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Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) : This is the core point of the debate. It was raised by me on Second Reading and an assurance was given. It was raised again in Committee on 17 May and again an assurance was given. To this day, we do not know the answer. The hon. Gentleman is perfectly right to refer to frustration of contract. It is nothing short of that and, in my respectful submission, it is a disgrace. Perhaps the hon. Gentleman agrees with me.

Mr. Rowlands : I am getting some confirmation about my interpretation from those who know more about this than I do. If my interpretation is correct, we should be deeply disturbed and there should be a tremendous row. I am half hoping that somehow Ministers will show that this is not the way to interpret the words and that there is no intention to remove the rights of staff who are to be


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transferred. We will look later at the view of Mr. Elias and the Local Government Management Board. Ministers accepted in Committee that TUPE applied to a significant proportion of staff, although not to all. I fear that amendment No. 62 could be interpreted as an attempt to remove people's rights, because they are not being transferred but are being dismissed and reappointed. I do not want to build great edifices on a weak foundation. However, if I am right, we will feel a sense of betrayal, as will an enormous number of staff in local government.

Ministers have been very helpful in this regard. After Mr. Patrick Elias's opinion was referred to in Committee, we were quickly circulated with copies of his opinion. I suspect that it has been subsumed into the Local Government Management Board document "Reorganisation in Wales Human Resource Timetable". I am old-fashioned and I think that this sort of language--the language of modern industrial relations--should be outlawed by the Secretary of State. In fairness, it is not his document. I do not want to weary the House with the document, but it analyses in considerable detail the application of TUPE. It states that the Advocate-General of the European Court of Justice believes that the directive applies to the public sector and covers transfers of undertaking such as those affected by local government reorganisation. It concludes by stating in paragraph 31 :

"Although it seems certain that as a result of this change TUPE will apply to local government reorganisation, the government has so far not formally accepted this, and the point is yet to be tested in the courts."

4.45 pm

I thought that in Committee the Government had accepted that certain groups of staff would be covered by TUPE. I accept that they qualified that by saying that it did not apply to all staff. That is shown by the second of the two references I made to our debates in Committee on clause 44. If nothing else, before the House proceeds much further, we must obtain confirmation from the Minister that TUPE does and will apply.

If any doubt is left, are we going to drive local government representatives and organisations to the enormously expensive business of applying for a judicial review ? That is potentially very expensive and would use a great deal of council tax payers' money. Also, imagine the enormous cost of having to go to the European Court. We should not pass amendments which we do not understand and which would leave enormous challenges to be pursued and enormous costs incurred. We need a full explanation. In the spirit in which I introduced my remarks, I ask the Minister to clear this matter up. My next point deals with who is covered by the amendment. Local government employs a fantastic number of people in different ways. The Minister was kind enough to provide me in a written answer with some figures on the employees in local authorities. Mid Glamorgan has 12,000 full-time employees and 9,000 part-time employees. Would just the administrative staff be covered or would everybody who works for the authority ? How many employees, as opposed to administrative staff, would be affected and have their contract deemed to be terminated under amendment No. 62 ? How extensive is the process described in amendment No. 62 ?

I should like the Minister to clarify the position of direct labour organisations and direct service organisations. As a result of various Government changes during the 1980s,


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they are semi-detached from Government and have to apply for contracts. That is a good layman's way of describing them. What happens to those employed by direct labour organisations and direct service organisations as a result of the reorganisation and what are their rights ?

I hope that I have indicated--nothing more than that--that those are very important and serious questions to be answered. I am not willing to condemn the Government and I shall not say that they are doing anything nasty, dirty or reprehensible at the moment, but I want to know and try to understand exactly what they are asking us to accept in amendment No. 62. I find the whole world of local government staffing and its language fairly difficult to understand. I should be grateful if the Minister, who perhaps understands such things, would tell me what this marvellous quote from the report by the Local Government Management Board means :

"The drawing up of staff structures will be a major task for the HAPS".

Who are the HAPS ? The report continues :

"and the management team, (and any other senior staff, including HR specialists".

Paragraph 41 says :

"Current estimates are that some 90--95 per cent. of existing staff will transfer by order."

Is that the percentage that will be transferred if we accept amendment No. 62, or will anybody be transferred if it appears that a person was dismissed first and then reappointed ?

Those are important issues and I hope that the Minister will explain it to hon. Members and, more importantly, to the thousands of people whose livelihood, jobs and security are threatened--perhaps that is a strong word. Anxiety has descended on them as a result of a piece of legislation which we shall probably pass by the end of the evening.

Mr. Alex Carlile : I wonder whether the Minister can help us in relation to the redundancy and severance terms and compensation arrangements for those employees of existing local authorities who are affected by reorganisation. I refer in particular to a letter dated 14 June, which reached its listed recipients only yesterday and, therefore, was made available to hon. Members after the debate had started. In my case, it was made available today. It is addressed, among others, to the Welsh Office, so I assume that the Secretary of State has received his copy by now. It is also addressed to the Shadow Staff Committee for Wales, as well as to district and county councils in England and Wales. I realise, of course, that it is a consultation document and that responses will be sought to it and that it may be amended in due course. However, one is bound to wonder why the document has not appeared with the draft regulations until now, bearing in mind the expressions of concern in Committee several weeks ago.

Mr. Morgan : And on Second Reading.

Mr. Carlile : And, indeed, on Second Reading, as the hon. Gentleman says. Will Ministers explain to the House why such an important matter, affecting so many of our constituents, appears not to have been resolved until this very late stage ?

Paragraph 2 of the letter is headed :

"The Local Government (Compensation For Redundancy) Regulations 1994".

Was the Welsh Office consulted on the matter ; if so, what representations did it make on behalf of those loyal


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servants of local government in Wales, many of whom, if they are in the 5 per cent. or so--a minimum estimate of those who will lose their jobs--will find it difficult to obtain jobs elsewhere, at least without a disturbing and upsetting uprooting of themselves and their families ? Paragraph 2 states :

"A maximum ceiling on payments is now proposed, based on a tariff which takes account of age and service."

When was the change decided which leads to the word "now" being included in the sentence ? What is the reasoning behind the introduction of that maximum, which was obviously based on a change of mind by the Departments concerned ? The paragraph continues : "Employees, aged 50 or over, who qualify for immediate payment of pension under the local government superannuation regulations will not now be able to benefit from these regulations."

The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has shown a great grasp of these issues, which is much better than that of many lawyers, who still find employment regulations a little strange and difficult to deal with and are a little perplexed by it all, apart from one or two experts, like the wife of the hon. Member for Sedgefield (Mr. Blair). Why has it been decided, at least at the proposal stage, that employees who are entitled to benefit from the local government superannuation regulations should no longer be allowed so to do ? How is it considered to be fair that that should be brought on employees of 50 or over, who will find it especially difficult to find at least commensurate new employment ?

Part 3 of the draft regulations deals with the authorities affected by local government reorganisation and provides that, for a defined period of reorganisation, there will be a mandatory floor between the statutory minimum under employment protection legislation and the discretionary statutory maximum. That means that a limit is placed on the compensation arrangements available to those who are made redundant as a result of local government reorganisation. We must examine what level of compensation is proposed for those who are made redundant as a result of reorganisation. We are told that those mandatory payments will accrue at the rate of 1.5 weeks' pay for each year of service between the ages of 23 and 41 and 2.5 weeks' pay for those between 42 and 49, but up to a maximum of 45 weeks' pay plus a generous extra half-week for 45 to 49-year-olds. As I understand it, that means that a 22-year-old clerk or housing officer working in a local authority affected by reorganisation will receive six weeks' pay if he has worked there for four years. As an estimate of loss, that is not merely stingy, but borders on being absurd, especially for local government officers working in rural Wales. I hope that my understanding of what is proposed is wrong, but that understanding is shared by local government officers who have received notice of the proposals in the past 24 hours.

Let us take another example at the extreme end : a 53-year-old chief planning officer, who has very little prospect of obtaining a job elsewhere, will receive a maximum of 45 weeks' pay as compensation. How does that compare with the compensation arrangements available in the private sector ? It does not compare even with the limited compensation arrangements available to Members of the House who lose their seats.


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Surely, at the very least, we should be able to give loyal and experienced local government officers compensation arrangements commensurate with what they would be able to obtain in a comparable area. I suggest to Ministers that one comparison would be what employees would obtain if they went to an ordinary court for breach of a similar contract of employment. Someone in as one-off a type of employment as the example I have given should be able to claim a year's notice at the least, yet under the proposals he would be given just over three quarters of a year's notice. It is not good enough for the Government to set such low standards in the public service compared with the private sector. There are examples of people who have been brought into the public service from the private sector and of enormous compensation payments being made.

The draft regulations provide :

"during the period of reorganisation, local authorities are obliged to compensate employees below the level of the mandatory floor but . . . they retain discretion to pay up to the prescribed maximum". There is great uncertainty among local government officers about what they will be able to recover in compensation for loss of office and consternation and genuine concern in Wales as a result of the draft regulations and the letter, not least because the information has been provided at such a late stage.

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Will Ministers at least confirm that they will adopt a flexible attitude during the consultation period and that they will examine seriously the "comparables" that can be found elsewhere so that we can ensure that fair compensation arrangements are available to some good officers who, unfortunately, are bound to lose their jobs ? That is a matter of particular concern, as many of the 5 per cent. will be at a senior level. They will be in the older age group and are likely to be the people most affected by heavy family and mortgage commitments, which they may become unable to meet.

Mr. Llwyd : I have three specific questions to ask. First, amendment No. 62 refers to "any other enactment". What does that mean ? Am I right in thinking that it is a reference to TUPE regulations ; or is it a reference to another enactment ? It is important that the meaning of those words is made clear today.

Secondly, will there be an entitlement to receive notice of termination of employment ? The Minister will no doubt realise why I ask that, and it is important that we receive an answer.

Thirdly, in connection with the "enactment" to which I have already referred, I draw the Minister's attention to section 5 of the TUPE regulations. Am I right in thinking that any contract which would otherwise terminate shall be transferred to the new authority by virtue of those regulations ? Those three core questions deserve to be answered, not only for our sake but for that of the tens of thousands of people in Wales who have, alas, been considering the passage of the Bill with a less than enthusiastic gaze in the past few months.

Part of the reason for their lack of enthusiasm has been that matters so vital to them have had to be raised time and time again. As I said in an intervention on the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), on Second Reading I mentioned TUPE and the frustration of contract and was told that the issues would be dealt with. Not having been satisfied in any shape or form, I raised


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them again in Committee on 17 May, when assurances were again given. If Government assurances are to mean anything, they must be fulfilled. That is a painfully obvious point. I believe that these issues, at the very least, should be cleared up today so that we can give accurate reports to the people of Wales.

As a first principle, I do not accept that the provisions now being discussed by the English Staff Commission should apply to Wales. Clearly, we are seeking the most appropriate arrangements for employees in Wales, and local government in Wales will of course differ from that in England in two key respects. First, reorganisation in Wales, unlike reorganisation in England, will not be phased but is to take place on one specific date. Therefore, the opportunity for staff to seek other employment in local government is diminished. Secondly, and just as important, local authorities are the major employers in many parts of Wales and, given the economic circumstances of the region--or the country--it might be difficult for staff who lose their jobs as a result of reorganisation to obtain further employment.

I note that the Local Government (Compensation for Redundancy and Premature Retirement) Regulations 1993 give authorities the power to pay at their discretion up to 66 weeks' severance pay--less, of course, any redundancy payment to which the employee would be entitled under existing statutory and local government legislation. Those regulations were made in the wake of the Court of Appeal decision in the case of North Tyneside Metropolitan Borough Council v . Allsop. They were not drawn up as a response to local government reorganisation, and I believe that they would be inappropriate in this instance.

Like many other hon. Members, I am especially concerned about employees aged between 40 and 49 or 50 who may be casualties of this reorganisation and who will doubtless find it very difficult to obtain commensurate jobs elsewhere. Compensation arrangements for reorganisation should not apply only in respect of redundancies which take place on 31 March 1996. I believe that they should operate for a period of, say, a year or 18 months before and after reorganisation. That would provide an incentive for staff who wish to take early retirement and make way for employees who would otherwise be made redundant on vesting day. It would be only right and fair if that were to happen. Of course, reorganisation compensation should be paid only if redundancy is due specifically to the creation of the new authorities. In the case of other redundancies or early retirements, I believe that the usual arrangements should apply.

I have already asked questions about TUPE--questions which were also eloquently posed this evening by the hon. Member for Merthyr Tydfil and Rhymney. Ministers are no doubt aware of last week's landmark decision in the European Court of Justice, and I sincerely trust that the Government will not have to be hauled again by their hair through the courts because of their stubbornness and disrespect for the rights of ordinary working people. I am sure that their mandarins are now considering their obligations in the light of that decision, and I respectfully suggest that TUPE will most definitely apply to everyone involved in this transfer. Indeed, I would go further and say that, fortunately for me, that was also my opinion on 17 May--an opinion I still hold--when I declared that the Government were intent on acting illegally and that EC directive 75/129 on employment provisions, which was later amended by another directive, came into force under


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the Trade Union Reform and Employment Rights Act 1993. As Ministers are aware, the method proposed under that Act for calculating redundancy payments is abundantly clear.

Mr. Alex Carlile : Will the hon. Gentleman comment on some information that I have just received ? I have just been told by a senior local government officer that it is now understood that older officers-- those over 49 years of age--will not receive the compensation that I outlined. By reason of their age, they will be given less. I understand that in my example a 53-year-old local government officer in Wales will be able to recover only 26 weeks pay under the proposed regulations.

Mr. Llwyd : I agree that that is an appalling scenario, and I trust that it will prove to be faulty in due course. I am sure that the interpretation is right, but it is absolutely unfair and we must examine it carefully.

The 1993 Act details some ways of avoiding dismissals, reducing the number of employees to be dismissed and mitigating the consequences of dismissals. Those matters are important. I have already referred to the TUPE regulations. Once again, I invite the Secretary of State and Ministers to respond to that point. As for the point raised by the hon. and learned Member for Montgomery (Mr. Carlile), if that is the correct interpretation, it is an appalling situation. There is, I regret to say, continued uncertainty and there are no hard facts about the Secretary of State's commitment to a 95 per cent. staff transfer level. We have heard references to the opinion of Mr. Elias QC. I am still in the dark about that ; what is worse--and more important--many thousands of people in local government in Wales are also in the dark. May I ask the Minister how that staff transfer level was initially derived, measured or compiled ? How will that level of transfer be achieved if all the staff seeking continued local government employment are not transferred by order on 31 March 1996 ? The Government need to be precise and clear at this stage or they will face the continuing accusation of window dressing for political and pressure effect, rather than dealing with the substance of this vital issue.

I have already referred to the TUPE regulations. The European acquired rights directive was applied in the European court case. However much Ministers may seek to bury their heads in the sand, we are part of the European Union and, accordingly, we are bound by that directive and the court's decision. I hope, therefore, that in the next few days--not months, as we have seen with the tabling of amendments--we might have some pertinent references to that case and possibly some early and urgent amendments to the way in which the Government are thinking about the matter.

I respectfully remind Ministers that the objective of the European acquired rights directive is twofold : first, there is a need to secure appropriate posts in the new councils for all staff who wish to continue in local government employment ; secondly, there is a need to protect both the global level and the important position of local government employment in the socioeconomic life of Wales. I shall ask the Minister some further questions. I hope--perhaps I am hoping against hope--that he will answer them because we need details ; otherwise, as the hon. Member for Merthyr Tydfil and Rhymney said yesterday, the process of scrutiny is a sham. If it is a sham, we are


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letting the people of Wales down. I believe that we are letting them down anyway because the Bill is badly flawed. We need clear indications from the Government on staff transfer arrangements, TUPE and compensation arrangements for Welsh employees.

Reference has been made to frustration of contract. We need details on that today. We also need the details of detriment packages for loss of earnings and so on. Undoubtedly, the Minister will refer to the letter that was sent out on 14 June. I make no apology for not having read it. It is my good fortune that the hon. and learned Member for Montgomery handed me a copy a few moments ago. I have not evaluated the covering letter, and I make no apology for that. The letter should have been made available at a much earlier stage than the Report stage of such an important Bill.

To say that the situation is disappointing is not strong enough ; I am very disappointed--it is a shambolic way to run any Department. The Department of the Environment is writing letters when the Welsh Office is supposed to be dealing with the matter before the House. Why did the Welsh Office not request the information earlier ? Why were hon. Members not made fully aware of the consultation process before now ? If I am corrected by the Minister at any stage, I make no apology for that. I am in blissful ignorance of the provisions. It is unfortunate that those of us who spent six weeks in Committee were not even accorded the decency of being allowed to know what consultation was going on behind closed doors. This is supposed to be the Government of open government, but we have yet another example of anything but open government. It is a shambolic experience and I am disgusted by it all.

5.15 pm

There are compensation provisions. We are all being invited to take part in the process known as consultation, which may or may not turn out to be true consultation. In the past, I have been less than happy about the standard of comprehension by Ministers and, indeed, the extent to which they are prepared to listen during the consultation process. However, for what it is worth, I will throw my hat into the consultation ring. As the Welsh changes will happen on the same day, and as the average wage for local government employees in Wales is low, it is important that we are given firm indications of the direction in which we are travelling. I have referred to detriment and frustration of contract. Once again, I invite the Minister to respond fully to those points.

I shall put forward one or two views which I hope will be taken into account in the so-called consultation process. I believe that there should be a statutory non-discretionary scheme, adopting the principles of the 1986 regulations but with improvement for employees over 50 and between 45 and 50. Employees aged 50 and over who are so entitled should receive an immediate pension with maximum added years and a maximum severance payment of at least 52 weeks' pay. A maximum of 82 weeks' pay should be made to those not entitled to an immediate pension. Those aged 45 should have their pension frozen and brought into payment at the age of 50 with maximum added years and a minimum severance payment of up to 82 weeks' pay. The calculation of redundancy payments should be based on an actual week's pay or any multiple of that.


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Nothing short of a full reply to those detailed points will allay the fears that I have for my constituents and for all local government employees in Wales. They deserve to be told where they are going. They are energetic and they went into the service with the best possible intentions. Some of them went through the trauma of the 1972- 74 changes and are now to be subjected to this reorganisation. People in Dolgellau who have young families, mortgages and so on are desperately worried about their future. I cannot stand idly by and tell them, "Yes, I raised it on Second Reading and I am to be given a reply" or "Yes, I raised it in Committee and I am to be given a reply." We are now on Report : for heaven's sake, will the Minister please reply ?

In conclusion, I refer briefly to the assurances given by the Under- Secretary of State at a conference in Llandudno on 7 January, to which reference has been made. He said then that he would urge that Welsh provision should be tailor made to meet the needs of organisations in Wales. I am asking him to deliver on that undertaking.

Mr. Peter Hain (Neath) : The Minister will be aware--he will contradict me if I am wrong--that Lliw Valley borough council is the only example of a borough authority that will be split after the change to the new unitary authorities. As such, it is distinct from a county which will-- and does--supply services to a range of residents in different borough authorities. When staff are transferred from counties to new unitary authorities, therefore, they will be in a slightly different position from those in a borough authority. A number of questions were raised by the Under-Secretary of State's answer in Committee when he said, referring to advice received by the Local Government Management Board, that

"senior and central administrative staff in split authorities, such as counties, are less likely to be protected than similar staff in merged authorities, such as most district councils. "

He continued :

"If that advice is correct, it emphasises the importance of devising staff transfer arrangements that, as far as possible, provide equality of treatment for all staff."--[ Official Report, Standing Committee A , 17 May 1994 ; c. 540.]

It is significant that in that brief but highly potent statement the Under- Secretary of State referred only to a split county authority, not to the only example of a split district council that I can think of in the reorganisation--Lliw Valley district council. Can the Minister reassure my constituents and those people working in Lliw valley--both that part served by my hon. Friend the Member for Gower (Mr. Wardell) and the upper Lliw valley, which I represent ? I imagine that a teacher working in a school in Godrergraig, which is to be transferred into the new Neath and Port Talbot unitary authority, will also be transferred to that authority, so there will be no problem. What about a park attendant employed in Pontardawe, let us say ? He or she will also be transferred to the new unitary authority, which is Neath and Port Talbot.

What will happen to members of staff in Lliw valley who straddle the divide ? They may be housing officials--or work in leisure, recreation or some other council department--who do not have a location on either side of the border. Where would they be transferred and would their rights be fully protected ?

It is not clear whether all existing employment rights will be protected consequent upon transfer to the new


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unitary authorities. That is a general point. Even though the Government are tidying up the arrangements through these amendments, they do not seem to guarantee that all existing employment rights will be protected as a general principle. But it is a particular problem in the schizophrenic situation that I have mentioned, where some employees of Lliw Valley are in the anomalous position of serving both sides of the border and it is not clear to which authority they will be transferred--Neath and Port Talbot or Swansea. Will their redundancy, contracts of employment, pay, salary and conditions all be protected ?

It is very important for the Minister to give some serious reassurance that the Bill protects the rights of those individuals who are caught between the two authorities. It is not clear to me that the Bill as drafted, or as it might be changed by these amendments, would give them that protection. They would value a positive response from the Minister in that respect.

Sir Wyn Roberts : This is indeed an important batch of amendments. Let me assure the House at the outset that we do not expect the reorganisation to lead to a large reduction in the number of staff. We hope to secure the necessary reductions in staffing levels by voluntary redundancies. It should, therefore, be possible to avoid any compulsory redundancies on 31 March 1996, but the House will appreciate that I cannot give a guarantee on that matter, since a great deal depends on the decisions of the new authorities and members of staff.

Volunteers for redundancy could be sought in the summer and autumn of 1995, but only from among those staff whose jobs are changing or disappearing as a result of the reorganisation. Staff whose jobs are not changing, such as teachers, care assistants and so forth, will be transferred, so the question of redundancies and compensation will not arise for them.

My hon. Friend the Under-Secretary of State for the Environment announced on Tuesday the Government's proposals for the severance payments that authorities could make and hon. Members have referred to them. We are proposing that staff under the age of 50 could qualify for a redundancy payment of up to 66 weeks' pay, depending on age and length of service. It would be up to the authorities, if they wished, to make a payment at the highest permissible level, but we propose that they should not be allowed to go below a minimum floor, which will apply for reorganisation-related redundancies occurring in the calendar year 1996. That is what we are consulting on and not the document of November 1993, to which the hon. and learned Member for Montgomery (Mr. Carlile) referred.

The proposed local government redundancy compensation payments do not cover people beyond the age of 50 because staff over that age can qualify for immediate payment of pension. Staff under the age of 50 cannot do so and it is appropriate, therefore, for the higher redundancy payments to be made to them. They are higher. I assure the House that both the floor of payment and the maximum payments will be considerably better than entitlement, in the form of the statutory minimum under the Employment Protection (Consolidation) Act 1978. The transfer arrangements would be as follows. First, there would be a competition for chief executive and chief officer posts. I would expect that process to be completed by the end of summer 1995. Staff whose jobs were not changing would be identified and listed in draft transfer


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orders, which would be published no later than the end of November 1995. Any other staff with the right of transfer, under TUPE, would be included in supplementary transfer orders.

Volunteers for redundancy would be sought from the remaining staff. Those who did not volunteer presumably would wish to remain with local government and would be seeking a post in a new authority. The new authorities would have at least until the end of March to complete their procedures for recruiting staff to the new posts that they would be creating.

We hope that sufficient volunteers for redundancy would come forward so as to avoid the need for any compulsory redundancies on 31 March 1996. But if that were not the case, some redundancy notices may need to be served before reorganisation. If such notices had not expired by 31 March 1996, it would be possible to transfer the staff concerned to serve out their notice in a new authority.

Perhaps this is the point at which to emphasise that clause 53(4) provides for new authorities to take over the contractual responsibilities of the old authorities. The arrangements that I have described would maximise certainty for staff at the earliest possible stage in each case, and would ensure that the vast majority of staff from counties and districts transferred to the new authorities receive equal treatment.

5.30 pm

The Opposition amendments would do none of those things. Apart from the staff who have the right to transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981, there would be no means to transfer staff from the old authorities to the new. The transfer orders in clause 42 would set out clearly to which authority an individual had been transferred, and I think that that answers the point raised by the hon. Member for Neath (Mr. Hain). The amendments would leave industrial tribunals as the only means of securing certainty in cases of doubt, and of course I cannot commend them to the House.

I want to deal with the Government amendments.

Mr. Morgan : The Minister is quite correct in saying that the emphasis of new clause 12 is on the preserved or acquired right to be able to take a case of unfair or constructive dismissal to an industrial tribunal. Is he then commending the Government's legislation ? Is he also guaranteeing that there will be continued rights to sue in an industrial tribunal, regardless of whether one is suing an old or a new authority ? Would that be correct even if the case eventually only gets to an industrial tribunal after 1 April 1996, when there will be no old authorities, even if it is one of those which is being sued ?

Sir Wyn Roberts : I will come to precisely that point as I deal with Government amendments Nos. 62 to 64.

Mr. Rowlands rose

Sir Wyn Roberts : I am just going to refer to the point made by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). The hon. Gentleman, referring to clause 44, said that it shall be assumed that a person was dismissed "by reason of redundancy" and that his dismissal was proposed by the authority. Those words bring with them the requirement to consult representatives of staff, to give notice and so on.


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In that case, we are talking about people who are not transferred by order and who are in the employment of existing authorities. I shall have more to say about the points made by the hon. Member for Merthyr Tydfil and Rhymney in a few moments.

Government amendments Nos. 62 to 65 give effect to the undertaking which my right hon. Friend made to the House on Second Reading to reassure staff that they will have full rights under employment protection legislation, including rights to consultation with representatives of staff and trade unions about prospective redundancies and notice of redundancy.

Mr. Morgan rose

Sir Wyn Roberts : I am dealing with this set of amendments so the House can understand their full scope. Clause 44 applies only to staff who lose their jobs at the point of reorganisation. We hope to secure the necessary reductions in staffing levels by voluntary redundancies, so it would be possible to avoid compulsory redundancies on 31 March. It is not possible to give an assurance on that point.

Government amendment No. 62 was somehow misunderstood by the hon. Member for Merthyr Tydfil and Rhymney. It mentions the relevant employment protection provisions of the Employment Protection (Consolidation) Act 1978 and the Trade Union and Labour Relations (Consolidation) Act 1992. These are concerned primarily with redundancies, which is precisely the situation dealt with by clause 44.

I think that the hon. Gentleman is confusing matters with the right of transfer which staff might have under the TUPE regulations. Such staff are implicitly recognised in the wording of subsection (1A)(b) of the amendment, which states that

"a contract of employment is transferred--(i) to a new principal council, if it is treated by any provision made by this Act, or by or under any other enactment, as continued in force with that council". In other words, staff transferred under TUPE will not be covered by clause 44 because they will be transferred. The provisions of the Bill cannot override the requirement of European legislation, such as the TUPE regulations, which implement the acquired rights directive.

Mr. Rowlands : I feel out of my depth and I am willing to accept the ministerial word on the matter. Is it the ministerial word that nothing in the amendment undermines the rights of staff under TUPE in the event of reorganisation ? I would appreciate it if the Minister could give that categoric assurance.

Sir Wyn Roberts : TUPE can apply, but it depends on the circumstances of the individual case and I am happy to reaffirm that now. There is no attempt to undermine that directive in any sense. Mr. Morgan rose

Sir Wyn Roberts : Government amendment No. 66 plugs a gap which we have identified in clause 45.

Mr. Morgan : One matter needs to be cleared up. If I understood correctly what the Minister said before the intervention by my hon. Friend the Member for Merthyr Tydfil and Rhymney, he was referring to the emphasis


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which the Government were placing on facilitating the transfer of staff with all their acquired rights under TUPE from the old authorities to the new. He said that this was in the form of a guarantee that the staff will be transferred. The problem is that people can lose rights while they are being transferred. For instance, they may find that they were moving from full-time to part-time work, which would normally give them the right to compensation for detriment. That could take place under TUPE or under old-fashioned UK employment law.

The right hon. Gentleman has not mentioned not only the right to sue for compensation and to be entitled to a redundancy package because a person has lost his job, but the substantial deterioration in terms and conditions, such as a loss of hours. Is he covering that point of detriment as well ?

Sir Wyn Roberts : I have covered the transfer of staff from one authority to another. I shall again remind the hon. Gentleman of clause 53(4), which states :

"Anything done by or in relation to an old authority before 1st April 1996 . . . shall . . . have effect as if done by or in relation to the successor authority."

In other words, the liabilities of old authorities transfer under clause 54 to the appropriate new authorities. Clause 44(2) already recognises that such liabilities will be transferred to new authorities. There will not, therefore, be the change which the hon. Gentleman anticipates. If a change resulting in detriment to an individual occurs, the new authority will be as responsible as the old authority might have been.

Mr. Morgan : I am finding some comfort in what the Minister is saying, except for one point--he is overselling the matter to the House. Is he implying that clause 44, as amended by Government amendment No. 62, confers rights to transfer, without loss of acquired rights under employment law ? We understand that it is neutral on that point, permitting that to occur without debarring it. It does not confer it as a matter of right. The Minister is leaving the clause in a form whereby staff would have to find out how the right to transfer without losing their acquired rights will be enforced. The right is not conferred by clauses 42 to 45, which pertain to the transfer of staff from the old authorities. It would be misleading to the House and the 140,000 staff who could, in theory, be affected if he tried to imply that he is conferring something on them when, in reality, he is permitting, in a neutral manner, another form of regulation, which will have to come back to the House in another form, to confer that right. Is not the clause simply neutral on that point ?

Sir Wyn Roberts : The hon. Gentleman is leading us down the wrong garden path. He forgets that all the other employment legislation, for example on redundancies and transfers, comes into play. The clause relates only to local government reorganisation in Wales and the specific transfers of staff that will be needed between authorities. The hon. Gentleman should remember that other employment legislation is still effective.

Government amendment No. 66 plugs a gap which we have identified in clause 45. For example, an individual on a fixed-term contract with an old authority could have already secured a job by competition in one of the new authorities, yet could have claimed damages for loss of office under his existing contract. The House will agree that that would not be an appropriate use of public funds.


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