Select Committee on Delegated Powers and Deregulation Eighteenth Report



Memorandum by the Department of Trade and Industry


1.        This memorandum gives an account of the purpose and scope of the delegated powers proposed to be taken in the Public Interest Disclosure Bill, a Private Member's Bill introduced in the House of Commons on 18 June 1997.

  Outline of scope of Public Interest Disclosure Bill

2.        The Bill confers on workers a new employment right not to be subjected to dismissal or detriment for making disclosures of information about certain matters. The Bill introduces the new right as an amendment to the Employment Rights Act 1996.

  Purpose of the Bill

3.        The purpose of the Bill is to provide a remedy for workers who are dismissed or otherwise subjected to detriment by their employer for reasonably disclosing information about criminal offences, breaches of legal obligation, miscarriages of justice, health and safety dangers, environmental damage or the deliberate concealment of information relating to any of these matters.

4.        The Bill amends the Employment Rights Act 1996 to include this new right.

  Delegated powers

5.        The Bill contains three order making powers. Clause 1 inserts a new section 43F into the Employment Rights Act 1996 which enables the Secretary of State to prescribe persons, or descriptions of persons to whom certain disclosures of the kinds that the Bill in principle protects, may be made. Clause 8 inserts a new section 127B into the Employment Rights Act 1996 which provides power for the Secretary of State to make regulations concerning the compensation that shall be awarded to workers making claims under the Bill. These two orders would be made under the negative resolution procedure (see section 209 of the Employment Rights Act 1996). Clause 18 provides for the provisions of the Bill to come into force by commencement order but this does not apply in relation to the provisions containing the two regulation making powers mentioned; these come into force on the passing of the Bill.

6.        In addition, the Bill contains provision enabling an Order in Council under Schedule 1 to the Northern Ireland Act 1974 made only for purposes corresponding to those of the Bill to be subject to the negative resolution procedure.

  Classification of subordinate legislation

7.        In deciding whether subordinate legislation was appropriate in the cases mentioned, the Department had in mind the following criteria:

        -  to ensure flexibility in responding to changing circumstances without the need for primary legislation in respect of prescribed bodies under clause 1 of the Bill;

        -  to ensure consistency with existing compensation arrangements while providing additional time to reach agreement on the details;

        -  to provide time for publicity and information about the new rights before the provisions are commenced.

  Clause by clause analysis of delegated powers

8.        These are described in paragraphs 8.1 to 8.4

  Clause 1 - disclosure to prescribed person

8.1      Under the Bill, a qualifying disclosure is one made in accordance with one of the new sections 43C - 43H inserted into the Employment Rights Act 1996 by clause 1. In general, the provisions are drafted to encourage workers to raise concerns internally before disclosing to an outside body. However, some bodies have duties to deal with such concerns - for example, the Health and Safety Executive in relation to health and safety concerns. Section 43F provides for bodies of this kind to be prescribed by the Secretary of State in respect of the matters they deal with, so that workers will be protected if they raise matters directly with these bodies rather than with their employer.

8.2      The Government intends to prescribe the HSE and health and safety representatives; the Environment Agency; the Office of Fair Trading; the Financial Services Authority; Inland Revenue; the Insolvency Service of the DTI; and utility regulators. Other Government Departments are being consulted on these and whether other bodies should be added. The order making power will enable the list of prescribed bodies and functions to be updated as circumstances change without the need for primary legislation.

  Clause 8 - compensation for unfair dismissal

8.3      This clause provides for the Secretary of State to make regulations which will specify the calculation of compensation for the new right not to be subjected to detriment for making a protected disclosure. The Government considers that compensation under the Bill should be aligned to that provided under existing provisions of the Employment Rights Act 1996. The order making power will allow additional time for agreement to be reached on this issue, on which there remain differing views. The Government has already stated its intention of considering whether the current limits on compensation, and the arrangements for reviewing them, work in the best way to meet its aims.

  Clause 18 - commencement

8.4      Clause 18 provides for the making of commencement orders by statutory instrument to bring into force the provisions of clauses 1 to 16 of the Bill. There are no firm plans for commencement but it is likely that the provisions will be brought into force around three to six months after Royal Assent. This would provide time for employers and workers to learn about the new rights, for information booklets to be published and for employers to consider setting up appropriate internal procedures.

  May 1998

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