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Lord Wedderburn of Charlton: I wanted to ask the noble Baroness, Lady Miller—and no doubt she can reply to this in due course when she responds to the debate—whether what she called this clear and elegant amendment really means what it says. It says that there is to be no detriment by virtue of taking adoption leave—most previous precedents against victimisation. Of course the word "detriment" is a polite word in employment protection legislation for "victimisation" of a worker who takes his rights or indeed proposes to take his rights. I do not notice any element of proposing.

Even more importantly, the amendment goes on to say that a worker is not to be protected from any detriment that he would have suffered if he did not take adoption leave. Does the amendment mean any lawful detriment or does it mean any detriment? There is, of course, a raft of legislation protecting workers from employers who victimise them for taking or proposing to take their employment protection rights.

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However, not in this Bill; it is defective on victimisation, even in the schedules. It is a bad employer who does it, but anyone who thinks it does not happen should look at the law reports every month and he will find these sections being the subject of enforcement, since employees are not yet barred from access to the tribunals. If the amendment means any detriment, including those covered by sections of other statutes, its elegance mystifies me.

Baroness Miller of Hendon: I suggest that, as the noble Lord, Lord Wedderburn, said, I can leave my response until after I hear what the Minister has to say.

Lord Sainsbury of Turville: I deal first with those two points. The first is whether one should in these cases refer back to something in a previous Act. We would not, of course, expect employers to have to refer to Acts themselves. What they do in reality is to refer to guidance and we will provide that. The approach of the noble Baroness, Lady Miller, would mean endless copying out of previous legislation into the new legislation, making it lengthier and wordier and doubtless attracting criticism accordingly.

On the substance of her amendment, as the Minister in the other place explained to the honourable Member for Runnymede and Weybridge, the question of detriment is dealt with in paragraph 24 of Schedule 7 to the Bill. This provision will amend the Employments Rights Act 1996, Part V, Section 47C(2) so that employees who exercise their right to ordinary or additional adoption leave do not suffer detriment as a result of taking or seeking to take that leave. The detriment treatment in question must relate to adoption leave. This includes the intention to take it. For example, it would protect an employee from detrimental treatment if he were selected for redundancy on grounds of his being on adoption leave or the intention to take adoption leave.

On the other hand we should be absolutely clear that it will not protect an employee from suffering the consequences of any of his actions that are not related to his taking or intending to take adoption leave. It does not provide the employee with some generalised protection from being disciplined simply because he happens to be on adoption leave at that time. I therefore invite the noble Baroness, Lady Miller, to withdraw her amendment.

Baroness Miller of Hendon: I listened very carefully to what the Minister had to say and I hoped that he would comment on the point about lawful detriment in the second part of my amendment, which would have made it somewhat easier for me.

I should like to say to the noble Lord, Lord Wedderburn, that I would not pretend to debate with him anything of this ilk in employment law, because I know that he is an authority. In view of what he has said about a number of other things that could be causing the problem when they were not lawful, which I did not know about, I would certainly beg leave to withdraw this amendment. I shall look very carefully at that particular part to see whether I consider it

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worthy to add that provision and perhaps to make it, in the noble Lord's words, "not elegant"—I described it as elegant—and bring it back at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clause 4 [Statutory adoption pay]:

[Amendments Nos. 36 to 39 not moved.]

Clause 4 agreed to.

Clauses 5 and 6 agreed to.

5 p.m.

Clause 7 [Funding of employers' liabilities]:

Baroness Miller of Hendon moved Amendment No. 40:

    Page 22, line 28, leave out "may" and insert "shall"

The noble Baroness said: I speak to Amendments Nos. 40 and 41 together. Although these two amendments are for two consecutive clauses, Clauses 7 and 8, on two different subjects, they both deal with the contents of yet more regulations to be made by the Secretary of State.

Clause 7(1) requires the Secretary of State to make regulations concerning the funding of employers' liability to statutory paternity and adoption pay. The subsection begins:

    "The Secretary of State shall".

Since the clause requires the Secretary of State to make regulations, it is logical that the clause should specify the content of those regulations. It is not as though the content of subsection (4) is some long, esoteric shopping list. The use of the word "may" here, as distinct from "shall", is also, in a way, objectionable, because subsection (4) relates to funding which should be mandatory and not at the discretion of the board or, even more importantly, the Secretary of State.

The straightforward contents of subsection (4) are matters which logic, good government and sensible drafting make mandatory. I would not want to accept an answer that my amendment is too prescriptive, if that is what the Minister might be minded to say in response—as he sometimes does. If the Minister will not accept this amendment, I would like him to tell me what is wrong with his own menu in subsection (4), and to tell me which of the three simple and logical provisions—(a) or (b) or (c)— the Government might not include in any regulation. If they were not going to include them, why not?

I now turn to Amendment No. 41. Clause 8(1) is permissive about whether the Secretary of State makes the regulations or not. The subsection begins:

    "The Secretary of State may make regulations",

and that is why the amendment begins:

    "If the Secretary of State makes regulations".

However, the amendment goes on, as in the case of Clause 7, to prescribe that they shall contain the provision set out in subsection (2). Once again, there is nothing exceptional in the list in subsection (2) and I can see no reason why the Secretary of State would not

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wish to include the complete set of these items which the Government have selected in the regulations, if she decides to make any. Indeed, in our opinion, the Secretary of State should be obliged to make regulations on the very points that they have put into that subsection, which is why I have brought this particular amendment forward.

I would appreciate an explanation of which of the specified amendments the Minister thinks there is even a remote possibility of not including, and his reasons for that. I beg to move.

Lord McIntosh of Haringey: We have had many happy hours on "may" and "shall" in legislation over the years. Parliamentary counsel will not thank me if I depart from the standard line—which I never believed when I was in Opposition and I do not expect the noble Baroness, Lady Miller, to believe now.

The principle of "may" and "shall", so far as this case is concerned, is that this is a clause about administrative arrangements. It is right that the power to make regulation should be broadly permissive, and that has been observed in legislation for many years. The administrative arrangements may need to change as the scheme develops, either because they become too complex or because they do not do the job for which they were intended. We do not think we intend to make changes but we may have to do so.

I turn to the particular case now. Clause 7 is all about the way in which statutory paternity pay and statutory adoption pay will be recovered by employers. We have made it clear from the start that employers will be able to recover a proportion or all of the statutory payments they make, following the precedent of statutory maternity pay. Indeed, I think we would come under legitimate criticism if we departed from statutory maternity pay. The provision for recovery is on the face of the Bill and the detail will be in regulations.

Subsections (1) and (2) of Clause 7 set in place the same system for recovering statutory paternity and adoption pay at the same rate as applies for statutory maternity pay. All employers will be entitled to recover at least 92 per cent and it also provides for small employers' relief.

We see no circumstances in which we would withdraw the employer's right to recover, and indeed in Clause 7(1) in line 2 of the page we say that the Secretary of State shall make those regulations and that those regulations shall deal with the amount that an employer may recover. The amount in percentage terms is fixed on the face of the Bill, as it is for statutory maternity pay.

The amendment asks us to commit ourselves to regulations under subsection (4). There is no difference here. The subsection sets out the things that will be in regulations but it does not set out everything. As the noble Baroness rightly quoted, it sets out for funding in advance, for funding to come from monies that the employer is due to pay over to the Inland Revenue and for the Inland Revenue to recover any amount overpaid.

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If the noble Baroness is looking for a commitment that we will do those things, we gave that commitment in the other place and I give it now. The regulations under subsection (4) of Clause 7 will do a couple of very important things.

They will enable employers to recover what they pay out in statutory paternity pay and statutory adoption pay from amounts that they owe to the Inland Revenue. The most important thing that the clause does is to provide for a new right for employers to be able to ask for a payment in advance from the Inland Revenue to cover statutory paternity or adoption pay payments where the money the employer is due to pay is greater than the total amount due to the Inland Revenue in the same period.

That is better than statutory maternity pay and we introduce a similar right to claim advance payments in Clause 21 of the Bill. Making this change will bring the statutory payment schemes in line with what already exists for tax credits and is an important step in easing the burden of these schemes for employers, especially for small employers who will most often be in the position of requesting funding.

I turn now to Clause 8 and the amendment to page 23 line 6. Again, the noble Baroness is asking what the regulations cover here. I think that is clearly set out in the Bill and I do not think there is any need to go into any further detail. The difficult part is the word "shall", and it is drafting procedure that we are dealing with, administrative arrangements that should be made. As I said at the beginning, it is governed by the "shall" which is in subsection (1) of Clause 7.

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