Informing and Consulting Employees

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Dr. Ladyman: The hon. Member for Vale of York argued about the regulation of industry. Earlier, the hon. Member for Bognor Regis and Littlehampton, speaking from the Conservative Front Bench, described the worker-shareholder arrangements at John Lewis as an example of best practice. Does my hon. Friend agree that we have slipped into a parallel universe?

Mr. Darvill: My hon. Friend makes a good point, as usual. We are moving that way. It is good to have a debate in which we can discuss such things, and speak from our own experiences, which may influence the position.

I am disappointed, because the debate has not moved on as it should have done. The impact of regulations should be addressed because we must ensure that businesses and employees are properly protected and a balance must be struck. If we do not create and encourage an atmosphere in which good employee consultation develops, the country will suffer. The economic benefits of arising from staff retention and training are such that we should not ignore them. We must move in that direction and I am happy to accept the Government's points about subsidiarity, but, as my hon. Friend the Member for South Thanet said, we need a programme to encourage forward movement.

12.1 pm

Mr. Alan Johnson: The debate has raised a number of issues, and I shall try to cover them. We are in a bizarre parallel universe with complete accord between the two Front Benches, but I shall destroy that by returning to normal service.

There is a fundamental difference between our approach and that of the Opposition. The hon. Member for Bognor Regis and Littlehampton would not disagree with that. The Government believe that we should have civilised standards in the workplace, and, since we came to office, we have introduced a large tranche of changes, including the minimum wage, the right to be accompanied at disciplinary hearings and union recognition. Approximately 24 provisions have been introduced; they were long overdue and I have always believed deeply in all of them, although some of my colleagues did not believe in the minimum wage back in the 1970s.

No one should argue that our stance on information and consultation reflects in any way the Opposition's approach to the matter, but we have tried to achieve a consensus on all the measures that we have introduced. We want to ensure that no right-of-centre mainstream political party in this country, or elsewhere in Europe, would dare to remove those fundamental rights once they are established. Having introduced so much in such a short period, we must recognise the effect on business of taking our agenda further. I do not go along with the mantra that regulation is a burden on business if it covers social progress, but we must ensure consensus, by and large, on the measures that we introduce.

On the minimum wage and other employment rights issues, we have achieved consensus, and, although I am a bit foggy about the Conservatives' policy on the minimum wage, I doubt that even they would dare to remove it. The Conservative party has been through a policy-making process known as the Portillo process, and I am not sure whether it would protect the minimum wage in all companies with no sectoral or regional variations.

The previous Government did not believe in the fundamental rights that we have introduced. They may have believed in good, decent employers being kind to their staff, but they removed wages councils and attacked free, independent trade unionism, which is the best safeguard of workers' rights. I must make that point because it is relevant to burdens on business. The previous Government introduced a regulation under which every company had to remind its work force that union subs did not have to be paid by check-off. The company had to write to each individual whenever union subscriptions were increased. Every three years, the company had to pay the cost of the union effectively re-recruiting its members. That placed a terrible burden on business, and the measure was spiteful, petty and designed to undermine free and independent trade unionism. Thankfully, we have repealed it.

Mr. Ivan Henderson: I think that the case has been proved in respect of the European works councils. The Conservatives used political dogma and fostered anti-employee relations. Industries that were against the measure signed up to it, regardless of whether there was a voluntary or regulatory burden.

Mr. Johnson: My hon. Friend makes an important point that I was about to mention. The hon. Member for Bognor Regis and Littlehampton referred to the position of the Conservatives, who opted out of the social chapter. In fact, the European works councils directive was a good example of a mistake by the previous Government. The directive was negotiated, and companies that operated in other parts of Europe as well as in this country were affected by it. Because the UK Government had opted out, such companies had no input and the directive proved a fait accompli. That is a classic example of the faults of the previous Administration.

A further example of such faults is the working time directive, which the previous Government were able to influence because it concerned health and safety. They approached the European Court of Justice, claiming that the directive should relate to the social chapter, but they were humiliated. All that the party of the family achieved was the right to a day off that could be any day of the week, rather than just a Sunday. In every other sense they were completely and abjectly humiliated.

Miss McIntosh: The Minister referred to the trade union reforms of the previous Conservative Administration, only some of which the Government have repealed. If they disliked the package, which included a ban on the right to secondary picketing, why did they not repeal it in its entirety?

Mr. Johnson: At the moment, no one would dare interfere with James Prior's reforms of the closed shop and secondary picketing, the requirement to ballot before strike action, and the requirement to ballot the executive council. Those reforms were necessary and I have argued that many trade unions should have pursued them voluntarily—indeed, many did. However, there is a world of difference between those reforms and the seven employment Acts that followed. They were progressively spiteful, and in the end even employers were embarrassed to implement them. They were an attack on free and independent trade unionism, and the Conservative party should be ashamed of them.

It is therefore clear that a different approach can be taken. Indeed, the question of whether to pursue this initiative must be seen in the context of the approach that we in this Committee take to this issue. It is particularly relevant at the moment and people are genuinely concerned about it, but that has not always been the case. In terms of the White Paper ``Fairness at Work'' and the question of the employment relations package that a Labour Government would implement, information and consultation did not even register on the Richter scale.

Indeed, in the past 10 years the only occasion on which this issue has been debated at a Trades Union Congress was in 1993, when one Mr. A. A. Johnson, a young trade union general secretary from the Union of Communication Workers moved a document on employee participation and industrial democracy. I said:

    ``Looking at the history of industrial democracy in Britain, it is hard to escape the conclusion that disinterest is nothing new. Since the Guild Socialists''—

I apologise for using that word—

    ``pursued the idea at the turn of the century, industrial democracy has been a recurrent theme, but at every stage where workers in Western Europe moved a step closer to genuine social partnership, trades unions merely stepped aside.''

The people who came to support me in the debate—although no one ever opposes a motion to the TUC—reflected views that existed right up to the present day, or at least until very recently. One delegate said:

    ``Here we come to another popular but I think dangerous argument which is that by being the best organised group in the work force and running slates in the elections, trades unions can occupy leading positions within works councils and works councils will therefore act as mutated form of a trades union.''

She concluded that

    ``works councils are designed only as a forum for exchanging information and for consultation.''

My hon. Friends will have heard the argument that civil rights at work are obtained only through a union card and that anything that threatens union power will diminish workers' rights. The delegate concluded that

    ``the very same works councils that the TUC has argued for and helped come into being will be used against us to weaken and marginalise the role of trades unions in the work place.''

The matter must be addressed, but we should not let anyone pretend that it has been a burning issue in the labour movement, the TUC or the trade unions in years past.

The hon. Member for Bognor Regis and Littlehampton suggested that the review that was announced on 18 January was a fudge and a climb down. We have argued that the directive breaches subsidiarity. We should review the working of the existing legislation that contains provisions for information and consultation—including the redundancy Acts and the European works councils directive—before we decide how to move forward. It is not a fudge or a climb down.

We are considering the concerns that have been expressed about what happened at General Motors in Luton and at Ford. It was disgraceful to inform the work force over the radio about decisions that would affect their working lives. The hon. Member for Bognor Regis and Littlehampton told me that we should have contingency plans. On one hand he tells us that we should have contingency plans, but on the other he accuses us of fudge and climb down. I assure hon. Members that wherever the debate on the directive takes us, we will keep the European Scrutiny Committee informed.

The hon. Member for Vale of York mentioned confidentiality and enlargement. We understand the sensitivities that surround confidential issues and disclosures. The directive contains provisions to protect against damaging disclosures. We believe that the provisions that we put into the European works councils directive are the proper way to deal with breaches of statutory duty. Other European states are concerned that they should be able to use their own legislation to address the problem, not a catch-all provision from the Commission.

On enlargement, we do not know what consultation the European Economic Area and the applicant countries have undertaken in their own countries, but they would sign up to all the directives that apply in the European Union, including this one. The Commission is working with them to help them to prepare to accept their obligations on joining the EU.

I am glad that my hon. Friends the Members for South Thanet and for Upminster (Mr. Darvill) understand our point about subsidiarity and realise that although we oppose the directive, we are in favour of information and consultation. I hope that they agree that we must take the matter forward in such a way as to ensure consensus. That would not be achieved by implementing the kind of structure that we have seen before as a result of the Bullock report and the industrial democracy experiment. Indeed, that would positively damage what we are trying to do in changing the climate of employment relations.

My hon. Friend the Member for Upminster asked whether there is sufficient best practice. There is a lot of it about, but it has never been sufficiently passed around—as we discovered in respect of the work and parents Green Paper. We talked to companies of all sizes and found some splendid ideas about how people can work more flexibly, but they had never been exchanged with anyone else. It is important to exchange such information.

We believe that the European Union should leave member states free to foster domestic arrangements in keeping with their national traditions. The directive would not achieve anything that could not be achieved by member states acting alone. It would require the establishment of formal structures and new patterns of employee representation. UK companies tend to manage employment relations through less formalistic procedures and structures than is common on the continent. The directive does not address the real issues and is unlikely to fit well into the UK domestic setting.

We have made our position clear to our partners in Brussels, which is why there has been no agreement on the text first proposed by the Commission in November 1998. In opposing the directive, we are not opposing the aim of promoting information and consultation of employees. We take issue with the means, not the end. I urge the Committee to support the motion.

Question put and agreed to.


    That the Committee takes note of the unnumbered Explanatory Memorandum from the Department of Trade and Industry dated 21st November 2000 relating to a draft Directive of the European Parliament and of the Council establishing a general framework for informing and consulting employees in the European Community; and supports the Government's position that it is not persuaded of the need for a directive on information and consultation in undertakings operating only at national level, which is difficult to reconcile with subsidiarity and would cut across existing practices in member states to no benefit.

        Committee rose at fifteen minutes past Twelve o'clock.

The following Members attended the Committee:
Madel, Sir David (Chairman)
Darvill, Mr.
Henderson, Mr. Ivan
Hesford, Mr.
Ladyman, Dr.
McIntosh, Miss
Wright, Mr. Anthony D.
The following Members also attended, pursuant to Standing Order No. 119(5):
Cable, Dr. (Twickenham)
Campbell, Mrs. Anne (Cambridge)
Gibb, Mr. (Bognor Regis and Littlehampton)
Johnson, Mr. Alan (Minister for Competitiveness)
Lewis, Mr. Ivan (Bury, South)
McNulty, Mr. Tony (Harrow, East)

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Prepared 28 February 2001