Employment Bill

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Mr. Lloyd: For understandable reasons, the hon. Gentleman was not with us this morning. If he had been, he would have heard several of his hon. Friends sympathising with the Minister's objectives. The debate concerned whether the Bill will achieve what we want it to: there was no difference in objectives or ambitions. The hon. Gentleman should agree with fairness in industrial relations.

Mr. Hammond: The hon. Gentleman knows that I am in favour of fairness. One of the principal objectives of all legislation is that people should be treated fairly, and I abhor unfairness in all its forms. However, the hon. Gentleman's approach is slightly naive. This is the most sensitive clause in this part of the Bill, and it is, unfortunately, being tampered with. If the Minister is tempted to tamper with it any further, as has been suggested, he will provoke a reaction.

Since the debate, I have examined the briefing from some of the small employer organisations. It may surprise the Minister to learn that the significance of the words at the beginning of proposed new section 98A(2), ''subject to subsection (1)'', has not been fully appreciated by those outside the House. Some commentators have interpreted it as restoring the state of affairs before the Polkey judgment. Clearly, that is not the Minister's intention, so some people will be disappointed that they over-egged the pudding in their interpretation of the Government's actions. They will also be disappointed that the Government are to retreat further from their previous position, which they defended vigorously.

I made unkind comments about the Law Society's amendments earlier, so I am delighted that its efforts today seem to have achieved a 1-1 draw against the Government's draftsmen. I am disappointed that the Minister has not produced the amendments that he says will be necessary for this clause and for clause 31. I find it strange that we debated clause 31 without the Minister mentioning that it has a fundamental flaw. After the debate, and clause stand part, he tells us that he will amend it.

This morning, I mentioned parliamentary sloth. The Liberal Democrat amendments that deal with the Law Society's points, which the Minister has accepted, were tabled on Friday. I would have thought it possible that the parliamentary draftsmen—with guidance from Ministers and civil servants—could have made amendments available today. They would have been starred, Mr. Benton, but you could have used your discretion if you felt it useful for the Committee to consider them.

I am disappointed that the Government have not tabled those amendments that they described as essential. They could have been considered today, but will now come at a stage when detailed consideration will not be possible. As we all know, the Report stage of the Bill will be timetabled. New clauses will be considered first. It may be the case—it often is—that we will not reach amendments in time to debate them

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and that they will simply be voted on at the end of the allotted time. That is unfortunate. As there has been a clear failure in the Bill's drafting, the Government should concede that detailed scrutiny of this part of it and of any further amendments would be appropriate and beneficial. That would avoid unanticipated pitfalls requiring further changes to the legislation at a later stage.

I am concerned about tampering with this delicately balanced part of the Bill and I am disappointed that the Minister has not tabled the necessary amendments for us to consider.

5.30 pm

Norman Lamb: I endorse the comments of the hon. Member for Runnymede and Weybridge (Mr. Hammond) about the importance of proper scrutiny of the amended clause. As it is not available, that opportunity will be missed. I am grateful that the Government have recognised the merit of our amendment, even though it does not achieve the required objective and so a further amendment is necessary. I share the concern about the lack of scrutiny.

I stubbornly stick to the view that the combination of the effective reversal of the Polkey case and the modified procedure will result in a substantial weakening of the protection for employees facing allegations of gross misconduct in certain circumstances. I urge the Minister to look carefully at the potential impact on fairness to employees. It is fine in certain cases where the evidence is stark and obvious, but in the more complex cases there is a weakening of the protection for employees, who can be dismissed under the modified procedure without a prior hearing. I urge the Minister to consider whether that issue could be addressed by an amendment or by the regulations limiting more than has been so far indicated by the circumstances in which the modified procedure would apply. I would expect there to be grave concern among Government Members on the implications of the loss of the right to a hearing before dismissal in complex cases of allegations of gross misconduct.

Rob Marris: I should like my hon. Friend the Minister to summarise one or two of the issues to which we have referred during consideration of this part of the Bill, as clause 34 is the linchpin. He has clarified that under the basic procedure the existing right to be accompanied will continue and that under schedule 3 there will be a right to a fair process rather than a fair hearing. I confess to being unclear as to whether there is a duty on the employer to investigate and I hope the Minister will clarify that.

I turn to the contribution of the hon. Member for North Norfolk (Norman Lamb). Will the Minister clarify a time frame for a review of the procedures in clause 34 and schedule 2 to see whether the problems posed by the hon. Gentleman are realised? I asked this morning whether the change in emphasis of Polkey leads to a dilution of existing procedures that are better

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than the schedule 2 minimum, and whether subsection (2) of new section 98A would lead to employers simply not following the enhanced procedures.

Alan Johnson: The hon. Member for Runnymede and Weybridge must have had a bad time at the Adjournment debate, as he is not his usual, charming self. Understandably, he could not be with us in Committee this morning.

I struggle to see what great concessions I have made on the clause. We have had a good debate, and we went into the matter in some detail. My hon. Friend the Member for Wolverhampton, South-West called the clause the lynchpin of the Bill. We discussed clause 29 and schedule 3 and agreed that there should be a statutory minimum procedure. We agreed that there were cases where even those statutory procedures would not apply, such as cases of bullying, harassment and violence, which will be set out in regulations. We also agreed that a modified procedure is needed to deal with certain cases of grievance and discipline.

Clause 34 deals, in effect, with the no-difference test. This morning's debate made it clear that we have introduced those basic provisions and that employers are expected to comply with them. If they do not, a dismissal will automatically be unfair. We also discussed the fact that the change to Polkey referred to discipline procedures above the minimum.

Several Opposition Members, including the hon. Member for Hertford and Stortford (Mr. Prisk), expressed concern that there may be an inconsistency in having minimum procedures, encouraging people to abide by them and then making it seem as if they did not have to abide by them because the no-difference test would be restored. I explained that we were setting a minimum standard, encouraging people to move to a more sophisticated system and taking account of the ACAS code. If we did not reverse the no-difference test, employers would rightly wonder why they should move to a more sophisticated code if they could be found to be wrong on a minor error of procedure, irrespective of the fundamentals of the case.

I accepted the amendment tabled by my hon. Friend the Member for Wolverhampton, South-West on the basis that we had made it clear that nothing in clause 34 changed the requirement of the employment tribunal to ensure that the case of unfair dismissal was fair in other respects. That obligation is placed on the tribunal. My hon. Friends believed that that was not clear enough in relation to clause 34(2)(c), and I therefore accepted the amendment in the spirit of making clear what we had set out to do. We are criticised for accepting sensible amendments and for not accepting them. The amendment is sensible, and we accept it. I reassure the hon. Member for Runnymede and Weybridge that that makes no difference to the fundamentals of the Bill, to the issues on which we consulted or to the message that we sent out to employers and employees about the new rights and responsibilities in the Bill.

I also accepted the other amendment. Once again, we are damned if we give no warning of forthcoming amendments and we are damned if we listen to a carefully argued amendment and respond by saying

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that we will table an amendment. The amendment does nothing other than point out, as the hon. Gentleman did, that there was an error in the drafting. Because of that error, an employer who followed only the modified procedure that we agreed last week under clause 29 would automatically be found to have dismissed unfairly. We must deal with that and we are doing so through an amendment. It is no big deal. Employers' organisations are unlikely to be marching on Downing street tomorrow. This part of the Bill does not fundamentally change anything.

The concerns of my hon. Friend the Member for Manchester, Central are understandable and other Government Members have also asked me to think again. However, I believe that the balance is absolutely right. This morning, my hon. Friend the Member for Wolverhampton, South-West asked whether we would keep the process under review. Once it has been implemented and has had time to take effect, we will consider the employers' argument that reversal of the no difference test will encourage participation in the fuller procedures. As to my hon. Friend's concern—shared by my hon. Friend the Member for Manchester, Central—we would obviously examine the position carefully, but we believe that the balance is just right. None of the amendments—neither the one we accepted, nor the other intended for Third Reading—disturbs the balance. Clause 31 is not being amended. Clause 34 is being amended to make it consistent with clause 31. We are therefore talking about two, not three, amendments here.

If members of the Committee have listened carefully to the debate and examined the explanations offered, they should feel happy that we are amending the provisions for the better, without fundamentally changing the principles. The error pointed out by the Liberal Democrats needs to be addressed.

The hon. Member for North Norfolk articulated his concerns about summary dismissal. On the basis of my long experience of these matters—I know that he has had experience too—I do not share those concerns. If we get the regulations right—there is at present no requirement for these procedures—it is wrong to insist that employers have to keep someone on the premises—

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