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Lord Falconer of Thoroton: If I may, I will deal with Amendments Nos. 105 and 117 together. Amendment No. 105 is the application of the noble Lord, Lord Razzall, to get rid of the modified disciplinary procedure. Amendment No. 117 tabled by my friend Lord McCarthy, is intended to get rid of the modified grievance procedure. When will the modified disciplinary procedure be needed? It will be determined by regulations, mainly made under the power provided by Clauses 30 and 31. We have made
known our intention already as the noble Lord, Lord Razzall, said. It will apply to cases involving gross misconduct.The wording in the modified procedure assumes that it can apply only in situations where a dismissal has already occurred. It will therefore apply only to instant, or near-instant dismissals; that is, at the time of the alleged incident of gross misconduct or very shortly thereafter.
The noble Lord, Lord Razzall, will know that instant dismissal is a relatively rare occurrence. Plainly, it is one that should not be taken lightly by the employer, but it occurs in extreme circumstances. At such times it may be inappropriate to hold the full three-step procedure before the dismissal occurs, with or without the suspension of the employee.
Cases of instant dismissal may well be judged unfair by a tribunal on procedural grounds. However, tribunals do not treat all cases of instant dismissal as axiomatically unfair. There is no golden rule of that kind. In fact, as a consequence of our proposal, dismissals will be automatically unfair if the employer has not followed in the disciplinary circumstances the two-step procedure in the modified procedure. Among other things, that would give the employee the right to a meeting to appeal against the dismissal. The practical effect of our proposals is to increase employee rights in such extreme situations. It does not take them away.
It is alleged that the modified procedure would encourage employers and the tribunals to treat all cases of gross misconduct as justifying an instant dismissal; that employers would feel free to ignore ACAS guidance on the treatment of gross misconduct. As we know, the ACAS code advises that most cases of gross misconduct should not result in instant dismissal, but should first be subject to an internal procedure before a decision is taken.
The schedule does not change the obligation on the employer to act fairly when dismissing. We are not diminishing employment rights. If it is currently unfair to dismiss an employee instantly for certain types of gross misconduct or in particular circumstances, that will remain the case in the future.
Lord McCarthy: Perhaps I did not hear the answer at ten past five, I do not know. It is a long day. Is the Minister saying that putting on the face of the Bill a statutory procedure which allows an employer instantly to dismiss an employee with no explanation, with no investigation, with no meeting and with no appeal is adding to workers' rights?
Lord Falconer of Thoroton: I am saying that the process does add to workers' rights because the position in relation to the instant dismissal is already to be judged by the normal rules in relation to unfair dismissal. By applying the modified procedure to such a dismissal, those are additional rights that would apply to the employee.
As now, the ACAS code should be taken into account by the tribunals when assessing whether the employer has acted reasonably and fairly. Though this is a matter for ACAS, we would not expect ACAS to
revise its guidance significantly on gross misconduct, though of course it will need to refer to the enhanced rights for employees who are instantly dismissed.In other words, the modified procedure should be viewed as underpinning reasonable behaviour. It sets out a new procedural standard below which employers should not fall in any circumstances. However, it does not absolve employers from the need to follow more elaborate procedures where necessary. This may well involve employers suspending employees while investigations take place. It may well involve meetings with the employee before a decision is taken.
The modified procedure is necessary. It deals with special cases where it may not be appropriate to follow the full procedure, requiring former employees to attend hearings. However, it does not reduce the standard—and I say this again—against which tribunals will judge the fairness of employer actions in cases of gross misconduct.
It may be helpful at this point for me again to stress—and this is the strand that runs through all these debates—that so far as dismissal is concerned, the purpose of the statutory procedures is simply to require suitable minimum procedures to be followed when employees are dismissed. I fully understand that my noble friends would like us to change the law relating to unfair dismissal so that it is always unfair to dismiss instantly. However, I hope that it will be apparent to them that, much as they may regret it, that is not our intention. Rather, it is to leave the underlying law of unfair dismissal as it is while securing that procedures appropriate to the nature of the dismissal, whether it is on notice or summary or instant, are required to be followed.
I hope in the light of those comments, the noble Lord, Lord Razzall, will withdraw his amendment.
The amendment of my noble friend Lord McCarthy deals with the modified grievance procedure. The modified procedure, as my noble friend points out, places very limited obligations on employers and employees. It is entirely written and does not require the parties to meet.
The schedule does not specify the circumstances within which the modified grievance procedure would apply. That will be a matter for the regulations. However, we have stated our intention to apply the procedure to circumstances where a former employee has a grievance against his employer following the termination of employment. Grievances of that kind are by no means rare. For example, they can occur where employees think they have not received the correct holiday or redundancy pay when they have left a company.
In those circumstances we feel that it would be unrealistic to impose requirements on the parties to meet to discuss an issue. Indeed, some former employees may find it extremely expensive or practically difficult to meet their employer. Consider the case in which an employee has resigned because he or she has moved to another part of the country.
Rather, the procedures simply require the employee to raise the grievance in writing; the employer is then required to reply in writing. Those steps should help to elucidate an issue. They might even themselves result in a resolution of the problem—for example, there might have been a misunderstanding about the facts. In some cases they might also lead to further voluntary steps by the parties to sort out the problem.
Our consultations have shown a general acceptance of the need for a modified procedure that deals with cases of that nature. In light of that explanation, which I believe meets most of the points raised by my noble friend, I hope that he will not move his amendment when the time comes.
5.15 p.m.
Lord Razzall: Before the Minister sits down, will he give us the benefit of his comments on the following matter? As I understand it, the point that is being made about Chapter 2 as regards dismissal and disciplinary procedures, which I understand, is that no change purports to be made to the law regarding unfair dismissal for gross misconduct. Indeed, no change will be made, and therefore the employee who has been dismissed is subject to modified procedure and has not had his or her rights diminished to sue the employer for unfair dismissal.
I turn to another point—if I did not raise it, I suspect the noble Lord, Lord McCarthy would. One of the problems in this regard is that if we start from the proposition that we want to encourage workplace resolution of such problems—if we want to implement the modified procedure in those circumstances rather than a standard procedure—that is likely to increase the risk that an unscrupulous employer will simply dismiss somebody, and apply the modified procedure, and therefore say, "Your remedy is simply to sue me for unfair dismissal". As we know, many people—for all sorts of perfectly understandable reasons—do not do that.
The concern that we have is that this is going to encourage the blackmail element among employers—they will seek to use this procedure and force either financially weaker or emotionally weaker employees into simply having to go to the employment tribunals to pursue their remedies. However, were the standard procedure to apply, there would be a greater application of workplace resolution to those disputes.
Before considering whether to withdraw my amendment, I would welcome the Minister's comments on that.
Lord Falconer of Thoroton: I am grateful for the fact that that question is very clearly put. The noble Lord does not deal with the case in which instant dismissal can be justified. In effect, he is suggesting that there can never be circumstances where that would be lawful. As I understand it, he is saying that before you can dismiss whatever the circumstances, unmodified—that is, Part 1—procedures have to be gone through. Therefore, he is saying that we should change the
fundamental law because the fundamental law is not currently that instant dismissal is axiomatically unfair. It may well be in very many cases.
In effect the noble Lord is proposing in his amendment—or in the question that he asked—that you can never instantly dismiss. We are not intending to change the law to say that you can never instantly dismiss. That is the issue that he has to deal with, but he has not dealt with it in his submissions.
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