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Lord Wedderburn of Charlton: My Lords, would my noble friend like to wait and see what I say about that?
Lord Borrie: My Lords, I was anticipating a little because I have read some of what my noble friend has written, but I am happy to say no more about it at this stage.
My view—and it is natural that I should give my view rather than that of my noble friend—is that there is every reason in principle for legislating to ensure that internal dismissal and grievance procedures in the workplace are created where they do not currently exist and that their use is fully encouraged. I am told that most larger employers have such procedures, but far too many smaller and medium-sized employers have no internal procedures. I favour the requirement and the no contracting out provisions in Clause 30.
In parentheses, I may want to raise in Committee the question of whether Clause 30 affects the disclosure of wrongdoing regime in the Public Interest Disclosure Act 1998. I hope that it does not. Clause 30 may need to be amended to make it clear on the face of the Bill that an employee may properly make appropriate disclosures of wrongdoing in the workplace to regulators such as the Financial Services Authority without first having to raise the matter internally.
While I favour the concept of Clause 30, I have serious doubts about Clause 31, which requires tribunals to vary compensatory awards for failure to use internal procedures before approaching a tribunal. The Government will know that Judge Prophet, the president of the employment tribunals, has published a paper that is highly critical of Parts 2 and 3 of the Bill. He asks why an employee dismissed for redundancy should risk having to lose part of his redundancy payment, to which he seems to be fully entitled under law, because he has not used to the full his former employer's internal procedures. Similarly, on the other
side of the argument, why should an employer have to pay an employee or former employee up to 50 per cent more than the employee's actual loss for failure to use his own internal procedures? Judge Prophet suggests that the Bill seems to mix up compensation assessment and a penalty.Of course, there must be some enforcement procedure if parties are to be encouraged sufficiently and effectively to use internal procedures before going to a tribunal. Judge Prophet reminds us that a tribunal can always stay proceedings that have been launched at the request of an employer who has proper grievance procedures, pending the completion of the internal processes using those procedures. Tribunal proceedings may then be unnecessary because the parties have resolved their differences through those internal procedures. The Bill could require tribunal proceedings to be stayed pending the outcome of internal procedures. That would be a more straightforward and fairer sanction than attacking the amounts of compensation to which someone is entitled.
Part 2 introduces tougher cost disincentives to discourage abuse of the tribunal system. I see value in the Bill's proposals to award costs against paid representatives and to extend costs to cover lost management or preparation time. However, existing regulations already give tribunals the power to impose costs on any party who behaves,
- "vexatiously, abusively, disruptively, or otherwise unreasonably".
According to paragraph 58 of the Explanatory Notes, the Government want to widen the powers because existing regulations,
- "do not give tribunals a general power to award costs against the losing party, in the absence of these factors"—
I would suggest that an employee or employee's representative who seeks to make an effective application may often seem to a tribunal to be time wasting, especially if that tribunal subsequently refuses the application. If the tribunal does not feel that my application is justified, it may well feel that I have wasted time. However, if the time wasting does not amount to vexatious or unreasonable conduct—which is already covered by costs regulations—why should it be condemned in costs? Clause 22, which is what I am talking about, is much too broad and could,
on the Government's own explanation of their intentions, be a serious and unjust disincentive to bringing what may be—or may not be—a valid claim.Your Lordships may be surprised to hear me say that I commend the Bill, which I largely do. I commend the parts of it about which I have not spoken. For the sake of time, I have chosen to concentrate on the provisions about which I have serious reservations.
5.21 p.m.
The Lord Bishop of Hereford: My Lords, I should first apologise to noble Lords who remain in the House for not being in my place when the Minister began his introduction, surprised as I was by the speed with which we have reached this item of business. Noble Lords had the same experience yesterday evening. I hope that the Minister will accept my apology.
I shall speak very briefly, and very differently from recent speeches by noble Lords, about Part 1—the provisions relating to parental leave—and the implications of those provisions for childcare, good family life and a stable society.
The Church of England Board for Social Responsibility responded in detail to the Government Green Paper, Work and Parents: Competitiveness and Choice, which was published just over a year ago. We recognised the radical change that has occurred in the past 20 or 30 years in the part played by women in the world of work. That is much to be welcomed, although of course it has enormous implications for childcare and for family life. It is good that there is an increasing recognition of the vital part that fathers play in the care and nurture of children, not least in their very early years. The emergence of the "new father", with his nappy-changing skills, is a very important and welcome development. On reflection, however, I think that it is not all that new: I was a pretty dab hand at nappies myself 38 years ago.
We therefore warmly support the Bill's proposals on paid parental leave for fathers. Childbirth is an amazing and wonderful experience, and any father who is present at the birth of his child will know how profoundly moving it is—although fathers do well to be properly modest about their part in the process. Childbirth is also a time of radical change in the relationship between mother and father, a change that can make the man feel distinctly vulnerable as love and loyalty have to begin to be shared in new ways. It is a very good use of public money to enable fathers to spend more time at home after the birth of a child and to become used to being almost equal partners in childcare.
The same warm welcome applies to the provision on adoption leave. For children to remain in care must be the policy of last resort. But adoption is not easy however confidently and knowledgeably it is approached and however wise and careful the support given to adoptive parents. I declare an interest as an adoptive parent; there has been plenty of grief and bewilderment as well as delight and happiness and fulfilment. It is excellent that adoption leave is being introduced.
We should, however, like to urge that adoption leave be extended in certain cases to extended family adoption; not of course to step family adoption or to adoption by existing foster parents, who will already have established a very close relationship with a foster child. However, there are not infrequent cases in which a member of the extended family adopts a child, which is often the option that is in the child's best interests and most likely to lead to a stable long-term future. The Bill currently makes no provision for such leave. It may be, for example, that grandparents are the best people to adopt, but that may be at considerable cost in terms of income forgone. They should be able to qualify for any help that is available.
The Government rightly attach very great importance to encouraging people into work, which is fulfilling in itself and the best remedy for poverty and for deprivation. However, the emphasis on work as the answer to these social problems raises considerable issues about family life. How can we strike the right balance between work and family care? The ecumenical Church report Unemployment and the Future of Work, published five years ago, contains some very wise insights into these issues. They bear repetition and careful study. How can the participation of both parents in the labour force be reconciled with the stability of marriage and the upbringing of children? If I use the word marriage, it is not because I want to exclude or denigrate other forms of stable partnership which are so widely found in society today. Seven years ago, the Church published a report entitled Something to Celebrate that looked sympathetically and realistically at various forms of partnership, although of course we believe that marriage is the ideal relationship, and certainly the ideal relationship for the bringing up of children.
Do the Government's proposals recognise the reality of unstable, casual, low-paid work in which there is very little commitment on the part of employers to their employees? The provisions concerning qualification for enhanced maternity pay and leave are still strict, and this part of the Bill is fearsomely complex. If the Bill's provisions do not always fit patterns of low-paid employment, there would be grounds for real concern about whether, even with the provisions, women in low-income families will have enough money to eat properly during pregnancy and be able to make real choices between hanging on to desperately needed paid work, however poorly paid, and staying at home to look after children.
There are serious issues surrounding overwork and the rhythm of work. Looking at society as a whole, it is extraordinary how some have managed to secure significantly reduced hours of work, to well below 40 hours a week for many people, whereas many others have come to accept—even, I fear, to expect—hours of work and a pace of work that would have been regarded as intolerable 20 or 30 years ago. These changes—this workaholic lifestyle—are especially evident among high-flyers in the City, for example, at
one end of the spectrum, and among the lowest paid at the other; freely chosen by the former, but forced by circumstances on the latter.The changes raise serious questions about the balance between work and family life and make one wonder whether the Government's emphasis on raising skills levels and on competitiveness, as understandable and desirable as those things may be, may not be ignoring the fundamental need of human beings for rest and for rhythm and for families to have time off together, not simply round childbirth but at other times as well. The Sabbath principle is one which we need to recapture and to treasure.
There is much in the Bill to be welcomed most warmly. The Churches will be glad to celebrate in particular paid paternity leave and adoption leave and the provisions on flexible working. However, we have to signal the urgent importance of the needs of the poorest members of society, and the need of all human beings, especially families with young children, for a rhythm of regular alteration between work and recreation—a rhythm that the 24-hours-a-day, seven-days-a-week society has already done much to compromise if not in some cases to destroy. The crown of creation, in the profound and picturesque account of the book of Genesis, is not the creation of humanity, but the day of God's rest.
5.30 p.m.
Lord Davies of Coity: My Lords, like John Monks, the General Secretary of the TUC, I believe that much of this Bill is to be welcomed. I certainly do not see it in the extreme terms as described by the noble Baroness, Lady Miller of Hendon. Nevertheless, a number of questions need to be raised on the Bill, particularly in relation to Parts 2 and 3 on dispute resolution and employment tribunals. However, this afternoon, very much like the right reverend Prelate the Bishop of Hereford, I shall draw attention to some of the terms in Part 1.
I should like to raise the issue of payment during paternity and adoption leave for those earning less than the national insurance lower earnings limit, currently standing at £72 a week. That is an issue affecting millions. Around 2.5 million people work for less than that amount every single week. This issue was raised in the other place during both First and Second Reading and the Committee stage. I am pleased to see that since the original drafting of the Bill, which excluded this large group of workers from any entitlement to payment during paternity or adoption leave, a system of reimbursement similar to that for maternity allowance will be set up for low-paid parents on adoption leave. That will help both the low paid and those with breaks in their employment to qualify for payment during adoption leave.
However, I am less supportive of the proposals to help low-paid parents during paternity leave. While the Government recognise that those earning below the lower earnings limit would need some financial recompense to enable parents to take any time off work when a baby is born, the benefits system is a very
cumbersome means of obtaining financial support for a two-week period. It is not geared to accommodate those needing benefits for a short period with little or no notice of a start date.There are 600,000 men who earn less than the lower earnings limit and the Government estimate that, of those, around 5,000 per year will wish to take paternity leave. That is a substantial number of people who will be affected. Often the lowest paid families are those in most need of support and the opportunity for a father to bond with a new baby and to support his partner during and after the birth will be the most valuable help to hold that family together.
There are many reasons why it is impractical for people on low earnings to claim benefits for a short time, however much they may wish to spend those important times with their families. Fathers will not know for certain exactly when the baby will be born and when they will need to take paternity leave, so it will be extremely difficult for them to apply for benefits appropriately. Even if it proves possible to improve the system to help prospective fathers to claim early, all experience of the benefits system indicates that it would be impossible for fathers to receive benefits immediately they went off work on paternity leave.
People who earn under £72 a week do not have savings. Nor do they tend to have access to any credit. They are unable to do without payment for two weeks, especially at such an expensive time as the birth of a baby. The Minister will be aware that claims for income support, for housing benefit and council tax benefit have to be made to different agencies and take several weeks to process. Problems with the housing benefit system have been well documented. People on very low incomes have no savings and simply cannot afford to wait for the benefit payment to come through, especially at such an expensive time as the birth of a new baby.
Under the current rules, claims cannot be made until the period of claim is known. The sad fact is that, even if they could receive benefits several weeks later to make up for the lack of wages during paternity leave, for low-paid fathers that is not an option. They will therefore be unable to take their paternity leave.
In Committee in the other place the Government argued that keeping the necessary payroll records for those earning under the lower earnings level would be disproportionately burdensome for employers. However, employers have to keep payroll records already for many purposes, such as ensuring that people are paid correctly and receive at least the national minimum wage; to prove to Inland Revenue auditors that those people should not be subject to PAYE or national insurance contributions; P60s have to be provided for those who have more than one job so that their income tax can be calculated, based on their total earnings from all sources.
At the time that paternity leave is introduced, many of those earning less than the lower earnings limit will also qualify for the new working tax credit and, once they have children, for the children's tax credit as well.
Records of their pay throughout the year will need to be kept for those purposes. It would seem to me that the simplest method for reimbursing those people earning less than £72 a week would be for them to receive paternity pay at 90 per cent of the average weekly pay. That calculation is the same as that to be used for those earning between £75 and £111 per week, so it will be known to employers.I sincerely hope that this issue will be looked at further. I hope too that, on reflection, the Minister will agree that the only disproportionate burdens that are being proposed are those to be imposed on low-paid fathers wishing to take paternity leave. Therefore I hope that he will bring forward amendments in Committee in line with the view I have expressed.
5.36 p.m.
Baroness Turner of Camden: My Lords, this is a complex Bill—really it is two Bills. The first section, dealing with maternity, paternity and adoption, is quite different from the second part and might almost be an entirely separate Bill. It is family friendly. It has rightly been welcomed by trade unions and even, although with some reservations, by the CBI. It is a great advance and although there are some issues—like affordable childcare and some of the issues referred to by my noble friend Lord Davies of Coity—that still present problems for some families, the Government are to be congratulated on having responded to widespread concerns about these matters and to have done so in so positive a manner.
I do however have some worries about the second part of the Bill dealing with conflict resolution. Like most former trade union officials in this House, I have considerable experience of dealing with employment tribunals. In my day we called them "industrial tribunals" and I am old enough to remember when they were first introduced. I believe that their existence has made an enormous difference to working lives. Once they were introduced, employers could no longer deal as they wished with individual work people; work people had rights and the means to enforce them.
The Government seem to have accepted complaints from employers' organisations that there has been an escalation in claims before tribunals and that a "compensation culture" has emerged with work people going to ETs without attempting to resolve issues internally—so there is a huge number of cases. The figure of 130,000 for last year was mentioned by the Minister and by the noble Baroness, Lady Miller. But out of a workforce of around 25 million that is surely not huge. Moreover, in recent years there have been quite valid reasons for the increase.
There has been a decline in manufacturing industry with large numbers of dismissals. There has, unfortunately, been a decline in union membership—hopefully now being reversed. If the CBI is anxious, as it says it is, to ensure that issues are resolved through internal procedures, it could do more to urge its members to recognise and negotiate with independent trade unions. ACAS has asserted that where there is
union involvement and union-negotiated procedures, it is much easier to resolve issues internally, and I hope the noble Baroness, Lady Miller, will take note of that. There has been an increase in discrimination cases, perhaps due to the increased number of women in the workforce.The proposals in this Bill, if passed unamended, will undoubtedly result in fewer cases before employment tribunals. The Government have said that there could be between 20 and 30 per cent fewer cases, and that bothers me. The percentage of vexatious or frivolous cases before ETs has been stated as being as low as 0.2 per cent. That must mean, therefore, that numbers of valid cases simply will not reach tribunals at all.
I shall now deal with the parts of the Bill which I feel could be reconsidered or amended. As I understand it, access to tribunals could in future be denied to an employee who has not complied with the statutory internal procedure or the compensation that he or she receives could be much reduced. That could be very unfair in the case of an individual who is no longer in employment, who has been dismissed or has made allegations of discrimination or harassment. I understand that it is intended that such employees would not have to comply with internal procedures before getting to an ET, but, so far as I can see, that is not on the face of the Bill. Perhaps the Minister will explain to the House how that is to be achieved. Incidentally, as I think my noble friend Lord Borrie mentioned, there is already provision for conciliation by ACAS before cases come before an ET. Frequently nowadays cases are resolved at conciliation. The statutory procedures make no requirement for the employer actually to investigate; nor is there any provision for the employee concerned to be accompanied. Both provisions are desirable in any fair procedure.
Several unions have raised with me what appears to be a reversal of the so-called Polkey judgment of the House of Lords. Under current law if an employer fails to follow appropriate disciplinary procedures before dismissal the dismissal may still be unfair even if the employer had some substantive basis for dismissal. It would appear that Clause 34 reverses that despite the fact that ETs accept that minor procedural lapses by employers do not necessarily cause a dismissal to be unfair. It is felt that a reversal of the Polkey judgment would have the opposite effect from that intended by the Government in that employers will not feel bound to follow internal procedures negotiated with unions.
Then there is the provision in Clause 22 which gives the Secretary of State powers to authorise tribunals to order that one party makes payments to the other in respect of time taken in preparing his or her case. Clearly, employers are much more likely to spend more defending a case than an applicant making it. Employers are likely to have personnel and other senior staff whose time could be costed and claimed as the cost of preparation. The measure also introduces the idea of double recovery as parties could get back their legal costs plus preparation costs. That could be substantial. It will be difficult for ETs to apply such an
arrangement in a fair and equitable way and may well serve as a further deterrent to applicants considering taking a case.A further cause for concern arises from Clause 25. It would appear that the Secretary of State may redesign the form of application to a tribunal. When tribunals were first introduced the idea was that they would be easy of access for people who would often be unrepresented and would therefore try to represent themselves. The form was intended to be simple to complete even for those with language difficulties. I am afraid that if it is left to government departments to draw up forms, they will resemble some of those to which I have objected in the realm of social insurance, or else tax forms which are many pages long and difficult to complete except by the educated and literate. I hope that failure to complete the form appropriately will not be another reason for denying or delaying access to a tribunal.
I turn to Part 4. Clause 43 gives union learning representatives statutory rights in all workplaces where independent trade unions are recognised by their employers for collective bargaining purposes. The unions will have to give the employer notice in writing that the employee is a learning representative of the union, but the measure does not give unions any new collective rights to bargain over training. There appears to have been some employer lobbying against that clause. The noble Baroness, Lady Miller, also expressed her disagreement with it. I believe that she is profoundly mistaken and that the lobbying is also wrong. Everyone now agrees that training and retraining are important. Arranging for employees to have information and encouragement to train is vitally important. The clause provides the basis for a sensible and constructive partnership between employers and recognised trade unions. The Government are to be congratulated on bringing that forward. I hope to persuade the noble Baroness, Lady Miller, of that during the course of discussion on the Bill.
Clause 45 refers to fixed-term work and seeks to implement the EU fixed-term work directive. This seeks to improve the quality of fixed-term working by ensuring equal treatment with comparable permanent workers and preventing abuse arising from the use of successive fixed-term employment contracts or relationships. I understand that draft regulations were issued by the DTI in January and that these are now the subject of consultation.
I have been approached by the Association of University Teachers which is concerned about certain aspects of the clause and the regulations. Generally speaking the AUT welcomes the regulations but points out that the use of fixed-term contracts in higher education has risen to a high level. The draft regulations propose that the maximum duration of FTCs should be four years. The AUT believes that it should be two years and that service prior to implementation of the regulations should be counted. It says that many employees in higher education have suffered years of employment on successive fixed-term contracts and for them to wait another four years after the implementation of the regulations to be able to
claim their right to equality of treatment with permanent employees would be unfair. I was surprised to learn that 84,000 workers in higher education are employed on FTCs and that most had accepted an FTC only because contract work was the only form of work that was offered or was available. I hope that the Minister will say that these legitimate concerns will receive attention.Other issues may well arise during the course of discussion in Committee and there are certainly some areas where I believe that the Bill could be improved by appropriate amendments. However, I welcome the Bill. As I indicated earlier, there is a great deal in it which is thoroughly to be welcomed. I congratulate the Government on introducing it.
5.46 p.m.
Lord Henley: My Lords, I begin by following my noble friend Lady Miller in offering my congratulations to the noble Lord, Lord Sainsbury, on his lucid and clear introduction of this fairly complicated Bill which, as all speakers have pointed out, covers a number of subjects. I am sure that the noble Lord will enjoy this Second Reading more than he did yesterday's debate tilting at windmills in Wales when he seemed to have considerably less support from his own Back Benches, these Benches or, for that matter, any Benches at all.
When my noble friend Lady Miller sat down, the noble Lord, Lord McCarthy, made an intervention to the effect that when this party was in government we regulated a lot. He referred to me as one of the regulating Ministers. I fully accept that we regulated and I fully accept that all governments have to regulate. The question is how much they regulate. I think that even the noble Lord would accept that there has been a great increase in regulation over the past four or five years. The important thing is to get the regulation right and to regulate at the right times.
I give an example from social security. When one has a Bill dealing with a new benefit it is right that there should be regulations in that Bill to allow that new benefit to be increased as time goes by. No one would think it right that those kind of things should be left to primary legislation. However, what is wrong is when the Bill itself merely acts as a framework for the regulation provided by the Secretary of State and it is then left to the Secretary of State to bring forward regulations creating the benefit. The benefit itself should be set out by the legislation but one can leave the increases to the annual uprating and all those processes which are quite right and proper matters for regulation.
Further, as regards the noble Lord's accusations that we over regulated, while we were in office we made great efforts to deregulate. As the noble Lord will remember, within this House we introduced a special committee to look at all delegated powers. While we were in government there was not one recommendation of that deregulation committee that we did not accept in its entirety.
I return to the Bill and the general attitude of the Government to their legislation. I refer to a briefing sent to me by the Engineering Employers' Federation which states:
- "The Bill is largely enabling legislation that provides the Secretary of State with extensive powers to introduce secondary legislation through Regulations or Orders. This approach to legislation inevitably prevents detailed Parliamentary scrutiny of these important areas of new legislation".
During the passage of the Bill I also look forward very much to the Government tabling further amendments, as I believe they indicated in another place that they might do, in order to put more flesh on to the Bill and to take out some regulations relating to matters which quite properly should be dealt with in primary legislation. No doubt we shall be able to pursue those matters in due course as the Bill passes through Committee and later stages.
I now move on to the subject of paternity leave and associated measures. Perhaps I may refer back to 11 years ago this day when I introduced the Disability Living Allowance and Disability Working Allowance Bill. I believe that the noble Baroness, Lady Turner, took part in that debate. It was precisely 11 years ago today. I remember it well because I was extremely grateful to the noble Lord, Lord Carter—now the Government Chief Whip—who was then acting as social security spokesman for the Opposition. The noble Lord, Lord Carter, and no doubt the noble Baroness, Lady Turner, and others all kept their speeches admirably short. We finished the Second Reading in record time, allowing me to go across the road to St Thomas' where my only daughter was born later that evening. Therefore, as a result of actions by the now Government, I experienced a degree of paternity leave—albeit a very brief period—some 11 years ago.
Having mentioned that, I want to turn to the issue of the introduction of paternity leave. I want to ask why on earth it is being introduced at all. What is the point? Who is clamouring out for it? Who needs it and, if it is needed, why should the leave be for only two weeks? The right reverend Prelate referred to the importance in the brave new world in which we live of fathers being at home learning how to change nappies. I am sure that for many that will take considerably longer than two weeks. He also referred to the vital importance of fathers being with their families. I fully agree with that. But is two weeks right at the beginning of a child's life necessarily the right way of going about this matter? Are there not far more important times in a child's life when some form of paternity leave should be on offer?
I also have considerable concerns that when a benefit such as this is introduced, there is the likelihood that, like Topsy, it will grow and grow. We are told that in this case the benefit will last for only two weeks more or less immediately following the birth of a child. I believe that we can all make a fairly strong prediction
that over the years there will be greater and greater pressure to increase the rates and the times, all in the name of equality.One should also refer, as I believe my noble friend Lady Miller did, to the effect of such a benefit on employers and, in particular, on small employers. We all know that the noble Lord, Lord Sainsbury, has great experience of large employers. We all know that his own family firm is well able to cope with the type of benefit that we have. Whenever a new benefit is introduced, we always hear many large employers or their representatives making the perfectly valid point that any good employer will introduce that benefit anyway and that any good employer can cope with such a benefit.
However, even with the allowance that is to be built in for the small employer—I understand that it is to be 105 per cent compensation—the benefit will not be that easy. Such an employer might easily be able to carry it but, in the event, it may be a key worker who is being lost, perhaps at a bad time. That is not a situation with which any good employer can cope. I suspect that it is far better to leave large employers to introduce the benefit if they so wish or small employers to introduce if they can. Why do we not leave it to the market?
I now turn to the issue of maternity leave. I have no objection to maternity leave. It is right and proper that we make appropriate provision for mothers to take leave at the time of a child's birth. But here we also see a further major increase. We are told that ordinary maternity leave will be increased to 26 weeks followed by an additional 26 weeks of unpaid maternity leave. Employers—again, small employers will find this particularly difficult—will have to keep jobs open in effect for a year, often with the added complexity of finding a replacement who, at the end of that year, may or may not have to be kept on, depending on whether the employee taking maternity leave decides to come back.
Again, when he comes to reply, perhaps the Minister can tell us approximately what proportion of those within his own department or within the department of the noble Lord, Lord Sainsbury, who take maternity leave return to work at the end of that leave. On anecdotal evidence, and certainly in my own experience, not all those who take maternity leave and say that they will return to work do so. It would be interesting to know what evidence the department has of the numbers who do or do not return.
That brings me to the subject of the rebate. I mentioned that I had noted that it was to be repaid for some small employers at 105 per cent. However, I understand that for the vast majority of employers the amount of rebate for both paternity and maternity leave will be only 92 per cent. Surely it should be 100 per cent with, in addition, some compensation for the costs that the employers incur in administering what is essentially a state social security benefit.
I turn to what I believe is Part 4—it may be Part 3—of the Bill concerning tribunal reform and the resolution of disputes. We all know that there has been
an extraordinary rise in the number of applications to industrial relations tribunals. I should be grateful if the Minister could confirm the figures that I have; that is, that in the year 2000 there were some 130,000 applications. That represents a 25 per cent increase on the previous year and almost a 300 per cent increase over the past decade. According to CBI estimates, such applications bring an annual cost to business of some £630 million per annum in terms of management and legal and recruitment costs alone. I should be grateful for the Government's comments on the CBI figures as well as confirmation of the other figures.With that in mind, I am very sympathetic to the Government's desire to reduce this burden and to try to ensure that disputes are resolved at an earlier stage. I noted the Minister's confirmation that more than a third of cases come to tribunals without any earlier in-house attempt to resolve the dispute. But, while I share the Government's aim, I am certainly concerned that the complexity of some of the proposed new arrangements will create only further confusion and uncertainty for employers. For example, a number of workplace issues, such as ill health and redundancy, do not fit neatly into either the proposed grievance or disciplinary statutory procedures. There is also likely to be uncertainty about the inter-relationship between the proposed new statutory procedures and the ACAS code of practice on that subject. As I said, I hope that we can pursue those matters in greater detail in Committee.
I end by saying that much of the Bill—certainly parts of it—is admired in different parts of the House. However, I believe that there is much in the Bill to provide us with a busy Committee stage and, I hope, later, a fairly busy Report stage and Third Reading as we try to add flesh to the Bill. I certainly hope that the Government will be prepared to add a degree of flesh to their own skeleton in due course.
5.58 p.m.
Lord McCarthy: My Lords, I want to make two preliminary points in order to explain the attitude which my noble friends and I adopt towards this Bill. As my noble friend Lady Turner said, and as she demonstrated in the points that she made, we intend to be constructive in relation to the Bill. We intend to be helpful. You may be awkward; others may be wreckers; but we shall be as constructive as we can.
Secondly, although I do not intend to say much about these matters tonight for obvious reasons, we do not deny that parts of the Bill are excellent. It is not so much a curate's egg; it is more a manky meat sandwich. Parts 1 and 4 are first class, but Parts 2 and 3 leave a great deal to be desired. The Bill goes wrong in the middle.
The Government make no attempt to disguise what they are trying to do, although they appear to be moving away from that a little. It is there in Routes to Resolution. The middle part of the Bill is intended to force a reduction in the number of applications by between 23 per cent and 31 per cent, or by between 30,000 and 40,000 cases. Perhaps the Minister can tell
the House whether that is to be achieved in a year, in 18 months, and whether the effect will be cumulative, so that in three or four years' time there might not be any cases at all.The main objective of Parts 2 and 3 of the Bill is to bring about a significant reduction—about a third—in the number of hearings and, therefore, the number of applications. It is also clear why we must have such a reduction in applications. It is because there has been an unprecedented increase in litigation. The British worker is mad about litigation. He or she wants his or her day in court. Because of the unprecedented rise in litigation there has to be some way of stopping the flood. And the flood will be brought under control by the tough provisions in Parts 2 and 3.
We have four objections to that argument. First, there is no evidence whatever—not one scruffy piece of data—to support a rise in the propensity to litigate. Secondly, we can explain, with good reasons, the increase in hearings and the increase in applications that have taken place, for example, since 1990. There are good explanations for the rise. Moreover, applications will continue whether this Bill is enacted or not. They are inevitable. I shall say why that is the case in a moment, but it has nothing to do with an increased propensity for litigation. This Bill directs itself at the wrong objective.
Thirdly, the detail of the Bill, on which more will be said in Committee, will actually generate hearings and applications. That is what Judge Prophet said. In so far as it will have an impact, the Bill will add to disputes rather than reduce them. Fourthly, it will put the heaviest burden on the weakest, unsupported applicants.
I shall deal first in detail with the fact that there has been a 300 per cent increase in the number of applications since the early 1990s. In relation to what has been claimed from the Benches opposite, it is important to realise that there is nothing unusual about that. In some years, the figure falls; in some years, it rises. But it is swings and roundabouts. In the long term, there is a more or less steady rise in applications.
The reason the Government felt justified in introducing barriers to access was not the rise in the number of applications over the past 20 or 30 years but the fact that they have taken on board the argument that there has been a rapid increase in the propensity to litigate and that they have as evidence for that the survey, Findings from the 1998 Survey of Employment Tribunal Applications. I make it clear to the House that the survey has not yet been published. The report has not been professionally proof read. Last week, as a result of letters and parliamentary Questions, a few copies were placed in the Library of this House, but it is not available to the press and it has not been published. However, parts of it have been selectively quoted by Ministers. That is the problem.
For example, in Routes to Resolution, it is said:
- "There is worrying evidence that employees are increasingly resorting to litigation to sort out work-based disputes".
- "64 per cent of applications to employment tribunals come from employees who have not attempted to resolve the problem directly with their employer in the first instance".
- "whether or not there had been a meeting to try to resolve the dispute before the application was made".
Over the past few days I have noticed that the Government do not like the figure of 64 per cent—they make it 62 per cent—and now they have changed it to 37 per cent. The noble Lord, Lord Wedderburn, in an intervention to a Question that I asked a week or so ago, talked about the 62 per cent and the 64 per cent. On 5th February the Minister did not refer to 62 per cent or to 64 per cent, although it was actually 60 per cent as far as the applicants were concerned. He said that what was,
- "absolutely clear was that in 37 per cent"—
- "of cases there was no communication whatever".
When one considers that question, one can see that any applicant could believe that there was a meeting but that it was not to resolve the dispute. The applicant could have thought that the meeting made matters worse. The employer could have refused to have a meeting. We cannot use such evidence—particularly when it is 37 per cent—as an indication of a rise in the propensity to litigate.
I do not apologise for making this point. But the Government should have advisers who tell them such matters. A trend cannot be taken from a single survey. After three or four surveys over a period of 10 or 15 years, one can then say that the figure is rising or decreasing. We do not know what people would have said if that question had been asked in the previous two surveys. So we have no trend.
However, we have some trends that can be used to see what is happening. For example, if there had been a move away from the use of conciliation so that the proportion of disputes settled by conciliation had fallen and the number of people who pressed themselves forward for a hearing had gone up—if it
was 50:50 and not two-thirds—we could say that there was an increase in the propensity to litigate. But there is no sign of that.
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