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Baroness Blatch moved Amendment No. 93A:

Page 6, line 39, at end insert--
("(8) In this section--
"contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether it is oral or in writing;
"employ" means employ under a contract of employment and "employment" shall be construed accordingly.").

The noble Baroness said: This amendment will introduce into Clause 8 a definition of the term "employ". That definition will make clear that employment means employment under a contract of service or apprenticeship. The intention is to make clear that the employed, but not the self-employed, should come within the scope of Clause 8.

As the Committee will know, Clause 8 will make it an offence to employ a person aged 16 or over who does not have permission to live and work in the United Kingdom. However, the term "employ" is not defined. That is consistent with the approach taken in the Immigration Act 1971 and in the Immigration Rules, where no attempt is made to define what is meant by "employment". The appellate authorities have not felt bound to consider whether people are, strictly speaking, employed having ruled, for example, that providing childcare for a sister and brother-in-law constituted employment.

If we did not define what we meant by "employ" in Clause 8, it would finally be for magistrates' courts to decide the scope of that term for the purposes of Clause 8. A number of respondents to our consultation document made the point that we ought to define in the Bill what is meant by the term "employ".

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Having considered the matter, we agree that it would be helpful to have such a definition. It would make it easier to give clear guidance to employers about the nature of their obligations.

The term is, of course, defined in other legislation affecting employment. The most common definition, and the one which seems to us most appropriate to use in the context of this new offence, relates to employment under a contract of service or of apprenticeship. This is a well-established term and there is a considerable body of case law which explores the circumstances in which such a contract will be taken to exist. A person who is self-employed works under a contract for services and would quite properly not be covered by the terms of Clause 8. I beg to move.

Lord McIntosh of Haringey: This only confirms what I was saying on the last amendment. I do not know whether to laugh or cry when I see these amendments. The Minister is right: it is necessary to define "employment". She is probably right too in saying that it is necessary to define it in terms of a contract of employment or apprenticeship. But what will be the effect of that? All the rogue employers she describes--those who employ illegal immigrants--will immediately say, "I am not employing you. You are self-employed." Sometimes they will be what are called "gangmasters" or employers of "lump" labour, but more often people will actually be self-employed.

In order to provide for this nonsensical attempt at control of illegal immigration--I am not against the control of illegal immigration; I am against the way it is proposed in this Bill--the Government will drive large numbers of legal workers in this country into self-employment and outwith the protections of employment legislation. As I say, I do not know whether to laugh or cry.

Earl Russell: I apologise to the noble Lord, Lord Lucas of Chilworth, if I have been repeating myself. So far as I know, I have only one question to which I have yet to receive an answer where I see the same mischief arising under several different parts of the Bill.

I agree entirely with what the noble Lord, Lord McIntosh of Haringey, said. The trend to self-employment is already in progress for a great variety of reasons. It has the effect of depriving people of the protection of employment legislation. It has the effect also of depriving government revenue of national insurance contributions.

We are faced with a real problem which is worrying the Chancellor of the Exchequer considerably; that is, falling tax takes of various sorts. I cannot help wondering whether this measure will give a further twist to that process and make the problem of putting right the public sector borrowing requirement even more serious. I hope that that point will receive thought and that there will be consultation with the Treasury about it.

Baroness Seear: Referring back to the construction industry, about which I seem to have spoken a great deal this evening, this provision means that a vast proportion of people will go on what is known as the "lump" in that industry; and I wish everyone luck with it.

2 May 1996 : Column 1851

On Question, amendment agreed to.

[Amendment No. 94 not moved.]

Lord Dubs moved Amendment No. 95:

Page 6, line 39, at end insert--
("( ) Within 18 months of this section coming into force, the Secretary of State shall lay before both Houses of Parliament a report estimating the costs to business of implementing this section during its first year of operation.").

The noble Lord said: In moving Amendment No. 95, I shall speak also to Amendment No. 96, both amendments being in my name and that of my noble friend Lord McIntosh of Haringey.

These amendments take the situation forward after the Bill has come into force, although I hope that it will not be passed as it is presently drafted. Amendment No. 95 seeks to establish that,

    "Within 18 months of this section coming into force, the Secretary of State shall lay before both Houses of Parliament a report estimating the costs to business of implementing this section during its first year of operation".
We believe that to implement Clause 8 will put a significant additional burden on to businesses; and we think it right and proper, as the Government deny that proposition, that within a certain period after the Bill comes into force there should be an assessment of the cost to business.

Some figures have already been put forward as to what the cost might be. I am not sure that they are worth quoting because all the matters involved may not have been considered. I shall give the Committee one or two examples of what costs might be incurred. Some employers will have to train staff to operate the new system. Personnel departments will need to know what the legislation says and how they must conduct themselves. Employers may have to develop new systems for keeping records and for monitoring their employment practices.

The cost to employers might be raised in another way. Foreign nationals are increasingly required to present their original documents to, or leave them with, a number of agencies, particularly the Home Office. From June this year they will have to leave certain documents with the Home Office when making particular applications. The Home Office often sits on those documents. While the Home Office has the documents, the employee cannot show them to the employer. This applies not only to the Home Office, lest the Minister thinks that I am picking unfairly on her department. It may be the embassy of the country from which the individual comes; it may be educational establishments; it may be health authorities; it may be the DSS, local authorities or others. Such agencies may require the same documents that the Government require should be shown to employers.

There will be an extra burden on employers because they will have to know how to cope with the situation when an employee says, "I have a passport. It says that I am allowed to stay here and to take work, but it happens to be with the Home Office". We all know that it takes quite some time for the Home Office to process these documents. Employers can, as the Minister said, take people on without the documents on the strength

2 May 1996 : Column 1852

of the assurance that the potential employee gives. This represents an extra burden on employers. It is one of the reasons why we should like an amendment to be accepted which ensures that there will be some assessment of how the system works.

Amendment No. 96 concerns whether the effect of the legislation will be to discriminate against the black and ethnic minority communities of this country. I fear that it will be. I said earlier--I do not mind repeating it--that I understand that the Cabinet itself was divided on precisely this issue when considering whether to bring forward the Bill. The Commission for Racial Equality, the TUC and others fear that the effect of the provision will be discriminatory. The Government say that it will not be. The amendment deals with that dilemma or that difference of opinion.

The amendment will ensure that the Secretary of State lays before Parliament after two years of this section coming into force a report on the effects on the employment of members of ethnic minorities. We know that unemployment among black and ethnic minority people is higher than among their white equivalents. Afro-Caribbean men suffer a much higher level of unemployment than their white contemporaries. If there is any basis for our fear on this side of the Committee that the measure will add to the discrimination against those minorities, it is right that that should come out in the open.

I put the amendment to the Minister in the hope that she will accept it because it will at least resolve the issue of whether there is discrimination as a result of these measures. I beg to move.

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