§ 8.8 p.m.
§ Lord Davies of Oldham rose to move, That the draft code of practice laid before the House on 10th February be approved [15th Report from the Joint Committee].
§ The noble Lord said: My Lords, the code was first introduced in 1978. It has been revised several times since then to reflect changes to trade union law and to employment practices more generally. ACAS has produced this latest version of the code in response to the Employment Act 2002. Section 43 of that Act provides rights to union learning representatives—ULRs—to "reasonable" time off with pay to carry out their functions and to undergo training. The Act also gives the right to "reasonable" time off without pay to union members wishing to access the services of ULRs.
§ Union learning representatives are lay union representatives. Their main function is to advise union members about their training and educational and developmental needs. They are particularly effective at raising interest in training and development, especially among the lowest skilled workers and those with literacy and numeracy problems.
§ Unions have had a long-standing interest in training matters, but ULRs are a new phenomenon. Just six years ago, there were very few of them indeed. Now, I am glad to say, their numbers have grown to more than 4,500.
§ The Act specifies that either ACAS or the Secretary of State may produce a code containing practical guidance in two areas: first, the time off entitlements to ULRs and, secondly, what training should be sufficient for ULRs to begin carrying out their functions. In the event, the Government thought that it was more appropriate for ACAS, with its wealth of employment relations experience, to produce the code. ACAS issued an initial draft last year for consultation. Fifty responses were received, the majority of which were generally supportive.
§ The bulk of the draft code before us incorporates guidance contained in the existing code. Much of the wording is therefore unaltered. However, some minor changes were made to update the text. For example, paragraph 11 states that unions and employers might wish to negotiate about "family friendly policies". Another small change at paragraph 16 relates to the entitlement of lay representatives to time off to accompany workers to disciplinary and grievance hearings. That right was introduced in the Employment Relations Act 1999 and came into effect in September 2000.
§ As I said earlier, the most significant changes to the code concern the addition of guidance about ULRs. Paragraphs 13 and 14 cover their time off entitlements. Those paragraphs, together with Section 4 of the code, give guidance on what factors or circumstances should be taken into account when assessing whether time off for ULRs would be "reasonable".308
§ The second strand of the code's guidance relates to the application of the "training condition". The Act requires ULRs to be sufficiently trained to carry out their duties either at the time they begin functioning as a ULR or within six months of that date. That latter time limit provides for individuals to receive paid time off to receive the initial ULR training.
§ The code of practice gives guidance at paragraphs 22 to 26 on what may constitute "sufficient training" in practice. Useful examples are given on how employees could demonstrate that they have received sufficient training. They include attendance at a training course or the shadowing of an experienced ULR. Relevant previous experience may also help to demonstrate that that condition is met.
§ We did not want the training condition to be restrictive or narrow. That is why we did not want it to be tied to any specific qualification. People learn in different ways. Formal learning leading to a qualification suits some people but not others.
§ Noble Lords may be aware that the Joint Committee on Statutory Instruments made a number of observations on the code. Those observations relate to Section 199(3) of the Trade Union and Labour Relations (Consolidation) Act 1992, which provides that the code must contain guidance on time off for trade union activities that are connected with industrial action.
§ The committee recognised that the code's wording is sufficient to meet the requirements of Section 199(3). However, it reported that the code did not specifically refer to those parts of the text that fulfil the requirement under that section. The committee considered that an explicit cross-reference to Section 199(3) would make matters clearer. We are grateful to the committee for its views, which we take extremely seriously. The code is designed to provide practical guidance to trade unionists, employers and individuals when they apply the ULR entitlements at the workplace. It is therefore written in a style which is accessible to the practitioner audience. The absence of a cross-reference does not significantly weaken the purpose of the code. However, the Government will certainly draw the committee's observations to the attention of ACAS and invite it to give them due consideration when the code is next revised.
§ ACAS has drawn on its rich pool of knowledge of employment regulations to revise the code. The text is based heavily on the existing code, which has worked very well and given helpful advice to many thousands of practitioners. I am confident that the latest version will maintain that excellent record and that it will prove invaluable guidance to all concerned. Therefore, I strongly commend the code to the House for approval.
§ Moved, That the draft code of practice laid before the House on 10th February be approved [15th Report from the Joint Committee].—(Lord Davies of Oldham.)
§ 8.15 p.m.
§ Baroness Blatch
My Lords, the House will be grateful to the Minister for explaining the code. It 309 received a fairly full discussion in another place and a number of questions arose from that. I want to reinforce one or two of those matters and add one or two myself.
First, I want to refer to a point which I do not believe was made in another place. The noble Lord referred to there having been 50 responses. It seems to me that, when one thinks of the number of employers, that level of response is fairly pathetic, especially if the CBI, which is responsible for companies employing very large numbers of people across the country, is counted as one of the 50. By and large, the CBI does represent larger companies. Often when burdens are placed on industry, the larger companies are far better able than medium and small-sized companies to meet the costs involved. I do not know whether, in responding to the debate, the noble Lord will be able to say what the department thinks of the level of response. On the basis of 50 responses, I believe it is difficult to determine how the code was received by employers.
Next, I turn to the report of the Standing Committee on Delegated Legislation. I refer to the first column of the report—col. 3—where the committee discusses the number of ULRs. My understanding is that the number will rise substantially to 22,000 union learning representatives. I quote from the report:We believe that with the new statutory rights there could be more than 22,000 ULRs in place by 2010 supporting as many as 250,000 workers".—[Official Report, Commons Sixth Standing Committee on Delegated Legislation, 2/4/03; col. 3.]That is one ULR per 11 workers. Is that really what the noble Lord is advocating? What would the cost of that be to industry and what is the impact assessment to employers expected to be in 2010, particularly for medium-sized and smaller employers? That seems to me to be an enormously high ratio.
On the general point of education, I do not want to say anything that would argue against the importance of people continuing to improve their skills. Whatever the level of skills, there should always be an opportunity to go to the next level. But the predominant talk about the kind of skills addressed by the ULRs is that they are mainly basic skills. That predominantly forms the work of ULRs. If one looks across the piece in education, there are further education colleges, a university for industry, learndirect and learning and skills councils, not to mention the fact that the skills mostly referred to are basic skills, which frankly should have been mastered when the young people were at school.
Therefore, one wonders why there needs to be another complete layer of people who are concerned with improving skills in the workplace. Of course, there is a responsibility on employers, and one recognises that. But the Adult Literacy Basic Skills Unit—I believe that it has a new name these days—also deals with adult literacy and numeracy and basic skills. I wonder whether the noble Lord is able to comment on that.
On reading partly the code and partly the report of the debate in another place, I found it difficult to know exactly who these people are and what they are. What 310 is their job description? Do they have a full-time job description? Does the work form part of their normal work? Are they normal employees of companies who take on the work as an extra duty? If they do, what is the minimum qualification required to undertake the whole business of addressing the education and skills needs of other employees? It seems to me that, if they are in that position, they should be fairly skilled themselves, but I am not sure whether they need a minimum level of qualification.
The other point is that peppered throughout the code is the word "reasonable". In another place the Minister was not able to throw much light on what that meant. It seemed that if a challenge was made it would presumably be left to tribunals to determine what was reasonable. But I believe that it is incumbent on someone to have a view about what would be a reasonable action on the part of employers, what would be unreasonable, and whether "reasonable" takes into account the size of a company, its ability to meet the training needs of its workforce and the inability of some very small firms to do so. I believe that more than 90 per cent of companies in this country employ fewer than 50 employees. So you are talking about large numbers of companies with small numbers of employees.
Another question for the Minister is on the compulsory nature of the code. Why can we not leave it to the good will of the employers, co-operating with the unions? The Minister in another place spoke of the high level of co-operation between unions and employers. If that is the case, why do they need a compulsory code? A compulsory code smacks of "You must do this or else", and the "or else" is judged by the standard of reasonableness. As we do not know what "reasonableness" means, it seems to be a difficult proposition for employers.
My final point is on burdens. Whenever we receive a code or a regulation or a statutory instrument from the Government that will have an impact on employers—usually the impact is one of cost and time but it is taken in isolation. One considers this to be a laudable activity; it concerns improving the skills of the workforce, with which it is hard to argue. But putting this code alongside all the other regulations on employers means that for many it will add up to a burden that they simply cannot absorb. If this is a compulsory activity for employers, they will have no choice. They either comply or they go to court, or, worse, they go out of business altogether. We know that that has been the case and that some have gone out of business simply because of the weight of regulation.
The code means time off for the union learning representatives, for union members and for their representatives and it means time off for part-timers for trade union activities. It will also increase the burden on business, so it would be helpful if the Minister could let the House know the cost of the so-called predicted 22,000 ULRs—I notice that there could be more than 22,000—who will serve only 250,000 workers, a fraction of the workers in this country. What will be the impact on the employers 311 who will have to meet their proportion of the costs, and what will it mean for a workforce, where a substitute workforce will be required to cover for those taking time off? If we are to pass a code of practice like this in Parliament, we owe employers and employees an explanation.
§ Baroness Sharp of Guildford
My Lords, I too thank the Minister for explaining this new code of practice. As he said, it puts into effect the proposals in relation to statutory trade union learning representatives, which were incorporated, with support from these Benches, into last summer's Employment Act.
The purpose of the trade union learning representatives is to facilitate access to learning in the workplace. At present, as the noble Baroness, Lady Blatch, made clear, the emphasis is on basic skills. There are some 7 million adult employees in this country—approximately 25 per cent of the workforce—without a level 2 qualification, which means that they do not have a qualification equivalent to five A to C grade GCSEs. Many of them have no qualifications at all. Many of those people have problems with basic literacy and numeracy, which, in turn, has knock-on effects on their ability to cope with more complex job responsibilities; for example, reading health and safety requirements on new machinery. That inhibits their performance in the workplace. A perennial problem of British industry is its low productivity performance.
Pilot studies found that trade union learning representatives were an effective way of encouraging people with low skills levels to upgrade their skills. Often such people did not wish to reveal their lack of competence to their fellow workers, let alone to management, but many of them have been willing to talk to their trade union colleagues about those issues, seeing them as neutrals in whom they can confide. The success of the pilots encouraged the Government to incorporate the trade union learning representatives into the 2002 legislation.
On these Benches we back the proposals 100 per cent. We share the Government's concern with the lack of basic skills in the workforce and we are pleased to see the success of the pilots. Building on them, the whole learndirect initiative plays an important part in the basic skills agenda. These initiatives are, as I understand them, complementary to the trade union learning representatives rather than being competitive with them. Many basic skills initiatives work with the trade union learning representatives.
We welcome therefore the extension of the role of trade unions into the training function and the prospect that every unionised workplace will have such learning representatives. We are not worried about these issues because we think that—and many empirical studies have shown this—increased skills increase productivity. That is very much to the advantage of particularly small and medium-sized firms where the big problem of upgrading of, so to speak, hi-tech in low-tech industry really lies. One 312 needs to concentrate on upgrading their skills. Getting in at the bottom and working bottom up is so important.
§ Baroness Blatch
My Lords, I am grateful to the noble Baroness for giving way. Does she not agree that some companies in the first place cannot even afford the time off for their employees? It is a vicious circle. If they cannot afford the time off, then the choice for them is to go out of business or to be taken to court.
§ Baroness Sharp of Guildford
My Lords, I point out that these apply only to places that are unionised. Many very small industries are not unionised at the moment. That is perhaps one of their problems.
We think that ACAS has struck the right balance in these proposals. It is obviously sensible to make sure that such people are properly trained before putting them into a position where they are advising others. We endorse these proposals.
§ Lord Davies of Oldham
My Lords, I am grateful to both noble Baronesses who have contributed to the debate. I shall try to answer as accurately as I can the specific questions which the noble Baroness, Lady Blatch, introduced into it. On the issue of consultation, representatives of smaller businesses did reply to it. ACAS certainly sent out its document for the widest possible consultation. The Institute of Directors, for instance, responded to it, as did the British Metals Recycling Association. That association contains many small companies. I recognise—I think we always feel this with any form of consultation—that if we have less than a 100 per cent response then we have not consulted everyone. It would always be advisable and best if we could. It is in the nature of these documents. It is a free country. People make up their own minds whether or not they respond. What we do have is an overwhelmingly positive response.
The noble Baroness contends that that is principally because the larger companies would respond, but it is also the case that the larger companies are rather more involved in this work than the very smallest. As the noble Baroness, Lady Sharp, indicated, the very small companies are less likely to have trade union representatives and therefore less likely to come within the scope of this measure. I accept the point that we would always want to get a 100 per cent response to consultation if that were ever possible.
On the issue of basic skills, the noble Baroness referred to young people. I reassure her and confirm her in her own knowledge that we are not talking just about young people. The idea that the literacy and low skill levels of this country are attributable only to the 20 years in which the Conservative Government were in control of education would not be a fair charge to make. The story goes a long way back in terms of low level of skills in this country. What is different is that we now have an administration that is setting out to address it at the very highest level.
313 I am grateful for the remarks of the noble Baroness, Lady Sharp, in which she established the context for this code and the work to be done. It is in the context which the Chancellor put in his speech this afternoon on the Budget of how much we need to increase productivity. That does of course require the necessary investment and support to our industry in all kinds of ways. However, it also needs a significant level of skills in industry, as we know that by every international measure Britain compares very poorly in that respect. It is a key aspect in our relatively low level of productivity.
That is why—although, as the noble Baroness rightly said, other agencies such as the Basic Skills Agency are involved in that work and doing an excellent job—there cannot be too much provision of opportunity to enhance skills among people. They must, by definition, have had a poor educational experience of some kind in the past and a dearth of opportunities, otherwise they would enjoy the skills that they require but clearly do not have. That is robbing them of their opportunities and, what is more, is robbing us in the wider society of the ability to benefit from their enhanced skills.
That is why we consider that feature as important in contributing to the training opportunities of the country. Why is it compulsory? If all employers took such a keen interest in the development of their workforce, their training, education and opportunities for enhancement, they would have responded positively, in the way pleaded by the noble Baroness, to the measure and considered it as an opportunity to enhance their productivity and therefore their potential profit.
In fact, of course, the charge that the noble Baroness laid at our door—the limited response—is part and parcel of what we know to be a generation-long problem, if not longer, of the relatively little attention paid to training and skills opportunities in this country. Employers must take their share of responsibility for that.
The noble Baroness asked about the definition of "reasonableness". She no doubt knows that there is no statutory definition of "reasonableness" as, on the whole, the law is not constructed by theoretical philosophers and the definition of reasonableness is often contested by competing interests. However, within the framework of employment law and the relationship between employers and trade union representatives, we all know what we mean by reasonableness. We mean where a bargain can reasonably be struck.
The noble Baroness is right to say that that will vary between a large company, which can allocate more time to a larger number of employees to engage in such activity, and a smaller company that needs the activity and energy of the people who work for it devoted overwhelmingly to the work that ensures that the company continues in business. But that is why the concept of reasonableness is there: because the bargain needs to be struck. I am happy to say that, on the 314 whole, reasonableness works rather well in British industry at present. We have a basis of co-operation and understanding on which people are able to strike bargains within a framework of law.
The law is necessary to ensure that trade unionists have rights and that employers have obligations to respond to them. Nevertheless, what must be achieved in the relationship between them must be reasonable. That is why that term appears in the code.
On the question of how many ULRs will appear, I am tempted to say, in the vernacular, "The more, the merrier", but that might be too jocular. Let me state the obvious point. There are 100,000 full-time trade union representatives in this country. The figure cited of 22,000 by 2010 would mean that the number involved in that essential work would be only one-fifth of the total present number of full-time trade union representatives doing union work. I said full-time; I meant full-time and lay people who perform trade union work and are defined as trade union representatives.
So we do not seek an expansion above and beyond what obtains at present. Those people will be far in excess of the number of ULRs. Far from being excessive—I think that the noble Baroness cited the figure of one in 11 workers—
§ Baroness Blatch
My Lords, I did not say that the figure was excessive; I said that the figure cited by the Minister in another place was 22,000 for 250,000 workers. I simply said that that is one to each 11 employees.
§ Lord Davies of Oldham
My Lords, I see that a slight misunderstanding has crept in. The Minister may have made an error; it is not unknown for Ministers to do so. But I must accept that the noble Baroness has quoted him accurately. She will recognise that, if such an error occurred, it was the result of a slip of the tongue. Clearly, with 22,000 new ULRs, there will not be one ULR to 11 workers in this country; otherwise, the workforce will have been decimated to such a level that the crisis would be far beyond the scope of education or this code. There is something wrong with the figures. I do not have them with me.
I recognise that the noble Baroness queries the figures purely as part of a genuine enquiry and to seek reassurance that the numbers we propose will involve only one fifth of the present number of trade union representatives engaged in some lay trade union activity. From what I know, British industry has not come to a halt with 100,000 trade union representatives. I am sure that the noble Baroness will concur with that fact if with no other that I put forward.
So I recognise the anxieties. Costs are involved—they are bound to be part of investment in people's skills development. The noble Baroness's question is quite right. I know how she strives—as, I hope, I do in a much humbler capacity—to enhance the educational achievements of school-leavers to reduce the skills deficit in British industry. But we have inherited the 315 substantial problem of people who work in industry at present. We know that, for all sorts of reasons, we will never be totally successful with such education in schools. Therefore, training at the workplace will always be an essential investment. The code simply enjoins employers and trade unions to play their part in investing—through direct resources and, even more valuably, time. In doing so, they will be working in partnership. On that basis, I commend the code.
§ Baroness Blatch
My Lords, before the noble Lord sits down, he has not answered my questions. I did not argue against training in the workplace; I started my speech by saying how important it was. I asked what was the financial impact assessment of the order. A financial impact assessment is supposed to be made of all Bills, orders and regulations in this House.
My other question, which was not referred to, is what is the minimum educational qualification of a person holding ULR status?
§ Lord Davies of Oldham
My Lords, I apologise for not replying specifically to the question on costs. I am hoping to build on the point made by the noble Baroness, Lady Sharp, that the cost must be balanced against the benefit from the enhanced skills of the workforce. The cost will be £6.3 million in the first year, rising to £26.1 million after eight years, when the ULR numbers have risen to 22,000. On that basis, the figures are not insignificant, but, given the training investment that we make in this country, neither should they cause undue concern.
On qualifications, we do not believe that the training of ULRs should be approached on the basis of qualifications. People will be able to do the job on the basis of experience in the workplace. After all, we will be asking ULRs not to be trainers specifically but to introduce to those with needs the opportunities and signposts directing them to available help and resources to meet their needs. Within that framework, ULRs will play a very important part in the workplace of adding to the total resources that we develop to enhance the skills of the nation.
§ On Question, Motion agreed to.