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Lord Falconer of Thoroton: Let me respond. The effect of Section 3 is as my noble friend read it. It means one has to give a note or refer to a document which is reasonably accessible to the employee.
The purpose of Section 3 of the other Act is plainly intended to ensure that the employee has a note or reasonable access to the description of the procedure, which is the purpose I believe my noble friend Lady Turner of Camden had in her amendment.
4.45 p.m.
Baroness Turner of Camden: I thank the Minister for his response to the amendment and I am very pleased that he accepts in principle what we have to say. As for the noble Baroness, Lady Miller of Hendon, I have to say to her that she has her usual concern for small businesses, but I am sure that there will be plenty of information available once the Bill becomes an Act, to enable small businesses to cope with any new requirements that emerge as a result of the legislation. I do not think that we need bother too much about the burden on businesses, which I do not think will be extremely onerous.
As to what we will do with the amendment, I would like to read in Hansard what the Minister has said because of a very interesting point raised by my noble friend Lord Wedderburn. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 129 not moved.]
Lord Wedderburn of Charlton moved Amendment No. 130:
- After Clause 30, insert the following new clause—
The noble Lord said: Amendment No. 130 raises a point which I think has not been addressed in the debates on the Bill so far. A large number of legal consequences and consequences in life are dependent upon what is the moment at which a contract of employment terminates.
The amendment seeks to address a problem which is consequent upon the insertion into the contract of employment, as statutorily implied terms, of the procedures in Schedule 2. Indeed, Government spokesmen have made much of the fact that both sides to the employment contract will now have the advantages. That is as they see it because they do not accept any of the comments on Schedule 2 that its procedures are unfair in various ways. They see the Bill as providing the advantage—and they are right if it solves a single dispute at the work place level, but at what cost?—of having these procedures as the implied obligations of the contract on both sides. The employer must operate his disciplinary procedures in accordance with Schedule 2. The employee must operate the grievance procedures in Schedule 2. They become an inherent part of the employment relationship based on the contract.
If that is so, normal principle would suggest that the employment contract should be worked through before anyone can arbitrarily bring it to an end. It will be most inconsistent—to use the Minister's word on the previous amendment—to suggest that the employer and employee cannot oust the procedures by
On that basis, one could have moved an amendment to suggest that no dismissal should actually reach the effective date of termination—that is in the legal sense—until the procedures have been exhausted. If these are so beneficial at the place of work as the Government seem to think, we really ought to have them worked through, not just before anyone goes to a tribunal but before the employment relationship is shattered.
In fact, our amendment does not go as far as that. Our amendment concentrates on those parts of the dismissal scenario which fall within Section 97(1)(b) of the Employment Rights Act 1996. When a dismissal is terminated on notice, the effective date of termination is normally the date on which the notice expires. However, under Section 97(1)(b) dealing with summary dismissals, the normal view—and I say "normal view" because there is a doubt here—is that the employer can rupture the employment relationship at the moment of a summary dismissal. I am sorry to detain Members of Committee about that point but there are a number present who will not appreciate what the doubt is.
The doubt is that under the old law of master and servant, the summary dismissal of an employee, or the summary dismissal of a servant, took effect there and then. There has, however, eventuated a development of contract law that the termination of a contract does not come about in face of a breach on the other side, except it be accepted or elected to accept by the other party.
There is a whole string of cases on that to which I wish to refer. The most convenient way to refer to them would be to cite a passage in the recent case of Cerberus Software Ltd v Rowley. In spelling it out, Members of the Committee will remember that I try to help Hansard as we do not have a shorthand writer. The case verges on the sticks of legal principle. Lord Justice Sedley in the Court of Appeal ([2001] IRLR 165)—it is not in the Library but I have managed to obtain a copy and I am sure the Minister does not have it—said this:
It is important to understand the present position which that represents, because it is a mess. Therefore, in pursuit of the principles which the noble and learned Lord has put before us—namely, of pursuing certainty and clarity—that uncertainty, which will give rise to new litigation and even greater litigation under Schedule 2 even than the present position, really should be cured. It should be cured in favour of the principle that is put into legislation. Indeed, it is the Government's choice to put these procedures in Schedule 2 into the contract of employment by law. That is curious because they could have done so by regulation. They did not have to mention the contract of employment and it would have been a simpler Bill if they had not done so.
They may well have been right to do so because today statute is implying more terms into contracts and, if they take Schedule 2 so seriously—overlooking its unfairness—I can understand why they did it. However, if they do so, they should recognise the fact that these procedures should be completed before at least a summary dismissal—possibly any dismissal but our amendment says "a summary dismissal"—is effective and before its effective date of termination is in law expressed in the simple fact. What is the simple fact? The simple fact is that the worker is losing his job.
"TERMINATION OF CONTRACT AND NON-COMPLETION OF STATUTORY PROCEDURES
Where a dismissal falls within section 97(1)(b) of the Employment Rights Act 1996 (c. 18) (effective date of termination; termination without notice), the effective date of termination shall not take effect before any applicable statutory procedure has been completed."
"In contract law generally, an unaccepted repudiation may be, as Asquith LJ said it was (Howard v Pickford Tool Co Ltd [1951] 1KB 417, 421), a thing writ in water; but in the case of a summary dismissal the conventional wisdom is that it is carved in stone (Sanders v Ernest Neale Ltd [1974] IRLR 236), since an employee cannot make his employer give him work any more than his employer can compel him to work. There is in consequence a longstanding and formally unresolved debate as to whether the contract of employment should be regarded as a legal exception to the general rule. But the useful discussion of the 'automatic' and 'elective' theories of job termination in Deakin and Morris, Labour Law"—
and he cites the passage,
"includes this telling passage at pp.417-418: 'There is also support for the elective theory from the point of view of authority. It was accepted by a majority of the Court of Appeal in Gunton v Richmond-upon-Thames London Borough Council [1980] IRLR 321 and was approved after extensive analyses at first instance in Thomas Marshall (Exports) Ltd v Guinle [1978] IRLR 174 and Dietman v Brent London Borough Council [1987] IRLR 259.
21 Mar 2002 : Column CWH278Numerous decisions in which employees have been granted declarations or injunctions to prevent employers acting in breach of disciplinary procedures also depend on the application of the elective theory'.".
I pause to say that this is directly in point as regards procedures. He goes on:
"'including the decision of the House of Lords in McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594; it is not clear if or how far these decisions constitute some kind of exceptional category. In Rigby v Ferodo Ltd [1987] IRLR 516, the House of Lords declined to decide the matter, in a case not directly concerned with dismissal but with a cut in wages imposed, in breach of contract, by the employer. However, Lord Oliver said: 'I entirely fail to see how the continuance of the primary contractual obligation can be made to depend on the subjective desire of the contract-breaker and I do not understand what is meant by the injured party having no alternative but to accept the breach . . . I can see no reason in law or in logic why, leaving aside for the moment the extreme case of outright dismissal or [on the other side] walk-out, a contract of employment should be on any different footing from any other contract. . .'
Lord Justice Sedley goes on to say:
"Despite this, the application of the elective theory continues to be controversial, and it is unfortunate that the House of Lords did not choose to clarify the law when it could arguably have done so in Rigby v Ferodo Ltd. More recently, in Boyo v Lambeth London Borough Council [1995] IRLR 50, a unanimous Court of Appeal took the opportunity to cast fresh doubt on the elective theory, while at the same time feeling bound to apply the majority ruling in the earlier judgment of the Court of Appeal, Gunton v Richmond-upon-Thames London Borough Council. Gunton, according to the Court in Boyo, had produced law distinctly lacking in rhyme and reason, and was not to be preferred, in principle, to the judgment of Sir John Donaldson P, the president in Sanders v Ernest A Neal [1974] IRLR 236 laying out the case for the automatic theory. Given such dicta, the future of the elective theory can hardly be regarded as assured".
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