| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
The Solicitor-General (Lord Falconer of Thoroton): My Lords, as the noble Baroness has accurately pointed out, this matter was discussed in some depth in Committee. I made the mistake of believing that in the course of the Committee stage, I had explained the reasons for not accepting Amendments Nos. 15 and 16. At the time, I accepted that they were proposed in good faith in an attempt to try to improve and assist the enforcement of the Bill. There is much common ground between us on this matter but there are real practical problems in what the noble Baroness suggests.
I think we are all agreed on the importance of record-keeping to the success of the Bill. Without adequate records, it will not be possible to enforce the law. The worker needs to be able to see what he is being paid and the employer needs to have records in order to defend himself in case he is accused of underpaying. It is therefore in the interests of all that adequate records are available. In her Amendment No. 15, the noble Baroness proposes to limit the Secretary of State's flexibility to decide the form and content of the records by tying them to the kinds of records already required for income tax or national insurance purposes. That is driven by a perfectly understandable desire to prevent unnecessary duplication. I referred to that in the speech I made in Committee.
This Government understand and agree with the motive of avoiding duplication. We have no wish to impose unnecessary burdens on business. We have said that clearly on a number of occasions, in particular in the Regulatory Appraisal where we pointed out that most wage details will already be kept for tax purposes, which is one of the points the noble Baroness has made. I remind the House once again of what was stated in that document,
- "It is in employers' own interests to know how much they are paying their staff. Therefore, it is reasonable to expect that employers will already have records for the calculation of total pay that will be sufficient to calculate pay as it relates to the NMW. They will already have such records available for inspection by the Inland Revenue and Contributions Agency".
That is very much in line with what the noble Baroness said.
However, the Regulatory Appraisal went on to note that there will be differences in the kinds of records to be kept, not least as regards the number of hours worked and any non-monetary payments which may be allowed to count towards the hourly minimum wage rate.
Amendment No. 15 acknowledges that fact which is why it expressly allows for different requirements to be added.It is clear from what I have said that in relation to the principle, the need for good records and the desire not to place unnecessary burdens on business, the noble Baroness and I are in agreement. However, the Government do not believe there is any necessity to make any changes to the face of the Bill. The issues raised in the amendment go to the detail of which records should be kept, and, in the Government's view, are best dealt with in the regulations. As this amendment accepts, income tax contributions do not by themselves provide adequate records. Clause 9 as at present drafted is left wide precisely because we want to identify how best to fit in with existing legislative requirements in this area.
As the House knows, the Government are committed to consulting on the regulations in draft form before bringing them to the House. There will therefore be an opportunity for businesses and individuals to make representations on the record-keeping regulations. I thank the noble Baroness again for drawing to my attention, in the retabled amendment, the various related statutes covering record-keeping for tax and national insurance purposes. That is of great assistance in determining how best to move forward in relation to the regulations.
While the noble Baroness may be right that tax and national insurance records will suffice in some cases, we cannot be sure of that. I think it would be unwise for the Government to tie their hands in the way proposed by the amendment ahead of consultation. I think it is right that we do not jump to conclusions in primary legislation. However, as I have indicated, I recognise a number of the valuable points which the noble Baroness has made. I hope therefore that I have on this occasion explained sufficiently clearly--unlike on the previous occasion--why we do not think that income tax and national insurance provide the way forward. There is something to build on there but whether it is the appropriate course will depend to some extent on the regulations.
I shall now discuss Amendment No. 16. I have absolutely no doubt that it is proposed in a desire to help rather than to hinder the Bill. Amendment No. 16 would again limit on the face of the Bill the Secretary of State's flexibility to decide the form and manner of records to be kept in respect of hours worked for minimum wage purposes, this time by tying them to records of hours worked which may be kept for the purposes of showing compliance with the working time directive.
I hope that noble Lords will welcome both these initiatives--that is, the minimum wage and the working time directive--as a sign of this Government's commitment to improving the lot of workers who are obliged to work for too long and/or for too little. These are basic matters of social justice and fairness. It is much to the credit of this Government that we are proceeding apace with making them part of domestic legislation. I do not believe that it makes sense to prescribe on the face of the Bill what kind of records
should or should not be required to be kept. That would in my view be too limiting an approach and too premature.As I have already made clear, we intend to consult on draft regulations. That consultation will inevitably involve identifying the various existing record-keeping requirements. As regards records of working time, I should make it clear--as I thought I had done on the previous occasion--that the draft working time regulations, on which we have just completed a further consultation, contain a general record-keeping requirement on all employers. Employers simply need to show that the time limit of 48 hours is being complied with. They are not necessarily obliged to keep records of working time as a means of proof. For example, it might be sufficient to show simply a list of workers who regularly work no more than the 48 hours. Therefore there is no general requirement on all employers to keep records of hours worked. On this ground alone the amendment could be unsuitable because, as is clear from what I have just said, one could keep records for the working time directive but that would not indicate how many hours individuals had worked. I should have thought that hits amidships, as it were, the basic purpose of this amendment.
There is a more specific record-keeping requirement in the draft working time regulations which requires employers to keep records of hours worked, but this applies only to those employers with employees who have opted to work longer than the 48 hour limit. Therefore it would not cover everyone who is covered by the national minimum wage. Again that does not help to meet the requirements of the national minimum wage. I therefore have considerable doubts as to the suitability of this amendment in the context of the minimum wage. However, I take the general point, at which perhaps the amendments are aimed; namely, that the minimum wage records will almost certainly need to cover hours worked--however this may be defined--and there may be scope for avoiding duplication with other possibly similar records.
We shall certainly look at these issues in the context of our forthcoming consultation on the minimum wage regulations. Your Lordships will have an opportunity to debate the matter further when we lay those draft regulations before the House. I argue that the matters raised by the amendment are detailed issues on which we should not second guess the views of those who will be affected, principally business, but also workers. We shall canvass their views and then make any changes accordingly. I suggest this indicates that we should not amend the Bill but rather should leave such matters to the consultation and the regulations. Therefore I respectfully suggest to the noble Baroness--despite the fact that we agree on many of the basic principles relating to this amendment--that she withdraw Amendment No. 15 and not move Amendment No. 16.
Baroness Miller of Hendon: My Lords, I thank the Minister for that detailed and helpful reply. I certainly do not wish to pursue matters much further. I am quite sure he is right when he says that there will be much discussion on the proposed regulations. However, given
that the Government have already decided that benefits in kind will be excluded, I am not sure how much detail will be necessary in the regulations if the noble and learned Lord is suggesting that there may be some way of working out hours that are worked. I beg leave to withdraw the amendment.Amendment, by leave, withdrawn.
7 p.m.
Clause 10 [Worker's right of access to records]:
Baroness Miller of Hendon moved Amendment No. 17:
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 18 to 23, 25 and 26, and 27 and 28, which are all consequential on the passing of Amendment No. 17.
We spent no fewer than 45 minutes on this amendment in Committee. I then withdrew it to give further thought to the remarks of the noble and learned Lord the Solicitor-General in opposing it. I told him then that I was not satisfied with his answer and, after further and most anxious reflection, I feel that I have no alternative but to bring it back for your Lordships' further consideration.
It is no exaggeration to say that this clause raises an issue of fundamental constitutional importance tucked away in the administrative details that it contains. Clause 10 deals with the employee's right of access to records of the pay he has received, hours worked and any other factors relevant to the question of whether he has received the full national minimum wage to which he is entitled. Let me say at once and unequivocally that we fully support the right of the employee to receive that information. Initially he will receive it from the detailed information that the employer will be obliged to provide in compliance with the regulations that will be made by the Secretary of State under Clause 12. More than that, we support the employee's right, if necessary, to verify that information from the employer's own records.
So where is the difference between us and the Government? It lies in the method by which it is proposed that the employee should obtain the employer's records. We believe that for some reason the Government have taken a gigantic hammer to crack a small and very commonplace nut.
The regime that the Government seek to put in place is one which we believe is totally and unnecessarily heavy-handed. So far as I can ascertain, it is entirely without precedent. But worse than that, in a country which revels in the fact that it has no written constitution, we believe that this provision offends against the safeguards and protection that has been accorded by the common law for centuries.
Clause 10(5) provides that the employee may serve the employer with what is termed a "production notice", requesting the production of relevant records. That in itself is not objectionable. However, the consequences provided for by the Bill are.
In subsection (8) the employee then has the right, after notice, to enter the employer's premises or some other place to inspect the records. It may be asked: what is wrong with that? It may very well be that an employer may not want to be confronted by, or to meet, his employee--or more likely, his ex-employee, with whom he is presumably in dispute.
It seemed from his intervention during my remarks in Committee that the noble and learned Lord was unaware of that extreme power. But the matter does not rest there. Subsection (4) gives the worker the right to be accompanied,
Whatever the reason is for that provision, it clearly opens the door to the possible intimidation of the employer. I grant that that could not have been the Government's intention. However, it would be the height of naivety to suggest that it may never happen. I wonder whether the Government want to take the moral responsibility for that, as frequently as it may occur, especially as the presence of the "minder" to accompany the employee is no more necessary than the need for a worker to go onto an employer's premises or force the employer to nominate some other meeting place.
Why does the employee have to go anywhere to inspect the records? Why does the Bill not provide, as does the amendment, that the employee shall be entitled to receive a copy of the relevant documents, sent to any place or any person on his behalf that the employee nominates?
As I pointed out in Committee, if I require to see records relating to me in someone's computer, if I require to see my medical records, or if I desire to see the records of shareholders held on the register of a limited company, I do not have the right to go onto the premises of the person holding the records. I have to send in a written request and, within a prescribed time, the record holder is obliged to send me a full copy. If I am involved in civil litigation and I require to see documents held by the other party, I first need a court order, which is usually granted automatically as part of a set pre-trial procedure. After that, inspection takes place in the office of either of the solicitors to the parties. There are circumstances when even in civil litigation a party can obtain a peremptory court order to go onto another person's premises. It is known as an Anton Piller order, as I mentioned in Committee. It is hedged around with very strict conditions, including the presence of an independent solicitor to protect the interests of the occupier of the premises.
There is absolutely no need for an employee to have the right personally, with or without the assistance of someone else, to go onto the employer's premises. If the other person is required to assist the employee to read and understand the records, that can be done at the
I wish to examine the arguments advanced by the Government against the amendment that I moved in Committee. It is necessary to do so phrase by phrase. The Solicitor-General said:
But that is exactly what subsection (8) provides. The place at which the relevant records are produced must be either, as stated in sub-paragraph (a),
or, to paraphrase sub-paragraphs (b) and (c), another reasonable place or one to which the parties agree.
So if the employer cannot provide some other place and the parties cannot agree on one, then it has to be the employer's premises. The noble and learned Lord the Solicitor-General shakes his head in disagreement. Undoubtedly, he will reply in detail as to why that is. But that is how the provision appears in common English. I cannot see any reason why the noble and learned Lord shakes his head. The problem would not arise if the records could be supplied as copies or photocopies.
The Minister complained that the only remedy open to an employee is to take the matter to an employment tribunal, which can inflict a monetary penalty under Clause 11. How is that relevant to the matter that we were discussing in Clause 10? The penalty for refusing access to records has no relevance to the way in which the records should be provided.
The Minister argued that the presence of a third party was necessary, who,
I have already pointed out that the employer's adviser can do that just as easily by going through the copy records at a citizens advice bureau or trade union office or even the employee's own home, and can take as long as he likes to do so.
The Minister justified the presence of someone accompanying the employee by saying:
"Discourage some employers"? To me, that sounds like intimidation. It sounds as though the Government see the person accompanying the employee as more of a
The problem envisaged by the Minister will not arise if the process is handled at long distance by the employee demanding and receiving copy documents as I suggest. The Bill does not even provide for the length of any proposed personal inspection. Can the employee conduct a gigantic filibuster and keep his employer hanging around for hours?
After describing my approach as fallacious, the noble and learned Lord the Solicitor-General said:
I believe it is the Minister's argument that is fallacious. The Bill does not require the employer to provide documents; that is what I say should happen. Clause 10(1)(a) of the Bill says that he should produce the documents and allow the employee to inspect and copy them himself. At column 1401 the noble and learned Lord the Solicitor-General said:
We have no argument on that point. But he went on to say:
I thank the Minister for that remark because that is precisely the procedure which the amendment calls for and which the Government have been resisting, the procedure that the noble and learned Lord the Solicitor-General says would be the normal one. However, two paragraphs later, contradicting himself in a U-turn that must be a record even for the Labour Party, he said:
Why and how? On the contrary, it would strengthen them.
First, the Bill provides only for the employee to make copies of the records himself. How will he do that? Will he cart his own photocopier or computer printer into the employer's premises, or will he rely on the employer to loan him his own equipment and stationery and let him use his electricity supply simply to expedite his departure from his shop or office? Suppose the employer does not have any such equipment? Many small corner shops, hairdressers, flower shops, and so on, do not. The worker will then have to copy the records by hand, with all the opportunities that that presents for clerical errors. For example, an employee is paid £220, but he writes down "£202". Even an employer without a photocopier will be able to find somewhere from which to borrow one or go to a local copy shop. He is certainly not obliged to allow the worker to take the records away, and he would be most unwise to do so.
What reason did the noble and learned Lord the Solicitor-General give for his abrupt change of mind?
Under subsection (9) the employer has 14 days to produce these records, plenty of time for the employer, if he so wished, to remove or conceal anything he wants to. Even the search warrant that the worker is allowed to issue under subsection (5) does not give the worker the right to ransack the employer's premises to look for the documents. The Minister himself admitted that that would be quite inappropriate. Is it suggested that the mythical unscrupulous employer will doctor his records, risking a lengthy prison sentence for forgery? There is absolutely no advantage, from the enforcement point of view, for there to be physical inspection, but the amendment prevents harassment or embarrassment of the employer by having the employee and his minder intruding on his premises.
There we have it. We both agree that an employee should have the right to check the employer's records and to supplement the data that the employer will have to supply under Section 12. There is no argument between us. The only difference is the question of how and where. "How" should be by the method which is normal in any similar situation of a civil dispute: by the provision of copy documents, which, as the noble and learned Lord the Solicitor-General himself admitted, he imagined,
The answer to the question of where the records should be inspected is that it should be at whatever address the employee asked for the records to be posted to.
I beg the pardon of the noble and learned Lord the Solicitor-General if he finds it embarrassing that I keep quoting from the things that he quoted to me earlier. I read them with the most enormous care. The noble and learned Lord said, at the foot of column 1402:
Perhaps I may say, with even greater respect, that it was the Minister who was labouring under a fundamental misunderstanding. Now that he has had a whole month in which to re-read subsection (8), I trust that he will agree to accept the amendment, which does nothing to diminish the right that we both agree the employee should have to see records but does not infringe the employer's fundamental constitutional right not to have his premises invaded against his will by his employee and a total stranger.
Amendment No. 28 to Clause 11 is consequential to the main amendment. As we propose that the employee shall receive the records by means of copy documents rather than by direct access to the employer's premises, it naturally follows that an offence of failing to supply a copy of the records has to be substituted for the offence of failing to give physical access to them. I beg to move.
Viscount Thurso: My Lords, I rise to speak to Amendment No. 24 in this grouping, which stands in my name and that of my noble friends. When I rose to speak to a similar amendment at Committee stage, it was following the same argument that the noble Baroness has just put forward. I said then that I did not feel that I could agree with her and that, as an employer, I did not feel that there was a particular problem. Having listened to the argument again, I have exactly the same feeling. Therefore, with regard to those amendments, we shall support the Government and thus normal service is now resumed.
The effect of my amendment as it stands would be to add to subsection (9) of Clause 10 a third option: that the notice could be produced,
I must again apologise, as I did at Committee stage. I have spotted that there is a drafting error and that the amendment does not achieve what I wish it to achieve. The amendment should be drafted so as to place in subsection (9)(a) after "notice" the words that are printed on the Marshalled List. It would thus read:
This has a quite different effect from the amendment as currently drafted. As I gave notice of that mistake to the noble and learned Lord, I hope that he will allow me to speak to the amendment as it should have been drafted rather than as it is drafted.
The amendment seeks to put a further obligation on the employer in respect of the production notice. It has effect only for employees who are working at night, in that the vast majority of employees work during the day and consequently the obligation for the employer to produce the notice at the time the employee is working will cause no hardship to the employer and will have no effect on the employee. However, for those who work night shifts, such as night porters in the catering industry and night security guards, it means that the employee can oblige the employer to make the production of the records during his or her contracted hours. It can be argued that that places a further and more difficult burden on the employer. I would rather argue the opposite case: that not to do so is to place an unreasonable burden on the employee.
At Committee stage the noble and learned Lord said that he was sympathetic to the principles underlying the amendment. He went on to say, however:
I took that point. However, most shift workers begin at 10 or 11 at night and end at six or seven in the morning. Those are times at which--certainly in the hotel industry and I suspect in most other industries--there is someone on duty of a sufficient stature, be it a supervisor or a manager, who can be briefed by the personnel
Why then is it a burden on the employee to come in outside his contractual hours? There are two main reasons. The first is a simple one. If the employee works in the country, lives 40 minutes away and comes in using his own transport, then that employee is obliged to come to work at his own cost, using his own petrol or whatever it might be, at a time when he would not normally be at work. The exercise of his right therefore involves a cost and, as we know, cost for people who are on a minimum wage means a barrier.
The second reason is that it obliges the employee to come in and go through the records in his free time--either during those precious hours of daylight when he wants to sleep or, indeed, on a day off. It is a little hard and somewhat unreasonable to insist that an employee should come in to see the employer while the employee is on a well-earned break or a day off.
In effect, not allowing the employee to attend in his contracted hours discriminates between the day shift worker and the night shift worker. It gives the day shift worker advantages which the night worker does not have and gives the night worker costs and difficulties which the day worker does not have.
As a small final point, I mentioned transport. We have just had a White Paper published on transport. Anything that cuts down on the use of transport, particularly private transport, would be a good thing.
My argument therefore is straightforward and very much as I put it at Committee stage, though perhaps I take it a little further. It really concerns the balance of unreasonableness which I feel should be placed on the employer rather than on the employee. Throughout this legislation we have been talking about the bad guys because the good employers will always get these things right anyway. I suggest that my argument demonstrates that the balance of unreasonableness should be on the employer and in this case we should be supporting the employee. I hope that the Government will be sympathetic to the suggestion. I cannot move the amendment because it is defective but perhaps we can come together with something at a later stage which the Government will feel they can accept.
Page 7, line 31, leave out subsection (1) and insert--
("(1) Subject to the provisions of this section, a worker shall be entitled, on written request, to be supplied by his employer with a copy of any relevant records within twenty-eight days of receipt by the employer of that request.").
"by such other person as the worker may think fit".
"I think we would ... 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".
"the worker's place of work,
"might help explain to him what the records mean".
"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".
"A production notice can be given. That requires the employer to do certain things including providing certain documents".
"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 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".
"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".
"it is a regrettable fact that some employers may fail to provide the right records or may wish to conceal relevant records".
"will ... be the normal way to proceed".
"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".--[Official Report, 15/6/98; cols. 1400-02.]
7.15 p.m.
"during the paid contractual working hours of the employee".
"The relevant records must be produced--
(a) before the end of the period of fourteen days following the date of receipt of the production notice and during the paid contractual working hours of the employee; or
(b) at such later time".
"as an employer, the noble Viscount might be a little irritated if a person in his personnel office had to wait until three o'clock in the morning just to give someone like a night porter his records".--[Official Report, 15/6/98; col. 1407.]
Next Section
Back to Table of Contents
Lords Hansard Home Page