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Baroness Miller of Hendon: It has to be directly relevant to what the employee is looking for. If the noble Lord says that "relevant" states that, he will have no objection to the provision including "directly relevant".

Amendment No. 79 is a purely drafting amendment. It removes a possible ambiguity which establishes that the "worker" concerned is the one who has put the

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machinery into motion by making the request in subsection (1). That is precisely what is meant, so why not say so clearly? I beg to move.

Lord Falconer of Thoroton: I am grateful for the opportunity of perhaps dissipating a number of the misconceptions which underlay the moving of those amendments.

I think we would all agree that it is of considerable importance that the employee has some right of access to the records of the employer. It would also be sensibly agreed by all that the right of access of that employee should be only in relation to records relevant to establishing whether or not he is being paid the national minimum wage. I should have thought that everyone would agree that he should have no right of access unless he can establish reasonable grounds for claiming that he may not be being paid the national minimum wage.

I think we would also all agree that the arrangements made for the employee to look at the records should be convenient both to the employer and employee. By that I mean, first, that the employee should in the appropriate case be allowed to look at the records; and, secondly, that where appropriate he should be accompanied by someone who might help explain to him what the records mean. Many of the people wishing to enforce the national minimum wage may not readily understand what the employer's records contain.

I think we would also all agree that it would be quite inappropriate for the employee to have a right to go into the employer's premises and look around in relation to particular records. We would all agree, however, that some sort of remedy should be given. We need to balance the right of the employer against the right of the employee.

As regards enforcement of that right, the balance is tipped, if anything, in favour of the employer. The only remedy that the employee has is to go to an industrial tribunal and seek a declaration that the rights given in Section 10 have not been complied with. The only remedy that the employment tribunal can give is to award the employee 80 times the national minimum wage. So the right given to the employee is less than the right given in ordinary civil litigation in this country where a person fails to produce a written document. If the other party does not produce the written document, the person against whom the order is made can eventually be committed to prison. There is no such provision here.

The fallacy which underlay the whole of the first sequence of the noble Baroness's approach was that the employee could go into the employer's premises and search around for himself. That is wrong. The position is this. A production notice can be given. That requires the employer to do certain things including providing certain documents. If, however, the employer does not comply with that, that does not as a matter of law give the employee the right to go into the premises. It only gives the employee the right to make a complaint to an employment tribunal under Clause 11.

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Let us assume that I am right on that aspect. The noble Baroness will need time to consider whether I am right in relation to that because of the vigour with which the point was made against me. With respect, that would get rid of the major constitutional problem to which the noble Baroness referred in the first 10 minutes of her opening remarks. Assuming that I am right in relation to that, we should then consider the detail of the points she makes about the way that this right, which we all agree should exist, has been constructed.

We have sought to achieve a balance between the rights of workers, some of whom, for example, home workers, may be in the more vulnerable position of not having representation or contacts with other firms, and the rights of other employers. We fully accept that the enforcement should not be overburdensome. That is why in subsections (2) and (3) the Bill makes it clear that the right of access is already limited: for example, the worker must have reasonable grounds for believing that he is or has been paid less than the minimum. The intention of this provision is to cut out frivolous or vexatious claims. In addition, the right of access may be exercised only for the purpose of establishing whether the worker is being or has been paid at least the minimum.

Finally, the worker must produce a written notice--defined in the Bill as a "production notice"--requesting the production of the relevant records. Noble Lords may wish to note that, to this extent, the requirement of the amendments for a written notice to be produced adds nothing to the Bill that is not already there.

Clause 10 as it stands also allows a degree of flexibility, for example in agreeing a different period--longer than the specified 14 days--for the production of records, under subsection (9)(b).

Finally, the clause provides for workers actually to inspect records and to be accompanied if they wish. I believe this is an important entitlement which will encourage workers to exercise their rights and discourage some employers who may be tempted to use unfair tactics of dissuasion.

It is worth emphasising that the overall purpose of this and other enforcement mechanisms is to encourage self-compliance. It is far preferable, if at all possible, to encourage employers to comply voluntarily than to have to provide for a huge bureaucracy to do so. Furthermore, by allowing workers to inspect records it should be possible to prevent cases of simple confusion or misunderstanding. This in itself should help keep cases out of the tribunals and the courts.

The amendments would significantly weaken the position of the worker for no particular reason. In addressing them, I shall aim to focus on three main issues: the removal, by Amendment No. 56 and related amendments, of the worker's right to inspect and examine his records; the removal of the right to be accompanied; and the lengthening of the time in which records must be produced to 28 days.

Taking these points in turn, I believe that it is essential to the enforcement provisions for a worker to have the right to inspect records. Of course, in many cases that right will be met by the employer providing

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the worker with a copy of the records as they relate to him. I imagine that will in fact be the normal way to proceed. However, it is a regrettable fact that some employers may fail to provide the right records or may wish to conceal relevant records. It must be right to enable a worker, in such cases, to go to the source data; and indeed in all other proceedings that right is recognised.

I do not believe that the Bill allows this right to be abused. I doubt that there will be long lines of employees queuing to inspect their relevant records in person. Subsection (2) already makes it clear that the worker must have reasonable grounds to exercise the right.

Therefore, the replacement of the right of access with a right to a copy of records would, in my view, unacceptably weaken the enforcement provisions of the Bill.

This batch of amendments hanging on Amendment No. 69 would also remove the worker's right to be accompanied when examining the records. As already mentioned, this right is essential to prevent some employers from fobbing off their workers or from pulling the wool over their eyes. I do not believe there will be many such cases, but the option to be accompanied provides a reasonable deterrent.

There is also a pragmatic reason for this provision. Some of the calculations of remuneration for minimum wage purposes may not be at all straightforward. Some workers may feel more confident if they can call on a colleague with particular accounting or legal expertise. The outcome should assist understanding of the position and, to the extent that there may have been an innocent misunderstanding, should encourage early resolution of the problem.

Finally, the amendments would double the amount of time allowed to an employer to produce the records from 14 to 28 days.

There seems to be no particular reason for this proposal. It seems to me that any reasonable employer would be able to produce records relating to how much he pays his staff within a fortnight. Subsection (9) of the clause, in any event, allows the worker and employer to agree between them to an extension of the deadline if that is appropriate. So we have already built in more than sufficient flexibility for employers and employees.

That leads me to Amendment No. 75. Not all the amendments act in the interest of the employer. This amendment deletes subsection (9). It would therefore actually remove the right for the worker and employer to reach an agreement on a longer timescale.

Other amendments in this batch seem to work in the interest of neither worker nor employer. They simply remove straightforward provisions relating to the period of notice to be given and the location of the records.

It is clear from the speech of the noble Baroness that all of the amendments are, with the greatest respect, based on a fundamental misunderstanding of the position, which is that it gave the employee the right to walk into the premises. It does not. Once that is accepted the fundamental basis of the amendments goes.

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I strongly doubt that the removal of such provisions as the latter parts of the amendments does anything but weaken the effectiveness of the clause. As I have indicated, we have designed the clause to be effective in a balanced way; not in order to overburden or punish employers or to give employees rights way beyond what is reasonable. It is in everyone's interests, workers and employers, for enforcement to be fair and, in particular, for enforcement to be effective.

I hope that I have convinced your Lordships that Clause 10 is perfectly adequate as it stands and that the amendments would not benefit the Bill. I hope that I have set the noble Baroness's mind at rest as to what she perceived, wrongly, as a constitutional outrage. If pressed I would ask the Committee to reject Amendment No. 69, but I would ask the noble Baroness to withdraw the amendment.

9 p.m.

Baroness O'Cathain: I have listened with great interest to my noble friend's speech and the noble and learned Lord's reply. I have read through Clause 10 three or four times and I have come to exactly the same conclusion as my noble friend. I am not saying that I have a bright brain, but if I have come to that conclusion surely there must be an element of doubt about it. It is weighted against the employer.

I am not saying that the legislation should be weighted in favour of the employer and against the employee. I am looking for balance. I understand that the noble and learned Lord has said that balance is being sought, but the wording in this clause causes me to worry.

One of the noble and learned Lord's points was that in most cases the employer would produce the information in written form to the employee. Nowhere in Clause 10 does it actually say that that would be an option. The noble and learned Lord said that in most cases it would be a fait accompli, whereby the request would be made in writing and the information would be given back in writing. If so, why are there all these subsections of an intimidatory nature necessary?

There are occasions in commercial life where employees who might have been dismissed or made redundant have a deep-seated spite against their former employer. They would latch on to this. The place is littered with consultants and lawyers--with due respect to the lawyers present--who would be only too pleased to grab such a case and go to the employer's premises. I wonder why there is this deep-seated regret at not accepting these amendments. It leaves a problem. I am not convinced about the matter. One can imagine the example given by my noble friend of heavies going in with a disaffected employee and causing chaos within an organisation.

The second point concerns subsection (9)--before the end of a period of 14 days. The Minister drew attention to paragraph (b):

    "at such later time as may be agreed during the period between the worker and the employer".

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Returning to the point about the Christmas period, we all know that the Christmas period is not 14 days but extends in a lot of cases to three weeks. There would be merit in looking at the 14 days again.

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