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14 July 2008 : Column 72

Mr. MacNeil: I should like to emphasise that one of the reasons why many people give tips is that they are aware of exactly the point the hon. Lady makes and they try to help, so it is all the more galling when they realise that their tips are used to make up the wages.

Ms Clark: Indeed. People have become increasingly aware of the fact that, unless they leave cash, the money might not get to the right person. However, most of us would presume that any tip we leave would automatically go to the person whom we intended. As a matter of contract, our intention is that the person should get the money, so that is where it should end up, and it should not be used to subsidise employers who do not want to pay the full minimum wage. There is a very strong case for looking again at that matter, as such things were not originally intended.

I broadly welcome the Bill, particularly the steps to enforce the national minimum wage legislation, which has been a huge achievement of the Government, but I ask them to look again at some of the matters that colleagues and I have raised.

Rob Marris: My hon. Friend will have considerable experience of this matter as a former trade union solicitor. Would she care to say anything about the Bill’s initial clauses on the statutory dispute resolution procedure, which was contained in the Employment Act 2002? I served on the Standing Committee that considered that Bill, and several Members, including me, pointed out to the then Minister that that procedure would be unworkable. Sadly, that has proved to be so. I wonder whether my hon. Friend will share with the House her experiences in that regard.

Ms Clark: I hope that I made it clear in my initial comments that the more simple a law is, the more likely it is that it will be effective. One of the best examples, which is often cited, is the Health and Safety at Work, etc. Act 1974, which is a very short piece of legislation that lays down a principle. One of the problems that has developed since the 1970s is that employment law has become increasingly complex, whereas we need basic principles. Unfortunately, the legal profession—I say this as someone who used to be involved in that capacity—has attempted to look for loopholes and complex arguments to opt out of basic principles. We should fight for the basic principle that the Government have laid down of a national minimum wage that should apply to all work forces and to all people, irrespective of gender, race, age or other matters, and I therefore commend the Bill to the House.

6.47 pm

Mr. Richard Shepherd (Aldridge-Brownhills) (Con): The hon. Member for North Ayrshire and Arran (Ms Clark) made mention of 1997 and the body of law that the Government introduced to affect employment relations and so on subsequently. Indeed, I am grateful, too, to the Government, because one of their manifesto commitments during the 1997 election was to afford protection to the whistleblower.

The concept of the whistleblower owes much, of course, to Members of the previous Conservative-dominated Parliament, but I am mindful that my parliamentary neighbour, the hon. Member for Cannock
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Chase (Dr. Wright), came up with an idea that he gave to those who are involved in Public Concern at Work, and he asked them to make proposals for legislation. Those proposals were taken up by the then Opposition, and the right hon. Member for Islwyn (Mr. Touhig) introduced a private Member’s Bill, which had the support of a remarkable man who was a shadow employment Minister, the right hon. Member for Makerfield (Mr. McCartney), who helped to push very hard for the proposal. It also had all-party support, including a lot of support from Conservative Back Benchers. I learned then and subsequently that the power of the Administration, often unbeknown to Ministers, is quite something. I commend the Government’s support in their manifesto for the concept of whistleblowing.

I came what seemed like 140th in the private Member’s Bill ballot, but the Government very generously provided all the access and support needed to try to progress the matter. Indeed, the Bill passed through this House, and I owe something to my right hon. Friend the Member for Wokingham (Mr. Redwood), the then shadow Secretary of State for Trade and Industry, for not objecting to it. I also owe a lot of gratitude to a past leader of my party, who is now showing great instincts on social justice, for supporting the Bill from the beginning. The Bill was taken through the House of Lords by another distinguished man, Lord Borrie, who worked hard with Public Concern at Work and all the people there who had made effort, raised money and tried to advance the cause.

The Public Interest Disclosure Act 1998 was intended to promote responsible whistleblowing. Although it arose from a private Member’s Bill, it received strong support from the Government, especially from the then Minister, the right hon. Member for Makerfield. It was backed by business, unions and regulators.

Although PIDA forms part of employment legislation, the policy behind it closely follows the jurisprudence developed by the courts over the past two centuries on public interest disclosure. Accordingly, the Act provides strong protection to workers who raise concerns about wrongdoing that threatens the public interest. It provides that protection most readily when the concern is raised with the employer in good faith. It also protects disclosures made to prescribed regulatory bodies, whether or not they have been raised internally, when the concern has a substantial basis. It also protects wider disclosures, including to the police, Members of Parliament and the media, when the disclosure is reasonable and justified. Accordingly, the legislation was designed to encourage employees to raise, and employers to address, serious concerns about crime, fraud, danger, abuse and other harm to the public interest.

At the time when the Act was passed, we the promoters—and, I think, most people—understood that information about claims made under the Act would be on the public record. That was important because it would help to promote openness, to discourage specious claims and to encourage an employer to deal properly with any serious concern that was raised with it. Such openness was also necessary to monitor how PIDA was operating.

After PIDA’s commencement, the employment tribunals service and the Department of Trade and Industry denied the charity Public Concern at Work all information about claims brought under the Act. With reluctance,
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the matter was put before the High Court, which found in favour of the charity in April 2000. Mr. Justice Jackson concluded:

While the then DTI claimed that it would appeal the decision, it introduced, without consultation or announcement, temporary regulations to reverse the High Court ruling. It did so on the day before a summer recess, so I advise all Members in the Chamber to be very interested about what is listed on the Order Paper in the two days before the recess. Statutory instruments that come into effect within 45 or 60 days that are put down at that time may receive no parliamentary scrutiny. Although, at the time, we appealed to try to block those regulations, and the Government promised that they would be debated, they came into effect before we could debate them.

Although the DTI substantially agreed to consult on whether claims under PIDA should be treated differently from those under other employment laws, the promised consultation did not take place. As part of the dispute resolution regime that is being dismantled in the Bill, regulations were extended to remove all information from the public record about employment tribunals claims.

The charity Public Concern at Work forwarded a complaint through me to the parliamentary ombudsman, which finally reported in 2005. The report is perhaps the most damning that I have ever read about the conduct of officials in a Department of State. It is truly shaming. It was not published in the usual way, whereby every Member gets a copy, but put on Public Concern at Work’s website.

The ombudsman criticised the DTI’s handling of the matter because it was never honest with the High Court or the public about why it objected to information about tribunal claims being publicly available; because it launched a costly appeal that it had no intention of pursuing so that it could overturn the High Court decision in secret through regulations; because it repeatedly misled Public Concern at Work to try to head off all public criticism; because it failed to consider the public interest or to realise that whistleblowing claims

because it issued a one-sided and unfair consultation in breach of Government rules, ignoring “powerful arguments” for openness; and because it blocked parliamentary scrutiny by giving assurances that it failed to keep. I cannot think of anything more damning that has been said in an ombudsman’s report about the conduct of a Department. As a result of it, the DTI agreed to apologise and to pay £130,000 compensation to Public Concern at Work for misleading it and wasting its time.

One must ask what the damage to the public interest is. Employment tribunals statistics record that, in 2005-06, some 1,015 claims under PIDA were disposed of. Some 283 of those were disposed of after a hearing, and so,
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under the rules, information about those cases is on record. However, the rules mean that all information about the other 730 claims—72 per cent. of all whistleblowing claims—remains shrouded in secrecy.

Other than the numerical statistics, which can be obtained only by making a specific request under freedom of information legislation, there is nothing on public record about more than 70 per cent. of whistleblowing claims. There is no information about the nature of the concern, be it a crime, danger, abuse or other wrongdoing. There is no information about who was at risk, be they consumers, passengers, patients, taxpayers, shareholders or fellow workers. There is no information about whom the concern was raised with, be that a manager, a compliance officer, the chief executive officer, the audit committee, a regulator or someone else. There is no information about the employer’s response to the concern, whether it was ignored, investigated or hushed up, and whether it was claimed that it was misconceived, well founded or put right. There is also no information about the alleged reprisal, whether it was carried out by managers or colleagues, and whether it was dismissal or victimisation.

That is the case even though the claims are brought in a public forum, at public expense, and under the Public Interest Disclosure Act. Other than the two parties, no one, not even a Minister, is able lawfully to find out from the employment tribunals records whether, for example, a whistleblowing claim has been brought in relation to problems of clostridium difficile or methicillin-resistant Staphylococcus aureus at a hospital, even though that issue has fuelled public and ministerial anxiety about the NHS and anxiety within it. Additionally, one cannot find out whether a claim relates to a pre-existing problem with the fuel system of the Nimrod aircraft that crashed in Afghanistan with the tragic loss of 14 servicemen.

Such secrecy undermines the public interest and PIDA in two essential ways. It enables and encourages unscrupulous employers to buy off genuine whistleblowers, rather than address the underlying malpractice. The Public Interest Disclosure Act 1998 expressly encourages employees to raise whistleblowing concerns internally, so that responsible employers can deal with them properly and without delay, so it is not an imaginary problem. Contrary to Parliament’s intention when it passed the Act, the current rules have created a scheme under which crime, company fraud, public dangers and tax evasion can be readily hushed up, contrary to the public interest.

That secrecy damages responsible business, as it enables and encourages unscrupulous employees to bring spurious claims. A report in the Financial Times on 18 September 2007 quoted the City firm, Nomura, which warned:

The secrecy that now exists means that it is not possible to assess whether that claim is well founded. That is the substance of the anxiety that caused the right hon. Member for Makerfield—I see that he is present—to start on a course of action to try to bring about structural change in respect of whistleblowers.

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I know that the Department has again been in consultation with Public Concern at Work. All I ask is that the Department gives serious consideration to any amendments tabled to do with the publication of whistleblowing cases. Part of the difficulty is that there have been so many changes of junior Ministers in the Department that the collective memory of the Government or Executive, as opposed to the Administration, is somehow lost. Many undertakings have been given, and it has been said that there was no objection in principle. The Minister for Energy should read the ombudsman’s report, and people in the Department should re-read it, or read it, if they have not yet had the opportunity to do so. The problems can, and should, be corrected, and the Bill is the vehicle with which to do so.

7.2 pm

Mr. Charles Walker (Broxbourne) (Con): I am grateful to be called to speak on this interesting Bill. Before I came to the House, until 2001—actually, I did not come here until 2005. I would have liked to have come here in 2001, but unfortunately, when I stood against the hon. Member for Ealing, North (Stephen Pound) in 2001, I added 2,500 to his majority, instead of reducing it. He is grateful for that, and we get on very well. Until 2001, I was a director of an employment agency called Blue Arrow. In the late 1990s, I remember having some fairly testing meetings with the right hon. Member for Macclesfield—

Mr. Ian McCartney (Makerfield) (Lab): Makerfield.

Mr. Walker: I apologise. I had some very testing meetings with the right hon. Gentleman, and to be fair some of the practices taking place in the employment agency industry were unacceptable. Quite rightly, he outlawed them, and hopefully they no longer take place. However, I accept that there is a small rump of people operating in employment agencies who let everyone else down. I do not want the employment agency sector to be tarred with the same brush as those whose business behaviour is still outside the bounds of the acceptable.

Employment agencies play an important part in our labour market. The Government recognise that, and very early on after introducing the new deal they included employment agencies among the bodies placing difficult people who had been out of the workplace for a long time. My party recognised that employment agencies play an important role, too, and when we form the next Government we will hopefully pledge to use employment agencies to help people get back into work. Employment agencies are extremely good at helping the economy to flex in response to changes in the market. There can be sudden increases in demand, and employment agencies are very good at identifying a labour pool and filling that demand. Employment agencies are very useful for allowing women who have been out of the workplace for a number of years to re-enter it. They are very useful for placing youngsters in the workplace—yes, in temporary jobs, but jobs that allow them to prove their worth to a future employer.

Ms Katy Clark: The hon. Gentleman will be aware that a great deal of work has been done by Labour Members, and by the trade union movement, to campaign for fair employment rights for agency workers. Does he support that?

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Mr. Walker: The hon. Lady makes a very interesting point, and that was a useful intervention. I will come on to the issue in a moment. As I have said, employment agencies provide a useful route back to work for people who are often hard to place in work, and who struggle to find a permanent job because they have been out of the labour market for too long, or do not have the experience to get into the labour market in a substantive, permanent position.

I have an admission to make: if I had been a Member of Parliament when the minimum wage was introduced, I probably would have voted against it. I do not know for certain that I would have done so, because I was not here, but at the time—as the right hon. Member for Makerfield knows, because I sent him some papers on the subject—my instinct would have been to vote against it. However, I would have been wrong to have done so. The minimum wage has proved to be a step in the right direction. It has allowed people dignity at work, and why should the taxpayer subsidise bad employers? That brings me on to my next issue of concern—

Mr. McCartney: Before the hon. Gentleman leaves the subject completely and forgets to answer the question asked by my hon. Friend the Member for North Ayrshire and Arran (Ms Clark), let me put the point another way. If, in the future, a Conservative Government were in a position to sign the European directive on temporary agency workers, would he advocate signing it?

Mr. Walker: The right hon. Gentleman makes an interesting point about the agency workers directive. That directive has been mooted in Europe for about the past 10 years, and for nine of those years his Government have made a very good case on why we should not sign up to it. Their case has been very convincing; they said that we did not need it in this country, and that it would have a negative impact on the labour market and would reduce employability. That must be the case, or it would have been accepted five years ago. If one were cynical—I am not—one might think that the sudden embracing of the working time directive had more to do with the need to access trade union funding for future political campaigns than with the need to improve the lot of the down-trodden worker. Far be it from me to suggest that. I hope that answers the right hon. Gentleman’s question.

Ms Katy Clark: The question that the hon. Gentleman is being asked is whether he supports the discrimination that takes place against agency workers, who do not get the same sick pay, holiday pay or other entitlements as other workers doing the same job. Will he respond to that?

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