalisation of the railways. Some unions have still to learn that their members' prosperity and job security depends on the prosperity and competitiveness in the world marketplace of their employers. That is the truth: they must work together. If one does not work with the other, it is no good.
We must also examine the rather curious provisions of Clause 49, which relates to work-focused interviews for partners. The Explanatory Notes tell us that,Partners of working age benefit claimants who are themselves of working age will be required to take part in a work-focused interview".1337 I see the hand of the Treasury in that, as it seeks to cut down benefit entitlements by trying to coerce the other partner into work. I am relieved—the noble Lord may agree with me—that the Conservative Party did not come up with that concept. The howls emanating from the other side of the House would have been deafening, and I would have been in more trouble than,it seems, I sometimes am.
What a badly drafted clause it is. A "partner" is a person who is a member of the same "couple" as the claimant. A "couple" is then defined as having,the same meaning as in the Contributions and Benefits Act".Apart from putting a lay claimant to the trouble of looking at another Act, instead of simply repeating the definition, the draftsman may well have got the name of the Act wrong. I hope that the Minister will put that right at the next stage.
What, in fact, is a partner if the couple are not married? The 1992 Act refers to an unmarried couple as a man and a woman living together. Will the Benefits Agency demand the right to review couples' sleeping arrangements? If the provision does not apply to same-sex couples who do not have to submit to the interview, there would seem to be some discrimination against heterosexual couples. Perhaps the Minister will consider inserting a clause with a clearer definition, entirely self-contained within the Bill, so that every claimant and his or her partner will know their obligation without reference to a law library or a lawyer.
What is the whole purpose of the exercise when, as the notes make clear,The measure will not place any requirement on partners beyond taking part in interviews. (For example, they will not be required to attend training courses or seek work)"?We know that the work-focused interviews will require the Government to take on up to 650 extra civil servants at a cost of about £35 million, and even the Treasury will not give an estimate of the savings—if any—that it will make as a result of that piece of job creation.
Before leaving Clause 49, which is in the "Miscellaneous and General" part of the Bill, I ask the Minister to confirm whether it is part of—or, indeed, instead of—the welfare Bill, which was mentioned in the Queen's Speech, as distinct from this Bill, which, as I have already said, was not.
Schedule 7 contains what are called "minor and consequential amendments". I give the Minister advance notice that I shall introduce one of my own to clear up an ambiguity in the 1999 Act, which he and I have discussed verbally and in correspondence.
It is difficult for me to come to a conclusion about the Bill. Like the proverbial curate's egg, it is certainly good in parts. On the other hand, there are parts where it is clear that the Government are working to a different agenda. There are also parts in which the Government want to regulate strictly the purely personal working relationship between small employers and their staff. There is even an agenda of creating a working environment in the United Kingdom equal to the rigid practices applicable on 1338 mainland Europe, ignoring, say, Germany which must now re-think the social costs that have left 4 million people unemployed. Perhaps the view of those of us on these Benches can best be summarised by a quotation from the amendment to the Second Reading Motion in the other place:although it contains welcome measures which promote family friendly practices … and which seek to improve dispute resolution procedures, it depends excessively on secondary legislation which is likely to impose significant extra burdens on business, especially small businesses; and … will impose extra costs on business, further damaging British competitiveness at a time when manufacturing industry is already in a fourth successive quarter of recession".
§ Lord McCarthy
My Lords, does the noble Baroness agree with me that when her party—and the party of the noble Lord, Lord Henley, who is sitting behind her—was in power, there were just as many regulations as we have? Is the noble Baroness telling us that, if her party ever got into government again, it would have no regulations?
§ Baroness Miller of Hendon
My Lords, 1 shall say nothing of the kind. I would never commit myself or my party—which will be in government—to that. Since the Labour Government took us into the social chapter, the number of directives has grown enormously.
§ 4.9 p.m.
§ Lord Razzall
My Lords, as the Minister will be aware, we on these Benches have, unlike those on the Conservative Benches, consistently supported the Government on the three major pieces of employment legislation that they have brought in since taking office in 1997. That has been our position, and we welcome the provisions of the Bill in so far as they introduce maternity, paternity and adoption leave, and we also welcome the introduction of flexible working practices.
However, we are concerned that a Bill which we would have assumed was designed to deal with those matters, providing continuity to the previous three pieces of legislation brought in by the Government, has had added to it a number of provisions that are worrying. Our concerns may not be for the same reasons as those of the noble Baroness who has just spoken, but rather for a number of reasons which I shall try to summarise in the course of my remarks.
First, I turn to Parts 2 and 3 of the legislation dealing with reforms to employment tribunals and dispute resolution procedures. In his opening remarks, the Minister referred to the Employment Tribunal System Taskforce, recently set up by the Lord Chancellor and the Secretary of State for Trade and Industry to consider how the employment tribunal system could be made more efficient and cost effective for users. As the Minister indicated in his opening remarks, the taskforce is due to report in the spring of this year. However, notwithstanding the report of the taskforce, which was commended by the Minister in his opening speech, we find that the Government and, presumably, the Department of Trade and Industry have taken the 1339 view that they will not wait for that report, but rather they will put their imprimatur on the Bill with regard to what they already believe employment tribunal reform should be. The Bill must be brought forward now in order to secure the worthwhile alterations on maternity leave, paternity leave and so forth.
On reading the debate held in another place, it appears that that has been based on an assumption made and voiced, I think, by one of the Government Ministers in another place, Alan Johnson, that the DTI believes that 62 per cent of all cases that come before employment tribunals in this country are brought forward in a form that could have been resolved by grievance or dispute procedures. Despite considerable attempts made over the past few months by the noble friends of the noble Baroness, Lady Miller, to establish where that figure came from, we have not yet received a satisfactory answer.
I am sure that noble Lords will be disturbed by the significant concerns expressed by the president of the Employment Tribunals for England and Wales. He is of the view that those figures are incorrect—
§ Lord Sainsbury of Turville
My Lords, I rise briefly to point out to the noble Lord that, as has been debated in this House, we have brought forward the two reports and they have been deposited in the Library of the House.
§ Lord Razzall
My Lords, I accept the point made by the Minister. However, I am sure that he is aware that Judge Prophet, the president of the Employment Tribunals for England and Wales, takes the view that the figure cannot be correct because a large proportion of those who come before employment tribunals have already left employment as a result of alleged dismissal, redundancy or whatever it might be. Therefore he finds it difficult to accept the figure used by the DTI in its dispute resolution document; that is, that 62 per cent of all cases are brought by those who ought to have gone through the grievance procedures.
However, in a sense that is by the way because the significant point here, and to which I shall return, is that the Employment Tribunal System Taskforce was set up precisely to look at these issues. When the Minister responds to our debate, I should like him to justify why, at a point before the taskforce has reported, Her Majesty's Government have felt it necessary to implement the provisions of Part 2 and, to some extent, Part 3. The assumption being made by many working in the employment tribunals field is that this has happened because the DTI has an agenda with which they disagree. It may well be that the DTI is correct in its assumption on the agenda, but bearing in mind the strong representations that have been made by the president of the Employment Tribunals for England and Wales, and bearing in mind the Government's welcome commitment to consultation in relation to such issues, I think that the Government do need to justify why at this stage they are tacking on these measures to such a worthwhile Bill. I mention that in particular because, as was indicated both by the 1340 noble Baroness and by the Minister, we can anticipate further employment legislation from the Government into which the measures could have been fitted perfectly easily once the taskforce has reported.
Significant issues need to be discussed in relation to Part 3, many of which we shall wish to probe in Committee. In general terms, concerns have been expressed in a number of quarters to the effect that the Bill's proposed dispute resolution procedures will undermine ACAS. Noble Lords will be aware that the ACAS Code of Practice on Discipline and Grievance is widely adhered to and respected. Ministers in another place have admitted that there is no doubt that, if the Bill is passed in its current form, significant alterations will have to be made to the ACAS code of practice. Concerns have been expressed that the code will be watered down rather than strengthened, as it were, in the light of the provisions of the Bill. We would have assumed that the code should have been strengthened. Furthermore, it has been implied that best practice, as set out by ACAS, is not suitable for small employers. That, I think, is an assumption that this House should make at its peril.
A number of specific clauses in the area of dispute resolution have given cause for concern and will need to be dealt with in Committee and perhaps on Report. I turn first to Clause 34(2) which will amend Section 98 of the Employment Rights Act 1996. Noble Lords will know that this provides that dismissal will not be unfair for the reason only that a procedure has not been followed. From these Benches we take the view that this subsection provides rather a blunderbuss approach to overturn a decision reached by the House of Lords in 1988 which will be familiar to all practitioners in the area. However, in Committee we shall want to probe whether it will be more difficult to persuade human resources managers to follow a procedure if they think that they can get away with not following it simply by arguing that the employee would have been dismissed anyway. Serious concerns have been expressed about the "blunderbuss effect" caused by the drafting of this clause.
The second point that I wish to highlight in my remarks on Second Reading with regard to dispute resolution concern the modified procedures provided in Schedule 2. Concerns have been expressed with regard to the use of the modified procedures in cases of gross misconduct. We understand clearly the intention of the legislation, but it is possible that rogue employers will seek to use the modified procedures set out in this schedule in an abusive manner. In Committee we shall need to look carefully at those issues.
As I said earlier, we welcome Clause 45 and the introduction of the provisions on fixed term work. The noble Baroness, Lady Miller, will know that these provide for the implementation of European Council Directive 1999/70/EC. However, we should like to ask why the Government have chosen to limit the provisions to employees only rather than to apply them to all workers. Certain categories of workers 1341 such as agency staff and casual workers are to be excluded from these welcome provisions. We shall seek to probe that area in Committee.
Clause 49 is a cause of considerable concern because apparently it would give JobCentre staff full discretion in deciding whether or not the partner of someone claiming benefit should be called for interview. Such a measure clearly requires primary legislation. The benefits in question include not only income support and jobseeker's allowance but incapacity benefit, severe disablement allowance and invalid care allowance—which suggests that some partners of people in receipt of benefits payable to carers and disabled people would be expected to attend an interview or face one at home. They may come under pressure at an interview—on the assumption that if they can turn up for one, they can turn up for a job interview and take a job. The Government need to look seriously at the implications of Clause 49—particularly for disabled persons and their partners.
Having expressed some of our reservations albout the Bill, I welcome the provisions in respect of maternity, paternity and adoption leave, and flexible working Lime. We regret, however, that the Government have chosen to add a hotchpotch of measures—many of which are ill thought out and ought to be subject to separate legislation.