Draft Flexible Working (Procedural Requirements) Regulations 2002

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Dr. Vincent Cable (Twickenham): I strongly support the principle behind the regulations, just as I supported the Employment Bill during its passage. The principle that requests for flexible working should be given reasonable consideration, as opposed to being granted automatically, is a basic and sensible first step towards a more flexible labour force and a better work-life balance.

I have several specific points to make. First, why is the definition of the categories of people who will benefit from the regulations so narrowly drawn? I do not understand the logic behind that. The Minister said that the reason he opted for the parents of children under six and disabled children under 18 was because the survey suggested that the largest number of people who would be affected by inflexible working fell in those categories. By the same token, there are probably a few people who are seriously affected who would benefit considerably if the provisions were applied to them, and who, because they are few in number, would not necessarily add to the cost of the regulations. Let me deal with two specific cases.

There are experiences, such as when someone's partner is terminally ill, that arise perhaps once in a lifetime. I am dealing with one such case in my constituency. A man had worked loyally for a company for 15 years, but his wife was dying and he wanted to be with her for the last two or three weeks of her life. He asked for flexible working arrangements, but his request was angrily refused and threats were made about what would happen if he persisted with his requests. That struck me as precisely the type of case that is crying out for the regulations, because it features unreasonable consideration of a reasonable request for flexibility. It is not clear to me why interventions in such cases, which would probably be infrequent, could not be accommodated.

The parents of older children are another category. Parents of teenage children would not constantly require variation of their working arrangements. None the less, serious illnesses and problems arise perhaps once every three or four years, and a parent might want to ask an employer for flexibility. That seems appropriate. If the regulations are implemented and bedded down, will the Minister consider whether to accommodate other categories of workers with particular problems that are associated with a lack of flexibility? Will the Minister consider ways of proactively enlarging flexibility?

My second comment relates to—[Interruption.]

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The Chairman: Order. The hon. Member for Bolsover (Mr. Skinner) knows that he should not walk between the Chair and the speaker.

Mr. Dennis Skinner (Bolsover): Are you trying to get your own back for what happened in Westminster Hall?

The Chairman: Order.

Dr. Cable: My second point relates to an issue raised by the hon. Member for North-West Norfolk (Mr. Bellingham). I have some sympathy with the problems of small companies. If a key member of staff at a company that has 10 employees requests different working arrangements, the burdens will be grossly disproportionate compared to those on a company that has 100 employees. It is very much a small-firm problem. Small business lobbies probably want to exempt companies from the provisions, and although that might not be the right way forward, I would like to know whether the size of the company will be taken into account in the definition of reasonableness and taken into consideration by tribunals in disputed cases. That would in some ways accommodate the problems of small companies.

My third and final point relates to the regulatory impact assessment. I welcome it, but I am not sure where the figures come from. As they show high negative costs, it is better to be open and transparent. Do the negative figures for the cost of the regulations take into account the positive impact on labour supply? One assumes that if these regulations are enforced and are generally understood to be enforced, people who are currently unable to join the labour market—I am thinking in particular of young mothers—would be encouraged to work. Was any provision made in the calculations for the effect of that positive income stream on the economy? With those three qualifications, I warmly welcome the changes.

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Mr. Lloyd: Will the Minister tell me why the explanatory notes and memorandum make no mention of the awards that tribunals can make to successful applicants? The process seems odd.

Alan Johnson: I think that I might have misled the Committee by suggesting that the proposal of eight weeks' pay was part of the draft regulations. In fact, it will be dealt with in separate regulations that will be subject to the negative procedure. I should also point out that the reference to ''two weeks'' in regulation 15(3) relates to the failure to allow the right to be accompanied, not to the penalty for failing to treat the request seriously.

Mr. Lloyd: That is very helpful. It moves us on a little. As the Minister knows, I am not charging him with deliberately misleading the Committee. However, it is unhelpful if the explanatory notes and memorandum lack clarity. If they had been clearer, we would know where we stand. The amount that the tribunal can award in the event of a successful application is, as he says, a matter of detail, but it is also a matter for detailed debate. The gap between employers' organisations, which asked for a maximum award of four weeks' pay, and the TUC, which

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recommended a maximum award of 52 weeks' pay, is not a matter of detail—it is a gaping chasm. Even with tongue in cheek, I would not talk about splitting the difference between four weeks' pay and 52 weeks' pay and concluding that eight weeks' pay is the right amount.

The regulations give access to flexible working. We debated the issue in relation to the Employment Act 2002. The Minister managed to persuade even the Opposition that we should go down that particular route, so we are not really arguing about the principle—although I note that the hon. Member for North-West Norfolk (Mr. Bellingham) did want to argue about the principle a little. He suggested that the regulations would place another onerous burden on business.

I chair a non-profit making charitable company that does good work in my community. Through that company, I am aware of the burdens that legislation of one kind or another can impose on business. Even a non-profit making company has to subscribe to those laws, so I am not oblivious to the argument that there are associated costs. However, is the hon. Gentleman seriously saying that the regulations amount to a significant real cost to a given business? If he is, I think that he should discuss with small business people and those who operate companies such as mine whether that type of cost is the last straw, or the first. If he wants to get real, as they say, he should examine what the regulations really do. Even he should realise that the cost is minimal. The regulations ask employers to respond to reasonable requests by their employees, which a good employer ought to do automatically.

In relation to access to a tribunal, we are not talking about employers who are reasonable, or who have said that they cannot accommodate a request, but those who have flouted the spirit and the letter of the regulations. I hope that the official Opposition would not try to justify the actions of such people. We are discussing employers who are in breach of the spirit of the regulations, as the hon. Gentleman accepted. For that reason, I am troubled by the level of the penalty. I say to the Minister that we need to look at the sanctions that apply to the recalcitrant employer. I freely concede that an employer who makes a mistake is entitled to be viewed in one way, but we should have no truck with one who has gone out of his way to ignore the letter and the spirit of the regulations. Such an employer deserves to be brought before a tribunal to be forced to make proper and adequate recompense to the relevant employee.

I know that the way in which the procedures work mean that the voting mechanism is irrelevant. However, will the Minister guarantee that there will be proper review of the way that the regulations work in practice? Few cases will get as far as a tribunal under the regulations, so we are talking about a few recalcitrant employers who may need a stronger sanction. I hope that he will ensure that we do keep the eight weeks' pay compensation under review, so that we can look at it again if it proves to be inadequate. Perhaps we could then begin to operate the regulations in a way that better fits the purposes of Parliament, and public opinion.

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I was surprised to see that the right to be accompanied is limited. It is not an awful burden on a business that an employee who goes to see the boss should be accompanied quite legitimately by, for example, a full-time trade union official. I do not see why that would be such a massive and difficult overload on small or even larger companies, where it is more likely that it would be a full-time trade union official. Can my hon. Friend the Minister tell me whether there is a parallel restriction on the right to be accompanied in any other case? I hope he will tell me of any such examples, because we need to discuss whether that restriction should apply anywhere. I hope he can explain why it is included in the regulations because it makes no immediate sense to me.

The breadth of the regulations was debated in the Standing Committee on the Employment Act. To some extent, the case made by the hon. Member for Twickenham (Dr. Cable) about his constituent whose partner who is terminally ill falls outside the scope of the regulations, but I hope that my hon. Friend the Minister will consider that example. I sympathise with the spirit of what he is trying to do, and understand why there are some restrictions, but think that the hon. Gentleman has come up with a genuine hard case. It falls outside the regulations, so perhaps it ought to be carefully considered, to see whether we need to review the extent of our policy.

I do not intend even to contemplate opposing the order, as it would be a waste of time, and it would upset my hon. Friend the Whip, to whom I am already grateful for ensuring that I served on the Committee, thus enabling me to raise these issues with the Minister. I have a little known pact with the Whips: they alert me to controversial legislation so that I can hold Ministers to account. Given that the Whips have done that, I hope that my hon. Friend the Minister will honour the spirit of what they wanted to achieve and answer the questions that they have let me raise.

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