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Baroness Miller of Hendon: I believe that this amendment says that if employers and employees do not agree during the CAC process, the matter should be referred to arbitration--the CAC in consultation with ACAS. Why? Resolving such matters is exactly why the CAC is there. Also, the amendment proposes that the arbitrator should have the right to make substantive

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awards; for example, decisions on terms and conditions of employment. Again, I ask why. Surely that is the CAC's job.

Lord McCarthy: Did the noble Baroness ask why the matter did not go to ACAS rather than the CAC?

Baroness Miller of Hendon: Is not the point of the amendment that if employers and employees do not agree during the CAC process, the matter should then be referred to arbitration by the CAC in consultation with ACAS? I simply ask why. I thought that the CAC was to resolve these matters.

Lord McCarthy: One must make a distinction between the procedures and substantive terms and conditions. This time the CAC cannot make an award on substantive terms and conditions. It cannot give more money. It cannot shorten the hours. In effect, it cannot impose any sanction on the employer. All it can do is ask for specific performance on a procedure. There is no substantive remedy. We are saying that there should be one. A substantive remedy is that the CAC brings in a form of compulsory arbitration. We cannot take that to ACAS because it does not want to be involved in compulsory recognition. It considers that voluntary negotiation, conciliation and mediation is its business and does not want to become involved directly in compulsory recognition. If we are to have compulsory arbitration it has to be outside ACAS. It cannot be within the CAC because it has conducted the investigation. The people who investigate and declare cannot make a substantive award. So there has to be someone else.

We are saying that the CAC should have a panel of arbitrators and one, two or three of them could take on the task.

Baroness Miller of Hendon: I do not know whether I am particularly thick or, because it is late at night, I am particularly tired. I thought that this Bill was based on Fairness at Work and even-handedness between the employers on the one hand and the employees on the other. I thought that when an arrangement was set in place and the CAC was going to deal with it, that was it. Now other things are to be put in and if they do not work there can be extra compensation or what have you. I did not believe that was the intention of the Bill. But as I said, perhaps I am just thick.

Lord McIntosh of Haringey: The last exchange reminds me of the Marx brothers in, I believe, "Duck Soup". Margaret Dumont lost some of her jewellery. They searched the house and Groucho said that it was not in there so it must be in the house next door. There was not a house next door so they had to build one in order to search that as well. That seems to be the argument which my noble friend Lord McCarthy is using about the need for a further arbitrator since the CAC and ACAS cannot do the job that he wants done.

He spoke about last time and the Employment Protection Act 1975. We do not want to go back to that or the provisions of Section 11 of that Act. Under it,

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using an approach which amounts in effect to arbitration, a settlement imposed under the threat that a person or body-- in this case appointed by the CAC rather than the CAC itself--will make an award of new terms and conditions to be incorporated into individual worker's contracts if the employer does not keep to the settlement.

We looked again many times at the 1975 Act but, as we made quite clear in the White Paper and since, we believe that time has moved on. The number and severity of industrial disputes has declined dramatically since the 1970s. Members of the Committee opposite can gloat as much as they want about that. I am quite relaxed. Employers, workers or their representatives have on the whole learned to resolve their disputes without prolonged industrial action and indeed without such action at all in most cases.

The Bill is aimed more at promoting partnership than resolving disputes. Moreover, there are problems with the arbitration approach. At a time when inflation and the level of disputes were both high, compulsory arbitration had some attraction. Most disputes were about pay increases and could be settled by an arbitrator splitting the difference. But the world has changed. We are now in a prolonged period of low inflation. There is widespread use of performance pay, and industrial disputes are at their lowest level for over a hundred years. These days disputes are more likely to be about work organisation than basic conditions. Few employers will enter into a dispute unless they see the issue as very important for their business and arbitration is less attractive in these circumstances. Far more effective is the approach promoted with some success by ACAS of joint problem solving. That requires the willing consent of both parties and joint recognition of the large degree of common interest which both employer and employees have in the long-term success of the business.

The Bill is in part about signals and encouragement of a new partnership approach. For that reason I must say to my noble friend that the Government do not consider arbitration in the way suggested by him to be a necessary or appropriate element in the scheme for recognition. I hope that my noble friend will not pursue his amendment.

Lord McCarthy: I shall not pursue my amendment. My noble friend has made some very original and stimulating comments tonight but he cannot do so in relation to this amendment. We all know it has been laid down at the very highest level that there can be no movement on this matter. My noble friend said that the amendment reminded him of the Marx brothers. His observation reminded me of the Red Queen who said:

    "What I tell you three times is true."

Lord McIntosh of Haringey: It was the Bellman in The Hunting of the Snark who said that.

Lord McCarthy: It is not true in either case, is it? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Lord McIntosh of Haringey moved Amendment No. 229:

Page 57, line 13, at end insert--

("Notice of declarations

127A.--(1) If the CAC issues a declaration under this Schedule it must notify the parties of the declaration and its contents.
(2) The reference here to the parties is to--
(a) the union (or unions) concerned and the employer concerned, and
(b) if the declaration is issued in consequence of an application by a worker or workers, the worker or workers making it.")

On Question, amendment agreed to.

[Amendment No. 230 not moved.]

Schedule 1, as amended, agreed to.

Baroness Miller of Hendon moved Amendment No. 231:

Before Clause 2, insert the following new clause--


(".--(1) The Trade Union and Labour Relations (Consolidation) Act 1992 shall be amended as follows.
(2) After section 225 insert--
"Action pending recognition for collective bargaining.
225A. An act is not protected if the reason, or one of the reasons, for which it is done is that an employer has refused to recognise, to any extent, a trade union for the purpose of collective bargaining and--
(a) the procedure laid down in Part I of Schedule A1 has not yet been exhausted; or
(b) the procedure laid down in Part I of Schedule A1 has been exhausted and the union has failed to qualify for recognition."").

The noble Baroness said: I am in some confusion as to the siting of the amendment. When I tabled it I believed that it should fall somewhere in the middle of Schedule 3, but I am sure that the Public Bill Office knows better than I do. For that reason we find this amendment before Clause 2.

The Trade Union and Labour Regulations Consolidation Act 1992 provides for the protection of unions and their members from legal--I stress "legal"--action taken in furtherance of a trade dispute. Clearly, there can be no objection to that; indeed, the Act was itself produced by the former government. A strike becomes legal if a proper ballot is taken of the workers, appropriate notice is given, and so on, and the proper procedures are followed. This amendment removes protection from two courses of action: first, if the workers and the union seek recognition under the terms of this Bill and, although the employer refuses to agree to such recognition voluntarily, the machinery laid down in the Bill is still being conducted by the CAC; and, secondly, if the machinery laid down by the Bill has been employed and the CAC has decided that the union's case for recognition has not been made out. In other words, in the first case the matter is still sub judice, and in the second case the matter has been decided but the union has failed in its representations.

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The Bill gives extensive rights to employees and unions to enforce recognition against unwilling employers. If the case is made out the employer is bound to accept recognition whether or not he is willing. The amendment prevents a union or its members from jumping the gun by pre-empting the decision of the CAC and calling a strike or engaging in some other industrial action while the matter is still under consideration by the CAC. It also removes the protection from action taken after a decision has been reached by the CAC and the union has lost; in other words, it prohibits an attempted second bite at the cherry by using force where the conciliation machinery laid down by the Bill has already been employed. The Bill will give unions a lot of rights that they do not have at present. The reciprocal act required for those rights must be that unions and their members accept that a referee's decision is final.

11 p.m.

Lord McIntosh of Haringey: The amendment would prevent any form of industrial action in support of a claim for recognition. I hear the argument that it is a quid pro quo for the existence of a statutory procedure but I am not sufficiently convinced to accept the amendment.

The right of unions to call industrial action is already heavily circumscribed. We do not propose to limit it further. If we did, we would be breaching our International Labour Organisation commitments, which the Government take very seriously. The statutory recognition procedure in Schedule 1 will provide a better, more predictable way of resolving disputes than strikes. Industrial action over recognition should become extremely rare or disappear altogether. However, it would be unfair and unjustified to restrict a union's right to take industrial action in support of recognition.

The amendment is in danger of limiting the ability of unions to take industrial action in respect of causes entirely unrelated to recognition. If a union were to take industrial action on an unrelated matter after a failed application for recognition, an unscrupulous employer might claim that a reason for the dispute was that the employer had failed to recognise the union. That could deter a union from taking otherwise fully justified industrial action. That would be wrong.

There are drafting difficulties with the amendment, which refers to the recognition procedure that has "not yet been exhausted". It is not clear whether that is intended to include the case where no application has been made. If not, it is unclear. If so, the effect of the amendment would be to ban all industrial action in support of a recognition claim. The amendment makes no reference either to industrial action in support of a claim for derecognition under Part VI, which renders its scope somewhat defective.

I do not think that the amendment is necessary or proportionate to the end effect that it seeks, and I do not believe that its drafting is satisfactory. I ask the noble Baroness to withdraw the amendment.

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