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Lord McIntosh of Haringey: I have nothing to add. We have debated this issue before.
Lord Razzall: I accept, as the Minister indicated, that we have debated this before. Perhaps the grouping is slightly unfortunate, because we should have considered this matter in relation to Amendments Nos. 167A and, particularly, 190. If Amendment No. 190 is agreed to, none of these amendments would be necessary.
Having heard the debate—particularly that on Amendment No. 190—and listened to the Minister's undertaking to the noble Lord, Lord Wedderburn, the appropriate thing for me to do is to withdraw the amendment and to consider how to return to this whole issue on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 173 to 178 not moved.]
Clause 34 [Procedural fairness in unfair dismissal]:
Lord Wedderburn of Charlton moved Amendment No. 179:
- Page 39, line 5, at end insert "or in Part 2 of that Schedule (grievance procedures)"
The noble Lord said: We now come to Clause 34, which is generally known in the discussion of the Bill as the Polkey clause. However, the amendment is not essentially to do with Polkey; it concerns the first provision in new Section 98A, which Clause 34(1) would include within the provisions of the Employment Rights Act.
New Section 98A would provide that an employee who is dismissed is to be regarded as unfairly dismissed if three conditions are satisfied. First, if one of the
procedures concerning dismissal and discipline applies; secondly, that that discipline procedure has not been completed; and, thirdly, the non-completion of the procedure,
- "is wholly or mainly attributable to failure by the employer to comply with its requirements".
If I may put the Bill's proposal in this way, if the employer does not complete, because of his failure, the discipline procedure and dismisses, that is an unfair dismissal. However, we have already seen in a number of debates that the ACAS code is right in saying that, in the course of discipline—or, indeed, a number of other things—a grievance can arise and the employee may be pursuing a grievance procedure.
The amendment raises the question: why should it equally not be an unfair dismissal if dismissal eventuates where the employer has failed properly to complete a grievance procedure? The Minister, I am sure, will not say that that could not happen. It may happen in a small number of cases but it could plainly happen that the employer fails to write or does not take whatever other step is required under the standard procedure or under the modified procedure.
Its seems to us a matter of even-handedness that the employee should be equally protected in a case where a grievance procedure has not been completed, because he is quite properly protected in a case where a discipline procedure has not been completed by reason of the failure of the employer. I beg to move.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): New Section 98A(1) of the Employment Rights Act 1996, which will be inserted by Clause 34, will make it automatically unfair to dismiss employees without following specified minimum procedures. Those specified minimum procedures are the disciplinary and dismissal procedures in Schedule 2, and the new protection provides both an extra incentive for employers to use them and compensation for employees if they do not. Where an employee raises a grievance and is later explicitly dismissed, nothing would be added by providing that failures by the employer in the course of the grievance procedure would render the dismissal unfair. It would be a superfluous protection since, in these circumstances, it is for the employer to follow the disciplinary and dismissal procedures; any failure to do so will be automatically unfair.
However, the amendment may be intended to apply where an aggrieved employee resigns because of the employer's conduct and claims that this was a constructive dismissal—in other words, in cases where it is assumed that the disciplinary and dismissal procedures have not been followed because the employer did not consciously dismiss the employee.
Although I cannot support the amendment, I should like to take the opportunity to tell Members of the Committee how we expect to deal with constructive dismissals.We intend to provide in regulations under Clause 31 that employees who resign and complain that they have been constructively dismissed will generally have to follow one of the grievance procedures, either before or after resigning, if they want to take a case to a tribunal. In such cases the employer is liable to an enhanced penalty if he has not complied with his side of the grievance procedures, but I think it would be wrong for any such failure to render the dismissal automatically unfair. The link between the employer's action or inaction and the potential consequences would be too tenuous.
However, where an employer takes disciplinary action against an employee, he will of course have to follow the disciplinary and dismissal procedures in doing so. If the employee considers that the disciplinary action was a fundamental breach of contract entitling him to resign and claim constructive dismissal, and the tribunal agrees, there may be a case for providing that any failure by the employer to follow the disciplinary and dismissal procedures when taking that action will render the constructive dismissal automatically unfair under new Section 98A(1) of the Employment Rights Act 1996. But this is a difficult area. It is arguable, for instance, that it should only be the case where the employer contemplated dismissal rather than some lighter punishment. This is the kind of issue which we shall need to consider before making regulations about the application of the procedures. I can assure Members of the Committee that we will consider it and we will of course consult on whatever we propose. However, I believe that it would be unwise to make specific provision at this stage. I therefore invite my noble friend to withdraw the amendment.
Lord Wedderburn of Charlton: I am grateful to the Minister for his explanation of the Government's position. Of course, I understand that they do not want to put anything in the Bill—they never want to put anything in the Bill—but we have some glimmer now of how they might deal with some of the cases that could arise in respect of our amendments. He has been rather more forthcoming than my noble friend Lord McIntosh was in his discussion about constructive dismissal. If I understand him right, in at any rate most constructive dismissal cases, the employee must follow the grievance procedure—I think that that is what he said.
We know that, in certain situations, which in law will be dismissal, the employee has got to follow the grievance procedure. Yet he will not be protected by the protection of automatically unfair dismissal if the employer fails to fulfil and complete the grievance procedure—at any rate, not on that ground alone.
I thought the Minister was hinting that our case could not really arise because in order to dismiss properly, the employer must complete the discipline procedure. But, with great respect, that does not
finalise the argument. Under the grievance procedure in Step 7(3), an employer must inform the employee of his decision as to his response to the grievance. That is nowhere mentioned in the discipline procedure because the discipline procedure is drafted separately. So if the employer does not inform,
- "the employee of his decision as to his response to the grievance"
With the greatest respect, I believe that once again the Government's response is technically inadequate and in policy terms quite indefensible. Why should this apply only where the discipline procedure has been broken by the employer? Why should it not arise, as in the example I have given, where the grievance has not been completed by the employer?
I ask that question again. I shall read Hansard with great interest. On what I have heard today, I do not think I shall find an answer, except that the Government will not do it. The Government must understand that there is a theme running through their refusal even to consider the amendments. I do not ask that our wording should be accepted, but they refuse even to consider these amendments as proper for the Bill because they are always amendments that improve the position of the employee. It is therefore not unreasonable to believe that they are under pressure from employers' organisations not to accept any amendment which improves the position of the worker.
Ministers must understand the history of this matter. We objected to some of the proposals put forward in Routes to Resolution. We said that the research, which was unpublished, did not justify the conclusions the Government raised. We are then told that that has little significance from the point of view of policy making. The Secretary of State drives Clause 33 through the Joint Committee on Human Rights; through what, with great respect, last time we called a misleading prospectus. We then receive a refusal to accept any amendment that improves the position of the employee. The record will show that that is so.
Therefore, why do the Government have to object so strongly to a tiny amendment that would, I accept, apply only to relatively few cases, but cases where the justice of the case would demand that the dismissal be automatically unfair? I place that on the record. The Minister may not wish to answer it now but I put to Ministers that they have a case to answer. I suggest that a pattern is emerging whereby every measure which would improve the position of the employee is rejected. It is not even taken away for further consideration. I hope that organisations which represent workers in this country will notice that and
draw their only conclusions about the representations that should be made to the Government before we reach the Report stage.
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