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Sir Teddy Taylor : If the Government are so anxious to fight the battle and to change the directive, why, when they had the infraction proceedings against them, did they cave in on three of the four demands without a battle? It seems astonishing that they had two years of secret discussions and caved in on three of the four demands. I cannot understand why they are fighting the fourth demand at all.

Mr. Forsyth : It is unfair to describe the Government's approach as having been to cave in without a battle. We must consider the infraction proceedings that are being

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brought and, on the basis of legal advice, take a judgment on the best way forward. My hon. Friend is right to point out that, in one respect, we are continuing to fight our corner, but for obvious reasons I am not going to comment further.

My hon. Friend the Member for Southend, East knows perfectly well that it is not within the power of the House to alter the terms of the acquired rights directive or to pass legislation in conflict with it, without incurring those same infraction proceedings. If he is anxious about the effect of that directive and the extension of the effect of TUPE, I can understand and sympathise, but the way forward is to seek to amend the directive. That is the Government's position, for which we will continue to fight.

My hon. Friend should be in no doubt about our commitment to achieving change or our understanding of the problems that are being caused across the length and breadth of Britain, of which, I am sure, he will continue to remind us.

Sir Teddy Taylor : I promise that I shall not interrupt my hon. Friend again-- [Interruption.] I would not do this if it were not serious. On privatisation, is it the view of the Government that retrospective claims against local authorities will be met by local authorities, by the company or, in terms of Frankovitch, by the Government? Local authorities must know, because millions of pounds and lots of jobs with private firms are at stake. Surely the Minister should give some guidance on retrospective cases. Will councils, employers or the Government pay?

Mr. Forsyth : Ministers are expected to do many things, but they are not expected to give instant legal advice on cases where the facts are not before them. I cannot respond in the way that my hon. Friend would wish. The guidance that has been given by my right hon. and learned Friend the Attorney-General has made it clear that each case under TUPE must be considered on its own merits. I am sure that no one's case would be helped if Ministers or anyone else were to make casual off-the-cuff remarks about the implications of the legislation.

Lords amendment No. 32 was tabled and agreed on Report in another place and is concerned with an employee who does not wish to transfer to a new employer when the undertaking in which he works is transferred. It was tabled to make the position clear following speculation about the effects in the United Kingdom of what is known as the Katsikas case. I am amazed that the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith), having had such a good Scottish education, is not a classical Greek scholar. Mr. Katsikas was a Greek chef in a German restaurant. He refused to continue as a chef when the restaurant was franchised.

Mr. Dobson : A chef in a Greek restaurant in Germany?

Mr. Forsyth : I am delighted that, on this occasion, the hon. Gentleman has a clear grasp of the detail.

The chef argued that he did not want to continue in the same job and the European Court considered whether he had a right not to transfer. The court held that he had that right. It has been suggested that, under existing United Kingdom law, the contract of an individual who refused to transfer to a new employer would remain in force with the old employer, whether the old employer wished that or not. If the old employer declined to maintain the contract

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of employment, it was suggested that he would be found to have dismissed the employee, who would then be entitled to redundancy or compensation for unfair dismissal.

I am delighted that the Labour party obviously agrees with the Government's assessment that that would not be so, which is why it tabled its rather misguided amendment, which would seek to provide that those who do not wish to transfer to the same job should be paid redundancy money. I do not know whether there is some kind of sabotage programme against competitive tendering in the public sector or some hidden agenda, but I cannot believe that the Labour party tabled this rather absurd amendment on an idle afternoon. Labour Members would like public sector employees whose operations are privatised or transferred to be able to get redundancy payments for refusing to transfer and the following day be re-employed in the same post, with all their conditions maintained. That clearly would be an abuse. It would be indefensible and I urge the House to reject the Labour amendment for that reason.

I hasten to add that the Government do not share the view that the contract of an individual who refused to transfer would remain in force. The advice that we have received is that an individual who refused to have his contract of employment transferred to an employer in this way would have no continuing rights against the old employer.

Nevertheless, because we are a careful and cautious Government, it was apparent that the Katsikas judgment had given some scope for uncertainty about the position of individuals who make use of their right to object to the transfer of their employment contracts, and the Government amendment was made on Report in another place not to change the existing law but simply to put the position beyond doubt. Having listened to my hon. Friend the Member for Southend, East, I am even more convinced that we were right to do so. Had the position not been placed beyond doubt, I am sure that, at a future date, some other unfortunate Minister would be berated for not having acted swiftly and decisively. I look forward to receiving my hon. Friend's support--along with that of the rest of my hon. Friends--in the Division Lobby. I trust that my hon. Friends will reject amendment (a) and vote for the Government amendment.

Question put, That the amendment to the Lords amendment be made : --

The House divided : Ayes 230, Noes 306.

Division No. 300] [8.39 pm

AYES

Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashton, Joe

Austin-Walker, John

Banks, Tony (Newham NW)

Barnes, Harry

Barron, Kevin

Battle, John

Bayley, Hugh

Beckett, Rt Hon Margaret

Bell, Stuart

Bennett, Andrew F.

Benton, Joe

Bermingham, Gerald

Berry, Dr. Roger

Blair, Tony

Blunkett, David

Boateng, Paul

Boyce, Jimmy

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (Dunfermline E)

Brown, N. (N'c'tle upon Tyne E)

Burden, Richard

Byers, Stephen

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D. N.

Canavan, Dennis

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Column 941

Cann, Jamie

Chisholm, Malcolm

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Connarty, Michael

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Cousins, Jim

Cryer, Bob

Cunningham, Jim (Covy SE)

Dafis, Cynog

Darling, Alistair

Davidson, Ian

Davies, Bryan (Oldham C'tral)

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Denham, John

Dewar, Donald

Dixon, Don

Dobson, Frank

Donohoe, Brian H.

Dowd, Jim

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

Eastham, Ken

Enright, Derek

Etherington, Bill

Evans, John (St Helens N)

Fatchett, Derek

Faulds, Andrew

Fisher, Mark

Flynn, Paul

Foster, Rt Hon Derek

Foulkes, George

Fraser, John

Fyfe, Maria

Galbraith, Sam

Gapes, Mike

Garrett, John

George, Bruce

Gerrard, Neil

Gilbert, Rt Hon Dr John

Godsiff, Roger

Golding, Mrs Llin

Gordon, Mildred

Gould, Bryan

Graham, Thomas

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Gunnell, John

Hain, Peter

Hall, Mike

Henderson, Doug

Heppell, John

Hill, Keith (Streatham)

Hoey, Kate

Home Robertson, John

Hood, Jimmy

Hoon, Geoffrey

Howarth, George (Knowsley N)

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, Kevin (Doncaster N)

Hughes, Robert (Aberdeen N)

Hughes, Roy (Newport E)

Hutton, John

Ingram, Adam

Jackson, Glenda (H'stead)

Jackson, Helen (Shef'ld, H)

Jamieson, David

Janner, Greville

Jones, Barry (Alyn and D'side)

Jones, Ieuan Wyn (Ynys Mo n)

Jones, Jon Owen (Cardiff C)

Jones, Lynne (B'ham S O)

Jowell, Tessa

Kaufman, Rt Hon Gerald

Keen, Alan

Kennedy, Jane (Lpool Brdgn)

Khabra, Piara S.

Kilfoyle, Peter

Kinnock, Rt Hon Neil (Islwyn)

Leighton, Ron

Lewis, Terry

Litherland, Robert

Livingstone, Ken

Lloyd, Tony (Stretford)

Llwyd, Elfyn

Loyden, Eddie

McAllion, John

McAvoy, Thomas

McCartney, Ian

Macdonald, Calum

McKelvey, William

Mackinlay, Andrew

McLeish, Henry

McMaster, Gordon

McNamara, Kevin

McWilliam, John

Madden, Max

Mahon, Alice

Mandelson, Peter

Marshall, David (Shettleston)

Martin, Michael J. (Springburn)

Martlew, Eric

Maxton, John

Michael, Alun

Michie, Bill (Sheffield Heeley)

Milburn, Alan

Miller, Andrew

Mitchell, Austin (Gt Grimsby)

Moonie, Dr Lewis

Morgan, Rhodri

Morris, Rt Hon A. (Wy'nshawe)

Morris, Estelle (B'ham Yardley)

Morris, Rt Hon J. (Aberavon)

Mowlam, Marjorie

Mudie, George

Mullin, Chris

Murphy, Paul

Oakes, Rt Hon Gordon

O'Brien, Michael (N W'kshire)

O'Brien, William (Normanton)

O'Hara, Edward

Olner, William

O'Neill, Martin

Orme, Rt Hon Stanley

Patchett, Terry

Pike, Peter L.

Pope, Greg

Powell, Ray (Ogmore)

Prentice, Ms Bridget (Lew'm E)

Prentice, Gordon (Pendle)

Prescott, John

Primarolo, Dawn

Purchase, Ken

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