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Simon Hughes: On a point of order, Madam Deputy Speaker. As you know, yet again, the majority of new clauses and amendments tabled on Report by Back-Bench Government Members and Opposition Members have not been debated. Five new clauses and four amendments have been debated; eight new clauses and eight amendments have not. May I ask whether you, your co-Deputy Speakers and Mr. Speaker report to the Leader of the House on the amendments and new clauses that are not reached? The Leader of the House has assured the House that she is seeking to do something to ensure that the process is improved, but we have seen no action. May I ask that you, Madam Deputy Speaker, consider with Mr. Speaker reporting, yet again, another Bill where amendments and new clauses have not been discussed?
Madam Deputy Speaker: The occupant of the Chair is governed by the rules of the House—by the motion before the House. If the hon. Gentleman has concerns, and I understand what he has said, I suggest that he raise them with the Leader of the House. It is important that we get on with the remaining time and discuss the Third Reading of the Bill.
9.19 pm
Mr. McFadden): I beg to move, That the Bill be now read the Third time.
The Bill covers a number of significant issues. It reforms dispute resolution at work, minimum wage legislation, employment agencies legislation and, as we have just discussed, trade union membership. It brings together elements of the Government’s employment relations strategy to increase protection for vulnerable workers and reduce costs for law-abiding businesses. The Bill gives a better deal to low-paid workers and to agency workers who have been denied the national minimum wage against their rights. The Bill reflects on 10 years’ experience of the national minimum wage and seeks to build on it.
Mr. McFadden: I pay tribute to the tremendous contribution made to the minimum wage legislation by my right hon. Friend the Member for Makerfield (Mr. McCartney), who has been present throughout the debates this evening. I am happy to give way to him.
Mr. McCartney: I thank my hon. Friend for his kindness towards me in today’s debate and previous ones. Will he meet my hon. Friend the Member for North-East Derbyshire (Natascha Engel) and me to talk about the enforcement of employment tribunal awards for vulnerable workers? Will he have further discussions with me, Public Concern at Work and the CAB about the Public Interest Disclosure Act 1998 and what we need to do in relation to that?
Mr. McFadden: I will, of course, be happy to meet my right hon. Friend and my hon. Friend the Member for North-East Derbyshire (Natascha Engel), and to have those further discussions.
The Bill’s provisions on dispute resolution stem from Michael Gibbons’s independent review of dispute resolution in the workplace, published last year. The provisions will lighten the burden on workers and business by encouraging the resolution of more workplace disputes earlier and informally. The tribunal route provides important access to justice and it must be available. However, if we can resolve disputes sooner than we would through a tribunal, that will often be better for all concerned.
The Bill makes changes that will enable us to move away from the current, rigid legal process for resolving disputes, which, as Michael Gibbons found, has led to more claims being taken to employment tribunals than may have been necessary. We are putting in place a package that encourages employers and employees to resolve their issues earlier and informally. As I said earlier, we are expanding ACAS’s role in that area and we have allocated additional funds to ACAS so that it can fulfil its expanded role. The package includes statutory changes, revision of the ACAS code on disciplinary grievance procedures, and substantial investment to improve advice to employees. We estimate that, once in force and fully operational, the measures could save business up to £170 million a year.
The Bill introduces a new enforcement framework for the national minimum wage, involving the introduction of a new civil penalty that can be levied against all non-compliant businesses. The framework also introduces a fairer method of calculating arrears. Until now, an
employee who was paid less than the minimum wage over a number of years would lose out on the uprating of the minimum wage even if the arrears were restored. The Bill changes that; it makes non-payment of the minimum wage act, in effect, as an interest-free loan from the employee to the employer and introduces a fairer system of arrears by making sure that they are paid at the prevailing national minimum wage rate.
Lorely Burt: Does the Minister not regret, like me, the passing of the opportunity that the Bill offered? We could have strengthened enforcement to make sure that rogue employers paid arrears, and that ex-employees could not take redress other than through the civil courts.
Mr. McFadden: I do not believe that we have missed opportunities in this Bill. We have taken the opportunity to do two things—to strengthen the system for paying arrears to workers who are not paid the minimum wage and to strengthen the penalty regime for employers who do not pay the minimum wage.
The Bill makes offences under the National Minimum Wage Act 1998 triable in the Crown court as well as the magistrates court and strengthens the powers of Her Majesty’s Revenue and Customs to investigate criminal offences. The aim of these provisions is to create a clearer deterrent to non-compliance with the minimum wage and to provide a fairer outcome for workers who have suffered a loss in real terms as a result of underpayment of the minimum wage.
Simon Hughes: There are many good things in the Bill—I do not argue with that. However, does the Minister accept that it does not change the fact that it is still not compulsory for there to be a conciliation process between employer and employee in all cases of prospective dismissal?
Mr. McFadden: We thought that it was right to give ACAS a power to offer conciliation so that it can use these increased resources in cases where it can make the greatest difference.
The Bill introduces an improved enforcement framework for employment agency standards, making offences under the Employment Agencies Act 1973 each-way offences and defining investigative powers. Combined with the minimum wage provisions, the Bill provides more effective enforcement and greater support to vulnerable agency workers. It also promotes compliance, which we should never forget is in the interests not only of vulnerable workers but of the vast majority of law-abiding, decent businesses. Among other things, the Bill makes the changes that we have discussed, and which I will not go over again, in response to the European Court judgment in ASLEF v. UK.
I am pleased that as we approach the end of our deliberations in this House, most major stakeholders have broadly welcomed the Bill and that the broad consensus on its elements has been reflected in most of our debates. I believe that it has been improved during its passage through both Houses, and I am grateful to hon. Members on both sides of the House who have contributed to the proceedings.
The Bill will achieve two main things: it will reduce costs and burdens for businesses and for workers in terms of dispute resolution and strengthen enforcement
of the law, particularly for low-paid and vulnerable workers. In that sense, it benefits individuals, those who represent workers, and good business. I commend the Bill to the House.
9.27 pm
Mr. Djanogly: This Government have so far introduced some 18 Acts and more than 280 statutory instruments dealing directly with employment laws and regulations, and we are now debating another one. Their continual tinkering with employee rights and employer duties has left business and individuals confused. The Bill was originally called the employment simplification Bill, so the change was fully justified given that it involves no simplification whatsoever. It is hardly surprising that if one reviews the figures for employment tribunal cases, it is clear that small businesses make up the overwhelming majority of respondents. Many small businesses are no more sophisticated than the employees claiming against them. They do not have the large human resources departments or teams of lawyers that are needed to decipher the tangled web of employment laws that the Government continue to create.
Even while the Bill has been making its way through the House, a further, under-the-table deal was done between Labour and the trade unions to tamper with the laws on agency workers in a way that could be very damaging for our already over-burdened businesses. While that is hardly surprising from a Government who are almost entirely funded by the trade unions, it has got to a point where even the ex-Secretary of State for Business, Enterprise and Regulatory Reform seems to have recognised that the Government have gone too far. Prior to his promotion, he admitted that there was a
“need to challenge the automatic assumption that the only way to deal with exploitation in the workplace is by passing new laws.”
I hope for the sake of employers across the country that Lord Mandelson has read his handover brief thoroughly, not least because, given the Labour amendments tabled, it looks as if we will need to prepare for a union legislative onslaught as the TUC calls in its Warwick II promises. Just to recap: we heard proposals today to protect employees taking industrial action from dismissal; to prevent trade unions from being sued by employers suffering loss as a consequence of industrial action; to provide union members with a dual award—damages and reinstatement—where they are dismissed for striking; to shift the responsibility for ensuring ballots are properly conducted from unions to employers; to prevent businesses using so-called strike breakers; to provide special privileges not to work for so-called union workplace environmental reps; and to abolish all restrictions on trade unions’ rights to expel or exclude members—
Madam Deputy Speaker: Order. May I just remind the hon. Gentleman that on Third Reading we are discussing the contents of the Bill, not what might have been in it?
Mr. Djanogly: I thank you for that guidance, Madam Deputy Speaker. With that in mind, I would now like to discuss the provisions of the Bill.
The Bill was extensively debated in another place, as well as in Committee. I put on record the thanks of all hon. Members for the work that the other place did on the Bill. It was substantially reviewed by the time it
came to us. However, we have some problems with aspects of it. Mention was made of how the Government have taken us back to the position before the earlier provisions came into force. Our concerns focused on clause 3, and the changes that it would make to the employment tribunal system. The new ACAS code would remove the overly legalistic system that arose, despite the Government’s assertions to the contrary, from the Employment Act 2002. The ACAS code is now principle-based, but we could be in danger of elevating procedure over substance. Tribunals have the power to vary awards based on non-compliance with procedure and we think that there could be a dichotomy. If one acts in the spirit of a principle-based code, could one never fall foul of that procedure? In Committee, we asked the Minister to give us some statistics, and to discuss the various awards that the tribunals had granted, but those were not forthcoming. There is a perception among businesses that tribunals are disproportionately inclined towards the employee, and we share some of those concerns about the Bill.
The second part of the Bill deals with the national minimum wage. We support the national minimum wage, and a continual monitoring of legislative provisions that deal with it. We also support action to ensure that workers who receive the minimum wage do not lose out in real terms when they are owed arrears as a result of underpayment. The previous law gave almost no deterrent to underpayment, so the change in the Bill is welcome.
We had various concerns about the extension of powers of Her Majesty’s Revenue and Customs, and we still have those concerns. While the proposal to allow enforcement officers to remove documents under clause 10 is accepted, we do not accept that the balance in the Bill is as good as it could have been.
I urge the Minister to give maximum publicity to the changes in the implementation of the national minimum wage provisions. All employers must be given full opportunity to assess their companies and correct any failings in payment of the minimum wage before the new penalties are imposed.
We had a full debate during all stages of consideration of the Bill, including this evening, on clause 19, which relates to the European Court of Human Rights judgment on the ASLEF case. Although we believe that it was appropriate for the Government to respond to the decision of the European Court of Human Rights, we continue to have genuine concerns about clause 19 as it stands. Only time will tell, but I predict that court cases will derive from the provisions with which we have ended up.
The definitions of “membership of a political party” and of “political party” remain outstanding issues, which will lead to further court cases. The debates on the Bill’s progress through both Houses show that the Government have been slightly inclined to burrow their head in the sand when faced with reasoned argument. Worse, they legislate for perceived threats or concerns, without hard evidence to back up the need for legislative intervention. That could not only be expensive in terms of taxpayers’ money and the House’s time, but has made for a weaker Bill than it should be.
Although we agree with the Bill’s overall aims, concerns remain about its scope and implementation. Moreover, the Government have failed, once again, to address properly the concerns of business when they are mounting by the day. As it stands, the Bill will be a fitting
testament to a vacuous and empty Government, who have taken a short-term view and failed to push forward genuine change.
British business has been crying out for reform to employment laws, which are making them increasingly uncompetitive, and for protection from vexatious employee claims. Surely we could have done more than simply give unions the power to expel members for their political beliefs. To that extent, the Bill is a missed opportunity.
9.36 pm
John McDonnell: I welcome the elements of the Bill that deal with dispute resolution, and especially the provisions that cover the national minimum wage. However, I join the hon. Member for North Southwark and Bermondsey (Simon Hughes) in expressing concern about not reaching many amendments about the minimum wage.
Any Bill’s implementation must be properly resourced. Her Majesty’s Revenue and Customs has continuing concerns about the number of officers who are required and have been recruited so far to implement the minimum wage provisions. Earlier this year, the Minister promised us that there would be at least 20 extra officers and a 50 per cent. increase in expenditure on enforcement. I understand that those 20 officers have not been recruited so far. At best, we are up to 17, possibly 18, this week. Some—at least 10—are staff who are already in post, so there seems to be an element of double counting. I am therefore worried about whether there are adequate resources to implement the Bill.
Although the minimum wage provisions are welcome, they go nowhere far enough in some sectors of industry to address the genuine problems of low pay. I deeply regret not reaching the amendments about the minimum wage for seafarers. Let me remind hon. Members of the implications of that. On the vessel “Daroja”, owned by Marlow Navigation, which sails between Aberdeen and Lerwick, a Filipino worker is paid £295 a month. On the AHTS Survarna, an Indian seaman is paid £1.63 an hour. That is not acceptable.
Mr. Speaker: Order. My father was a merchant seaman all his life and I have some sympathy with what the hon. Gentleman is saying, but it is not in the Bill. On Third Reading, we must talk about the contents of the Bill.
John McDonnell: On that basis, I simply say that the provisions are not strong enough to deal with such abuse of workers in this country, and it needs to be tackled in future legislation.
9.39 pm
Lorely Burt: Liberal Democrat Members welcome the Bill in general—it certainly improves employment law. I should like to pay a small tribute to colleagues in the other place who scrutinised it thoroughly before it came here. That has made our work a great deal lighter.
Nevertheless, at the risk of trying your patience, Mr. Speaker, I want to mention a couple of things that we have not been able to discuss, including the mariners and the loss of the opportunity not only to safeguard the minimum wage for staff in the hospitality industry, which the Conservative party proposed, but to strengthen
public disclosure of whistleblowing allegations and, most importantly, to help employees to secure the implementation of awards for the national minimum wage.
I will move on to concentrate on what we have achieved in the Bill, which is a great deal. It has been described at length by the hon. Member for Huntingdon (Mr. Djanogly), so I will just mention the work that we have done on behalf of low-paid workers and agency workers and the improved dispute resolution procedures for employees and employers alike. We support clause 19, which we feel represents the best balance of freedom of association and the European Court of Human Rights requirements that could be achieved among all the parties.
Although we have had our moments, all parties have worked together to improve employment relations. We are happy to support the Bill and, to use the Minister’s words in quoting the noble Lord Morris, we wish it well on its way.
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