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Lord Falconer of Thoroton: Amendment No. 101 has two components. Its first element concerns the need to ensure that the employees are allowed to state their case at meetings which are held under the dismissal and disciplinary procedures. We do not need that wording. Paragraph 13(2) of the schedule already states:
- "Meetings must be conducted in a manner that enables both employer and employee to explain their cases.
The second element of the amendment concerns imposing a new requirement on the employer not to dismiss any employee for a first breach of discipline other than in a case of gross misconduct. My noble friend rightly says that that amendment reflects the guidance in the ACAS code which encourages employers to operate a graduated system of sanctions, including oral and written warnings, before taking the ultimate step of dismissing a person.
I believe that the code is the correct place for this kind of guidance. As I explained, we are not using the statutory procedures to change by the back door the underlying law on unfair dismissal, or to alter the requirement on employers to act reasonably.
If we accepted the amendment, we would be offending against that principle. We would be creating a new rule in statute by which unfair dismissals would be judged in the future. Again, it is not an appropriate amendment to accept.
Amendment No. 104 seeks to import into the schedule a reference to the ACAS code. In this context, the ACAS code of practice on disciplinary and grievance procedures would be particularly relevant.
I have made clear again and again, as I am sure has my noble friend Lord Sainsbury of Turville, that the ACAS code will remain very important. Inevitably, the code will need some revision when the Bill becomes law, but any employer wishing to ensure that he acts fairly when following procedures that may result in the dismissal of an employee will need to take the code into account just as he needs to at present.
However, the cross-reference proposed in the amendment is unnecessary. Under Section 207 of the Trade Union and Labour Relations (Consolidation)
Act 1992, the ACAS code may be taken into account by an employment tribunal whenever the tribunal considers that any of its provisions are relevant to any question before it. I am sure that employers and others would also turn to the codes for guidance, whether or not there is a cross-reference in the schedule.I hope that in the light of what I have said the noble Baroness will feel able to withdraw the amendment.
Lord Wedderburn of Charlton: I will read what my noble and learned friend has said, but perhaps he could go back a little in his comments on the amendment. Did I understand him to say that he did not want to put what he objected to into Schedule 2, because what is put in Schedule 2 might govern the outcome of a decision on the fairness or unfairness of a dismissal? Is it therefore correct that what we put into Schedule 2 may be taken into account by a tribunal in judging the unfairness of a dismissal? Would that not be a good reason for including civilised standards?
Lord Falconer of Thoroton: No. I said that we would be creating a new rule in statute by which unfair dismissals would be judged in the future. We believe the right principle is that dealt with in the obligation to act reasonably, to which question the ACAS code would be relevant.
Baroness Turner of Camden: I note what the Minister has said in response to what I believe to be reasonable amendments. I still believe that we are dealing with new procedures which will apply to people who have never had any sort of procedure before. I therefore believe that it would be far more appropriate if a little more detail were included in the Bill in relation to the ACAS code. However, I will withdraw the amendment now, and it will be up to my noble friends to consider whether they wish to raise the matter at the Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McCarthy moved Amendment No. 102:
- Page 64, line 28, at end insert—
The noble Lord said: The group contains a vast number of amendments. They are all very similar, but not the same. I shall understand if one or two Members of the Committee have not got right to the bottom of what I am trying to do. In fact, the very excellent
Lord Wedderburn of Charlton: That may be my fault.
Lord McCarthy: It is in and I intend to speak to it because we have to have eight amendments to achieve what we want to do. They are Amendments Nos. 102, 113 to 116, 119 to 120, and then Amendment No. 123, which defines mediation. The assumption is that we all know what arbitration means.
Therefore, we have eight substantive amendments, but what are they trying to offer? They are simply offering one choice. They are extending worker rights—that is, ex parte rights—so that an individual worker, faced with attempts to progress a claim of grievance or faced with an attempt to change a decision on discipline—perhaps dismissal—will be able to say unilaterally, ex parte, at a certain stage in the proceedings, "I should like to have mediation", or "I should like to have arbitration". We need to table eight amendments because of the way in which the Bill is written. There is one set of procedures for discipline and another set for grievances—I have never understood why—and there are two forms for the standard procedure and the modified procedure. Therefore, if one wants the option of the four different types of procedure, one needs eight amendments. That is why they have been tabled.
One might ask: why are we trying to provide the worker with the option of mediation and/or arbitration; what is the idea behind it? The answer is that it arises out of desperation. It comes from someone who is committed to the belief that we have to do something about the growing number of tribunal cases. I am the last person to think that we can ignore that problem, but we have not even started to deal with it. We have yet to deal with some of the issues that are in the pipeline concerning the latest directives and the further directives. And we have yet to get the measure of what will happen because we have, quite rightly, reduced the qualification time from two years to one year. Therefore, we have not even started to deal with the growth in the number of cases going through tribunals.
As the alternative to obtaining something other than the employer's last offer declines, the number of places outside the public sector where one can obtain any form of mediation, arbitration or independent assessment on a discipline issue declines year by year. Even if in a wages case workers are convinced that their employer's last offer is a barefaced denial of their legal rights and there should be no debate about it, the only place where they can go to obtain an improvement on what the employer is offering is a tribunal. In that case, in my opinion, the problem will not be dealt with unless we do what the Government do not intend—that is, we make the provisions horrendous, particularly Clause 25, so that virtually no one is able to reach a tribunal. If we do not do that, the number of tribunal cases will rise.
I am not, in any event, that enamoured of tribunals. They never, or very rarely—that is, in fewer than 3 per cent of cases—provide the real solution, which is suspension, re-engagement or re-employment. They rarely provide anything such as that. A tribunal will sack a person and give him compensation. When one seeks industrial justice, it is a very poor remedy to be awarded only a few pounds. Therefore, I am not a great friend of the tribunal system. It is an excellent system in the absence of anything else, but I want to try to return to domestic settlement.
Domestic settlement really can fit the case. It is very educative for employers, as it is for trade union officials, to become involved in these matters and to find out how people are disciplined, what is the best way to go about it and how to address grievances. Unfortunately, one will not turn back the growing number of tribunal cases by this one-sided system.
We have tried to make minimal improvements in what is on offer to workers outside the tribunals but have received no support from the Government. We have tried to ask, "Why not put in an investigative function?" They say, no, it is in there already, but of course it is only there when you get to tribunals. Why not put something in about suspension? We will hear what the Minister says—that is a terrible thing. There is no attempt to put anything into this domestic system which is going to make it a real alternative where workers can feel that they might be able to get something more than the employer's last offer.
I come in desperation to some form of independent assessment, not an appeal which goes to another manager, a higher level of management, but an appeal that goes to somebody outside. In order to make it as acceptable as possible, I do not impose the need for arbitration because many employers will say that they do not want arbitration, they do not like arbitration. The Prime Minister was very much against arbitration until we had a few railway strikes and he changed his opinion. But I am not looking for arbitration because of an outburst of industrial disputes. I am saying that if the Government do not want arbitration, why not have something more modest than that such as mediation? I happen to think that mediation—not just because I have done a bit of it—is one of the best ways outside the legal procedure of dealing with the kinds of disputes that end up at tribunals because you are getting somebody outside who proposes something which at least comes somewhere between the two sides and which tries to resolve those parts of their dispute and disagreement which they feel most strongly about. They will listen to this person, partly because there is a technique involved here. They themselves are listened to by the mediator. After that mediation there is a recommendation and they can go away and think about it. Mediation very often can solve these disputes. Very often after mediation you can go on to get arbitration because three-quarters of the dispute are settled by mediation and then you can get arbitration on the rest of it.
The Government may ask, "What about ACAS; they could do that"? But ACAS offers conciliation, not mediation. It does not like making recommendations
If the Government think I am going too far and say that my four amendments on arbitration are too extreme, I hope that they will consider my four amendments on mediation—they are alternatives. I want to make an inch of ground. I want the Government to realise—and if they do not realise, I want them to stand up and tell me that they do not realise—that they are not going to get the shift which we all want to see from a growing number of legal determinations to a workplace-based system unless they make that system more attractive. If they do not like my proposals for making it more attractive, let them think up some of their own. I beg to move.
Lord Falconer of Thoroton: As my noble friend said, these amendments are all closely linked. They all seek to introduce a third party element into the statutory procedures. I recognise and accept that third party involvement in dispute procedures may help in some instances. They work where both the employer and the workforce are committed to them and agree there is a place for such outside involvement.
However, these amendments seek to impose such third party intervention in all procedures, wherever the employee wants it, in organisations of all sizes and in relation to each and every grievance or disciplinary issue. We have the deepest misgivings about this approach in principle.
First, it would greatly complicate the procedures, adding in effect at least one further stage to the statutory procedure. It would significantly increase the cost of operating the procedures.
Secondly, I suspect that the introduction of what would be compulsory arbitration or mediation would undermine the rest of the procedures. It would in effect reduce the incentive for parties to resolve problems bilaterally. Employees would often be tempted to invoke a third party involvement in search of a better settlement. And employers may become unwilling to make a reasonable offer because they feel the matter will, anyway, be referred to the third party.
Thirdly, I am unconvinced that compulsion produces effective arbitration or mediation. ACAS currently provides its services only where both parties voluntarily agree to its involvement. The parties are then much more likely to implement the awards of arbitrators or follow the recommendations of mediators. Those advantages might be lost if access to arbitration or mediation became a unilateral right of
Fourthly, it is unclear how these additional procedures would fit into the legal system. These arbitrations or mediations would deal with disputes which involve legal rights, at least in some measure. I am not sure whether the noble Lord is suggesting that the acceptance of arbitration or mediation somehow ousts the freedom of employees to make tribunal applications. I would think not. This again could lead to wasteful expenditure. If an employee did not like an arbitrated award or a mediator's recommendation, there would be nothing to stop him or her making a tribunal application about the same complaint.
Finally, having set out our views in principle, there are real practical difficulties in pursuing this approach. The amendment would generate a substantial increase in the number of arbitrations or mediations which are undertaken. There are hundreds of thousands of grievances or disciplinary actions each year. In each case, the employee would be entitled to involve a third party if they did not like the employer's decision. If the employee took up this option in a tenth of cases, we would see an enormous increase in arbitrations and mediations. There simply are not enough skilled people to undertake these duties. Likewise, if my noble friend envisages that ACAS would be responsible for providing these services, the cost to ACAS of doing so could be vast.
That probably deals with all the points that were made. Arbitration, mediation and conciliation should be left firmly in the voluntary arena. Parties cannot be forced down that path without creating serious distortions and inefficiencies. In the light of what I have said, I hope that my noble friend will feel able to withdraw his amendments.
"( ) Where the employee does not accept the decision of the employer, at his request the issue shall be referred by the employer to an arbitrator, who shall be a person either—
(a) nominated by agreement or under the provisions of an agreement between the employer and a recognised trade union of which the employee was a member at the time of the employer's written statement, or
(b) in default of such agreement, appointed by ACAS,
who shall make an award within seven days."
4.45 p.m.
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