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Lord McIntosh of Haringey: I am rather inclined to agree with the noble Baroness that Part II of the Bill should not apply to existing voluntary agreements. One of the Government's aims in framing the legislation is to maintain stable bargaining agreements. We would have preferred to leave voluntary recognition out of the Bill altogether.

However, as we said in paragraph 60 of the Explanatory Notes, that would have created a loophole. The loophole would have allowed an employer to claim to recognise a union voluntarily but fail to negotiate with it. We have designed Part II of the schedule to plug that loophole, and that is where we have gone wrong. My noble friends are clearly right when they say that Part II does not meet its points.

In another place, Michael Wills, the Minister for Small Firms, Trade and Industry, responded to a similar amendment. He said:

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He said "We would seek to incorporate this method into the Bill if it were satisfactory", but asked for time to make sure that it was a genuine improvement.

We have taken time to consider an improvement to Part II and we believe that it is satisfactory. However, I promise your Lordships that we will put down an amendment on this subject for report. I refer back to what I said in answer to the challenge of my noble friends. Since our amendment will have the same effect as the noble Baroness's amendment that we are debating, I would like to ask her to withdraw her amendment.

Baroness Miller of Hendon: I am absolutely amazed. I am so surprised that I am not sure I can continue with the remainder of my amendments! Clearly, in view of what the noble Lord the Minister has said, I most certainly will withdraw the amendment. It seems extraordinary to me--and I must agree on one point with the noble Lord, Lord McCarthy--that after all the debate in the other place, after all the extra amendments that were put down here, after all the time that has been taken, and after all the promises that Mr. Wills gave in the other place, we are still here. I shall withdraw my amendment, because when the Government deal with Part II, they intend to do something. I do not like to sound churlish, a phrase which I used earlier, but it seems to me impossible to believe that in a government Bill that has been thought about for a long time, which followed Fairness at Work, here we stand-- on Part II, at half past nine at night. I shall withdraw the amendment and the noble Lords will have to go back to the drawing board with the officials and come up with something else. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 86A:

Page 31, line 36, at end insert--
("( ) If there is a voluntary agreement, any dispute concerning its interpretation or either party's performance thereof shall be resolved in such forum or by such other arbitrator as the employer and the union shall mutually agree from time to time, and in default of such agreement, by ACAS and not the CAC.")

The noble Baroness said: I am so surprised by the response to the last amendment that I find it difficult to continue with the next.

Amendment No. 86A seeks to improve the arrangements between employers and unions regarding recognised bargaining units when this recognition has taken place as a result of a voluntary agreement.

I was interested to hear that the noble Lord the Minister said that he would have preferred not to have had voluntary agreements within the ambit of this Bill at all, not only to improve those arrangements, I understand, but also to encourage them.

It is quite possible that, in negotiating a voluntary recognition agreement across a table, the representatives of employers and the unions may make a mistake, leave something out or genuinely misunderstand each other.

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With the best will in the world, there are endless possibilities for misunderstanding. It would be regrettable, after the parties had gone to the trouble of negotiating a recognition agreement, if some misunderstanding were to destroy the purpose of union recognition and that a strike should ensue. This additional clause inserts arbitration provisions into the agreement, something that a properly negotiated agreement would have had in the first place. I beg to move.

9.30 p.m.

Lord McCarthy: I have to say, "Welcome to the club". It is quite remarkable at this time of night to see--I understand that the noble Baroness is speaking for her party--the conversion of the Conservative Party to the use of arbitration. It is a good job the noble Lord, Lord Tebbit, has gone to bed. It is astonishing. We are now dealing with Part III of Schedule 1, which is entitled, "Changes Affecting Bargaining Unit". Paragraph 44(2)(b) states that,

    "references to the bargaining arrangements are to the declaration and to the provisions relating to the collective bargaining method". What the noble Baroness is telling us is that we should add to that what is in effect a compulsory arbitration provision. Is she serious? Is the Conservative Party really saying that when there is a voluntary agreement and a dispute we should enact a system of arbitration? Is that now Conservative policy?

Baroness Miller of Hendon: I am speechless. Perhaps it is the time of night. Is the noble Lord suggesting that because the noble Lord, Lord Tebbit, is not sitting behind me, I have strayed out of line or I have committed my party to something it would not wish to be committed to? I put down the amendment. That is it. I am sure that it will be rejected.

Lord McIntosh of Haringey: The noble Baroness can treat that as a rhetorical question, particularly as I think that the amendment is based on a misapprehension. The noble Baroness seeks to insert it after sub-paragraph (2) of paragraph 44 at the beginning of Part III of the schedule which deals with changing the bargaining unit. But sub-paragraph (1) makes it clear that the part applies only where the CAC has issued a declaration of recognition; that is, following a ballot or on the basis of majority union membership. The part does not apply to voluntary recognition. If that was the point of the intervention of my noble friend Lord McCarthy, I think that he may have been unjustly accusing the noble Baroness of breaking ranks. The presumption is that if parties are capable of agreeing on recognition in the first place, they are capable of dealing with a change in the bargaining unit. In the last resort a union always

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has the option of ending voluntary recognition and applying under the schedule. The amendment is therefore entirely unnecessary.

Lord Wedderburn of Charlton: Before my noble friend sits down, perhaps I may thank him for explaining the problem that some of us had with the amendment. It is in the wrong place.

Lord McIntosh of Haringey: Yes.

Lord Wedderburn of Charlton: But in view of the hour, if we were kind to it and it were moved some 20 or 30 lines up the page, would we then be in favour of it?

Lord McIntosh of Haringey: That is a hypothetical question.

Baroness Miller of Hendon: If it is found suitable to put it in a different place, so be it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 87:

Page 32, line 23, leave out ("there is prima facie evidence") and insert ("it is likely")

The noble Lord said: In moving Amendment No. 87, I wish to speak also to Amendments Nos. 89 to 104, 118, 120, 122 to 155, 157 and 159 to 161. I shall have to turn over a number of pages in order to get beyond the text and effect of these amendments.

This is a large group of amendments to Part III of the schedule. Although there is a large number of them, they make only two substantial changes: a minor alternation in one criterion for the acceptance of an application, and a number of changes which together allow the CAC to decide that a bargaining unit has split into several new units.

Amendments Nos. 87, 118 and 120 alter the standard of proof required for the CAC to consider an application in line with similar changes made in another place. Instead of considering whether there is prima facie evidence that the bargaining unit has changed, the CAC will have to decide whether it is likely that the unit has changed. It will be able to consider evidence about this, whether or not it is prima facie evidence. This is a slightly higher standard of proof to ensure that only well-founded applications go forward.

The rest of the amendments in this group--I shall not try the Committee's patience by listing them all--are intended to make one important alteration across Part III of the schedule. At present, an employer or union may apply to the CAC to determine whether a bargaining unit has changed. If it has, the CAC may specify the single new unit which it believes to be appropriate. The changes we are seeking will allow the CAC to specify more than one new unit as "appropriate".

I should like to give two examples of where this might be desirable. An employer might have two factories covered by a single collective bargaining

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arrangement. The employer might, for good business reasons, choose to manage each factory separately. We want the CAC to be able to decide that each factory is a new bargaining unit.

Another example is a firm which is restructured so that, instead of setting pay rates centrally, half a dozen regional offices will each set pay for workers in that region. I remember some controversy about nurses' pay on that subject in recent years. There could therefore be six new bargaining units arising from one original unit. In this situation, it is not appropriate for the CAC merely to identify one of the new units; it should identify all six.

The amendments fall into four categories. First, there are the amendments which merely alter references to a new unit, so that they read "unit or units". Amendments Nos. 89, 92, 94 and 96 are the first four such amendments in this group. They are essentially straight forward.

Secondly, there are amendments which are intended to prevent decisions by the CAC from interfering with other recognition arrangements. Amendment No. 90 is the first example of these. We have invented the concept of an outside bargaining unit--in other words, workers covered by another collective agreement. These amendments deal with a new unit which includes any workers who are members of an outside bargaining unit. If a union and an employer agree a new unit which includes such workers, the CAC will take no further action, in order not to interfere with existing arrangements. In other words, we are seeking to prohibit "overlapping" bargaining units. Amendment No. 100, for example, requires the CAC to determine new units in such a way that they do not overlap with each other.

The amendments also deal with the situation where the CAC decides that the bargaining unit has changed, and that one or more new units contain workers covered by another collective agreement. The CAC will "wipe out" recognition for all workers in a new unit which overlaps with an outside bargaining unit. The unions may then discuss between themselves whether they wish to apply for recognition, and, if so, whether they should make a joint application, or if one of them should apply on its own. We are proposing two changes to this procedure. Amendment No. 140 allows the CAC to deal separately with each new unit, so it may decide that new unit A overlaps with an outside unit, whereas new unit B does not. Amendment No. 150 means that the CAC will not interfere with a voluntary recognition agreement, but will only "wipe the slate clean" of recognition if the outside bargaining unit was recognised through the statutory procedure. It also provides for a 65-day interim period, which is three months in my calculation, during which the original bargaining arrangements will continue unless the CAC decides that they should cease immediately in the interests of good industrial relations.

I know this is getting hard to follow, so I shall give an example in a minute. I should first like to say that the third type of amendment in this group is consequential on the first two. Amendment No. 91 is an example.

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There are a number of amendments which remove references to "a bargaining unit which is no longer appropriate". Amendments Nos. 98 and 102, are examples. On reflection, the Government believe that the CAC should always decide the most appropriate new bargaining unit if the unit has changed. That is the fourth category.

I promised to give an example. It is wholly fictitious, but I hope it will illustrate the kinds of situation which the amendments are intended to deal with. Consider a firm which employs widget-makers and widget-painters. A union is recognised to conduct collective bargaining on behalf of both groups. The employer then expands by taking on some widget-packers as well. A separate union is recognised for the widget-packers, under Part I. The employer then applies to the CAC to rule that the bargaining unit of widget-makers and widget-painters has changed.

The employer and the union representing the makers and painters cannot agree a new unit or units. The CAC then decides that there are two new units. It decides that the units are as follows: Unit A is all the widget-makers and most of the painters, and Unit B is those widget-painters who used to parcel up the widgets for transport, plus the packers who now deal with the widget-painters. I trust that noble Lords are with me! The CAC then looks at each unit separately. The union continues to be recognised for Unit A. In Unit B, the CAC decides that it contains workers who are members of another bargaining unit--the packers--for which another union was recognised via Part I, and therefore decides that the bargaining arrangements should cease for all workers in Unit B, and that, in the interest of good industrial relations, they should cease immediately.

I admit that this is a rather contrived narrative--although I enjoyed it. But each of the CAC's decisions that I have just mentioned is one which it could not make without these amendments being made. The amendments add flexibility to the procedure for changing the bargaining unit, and will help the CAC to make appropriate decisions. I commend them to the Committee.

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