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My hon. Friend the Member for Hayes and Harlington believes that the law should specify in detail what sanctions short of dismissal the employer may apply against those taking part in protected industrial action and that those sanctions should be limited to the loss of earnings when the workers are on strike and, therefore, not working. That is typically what happens at the moment, although I accept that there can be disputes about this. For example, I understand that in a recent case in the education sector there was concern that the employer had deducted larger sums from pay than was fair in relation to the dispute. The court found in favour of the union member, stating that the employer had incorrectly
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calculated the amounts of pay to be deducted. In that case, the existing law provided an adequate constraint against abuse.

New clause 1 contains an extensive proposal to change the law by making it, in effect, unlawful for an employer to terminate a contract, where it is broken by a worker, for taking protected industrial action. The new clause would make it automatically unfair to dismiss an employee if any of the reasons concerned the taking of protected industrial action and would lift the limit of compensation.

Mr. Binley: The Minister will know that I welcomed the Bill in Committee, specifically because it placed more responsibility on ACAS to negotiate before tribunals were reached. Does he recognise that new proposed new section 238AA(2) opens up the opportunity for vexatious cases in the way that I described in Committee? Such an approach has helped to create a blackmail culture, which has made many small businesses give in to charges because it is cheaper to do so than to fight them. Will this proposal not simply open that up again?

Mr. McFadden: Elsewhere in the Bill we are strengthening the role of ACAS in dispute resolution, as is right. We have also committed to increase funding to ACAS in order that it may fulfil this role. That is the right thing to do, because if we can resolve more disputes before they reach a tribunal, that is in the interests of all concerned.

New clause 1 also proposes that tribunals be required to order the reinstatement or re-engagement of people sacked under these provisions. Under the new clause, the tribunal would not have a judgment to make about the suitability of reinstatement. This is a delicate area, because automatic reinstatement may not be suitable in all cases. As we know, tribunals can order reinstatement in some circumstances. I appreciate the intent behind the comments made by my hon. Friend the Member for Hayes and Harlington, but there is at least a question to be answered about why unfair dismissal on the grounds covered in his new clause should be treated differently from unfair dismissal on the grounds of discrimination or disability.

New clause 1 is based on the premise, which the Government do not share, that the law governing these matters is grossly unfair to one party. There will always be debate about the balance in these situations, but we believe that, through the reforms that I have cited, we have put in place a fair and balanced system of protection for those taking industrial action.

Mr. McCartney: An important aspect lies in ensuring that a tribunal has the capacity to take a decision other than reinstatement. There are occasions when between being dismissed unfairly and a tribunal decision the worker seeks and gains employment somewhere else. If it is simply a matter of reinstatement, they will lose the opportunity to be compensated for the loss of their job and for being dismissed unfairly. It is crucial that the options should include reinstatement, but, where that is not in the worker’s interests, an alternative to reinstatement should be forced on an employer, if necessary, by the tribunal.

Mr. McFadden: My right hon. Friend makes a strong point about discretion for tribunals in this situation and about why automatic reinstatement may not always be the wisest action.

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The essence of new clause 2 is to enlist the support of the employer to ensure that the trade union can fulfil its legal obligations regarding industrial action ballots. Representations have been made to the Government about the information required in the balloting process and so on. The question I pose is whether the right answer is to impose this new duty on the employer, in effect, to aid the trade union in organising industrial action. Again, my hon. Friend the Member for Hayes and Harlington may view this is a minor tidying amendment, but I am not sure whether that is how it would be seen.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): The Minister will be aware that there are 274,000 companies in the construction industry and that an amalgam of companies work on many of the larger sites. Many of the employees are falsely self-employed, so it becomes terrifically difficult to organise any kind of industrial action in a way that will engage everyone who is working and who has the right to strike. A provision of this nature would cover those circumstances.

Mr. McFadden: As I said, representations have been made to us about the difficulty that the law imposes on trade unions’ organising industrial action. There is a rationale behind that difficulty, because we want disputes to be properly organised and for there to be a ballot where people can express their views in private and make a free choice. In response to those representations, is the right thing to do, as the new clause proposes, to place an onus on the employer to aid the union in organising the industrial action?

John McDonnell: I shall try to be as constructive as I can. Does that mean that the Government have set in motion some form of review of the balloting procedure? Is there a timetable for them to come back with reforms and recommendations?

Mr. McFadden: My hon. Friend is over-interpreting what I am saying; I am saying that we have received representations about this matter, but I am not indicating what he suggested. He says that the employer should assist the trade unions because the obligations on them are too onerous and small slips by a union can result in legal action against it, the granting of injunctions and so on. The new duty on the employer that he proposes would relieve what he sees as an excessive burden on the union. Again, I hope that he would acknowledge that we took steps in the 1999 and 2004 Acts to clarify industrial action law. About a dozen measures were taken to unravel some of the complexity in that area. For example, new section 232B of the 1992 Act permits the court to disregard small accidental failures by the trade union to comply with key aspects of the law on industrial action ballots—so some flexibility has been provided.

Andrew Miller: Surely my hon. Friend realises that cases cited in this debate provide examples of when judges have not used that flexibility, but instead interpreted the rules in a way that suits employers.

Mr. McFadden: Some of those cases have been quoted to me, but I am not sure that new clause 2 would answer those concerns.

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Ian Stewart: My hon. Friend is correct to say that the Government have introduced legislation in the interests of working people and employers. I am not a lawyer, but the crux of the matter—this is what exercises me greatly—is that there is a difference between the approach to law in a criminal court, which is there to see justice done, and that of an industrial court, which is there to see the word of the law carried out. Industrial courts are very much colder and deal with much more specific situations. No matter what the member for the Fire Brigades Union, the hon. Member for Hemel Hempstead (Mike Penning), says, it is almost impossible for organisations as big as trade unions to be word perfect and on the dot.

Mr. McFadden: I appreciate my hon. Friend’s point, but I disagree that it is almost impossible. Ballots are organised, and official and legal industrial actions do take place.

Andrew Miller: Before my hon. Friend took that intervention, I think that he was about to say that he was not sure whether the new clause would do the trick and solve the problem of the trade union cases brought to his attention. Does he recognise that those cases are matters for concern and that the Government should address and solve the problem that they pose?

Mr. McFadden: I do not want to put myself in the position of judges in such cases, but, if my hon. Friend will bear with me, I shall touch on one of those examples in a moment.

The changes that we have made make it clear that trade unions are not expected to hold perfect information about their members whom they intend to ballot. The information supplied in the notices

The presumption is not, therefore, that the union must access information available to others. To comply with the law, it will not need information held by the employer that it will not necessarily possess.

My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) asked about some of the cases quoted, one of which concerned a recent dispute involving bus drivers—I, too, have received representations about that. I am always cautious when commenting on particular cases, because I do not pretend to know all the facts, but my understanding of that case is that the issue in dispute—pardon the pun—was the timeliness of the information, rather than the accuracy of the ballot result.

John McDonnell: That was my point: 36 hours elapsed between the receipt by the general secretary of the ballot result, which was overwhelmingly in favour of the dispute, and the application of the union’s internal democratic procedure, including consideration by the general secretary, the executive and the regions—in Unite, the regions are quite important. During those 36 hours, the union was injuncted because the employer was not informed in time. I do not believe that anyone would consider it reasonable for the court to make such a decision.

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6.45 pm

Mr. McFadden: The new clause deals with something different: the employer helping the union organise the ballot. The question has been raised about whether unions should know who and where their members are. We have encouraged unions to keep better records—in fact, we made funding available for it through the union modernisation fund—because we think that that is in the interests not only of trade unions, but of society as a whole.

Ian Stewart: I accept totally what my hon. Friend says about the union modernisation fund and the attempt to modernise unions—something similar should have been put in place for employer organisations. Nevertheless, does my hon. Friend accept that it is almost impossible for organisations with 7 million members to be perfect? If that is true of trade unions, it must also be true of organisations such as the National Trust, which has 1 million members. Why are trade unions treated differently?

Mr. McFadden: Twice my hon. Friend has said that it is almost impossible, but I disagree. Unions manage to organise legal industrial action ballots.

Mr. Dismore: My hon. Friend says that unions organise legal ballots, but most employers do not challenge the ballots in the courts. As a lawyer who practised in this area, I can tell hon. Members that were I acting for the employer, there would be very few ballots with which I could not find something wrong to present to the court.

Mr. McFadden: These debates are always enriched by union lawyers who have practised in this area, and I take all their points seriously.

I am happy to maintain a dialogue with trade unions, as with anyone, about how the law operates, but I am not convinced that a duty on employers to help trade unions organise ballots is the right way forward, so I am afraid that I cannot agree with new clause 2.

Mr. McCartney: Employers, such as the Post Office, rightly have the opportunity to write to their employees about why they should not strike. If that happens, it means that the employer has decided what position the work force is likely to take in the ballot. That must mean that it has the information available to enable it to write to its work force. Employers and trade unions should have access to a common list of people with whom to communicate. Increasingly, employers, such as the Royal Mail, that take unions to court will have already written to employees—legitimately—asking them not to take part in a dispute. On that basis, a way forward might be found, if my hon. Friend will look at it.

Mr. McFadden: I respect what my right hon. Friend says; he has significant experience in such matters. As I said, the Government are not convinced that the right way forward is to require the employer to help the union to organise the ballot.

Tony Lloyd: I listened carefully to what my hon. Friend said about new clause 2 and the ills put before him. I think that he has accepted that there is the capacity for some ills to arise in this area of the law and,
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in particular, that the law should not allow an employer artificially to frustrate the democratic will of trade union members where the union is only the servant of that will. Will he undertake to consider what remedies could be made available to deal, for example, with the Metrobus situation, in which it is quite clear that the employer used an injunction to stop a strike that the employees thought was valid?

Mr. McFadden: A couple of my hon. Friends have tempted me to give undertakings, but I am afraid that I cannot do that this evening. As I said, however, we are always happy to have a dialogue about such issues.

Let me turn briefly to new clause 3, which seeks to strengthen the Conduct of Employment Agencies and Employment Businesses Regulations 2003 in respect of the supply of workers. The approach behind the conduct regulations is to seek to reflect the interests of work-seekers, employment agencies and employment businesses, and the companies that use their services— [ Interruption. ] Regulation 7— [ Interruption. ]

Mr. Deputy Speaker: Order. Conversations are breaking out throughout the House. The House must listen to the Minister who is addressing it.

Mr. McFadden: Regulation 7 already contains provisions prohibiting employment businesses from supplying temporary workers to replace workers who are taking part in a strike or other form of industrial action. The same regulation prevents employment businesses from supplying temporary workers to do the work of other workers who have been transferred by the business to do the work normally done by individuals taking action. New clause 3 seeks to add to that provision by placing similar prohibitions on businesses that seek to hire agency workers and by requiring those businesses to inform the employment business of any strike or other industrial action when seeking to hire workers wholly or partly as a result of that industrial action.

Representations have been made to me and to the Department about compliance with that provision. Although the employment business is liable to be prosecuted for any unlawful supply of agency workers, the allegation is made that non-compliance could be at the behest of the business hiring the agency workers. In addition, there might be circumstances where the agency is not aware whether the workers it supplies are working in an area that is affected by industrial action. That is the representation that is sometimes made. I know that we have been given examples, but we have received few reports that the existing provisions have not proved effective.

There have been a number of investigations by the employment agency standards inspectorate into complaints about breaches of the provision and, in the vast majority of cases, the inspectors have not found evidence of non-compliance. Indeed, there is evidence that agencies take their responsibilities under the provision very seriously, frequently warning their client companies that they cannot supply workers to replace those taking strike action. The new clause would also require businesses to inform the employment business of such action when seeking to hire workers, but unions often inform the employment businesses that industrial action is taking place in order to ensure that the employment business cannot claim to have no knowledge of it.

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Finally, I point out to my hon. Friend the Member for Hayes and Harlington that other provisions in the Bill strengthen the enforcement of the conduct regulations. It is important to take account of them when judging the debate.

Clause 15 enables the more serious breaches of employment agency legislation to be prosecuted in the Crown court, where the maximum penalty would be an unlimited fine. Therefore, the consequences for employment businesses of breaching the conduct regulations could be a lot more serious in future.

Rob Marris: Does my hon. Friend—and neighbour—accept that the UK is currently in breach of some parts of international labour standards conventions, to which this country is a signatory? We have ratified those conventions. If my hon. Friend accepts that, by what date will our country be in compliance with those conventions?

Mr. McFadden: I thank my hon. Friend—and neighbour—for his intervention. His interventions are always helpful. I remind him that, as far as I am aware, we have not been censured by the International Labour Organisation on this issue, and that is an eloquent statement on this matter.

The other provision to which I want to draw the House’s attention is clause 16, which strengthens the investigatory powers of the employment agency standards inspectorate, for example by enabling inspectors to remove documents from the agency’s premises. Those provisions will enable inspectors to obtain more readily the relevant records of numbers of agency workers supplied during industrial disputes, and thus enhance inspectors’ ability to investigate such complaints. In conclusion—

Kate Hoey: Will my hon. Friend give way?

Mr. McFadden: I have given way to everybody else, so I will give way to my hon. Friend.

Kate Hoey: My hon. Friend mentioned the strengthening measures in clause 15, which would mean that people could go to the Crown court. Given the example that my hon. Friend the Member for Hayes and Harlington (John McDonnell) gave about Royal Mail, does the Minister expect anybody from Royal Mail to end up in the Crown court?

Mr. McFadden: That is not a decision for me. That would be how the law applied if somebody took up a complaint that was thought to be strong enough to merit that.

In conclusion, I am aware of some of the representations that have been made. We are always happy to look into these things, but I am afraid that I cannot accept the new clauses. My hon. Friend the Member for Hayes and Harlington has said that he wants to press one of them to a vote, but I am afraid that I shall have to ask colleagues to oppose it.

John McDonnell: I shall be brief, because there is much important business that we need to reach tonight. I am disappointed by the complete absence of movement on any of these issues—even after the intervention of my hon. Friend the Member for Manchester, Central (Tony Lloyd). I was expecting a form of words that would enable us to move forward.

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