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Lord Falconer of Thoroton: In different ways, these are very important amendments. Whatever the time that they have been reached, I am afraid that I have to set out what our argument is in relation to it, particularly as my noble friend was keen they should be dealt with now.

They deal with the need for the employer to investigate complaints before instigating disciplinary action against an employee. I have absolutely no difficulty with the underlying thrust of the amendments. Employers should investigate the facts of the situation before they take disciplinary action or dismiss an employee. That applies to virtually all cases, even where, on the face of it, the case seems clear-cut; we all know that.

Lord Wedderburn of Charlton: With the greatest respect, the amendment and that grouped with it do not deal with investigation; they talk about detailing the facts. Later amendments deal with investigation. Could my noble and learned friend deal with them then?

Lord Falconer of Thoroton: The first amendment says,

I see it as difficult not to establish the facts without some form of investigation. It seems to me totally unreasonable to suggest that when one is talking about establishing the facts, one does not address the issue of

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investigation. Indeed, that occurred in the speeches made by my noble friend and the noble Lord, Lord Sharman. That is a perfectly reasonable approach to take.

Often, investigations can reveal key facts that may have eluded the employer at first sight. The ACAS code rightly puts much emphasis on the need for employers to establish the facts before disciplining an individual. Tribunals take the ACAS code into account when assessing individual unfair dismissal cases. The Bill does not change that role for the code. Tribunals will still take the code into account, including its guidance on investigation.

We will be asking ACAS to revise the code in due course to ensure that it recognises the statutory procedures. The code will then give guidance on the totality of employers' obligations, both in respect of the obligations under the statutory procedures and the wider obligation to act reasonably when dismissing employees. That wider obligation can of course mean that the employer is obliged to take additional procedural actions outside the statutory procedures. It is worth stressing that we are not changing the existing obligation on the employer to act reasonably. We are not subtracting from existing employee rights, as some people appear to think.

Indeed, my noble friend Lord Wedderburn suggested that was what we were doing in his reference to predicting what the law might be. I can put no other construction than that on what he said. The issue for us is whether we should specifically mention these issues in the statutory procedures themselves.

I turn to Amendment No. 96 first. It obliges the employer to establish the facts promptly when a disciplinary matter arises. As far as possible, we have tried to draft the procedures as a series of discrete concrete actions. This achieves clarity and enables the parties easily to ascertain whether a step has been undertaken. We are concerned that this amendment undermines this approach. It would be unclear what the employer should precisely do in order to "establish the facts promptly" in accordance with Amendment No. 96. The amendment would therefore import a new uncertainty into the procedures. This will cause difficulties and give extra scope for disputes to arise as regards compliance with the procedures.

As Members of the Committee will know, disciplinary cases take many forms, they deal with a wide variety of workplace problems—persistent sickness, dangerous working, incapacity and alleged misuse of property. There is therefore no standard approach which an employer must follow when investigating an issue. Investigations can be simple or complex depending on the circumstances. It is often not clear how much physical or documentary evidence should be assembled. It is not always clear which employees or managers should be asked to provide evidence as witnesses. Indeed, it is often not clear whether experts should be called in to provide their views. For example, the involvement of medical experts in sickness cases may or may not be necessarily required, as the ACAS code recognises.

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Certainty, or the lack of it, is a very important matter for employers. As my noble friend will appreciate, there is a close relationship between the schedule and Clause 34. He will know that it would be automatically unfair for an employer to dismiss an employee without following in its entirety the statutory dismissal procedure. We therefore need to make the obligations on the employer crystal clear. I am afraid these amendments fail this test.

Amendments Nos. 100 and 112 spoken to by the noble Lord, Lord Sharman, both require the step 1 letter in both the standard and modified procedures to detail the information on which the employer relies. Again, they are drafted in open-ended ways which make it unclear what information the letter must contain. Must it be all the information, however minor? We think that this is likely to inject uncertainty in the procedures and increase the number of disputes over whether they have been followed.

There is also a real danger that many employers would feel obliged to enlist the services of a lawyer when drafting this initial letter. The letter itself may need to be long and detailed. Indeed, the amendments specifically require the evidence to be detailed. The three-step procedure would become excessively bureaucratic if we went down this road.

We also need to be conscious that these procedures would apply to companies of all sizes, including very small businesses. Many small businesses make very limited use of written communication, some would not have access to word processors. The approach suggested in these four amendments would therefore be seen as particularly intrusive by many small employers. It would be counter-cultural.

In conclusion, we cannot accept these amendments. However, the Government note and understand the points which Members of the Committee and others have made. I know the strength of feeling on these issues from the many representations we have

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received. The Government therefore intend to give further consideration to these matters with the aim of coming forward with amendments to the schedule at Report stage. This issue is by no means as simple as it looks. However, we will use our best endeavours to find a solution to it. In the light of these remarks, I would ask the noble Lord to withdraw his amendment.

Lord Wedderburn of Charlton: When the Government reconsider Schedule 2—it is very good news that they will do so, but they will still be pressed by amendments to direct their attention next time we meet—will they also consider the relationship of the matter we have been discussing to Section 92 of the 1996 Act, whereby the employee has a right to ask for reasons for his dismissal?

Lord Falconer of Thoroton: When we are considering the amendments we will consider all aspects of the amendments.

Lord Lea of Crondall: The Minister has indicated that the Government will look very carefully at this whole area, and I trust that he will also be looking carefully at Hansard in order to look again at all the points that have been made. I am grateful that we were able to deal with the matter today. It is difficult for me to be here on Wednesday afternoon and I hope that other people are not too inconvenienced by it. I thought that the Committee was to rise between 7.30 and 8 p.m., but that is a misunderstanding.

I trust that on that basis we will be able to look at this afresh when the matter is debated further at the Report stage. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sainsbury of Turville: This may be a convenient moment for the Committee to adjourn until 3.30 p.m. on Wednesday. The Committee adjourned at eleven minutes before eight o'clock.

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