Employment Bill

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Mr. Philip Hammond (Runnymede and Weybridge): I am grateful to the Minister for outlining the purpose of the new clause. Notwithstanding our more acrimonious exchanges during the previous sitting of the Committee, I hope that we can consider how the new clause will work. At the Minister's suggestion, I shall make a couple of general remarks, and go through our detailed amendments, but not the ones that the hon. Members for North Norfolk (Norman Lamb) and for Weston-super-Mare (Brian Cotter) have tabled. I shall then make a few concluding remarks about the new clause, so that the Minister can respond to the issues raised by the amendments.

I would like to place on the record my support for flexible working. It helps all of us with what I prefer to call the work-family balance, rather than the work-life balance. It also recognises that life has become increasingly complex, and that patterns of work are less rigid. Fewer people work in jobs in which it is necessary for them to be regimented in the way they work. One hopes and expects that as the economy moves up the value-added curve, more people are involved in jobs that have a flexible pattern of work. I urge the Government to recognise the need for diversity in patterns of work.

What are rather pejoratively called unconventional work patterns will become the norm in the near future. That reflects current labour force dynamics. Most businesses in this country say that their biggest problem is not lack of demand, capital or finance but a lack of qualified, skilled staff. In those circumstances, it makes sense to structure work patterns to accommodate as many of the population as possible who want to, and are able to, work.

I will take some shaking from my belief that the Government's role should be to focus on the macroeconomic management of the economy to ensure buoyancy that creates tight labour market conditions and compels workers and management to move higher up the value-added curve, and attain better-paid, better value-added employment. That is in everyone's interest. Ultimately, although it may be a disappointing thought to Ministers and civil servants who toil over such matters, no amount of Government exhortation will create well-paid, secure and flexible employment. Only a vibrant, buoyant economy with intrinsic strength can do that.

I encourage the Government to focus on that aspect of their role, and to be a little humble about the extent to which they can influence the long-term structure of the labour market through legislation.

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At the risk of boring the Committee, my views are coloured by what I saw when I worked in Germany in the 1980s. Everyone appeared to be wearing a nice pair of blinkers. They could see the wonderful package that was available and the marvellous in-work benefits that they received from their employers, but were oblivious to the fact that jobs were being exported. I will not say that they were being exported east, north, south and west because it was mainly east and south, but jobs were being exported at a phenomenal rate of knots. The consequences are evident in Germany now. That is just a word of warning to the Government.

I was disappointed by the drafting of the new clause. Following the pattern of the Bill to date, it should have been three new clauses. A new clause has been used each time that a different new section has been inserted into different pieces of legislation. New clause 2 has a curious architecture. The first subsection reads:

    ''The Employment Rights Act 1996 (c.18) is amended as follows.''

The next subsection simply states:

    ''After Part 8 there is inserted—''

That is completely out of line with the rest of the Bill. It should say something like ''After part 8 of the Employment Rights Act 1996 the following is inserted''. Some of the language in the new clause is very odd. On closer examination, it is clear that it has been taken verbatim from the Bain taskforce report, particularly new section 80G.

I accept that the Government are sensitive to the issue of balance and have sought to put into primary legislation the exact prescription of the taskforce, fearful, no doubt, that to change a single word or comma would lead to one side or the other saying that the compromise had been upset. The result is some unparliamentary language and certain things that appear to be frankly wrong.

I should like to draw the Minister on another issue. The flexible working measure introduces new statutory rights for workers with small children. They do not apply to those with a caring responsibility for a disabled relative over the age of 18 or those who are looking after an elderly parent rather than throwing that parent to the mercy of the local social services. The Committee must recognise what is happening. We are singling out one group, perhaps a very deserving group, for special treatment, and that will be at a cost to other groups.

Many employers operate flexible approaches to requests for variations to working conditions by employees. Some of them do so voluntarily because they think that it is good practice, others do so because they know that good staff are like gold dust and if they do not accede to the request, the employee will find another job that is more suited to their needs. There is a danger that employers who have juggled flexible arrangements for different employees, on the basis of employees' individual needs, and have perhaps prioritised in their own minds those who are the most deserving and in need of the flexible approach,

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will now have no flexibility. That flexible approach will need to be available, if the business has the capacity to make it so, to all employed parents with small children. This may mean making it unavailable to some people to whom it would have been available otherwise. By virtue of this legislation, parents of small children will be privileged.

We also have to recognise that, as we move into this world of accommodating people's family requirements in the workplace, there will be winners and there will be losers. There have been some well-publicised cases over the past few months. For example, there a policewoman established that she did not have to work certain shifts because it interfered with her family life. Workers on the London underground have the same issue, not having to work unsocial hours because of interference with their family life. That is all fine.

That may, however, create is a very new and interesting form of indirect sex discrimination. Typically—it will not happen in every case, and I am sure that the Minister can quote examples—women will argue that, because they have small children or caring responsibilities, they cannot work night shifts or flexible shift patterns and need to work standard daily patterns or shortened daily hours.

One can fully sympathise with that, but the Bill does not come cost free. For every policewoman—and our police force increasingly comprises women; they are an ever-growing minority group of the total force—who does not work her routine rota of night shifts, a policeman will have to work additional night shifts. For every London underground worker who can work only during the day, another will have to do more than his or her fair share of the night shifts.

I invite the Committee to consider carefully the fact that when we grant privileges in the work place to one group, other groups will suffer as a consequence—women without children, men and older people who no longer have direct family responsibilities. The provision is not a cost-free option: it does not cost employers, but it will cost other employees in the workplace. We must be careful when we impose privileges by statute for certain people that we do not inadvertently cause undue distress and harm to other people.

Norman Lamb (North Norfolk): The hon. Gentleman makes a good point about carers of older people, usually older relatives. Their situation is not helped in any way by these measures.

On his point about men and women, because of the developments that the hon. Gentleman referred to in indirect sex discrimination, the reality is that women effectively have good protection. In reality, any company faced with a woman asking for a change of working arrangements, will recognise that as a potential claim for indirect sex discrimination. Changes are happening the whole time because of that threat hanging over employers.

The new measures seem to redress the balance. If we put indirect sex discrimination aside for a moment, the measures contain equality in the way that men and women are treated. Does the Minister accept that?

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Mr. Hammond: There may be equality on the face of the Bill, but I do not think anybody will be in any doubt that the measure will impact more on women than on men in practical terms. I would be surprised if any of the Minister's surveys or investigations suggested that more men than women will take advantage of the new clause. Time will tell, and it will be interesting to come back and see what happens.

I expect women disproportionately to take advantage of the provision. The hon. Gentleman mentioned that the indirect sex discrimination legislation, which has essentially been established by case law, will not be wiped out by the Bill. There will be an uncomfortable fit between the case law and these measures.

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It will be difficult to measure the effect of the Bill. Employers and employees regularly talk to each other and discuss how to accommodate the needs of the business one week, and the needs of the employee the next week. An employee may be asked to work a bit longer and come in earlier on Thursday, or little Freddie may be sick on Tuesday, the employee needs the day off and offers to make up the hours on Wednesday and Thursday evenings. That happens day in and day out, and in most cases, it will not be documented or recorded as an application for flexible work that is agreed by the employer. The only circumstance that will be documented and recorded is where the employer says that he cannot give the employee any time off, and the employee submits his formal application to have a request considered for a change in conditions. Almost by definition, flexible hours will be documented only in a circumstance where the employer will be minded to refuse, because the circumstance that the employer is happy to agree will never be documented and recorded.

I do not suggest that the Minister would be minded to bet, but if he wanted to, I am prepared to bet with him that he could commission a study 18 months or two years down the line that would show that a large percentage of applications under the measure had been refused by employers. If he commissioned wider research to see how many employees had changed their terms and conditions of employment to make them more flexible, he might get a different answer. I offer a word of caution, as I do not want any wrong conclusions to be drawn from superficial analysis of what will happen under the new clause.

By common consensus, the meat of new clause 2 is section 80G. Section 80F introduces a right to apply for variation of contract terms, and section 80G deals with the right of the employer to respond in different ways. At the beginning of the debate, the starting point of the union side could broadly be categorised as wanting objective justification of any refusal to agree flexible working terms. The starting point for the employers was a desire for a purely procedural approach to dealing with any request. As a result, we have an awkward compromise that is reflected in the Government's obvious reluctance to move away from the precise wording of the report, even where the wording does not fit comfortably into primary legislation.

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The amendments seek to address various concerns about the substance of the new clause rather than the overarching principles. Amendment (l) seeks to leave out sub-paragraph (iii) and probes the Minister's views on how the provision will work in relation to the employer's duties in responding to applications. Those few people in the country who are even remotely interested in the proposed measure have been talking about this as a right to part-time work, and some people will want that. I suspect, and the Minister for Employment and the Regions alluded to this in his remarks, that an even more common request will be for minor variations of the working day.

Indeed, I can report best practice in the shadow Department of Trade and Industry team, as meetings have been shifted by 10 minutes to accommodate the school run of one member. The Minister will be pleased to learn that the Opposition Front Bench team is an enlightened employer and ahead of its time. There will be many such requests, but a more fundamental set of circumstances concern a request by an employee to work from home. I suggest to the Minister that that is a somewhat different class of request, and perhaps he will explain why it was necessary to include it in the provisions.

Amendment (m) would strike out sub-paragraph (iv) of proposed new section 80F(1)(a), which details the sweeping power of the Secretary of State to prescribe by regulations

    ''such other aspects of his terms and conditions of employment''

as the Secretary of State chooses. That concerns changes to the contract that do not relate to the hours, times and place that someone is required to work. Including that blanket provision may be bureaucratic belt and braces, but it drives a coach and horses through the stated intentions. We, and most of the employer organisations I have spoken to, have not been able to think of analogous contract changes that an employee may seek under the provision. There is a lurking fear that the Government have another medium-term agenda, which will be dealt with through sub-paragraph (iv). I would like to see the sub-paragraph removed, to make it explicit which contract changes may be dealt with in the Bill. If the Minister has good examples of why sub-paragraph (iv) might be needed, he should explain them to the Committee and reassure us that there is no hidden agenda.

Amendment (n) mirrors amendment (a), which was tabled by the Liberal Democrats. It would ensure that an application under the relevant section must be in writing. I am not one for introducing unnecessary bureaucracy, but it is clear that if there is a procedure, the failure to comply with which can give rise to a remedy, there must be some documentation of the procedure having been carried out. It is all too easy to envisage that if the procedure is not formalised, there will be endless disputes about whether someone made an application. That would be the case particularly in a small firm. If someone says to the boss over a cup of tea, ''I wouldn't mind coming in half an hour later in the morning'', does that constitute an application under proposed new section 80F(1) of the Employment Rights Act 1996?

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Endless dispute is possible. The hon. Member for North Norfolk will no doubt have his own points to raise on the subject, but almost everyone to whom I have spoken believes that it must be a simple but documented procedure. I recognise that that will give rise to the problem that I identified in my opening remarks, but only those cases that are likely to be refused will be recorded as formal applications. I do not see any way of avoiding the change if we do not want employment tribunals to be clogged up with endless debate about whether a verbal application was properly made and received.

Amendment (bb) would insert a new sub-paragraph. The proposed new section is explicit, and the right to ask for flexible working is available only for a specific purpose. The employer, in refusing such an application, is required to state his specific reasoning. In the interests of balance and focusing employees' minds on the specific nature of the right, we propose that the employee making his application in writing should clarify the reason for needing the change in contract.

For example, the letter may say, ''I wish to request a change in my working hours so that I can start at 9.30 each morning so that I can drop my child at school before coming to work.'' That is simple and straightforward—there is no debate about it. Once put in writing, the facts would be on the record. If it subsequently turned out that the child started school at 8.30, or that the child was 36 years old, there would be some basis for analysing the application and referring to the facts. That is a reasonable proposal, which puts some symmetry into the arrangements.

The purpose of amendment (z) is to specify that once an employer has acceded to an application, the change will be regarded as permanent. The employee will have the right to apply, after a year has elapsed, for a change back or a change to a different set of terms and conditions. The employer would have certain rights under existing legislation to seek to change the situation back in due course. The Liberal Democrat amendment—(d)—to which the hon. Member for North Norfolk will no doubt speak in due course, takes a diametrically opposite approach, seeking to make any such change temporary at the employer's option.

I can understand why the Liberal Democrats attempted to go down that route, but we believe that it would be more straightforward to make it clear that any change to terms and conditions of employment is permanent and that a change back would require the employee to go through the same procedure again after a year had elapsed. That is probably what the Government intend, but we seek to make it explicit in the Bill.

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