Standing Committee F
Thursday 13 December 2001
[Mr. Derek Conway in the Chair]
Statutory dispute resolution procedures
Question proposed [this day], That the clause stand part of the Bill.
Question again proposed.
Mr. Tony Lloyd (Manchester, Central): We have had an interesting debate on clause stand part. The hon. Member for Runnymede and Weybridge (Mr. Hammond) took an interesting line and I would be pleased if my hon. Friend the Minister would respond to that because there is genuine concern about the gap between schedule 2, which becomes the basic minimum standard of disciplinary and grievance procedures, and the Advisory, Conciliation and Arbitration Service's existing code of conduct. That code of conduct does not have statutory backing, but has similar force in that any industrial tribunal would consider itself bound by it.
The hon. Member for Runnymede and Weybridge referred to the legitimacy or otherwise of secondary legislation being used to introduce amendments to the schedule. I hope that my hon. Friend the Minister will resist the temptation to say that it is illegitimate to make changes in that way. I heard that argument deployed many times when my party were the Opposition, only to be rebuffed, and probably more casually rebuffed than the way in which my hon. Friend will rebuff the hon. Gentleman.
It is right and proper that there should be parliamentary scrutiny and the interesting question is whether that should be done in secondary legislation or in a similar way to the ACAS code, which has no backing from debate in the House. Most people believe that the ACAS code was well discussed and I am the first to argue that it is not always necessary for such matters to go through the House, but it would be an improvement for the provision to be discussed through the secondary legislation mechanism.
Mr. Philip Hammond (Runnymede and Weybridge): The hon. Gentleman is addressing the question of whether secondary legislation is more or less legitimate than primary legislation and I shall not pretend that I have never argued that case. However, my specific point to the Minister was that it would be dishonest to introduce a schedule if the Minister intended soon to use his powers to amend it by order to change it radically and fundamentally. I was asking for an assurance that he had no such intention and, for example and specifically, that he was not minded to replace the schedule before us with the ACAS code as an amended schedule 2.
Mr. Lloyd: The hon. Gentleman made precisely that point earlier and I am not trying to impute words to him. I had hoped that, as with our debate on workers and employees, when the hon. Gentleman seemed to be moving our way, he was urging the Government to go beyond the schedule towards the ACAS code, as I shall urge the Minister to do.
It is absolutely legitimate for my hon. Friend to place before us the opportunity to debate changes. The hon. Gentleman was a little dismissive as to whether 90 minutes' scrutiny in Committee would make a difference, but the important point with majority governance, as in this country, is not whether Governments get their business through—they do, as they should, because they have a majority—but whether they must put it to proper scrutiny with the possibility of full public knowledge of what has taken place. That is the important issue and the Minister has ensured that there will be adequate opportunity for the Opposition to pick up any sleight of hand. Changes will not simply slip through bureaucratic mechanisms. The hon. Member for Runnymede and Weybridge will have every opportunity to debate them.
The important issue is the disparity between the new schedule and the existing ACAS code. As the Committee is aware, the ACAS code has an effective force and the tribunals are presently bound by it. It has what is tantamount to legal status. There is certainly a gap between the present schedule 2 and the ACAS code. I would be grateful if the Minister could tell us why that gap exists, and why the code was not adopted as schedule 2. Many of us would argue the code has provided the status quo in tribunals in the past, so why not simply lift it across so that everyone knew where they stood.
We could have had a debate with Opposition Members about how they wanted to diminish the ACAS code. It would have seemed right to me to have had a debate that looked at the ACAS code, and to have said where it was too luxurious and where it was too protective of employers or employees. We could have also considered where we needed to reduce the code. Instead, we got something rather different.
The fundamental point is that, if it is legitimate to offer something different to the existing code, the change will, for the first time—and I applaud it—oblige all employers to offer a disciplinary grievance system to their employees. Our concern, however, is that not only does it fail to come up to the ACAS standard, but that it may be used in place of the ACAS code before the tribunal. Anybody arguing for either party in the tribunal is bound to argue that Parliament has decreed that schedule 2 is the basic standard. They will say that the ACAS code goes beyond that standard, and it is no longer legitimate. Yet the tribunal must now be bound by the ACAS code, and that is a real concern.
My overall point, then, is to ask why the ACAS code has not been put into the Bill. Will that not result in the erosion of use of the ACAS code before the tribunal?
My final point, as I promised the hon. Member for Runnymede and Weybridge, is that I must urge the Minister to make it clear to the hon. Member for Runnymede and Weybridge that he will introduce the ACAS code at the earliest opportunity in place of the existing schedule.
Mr. George Osborne (Tatton): May I say, Mr. Conway, what a delight it is to serve under your chairmanship in this Committee? No doubt, I shall serve under your chairmanship on many more Standing Committees during my career.
I wanted to pick up on some of the points that the hon. Member for Manchester, Central (Mr. Lloyd) made about the ACAS code, and to expand on the points made by my hon. Friend the Member for Runnymede and Weybridge. No doubt the Minister has received the briefing notes sent to the Standing Committee, so he will know that the Engineering Employers Federation says:
''As currently drafted, the proposals are unclear, complicated and might prove counter productive. For example, the relationship between the new statutory procedures, the existing law on unfair dismissal and existing ACAS Codes of Practice is confusing and therefore unsatisfactory.''
The Law Society said:
''We are concerned that the new procedures . . . will undermine the ACAS Disciplinary and Grievance Procedure Code.''
The Trades Union Congress expresses its concern, with others,
''about the confusion between the proposed minimum standards and the widely supported ACAS Code.''
In my view when the Engineering Employers Federation, the Law Society and the TUC agree on something, the Government have a problem. I would be very interested to hear how the Minister proposes to reconcile the problems with the ACAS code.
That does not necessarily mean that I agree with the hon. Member for Manchester, Central, that the ACAS code should take the place of schedule 2. In fact, I welcome the more streamlined approach set out in schedule 2.
I have other specific questions on schedule 2, the first of which concerns cases of sexual harassment. Figures from the Equal Opportunities Commission—I am relying on my memory here—suggest that 30 per cent. of sexual harassment cases involve a case against the individual's line manager and a further 30 per cent. of cases involve the boss of the company against whom the person is bringing a sexual harassment case. Are the Bill's procedures correct for such cases? It would be distressing for someone bringing such a case to find themselves going over the mechanics of what had happened with the very person against whom the case had been brought.
Later, we shall discuss how the Bill will apply to small businesses. How would schedule 2 operate for a company of only two people? Many small businesses are that size—one employer and one employee. A person could be a situation in which he or she had a grievance, discussed it with the employer and had to go through the charade of a formal dispute resolution process with the person against whom the complaint had been brought. Although schedule 2 may be applicable to larger companies, how can it possibly work for very small ones?
The Minister for Employment and the Regions (Alan Johnson): I welcome you, Mr. Conway, to Standing Committee F for fun, and look forward to serving under your chairmanship. I am pleased that the hon. Member for Tatton (Mr. Osborne) raised such an important point. As my hon. Friend the Member for Manchester, Central said, many hon. Members have raised concerns about how the basic three-step procedure will sit alongside the ACAS code.
We are introducing basic discipline and grievance procedures for every workplace in the country. As the hon. Member for Tatton said, the workplace with one employee would be covered. In that circumstance, we believe that setting minimum standards is right. The ACAS code has 66 clauses as opposed to the Bill's 53 and currently, 48 per cent. of employers who go to an employment tribunal do not have internal procedures. Jumping straight from that situation to the best practice of the Bill would be wrong and difficult for small business to cope with. We have set out a minimum three-step procedure because that is the right direction in which to move; it provides a minimum standard, just as the minimum wage sets a minimum yet is not intended to bring everyone down to that wage. There is no evidence that setting a minimum wage or any other minimum standard drags everything down to the minimum.