Employment Bill [Lords]

[back to previous text]

John Hemming: All parties are in agreement with the Bill’s direction, which is towards clarity and ensuring that issues are resolved at an early stage with the least formality—although one does need formality at a certain point, so that people know that there is a formal grievance. I ask the Minister to recognise that there are different ways of achieving that clarity and informality. It is when one gets the whole package, including any departmental guidance, that one has what people have to face. Even if it is not specified in the Bill, departmental guidance that clarifies which code of practice to follow in which circumstance is important. It is straightforward for a smaller business to look it up and not to have to bring in legal advisers, even if some organisations provide legal support. Clarity and simplicity are the order of the day.
Mr. McFadden: It is right that we consider clause 3 in the round, and the ACAS code in particular. The code is an important part of the system, which will replace the 2004 procedures abolished by clause 1. It is more principles-based than some previous ACAS codes, because we have had an important dialogue with business and employee representatives. Some respondents have said that they do not want a lengthy procedural handbook that they have to cover, but that they want to know in broad terms what they have to do to be fair.
The hon. Member for Huntingdon asked whether tribunals have discretion in this area. They do and that is one of the changes that we are making from the 2004 procedures, where the elevation of procedures was more automatic. The ACAS code that we have proposed is more principles-based. The draft code has been circulated. It will allow tribunals greater discretion in the varying of awards.
Mr. Binley: The Minister clearly recognises that vexatious cases can be a problem. He points to a strengthening of the code. My experience is that often, ACAS, and its code, have shied away from the issue of vexatious cases in reality because it is fearful of being labelled anti-employee or anti-employer. That is a real concern. Will the Minister take that into account and genuinely consider strengthening the code and the conciliation that follows in this respect? That would take away much of the concern that small businesses have about this matter.
11.30 am
Mr. McFadden: The hon. Gentleman makes a fair point about the fear small businesses have of vexatious claims. The changes that we are making will help in that regard. Part of the problem with the 2004 procedures was that they often placed the claimant—if I may put it like that—on a fast track to tribunal, without going through the kind of conciliation that could have solved the problem outside of a tribunal. Later, we will consider ACAS and time limits on intervention, which is another relevant issue. The system that the Bill creates places greater emphasis on pre-claim conciliation. ACAS will have more money to do that through the extra funding, and an expanded helpline will help with that. We will go a long way towards meeting the hon. Gentleman’s legitimate point.
I return to the questions that the hon. Member for Huntingdon asked about the code. The consultation on the code was with ACAS’s usual stakeholders—not a term I always like, but I use it for want of a better one. They include the business organisations, some of which have been represented here, the trade unions and others in this field. I understand that about 170 responses were received during the consultation on the code. ACAS has a balance to strike because some people’s responses will be that they want the code to cover everything—to mention this, that and so on—and others will be that they want less and less in the code. I think that ACAS is right to go for a principles-based code because we are trying to reach an end product that can be read and dealt with by businesses of all sorts and sizes. We are talking about busy people so it is correct to have something that is short, concise and principles based.
The publication of consultation responses is a matter for ACAS. The normal practice is that consultation responses are made available unless the person who submitted the response requests otherwise.
Is the code set in stone for ever? No, ACAS may revisit it. However, we have spoken of the virtue of clarity. When the code is settled, laid before Parliament and approved, I do not think that we will want ACAS to revisit it any more than necessary. In that way, businesses and employees will know what is involved and what is required of them.
The hon. Gentleman asked various other questions, for example, whether the size and resources of business could be taken into account. Yes, they can. He also mentioned the worker-employee distinction. That distinction is recognised in law, and the terms are used precisely. The hon. Gentleman will be aware—this is not a debate for this Bill—that the employment rights and the obligations attached to a worker are different from those attached to an employee, and that distinction exists in law.
The new code is more principles based, and tribunals, employees and employers are asked to have regard to it. It also contains a discretionary power for tribunals to take into account such regard when assessing awards, and to adjust awards by up to 25 per cent. if either party has acted unreasonably in failing to comply with the code. I emphasise that the power is discretionary; it is for employment judges to apply depending on the case, without the rigidity of the previous automatic link to the statutory procedures that we discussed earlier. As we discussed in relation to the amendment that I moved, proposed new schedule A2 lists the enactments that apply to the clause and to the power to vary awards. I commend the clause to the Committee.
Mr. Djanogly: I made some other points that the Minister has not mentioned, but I did make a lot of points. Therefore, I would be most grateful if he would go away and look at what I said, and address a letter to the Committee on some of those points.
Question put and agreed to.
Clause 3, as amended, ordered to stand part of the Bill.

Clause 4

Determination of proceedings without hearing
Mr. Djanogly: I beg to move amendment No. 13, in clause 4, page 4, line 13, leave out ‘only’.
The Chairman: With this it will be convenient to discuss amendment No. 12, in clause 4, page 4, line 14, at end insert—
‘(za) the proceedings relate to a money dispute, and’.
Mr. Djanogly: This is a probing amendment, to open up this important clause to wider discussion and perhaps clarification.
Michael Gibbons’s 2007 report “Better Dispute Resolution: A review of employment dispute resolution in Great Britain” recommended that some cases before the tribunal should be dealt with by a fast-track procedure. His emphasis was on the settlement of monetary disputes on issues such as wages, redundancy and holidays, as the legal points at issue were simple and would be resolved more quickly by expert determination. However, in the debate in the other place the matter got confused, and it is necessary to make it clear when a full tribunal hearing is required and when a fast-track individual hearing is appropriate. Specifically, there seemed to be confusion in the other place about whether the Government intended the process to apply solely to monetary claims.
The balance that must be struck is between comprehensiveness, fairness and cost. The aim of an abbreviated fast-track process must be to deal quickly and fairly with those cases that do not need a full tribunal. I support proposals for a system that, in the words of the Minister in the other place,
“will deliver swift and effective justice and help many claimants to receive redress early, potentially relieving them from hardship and uncertainty”.
The Minister went on:
“Respondents will also benefit from having cases determined at an early stage, freeing them to concentrate on their businesses.”—[Official Report, House of Lords, 4 February 2008; Vol. 698, c. 487.]
That is all well and good, but care must be taken not to place an individual in a weaker position for the sake of expediency. We need to limit the role of single-member tribunals to dealing with those cases that are so clear-cut as to be almost procedural. There is something worrying about limiting a claimant’s right to a review by a full panel in all but the most simple and incontestable cases.
If we are to introduce a written consent process, as envisaged by proposed new subsection (3AA) to section 7 of the Employment Tribunals Act 1996, provision must be made to ensure that that cannot be abused. I am especially concerned about the role of deemed consent to a single-person tribunal. To that end, I would be grateful if the Minister could make clear to the Committee the limits of the proposed new subsection: the claims to which the fast-track process would apply, and what form consent in writing to a single-member tribunal would take.
John Hemming: This comes down to the good old article 6 question of whether people are having a fair hearing. The bigger issue that needs clarification is proposed new subsection (3AB). Logically, if both parties agree that there should not be a hearing, there will not be one. That is entirely fair. There is a point about fast track. If we aim to resolve things prior to tribunal in the conciliation process, one would hope that there was a fast track in initial determinations to suggest such a resolution.
We see no reason why the word “only” should disappear, although it seems otiose in the circumstances, as the tribunal would have to be given a power to determine something without a hearing. Therefore if it does not have that power, it will not be able to determine it without a hearing. That should be limited. The circumstances are reasonable, but some clarity is needed under proposed new subsection (3AB) because employers who feel that they have responded and are then told that their response does not count would have a real problem. Perhaps the Government should considering tabling an amendment on Report.
Dr. Nick Palmer (Broxtowe) (Lab): I should like to say how much I look forward to serving under your chairmanship, Mr. Bercow. I appreciate the point made by the hon. Member for Huntingdon, but the amendment does not seem to address the key issue. If there is mutual consent or if one side has not bothered to put in a substantive case, it seems obvious that the matter should be fast-tracked, entirely independently of whether it is a money issue or something else. I take the point made by the hon. Member for Birmingham, Yardley: we need to be clear about the exact meaning of proposed new subsection (3AB) because there should not be any doubt. We have sufficient trust in the tribunal system to believe that a reasonably adequate request for a hearing would not be dismissed purely on frivolous procedural grounds.
John Hemming: Does the hon. Gentleman agree that it is particularly important to indicate to a respondent that their response has not been accepted and that they could submit an alternative before any written determination?
Dr. Palmer: That sounds reasonable to me.
Mr. McFadden: The clause was indeed the subject of considerable debate in the other place. That is understandable, because it deals with a traditional part of the tribunal process, and perhaps people are led to expect a full hearing with the tribunal chair and two lay members—or wing members as they are sometimes known. The question posed is whether that is always necessary in all jurisdictions and in all cases. Earlier we discussed faster and perhaps less costly mechanisms for resolving disputes, which is really what the clause is concerned with. The question at the heart of amendment No. 17 is: “If we are to have a system of written determinations or determinations without a hearing, what jurisdictions should that cover?”
11.45 am
The first point to make is that tribunal chairmen can already sit alone and deal with certain jurisdictions, so that is not new. I have written several times to hon. Members who have asked what jurisdictions I have in mind. They are largely, but not entirely, the same as those jurisdictions in which a tribunal chair can already sit alone—unlawful wage deductions, breach of contract, redundancy pay, holiday pay and minimum wage cases. The only difference is the addition of holiday pay.
That is the type of case to which we are referring, and the question at the heart of the amendment is how we define that in the Bill. Our intention, if introducing such a procedure, is to define in secondary legislation those jurisdictions to which it would apply. Were such a system to be introduced and prove successful, those jurisdictions might or might not change over time in the light of experience. The Government’s view is that it makes more sense to specify the jurisdictions and the type of cases to which the procedure would apply in secondary legislation. Also, the regulations and rules would be laid before Parliament, which would allow us greater flexibility to amend the jurisdictions in the light of experience while of course retaining proper parliamentary oversight. That is a judgment about what needs to be on the face of the Bill, and it is how we intend to proceed.
The hon. Member for Birmingham, Yardley asked about proposed new subsection (3AB). The secondary legislation consultation looked at default judgments and how parties might have a way back into proceedings, a point to which my hon. Friend the Member for Hastings and Rye also referred. We are currently considering the responses to that and will announce any changes we might make in due course.
In conclusion, I believe that the type of jurisdiction is best defined in secondary legislation. That would allow us the flexibility to make adjustments in the light of experience if necessary.
Mr. Djanogly: I thank the Minister for his clarification on the areas to which the clause is likely to apply. He said that that would be finalised in secondary legislation. I will go away and think about whether items of such importance merit being put on the face of the Bill, rather than going through secondary legislation, and I might well come back to that at a later stage. I take the point made by the hon. Member for Broxtowe that the amendment only loosely makes the point that I intended to make, but I raised it on a probing basis because I thought it was important that we had a debate about the fairness of the procedures whereby someone would effectively give up their rights. I think that the hon. Member for Hastings and Rye and, to an extent, the Minister recognised that. I am pleased that we have had the debate and will think a little further on it. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Previous Contents Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2008
Prepared 15 October 2008