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Lord Haskel: In reply to my noble friend, I can confirm that the serious irregularity and other provisions will apply. I can also confirm that the ACAS scheme will be for unfair dismissal. It is clear that the Secretary of State would be approving a scheme relating to unfair dismissal claims because of this and the arbitration

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would have no powers to consider any other jurisdiction. It would be for the parties to satisfy themselves that their case was limited to unfair dismissal. If the arbitrator discovered another issue, the parties would have the right to take that issue to an industrial tribunal. The agreement to arbitrate would not have removed the tribunal's jurisdiction in these areas.

My noble friend Lord Wedderburn asked about the legal experience of the arbitrators. The view of ACAS is that arbitrators will be deciding mainly on questions of fact, such as whether the person was dismissed fairly or unfairly. However, I have no doubt that ACAS will have heard what my noble friend said and will take his words into consideration. Therefore, I believe that my noble friend's amendment is not necessary.

6.45 p.m.

Lord Wedderburn of Charlton: I thank the Minister for that reply to my amendment. This is not the first time that I have been known to be "not necessary". Indeed, one of the problems of dealing with my noble friend the Minister and my noble and learned friend is that normally when there are two people in to bat, we can throw the ball in at one end and hope to run them out, but it is much more difficult to manage when two batsmen are hitting the ball at the same time. I say that because my noble and learned friend Lord Archer turned his mind to various other matters to which we shall come and which I should like to keep until we come to consider the Arbitration Act 1996.

With regard to Amendment No. 13, I have to say that the Minister has not completely convinced me that the existing provisions are sufficient to bring to the mind of the arbitrator the risks that he may run. Indeed, all three of us have skated over the very simple point that, given an unfair dismissal case, the arbitrator may find that an equality clause with regard to equal pay is at the centre of the matter although nobody realised it before. However, there are centres and centres and it may be that the arbitrator can still deal with the unfair dismissal, having in mind the other matters that have arisen, or it may be that the arbitrator finds that sex discrimination or equal pay really is at the centre of the case. I suggest to the Minister that before we come to Report we should consider including in the Bill--or at any rate in the ACAS scheme--provisions emphasising the centrality of the issue of unfair dismissal and that that should be put to the arbitrator. With those remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wedderburn of Charlton moved Amendment No. 14:

Page 6, line 12, after ("section") insert ("and after receipt by the employee or employees party to the proceedings of independent advice within the meaning of section 9 of the Employment Rights (Dispute Resolution) Act 1998").

The noble Lord said: We come to the question of the written agreement of the parties and their informed consent. As we had this debate on a previous clause, I had not been intending to say anything about it now because it seemed that we had said enough on the matter previously. However, I am moving the amendment

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because here we have one of those mysterious and odd groupings which I think it is agreed have to be changed. As I understand it, through the proper channels I have de-grouped Amendments Nos. 16 and 17 which will now be dealt with separately after Amendment No. 15. I understand also that if I provide the launching pad, my noble friend Lord Gladwin will be able to move Amendments Nos. 19 and 20 at this point and still remain in order. I hope that that is clear. I beg to move.

Lord Gladwin of Clee: I wish to move Amendment No. 19--

Baroness Turner of Camden: --to speak to Amendment No. 19.

Lord Gladwin of Clee: No, I wish to move Amendment No. 19. That is what I wish to do. Perhaps someone can guide me as to whether I can and I shall then speak to it.

At the moment, the law provides industrial tribunals with three remedies to deal with cases of unfair dismissal: compensation, reinstatement and re-engagement. In this amendment I am concerned only with reinstatement or re-engagement. An order by the tribunal that an unfairly dismissed employee shall be reinstated is defined as an order that,

    "the employer shall treat the complainant in all respects as if he had not been dismissed and must include benefits payable in respect of the period since dismissal and rights and privileges, including seniority and pensions";
in other words, the sacked worker goes back to the position that he enjoyed the day before he was unfairly dismissed.

The second remedy that is available to an employment tribunal is re-engagement. This is similar in effect to reinstatement except that the employee does not necessarily go back to the same job that he had before he was dismissed. The job to which he returns must be comparable, suitable and, as far as reasonably practical, as favourable as the previous position. It may be with an associated or successor company. The tribunal decides what terms should apply and the date by which there must be compliance. This is a more flexible remedy than reinstatement but it preserves the employment rights of the unfairly dismissed worker.

Why, therefore, does the Bill provide for the fourth remedy of re-employment? What does re-employment mean? The suspicion is that it may be re-employment in a post less favourable than the one previously held by the worker before he was unfairly dismissed. I am sure that that is not the intention of the Bill, but it is unwise to give arbitrators an ill-defined remedy that is neither needed by nor provided to employment tribunals, particularly when this clause in the Bill gives to employment tribunals the duty to enforce re-employment orders that they themselves cannot make.

I should like to speak also to Amendment No. 20. This is a probing amendment which provides a vehicle for putting a number of questions to my noble friend. Industrial tribunals make compensation orders against employers who have unfairly dismissed employees. If the employer does not pay, the sacked worker takes the

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order that he has received from the tribunal to the county court for redress. If an employment tribunal orders reinstatement or re-engagement and the employer does not comply with that order, the unfairly dismissed employee returns to the tribunal and is awarded compensation and an enhanced award by way of a kind of penalty against the employer for not reinstating him. If the employer does not pay, the employee takes that order to the county court for enforcement.

What happens under the new arbitration scheme? First, does the worker who has been awarded compensation for unfair dismissal go straight to the county court if his former employer has not paid the compensation? Secondly, where an arbitrator has awarded reinstatement or re-engagement and the employer has refused to comply with such an order, why must the employee get in the queue and go to an employment tribunal for compensation and the additional award that must be assessed? Why should not the employee return to the arbitrator for an order? After all, he knows all of the details of the case and he is in a much better position than the industrial tribunal to determine the level of compensation and exemplary damages. This is particularly important where there has been an award by an arbitrator of re-engagement, because re-engagement is a much more complex business upon which to adjudicate.

I believe that these questions require an answer, and I look forward to the response of my noble friend.

Baroness Turner of Camden: For some strange reason, Amendments Nos. 23 and 24 have been included in this group. I should like to speak to Amendments Nos. 23 and 24. During Second Reading several noble Lords made reference to the undesirability of including discrimination cases in the new arbitration procedures since they were often extremely complicated and might very well result in references to the ECJ. At Second Reading I gave examples of cases that had been very complex. This afternoon the noble Lord, Lord Lester, has given the example of a sex discrimination case involving a speech therapist that has been on the go for 11 years and has included a reference to the ECJ.

At Second Reading there appeared to be general agreement that the new fast-track procedures proposed in the Bill would be suitable for only relatively simple unfair dismissal cases. If that is so, it does not appear to me that the clauses of the Bill to which my amendment refers are necessary. I had the impression at Second Reading that the noble and learned Lord had some sympathy for that point of view. One wonders, therefore, whether there are any views on the amendments, whose object is to leave out those references to discrimination cases which, if it is not proposed to deal with discrimination through the fast-track procedures, it is not necessary to include in the Bill.

Lord Meston: I intervene simply to join the noble Lord, Lord Gladwin of Clee, in questioning the usefulness of the words "or otherwise re-employ". It would be very unfortunate if arbitrators had a power that was not given to an ordinary tribunal exercising this

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jurisdiction. It may be that the purpose of those words is to recognise that the statutory provisions to enable re-employment by associated or subsidiary companies are not wide enough. That may be one possible argument. I had experience of a case involving the employee of a government department that ceased to exist. The question arose whether the tribunal could make an order that she be re-employed by another government department. On a reading of the statute it appears that the existing provisions covering subsidiary and associated companies do not meet the requirements. If that is so, that may be a reason for adopting this phraseology, but in that case the amendment may be made not merely to this power but to the substantive power in the main legislation.

I turn to the amendments spoken to by the noble Baroness, Lady Turner. I share her concern, which has not been ventilated so far except in passing by the noble Lord, Lord Wedderburn, about the risk of a case that appears to be an unfair dismissal case turning out to be an equal pay or discrimination case, as all too often happens in practice. I have been involved in cases where that has happened. Of course, the tribunal can adapt its procedures and carry on dealing with the real issues between the parties. It would be very unfortunate if arbitrators could not do that or there had to be a bifurcated procedure whereby the arbitrator was tempted to carry on with the unfair dismissal aspect, leaving the issue of discrimination to a separate hearing. If arbitrators are not to deal with discrimination it is most important that there should be a clear means of ensuring that there is no potential discrimination element in the case before the matter goes to arbitration.

7 p.m.

Lord Lester of Herne Hill: Because of the unhappy grouping of the amendments, we are having to jump all over the place. I support what was said by the noble Baroness, Lady Turner of Camden, especially in relation to Amendment No. 23. I hope that the Minister will be able to obtain some advice on the matter, because I take this amendment as an important one upon which to focus. Under the Bill as it stands, the jurisdiction of the ordinary courts and tribunals is to be ousted by arbitration, where the parties agree, in cases involving sex discrimination or unequal pay. That is an area where European Community law, of course, has direct effect. It overrides any national inconsistent legislation to the contrary, including an Act of Parliament.

The two directives that deal with that are the equal pay directive and the equal treatment directive in employment. They guarantee to every employee that every member state will introduce into its national legal system the methods necessary to enable all who consider themselves wronged by a failure to apply to them the principle of equal treatment or equal pay to pursue their claims by judicial process after possible recourse to other competent authorities.

I cannot see how an arbitration system that binds in this way, and excludes utterly the jurisdiction of the employment tribunal or other court, can possibly be described as satisfying the obligations contained in the

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equal pay and equal treatment directives. Therefore it seems to me that, quite apart from the unfairness of the matter in relation to other forms of discrimination, to focus upon just the one type of discrimination where employees are given directly affected rights, a right to judicial process after possible recourse to other competent authorities, must be protected by Parliament, by government, and by the courts. Therefore I beg the Minister to take advice upon this matter, because it seems to me that the case for Amendment No. 23 is unanswerable.

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