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Lord Clinton-Davis: My Lords, I am obliged to the noble Baroness for giving way. It is not unknown to the criminal law even where the law is very specific, for the prosecuting authorities to exercise a discretion in all the circumstances.

Baroness Miller of Hendon: My Lords, that is correct, but it is not normally the case, before a Bill is passed, and while we are debating it, when I talk about a factor that could cause problems, for someone to say that the chances are that that will not be dealt with

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anyway. One does not know whether that will or will not occur until one knows all the circumstances of the case.

I was saying that if the Minister concedes--as he clearly does--that an anomaly could arise, or that there is a potential ambiguity, or even that there is merely scope for misunderstanding, I believe it is Parliament's job, and the Government's, to see that that is corrected before the Bill is passed (that is the point I was making to the Minister) because afterwards it is too late. My Amendment No. 55 addresses that point. I beg to move.

Lord Haskel: My Lords, the amendment of the noble Baroness would exclude family members from entitlement to the minimum wage. I think that was the point of her argument. We discussed this at some length in Committee. Our objection is that it goes entirely against the thrust of the Government's philosophy and of the Bill. This amendment appears to be yet another example of the Opposition's keenness to exclude as many categories of worker as possible from the minimum wage. Our wish is to include as many people as possible.

The amendment raises issues about the nature of ownership and control and whether a person is a substantial or a controlling shareholder. As regards the Bill, that is something of a red herring. The Bill is founded on the basis of whether or not a person is a worker, not whether he is in control of the business or is a family member. The status of shareholders, or family relationships, have absolutely nothing to do with it. It all boils down to a quite simple principle that a worker should be entitled to the minimum wage, whoever he or she has as his employer.

In particular, I see no reason why a person should be disenfranchised from the minimum wage just because the employer is his or her spouse, father, mother, niece or child, or whatever. However, it all depends on the nature of the relationship. If the family member is a worker, he or she will qualify for the minimum wage. If he or she is simply helping out on an informal basis, that is unlikely to form the basis of a worker's contract. As I said, we wish the Bill to be inclusive, not exclusive. It is a fair and sensible way to proceed. That is why we opposed the amendment previously, and why I recommend that the House reject the amendment on this occasion.

The question of directors was discussed at some length in Committee. The Government have not changed their view, which is clear. Under the Bill, a person who is a director of a company, limited or otherwise, will not normally be entitled to the national minimum wage. But that is because of the legal status of the director. Whether it is a small business--for example, the corner shop of which the noble Baroness is so fond--or a multi-million pound business, the director is an office-holder.

It is possible to be both an employee and a director. There may be many cases where a director additionally has a contract of employment with the business. That may be explicit or implicit. In this case, he or she would also be an employee of the company and would therefore be entitled to the national minimum wage. But that entitlement would be the result not of being a director but

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of being an employee. That may apply, for example, to some managing directors or directors who are "one-man bands" in charge of their own business.

The Bill is clear in its effect. Directors who are simply office-holders will not be entitled to the minimum wage, and directors who are employees will be entitled to it. The distinction derives from existing employment law.

That is an important point. The Bill relies at heart for its main definition of "worker" in Clause 54 on the approach taken by existing employment law. In the Bill we have tried to follow that. Much of the legislation, including the Employment Rights Act 1996, was introduced or maintained by the previous Conservative administration. I am therefore puzzled as to why the noble Baroness makes continuous efforts to change, or at least appears to call into question, the previous position of people under the Employment Rights Act 1996.

The amendment is therefore not necessary. The definitions in Clause 54 make it quite clear who is covered by the Bill. Where directors are not workers, they will not be covered; where they are workers, they will be covered.

I hope that the noble Baroness will consider this matter of principle and will withdraw her amendment.

10.15 p.m.

Baroness Miller of Hendon: My Lords, I shall certainly withdraw the two amendments that I have spoken to. However, I did not agree with the Minister's remarks. I am surprised that he did not comment on the case on which I asked him to comment; namely, Secretary of State for Trade and Industry v. Bottrill, which I believe refutes what he said. I totally accept that the noble Lord, Lord Clinton-Davis, was not in a position to comment previously. However, I thought that within the month I might receive a satisfactory answer. I suggest that the Minister looks up the case when this matter arises again at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 55 not moved.]

Baroness Miller of Hendon moved Amendment No. 56:

After Clause 44, insert the following new clause--

Exclusion of disabled persons and employment for therapeutic purposes

(" .--(1) The Secretary of State may, after consultation with the Low Pay Commission, make an order exempting disabled persons from the provisions of this Act.
(2) An order under subsection (1) above shall provide for the issue of permits by the Secretary of State to those persons whom he believes to be disabled and may make provision for--
(a) the procedure for applying for and issuing such permits;
(b) the procedure for establishing the minimum wage to which each permit holder shall be entitled (being less than the single hourly rate prescribed under section 1(3) of this Act);
(c) the appointment by the Secretary of State of suitably qualified persons to assess such applications; and
(d) the procedure for appealing against a refusal to issue such a permit.

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(3) No person shall be guilty of an offence under this Act in respect of an employee who holds a permit issued in accordance with an order made under this section.
(4) For the purposes of this section, a person is disabled if he is so affected by physical injury or mental deficiency or infirmity due to age or any other cause as to be incapable of earning the national minimum wage.
(5) A person whose employment is primarily undertaken for the purpose of therapy and whose employer is a non-profit-making organisation does not qualify for the national minimum wage in respect of that employment.").

The noble Baroness said: My Lords, the wording of this amendment is slightly different from that of the one I introduced in Committee. The difference is that I have used the word "disabled" in place of "incapacitated".

Representations were made to me by the noble Lord, Lord Rix, that the word "incapacitated" is objectionable to disabled persons because it is not representative of the problems that they face. Merely because a person suffers from any sort of disability does not mean that that person is incapable of normal, useful and productive activities. Naturally, I accept the correction. I very much hope that my drafting did not cause any offence.

Knowing the capacity of the noble Lord, Lord Clinton-Davis, for compassion, I could not understand his rejection of my amendment, which he agreed related to a difficult issue. We were arguing diametrically opposite cases, but with the same objective: to assist disabled workers. On reading his arguments in Hansard, I think I have discovered the reason. It is the classic conundrum of whether a glass is half empty or half full. The noble Lord saw it as a risk of discrimination, although he was gracious enough immediately to acquit me of any such intention. He said that it could,

    "deny the minimum wage to the very people who are most in need of its protection".--[Official Report, 22/6/98; col. 65.]

I, on the contrary, see it as an opportunity for disabled people who would otherwise find it impossible--at the very least difficult--to obtain work to do so.

This amendment is not designed as a licence for what the Government call unscrupulous employers whom they see lurking round every corner and ready to exploit vulnerable people. I was amazed when previously the noble Lord, Lord Clinton-Davis, commented on the fact that I kept saying that the Government regarded employers as unscrupulous. I suggest that, if the noble Lord has time, he should read the debates on some of the other amendments as carefully as I have done and count how many times unscrupulous employers have been referred to.

Lord Clinton-Davis: My Lords, the point I was trying to make was that if everyone in this world was scrupulous we would not require legislation. Most legislation is designed to deal with those people who, ambitiously and deliberately, set about avoiding legal provision. That is why it is necessary to have laws. It is as simple as that. It is the unscrupulous who disadvantage the scrupulous employer by seeking an unfair advantage.

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