Employment Bill [Lords]

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Natascha Engel: I do not entirely disagree, but the hon. Gentleman must also recognise that that is just politics. It might be a bit annoying and sometimes really painful, but havoc is politics—and legitimate politics, too, even if annoying. We must also recognise the difference between serious extremism, which the hon. Gentleman was so passionately angry about, and xenophobia and racism, both of which the BNP, as a political party, represent, which we all hate fundamentally and which are, importantly, fundamentally anti-democratic. The mainstream political parties, as well as trade unions, are democratic organisations. Again, that is another point that we must recognise.
We have also recognised in our debates, in terms of freedom of association and freedom of speech, that there are big political parties and trade unions. Those points have been raised time and again during our sittings. Freedom of association and freedom of speech are fundamental to democracy, and we all support those things. It is important to remember that this is about members in membership organisations—trade unions and mainstream political parties—having the right and the ability collectively to determine the rules of those organisations, as well as collectively to change them. Extremism absolutely undermines those democratic principles.
If a trade union or a political party decides collectively that it finds extremist views unacceptable—not just in principle, but as part of the ethos of the organisation—it should be within the rights of those organisations to expel people with those views. As my hon. Friend the Member for Hastings and Rye said, if no hardship is suffered as a result—there is no longer a closed shop—that should be within the rights of those organisations.
As the hon. Member for Northampton, South mentioned earlier, if an individual’s beliefs run so contrary to the organisation—in this case, a trade union—that they undermine everything that it represents, he or she should go. I support their going. The proposal is trying to enshrine in law the ability for a trade union or other organisation to get rid of a person if the organisation has collectively decided and judged that they are contrary to everything that it represents. Another fundamental point is that the ECHR’s decision on this matter was all about transparency and the ability to do that within trade union rules. That is all that I want to say about that. The clause supports all the things that we have been talking about today. Most members of the Committee agree that these are fundamental democratic principles.
Mr. McFadden: My hon. Friend the Member for Hastings and Rye is right on one point—whichever way people move on this issue, somebody is ready to tell them that they have gone too far or not far enough. That goes with the territory. To govern is to choose. Our responsibility is to try to get this right.
The thrust of the amendments is that there should be more conditions. The question is whether we have gone too far in respect of this power, and that is the judgment that we have had to make all the way through. I said in my first comments this morning that the Government changed our view as the debate went on in the other place. We canvassed two options—a broader option, to which the hon. Gentleman is encouraging us to return, and an option broadly in line with the clause as it is now. On balance, we have taken the view that although both those options would meet the legal requirement to legislate in line with the ECHR judgment, we should give unions the power that the judgment recommends. However, there was also a strong case for due process and safeguards in the exercise of the power, and that is what the clause tries to do. Hon. Members on both sides of the Committee will have their views on whether it does so perfectly.
Mr. Baron: I appreciate that the Government are not in an easy position and that finding the right compromise is difficult, but will the Minister, for the sake of clarity, give us his definition of a political party?
Mr. McFadden: For me, a political party is the kind of organisation that I joined. It is no more necessary to define that now than it was when the hon. Gentleman’s party introduced the 1993 provisions and felt no need to enshrine such a definition in law.
Mr. Baron: For the purposes of the Bill, some regard clearly has to be given to the term, “political party”. Will the Minister give us his definition of that term?
Mr. McFadden: I am not sure why the hon. Gentleman feels that it is more necessary to define that term today than it was when the Government whom he supported introduced their legislation, which made a distinction between party and conduct that had not been in previous legislation.
We should not lose sight of the safeguards, which we have discussed one by one and which are set out in proposed new subsections (4G) and (4H). They state that a decision to exclude or expel should be taken in accordance with the union’s rules and that it should not be done unfairly. We have been over the point about exceptional hardship. “Fairness” is defined as notice of the proposal to exclude or expel being given to the person with reasons and there being a fair opportunity to make representations, which should then be considered fairly. Most of us would recognise that as being due process that allows somebody a legitimate voice in a decision of this kind. This is delicate territory. We have to legislate with care and caution, and we should do so in line with the Court’s judgment. The Government have always taken the view that it was right to bring our legislation into line with that judgment. As the debate has progressed in the other place and in Committee, we have concluded that it is right to do so in this legislation, with the safeguards that I mentioned enshrined there.
Question put and agreed to.
Clause 18 ordered to stand part of the Bill.
Clauses 19 and 20 ordered to stand part of the Bill.

Clause 21

Mr. McFadden: I beg to move amendment No. 20, in page 18, line 16, leave out from beginning to second ‘on’ in line 17.
The Chairman: With this it will be convenient to discuss the following: Government amendment No. 21.
Government new clause 8—Employment agencies and national minimum wage legislation: information-sharing.
New clause 3—Exchange of information between National Minimum Wage and Employment Agency Standards Inspectors—
‘(1) After section 9(4)(a)(iv) of the Employment Agencies Act 1973 (c. 35) there is inserted—
“(v) to a National Minimum Wage inspector of HM Revenue and Customs for the purposes of the exercise of their respective enforcement functions under the National Minimum Wage Act 1998 (c. 39).”.
(2) After section 15(4)(b) of the National Minimum Wage Act 1998 (c. 39) there is inserted—
“(c) may be supplied by, or with the authorisation of, the Secretary of State to an inspector of the Employment Agency Standards Inspectorate for the purposes of the exercise of their respective enforcement functions under the Employment Agencies Act 1973.”’.
The forum’s report, which was published in August, sets out a programme to improve basic awareness of employment rights, to facilitate and encourage the reporting of abuses and to take steps to join up the workplace enforcement bodies and enhance their profile. One key issue that the forum identified was the need for closer working between the enforcement bodies. An important element of that is the ability of the bodies to share information about non-compliance. That is addressed in the new clause in my name and in that tabled by the Liberal Democrats.
As the forum recognised, there are currently barriers to effective information sharing between some of the enforcement bodies, including between those that enforce the national minimum wage and those that enforce employment agency legislation. The Employment Agency Standards Inspectorate can contact Her Majesty’s Revenue and Customs, which enforces the minimum wage, about potential non-compliance with the minimum wage only before it has undertaken an inspection when a complainant has clearly stated that there is a minimum wage issue or where that is clear from the complaint. Once an inspection has started, the current legal position is that it would be an offence to disclose information obtained during the inspection. In those circumstances, the agency standards inspectors can only advise the complainants to contact the minimum wage helpline.
Information about compliance with the minimum wage does not always come to light until the inspection is carried out, by which time it would be too late to pass from one agency to another. Clearly, there would be value in the inspectorate being able to contact HMRC after an inspection has been carried out, rather than having two sets of inspectors working in silos, where once they had started their work, they were not able to communicate with one another. The converse is also true: the restriction on minimum wage officers being able to share information about breaches of the law with regard to employment agencies or details of non-compliant employers represents a similar barrier in the other direction.
The minimum wage enforcement team at HMRC visited 122 employment agencies last year during the course of its national minimum wage enforcement. Of those, 30 were found to be non-compliant. Those 30 agencies may be non-compliant in other ways too, so this is valuable and important information sharing. There is really only one difference between the two clauses dealing with this issue. The new clause in the name of the Liberal Democrats deals with the particular bodies I mentioned in my remarks, that is HMRC and ASI. The new clause in the name of the Government deals with the Acts, which in terms of future-proofing, should give us a little more flexibility to ensure that, were we to go down that road, even if the bodies enforcing the provisions under these Acts change in the future, the information-sharing permission which we seek to gain through this new clause could continue.
2.15 pm
Much of this information between enforcement bodies is not a matter of principle. It is more to do with when the founding legislation for a particular body was passed by Parliament. For example, the Gangmasters Licensing Authority which was established a couple of years ago does not have this gateway problem of information-sharing. No one has suggested that the fact it does not have such a gateway is a problem. We are seeking to bring other bodies into line with that. Nor do I pretend—and it is important to stress this—that with the passage of this new clause we will have entirely dealt with the difficulty of information-sharing between different enforcement bodies in the employment field. What we would be doing is taking the earliest possible legislative opportunity after the publication of the vulnerable worker enforcement forum report to address the issue in the context of agency standards and minimum wage. Although I am grateful to the Liberal Democrats for tabling the amendment that addresses the same issue, I believe that operating on the basis of the legislation rather than particular bodies may be a better way to do it and I hope that hon. Members agree.
Amendment No. 21 provides for a commencement by order of new clause 8 and is therefore consequential to it. Amendment No. 20 deals with the passage of time. In the dim, distant and hopeful past there was a possibility that this legislation may have completed its parliamentary passage by now and, as hon. Members will be aware, the Government take the view that when bringing in new legislation which has an effect on employers or businesses, that it is best to do that on one of two common commencement dates so that employers know when changes will come into force. Hon. Members will see that clause 21 as it stands at line 16 refers to 1 October 2008 as a possible commencement date. That date has clearly passed. By my watch, that is 15 days ago and this amendment simply takes account of that to ensure a commencement date that is in the future.
John Hemming: I will not press new clause 3. It is not worth arguing about the difference between it and new clause 8 which was tabled afterwards.
Mr. Djanogly: Regarding Government amendment No. 21, well spotted to the Minister or perhaps others in his team. As for Government amendment No. 20, yes, I fully appreciate that employers like to know when things are coming up.
My main concern about new clause 8 relates to safeguards. Will the Minister explain what safeguards he is proposing concerning the information that will be kept? Will he please outline how such information will be stored, how and when it will be transferred and when it will be disposed of? The concern for small businesses is that once in the system they will face arbitrary investigation as their details are passed from one agency to another, perhaps on an ongoing basis or for ever. Given the problems of lost data suffered by various Departments, will the Minister assure me and small businesses that information will be transferred only when absolutely necessary? I am interested to know how the information transfers will take place. Will it be through a centralised searchable database or by specific transfers on request? My concern is that there may be additional administrative and financial costs, when a simple phone call between investigators might be adequate.
My final concern is with the phrase “any purpose relating to that Act”, which is used extensively throughout new clause 8. It strikes me as the sort of broad umbrella term that could hide a host of things. What safeguards are there to ensure that this requirement will be complied with? Should we not have more definite parameters than “any purpose relating to the Act” within the Bill to ensure that the courts are not flooded with cases to interpret that phrase?
Mr. McFadden: The hon. Gentleman is right to ask how the clause will work and what we have in mind. As I said in my opening remarks, when a minimum wage officer or agency standards inspector is called to inspect an organisation because of a report, if they feel that there is also a high risk of non-compliance in the other field of law, they may tell the other enforcement body about it instead of two sets of inspectors going in. Officers will be able to pass on information about a business that is found to be non-compliant. I also said such provisions operate without difficulty for the Gangmasters Licensing Authority. As hon. Members may be aware, that body operates in the field of agriculture and food production. The agency standards inspectorate works in the rest of the economy.
I would like to reassure the hon. Gentleman on the issue of data loss. We are not talking about the mass transfer of personal data, but the inspection of employment premises with a view to ensuring that they adhere to the law. We are fully aware of the concerns that he raised and we take them seriously.
New clause 8 will not affect the legal restrictions that prevent agency standards inspectors and minimum wage officers from disclosing information to other bodies. The phrase “any purpose relating to that Act” should not be too wide. It limits the use of the information to the enforcement of the two pieces of legislation that are specified. Both pieces of legislation contain criminal sanctions for disclosure that is not for the purposes of the legislation.
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