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Mr. Lloyd: There has always been provision for tribunals to issue costs against those who bring vexatious or trivial claims. We are talking now about the level of costs and the fact that tribunals will now be able to take into account the time involved. We must understand that there are very few vexatious cases, and there are other mechanisms, such as the pre-tribunal screening process, by which we can begin to tackle them.

As Members of Parliament, we are all aware of the cranks in our society—those who get a bee in their bonnet and become obsessed—and we should not flood tribunals with such cases. However, we should not be under the illusion that they are the cause of the enormous increase in the number of cases going to tribunals—there are other reasons for that—or we would do no service to the many good employers and employees who resolve difficult issues in tribunals. We need tribunals to determine fair practices in industry.

I turn now to the wonderfully named Polkey judgment, and the way in which it will be thrown into doubt by the Bill. I understand that the arguments on these matters are technical and detailed, but if we dismiss employers' legitimate need to operate due process, and say that due process is of only marginal use, there is a real danger that we undermine an important principle at a time when we are telling employers that they must introduce proper disciplinary and grievance procedures. If we expect those procedures to be honoured, and not only in the breach, we

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need to show that honouring them brings employers reward, and dishonouring them might put them in jeopardy.

As my hon. Friend the Member for Stoke-on-Trent, North pointed out, there are serious concerns that employers may not, for example, even be required to carry out proper investigations into cases of alleged misconduct, and that would be allowed under the reversal of the Polkey principle. It would leave employees open to abuse by employers. I hope that my hon. Friend the Minister will take that issue seriously. It is technical in concept, but very important in the practical impact that it will have on some of the most vulnerable people in the workplace.

I turn now to provisions that I would like to see in the Bill, or at least in legislation. I asked the Secretary of State whether, if the review of the Employment Relations Act 1999, undertaken by the Prime Minister demonstrated the need for legislative change, she could guarantee that we would see that legislation in the lifetime of this Parliament. Alas, my right hon. Friend forgot to respond to that question, so I hope that the Minister of State, in his winding-up speech, will give that commitment. I notice that the Minister for Pensions, is on the Front Bench. He deserves enormous credit for the present state of employment relations and industrial partnership. He will recall that the need for review was accepted by all parties when the Employment Relations Bill was going through Parliament.

There is now time for a review, and we already know that some of the events that followed that legislation have been unsatisfactory. I refer in particular to the sacking of 87 people by Friction Dynamex in north-west Wales. It is a scandal that people can be sacked for taking part in a legal strike because that strike lasts for over eight weeks. Such provisions have no place on the statute book, and I hope that the Minister accepts the need to consider that during the passage of the Bill. We might use this opportunity to improve on that legislation, which would do an awful lot to demonstrate this Government's good faith, not only to the trade union movement but to people in the workplace who deserve better. I hope that the Minister will also seriously consider other aspects of employment law where the need for change has already been demonstrated.

The Bill is already good and offers people in the workplace many new rights and opportunities, including the chance to be part of the social partnership between employer and employee. However, we can improve it in Committee and when it returns to the Floor of the House. I hope that the Minister will listen to the pleas from hon. Members on the Labour Benches but recognise that the views of Opposition Members are totally backward looking. The hon. Member for Runnymede and Weybridge (Mr. Hammond) used the word "dinosaur", and I agree with him that he is one. We should not allow Opposition dinosaurs to bludgeon our Government, who are committed to progress, into looking backwards too. Let us look forward and build on the Bill to develop a better industrial relations climate.

7.55 pm

Mr. Gregory Barker (Bexhill and Battle): Before I commence, I make a small declaration of interest as a modest employer of domestic and child assistance, although I assure Labour Members that I am not in the same league as the hon. Member for St. Helens, South (Mr. Woodward).

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Several organisations representing parents and families have welcomed certain family-friendly measures in the Bill, and so do I. Notable examples include the Equal Opportunities Commission and the citizens advice bureaux. As a Conservative, it is natural for me to support not only certain measures but the principle of family- friendly practices in the workplace. Furthermore, as the father of three young children, the youngest born only earlier this year, I fully understand the pressures under which employees throughout the country frequently find themselves.

I know the demands of balancing a young family and employment, but ultimately parenthood has to be enjoyed and relished. It is certainly more important than any job, and ultimately it is what we are all here for. As my own father recently reminded me, we should all take time to enjoy and appreciate our young children before they slip through our hands into adulthood while we are not watching. The value of parenthood cannot be overestimated.

It seems that recent tribunal cases, such as that of PC Chew, who won her case against Avon and Somerset police, and Neil Walkingshaw who, as the Secretary of State mentioned, won the right to care for his six-month-old son, have sent a clear message to employers that wherever possible they must agree to reasonable requests from parents. Improved maternity pay and leave and the introduction of paternity leave should mean that more parents have choices about how to combine their work and family responsibilities. These welcome advances recognise the changing roles of women and men at home and at work.

In my view, personal choices in balancing a demanding job and a demanding family are ultimately down to the individual, not the state. It is for individuals to prioritise how much time to give to work and their career, and how much to their family. Sacrifices have to be made, and it is a grown-up choice in a grown-up world. Although the intent of the Bill is admirable, the drafting is not. It is likely to backfire on the very people whom it aims to support. The result could be perceived as special treatment leading to a backlash against working parents.

Workplaces are already becoming more flexible, and we all welcome that. It makes sense, and is widely recognised by businesses, that as parents and employees we have conflicting duties that must be recognised and balanced in the interest of employers and employees. Although the adoption of new best practice is to be welcomed, we must be careful that increasing legislation does not create an intolerable burden on small business, the result of which, particularly in current economic conditions, could be to put many family breadwinners on the dole. The legislation that the House is currently considering will add another layer of administration for good employers and may result in bad employers sticking to the letter of the law, thereby limiting the choice open to working parents.

Common sense should prevail so that family-friendly policies do not dilute the competitiveness of the British economy and British industry. If we look at a few key facts, we see that the current outlook for the British economy is not good. Figures released by the Office for National Statistics on 21 November show that

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manufacturing investment has fallen to its lowest level for seven years, at the fastest rate for more than 30 years. The problems are now spreading to the services sector. The Chartered Institute of Purchasing and Supply recently reported that activity in the services sector fell in October at the fastest rate since it launched its survey in October 1996. Unemployment has started to rise for the first time in a decade, and figures released by the Office for National Statistics show that the number of dole claimants increased by nearly 4,500 in October. To choose to load further burdens on business will push many of our smallest firms into the red and possibly into receivership.

I should like to concentrate briefly on the issue of competitiveness. During the Labour Government's first term, red tape costs increased by £15 billion, according to the British Chambers of Commerce. The £15 billion red tape bill is based on the Government's own regulatory impact assessments—compiled from the BCC's "Burdens Barometer 2"—and does not include the financial cost of the national minimum wage. In the same period, according to the International Institute of Management Development, the United Kingdom fell from ninth to 19th in the world competitiveness league table. Employers have given the Bill a mixed reaction for precisely those reasons; the measure is likely to impose significant extra burdens on business—particularly, as I have said, small business.

I shall give the House just two examples. The requirement for companies to recognise trade union learning representatives may lead to problems when agreement has not been reached with the employer. Some companies have reported that learning reps provide a useful service, but that needs to be in partnership with employers. When workplace relationships are fragile, imposing learning reps is unlikely to add any value at all to businesses. The inclusion of pay and pensions in comparable employment conditions under the fixed-term work regulations will be complex for business and likely to lead to significant additional administrative burdens. Benefits such as pensions and company cars may be inappropriate for people on short-term contracts but, to ensure equality, employers will be required to calculate and compensate for their relative value.

The Federation of Small Businesses echoed those sentiments:

As my hon. Friend the Member for East Devon (Mr. Swire) said, the Institute of Directors supported that line. Indeed, Ruth Lea, the head of the IOD policy unit said:

It is admirable that the Government are attempting to help families and working parents, but that should be achieved without hurting employers through over-prescriptive

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regulations. British business is already under considerable pressure; when it says that enough is enough, why do the Government not listen?

In conclusion, I greatly welcome measures that seek to improve dispute resolution procedures and promote family-friendly practices in the workplace, but I oppose Second Reading because of the Bill's excessive dependency on secondary legislation and the significant extra burdens that it will impose on British industry, particularly smaller businesses. We all agree with the Bill's principles, but ultimately a balance between best practice and new legislative burdens must be found. The Labour Government have got that balance dreadfully wrong.

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