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Lord Simon of Highbury moved Amendment No. 7:

Page 16, leave out lines 23 to 28 and insert--
("(7) The provisions mentioned in subsection (8) apply to employment on board a ship registered in the register maintained under section 8 of the Merchant Shipping Act 1995 if and only if--

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(a) the ship's entry in the register specifies a port in Great Britain as the port to which the vessel is to be treated as belonging,
(b) under his contract of employment the person employed does not work wholly outside Great Britain, and
(c) the person employed is ordinarily resident in Great Britain.")

The noble Lord said: My Lords, this amendment is a purely technical change to the amendment on territorial extent which was introduced at the Report stage last week. It relates to subsection (4) relating to mariners.

Subsection (4) is intended to preserve the special position of mariners. However, the current wording fails to do that precisely; hence this technical amendment, which ensures that the current position of mariners is unchanged under the new provision. I beg to move.

On Question, amendment agreed to.

Clause 46 [Extent]:

Lord McIntosh of Haringey moved Amendment No. 8:

Page 20, line 24, leave out ("section 39") and insert ("sections 39 and 45")

The noble Lord said: My Lords, the amendment ensures that a commencement of a provision in the Bill that amends or repeals a provision in other legislation extending to Northern Ireland itself extends there. I beg to move.

On Question, amendment agreed to.

Schedule 1 [Collective Bargaining: Recognition]:

Lord McIntosh of Haringey moved Amendment No. 9:

Page 21, line 36, at end insert ("or 44")

The noble Lord said: My Lords, in moving Amendment No. 9 I shall speak also to Amendment No. 10 and to Amendments Nos. 12 to 26. All of these amendments are minor and correct or clarify provisions in Schedule 1. None is intended to alter the substance of the schedule.

Amendment No. 9 introduces a cross-reference which ensures that the same definition of collective bargaining applies to the tests in paragraphs 35 and 44. The tests are otherwise equivalent.

Amendments Nos. 10, 16 and 26 all relate to the territorial extent of the schedule, as discussed in connection with Amendment No. 7. The Government's intention is to exclude from Schedule 1 workers on ships from Northern Ireland, since it is for Northern Ireland legislation to deal with them. The existing wording was technically incorrect because under the Merchant Shipping Act 1995 ships are no longer registered "at a port" but in a central register. These amendments remedy the defect.

Amendments Nos. 12, 14, 21, 22 and 23 all remove references to agreements. This is a consequence of the new Part II, which excludes voluntary agreements from the scope of the schedule. Amendments Nos. 13 and 15 ensure that if recognition ceases for some workers in a bargaining unit but not for others as a result of an application under Part III, then the workers retaining recognition cannot have that recognition overwritten by an application under Part I.

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Amendment No. 18 inserts a missed cross-reference in the new Part II. Amendment No. 19 corrects a cross-reference. Amendment No. 24 is consequential to the new paragraph 91 and ensures that the correct definition of collective bargaining applies. Finally, an incorrect cross-reference is removed by Amendment No. 25. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 10:

Page 22, line 21, leave out from ("registered") to end of line 23 and insert ("in the register maintained under section 8 of the Merchant Shipping Act 1995 shall be treated as ordinarily working in Great Britain unless--
(a) the ship's entry in the register specifies a port outside Great Britain as the port to which the vessel is to be treated as belonging,")

On Question, amendment agreed to.

Baroness Miller of Hendon moved Amendment No. 11:

Page 31, line 5, at end insert ("if it is part of a business employing more than 50 workers in total, or at least 50 per cent of the workers if there are more than 20 but less than 51 workers employed by the said business on either of the dates referred to in paragraph 7(1) of this Schedule").

The noble Baroness said: My Lords, the Employment Relations Bill is mostly about the compulsory unionisation of businesses where at least 40 per cent of the workforce take part in a vote and the majority of those who actually do vote want it.

Noble Lords will know that I have enormous concern for the welfare of small businesses. Many noble Lords will also know that my concern might be described as a passionate one. I believe that nurturing small businesses is nurturing the very engine that drives the economy, which will provide jobs and prosperity in the future.

Under the Bill, the first threshold that triggers this union activity--or potential union activity--in any business is that it should employ more than 20 people. Last Thursday I proposed an amendment to the Bill to alter the definition of a "small business" from one employing fewer than 21 people to one employing up to 50 people.

I originally believed that the Government's figure was something they had plucked out of the air, but it is now clear that that figure was probably worked out with the unions. As if this trivial figure of 21 is not bad enough, paragraph 6(b) of the first schedule gives the Secretary of State power to vary it. When I challenged the Government at the Committee stage on the interpretation of that paragraph, the noble Lord, Lord McIntosh of Haringey, admitted:

    "We acknowledge that it may have to vary in either direction. It could be too stringent or not stringent enough".--[Official Report, 7/6/99; col. 1174.]

So it is clear that no trifle will be too small for them to snap up when they get round to it, which will be after gobbling up the bigger fish.

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I do not want to take up your Lordships' time by repeating the arguments I raised at the Report stage, but I should like to remind the House that the Government have used the criterion of 50 to define a small firm in the Late Payment of Debts (Interest) Act.

More importantly, as I have previously reminded your Lordships, the European Commission, complaining about a proliferation of definitions, said in a report issued as long ago as 1996 that:

    "In a single market without internal frontiers, the treatment of enterprises must be based on a common set of rules".

It goes on to say:

    "The number of employees is one of the most important (criteria) and must be regarded as imperative".

I stress "imperative".

After that preamble the report states in Article 1, paragraph 2:

    "A 'small enterprise' is defined as an enterprise which has fewer than 50 employees".

That imperative and that definition, prescribed by the European Commission, are what the Government are ignoring and totally disregarding with the derisory threshold of fewer than 21 employees that they have adamantly adhered to throughout the passage of the Bill; a threshold which they have taken power to reduce still further, even to the point of almost total invisibility, by statutory instrument.

My very reasonable and entirely proper resolution was lost last Thursday when the Government opposed it with the assistance of their junior partners, the Liberal Democrats. This surprised me--and saddened me greatly--because the Liberal Democrats claim to be great supporters of small businesses; they claim to be the true Europhiles. If "true blue" is the wrong expression, perhaps "rose-coloured glasses Europhiles" is a better description--the party that would drop us into the single currency this very day if they only had the chance.

What happened last Thursday? Not only did they not support my amendment, they did not even abstain, which I think I could have understood. On the contrary, they had a very strong Whip and, if my researches are correct, they secured one of the largest turn-outs they have had this Session. I suppose I should feel flattered.

Imposing trade unions on genuinely small businesses will not be in the least helpful to those small businesses. Noble Lords opposite and their Liberal Democrat colleagues may disagree, but show me the union which says that its objective is to help the employer earn more money or where the needs of the business are at the top of its agenda.

As I said, paragraph 29(3) of Schedule 1 invokes the union recognition procedure if a majority of the workers voting vote in favour of union recognition. However, there is a further qualification; that is, that at least 40 per cent of the workers in what the Bill calls "the bargaining unit" must actually participate in the vote. As usual, the needs of big business have been given precedence over small businesses. That is very dangerous for small businesses, which have hardly been considered at all, especially in the case of union recognition, where they have been totally ignored.

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My amendment applies to a small business of the size generally recognised as such and prescribed by the EC, of no more than 50 workers. In those cases, instead of 40 per cent of the workers being the quorum to validate a vote, the amendment requires 50 per cent to do so. Let me stress that: in a business with more than 20 but fewer than 51 workers, 50 per cent of the workers will need to take part in the vote.

Before the Government argue that this will somehow wreck the Bill, let me point out the mathematical consequences. In the case of the Government's artificial figure of 21 workers, it would take 11 voters at the 50 per cent level to trigger recognition, instead of nine at the 40 per cent level; only two more people. If we go all the way up to the limit of my amendment-- 50 workers--then instead of 20 workers being necessary it would take 25; again, a mere handful. Certainly the difference will not bring the whole structure of union recognition crashing to the ground.

My original amendment undoubtedly offered the simplest way of resolving this problem for small businesses--a problem recognised by the noble Lord, Lord McIntosh, when he said:

    "We accept that to apply the statutory provisions to firms with 20 or fewer workers could be onerous and inappropriate".--[Official Report, 8/7/99; col. 1045.]

One thing is certain: for 50 or fewer workers to be deemed to constitute "a small firm" is beyond argument; it is not onerous; it is wholly appropriate and absolutely fair. It is consistent with European law and practice. It is certainly consistent with the rules under which our European competitors will be working. Noble Lords can be certain that the French and the German Governments do not spend a single moment trying to make things harder for their businesses and easier for ours.

At the previous stage of the Bill the Government, aided and abetted by the Liberal Democrats, decided to make things harder than they need be for our small businesses in order to promote the interests of the trade unions. This is a small amendment which seeks, in an equally small way, to redress the balance ever so slightly. I beg to move.

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