Standing Committee F
Tuesday 18 December 2001
[Mr. Joe Benton in the Chair]
Contracts of employment
Mr. Philip Hammond (Runnymede and Weybridge): I beg to move amendment No. 53, in page 35, line 27, at end insert-
'(2A) The Secretary of State shall by regulations prescribe a procedure for certification by the Advisory, Conciliation and Arbitration Service, or by a Tribunal or by the Secretary of State of model agreements to follow procedures other than the statutory procedure as being not inconsistent with the requirements of the statutory procedure'.
Good morning, Mr. Benton. We shall need to make rapid progress today as the guillotine, which the Government outrageously imposed, will fall after clause 41 at 7 pm. That means that some substantial issues that fall to be debated today will have to be raced through at a canter, if not a gallop.
I apologise to you, Mr. Benton, and the Committee for having to leave a little early before lunch-[Interruption.] I am glad to see that Labour Members are disappointed-
Helen Jones (Warrington, North): Desolate.
Mr. Hammond: Desolate, indeed, at my enforced departure. I have been fortunate enough to secure an Adjournment debate on a matter of great importance in my constituency. I trust that I may crave your indulgence, Mr. Benton, and that of the Committee. My hon. Friends will hold the fort admirably in my absence.
Amendment No. 53 is yet another step in my perhaps not quite one-man campaign to try to reduce the earning potential of lawyers. Under clause 30 statutory provisions are written into contracts of employment. The Minister has explained the logic of his position and I do not take issue with the substance of that. However, subsection (2) provides that
''Subsection (1) shall have effect notwithstanding any agreement to the contrary, but does not affect so much of an agreement to follow a particular procedure as requires the employer or employee to comply with a requirement which is additional to, and not inconsistent with, the requirement of the statutory procedure.''
As I understand it-the clause is not easily penetrable-it will not interfere with the wording of the contract to the extent that the contract provides for procedures in addition to and not inconsistent with the statutory procedures. Clearly what the Minister has in mind is that if employers and employees want to agree on a more comprehensive disputes procedure-perhaps if they want to adopt the Advisory, Conciliation and Arbitration Service's code-nothing in the clause should prevent them from doing so.
If the Minister has in mind adoption of the ACAS code, I can see why he has not addressed the problem that I am trying to address. If it is established that the ACAS code
''is additional to, and not inconsistent with''
the statutory procedures, adoption of the ACAS code in a contract will clearly be acceptable. However, there is no specific reference to the ACAS code and it is possible that employers and employees could try to write into contracts other provisions that may be inconsistent with the statutory procedures, which would open the door for yet another lawyers' bonanza.
I have tried to provide a procedure whereby ACAS could pre-clear a contract so that if an employer, a group of employees, a trade union or a group of employers through a trade association or federation wanted to produce a model contract, they would be able to submit it to ACAS and obtain what amounts to a pre-clearance of the wording of the contract as being compliant with the Bill. I am simply trying to avoid unnecessary litigation and to provide some certainty for all parties concerned. I am not committed to the wording or the method in the amendment, but I hope that the Minister will accept the principle that we want to establish certainty so that employers and employees can enter contractual arrangements knowing that they are compliant comply with the law without having to get involved with lawyers. The ACAS route is the obvious one, but I look forward to hearing from the Minister and, if he accepts in principle what I am trying to achieve, whether he can suggest a better method of achieving that.
The Minister for Employment and the Regions (Alan Johnson): The clause ensures that all employees have a contractual right to use the statutory dispute resolution procedures. It does so by inserting an implied term to that effect in all contracts of employment so that when employers do not operate more elaborate procedures, the minimum statutory procedures in schedule 2 will be deemed to apply to employees as a default.
The amendment would cover situations in which employers already operate procedures. Those employers will be largely unaffected by the clause, and their procedures will usually incorporate the basic three steps of the statutory procedures. If so, they will not need to amend their existing arrangements. Others may fail at the margin to comply fully; in such cases only small adjustments would be required.
Mr. Hammond: The Minister said that the amendment covers situations in which there is an existing arrangement. Can he confirm that the clause will apply equally to new contracts that include procedures
''additional to, and not inconsistent with''
the statutory procedures?
Alan Johnson: Yes, they would. The three-step procedure has been designed to be simple for those organisations that do not have a procedure at the moment, and there is no ambiguity. The procedures were designed to be simple and easy to understand. Relatively few actions are involved, they are clearly defined and it should be straightforward for employers to ascertain whether their procedures are consistent with the statutory minimums. Uncertainty should not arise, and I do not believe that there is a strong argument to set up an accreditation system to certify the procedures that individual employers operate. Such a certification procedure would be costly: hundreds of thousands of employers operate procedures, and many of them might wish to gain the accreditation on offer.
There is nothing to stop reputable organisations from drafting procedures that may serve as models. Employer organisations or trade unions may wish to do so and, more generally, ACAS stands ready to advise individual employers on their internal procedures.
In summary, it would be relatively easy for employers to check their own procedures against the statutory minimums. If employers are in doubt, sources of advice are open to them to help with the exercise. I fully share the hon. Gentleman's concern that we do not make more work for lawyers: a Government-funded accreditation system would be unnecessary and wasteful. I hope that the hon. Gentleman will withdraw his amendment.
Mr. Hammond: I am interested to hear the Minister's comments. I did not draft the amendment to provide an accreditation system but as a way of delivering to employers certainty that the contract that they offer is compliant. I recognise what the Minister said about ACAS's willingness to advise, provide information and generally support the process. The purpose of the amendment is to flag was to flag up the issue and to ensure that the Minister had considered it. Having heard his comments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 30 ordered to stand part of the Bill.
Non-completion of statutory procedure: adjustment of awards
Mr. Hammond: I beg to move amendment No. 54, in page 36, line 34, leave out paragraph (d).
The Chairman: With this it will be convenient to take amendment No. 55, in page 36, line 36, leave out paragraph (e).
Mr. Hammond: Clause 31 deals with a penalty system for failure to comply with statutory procedures and a number of issues arise which I am sure Members on both sides will want to explore. That is probably best done on clause stand part.
I suspect that the amendments have been grouped for reasons of economy, not because there is a clear link between them. Amendment No. 54 seeks to leave out clause 31(5)(d), which says that the Secretary of State may by regulations
''make provision about circumstances in which a person is to be treated as not subject to, or as having complied with, such a requirement'',
that is, the requirement to undertake the statutory procedure. The amendment was tabled to probe the Minister as to the circumstances in which he intends to designate a person as being ''not subject to'' such a provision, or as ''having complied with'' it.
Alan Johnson: A key part of the Bill is to ensure that procedures are used to try to resolve disputes. Clause 31 and the regulations made under it will encourage completion of the statutory procedures by enabling tribunals to vary an award if a party does not comply with the requirements of the procedure in question.
At the same time, we recognise that there will be occasions when it will not be appropriate or possible for a party to complete or even initiate procedures. One example would be where the applicant has suffered harassment and the person to whom she would have to complain has been implicated in the harassment claim. Another example would be where there was the threat of violence by either party. That issue was raised in an earlier debate. Serious illness could also make completion of the procedures impossible. Nor do we envisage that the statutory procedures should be used when the issue has been handled as a collective process.
When provisions are fleshed out in regulations, a balance will have to be struck between not allowing so many exemptions as to nullify the purpose of the clause and recognising that there will be circumstances in which it would be unreasonable or impractical to expect the procedures to be used or completed.