Employment Bill

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Mr. Hammond: I beg to move amendment No. 7, in page 32, line 1, leave out 'may' and insert 'shall'.

The Chairman: With this we may discuss amendment No 18, in clause 23, page 32, line 32, leave out 'may' and insert 'shall'.

Mr. Hammond: I look forward to moving on to the substance of what we are here today to discuss.

Clause 22 replaces section 13 of the Employment Tribunals Act 1996. I hope that the debate on this group of amendments will be relatively quick. They deal with an issue that arises under both clause 22 in relation to employment tribunals and clause 23 in relation to employment appeal tribunals. For that reason, the two amendments have been grouped together.

The amendments will be familiar to the cognoscenti; they would remove a ''may'' and insert a ''shall''. We do not wish to make primary legislation more prescriptive, but we want to explore the strength of the Government's intention to implement the regulations for which the clause provides. I seek an assurance from the Minister that the regulations will include—not ''may'' include—provision for the award of costs and expenses. I suspect that the award of costs, expenses and allowances will be the subject of substantive debate as we consider this part of the Bill. We need to know that this will not be one of those permissive clauses that the Government then decline to use for one reason or another; that there will be regulations allowing for the award of costs, expenses and allowances.

If the Minister is able to say that the regulations will include provision for the award of costs and expenses, I will be happy to withdraw amendment No. 7. I can accept that the conventional language of the Bill is permissive rather than prescriptive so long as the Minister writes it into the record that the Government intend to include such provision.

In relation to amendment No. 18, the situation is a little more complex. My understanding—I am sure that hon. Members who have studied the matter will leap up to correct me if I have made an error—is that the wording in clause 22 that is to replace section 13 of the 1996 Act always contained a general power for the regulations to permit the awarding of costs. Therefore, we are removing section 13 and replacing it with wording that is of very similar construction and has the same effect.

The wording proposed in clause 23 does the same thing as the wording proposed in clause 22, but the wording in section 34 of the 1996 Act is somewhat different. Section 34 provides that the rules of procedure may include provision for ordering an award of costs or expenses where

    ''the proceedings were unnecessary, improper or vexatious''

or where

    ''there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings.''

That is to be swept away. Instead of limiting the circumstances in which costs or expenses can be awarded—as the 1996 Act does—at employment appeal tribunals, clause 23 will create symmetry with employment tribunals, which will have a general power to award costs and expenses.

The Minister may tell us that the regulations will reintroduce some of the restriction that the Bill is removing, but that is bizarre. We delete a provision in primary legislation that imposes a restriction; we replace it with a provision in primary legislation that does not impose that restriction; and we then look to secondary legislation to reimpose it. I cannot advocate leaving more provisions to secondary legislation. We all know that we do not have adequate time or facility to scrutinise statutory instruments properly in this place. Another subject is being removed from proper parliamentary scrutiny and placed in statutory instruments, which are inevitably debated in a cursory fashion.

Will the Minister confirm that provision will be made for the award of costs and expenses in both employment and employment appeal tribunals? Will he explain the practical effect of removing the restriction in section 34 of the Employment Tribunals Act 1996? Does he intend to reimpose the restriction through regulations and, if so, why is it necessary to remove it from primary legislation? Will he allow the Committee fully to understand the intention behind the two clauses?

Alan Johnson: There are many ''mays'' and ''shalls'' ahead. I was pleased to hear the hon. Gentleman; we may not have quite as many debates as I originally feared.

Amendments Nos. 7 and 18 are being taken together. To give the hon. Gentleman the assurance that he seeks, we have already said that costs and expenses will be included in cost awards. We are using the language of the Bill. The Act that we are amending uses the word ''may'' and the Bill is littered with it; it would be strange if we suddenly changed to ''shall''. We intend to use the new powers in the clause, and I see no compelling reason to accept amendment No. 7 and change wording that has been consistent over the years. Nothing is to be gained from creating a requirement when we previously had a discretion.

The same arguments apply to amendment No. 18. Clause 23 makes sensible changes so that the cost rules in the employment appeal tribunal are brought into line with those for employment tribunals. At the moment there is a difference between the two. The clause covers the power to make rules on wasted costs in EAT proceedings, and we intend to use that power. The circumstances in which costs can be awarded in employment tribunals and employment appeal tribunals are already similar in practice. However, we are introducing new powers for employment tribunals and EATs, so the legislation should be consistent. Clause 23 achieves just that, so I ask the hon. Gentleman to withdraw the amendment. If he does not, I shall invite the Committee to reject it.

Mr. Hammond: Will the Minister explain how the regulations will be framed? Will awarding costs be a general power at the discretion of the tribunal or appeal tribunal, or will the circumstances for awarding them be limited?

Alan Johnson: We are not changing the circumstances in which costs are awarded. They are awarded now when claims demonstrate that vexatious, abusive, unreasonable and disruptive behaviour has occurred. At the suggestion of the judiciary in July, we replaced the old frivolous behaviour clause with a misconceived behaviour clause. The same basis of cost awards applies, and we do not propose to change it, though some later amendments suggest that we do. We will resist them because the current basis is fair.

Mr. Hammond: I am grateful for the Minister's clarification and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Hammond: I beg to move amendment No. 9, in page 32, line 5, leave out 'may' and insert 'shall'.

The Chairman: With this we may take amendment No. 20, in clause 23, page 32, line 34, leave out 'may' and insert 'shall'.

Mr. Hammond: Once again, the same issue arises in that the clauses are framed to give discretion over whether the regulations will provide for the disallowance of costs or expenses of a representative, for the ability to order a representative of a party, to meet costs or expenses of a third party or to order a representative to meet the costs of any allowances payable by the Secretary of State. As the amendment paper demonstrates, members of the Committee want to scrutinise in some detail the provisions that will become subsection (1A) of new section 13 and subsection (2) of new section 34 of the Employment Tribunals Act 1996.

We should be clear from the outset whether the Government are toying with this idea, or have firmly resolved to introduce regulations that will confer a power to deal with abusive representatives. If the Minister can make it crystal clear on the record that the regulations will deal with abusive representatives, I will withdraw the amendment. He could also help the Committee by clarifying the criteria for abuse: how high is the threshold? We must understand the degree of misconduct that the Government intend to punish—it is, effectively, a punishment—in this way. Will the provisions deal only with the grossest abuse and misconduct, or could they apply to representatives who pursue matters when their professional judgment should tell them that further pursuit is misconceived and a waste of the tribunal's time? Will the Minister make clear whether we are talking about gross abuse or about cases that waste time and cause costs to other parties, and that the representative should have known better than to pursue? How do the Government propose to address similar abuse by litigants in person who are not represented? The clause deals exclusively with representatives of parties to tribunal proceedings.

10.15 am

Alan Johnson: I assure the hon. Member for Runnymede and Weybridge that we intend to use the powers that the clause will give us. The clause amends section 13 of the Employment Tribunals Act 1996, which uses ''may'' throughout, so it would be odd to change suddenly to using ''shall''. The arguments might be similar for other amendments. The hon. Gentleman asked for the assurance, and I have given it.

All sides unanimously supported the proposal in ''Routes to Resolution'' that where a paid representative pursues a vexatious, misconceived claim, the responsibility to pay costs should be on them, not the applicant. When it comes to judging that, any significant misconduct is included in the list of powers for the tribunal, and it is for the tribunal to decide the level of misconduct. There are horror stories about misconceived cases that have been taken forward, including cases in which the applicant did not have even the required years of employment to take a case forward. It is not for us to set in concrete the level of misconduct, but we will consult widely on the regulations.

The hon. Gentleman asked about litigants who are not represented. We already have the power to penalise on unreasonable conduct, so that parties who are not represented can have cost awards made against them.

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