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Mr. Jonathan Sayeed (Mid-Bedfordshire): My hon. Friend the Member for Daventry (Mr. Boswell) presented his proposals with characteristic modesty. As one who has worked in companies that varied from having 19,000 employees down to 25, I can assure the Secretary of State that one sometimes comes across an awkward employee. One tries to reason with him or to help him, but if he continues to be awkward, one must get rid of him.
Some employees have milked the system--particularly the employment tribunals--time and again, and it sometimes takes time to find that out. No sensible employer wants bad working practices. A good product requires a contented work force.
Legislation is an extremely crude instrument. It cannot deal with all the different types of companies, whether they are services or industrial firms. It cannot deal with companies of different size and ethos. It can, however, impose onerous regulations and rules on companies that cost money and, consequently, jobs.
In law in general, acting in a reasonable manner is a satisfactory defence, and it would be sensible to translate that principle into employment law. First, that would overcome the crudity of exercising the law alone. Secondly, it would provide flexibility to deal with different types and sizes of company. Thirdly, it would provide a defence against a bloody-minded or awkward employee who has to be got rid of.
I can tell the House how much it costs to get rid of an awkward employee. The minimum is likely to be between £12,000 and £15,000. Preparing the case will take at least
two days of senior management time. For two more days--often longer--senior managers will have to leave the workplace to present the case.
Mr. Boswell:
Does my hon. Friend agree that the normal and rational reaction of a management faced with that kind of cost is to settle out of court for almost any lower sum?
Mr. Sayeed:
My hon. Friend has shot my fox. In addition to preparation time, the business may require to hire legal counsel. An appearance in person is also required. I have asked the Secretary of State whether it would be possible for small businesses to put their cases to tribunals in writing, but he said no. I have seen the problems from the employers' side. With a minimum cost of £12,000 to £15,000, one realises that one has a better job to do--actually running the company. Often, therefore, the employer gives in and pays up.
That encourages the awkward employee. I have come across multiple-claim employees who make a nice little living by doing just enough to ensure that they are entitled to take an employer to tribunal for unfair dismissal or whatever, whereupon they rake it in.
Mr. Ian Stewart:
The hon. Gentleman paints a picture of an aberrant worker who puts in multiple claims. Is he aware, from all his experience, that there is a two-year time limit on making a claim for unfair dismissal to an industrial tribunal? Is he aware that the average award amounts to hundreds of pounds, not thousands?
Mr. Sayeed:
I agree. I do not say that the problem I have outlined is common or normal. Most employees work hard, want their companies to do well and want themselves to do well as a result. The Bill seeks to reduce the time limit referred to by the hon. Gentleman from two years to one.
I recall the case of an employee who had had maternity leave and sick leave and a whole variety of other things, in a very small company in which her job was so critical that another person had to be hired to do it. The employee could not physically manage a return to the specific job and would not do any other job. She claimed unfair dismissal. I do not say that that case is normal. The point is that there are sometimes abuses of the system. Companies should have a defence of acting reasonably.
Mr. Stewart:
The hon. Gentleman makes a case for a new provision, but, under existing provisions, an industrial tribunal may hold a pre-hearing assessment to consider several criteria, one of which is whether there is any merit in the case or whether it is frivolous or vexatious.
Mr. Sayeed:
The hon. Gentleman makes a perfectly fair point. However, before an employer gets that far, he must have done all the preparation and spent a considerable amount of management time gathering the documents and evidence together. The smaller the company, the more important the manager is to it.
I do not suggest that abuse is widespread. I do not suggest that most employees are on the fiddle: they are not. However, two things are required. First, a defence
must be provided, and that can be done by creating a code of practice acceptable to and understood by employees and management. The second point, on which I am on all fours with my hon. Friend the Member for Daventry, is that there should be a code or codes. We will need codes, because they will have to cover different types and sizes of companies that operate in different ways. Once those codes are agreed, they can be adapted over time.
New clause 3 would be a valuable addition to the Bill. The House should not make unnecessary laws, because they are held in contempt and constitute a legislative and financial burden on companies that have to implement them. I endorse the points made by my hon. Friend the Member for Daventry and I hope that the Secretary of State will implement them.
Mr. Ian Bruce:
It is always nice to support the Government in some small way, and I welcome the fact that Government amendment No. 57 will introduce the positive resolution procedure for the regulations proposed under the Bill. However, my understanding is that a single regulation or number of regulations made under the Bill would be discussed for only an hour and a half, and that is not enough for regulations of such complexity. I appreciate that that is not necessarily a point for the Minister, but perhaps the House authorities could address the time that is allowed to consider detailed regulations. I am concerned that the Government cannot properly do their job if they produce an unamendable regulation with only an hour and a half for discussion. Colleagues sometimes want to get away as quickly as possible and the House often does not scrutinise such regulations properly.
The Opposition would prefer not to have the regulations, because we would not wish to be so prescriptive. I pray in aid of new clause 3 the excellent speech in Committee by the Minister for Small Firms, Trade and Industry, in which he rightly pointed to the good sense of adopting codes of practice, as opposed to the letter of the law. The problem that arises when tribunals are asked to judge issues against the strict law is that the situation becomes legalistic, not one in which both sides address what is reasonable. Both the employer and employee have to be reasonable. The Opposition do not condone bad business practice or bad practices by employees: we simply say that the best solution is often to use a code of practice, so that if a small business is taken to a tribunal, it can claim that it acted reasonably and be judged on that basis.
The Minister for Small Firms--who is unpaid and likes me to remind the House of that, so that someone will hear and ensure that he is eventually paid for his excellent work--made a very good speech about age discrimination and the difficulty that one has in nailing down any discrimination in a strict law. I shall paraphrase parts of his speech. He said that the Government were taking a measured approach and intended to use the lessons learned from the initiatives to form future plans. He said that we needed to change the attitudes of employers and that the results of consultation published last year pointed to a non-statutory code of practice as the best way to encourage this process of change. He added that if we did not change the culture, we would not solve the problems. What good common sense from the Minister! It was almost his last speech in Committee and he was beginning to understand what the Conservatives were saying. Unfortunately, the Liberal Democrats were not saying the same things, because they wanted even more regulation.
The Minister continued by saying that the code would bring real benefits in promoting good recruitment and employment practices. That is a sensible approach. The Government went further and said that they would monitor this code's effectiveness, but that they would not evaluate it until February 2001. It will be too late for them to legislate by then and they have, therefore, made it certain that legislation on age discrimination has been kicked into the long grass.
New clause 3 reminds the Government that codes of practice and reasonableness are the way forward. The Conservative party has a proud record. For years, Governments of all colours tried to solve the problem of strikes. I remember the wonderful document, "In Place of Strife" produced by Barbara Castle, now Lady Castle. That became a reality under Conservative legislation. We are proud of that record and willing to pass it on, as part of our golden legacy, to the Labour Government. They have said the right things when talking to business audiences, but unfortunately, the Bill does not deliver. New clause 3 would give the Government a chance to add reasonableness to the Bill and it would be better for it.
Mr. Byers:
As Opposition Members have pointed out, Government amendment No. 57 requires the Government to subject the code of practice on part-time work to the affirmative resolution procedure. I understand that it fulfils a commitment given in Committee and I am pleased to honour it this evening. I shall, however, ask the House to resist new clause 3. In so doing, I should add that there is not much that divides the comments made by the hon. Member for Daventry (Mr. Boswell) and the approach that the Government intend to take to the issue.
7.45 pm
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