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Lord Monson: I am happy to support the noble Baroness's amendments. They are common sense amendments and, I imagine, would be regarded as such by the great majority of people. Can the Minister tell us what is the position of those aged, say, 18 or 19 who work part-time for their parents in return for board and lodging and perhaps other benefits in kind, with no
money changing hands? Presumably there would be no contract of employment in such a case. Are they excluded from the provisions of the Bill as it stands?
Viscount Thurso: Perhaps I may ask a supplementary question in relation to Amendment No. 119 which raises some interesting issues. It relates to companies limited by guarantee. I have served as a director of a number of such companies, usually associated with charities, or quasi-charity or voluntary organisations. A considerable amount of work is carried out by the directors of such companies and no remuneration is expected. In those circumstances and under the proposed legislation, would it be appropriate for those directors to remain unremunerated?
5.30 p.m.
Lord Clinton-Davis: I thank the noble Baroness, the noble Lord, Lord Monson, and the noble Viscount, Lord Thurso, for the interesting points which they raised. I shall do my best to reply. Before I do so, I should say that I appreciate the indulgence of the noble Baroness as regards the tug-of-war because it is being held for a very worthwhile charity--the Macmillan Nurses. It is a bit late to invite other people. However, it is an important charity and Members of both Houses have before played a significant role in helping it. Secondly, I know that the noble Baroness wants to watch the football, so her remarks were rather self-serving.
Before I deal with the specific points raised by the noble Baroness and other noble Lords, I should say, again, that Amendment No. 118 deals with exclusions. This time it excludes family members from entitlement to the minimum wage.
In another place, there was a lot of discussion about the employment of spouses. Amendment No. 118 goes rather further than that because in effect it seeks to exclude anyone employed by spouse, parent or child or by a business in which the spouse, parent or child is a substantial shareholder. The noble Lord, Lord Monson, said that that is quite reasonable and will be accepted by the wide majority of the public. I am not sure how he measures that but that is a matter for him to answer. I am not in the business of trying to go about excluding as many people as possible from the operation of this Bill. But that is what the Opposition are about. What is being proposed here would go against the whole principle of the Bill.
Amendment No. 118, which was revised something like two weeks after it was first tabled, seems also to indicate a desire to over-complicate. I do not wish to become involved in a debate about the nature of shareholding control and whether a person is a substantial or controlling shareholder. Here we are talking about a Bill which is designed to deal with workers. It is founded on the basis of whether or not a person is a worker. The status of shareholders has nothing whatever to do with it.
It is a very simple principle even though the Opposition seem to be in the business of making the matter as complicated as humanly possible. A
worker should be entitled to a minimum wage whoever he has as his employer. I see no reason why a person should be disenfranchised from the procedure which we are seeking to invoke for the first time just because the employer is his spouse, father or child. We are dealing with extremes all the time in this regard. An employer may quickly marry his employee in order not to pay the national minimum wage.
Baroness Miller of Hendon: I do not wish to interrupt the Minister's flow but we are not talking about ridiculous instances. We are talking about the basic small family shop, which would not survive if the wife who came in to help had to receive the national minimum wage. Such people give their services virtually free. That is what we are talking about. We are not talking about eccentric examples. The Minister should give some credence to the sensitivity of the issue. There are many small businesses in this country which will undoubtedly go out of business if there is a blanket coverage for the national minimum wage.
Lord Clinton-Davis: With respect, I believe that the noble Baroness has in the past dealt with some extreme situations. I am entitled to an occasional riposte.
I do not wish to pick holes in the amendment because my objection is fundamental. I do not question the noble Baroness's integrity for one moment and she does her duty by probing these matters. Our approach is to make the Bill inclusive and not exclusive. It is part of the whole integrity of the concept of a national minimum wage. That is the basic reason why I shall ask the Committee to reject the amendment unless the noble Baroness withdraws it.
The whole essence of this matter is whether there is an employee relationship. I listened very patiently to what the noble Baroness said and she seemed to suggest that she was talking about small children. Perhaps I misunderstood her. Of course, that would not apply. The provisions apply only where there is an employment relationship. For example, in the case of a greengrocer's wife, one must ask whether she is working under a contract for money.
The noble Baroness then sought to pray in aid an insolvency case, the details of which I am not familiar with. The answer is that, in some cases, a director would be an employee; in other cases, he would not. It depends entirely on the contractual relationship which exists. In those circumstances, each case must be decided on its own merits.
I turn now to Amendment No. 119. Again, this amendment was discussed extensively on Report in another place. Under the Bill, a person who is a director of a company, limited or otherwise, would not normally be entitled to receive a national minimum wage because the legal status of a director, whether of a small or multi-million pound business, is that of an office holder. That is the distinction which must be drawn.
There may be cases where, in addition, a director has a contract of employment with the business and that contract may be explicit or implicit. In such
circumstances, he would be an employee of the company and therefore entitled to the national minimum wage. That would apply to managing directors or directors who are one-man bands in charge of their own business.The Bill makes it very clear that directors who are simply office holders will not be entitled to the minimum wage; directors who are employees will be. That is the very simple proposition. That distinction is derived from existing employment law. Therefore, we do not need the amendment because it would add nothing useful to the Bill. The definitions in Clause 54 make it quite clear who is covered by the Bill. Directors who are not workers will not be covered, whereas directors who are workers will be so covered.
In her references to director-employees, the noble Baroness raised various points which I shall try to answer. A director who is an employee of his own company could claim the minimum wage from that company in just the same way as such a director may claim other employment protection rights as an employee. The practical reality must surely be that nothing would be gained by pursuing such a course.
I cannot envisage that that situation will arise. That is why I said it is rather fanciful. Even if it did, can one really envisage enforcement officers being inclined to take action in such circumstances? I hope that the noble Baroness will withdraw the amendment.
Baroness Miller of Hendon: I am even more disappointed with the Minister's reply to these two moderate and reasonable amendments. I believe the death knell will be sounded for many small businesses up and down the country if they realise that if they are given any assistance by a member of the family they will have to pay that person the national minimum wage. The noble Lord, Lord Haskel, shakes his head. I can tell him that I have already been approached by numerous small family businesses from all over the country on this matter. It is a brave government who think those feelings can be disregarded and that all will be well.
Lord Clinton-Davis: I do not seek to disregard the generality of the points that have been made by the noble Baroness. It is quite possible that we need to inform the public better on this matter as the noble Baroness herself misunderstood the position. Therefore it is perfectly possible that other people may misunderstand it. It is my job here to try to correct a mistaken impression. I hope that the noble Baroness will read carefully what I have said. I hope I have convinced the Committee that I have advanced a perfectly reasonable proposition. I hope that small businesses will not be misled by some of the statements which have been made tonight which need to be corrected.
Lord Monson: Before the noble Baroness decides what to do with this amendment, I hope the Minister will answer my query about 19 year-olds who, for
example, work for an hour and a half each evening in their parents' shop in return for board and lodging. Will they be excluded from the provisions of this Bill?
Lord Clinton-Davis: I thought I had embraced that situation in the remarks that I made. The matter depends on whether there is a contract of employment and whether there is a consideration in money or in kind in relation to that.
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