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Mr. Bob Laxton (Derby, North): Follow that!
10.43 pm
The Minister for Employment and the Regions (Alan Johnson): I congratulate my hon. Friend the Member for Dartford (Dr. Stoate) on securing this debate and I am grateful to him for raising this important issue. I am not sure whether I can follow that and quote so eloquently from Marx and Castro, although if time allows I might have a go at the theory of surplus value. Perhaps it would be better if I addressed the major points of my hon. Friend's speech.
This Government took office in 1997 with a determination to improve employment rights for working people. Indeed, we had a determination to introduce basic, civilised minimum standards in this country in the workplace practically for the first time. In the past four years, we have introduced many important measures that have created a substantially better working environment for many employees. The measures in the current Employment Bill—which I urge my hon. Friend to read, because it addresses some of the issues that he raised—will continue to take that good work forward. However,
while we must recognise that most employers happily comply with those measures because they recognise the link between good employment relations and success in the marketplace, we also have to accept that that is not always the case and that some workers are not receiving all the employment rights to which they are entitled.The key question is how best to address that problem. It seems to me that my hon. Friend has identified two principal difficulties with the present system. The first is that some employees are not aware of their rights, and that some employers deliberately or through ignorance do not apply those basic minimum standards. Our approach to that is to try to help to build constructive employment relationships, and thus ensure that workers and employers alike are aware of their rights and responsibilities. Advice on employment rights is provided by a range of bodies, including ACAS, which has seen a step change under Rita Donaghy's chairmanship and a new chief executive. It is now committed to increasing the number of seminars that it conducts with businesses to help them to understand the complexities of employment rights.
Apart from ACAS, the Department of Trade and Industry, equality commissions, the Trades Union Congress, voluntary sector bodies such as the low pay units, and advice agencies such as citizens advice bureaux raise awareness as far as possible through publicity campaigns to improve understanding of specific employment rights. An ever-increasing amount of information is also available on the internet, including the Tiger website, which the National Association of Citizens Advice Bureaux has helped us to develop. That will continue to expand to cover a broader spectrum of employment issues.
Much guidance material is available from both the DTI and ACAS, which also runs conferences, seminars and employer workshops to raise awareness of statutory duties and rights. The Small Business Service provides employers, especially in small firms, with a single entry point for guidance on regulations on employment legislation from across Government. The Government and the bodies that I have mentioned are always reviewing the available guidance and advice to see how it can be improved and better publicised. It is clear that a wealth of guidance material is already available to employees and employers.
My hon. Friend argued that employment tribunals are expensive to access and that few employees think that the risks involved in taking an employer to a tribunal are worth the perceived benefits of winning a case. It is precisely such problems that the dispute resolution measures in the Employment Bill are designed to tackle. We are ensuring that all workplaces must have grievance procedures. The proposed steps are simple and easy to use. They will ensure that a dispute is tackled where it arises, in the workplace. Employers will have to take the process seriously, or they could find that any award made against them is increased by up to 50 per cent.
We are ensuring that all employees are issued with a written statement of terms and conditions of employment that lays down those procedural steps. At present, there is a requirement to do that, but companies employing fewer than 20 employees have no obligation to include disciplinary and grievance procedures. In any case, there
is a problem with compliance. Mitigation awards of between 10 and 50 per cent. will apply in that respect. Everyone in the workplace will know where they stand and how best to approach a dispute. The use of such procedures should mean that far fewer disputes have to be taken to tribunal for resolution.My hon. Friend mentioned the awards made by tribunals. Just under 50 per cent. of awards are for unfair dismissal, which is not relevant to this debate. It is true that the median award is not high, but we are not trying to create a compensation culture in employment tribunals, and awards are designed to compensate for actual losses. Tribunal chairmen assess the level of an award as they deem fair, taking into account the circumstances of the person against whom the award is made.
In addition to the measures in the Employment Bill, we have set up a partnership fund to promote understanding between employers and employees in the workplace. That is an important non-legislative measure aimed at improving work relations. The Government and business have invested £10.3 million in it.
My hon. Friend suggests that the answer to the difficulties that he raised would lie in creating a new body, to be known as the national employment rights office. That would act as an independent assessor of whether employers were meeting their legal obligations to their staff. I am aware that others, including the Institute for Public Policy Research and NACAB, have made the same suggestion.
I remain to be convinced that the formation of a single, over-arching body would be the best way forward. In many respects, it would duplicate work that is already being done. It is not clear to me that the creation of NERO would necessarily improve the volume and quality of information available about employment rights. It is entirely possible for us to improve that within the present system, and we are always looking to do so. Nor would NERO improve the way that employment tribunals work. Employment disputes often lead to complicated and intricate cases and would not naturally lend themselves to resolution through an investigative agency. Tribunals are structured as they are because the expertise of lay members combined with the legal knowledge of the chairman is required to reach a solution.
It is also not entirely clear how the new body would fulfil its role. How could NERO be seen by employers and employees as an independent adviser and conciliator on the one hand while also acting as the body responsible
for enforcing employment rights? ACAS, for example, does vital work in both its advisory and conciliatory roles while maintaining its independence and integrity. It is difficult to imagine how NERO could continue as an independent body if it were to take on the dual role suggested by my hon. Friend.The creation of a single body does not of itself resolve any of the difficulties in the present system. Indeed, it is even possible that, if not carefully handled, the body could create additional difficulties: effort and resources could be drawn into the creation of a new bureaucracy, rather than being used for the operation and improvement of the existing system.
As my hon. Friend pointed out, we made an exception in relation to the minimum wage: because of a service agreement between the DTI and the Inland Revenue, Inland Revenue officers are dedicated to enforcing the minimum wage and to taking cases through employment tribunals. That is fundamental because the matter relates to people's pay and because we introduced a minimum wage for the first time in 1999, whereas such arrangements are well established in other countries.
The Inland Revenue does an excellent job on our behalf, but other employment rights—such as weighing up part-time and full-time work in relation to the directive on part-time workers—are more subjective. To create a body to enforce all employment rights across the board would demand substantial resources, and I am not convinced that it would deliver a better result.
That is not to say that the Government are irrevocably opposed to the idea of NERO. Incidentally, there seems to be awareness of our minimum standards. Last week, it was reported that Madonna said that every worker on her new house knows that they are entitled to four weeks' paid holiday, to the minimum wage and so on. I do not know whether she intended that as an accolade for the Government, but we shall accept it as such.
We are not irrevocably opposed to my hon. Friend's idea. Although I am not convinced that it offers significant advantages at present, I should be happy to reconsider it at a later date. My hon. Friend has raised an important point. We do not intend to set up basic minimum civilised standards only to have them ignored by a minority—thankfully—of unscrupulous employers. We shall look at the proposal again, and I am grateful to my hon. Friend for initiating this important debate.
- Adjourned accordingly at seven minutes to Eleven o'clock.
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