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Let me explain what the new clause means and what has motivated it. Most hon. Members are aware of the case of Friction Dynamics, which demonstrates that a group of workers can take lawful strike action—they went through a proper ballot and sent out the due
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notices—yet be sacked. Two years later, a tribunal found that they had been unfairly dismissed. But what happened? What redress did they then have? Their jobs were gone. They could not gain reinstatement orders or even compensation because the employer company had gone into liquidation. Actually, the real owner was trading at the same factory under a differently named company, and the strikers’ jobs had been filled by others. That was grotesquely unfair, and that example—one of the starkest—shocked the House and the Labour trade union movement into action.

Hywel Williams (Caernarfon) (PC): Friction Dynamics was located in my constituency. Seven years on, the workers involved have had no compensation whatever. To add to the iniquity of the situation, their then employer has now set up in another town with another variation on the Friction Dynamics-Celtic Friction name. That is disgraceful.

John McDonnell: That demonstrates how the law currently fails to protect workers undertaking lawful industrial action, and fails to provide them with any prompt and effective form of redress. Friction Dynamics was the starkest example, but many others can be used. That demonstrates that the law is grotesquely unfair.

In other countries, when industrial action takes place the contract of employment is suspended, not broken. In the past, the Government’s response to these proposals has been to argue that during a lawful strike, protection against dismissal has been provided for up to 12 weeks, but in practice that has proved to be illusory. The right to claim unfair dismissal and receive compensation when sacked does not amount to protection against dismissal.

In response to the hon. Member for Northampton, South (Mr. Binley), the last figures that I have obtained, which are admittedly 18 months out of date but show a trend, show that reinstatement was awarded in only 0.2 per cent. of tribunal cases where claims went to a hearing. That is only 0.4 per cent. of all unfair dismissal claims. Even where an employer is ordered to reinstate, they are free not to comply, subject to penalties of compensation. There are now numerous cases where it is very difficult to gain reinstatement, and even where that happens employers flagrantly refuse to comply. I understand the hon. Gentleman’s point with regard to burdens on business, but I do not believe that these proposals would be burdensome, and that has not been argued in the discussions that have taken place within Government. I think that he will understand that there is an issue of unfairness and equity if we can reach a situation whereby only 0.2 per cent. of tribunal cases result in reinstatements when so many are demanded.

Mr. Andrew Pelling (Croydon, Central) (Ind): The hon. Gentleman highlights the weaknesses in the current legal situation. His figures are from 18 months ago. Does he think that there might be an additional argument in favour of these proposals in the context of the changed financial environment, where some employers might be further tempted to exploit those weaknesses?

John McDonnell: The hon. Gentleman, who came into the debate slightly late, makes a valid point that I made in my introduction. People require greater protection as we enter a recession. They will be looking to their
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trade unions for protection, but they will be looking to Government to ensure that the legislation is in place to provide that protection.

Rob Marris (Wolverhampton, South-West) (Lab): Does my hon. Friend agree that, as regards burdens on business, the state of UK law arguably leads to unfair competition by our capitalists, because most of the labour jurisdictions in which other capitalists operate, in western Europe and in most of North America, have decent, enforceable rules about reinstatement?

John McDonnell: That is a good point. When Tony Woodley, who was general secretary of the T&G and is now joint general secretary of Unite, was the midlands organiser for the car industry, he consistently argued how much easier it was to sack workers in Britain, and therefore how much easier it was to relocate to other parts of Europe. The supervisory body of the United Nations international covenant on economic, social and cultural rights has told the Government on at least two occasions that in order to conform to their ratified obligations they need to protect the right to strike and to ensure that the dismissal of those on lawful strike is prevented and that any such dismissal must be rendered void and ineffective. The new clause would enable a form of compliance with this element of the Government’s obligations and provide some protection from dismissal for workers taking lawful industrial action—those who, before taking industrial action, have complied with every procedure that the Government have obliged them to with regard to balloting, notices and so on.

That brings me on to new clause 2 and balloting. The new clause attempts to resolve the ongoing administrative problems of balloting procedures for industrial action. Let us be clear about this: under the existing procedures, trade unions must, before conducting lawful industrial action, comply with extensive rules on notices and ballots. Anybody who has had practical experience of that process can demonstrate the difficulties of consciously complying with the law. It places a heavy administrative burden and costs on the unions.

Mr. Dismore: As my hon. Friend knows, I used to practise in this area of law, and once those rules were introduced, it became a battle of lawyers rather than a battle of unions and employers. Time after time, I was asked to check balloting processes, and it was absolutely frustrating to find that employers would do all that they could to frustrate the ballot but would immediately rush off to court if one of the t’s was not crossed. I cannot understand why, of all my hon. Friend’s new clauses, the Government do no agree to this one, which I have backed. All it does is level the playing field. If an employer wants a ballot to be held, let us expect him to co-operate by giving the names and addresses of those to be balloted. What is wrong with that?

5.30 pm

John McDonnell: Various Members will have their own experiences of this situation, but for most trade unionists, let alone lawyers, it is an incredibly onerous task to comply with the law in question. It is costly, overcomplicated and, to be frank, it provides a battleground and a fair income—with the greatest respect to my hon. Friend—for lawyers. [Interruption.]

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Andrew Mackinlay (Thurrock) (Lab): The Minister wants my hon. Friend to give way.

John McDonnell: I thought that it was a Government acceptance—a message from the front.

In practice, this situation sours industrial relations. It turns the industrial relations climate into one of hostility rather than one of negotiation.

Kate Hoey (Vauxhall) (Lab): My hon. Friend was talking about the souring of relations. Does he remember the national dispute last year involving the Communication Workers Union and the Royal Mail? After going through all the hoops by getting all workers in all categories put forward, the Royal Mail spent a huge amount of our money at the last minute on going to court. Is that not nonsense? In his discussions with the Minister, did the Minister give any real reason why the new clause cannot be accepted ?

John McDonnell: No; I hope that the Minister will give us the reason why he can accept it. I cannot see any reason why it should be rejected.

We all have examples—I have mine—but the Royal Mail is a classic one. All the information was provided, but the totals of each grade of staff were not added up. All that was needed was a calculator, but on that basis an injunction was awarded to prevent the dispute. As my hon. Friend said, that was costly, and it soured relations between the union and management for a period.

The Government recognised the problem, and they legislated in 1999 and 2004 to tackle the issue. They understood that the procedures undermined the democratic wishes of trade union members by preventing their implementation. I was pleased that the Government recognised that and introduced reforms. Experience has since shown that the reforms were not successful; we still have the same problems. The current laws require unions to provide the employer with exact numbers of members, categories of workers and the workplaces of those to be balloted, but still allow lawyers to apply for injunctions based on small technical errors, even where they have no effect on the outcome of the ballot. That cannot be just, and it cannot be right. The use of injunctions by lawyers is frustrating and undemocratic, especially when the error complained about could have no impact on the final result. It is extremely difficult in modern work life to keep trace of meticulous records of all members in a modern work force.

Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): Hang on a moment. Elsewhere in the Bill trade unions are being given the right to discriminate against their membership in the name of defining what their membership should be, as membership organisations, but here is the hon. Gentleman arguing as part of the package he wants that unions should not have to keep meticulous records of who their members are. That does not hang together very well.

John McDonnell: I appreciate the hon. Gentleman’s point, but I am trying to explain the difficulties that exist. I am not trying to argue that unions should not keep meticulous records—they will do their best. New clause 2 seeks to gain employers’ co-operation in statute to enable that to happen.

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Mr. Dismore: A good example of my hon. Friend’s point is that, when people change their address, they almost always notify their employer, but nearly always forget to tell their trade union. In these days of postal ballots, how on earth is the union to get the ballot papers to the members if they do not register their addresses? With the best will in the world, the employer knows the employees’ addresses far better than the union, even if the union knows the names of the members, which it does.

John McDonnell: I shall deal with the detail of new clause 2 shortly, but it seeks to ensure co-operation between the union and the employer and vice versa—that is all.

Let us consider the difficulties in the modern workplace. First, flexible work patterns have increased among the modern work force. In some industries, workers do not have a regular workplace—they often work from a distance or move between different work sites. Privatisation, out-sourcing and offshoring individual contracts in company departments have exacerbated the trend. Payment of union subscription is often made by direct debit and people do not notify the union of change of employment or workplace. Consequently, employers issue injunctions for minor technical issues, disputes escalate and the overall industrial relations climate deteriorates.

Let me give some examples of the farcical nature of the problems that are experienced. The Communication Workers Union and Royal Mail have already been mentioned. The Union of Construction, Allied Trades and Technicians—the building workers’ union—finds it virtually impossible to comply with the law because so many of its members are on so many different sites that it is cost-ineffective even to try to ballot them. It is difficult to trace them at any one time.

The latest example involves Unite and the bus strike in London. Unite balloted its bus worker members on a wages matter. Bus drivers were being paid differently for doing the same job—even on the same route—because they were employed by different companies under the privatised system. There was 90 per cent. support for industrial action and the results were provided to the general secretary. As some hon. Members know, the procedure in Unite is that the general secretary receives the results, discussions take place with the national executive committee, the matter is passed on to the relevant region and it is decided whether to proceed with the action. That is perfectly appropriate and exhaustively democratic. However, because the process took 36 hours, Unite was injuncted and the industrial action could not go ahead. We are now told that the union may be threatened with damages for some action that took place.

Andrew Miller (Ellesmere Port and Neston) (Lab): Is not that the core of the problem? My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) is the only lawyer I know who has driven a bus. The judge who made the decision had no practical understanding of the workings of a trade union or of running a bus company. If the matter had been left to the bus company and the trade unions in the spirit of new clause 2, the problem would not have arisen.

John McDonnell: The problem is that the current system encourages the rush to litigation. It undermines normal industrial relations as we have experienced them
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in the past and frustrates individual trade members, who feel that their internal democracy is being undermined. It also frustrates several managers on the ground, whose wishes have been overridden as a result of senior management decisions, after conferring with lawyers, to resort to legal action.

The National Union of Rail, Maritime and Transport Workers had a similar case. It balloted employees of Southeastern Trains and the result was a 72 per cent. majority in support of strike action. Three days before the action was due to commence, Southeastern Trains announced that it sought an injunction against the union on the basis that the ballot was invalid because the union had not included four drivers. The union then balloted those four drivers, but it was argued that that was too late. Four votes either way would have made no difference whatever to the decision to undertake industrial action, but that action was prevented, as was, in my view, the speeding up of negotiations to resolve the dispute. There is example after example of where the Government’s genuine wish to reform the balloting procedures and enable us to return to a decent industrial relations climate and re-establish basic trade union rights in this country have been frustrated because we did not go far enough in 1999 or 2004.

Mr. Dismore: My hon. Friend is being very generous in giving way. It should be emphasised that when a ballot is challenged in the courts and an injunction is granted, that is not the end of the story. The union will rerun the ballot, hoping to dot the i’s and cross the t’s, and inevitably the vote in favour of industrial action will increase dramatically, hardening attitudes on both sides and making the dispute that much harder to resolve in the long run.

John McDonnell: I do not know of any incident where the decision of a ballot has been reversed after a subsequent ballot. We have trawled as many cases as we can, looking for examples of where the provisions have been nefariously implemented and trying to get an honest appraisal of how the law is being implemented.

New clause 2 is an extremely reasonable and relatively minor amendment. It is a tidying-up amendment that would place a duty on employers to co-operate with the unions when a ballot is held. What would that mean? Employers would be required to supply information to assist the union in complying with the notice and balloting requirements. In particular, employers would be expected to provide unions with information on

they plan to ballot. That would assist the union in complying with its legal requirements, but not diminish the employer’s entitlements. The employer would have only to respond to reasonable requests. We introduced similar duties in the statutory recognition procedures, which we debated in the House in 2004. New clause 2 goes no further than that, making a simple request for co-operation from the employer, which must be undertaken in a reasonable manner.

Mr. David Drew (Stroud) (Lab/Co-op): I hear exactly what my hon. Friend is saying and I totally support him. Does he agree that there is a marked difference between the private and public sectors? My experience
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of trade unions in the public sector is that employers would never dream of not realising the type of information that he has described. That is sometimes not the case, but in many cases good relations have been built up over a long period. However, there are still significant problems in the private sector. We need parity, equality and fairness.

John McDonnell: That description might have applied 10 or 15 years ago, but I am not sure that it does now. For instance, privatisation, outsourcing, contracting out and the use of agencies rather than departments has undermined the position. Those agencies that remain in the public sector, but which are undertaking work that would have been mainstreamed within a department, now operate virtually as private contractors. There was a difference in the past, but there is an increasingly smaller difference now.

Mr. Ian McCartney (Makerfield) (Lab): My hon. Friend is being somewhat unkind about the history of such matters. As someone who dealt with the issue in 1999, I can say that the determining factor is not whether an employer is in the public or private sector, but the relationship at the point that the dispute breaks out and industrial action becomes possible. It is irrelevant whether the employer is in the public or private sector. The consequences are quite devastating, and the real issue is not the right of trade unions as bodies, but maximising the participation of the work force in a decision that might lead to them withdrawing their labour, with all the consequences that my hon. Friend has mentioned.

John McDonnell: Any laws that undermine union members’ democratic participation in and control of that union need to be reformed. That is what our amendments are all about. I agree with my right hon. Friend. There can be poor employers in the public and private sectors. The differences have now gone and complications are experienced just as much in the public sector, as units have been broken down and forms of flexible working have been introduced, even right down to hot-desking, all of which make it difficult to maintain records of membership.

Tony Lloyd (Manchester, Central) (Lab): On the public-private issue, is my hon. Friend aware that, when Unison has to conduct a ballot in schools, it now has to write to 25,000 schools? Among the 25,000, it knows that 10,000 now have a degree of self-management, and that not all those schools are well disposed towards trade unionism. However, the union does not know which other schools might have changed their status and, as a belt and braces measure, it has to contact all of them. This involves massive expense and a great deal of uncertainty for those involved. It makes no difference to the outcome of the ballot, because a ballot has never been lost on that basis, but it does increase resource costs to union members.

5.45 pm

John McDonnell: The fact that there is now such a variety of public institutions complicates matters—do not get me going on academies.

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