Employment Bill [HL]

My Lords, first, let me say what a pleasure it has been to listen to this Second Reading debate. There is a huge amount of expertise on all sides of the House in this field and the speeches have been extremely powerful. The speech of the noble Lord, Lord Lester, was powerful. On my side, if I may mention it in particular, not to embarrass him, the speech of my noble friend Lord Morris of Handsworth was powerful. This is an interesting Bill, which has been criticised for being something that it has never claimed to be. It is really a bits and pieces Bill in dealing with employment law—nothing wrong in that, I think—concerning major and important issues. Indeed, I do not think that we should have had such powerful and impressive speeches if it had not raised such issues. It is not a minor piece of legislation by any means, but please see it for what it is and let us judge it on that basis. The noble Lord, Lord Henley, said—I think probably tongue in cheek; I hope so, for his sake—that this is an odd way of legislating: to legislate, agree to have a review in a couple of years and, if the legislation is working well, not repeal it, but if parts of it are not, repeal them. That seems to me, as it did to the noble Lord, Lord Razzall, an immensely sensible way to deal with complicated matters such as this. The noble Lord, Lord Hunt of Wirral—I thank him very much for his kind words, but I knew that a ““but”” was coming eventually—talked about the Bill not being about job creation. I think that my noble friend Lord Watson dealt with that to some extent. No, it is not a Bill about job creation, but I think that we will all agree—I know that the noble Lord will from his time when he was Employment Secretary—that the better employment relations are, the better it is for economic success in the country. In that sense, a Bill that is aimed at better employment relations goes to the heart of whether we remain a successful economy. I am sorry that the main opposition party does not really support the Bill. I was hoping for words of support from the Front Bench, but I never got them. I was disappointed. The Liberal Democrat Benches were much more favourably inclined. The CBI, the voice of business, is very encouraged by the Bill and supports it a great deal. I make no apologies whatever for pointing this out, especially to the Conservative Party opposite. It states: "““The CBI welcomes the Employment Bill and supports its major provisions. The Bill provides a balanced package of ""measures which will help promote the resolution of disputes … and protect vulnerable workers””." Not bad. Even noble Lords opposite may have received the TUC’s comments on the Bill. It, too, in general terms, supports it—not completely, but it supports it. On this occasion, as has perhaps been true about industrial relations for a long time, the party opposite is the party out of step. As for employment, we heard comments about difficulties there. I point out to the House, if I may, that employment in the UK is at its highest level since comparable records began, with 29.3 million people as at October 2007. The employment level in October 1997 was 26.6 million, so that represents a 10 per cent rise in the number of people in employment since October 1997. By any standards, that is not a bad record. I want to deal with as much as I can in the limited time available to me. If I do not succeed in answering everyone's questions—of course, I will not—I will try to write with the answers to particular questions. We know that many of these issues will come up in what will undoubtedly be a fascinating Committee. On consolidation, the Department for Business, Enterprise and Regulatory Reform is undertaking a major project to improve and promote guidance on the body of employment law. That is projected to save £365 million per year by 2010 by reducing the cost of understanding and complying with employment law. That is as far as I can go in answering the questions about consolidation. A fair point has been made all around the House about that. What is the Bill trying to do? It is trying to strengthen and clarify key aspects of employment law. In doing so, we believe that it will improve the effectiveness of employment law for the benefit of all: employers, trade unions, individuals and the public sector. Importantly, we argue that it brings together both elements of our employment relations strategy: on the one hand, increasing protection for vulnerable workers; and, on the other, lightening the load for law-abiding businesses. I argue that that is exactly what the Bill does. There are four parts to the Bill, and I shall deal with them as shortly as I can. Dispute resolution is one. The national minimum wage is second. Employment agencies are third. The fourth is the vexed issue about which we have heard especially impressive speeches: Clause 17. I will not do justice to any of those four tonight, but let me try to deal with some of the issues that arise from them. On dispute resolution, in Clauses 1 to 7—praised even by the party opposite for their deregulatory effect; I am grateful for small mercies—the Bill provides for the repeal of the statutory dispute resolution procedures and implementation of a package of replacement measures aimed at ensuring that the underlying principles of good practice in resolving workplace disputes are followed, while removing inflexibility and reducing administrative burdens. Many noble Lords wanted to know about the package. It includes statutory changes, revision of the ACAS code on disciplinary grievance procedures—I shall say more about that in a moment—and substantial investment to improve advice to employees and employers and to provide additional ACAS conciliation services. Through those measures, we seek to encourage more early and informal resolution of disputes. As regards some individual questions raised, the noble Baroness, Lady Miller, made the very important point that one size does not fit all. She is absolutely right. We need some flexibility. The dispute resolution provisions will abolish what has turned out to be a fairly inflexible statutory provision. The chair of ACAS has confirmed that the revised code on discipline and grievance will be short, principles-based and proportionate. My noble friend Lord Hoyle asked about the role of ACAS, and other noble Lords, including my noble friend Lord Wedderburn, were also concerned about that. ACAS will continue to have its current role in conciliating disputes. We are going to invest new resources—the noble Lord, Lord Hunt, was also concerned about this—in disputes which are not yet the subject of an employment tribunal claim. The Bill will enable ACAS to use these resources to best effect where it is needed to conciliate in pre-tribunal disputes. Why does the Bill not state when the ACAS code is the relevant code for the purpose of tribunal judgment? The tribunal has a duty to take into account any procedural provision of a code which appears to be relevant to the proceedings being decided. My noble friend Lord Wedderburn went on to ask why we could not delay consideration of the Bill until we have the revised ACAS code. I know that there is strong feeling around the House that it has not seen enough yet. I understand that. I want to be careful in the words that I use now, so that they are not held against me in the future, although I am sure that no noble Lord would be so mean as to do that. I will do my utmost to ensure that a draft copy of the ACAS code is with noble Lords by the time we get to Committee. I make no promise that that will happen, but I will do my utmost—and my noble friend Lord Jones agrees that he will, too—to ensure that it does. The point is well made: a draft copy of the code is necessary. However, those who have been in and know about government will know that these things are not always quite as easily available as we would like. I hope I have dealt with that point and the one about resources. Alternative dispute resolution is an important issue. We agree that mediation often provides an excellent way to resolve disputes, and will invest resources in improved advice for people in dispute that will include advising on all the potential mechanisms for resolving disputes. I hope that goes some way to dealing with that point. The noble Lord, Lord Razzall, my noble friend Lord Watson and others talked about a fair employment commission to enforce tribunal awards. There are new powers in the Tribunals Courts and Enforcement Act 2007 which streamline the process by which unpaid awards are enforced. They may be enforced in the same way as any county court judgment if unpaid after 42 days. I hope noble Lords will be patient. We want to assess the effectiveness of these measures before considering any potentially more burdensome methods for enforcing awards, but we know how strongly it is felt that some enforcement is necessary. There is obviously strong feeling, perhaps mostly from behind me, about employment tribunals and where they are going. My noble friend Lord Wedderburn talked about tribunals deciding cases without hearings: fast-track cases. I make it absolutely clear that each party will have the right to request an oral hearing in any fast-track case. The human right to a fair trial can generally be waived in any case. The clause in fact introduces more safeguards to this power than previously existed. The noble Lord also asked whether we can guarantee that a lay member role in tribunals will be maintained. Responses to the consultation showed the great importance placed by many tribunal service users on the role of lay members. I emphasise that the proposals in the Bill make no changes to that role. My noble friend Lady Gibson asked about the threat to the employment tribunals as a separate pillar. We are committed to the maintenance of employment tribunals as a separate pillar within the tribunal service. Employment judges will still be required to have seven years’ legal experience before appointment. My noble friend Lord Hoyle asked whether he could be assured that there would be no change in workers’ ability to go to an employment tribunal. Yes, there is no change at all in the right to go to a tribunal. The abolition of pre-acceptance mandatory procedures will ensure that technical failures by claimants do not invalidate their claims. Of course that right will exist. One of the issues is whether it should always be exercised. My noble friend Lord Wedderburn asked about the status of voluntary agreements between workers and managers to resolve disputes. The tribunal will be able to take into account how far a party unreasonably failed to follow the provisions of the ACAS code. The code will be principles-based, and so it is likely that agreed arrangements, if followed, will be compliant. My noble friend Lord Watson asked how non-unionised workers can access the tribunal. We intend to invest significant resources in better advice services from ACAS to ensure that all employees and employers have access to the best advice on how to sort out the disputes. My noble friend Lady Turner asked about arrangements for bringing class actions. I have noted what she has said, and will pass her comments to the Minister responsible so that she gets a proper reply to that. The noble Baroness, Lady Miller of Hendon, talked about Clause 2 requiring a tribunal to find a dismissal unfair for the slightest error in procedure. The consultation certainly showed that most people believe that the clause that we have drafted reverts to a well understood position, where the tribunal must consider whether the employer acted reasonably in issues of procedure. This was supported by many consultees as a fair balance, but I am sure that we will come to this in Committee. Moving quickly on, there was widespread support in the House for the measures we are going to take on the national minimum wage issues. There was a slight reluctance by the noble Baroness, Lady Wilcox, but we can forgive that bearing in mind her party’s record in this issue. Still, I know that it is now the policy of the party opposite to support the national minimum wage and, for that, everyone will be delighted. Since April 1999, enforcement teams have identified more than £27 million in wage arrears. In 2006-07, arrears of £3 million were identified as being underpaid to 14,000 workers. Do not just look at the figures; they are high enough as it is, but we are talking about underpayments to the worst-paid in our country. That, of course, is the point of the national minimum wage in the first place. Non-compliance was raised by the Low Pay Commission in two annual reports: 2005 and 2007. Almost 10 years after the introduction, we consider—and I believe that this has general support—that it is right to strengthen the national minimum wage enforcement regime to encourage compliance by creating sanctions for employers who do not comply. We want to send a clear message that non-compliance is not an option. This is not just for the low paid. It is very much for the vast majority of British employers who pay the national minimum wage as the law requires. I know that we will come back to the national minimum wage in Committee, but I will move on and say a little about agencies. There are real issues around employment agencies, and we understand the strength of feeling on all sides of the House about how some employment agencies behave. It must be said that the vast majority of employment agencies behave well. My noble friend Lord Morris, who went on to criticise the status of some of the workers there, made the point that many agency employees were well looked after. It is important to remember that. The noble Lord, Lord James, had some particular issues about this which were important. He will forgive me if I do not deal with them today; I will write to him with the answers to his queries. The general point about employment agencies is that we continue to support the underlying principles of the draft agency workers directive, but we want a directive that offers appropriate protections and does not damage economic flexibility or close off a valued route into employment for many people. I do not claim that getting the balance right is easy, but it is something that any Government must do. Finally, because I want to finish in two or three minutes, I move on to Clause 17, which in some ways probably dominated—