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Mr. Michael Weir (Angus): How would this statutory procedure sit with companies' internal grievance procedures? I know from my long experience as a lawyer that when cases reach tribunals there is often a lot of discussion about the fairness of the internal procedure that was carried out initially. Would the statutory procedure override existing grievance procedures?
Alan Johnson: We seem to have moved on to disciplinary procedures. Given that an employee was allowed to be informed of the so-called offence that had been committed, to discuss it with the employer—unless it was an offence of gross misconduct—and was granted the right of appeal, internal disciplinary and grievance procedures would not breach the basic three and two-step criteria.
That brings me to a point raised by several hon. Members, including the hon. Members for Hertford and Stortford and for Boston and Skegness (Mr. Simmonds). They ask what effect the new clause will have and say that it does not go far enough. At present, 6 million workers have no recourse to any grievance or disciplinary procedures in the workplace. Some 600,000 workplaces have no procedures, and a further 340,000 have substandard procedures.
Mr. Simmonds: Does the Minister accept that a large proportion of those workplaces have voluntary systems that work very successfully?
Alan Johnson: I do not know what the hon. Gentleman means by voluntary systems. If they are voluntary, they are not recorded, and the employee does not know that he or she has recourse to them. I am referring to workplaces where there is no procedure whatever. There are reports in today's newspapers of an horrific case of someone who was dismissed and had no right of appeal because there was no internal procedure to allow that.
I fully accept that people are more aware of their rights. Thanks to this Government, they have more rights to be aware of—we do not apologise for that. Given article 13,
which outlaws discrimination on grounds of sexual orientation and age, it is almost inconceivable that the number of tribunal cases will not rise. However, we estimate that between 30,000 and 40,000 cases that go to employment tribunals could be resolved in the workplace if the procedure existed to deal with complaints or grievances there.
Mr. Mark Field (Cities of London and Westminster): I appreciate what the Minister says. However, the acid test of the Bill in terms of improving employees' rights will be if more cases go before employment tribunals. My concern is that that will be seen as a mark of success. I ran a small business before coming to this place, and I am not sure what our procedures were. They were certainly not written down in a massive booklet—not that there was any problem in that regard, I hasten to add. I may well have qualified as one of the 600,000 employers mentioned. There has been increasing awareness of employee rights, with more people rushing to use employment tribunals as a first rather than a last resort. That has to be the underlying concern, given all the waste that would result for business.
Alan Johnson: I do not know about people rushing to use employment tribunals as a first recourse. However, people who have no other outlet to resolve their problem will go to an employment tribunal and slap in their IT 1.
Business organisations, including the Confederation of British Industry and the Federation of Small Businesses, support this simple fact: having a basic procedure in the workplace must be preferable to airing problems at a full-blown employment tribunal.
Mr. Hammond: Let me go back five minutes. If someone submits his grievance in writing within 28 days—I am not talking about an exception case in which harassment or something similar has taken place—and the employer suggests meeting to sort it out, the employee is entitled to ignore that and go ploughing off to the tribunal anyway. Will the Minister confirm that the Government's original intention was that the entire statutory procedure should be exhausted before there was access to a tribunal? Will he confirm that he has backed down, watering down the proposals during the Bill's consideration to the point where an employee can ignore the employer offering a grievance meeting and go straight to a tribunal?
Alan Johnson: No. The hon. Gentleman is entirely wrong. It was never our intention that every case must exhaust the discipline and grievance procedure prior to being allowed into the employment tribunal procedure. The hon. Gentleman should read our response to the "Routes to Resolution" document published last November, in which we talked about grievances.
The other point being missed is mitigation. Elsewhere in the Bill there is the right for an employment tribunal to take action if it believes that either the employee or the employer has not followed the procedures. First, if the employer has not carried out the basic three-step procedure and there has been a dismissal, that dismissal is automatically deemed unfair. Secondly, if the employee or the employer, without good reason—one of the
exceptions such as racial harassment or bullying, for example—did not go through the full procedure but came to the tribunal before completing stage two or three, the award can be mitigated by between 10 and 50 per cent. That is a salutary and sobering prospect for people who may be tempted to think, "The procedure's there, but I'll simply ignore it."This is a crucial point, fundamental to human rights. As things stand, someone can simply sling in an IT 1 and there are no procedures in the workplace. Should we move from that to a procedure in which people are locked out of the system altogether and prevented from seeking justice at an employment tribunal?
We took that question extremely seriously, and business supports us here. For example, there is the CBI document—although perhaps some Conservative Members now consider the CBI to be the provisional wing of the DTI. The CBI said that it warmly welcomed proposals that would require employees to raise a problem with their employer. Most business people said that for them, the important thing was not to hear about a grievance in a courtroom but, that if someone still in their employment was worried, perhaps after having been passed over for promotion, they would talk to them first and air the grievance. That view has been reflected in new clause 6.
The hon. Member for Weston-super-Mare (Brian Cotter), whose general support I appreciate—
Alan Johnson: For a moment I thought that the hon. Gentleman was insulting me; I think that my suit fits rather well.
The hon. Member for Weston-super-Mare asked how relevant the step one letter was to the tribunal's decision on the substance of the case. The letter will be relevant to the tribunal's decision on whether the complaint is covered by the grievance that the employee raised, but not to the decision on the substance of the complaint.
The hon. Gentleman also asked who would decide whether an exemption should apply. The tribunal will decide. I agree that that might require it to hold preliminary hearings, but we think that if we get the regulations right and the exceptions are clear, there will be less need for that to happen.
The hon. Member for Hertford and Stortford asked why the new clause did not require the employee to follow the three-step procedure. He made some curious points about why the employee gets three steps but the employer does not—
Mr. Prisk: The other way round.
Alan Johnson: Sorry, that is what I meant.
Both sides have to follow those steps or any award will be liable to serious mitigation of between 10 and 50 per cent.
This is not about one side or the other; it is about having a facility in the workplace to air grievances. Insisting that an employee had to follow the three steps before reaching a tribunal would cause a simple problem: we can imagine all the barriers that an unscrupulous employer would put up to stop the case going to a
tribunal. He could ensure that, even with the extra three months that we have provided under clause 32, it was time-expired.There is also a series of exemptions. The hon. Gentleman and I agree that certain situations need to be exempted, certainly from the full three-step procedure. We would have to have more exemptions, and there would be more preliminary hearings. The representatives of all sides of business whom we consulted shared the view that stage one of the grievance procedure was the important part.
Mr. Prisk: The Minister said earlier that the Government were sympathetic to the idea that during the 28-day period following the provision of a letter, more employers and employees should have hearings and discussions—that they should, in his phrase, use that period. Will he give businesses guidance on that?
4.45 pm
Alan Johnson: By the time we have finished, businesses will have guidance on all aspects of the Bill coming out of their ears. The proposals are very important, especially for small businesses. There are 600,000 workplaces with no discipline or grievance procedures. Those employers are under no obligation to put such procedures in the written statement that goes to every employee because they employ fewer than 20 people. We have changed that requirement also, but the matter will need careful guidance, which I certainly undertake to supply.
The hon. Member for Boston and Skegness asked how the admissibility regime would apply to a complaint by a redundant former employee. As I said when I moved the new clause, we do not envisage that the procedure will apply to former employees. For them, the relationship between employer and employee has been broken, so why should they write to a person who is no longer their employer? However, we believe that, with careful guidance, the step one procedure would help clarify and resolve constructive dismissal cases, without recourse to a full-blown tribunal.
My hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) also contributed to the debate. She was absolutely right to say that we must recognise that there could be circumstances in which it would be difficult for an employee to go even as far as writing a letter and waiting for the 28-day period.
The hon. Member for Tatton (Mr. Osborne) supplied some very welcome flattery, and that is always appreciated. However, I do not agree with him, for the reasons that I set out earlier.
I shall spend a second on amendment (a), in the name of the hon. Member for Runnymede and Weybridge. It deals with the necessary powers contained in new clause 6 that would allow the Bill to be amended by secondary legislation. New clause 6(8) provides the power to extend the scope of the clause to non-employees. We will debate that matter again in connection with new clause 2, so I shall not spend much time on it now, other than to suggest that Opposition Members are making a considerable mountain out of a molehill.
Proposed new subsection (8) provides the power to amend the admissibility criteria by order. We consider that to be prudent and sensible. We think that we have set
sound and reasonable criteria that will encourage dialogue without delaying access to tribunals, but experience may show that the admissibility criteria could helpfully be recast.For instance, it is conceivable that the 28-day period might be too short for proper dialogue to take place. We need to learn from experience about that, which is why we have given ourselves the power to deal with the matter in secondary legislation. In proposed new subsection (9), we have committed ourselves to consult the Advisory, Conciliation and Arbitration Service before making any changes in this area. Likewise, I would expect that we would consult widely before proposing any changes.
I therefore hope that the hon. Member for Runnymede and Weybridge will not press amendment (a), and that the House will endorse new clause 6 and the associated amendments.
Clause read a Second time, and added to the Bill.
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