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6.15 pm

Mr. Lloyd: I congratulate the Government on listening to our noble Friend Lord Wedderburn. Clearly there was sufficient uncertainty, as hon. Members on both sides of the House accept, and it would have been imprudent to proceed with the clause. My hon. Friend was right to remove it. Sometimes it is better to be kind to a Minister, and we should recognise that he reached the right conclusion as a result of intense debate in the House of Lords. We will improve the Bill by accepting the amendment, and he deserves credit for his approach.

Alan Johnson: The hon. Member for Runnymede and Weybridge (Mr. Hammond) has had a bee in his bonnet about the timetable from day one. The timetable is not a matter for me, but if we had had all the time that he wanted—we did manage to fit in a few extra Committee sittings—I doubt whether hon. Members would have focused on clause 39 to the extent that he suggests.

Mr. Hammond: As the Minister mentions the extra sittings, the House should know that the Government introduced a major new clause. Two eminently well qualified and experienced employment lawyers—one Liberal Member and one Labour Member—served on the

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Committee. I do not share the Minister's doubts about whether one of them would have picked up the problem with clause 39.

Alan Johnson: I am trying hard to pay a compliment to the hon. Gentleman. All Committee members, including the hon. Member for North Norfolk (Norman Lamb), did their job properly. Scrutiny has been mentioned. I think that clause 39 was the only provision on which there was unanimous agreement in the consultation. We agreed that it was a small, sensible tidying-up measure. It allowed compromise agreements, which happen rarely and require the endorsement of, for example, a trade union official or solicitor, to bring a dispute to a conclusion. Such decisions would not go through conciliation, ACAS arbitration or an employment tribunal.

Lawyers explained that it was crazy that such decisions did not have the same scope as ACAS-conciliated settlements. It is a minor point. Opposition Members may not have debated that clause, but they would have read it. The hon. Member for North Norfolk and my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) were keen on reading every esoteric part of every clause, for which I give them due credit, and I doubt whether they turned a hair when they read clause 39.

We should pay tribute to Lords Wedderburn and McCarthy. Hon. Members may remember that the matter was portrayed, not by them but by a journalist, as part of a covert agenda by the Government to get employees to sign away their right to go back to an employment tribunal in any future case. When the press reacts like that to a clause whose ramifications seem to us so minimal, we need to consider carefully whether to withdraw it on the basis that it is more trouble than it is worth or to amend it. It is not a central element of the Bill, and no party ever suggested that it was.

Norman Lamb (North Norfolk): I join the Minister in paying tribute to Lord Wedderburn for identifying the disaster that could have occurred if the provision had been accepted. Clearly, it could have led to many employees losing basic rights under pressure from their employers, so it is right that it has been deleted. However, the Minister was wrong to say that compromise agreements are rarely used. In fact, they are frequently used, and were being used every week in our office to conclude agreements. These days, they are a common way of settling a case.

As the Minister rightly said, the sensible purpose behind the clause was to bring compromise agreements into line with ACAS agreements. Does he intend to return to the issue to address the concerns that led to the clause being included in the first place, or will he simply leave the law as it stands?

Alan Johnson: The hon. Member for Hertford and Stortford (Mr. Prisk) asked whether we considered alternative amendments, and we did. It was too great a risk to leave the Bill as it was, and the amendments would have resulted in a cure that was worse than the disease. If we amended the Bill to deal with ACAS-conciliated settlements and left the so-called COT 3 agreements as they were, there would have been a feeling that the latter did not provide the same protection, so we would have had to amend them. Given that the provision is not central

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to the aims of hon. Members on either side of the House, we ask the House to support the amendment to delete clause 39 in its entirety.

We are consulting ACAS about what we can do to redress the situation. I accept what the hon. Member for North Norfolk said about compromise agreements being more frequent than I had thought, although that is not a big deal. They will remain as they are, and we will encourage their use. All that is missing is this minor but sensible tidying up to give them exactly the same status as ACAS-conciliated settlements.

We should not talk about close shaves but commend the Houses of Parliament for having done their job of scrutiny. The Law Lords have a particular locus in dealing with such issues, and the points made by Lords Wedderburn and McCarthy related to a recent case, BCCI v. Ali. We should not suggest that the fact that the clause passed through the Committee was in any way indicative of a lack of scrutiny in this House.

Mr. Hammond: The hon. Member for North Norfolk (Norman Lamb) asked the Minister whether the Government will return to compromise agreements. It became apparent, as the Minister acknowledged, that the Minister may have been misinformed about the extent to which they are used. It is slightly alarming that the Government are legislating without being aware of the basic facts. Can the hon. Gentleman's Department collect data about the number of compromise agreements being reached, because it is difficult to see how, without it, the Government can make an informed decision about what needs to be done?

Alan Johnson: Hon. Members should not take that error as any reflection on my Department; it was my error. I did not read my brief correctly and mixed up one aspect of employment law with another. I am sure that we do know the number of compromise agreements, and I shall write to the hon. Gentleman and let him know what it is.

Lords amendment agreed to.

New clause

Power to confer rights on individuals: amendment

Lords amendment: No. 57.

Alan Johnson: I beg to move, That this House agrees with the Lords in the said amendment.

This is a technical amendment that does not in any way alter the scope of the power in section 23 of the Employment Relations Act 1999. The power enables the Secretary of State to confer employment rights on individuals who do not currently have them. The amendment's effect is that we would need to confer rights on individuals by an order that amended existing legislation and not by an order that just spelt out the rights to be extended. It would not alter the rights that we could confer, the individuals on whom we could confer them or the way in which any rights conferred would work in practice.

We listened to the opinions of the noble Lords in debating this issue. They argued strongly that the words "or otherwise" were not appropriate and gave the Secretary of State additional powers to extend rights other than by a statutory instrument. On balance, we considered

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that since the words "or otherwise" had been understood in that way, we should not retain the current wording simply on the basis that it gave us some flexibility. The advice of Lords Ackner and Brightman cannot lightly be set aside.

The amendment may not please the draftsman should we decide to use the power under section 23, but I hope that it will alleviate concerns raised in the other place that we were intending to circumvent Parliament by use of the words "or otherwise". Removing those words will not limit the scope for conferring statutory employment rights on individuals to whom the rights do not currently apply. As Members will be aware, a review of employment status in relation to statutory employment rights is under way, and we intend to publish a discussion document on employment status this month.

Mr. Hammond: The story behind the amendment is extraordinary. I take issue with the Minister when he says in one breath that this is a technical amendment and in the next that the opinions of Lords Ackner and Brightman cannot be lightly dismissed. Lord Ackner opened his speech on Third Reading in the other place by saying:

Ministers in the other place sought to present this as a technical matter, and the Minister has repeated that this afternoon, but that is not so.

The Minister, like his noble but sometimes discourteous Friend Lord Sainsbury, also managed to avoid giving any credit to my noble Friend Baroness Miller of Hendon, without whose unstinting determination this amendment would not have been brought to the attention of Lords Ackner and Brightman and, ultimately, accepted by the Government. Indeed, Baroness Miller had to table the amendment three times and put up with a good deal of rather ungentlemanly ridicule from the Government Dispatch Box before the wisdom of what she was advocating came to be recognised. She apologised on Third Reading when she introduced this amendment for the third time, explaining that she was

to accept the deletion of the two offending words from the Employment Relations Act 1989.

When I read the Lords debate, I was disappointed and, frankly, surprised to note the patronising tone with which Ministers in that place, who seem to be far less courteous than their counterparts in this place, dealt with my noble Friend. Many of my hon. Friends will know Baroness Miller well, and would know better than to step in her way when she is determined to achieve something. Terriers with bones have nothing on my noble Friend.

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