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Lord Wedderburn: I suspect that the debate that we have just had was riding on the back of Amendment No. 14. Therefore, it is right that I should beg leave to withdraw that amendment. However, the debate included Amendment No. 18, which deals with the problem with the Arbitration Act. Perhaps I may make one comment on that Act; I believe that for the first time the Minister said that the Government would consult seriously with ACAS to consider importing some sections of it. I beg the Government to consult not merely with ACAS, because it does not know a great deal about the Arbitration Act 1996. Arbitration Acts have always been excluded from employment matters. I beg the Government to consult with those who are expert in commercial arbitration, for which the 1996 Act was passed, in order to ascertain whether it is a suitable vehicle to use as an answer to problems to which no other answer has yet been given. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wedderburn of Charlton moved Amendment No. 15:

Page 6, line 14, at end insert--
("( ) Where--
(a) a party to an arbitration under a scheme to which this section applies shows before, or within a period of one month of, the award being made that there are reasonable grounds to believe that a reference should be made to the European Court of Justice, or
(b) the arbitrator concludes that such grounds have been shown to exist,
the case shall be referred by the arbitrator, or failing him by that party, to the Employment Appeal Tribunal which shall, if it gives leave, hear and determine whether any such reference shall be made and, if so, which questions shall be formulated for that purpose.").

The noble Lord said: Amendment No. 15 has also been semi-discussed in the wider debates that the Committee has had. Perhaps I may recapitulate very briefly. First, it raises the problem which the noble Lord, Lord Meston, put to us where the duckling of an unfair dismissal case turns out, after a day or so, to be the swan of equal pay or sex discrimination. What is the arbitrator to do?

Unfair dismissal certainly includes dismissal under the TUPE regulations of 1981. The Court of Appeal had cause to hold that again this year in the course of MRS Environment Services v. Marsh. But as the noble Lord, Lord Lester, pointed out more than once, European Community law requires the availability of judicial process, certainly in Directive 76/207, Article 6, on equal treatment, and there are those who argue that the demand for judicial process goes somewhat wider.

Therefore, it cannot be that this Parliament will pass a Bill which leaves with an arbitrator a decision on matters which could be about equal pay and sex discrimination. There must be some judicial process. It was the bother with that question which led my noble friends and I to table Amendment No. 15.

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Perhaps I may just explain it. It provides that where there are reasonable grounds to believe that a reference should be made--and perhaps that should read "might be made"--to the European Court of Justice or the arbitrator concludes that such grounds have been shown to exist, he must refer the case.

The question arises as to where he should refer the case. It has been argued this evening that the reference should be to the High Court. With great respect to those who have argued that point, I adhere to what has been put into the amendment. The High Court may or may not know anything about employment. As everyone who goes there knows, you may be lucky or unlucky. I do not believe that the judges of the High Court would deny that. But the one place where an appeal can be heard which does know something about employment law is the Employment Appeal Tribunal. There seems to us no reason, therefore, why we should not put to the Employment Appeal Tribunal a case which, if it is put at the back of the queue for industrial tribunals, will have to wait another year. That is not the spirit of the Bill. It should not be put back to the industrial tribunal but should be put straight to the EAT. The EAT should be asked whether it will give leave and we have built in an extra defence mechanism against trivial, unimportant matters. If the EAT says, "Yes, this is the sort of case where a reference is likely to be made", we can formulate the questions. I do not expect that this amendment has all its semantics correctly posed, but it is an outline of an answer to a question to which, if we do not provide an answer, we shall put through a Bill which is contrary to the European sources which, whatever we think of them, we must respect.

We used to find that the previous government did that sort of thing, but I do not believe that our Government will wish to do anything of the kind. I hope that the Minister will tell us that he will consider this very favourably when the matter is considered before Report. I beg to move.

Lord Lester of Herne Hill: I agree with the object of the amendment but I disagree with the means employed. The object is to try to introduce a judicial process where it is needed as a result of European Community law. That need was illustrated in a famous case, Johnston v. the Chief Constable of the RUC 10 years ago when the European Court of Justice in Luxembourg looked at Article 6 of the European Convention on Human Rights and said that there had to be proper judicial process. The other European Court in Strasbourg has made it clear that the national court must be able to look at facts as well as law: there must be a merits determination by an independent and impartial tribunal established by law. Therefore, the two European courts are on exactly the same lines. They both require a merits determination by an independent tribunal which satisfies all the requirements of judicial process. Of course, arbitration can come first but that has been made quite clear.

The difficulty about the amendment is that it does not achieve that. Of course, the arbitrator or arbitrators cannot refer a question of law to Luxembourg. It must be a court or tribunal. That is why the noble Lord,

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Lord Wedderburn of Charlton, has drafted an amendment which seeks to get questions sent to Luxembourg by a court--by the Employment Appeal Tribunal. However, it fails to deal with the real problem; namely, that the arbitration is no substitute for judicial process. The amendment merely seeks to ensure that questions of Community law can be sent to Luxembourg whereas it is up to the national system to guarantee a national court or tribunal that can decide questions of fact, having applied the questions of Community law.

To understand that, one must read a lot of rather dull European human rights convention cases together with the case of Johnston to which I referred. I apologise for all of that legal gobbledegook but I believe strongly that there is a very serious problem which is not solved by the amendment.

Lord Archer of Sandwell: I do not wish to repeat what I said earlier on this matter. I take fully the point made by my noble friend and I take fully the addendum of the noble Lord, Lord Lester. Part of our difficulty is that at present the European Court of Justice is seized of a number of cases on the extent to which arbitral awards should be the subject of judicial review or other forms of review. As I understand it, the United Kingdom has intervened in those cases on the basis that it wishes to preserve so far as possible the principle of finality which is the very inducement to enter into arbitral proceedings.

It may be that my noble friend Lord Haskel will confirm this, but my understanding is that the Government wish to reserve their position on the extent to which references on arbitration to the European Court of Justice must be allowed until the outcome of those cases.

I take fully the point and share the impatience of my noble friends who would like to resolve something at this stage. However, I believe that we are more likely to get ourselves into difficulties with the European Court of Justice if we jump the gun. This is precisely the sort of case management where, in the tribunal, we should persuade a legal officer or perhaps a chairman to stand the matter out. We are not in a position to do that with our procedures but I think that until at least the next stage in our debates, I ask my noble friend to withdraw the amendment.

I should just add that it is possible under the Arbitration Act for my right honourable friend the Secretary of State to make use of Section 45 to ensure that there is a method of referring the matter to the European Court. I understand that that may not appeal to my noble friend who does not like the Arbitration Act anyway.

Lord Wedderburn of Charlton: Oh, I like it.

Lord Archer of Sandwell: I would not seek to be doctrinaire about it. I know that it was designed for commercial arbitrations. I can see the difficulty about applying it to employment law but it may be a possible way forward. I do not seek to say more than that at this stage but I hope that my noble friend will make it possible to have further discussions.

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7.30 p.m.

Lord Lester of Herne Hill: Perhaps the noble and learned Lord can clarify one matter. I take it that the pending cases are not dealing with what is meant by judicial process in the equal pay and equal treatment directives where it is clear beyond argument that they are dealing with the process before an independent and impartial tribunal established by law. Therefore, as I understand it, the noble and learned Lord is not suggesting that arbitration would be a substitute for judicial process within the meaning of those directives.

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