Employment Bill

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Clause 29

Statutory dispute resolution procedures

10.15 am

Mr. Hammond: I beg to move amendment No. 79, in page 35, line 9, leave out subsection (b).

The Chairman: With this it will be convenient to take the following amendments: No. 50, in page 35, line 16, at end insert—

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    '(c) make provision for the Standard Procedures to apply in classes of cases specified for that purpose in the order and for the Modified Procedures to apply in classes of cases specified for that purpose in the order.'.

No. 51, in page 35, line 16, at end insert—

    '(c) make provision for the Schedule not to apply to certain classes of cases'.

Mr. Hammond: Clause 29 provides for schedule 2 to have effect and subsection (2) gives the Secretary of State certain powers in relation to the way it takes effect. Schedule 2 provides the minimum statutory dispute resolution procedure. One of the abilities that the Secretary of State is given in subsection (2) is, in effect, to extend the application of the statutory dispute resolution procedure beyond employees.

That brings us to the now familiar debate about workers versus employees, which by the end of our proceedings will no doubt have become even more familiar. The subsection uses the rather bizarre means that were described in one of the briefings that I have received as ''impenetrable''. It provides, as only legislation can provide, that for the purpose of the Bill a person who is not an employee can be an employee and the person who is not his employer can be his employer. We move into an Alice in Wonderland world in which people are what they are not for the purposes of legislation.

It is not a small matter to treat someone as an employee when he is not, or to treat someone as a person's employer when he is not. I expect that other hon. Members will comment on the broader issues. I simply want to ask the Minister what classes of non-employees he intends to make employees for these purposes. Does he want to extend the scope of the clause to all workers? The term ''worker'' is perfectly well defined in law and we know what it means: we have had these debates before and we have legislation that refers to workers. If he is going to use the power to apply the statutory dispute resolution procedure to workers rather than to employees, and to the people for whom they work rather than to employers, he should have the courage of his convictions and say so now.

It is disingenuous to produce a Bill that refers to a procedure applying to employees and employers and that contains a clause that allows the Secretary of State to redefine the terms ''employee'' and ''employer'' so that they include people who are not employees and employers. If the Minister intends to use the power only at the margin to deal with hard cases or specific exceptions, we must understand precisely what he has in mind. If he intends to use it on a much broader scale to change the fundamental effect of the clause, we need to know that now, not later.

All of us as non-employee workers and Members of Parliament would like to know whether we will be caught within the scope of the clause. Many others who are not employees will also be interested to know that. To be honest, even more people who are not employers might be interested to know whether, for example, contractors to them will be brought within the remit of the statutory dispute resolution procedure. That would quite a startling change if it were to happen.

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When we consider schedule 2, procedural questions may be raised about how the steps it describes would be carried out. We need to exercise our minds about the types of people who might be covered by any extension and how the procedure would deal with them. The Minister should—in the words of a trade union leader whom I quoted earlier—come clean about what he intends to do. If he intends to apply the procedure to workers rather than employees, he should use the word ''worker'' in the Bill.

Mr. Tony Lloyd (Manchester, Central): I am delighted to hear the well-argued case for extending the scope of the schedule made by the hon. Member for Runnymede and Weybridge. We are right behind him. That statement—I will not say U-turn—on behalf of the official Opposition is welcome. He has come clean and I congratulate him.

Mr. Hammond: If I thought that the hon. Member for Manchester, Central (Mr. Lloyd) was right behind me, I would be exceedingly nervous. I have not made a case for extending the definition in the clause to workers. I have made a case for honesty in legislation and for the Government to come clean. It would be sneaky of the Minister to use the term ''employee'' and then redefine the word so that it incorporated a group of people who are not employees. That is not how legislation should be produced. I look forward to hearing the hon. Gentleman's contribution to the debate.

Amendment No. 50 deals with cases in which the standard procedure or the modified procedure are used. Schedule 2 contains a standard and a modified procedure for dispute and dismissal proceedings and grievances. It is not clear in the legislation—as opposed to the TUC brief, which may be authoritative but does not have the status of legislation—when one procedure or the other should be applied. Given the warnings that I issued to the Committee, I should be more careful, but I shall risk quoting the Law Society brief:

    ''The circumstances in which the Modified Dismissal and Disciplinary Procedure will apply are not specified in the Bill and this should be clarified. The government's response to Routes to Resolution suggests that it will apply in cases of gross misconduct. If this is the case then it is thoroughly misconceived. It mistakes what should be an exception for a very limited class of dismissals for gross misconduct for a general rule for all such cases. There will be cases in which it might be appropriate for an employer to dismiss without holding a hearing such as violence by the employee. But this will not be the case in the overwhelming majority of gross misconduct cases. In many cases the reverse will be the case—the very severity of the sanction of summary dismissal will require higher standards of procedural fairness before action is taken.

    Again, the circumstances in which the Modified Grievance Procedure will apply are not clarified in the Bill and should be. The Government's response to Routes to Resolution suggests it should apply where the person raising the grievance no longer works for the employer.''

Those are important issues. Other bodies have expressed other concerns, but the Minister should place on record when the modified procedure will apply. Members of the Committee may then wish to probe the effect of that.

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Amendment No. 51—perhaps slightly provocatively—provides a power for the Secretary of State by order to make provision for the statutory dispute resolution procedure not to apply in certain cases. I note that there is a power in subsection (2)(a) to amend schedule 2 which would enable the Minister to apply or disapply it to any classes or groups. The purpose of amendment No. 51 is to probe whether he intends to exclude from the provisions of clause 29 either any class of employees or employer—the Crown, for example—or any class of application or jurisdiction. There will be more to say about all those matters after we have heard from the Minister.

Alan Johnson: Let me start, as the hon. Member for Runnymede and Weybridge did, with amendment No. 79,which deletes subsection (2)(b). The statutory procedures currently refer to the ''employee''. As such, they do not apply to workers who are non-employees. The subsection gives the Secretary of State the power to issue an order that will extend the application of the statutory procedures to non-employees. On Second Reading, she announced that she would begin reviewing the law on employment status early next year. The Employment Relations Act 1999 says that the confusing distinction—generally, only decided by employment tribunals—should be reviewed.

The review will examine why certain parts of employment law apply to employees only, whereas other parts apply to the broader category of worker; sometimes there is no obvious reason for such a distinction. The review will give us an opportunity to consider the issue in its entirety. The hon. Gentleman asked me to come clean; I am coming clean about the review. The House has agreed to legislation that states that there should be a review.

The review could make recommendations about the application of the statutory procedures, or it could conclude that there should be no recommendations. As the Minister, I have no views at this stage. However, if it decides that the category of employee should be widened to include workers, it makes sense to retain flexibility in the Bill to cater for that situation.

Mr. Hammond: I understand the logic of what the Minister said, but I disagree with his conclusion. If the upshot of the review is a decision that the term ''employee'' should be replaced with ''worker'' in all employment legislation, legislation will be needed to make that change in a whole raft of different statutes. There is no need to include a specific power in the Bill to make the change by order, because more general legislation will be needed if that is the review's conclusion. Independent of the review, does the Minister plan to make any order that would make someone who is not an employee subject to schedule 2?

Alan Johnson: We are setting out a procedure for people to pursue discipline and grievance cases in every workplace. Schedule 3 sets out what the grievance and discipline subsections may cover. Some cover workers, and others employees. Someone could be pursuing a case through the statutory three-step procedure, which currently applies to employees,

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about a grievance that applies to workers. They would fall outside the statutory three-step procedure, which is why we must have the order-making power.

10.30 am

To give an example, the right to be accompanied at discipline and grievance hearings applies to workers, as does the national minimum wage. We have framed the legislation in accordance with all the employment tribunal legislation for employees, who are those who have a contract of employment. This is a murky area. The order-making power is designed so that, if the review recommends it and we decide to extend ''employees'' to cover ''workers'', we do not have to make a different provision on who can pursue grievance and discipline cases through the three-step basic procedure.

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