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Lord Davies of Coity: I wonder whether the noble Baroness really understands. Employment tribunals take decisions on the evidence presented and it is not helpful to talk about "gullible" employment tribunals and "imaginary" claims. If a tribunal adjudicates on a well-founded, sensible claim where the employer has acted unjustly towards the employee, it is not only a question of expenses and the practical loss experienced but of an entitlement to compensation.

Nothing in the Bill is in contradiction with the normal standards that would apply under the current system of employment appeal tribunals legislation. I am bemused that the noble Baroness thinks that people who have

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been unjustly treated by their employers are not entitled to compensation when they make a well-founded, not imaginary, application to not a "gullible" but a reasonable tribunal.

Lord Meston: I entirely agree with the noble Lord, Lord Davies of Coity. Listening to the noble Baroness, Lady Miller, there was some confusion of thought between punitive awards and exemplary awards--and the fact that exemplary awards are themselves the exception was lost from sight.

The noble Baroness referred to persons launching unjustifiable claims. Such persons do not receive punitive or exemplary awards. They do not receive any formal compensation. Tribunals are well versed in dealing with such claims.

Lord McIntosh of Haringey: I have some sympathy with Amendments Nos. 222 and 225, proposed by my noble friends, which are intended to protect workers against detriment or dismissal where they accidentally breach their contracts or commit breaches in reasonable furtherance of a purpose protected by virtue of Paragraph 115(2), which is concerned with grounds for protection against detriment, or paragraph 120(2), which is concerned with dismissal. Our intention has always been that a worker dismissed on one of the grounds set out should not be protected where the worker's action amounted to a breach of contract in a different way or was unreasonable.

I also remind my noble friends that Part VII of the schedule does not exist in isolation. The effect of that part is to make it automatically unfair to subject a worker to detriment or dismissal if the reason is one set out in paragraphs 115 or 120, unless the worker falls foul of sub-paragraph (3). This does not, of course, mean that it is fair to dismiss or punish such a worker. Rather, it is simply not automatically unfair. An employee who was dismissed in these circumstances, or who was subject to such detriment as to justify a complaint of constructive dismissal could still argue that the dismissal was unfair and the tribunal would consider such a complaint in the normal way.

However, I listened carefully to what my noble friend said in support of the amendment. I am not entirely sure that the Bill as drafted achieves everything we intended. With the assurance that we will look closely at this matter again and, if necessary, come back with a suitable amendment on Report, I hope that he will feel able to withdraw his amendment.

I turn to Amendments Nos. 223 and 224 in the name of the noble Baroness, Lady Miller. Part VII of the schedule provides workers with protection against detriment or dismissal arising from their actions concerning recognition or derecognition of a union under the schedule. That is only fair. Without such protection, workers could not make a free choice as to whether or not they wanted to be represented by a union. If a worker believes that he or she has suffered detriment, the case may be put to an employment tribunal.

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These amendments would restrict a tribunal award for detriment to the economic loss suffered. They would exclude any element of compensation from the award. I do not believe that this would be a sufficiently credible sanction on a bad employer, even if one puts aside the points made by the noble Lord, Lord Meston. The bad employer will think, "Even if I lose, I won't have to pay any more than I would have anyway. And I might win, or my employee might not complain". That is a calculation stacked against the worker. Instead, we need to send a clear signal that treating workers badly because they favour recognition, for example, is not acceptable and carries a penalty.

Of course, we sympathise with employers' fears that this will lead to a spate of tribunal actions. That is not our intention. We have been careful to ensure that workers must act in accordance with their contracts and must act reasonably in order to benefit from protection against detriment.

These amendments would reduce the protection available to workers who suffered genuine detriment, and would therefore encourage unscrupulous employers to take action against workers wanting to recognise or derecognise a union. Paradoxically, these are the very cases in which workers are most likely to need the protection of a union from a bad employer. I therefore ask the noble Baroness not to move her amendments.

In summary, I hope that my noble friends will feel that our undertaking will enable them to withdraw their amendments and I hope that the noble Baroness from the Opposition Front Bench will feel that our arguments have persuaded her not to move her amendments.

10 p.m.

Lord Wedderburn of Charlton: Will my noble friend look again at this issue? On page 55, under what concerns dismissal, the reasons, the main one of which is one of those set out for the worker's protection, are in sub-paragraph (2). As regards detriment short of dismissal on pages 53 to 54, the grounds for protection are set out in sub-paragraph (1). However, sub-paragraph (2) sets out a list which is totally modified on page 54 by sub-paragraph (3). There is no mention of the main purpose. If the worker picks up a pencil and part of the work rules in his contract is that he must not pick up company pencils to register a communication which would have fallen with sub-paragraph (2) he does not fall within that sub-paragraph; he has broken his contract. I hope that my noble friend will look at least at the question of how far the breach of contract must be a substantial one and how far it is related to the grounds in sub-paragraph (2).

Lord McIntosh of Haringey: Of course, I shall look at it again, but on my reading of paragraphs 115 and 120, the respective sub-paragraphs (3) are identically worded in each case.

Lord Cavendish of Furness: Perhaps I have been absent from your Lordships' House for too long. When the noble Lords, Lord Wedderburn and Lord McCarthy,

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speak they often say "we". Given that the noble Lords speak on their own account, how does the Minister interpret the use of the word "we"?

Lord McIntosh of Haringey: I respond to arguments and not to personalities.

Lord McCarthy: It is the three of us who have tabled the amendments.

Baroness Turner of Camden: I thank the Minister for his reply. I still have some doubts which have been voiced so eloquently by my noble friend Lord Wedderburn. As he rightly says, this is a different part of the Bill from that to which my noble friend drew our attention. They were the rights set out under the heading of "dismissal", whereas here we are talking about detriment.

I shall carefully read what the Minister said in Hansard to see whether a slightly different amendment may be suitable on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon had given notice of her intention to move Amendment No. 223:

Page 54, line 42, leave out ("the infringement complained of and to")

The noble Baroness said: I shall not move Amendments No. 223 and 224, but I want to make one point. When talking about the menu of detriments in paragraph 115 of sub-paragraph (1), I said that there was nothing in the list of detriments that I thought would justify punitive damages. However, I have listened carefully to what the Minister said and I shall not move the amendment.

[Amendment No. 223 not moved.]

[Amendments Nos. 224 and 225 not moved.]

Baroness Miller of Hendon moved Amendment No. 226:

Page 56, line 31, at end insert ("but he must provide written reasons, in an explanatory note to any draft order, for not following the recommendations of the CAC")

The noble Baroness said: In speaking to Amendment No. 226 I shall also speak to Amendment No. 230. Both amendments are in support of the concept of open government, or to use the new buzz word "transparency".

I shall deal first with Amendment No. 226. Paragraph 19 of the first schedule provides for the machinery to be employed by the CAC when it is dealing with an application for union recognition. The Government have already discovered that the machinery that they proposed needed some adjustment, hence Amendment No. 29 which was proposed by the Minister.

This is a massive Bill containing a whole new and novel system of the administration of labour relations, including concepts of a quasi-judicial nature. Quite rightly, the Government have introduced what I may call

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a long-stop provision, enabling the Government to have second thoughts if they discover that what has been legislated for is not necessarily working perfectly.

That is exactly the same sort of situation as I believe a helpful amendment, which I intend to introduce later and which comes before Clause 27, is designed to cover.

The long-stop provision that the Government have proposed is in paragraph 125: that if the CAC in the light of its experience of the operation of the Act, decide that the paragraph 19 machinery is not working properly, they can ask the Secretary of State to amend the paragraph. Sub-paragraph (2) gives the Secretary of State the necessary power to amend paragraph 19.

However, it is also provided that the Secretary of State does not have to amend the paragraph in the way proposed by the CAC. I suppose that is fair enough because it is the Secretary of State who represents the Government and not the CAC.

Therefore, we have no quarrel with the concept of paragraph 125, except in one respect. If the Secretary of State decides to depart from the advice of the CAC, which will be based on their practical experience of the working of the schedule, he should be prepared to give his reasons at the earliest possible stage--that is, when he tables the proposed new regulations.

Sub-paragraphs (3) and (4) require the Secretary of State to make any amendments by statutory instrument, and for such instrument to be subjected to a positive resolution of both Houses. As his decision will be subject to parliamentary scrutiny, no real concession is being asked for, except for Parliament to be given as much advance notice as possible of the Secretary of State's reasons. The dividend that the Government will receive is that it may save them some precious parliamentary time if prior information enables the regulation to go through on the nod.

I now turn to Amendment No. 230. This is on the same grounds and for the same purpose. When the CAC makes a decision that can affect the parties to a dispute, or even a set of complicated negotiations, it cannot be wrong that it should give reasons to the parties for its decisions and that those reasons should be in writing. The amendment also provides that other persons should be entitled to a copy of those written reasons; first, because the CAC will be acting in a quasi-judicial capacity and justice must be open; secondly, and no less importantly, because the publication of decisions will ensure that the parties to future matters being dealt with by the CAC will be aware of its attitude to given problems. A set of precedents will be established. It will also ensure that there is consistency in the manner in which the CAC makes its decisions. I beg to move.

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