Employment Bill [Lords]

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The Committee consisted of the following Members:

Chairmen: Mr. Martin Caton, † John Bercow

† Baron, Mr. John (Billericay) (Con)

† Binley, Mr. Brian (Northampton, South) (Con)

† Burt, Lorely (Solihull) (LD)

† Crabb, Mr. Stephen (Preseli Pembrokeshire) (Con)

† Creagh, Mary (Wakefield) (Lab)

† Djanogly, Mr. Jonathan (Huntingdon) (Con)

† Engel, Natascha (North-East Derbyshire) (Lab)

† Foster, Michael Jabez (Hastings and Rye) (Lab)

† Gardiner, Barry (Brent, North) (Lab)

† Hemming, John (Birmingham, Yardley) (LD)

† Kidney, Mr. David (Stafford) (Lab)

† McFadden, Mr. Pat (Minister of State, Department for Business, Enterprise and Regulatory Reform)

† Palmer, Dr. Nick (Broxtowe) (Lab)

† Seabeck, Alison (Plymouth, Devonport) (Lab)

† Swire, Mr. Hugo (East Devon) (Con)

† Ward, Claire (Vice-Chamberlain of Her Majesty's Household)

Hannah Weston, Committee Clerk

† attended the Committee

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Public Bill Committee

Thursday 16 October 2008

(Morning)

[John Bercow in the Chair]

Employment Bill [Lords]

Clause 18

Exclusion or expulsion from trade union for membership of political party

9.25 am

Mr. Jonathan Djanogly (Huntingdon) (Con): I beg to move amendment No. 19, in clause 18, page 17, line 27, leave out ‘other exceptional hardship’ and insert ‘any material financial disadvantage’.

We move on to the part of the Bill dealing with trade union membership. This is not the first time that I have spoken of my concerns about the clause, and I fear that it may not be the last. The clause embodies the conflict between two fundamental civil liberties: the freedom of association and an individual’s right of political belief unhindered by arbitrary interference by public authorities. For that reason, we must ensure that the clause is debated to the fullest extent and that arguments both for and against are carefully examined.

The bar on trade unions excluding or expelling individuals from membership is set out in section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992 as introduced by section 14 of the Trade Union Reform and Employment Rights Act 1993. The section was subsequently amended in considerable detail by the Employment Relations Act 2004, and the changes made it clear that it was lawful for trade unions to exclude or expel individuals on the grounds of their political party activities. I was on the Committee that considered that legislation and recall the debate in which we went with the right for unions to end membership on grounds of conduct but not of belief. Despite the best efforts of this House and the other place when passing that legislation, the balance of the competing rights of the individual and of the trade unions was knocked somewhat out of kilter by the decision taken in Strasbourg by the European Court of Human Rights in ASLEF v. UK. Conservative Members accept that decision, although we do not like it.

For the sake of brevity and to save the Committee from a discussion on a judgment that many hon. Members will no doubt be well acquainted with, I will note only the barest bones of the details of the case. Mr. Lee, for 10 years a member of the British National party, applied for and was accepted into membership of ASLEF. Three months later, ASLEF received a report about Mr. Lee alleging not only that he had stood for the BNP in local authority elections but that he had been engaged in racist conduct. He was expelled by ASLEF and took his case to an employment tribunal, alleging breach of section 174 on the ground that he was expelled not for

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his conduct but for his membership of the BNP. The tribunal upheld his claim. However, ASLEF appealed to the European Court of Human Rights. The Court’s assessment of section 174 led it to the conclusion that trade unions should be given greater scope to exclude or expel members on the basis of political party membership alone. In essence, the Court said that section 174 as it stands interferes with ASLEF’s freedom of association under article 11 of the European convention on human rights. Under article 4 of the convention, an obligation is placed on the United Kingdom to comply with the judgment of the Strasbourg Court and adopt amending legislation, and that is what today is all about.

First, I want to express the Conservative party’s deep unease with the decision in the ASLEF case. To our mind it marks a further erosion of personal civil liberties by an organisation with a remit that is meant to protect them. What a topsy-turvy world we live in when a court of human rights is reining in the freedoms of an individual to be a member of a recognised political party. Secondly, it seems that the Strasbourg decision was affected by the fact that the BNP member’s job was not put at risk by his union expulsion, which would be the case if, for instance, there had been a closed shop. It seems that there is yet room for this area of law to be developed further.

As the Committee will be aware, following the European Court of Human Rights decision, the Government’s consultation paper of May 2007 suggested two options for the amendment of the existing legislation. Option A, which was initially used in the Bill when it was presented in another place, proposed a broad amendment to section 174 which would make it lawful for trade unions to expel or exclude on the basis that political party membership activities were unacceptable to them. That provided much greater autonomy to the trade unions in deciding their membership. The vast majority of the 33 consultation respondents were in favour of that option, but that may have had something to do with the fact that 26 of them were trade unions.

Option B, we thought, was the more constrained and sensible option, containing safeguards against abuse. It was proposed in the other place by the Liberal Democrats and received our support. The Government are to be commended for their eventual decision to go with that option.

The two options were discussed at some length in the other place, as were almost all aspects of the clause. I will not rerun those debates. However, I will draw out some key points that it is important to reiterate. We support the decision to use option B. To my mind, the likely consequences of option A on trade union autonomy are difficult to swallow. I fail to see how giving arbitrary powers to trade unions to bar membership would result in less litigation, as was originally suggested by the Government.

Any legal challenge under option A, which would undoubtedly arise given the BNP’s tendency to grandstand in the courts on these issues, would be made a common-law breach of union rules and decided on the arbitrary nature of the rules. That could take us back 30 years to the days when trade union rules were seen as quasi-legislation that the court had to interpret, rather than as a contract between the union and its members.

We believe that the statutory safeguards in option B are far safer and more democratic because Parliament, rather than the courts, will set the parameters. With that

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in mind, we believe that option B is the correct method, or at least the best of the available choices. The provisions set out that trade unions should not exclude or expel members

“otherwise than in accordance with the union rules”

or by a decision that is unfair. Option B, as it appears in the Bill, will ensure a test of proportionality to some degree. Such measures are the yardstick for any decision about an individual. Openness and transparency of the criteria must be applied and there must be fairness in the application of the facts.

As I said, the Conservative party thinks that the clause requires further refinement if it is not to harbour the possibility of unfairness. I apologise for my somewhat lengthy introduction, but without putting them in context the amendments would not have made sense.

Amendment No. 19 has its roots in the ASLEF decision in the ECHR and the need to safeguard individual rights. The ECHR decision was that Mr. Lee had not suffered

“any particular detriment, save loss of membership itself in the union”.

Indeed, it went on to conclude that he lost nothing

“in terms of his livelihood or in his conditions of employment”.

While that was not the turning point of the case, it was a significant point raised by the Court. There is enough indication, however, that in other circumstances the Court may have been persuaded that there had been sufficient detriment to a claimant for a decision to go in his or her favour. Although the UK employment market is no longer blighted by the closed shop, this aspect of the decision opens a rich vein of opportunity for claims to be made by the BNP and others.

This important amendment was provided by the Liberal Democrats in the other place. Its aim is to ensure that appropriate statutory safeguards are put in place to prevent the abuse of the clause. Furthermore, such safeguards would prevent the courts from being unduly forced to prevent abuse by trade unions and deal with the corresponding litigation.

Under the amendment, a trade union would not be able to expel or exclude a person from membership if the result would be to inflict a “material financial disadvantage” on the individual. The Bill uses the term “exceptional hardship”, which while an improvement on the original concept of “hardship” alone, is too broad to act as a consistent measure of hardship. I share Lord Lester’s concern that without a more clearly defined and qualified concept of “hardship”, the ambiguity of the term could lead to court cases. We need to spell out a clear and concise measure so that that cannot happen.

Therefore, with reference to proposed new subsection (4G)(c), I submit that a criterion of “exceptional hardship”, with all its associated problems, as the Government showed in the other place, is perhaps too opaque a phrase for the purpose. I instead propose “material financial disadvantage” as the safeguard to be included in the clause.

Michael Jabez Foster (Hastings and Rye) (Lab): Material hardship is such a low test. I cannot think of an example in which there would not be material hardship, material being a non-quantitative term, save that it

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exists. It is such a low test that, were it to be imposed, I cannot see a situation in which a union could ever expel. Will the hon. Gentleman give an example in which he thinks expulsion would arise?

Mr. Djanogly: We believe that an assessment of that phrase is far easier than what is proposed. Financial hardship is a concept that we all recognise and I trust it can be judged on an objective basis. It allows the courts or trade unions to take into account the financial circumstances of the affected individual without undue difficulty.

Michael Jabez Foster: Will the hon. Gentleman give way again?

Mr. Djanogly: No, because I am going to answer the question.

As regards what is material, the courts in this country have a long tradition of considering what is material in any case. Commercial contract disputes often pivot on what is to be considered material. Given that background, the familiarity of the courts and trade unions with these concepts and with case law, and the subsequent ease with which an assessment can be made on the facts, we think it better to replace “exceptional hardship” with “material financial hardship”.

The Minister of State, Department for Business, Enterprise and Regulatory Reform (Mr. Pat McFadden): The hon. Gentleman talks about material financial “hardship”, but his amendment refers to material financial “disadvantage”, which is even milder than the point made by my hon. Friend.

Mr. Djanogly: I think the hon. Member for Hastings and Rye was questioning the use of “material”. We believe that materiality as a concept is the key. That is why we have moved the amendment.

John Hemming (Birmingham, Yardley) (LD): Before I go on to the substantive issue, I must reiterate a declaration of interest. Perhaps uniquely among Opposition Members, I had a vote in the Labour deputy leadership election. It is still stuck on the wall of my office, uncast. I had it because I happen to belong to a trade union that is affiliated to the Labour party. The clause, in a sense, has a direct relevance to me because I am not a Labour supporter, Labour voter or even a member of the Labour party; I am a member of another political party and I could be expelled from the Musicians Union for standing here as a Liberal Democrat Member of Parliament.

Michael Jabez Foster: On a point of order, Mr. Bercow. The hon. Gentleman has just declared something that may be unconstitutional. If he does not pay his political levy to the Labour party, he would not have a vote.

The Chairman: That is not a point of order. It may be considered to be a point of merriment, but that is not quite the same thing.

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John Hemming: On the point of merriment, I have told the Labour party that I do not mind it having the £5 affiliation fee, as long as it stops selling peerages or accepting loans for peerages. In the interests of pluralism, I am quite happy for the £5 or so, which is paid by the trade union without my agreement, to continue to be paid to the Labour party.

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Prepared 17 October 2008