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Baroness Miller of Hendon: I have listened carefully to what has been said about the amendment, which would add the phrase, "after appropriate investigation to establish the facts" to the schedule. It seems to me—I am nervous of using the word—that that smacks a little of "nannyism" or "nannying". It is such a long time since I had a nanny that I am not quite sure of the phrase. That would make that amendment prescriptive because we all know that, if an employer failed to carry out an adequate investigation, he would destroy his own case that the dismissal—or, for that

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matter, another decision depending upon the dispute—was reasonable and in good faith. The noble Lord, Lord Wedderburn, said that he did not know that and that this approach would make it clearer.

There are innumerable cases that are ruled that an employer can rely on facts which are known to him only when he makes his decision, and he cannot rely on acquired information. Therefore, it follows from prudence alone that it would require an employer to make sure that he had his facts right before he started. The idea that it must be written in that he knows he must adequately investigate, assumes that nobody knows anything about the sort of procedure that should be followed. Indeed, the noble Lord, Lord Wedderburn, himself recognised that in his Amendment No. 109, to which we shall come later, which requires a written statement to include,

"the facts known to the employer".

If we have to spoon-feed at every stage and put into it what he has to do, it follows that he must know the facts before he gets involved in this; or, if he does not, he will have to lose the case that would give grounds for dismissing his defence.

Lord McCarthy: Surely, it is a matter of who you are nannying. You are not nannying the employer if you take these things out. You may be nannying the worker and saying to the worker, "These are your rights, these are what you are entitled to have". Perhaps the employer knows more about the law. Perhaps the employer has lawyers to advise him.

On the other hand, there are many cases in tribunals in which workers win the argument because the employer has not done a proper investigation; however, you have to go all the way through. Now you are putting up a barrier to getting there and also saying, "We shall erect this thing called the statutory procedure, which we have never had before. It is the minimum procedure in relation to which the employer can reasonably say—it may not be law—'That is all that I have to do'". You are not nannying him. You are helping the worker if you put something on the face of the Bill where the employer cannot use that device.

The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): The noble Lord, Lord McCarthy, said in his opening remarks that the amendment is similar though not identical to the amendments that we discussed at the end of our sitting on Monday. The argument of the noble Lord, Lord McCarthy, encapsulated what the issue is between us in relation to this matter. The statutory procedures seek to set out a minimum requirement that employers (in relation to dismissal) and employees (in relation to grievance) have to go through. It is not intended to affect in any way at all the principles that govern reasonableness. As I made clear on Monday afternoon, if there is not an investigation, in virtually every case that would make the dismissal unfair under the usual provisions of the unfair dismissal law.

However, this is seeking to define a minimum requirement that has to be gone through. In order for that to be effective—in order for that effectively to give

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rise to an automatic unfair dismissal, which is what the consequence is of not complying with the minima—it must be clear what is required in relation to it.

Would Members of the Committee look at the amendments against that proposition? Amendments Nos. 97 and 106 would oblige the employer to undertake an "appropriate" investigation before instigating disciplinary action. As I said, we have tried to draft the minimum procedure in the Bill as a series of discrete concrete actions. This achieves clarity. We have kept to a minimum the qualitative tests of reasonableness or appropriateness. Both Amendments Nos. 97 and 106 would add such qualitative tests, immediately depriving the minimum standards of their efficacy, which involves making it clear whether or not there is to be an automatic unfair dismissal. It would create a new level of uncertainty in the procedures. It would cause difficulties and give extra scope for disputes to arise concerning compliance with the procedure.

The purpose of the procedure is to make clear what is required as a minimum without in any way detracting from good practice. My noble friend Lord McCarthy said that this was not just what happens in the tribunal; it is also about what happens on the ground in relation to the vast number of dismissals that never get anywhere near an industrial tribunal. Of course, the ACAS code of practice will still apply just as the statutory minima will apply, and we do not accept the proposition that if we put in a statutory minima, that is all that will happen and people will ignore the ACAS code of practice. It will become clearer and it will improve standards.

My noble friend Lord McCarthy asked if investigations in future would involve the ACAS code. He asked me to promise that they would. It is important to point out that ACAS is independent; we cannot tell ACAS what to include in the code. However, there is no reason why it should not deal with the issue on investigations in the same way as the existing code.

Amendments Nos. 98 and 100 require the step 1 letter to contain information about the investigations undertaken or the facts which have been established. Again, they are drafted in open-ended ways that make it unclear what information the letter must contain. Again, that would introduce confusion and uncertainty into the procedures. There is also a real danger that many employers would feel obliged to enlist the services of a lawyer when drafting the initial letter. The letter itself may need to be long and detailed if the amendment were agreed to, and the three-step procedure would become excessively bureaucratic if we went down that road.

I turn to the points made by my noble friend Lord Wedderburn of Charlton. There may be an overlap between discipline and grievance, as he pointed out by drawing attention to an extract from the existing ACAS code. We intend to ensure in regulations that the circumstances in which each of the statutory procedures applies is clear. With respect to my noble

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friend, he was saying that the position was not clear in the Bill. We accept that, but it will be made clear in the regulations.

My noble friend said that the purpose of Clause 33 was to prevent certain cases from reaching tribunals. That is not a fair characterisation of the arrangement; it will ensure that the grievance procedure is gone through before a tribunal case is brought.

Lord Wedderburn of Charlton: I am grateful to my noble and learned friend for giving way. I find it difficult to understand what he has just said. Clause 33 says:

"An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—

(a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and

(b) the requirement has not been complied with".

So, of course, I appreciate that both points are surely equally true. The one does not exclude the other. What the Minister said is right; namely, the measure aims to try to get the requirements in paragraph 6 or 9 of Schedule 2 to be completed. But it also says that if you have not done that, you are prohibited from getting inside the door of the tribunal.

May I make the second point so that it is not inconvenient for the Minister? The point which gives rise to this is that a disciplinary procedure can give rise to the raising of a grievance—and I am referring to paragraph 48 of the ACAS code, if I may quote what it says:

"Sometimes a worker may raise a grievance about the behaviour of a manager during the course of a disciplinary case. Where this happens and depending on the circumstances, it may be appropriate to suspend the disciplinary procedure for a short period until the grievance can be considered. Consideration might also be given to bringing in another manager to deal with the".

Is the initial thinking of the Government to adopt that and put it in the schedule—that where a disciplinary procedure gives rise to a grievance the matter should be suspended? Because if that is going to be put in, it really should go in the Bill. This is a matter of primary principle, not of regulation or tittering about with the detail.

Lord Falconer of Thoroton: As regards the first point raised by my noble friend, he gives an exactly accurate account of what Clause 33 does. It sets out certain requirements that have to be complied with. If the requirements are not complied with, then the employee will not be in a position to present a complaint. That is an exactly accurate account of it. The issue is not whether that is right but what the purpose of Clause 33 is. I said that the purpose of Clause 33 is not to prevent certain cases reaching tribunals; it is to ensure that the grievance procedure is gone through before a tribunal case is brought. Therefore, that was the issue between us there.

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On the other issue about overlap between discipline and grievance, again I accept entirely the practice set out in paragraph 48 that was mentioned. To which procedures the statutory procedures in Schedule 2 apply will be determined, as I have said, by regulation.

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