Employment Bill

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Mr. Hammond: I am conscious that we are straying into the territory of clause 34, but this is an important point. The Minister appears to be saying that an employer, however well meaning, might not know whether he has conducted the procedure fairly until he gets to a tribunal and finds out whether it regards him as someone who should have followed something more than the minimum procedure set out in the schedule.

The Minister seems to be saying that following the procedure in the schedule will be all right for some employers but not others and that tribunals will decide which employers fall into which category. As a general principle, I do not like the idea that a well-intentioned, law-abiding person cannot determine a priori whether his behaviour will comply with the requirements of law and procedures. Does that not concern the Minister?

Alan Johnson: It is not a concern in the sense that currently, an employment tribunal takes into account the ACAS code of practice when reaching its decisions. It does not suggest that the corner shop with one employee should have followed every dot and comma of the ACAS code, and we do not intend to make that the case. We intend the ACAS code to be best practice guidance, as at the moment.

Mr. Hammond: I accept what the Minister says, but he is being slightly disingenuous in using the extreme example. We all understand that the corner shop with one employee falls into the category of an employer who, by following the minimum procedure, does what he is supposed to. Equally, we understand that Rolls-Royce or BAE Systems will have to do something much more substantial, but where is the cut-off point? Is it five employees, 10, 25, 50 or 100? How does the person running a small or medium-sized business find out what he has to do to comply with the requirements of the legislation?

Alan Johnson: The employment tribunal will take into account all the circumstances. In a sense the hon. Member is right. The one thing that will be absolutely clear from this Bill is that if the basic minimum procedures have not been followed, dismissal is automatically unfair. Lots of other elements apply, such as whether the case was investigated properly. That is not part of the minimum procedures, but it would be something that an employment tribunal would take into account. Unless the hon. Gentleman is suggesting that every dot and comma of every eventuality should be covered, I am afraid that employers will to a certain extent be required to follow the basic three-step procedure and, since every case is different and involves different elements, employers will know whether they have carried out the procedures properly only when they get to a tribunal.

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Mr. Hammond: May I take a different tack? I understand what the Minister is saying, but it seems to me that there is a danger here of an unintended consequence, in that employers may believe that what is being introduced is an absolute standard and they will be in the clear if they comply with it. Indeed, I suspect that many employers who are aware of the Bill already believe that. Larger employers may understand that they will have to behave somewhat differently, but I am concerned that many smallish firms with 10 or 20 employees will believe that they will henceforth have a very clear set of obligations to comply with and, provided they do that, they will have met their obligations. It would be unfortunate if they were misled by the Bill into finding that when they got to a tribunal they were then penalised for not having complied with something that, on the face of the Bill, they did not think they had to comply with.

Alan Johnson: The problem is that the hon. Gentleman suggests that some employers could think that if they just go through the motions, they will be okay at an employment tribunal.

Mr. Hammond: No.

Alan Johnson: The hon. Gentleman shakes his head, but the point about the ACAS best practice guide and the point about the employment tribunal looking at all the circumstances in every individual case, is that it is not just about going through the motions. It will not be a case of, ''I sent the letter at the right time, I had the appeal, and it did not investigate''. The circumstances of an incident will be considered. I do not think that there is any way to cater for all eventualities in the Bill. What we can do, and are doing, is to ensure a basic minimum standard and to ensure that the ACAS code of practice sits alongside it.

Mr. Lloyd: My hon. Friend should be pleased: he has managed to unite the Opposition with at least some Government Back Benchers. The hon. Member for Runnymede and Weybridge has a legitimate concern.

Perhaps the Minister can help us in another way. Can he talk us through the discretion that the tribunal will have? It seems to me that the tribunal will be faced with what will be extant on the face of the Bill. It will also have to take account of the ACAS code of conduct. My hon. Friend is saying that somewhere in between, the tribunal will be able to negotiate which parts of the ACAS code and which parts of the Act are relevant. Frankly, that seems unclear to me and the hon. Member for Runnymede and Weybridge. The Minister would help enormously if he clarified how the tribunal will be charged. It must rely on the force of law in making its decisions, but where will its discretion kick in? Both sides of the tribunals, the applicants and the respondents, are entitled to know where that discretion lies.

Alan Johnson: At the moment, the discretion of employment tribunals is wide. They have to take into account the size and resources of the employer. They have to take into account the different circumstances of every individual case. There is not a procedure for every case. We cannot devise a procedure that provides complete certainty for employers in all circumstances, because this is a matter of individual incidents and they vary greatly with different circumstances applying to them all. Although I am uniting a coalition of forces both in front of and behind me, we cannot give absolute certainty to employers that if they follow whatever mechanism we set out in this schedule they will, no matter what the circumstances, be all right at an employment tribunal. The code of practice is important and so will be the revised code of practice once the Bill has been taken into account. However, we are labouring under a misapprehension if we think that the employment tribunal does not currently have the discretion to take into account the size of the company and the resources available to it. It has that discretion now, and that will still be the case when the Bill is enacted.

Rob Marris (Wolverhampton, South-West): Welcome, Mr. Conway. The point being made on both sides is that if schedule 2 goes through as the minimum, some employers will end up with what might be termed a double vagueness. First, are they subject to ACAS at all and secondly, if they are, which bits of it are they subject to? I appreciate the Minister's point that we cannot introduce certainty, but I should prefer a single vagueness, which is what currently exists with ACAS, rather than a double vagueness.

We can cut that Gordian knot by introducing the ACAS code as the statutory minimum under amended schedule 2, which clause 29 would give us power to do. However, the Minister is clear that he has no plans to do that. Is he prepared to say that after a specified period he and his Department will review the operation of the double vagueness and other aspects to see whether the Bill is leading to better industrial relations or to more confusion?

Alan Johnson: I do not accept that single vagueness is better than double vagueness. We are providing a procedure for every work place in the country—900,000 micro-businesses. The people in each company will have a basic three-step procedure. Most of the problems that occur at the moment, as my hon. Friend the Member for Wolverhampton, South-West knows, are due to people not having the chance to appeal, not being told clearly what offence they are supposed to have committed and not having a meeting face to face with a manager.

To pick up the point made by the hon. Member for Tatton, we recognise that if there is only one manager, the meeting will be that with manager at both stages of the procedure. To cover those circumstances, we have introduced the enormously beneficial concept that not following those minimum standards means that dismissal is automatically unfair. Employers therefore know where they stand. However, they should not then think that the process is mechanistic. We need the ACAS code of practice to sit alongside that. I do not think that that will introduce a double vagueness. My problem is that although it would be useful if I could give an example, I cannot, because no two cases are alike.

My hon. Friend asked whether we would review the change shortly. We have no plans to do so. We plan to ask ACAS to draw up the code of practice and to put the revised code, including the new circumstances included in the Bill, before Parliament for affirmative procedure. Who knows whether we shall need to review the length of time over which it will be allowed to operate?

Mr. Hammond: Will the Minister give way?

Alan Johnson: I do not want to give the hon. Gentleman any fresh fears. He is looking quite calm at the moment; I want him to think that there is going to be an immediate change. When we have introduced the procedures and have had an opportunity to see how the two elements sit alongside each other, we shall be better placed to deal with the issue. However, at the moment we are looking at shadows that do not exist.

Mr. George Osborne: The Minister referred to the corner shop situation. Would we not end up with a farce, where there were two people behind a counter, one employing the other, but where the employer would still be obliged to send the employee a letter, passing it across the counter, to invite him to a meeting that would take place in the shop, behind the counter? The employee would then have to take all reasonable steps to attend the meeting, even though it would take place behind the little shop counter. Endless procedures would be conducted in writing, with two people playing an elaborate charade because one was trying to take disciplinary action against the other.

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