Employment Bill

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Alan Johnson: I am happy to give that assurance and hope that it enables the hon. Gentleman to withdraw the amendment.

Mr. Hammond: The purpose is served as regards amendment No. 57. We may have disagreements about the wisdom of putting such a provision in the Bill, but as long as the Minister uses it only in the context of the outcome of broader review, and as long as contentious issues will be debated and properly scrutinised following review, that is fair enough.

On amendment No. 56, the Minister has once again come up with a circumstance in which it may not be appropriate to apply statutory procedures, and I cannot disagree with him about the possibility of such a circumstance arising. However, it is unfortunate that a simple three-step procedure-some on the Labour Benches may argue that it is too simple-which will be implied and, I hope, spelled out in every contract of employment, will appear straightforward, understandable and comprehensive to an employee but may turn out to be full of all sorts of caveats and exclusions when he seeks recourse to it. Those will have been made by order and will not have been apparent from reading the Act.

I hope that the Minister agrees that that would be a reason for using regulation-making powers sparingly. Part of the attractiveness of having a simple procedure that applies to everyone in every case without exception is that it creates certainty and familiarity. I suspect that one thing that horrifies employers and makes employees reluctant or wary of pursuing their rights is the sheer complexity of wading through reams of statutes, regulations and orders to find out what applies to a case. I hope that the Minister will bear in mind that excessive use of the ability to exclude classes of cases or persons will undermine the purpose, which we broadly support, lying behind the introduction of a simplified procedure. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Tony Lloyd (Manchester, Central): In passing, I note that invitations from the Opposition to the Minister to set all aspects of Government regulations in aspic have so far been unsuccessful. I hope that he will tell the Committee that the review will now have to proceed apace so that we can unlock those aspects of the Bill.

The clause contains provisions to reduce, or increase, the value of an award depending on how statutory procedures have been complied with. In subsection (4) there is a duty to make a reduction or increase, but that is offset by

    ''exceptional circumstances which would make a reduction or increase of that percentage unjust or inequitable''.

I ask the Minister to reflect on the words ''exceptional circumstances'' and on whether the subsection would be better without the word exceptional. The turning point would then be the lack of justice or equity, rather than the exceptional nature of the circumstances. In some discrimination cases that appear before a tribunal, such as bullying cases, it is not necessarily reasonable to expect the person being bullied to pursue a complaint when the person making the judgment has been the source of the bullying. That applies where the bullying is of a fairly straightforward kind.

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According to a survey by the Equal Opportunities Commission, in one third of sexual harassment cases the perpetrator is the line boss, and in a further third the perpetrator is a director or senior manager. In other words, those who sit in judgment at different points in the statutory process could be the perpetrators of such unacceptable behaviour. The clause need not be changed fundamentally, but the word ''exceptional'' is not appropriate, because although such a circumstance would certainly be ''unjust and inequitable'', it might not be exceptional.

Mr. Hammond: I shall want to say something about removing ''exceptional'' in a moment, but the hon. Gentleman's concern would surely be dealt with by exclusions that the Secretary of State is empowered to make under subsections (5) and (6). It would seem inappropriate to empower the Secretary of State to exclude cases such as those involving sexual harassment from a duty to comply with the procedure, and to overlay that power with the ability not to apply penalty provisions in a wide range of cases.

Mr. Lloyd: I understand what the hon. Gentleman is saying. Of course, in any case he has persuaded the Minister to freeze the process for the time being. Therefore, even if the Secretary of State were minded to exclude sexual harassment from the provisions in the clause, the exclusion would not necessarily apply when the Bill is enacted.

Mr. Hammond: Will the hon. Gentleman give way?

Mr. Lloyd: Let me make this point first, so that we can at least agree about what we differ on.

I am arguing not that sexual harassment should be excluded from the clause-in certain circumstances, its inclusion could be appropriate-but that a clear message needs to be sent about cases such sexual harassment and bullying. The hon. Member for Runnymede and Weybridge may be right to say that they could be dealt with under subsection (5), but the phrase ''exceptional circumstances'' has a ring that might not be appropriate, given what we know about the norm in such cases. Two thirds of the perpetrators of sexual harassment are line managers or more senior figures, and it could be argued that it would not be exceptional for certain individuals to want to fall outside the scope of the provisions.

Mr. Hammond: The hon. Gentleman seems to have interpreted the Minister's concession to me rather more widely than I did. In my view, the Minister has simply undertaken not to use subsection (6)(c) ahead of the Secretary of State's wider review. He offered no commitment not to use other regulation-making powers in the clause ahead of that review.

Mr. Lloyd: I am sure that the Minister will be grateful for that interpretation.

Mr. George Osborne (Tatton): The hon. Member for Manchester, Central (Mr. Lloyd) is absolutely right: according to Equal Opportunities Commission statistics, sexual harassment cases that do not involve the line manager or the ultimate boss are the exception. I am not sure whether the Minister said that he would exclude all sexual harassment cases from the relevant procedures, or only those involving line managers, bosses and so on. In any event, the majority of the latter will be excluded, as the hon. Gentleman says.

Mr. Lloyd: The simple point that I am trying to make is that the Minister should perhaps reconsider using ''exceptional''. It is unnecessary because the driving force behind the subsection is the phrase ''unjust and inequitable''. Tribunals would be able to interpret cases, whether exceptional or not, in a common-sense way that is consistent with the intention behind the clause.

The point that I am trying to make is fairly simple. I hope that the Minister will consider it, although I do not expect him to offer a commitment now. It is important that we get such matters right, and it is also important that he re-emphasise a view that I know he holds, which is that the purpose of the clause is not to make life more difficult for the victims of bullying or sexual harassment.

Mr. Hammond: I disagree with the hon. Member for Manchester, Central, in that removing the word ''exceptional'' would change the nature and operation of the clause. The intention behind it is to introduce an automatic penalty for failing to comply with the statutory procedure, and matters such as those to which he has referred by way of illustration could easily be dealt with through an exclusion from the requirement to use that procedure. The point of defining the area to which the statutory procedure must apply is to make it absolutely clear that an automatic non-discretionary penalty will be imposed on a party who fails to comply with that procedure.

I have no difficulty in understanding the hon. Gentleman's argument. In effect, he is suggesting that we sweep away the automatic penalty procedure and operate on a case by case basis in the light of justice and equity. That is a perfectly logical suggestion, but it constitutes not a minor change to the clause but a fundamental unravelling of the intention behind it. On balance, I should be very concerned if abandonment of the automatic surcharge principle and a resort to an inquiry into the justice and equity of charging various amounts were to become a more widespread procedure. Such a change would involve not merely the removal of a partially redundant word, as the hon. Gentleman seemed to suggest; but would be fundamental and would require in-depth debate.

Mr. Lloyd: In any case, a tribunal would have a duty under subsection (4) to examine the equity and justice underpinning a waiver. I assume, however, that in normal circumstances the clause would kick in and the tribunal would exercise the right to increase or decrease the penalty as appropriate, subject to the test of equity and justice. My problem with the word ''exceptional'' is that it prescribes something over and above the question of equity and justice. The point is a narrow one, and time and experience will tell, but I hope that the hon. Gentleman and the Minister will consider carefully whether use of the word ''exceptional'' is necessary.

Mr. Hammond: I am not sure whether we disagree-I think that we probably agree. I am not a lawyer, but I suspect that use of ''exceptional'' will prove significant in terms of the way in which the clause is interpreted. As the hon. Gentleman has suggested, a tribunal will not routinely look at the equity and justice of a surcharge that it is about to impose. As I understand it, it will be empowered to inquire into the equity or justice of making such a surcharge only in exceptional circumstances. I do not want to initiate a debate now about whether it would be better to have a system based on equity and justice rather than a standard tariff system, except in exceptional circumstances. I think it important, however, that the hon. Gentleman should recognise that what he proposes is not tidying-up or tinkering at the edges but a fundamental re-writing of the way in which the clause would work in practice.

I hope that the Minister will not say that he will consider what his hon. Friend proposes because the Bill, as has been said many times, is a delicately balanced package. Were the Minister to move in the direction in which his hon. Friend the Member for Manchester, Central seeks to persuade him, I suspect that it would change the balance of that package. As the hon. Gentleman has sprung his suggestion on the Committee, I have not considered it in great depth, but, intuitively, I would not want to concede on it readily without examining it in some detail. I hope that the Minister will give a robust defence of the wording in the Bill and will not be tempted to tell his hon. Friend that he will go away and think about his suggestion with a view to possibly taking it on board.

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