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Mr. Fabricant: I shall not pursue my hon. Friend's point, Mr. Deputy Speaker.

However, the capability of a company to respond within two weeks is based less on turnover than on the number of people employed by that company. For example, there is an American corporation--I had better not mention its name; it is based in Seattle and it is not Microsoft--which has a paid-up value of £44 billion, but has only 24 employees. Nearly all of us use that company's software to allow us to see television pictures.

Mr. Deputy Speaker: The hon. Gentleman is wool- gathering. He should come back to the amendment.

9 pm

Mr. Fabricant: My point is that it is not a company's turnover or profitability that defines its ability to deal with the notice from a union requesting collective bargaining, but the number of people employed by that company. The definition of a small and a large company in the Bill

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reflects the Secretary of State's acknowledgement that companies employing fewer than 20 should be subject to a different number of legal requirements than a company employing more than 20. However, I believe that a company employing 21 people should not be regarded as a large company.

The amendment requesting three weeks--15 working days--in which to deal with the notice from the union is not unreasonable in respect of a smaller company. If the Minister rejects the amendment, large public companies, such as Unilever, will continue to be well able to deal with requests within a two-week period; but I would ask him to consider that companies of an interim size--employing up to, say, 50 employees--should be allowed rather more time.

Accepting the amendment would demonstrate a recognition of the fact that companies operate in difficult times and that the implementation of this Bill and others that have recently been enacted--including one that will come into force tomorrow, the name of which I shall not mention, lest you rule me out of order, Mr. Deputy Speaker--might restrict the number of employees employed by a company, force the individuals employed by that company to work even harder and so restrict the amount of time available to them to comply with the requirements of the Bill.

I simply ask the Secretary of State to demonstrate tonight that he is not the enemy of small business, but its friend. I ask him to show not only a little flexibility and a little heart, but a little of the mind and intelligence needed to ensure that small businesses survive. I ask him to accept the amendment, or at least introduce some suitable compromise on the basis that I have suggested.

Mr. Byers: This issue was debated at some length in Standing Committee. There is clearly a strongly held view among Opposition Members that 15 days--or perhaps 20--is the appropriate period, but I am not sure that that is correct. It is a question of balance, and we believe that 10 days is right in the circumstances. We have heard the argument and considered the issues, but the Government's view remains the same. I am sorry that I cannot agree with Opposition Members' points, but I hope that, having had the debate, they will withdraw the amendment.

Mr. Boswell: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Boswell: I beg to move amendment No. 8, in page 23, line 48, at end insert--

'(c) the proposed recognition of the union or unions would contribute to good industrial relations.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following: amendment No. 45, in page 24, line 15, leave out from '18' to end of line 18.

Government amendments Nos. 71 and 72.

Mr. Boswell: I shall be brief, as I now sense that the House might wish to conclude these matters. I shall be able to compress my remarks in view of the express willingness of the Secretary of State to listen to us, and perhaps to some extent he can take some of my points as read.

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The amendment would build into the Central Arbitration Committee's criteria a test that

That is a objective which we all share.

The context in which we tabled the amendment was the concern reportedly expressed by John Monks in respect of the restructuring of the trade union movement to produce a modern trade union structure. As the Minister for Small Firms, Trade and Industry knows from our previous debates, I wish no ill toward the trade union movement; in fact, my feelings are to the contrary. The amendment also reflects our desire to eliminate potential conflicts of interest, one of which arises from inter-union disputes, which we are anxious to avoid.

My understanding of the Government amendments in the group is that they would put the CAC more in the driving seat, instead of its relying on union certification. That appears sensible and likely to reduce evidential arguments. Subject to what the Secretary of State has to say about his amendments, I am inclined to welcome them.

Mr. Andrew Welsh (Angus): The two Conservative amendments cause me some concern. Under paragraph 17, union recognition is based on very clear and exact criteria, such as 10 per cent. union membership or where the majority of workers are likely to favour recognition of the union. The Conservatives wish to introduce a much vaguer criterion in amendment No. 8, which states:

I should like to hear an explanation of how the CAC would judge, on any objective basis, which unions would contribute to good or to bad industrial relations.

If the amendments were passed--I hope they will not be--how would the criterion be measured? How would the new Tory criterion fit with the idea of the democratic choice of the work force? It is surely up to the workers to decide the efficacy or otherwise of the union that they choose to represent them. We should offer the work force more freedom of choice, not less. The amendments are basically anti-democratic and are designed to restrict workers' freedom of choice.

The second Conservative amendment, which refers to "a majority", underlines my suspicions. I have the feeling that the amendments are designed to hamper rather than help the legislation. I believe that the Government have got it right in this case and the amendments have got it wrong.

Mr. Byers: I am pleased that the hon. Member for Angus (Mr. Welsh) believes, at least on this occasion, that the Government have got it right. I am inclined to agree with him, and I shall ask hon. Members to resist amendments Nos. 8 and 45 if they are pressed to a Division.

Government amendments Nos. 71 and 72 clarify the way in which the Central Arbitration Committee is to decide on automatic recognition. They allow the CAC to examine in a little more detail whether a majority of workers are likely to favour recognition or de-recognition. They alter slightly the criteria by which the CAC decides whether a union has 50 per cent. membership in a

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bargaining unit. Instead of the union merely showing that it has 50 per cent. of members, the CAC must be satisfied that that is the case. In the vast majority of cases, the results should be the same. However, if they are not, it is better for the CAC to decide to hold a ballot.

The amendments make the method of the CAC's scrutiny of applications clearer and a little more rigorous. That is a desirable result, and I hope that hon. Members will be able to accept Government amendments Nos. 71 and 72.

Mr. Boswell: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 71, in page 24, line 17, leave out

and insert 'CAC is satisfied'.

No. 72, in page 24, line 46, leave out

and insert 'CAC is not satisfied'.--[Mr. Byers.]

Mr. Welsh: I beg to move amendment No. 37, in page 27, line 17, leave out from 'voting' to end of line 18.

I should like also to discuss amendment No. 38, in page 48, line 26, leave out from 'voting' to end of line 27.

Schedule 1 is concerned with the recognition of trade unions by employers for the purpose of conducting collective bargaining on behalf of the workers. Voluntary agreements are still promoted as the best solution, but schedule 1 legislates for statutory recognition. If more than half the workers are already union members and the CAC is satisfied that there is no need for a ballot, the union can be recognised automatically at that stage; otherwise, there will be a secret ballot of the work force.

In order for a trade union to succeed in a ballot on recognition under schedule 1, it must be supported by at least 40 per cent. of the work force--not just a simple majority of those voting. However, the 1997 Labour manifesto did not refer to any such threshold. It said:

I certainly agree with that.

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