---

Lord Sainsbury of Turville: Perhaps I may respond to the last point. My response clearly covered the technical position that the noble Lord raised. We have two criteria to this Bill. The first is whether it improves industrial relations in the workplace; and the second is the criteria of fairness. That is what we shall judge all the aspects of the Bill by and we are under considerable pressure from all parties in that. The first of the two criteria in which we are interested is improvement of the workplace relationships and the second is social justice. We shall stick to those two principles.

Lord Wedderburn of Charlton: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5 p.m.

Lord Wedderburn of Charlton moved Amendment No. 180:

Page 39, line 10, at end insert—

"(1A) In cases of unfair dismissal falling within subsection (1), the tribunal shall, if the employee expresses such a wish under section 112(3), make an order under section 113."

The noble Lord said: Amendment No. 180 refers to what is already in the Bill; namely, that where an employer has failed to complete the discipline procedure but dismisses, that is an automatically unfair dismissal.

In unfair dismissal, in our law in the tribunals, the primary remedy is, theoretically, that the worker should get his job back. That is called "reinstatement" or "re-engagement on similar terms". I shall call it reinstatement. Other systems regard it as obvious that this should really apply. In practice in our system, something like 0.03 of the successful cases achieve reinstatement. Of course, there are some cases where the employee does not ask for reinstatement, and it would be absurd to provide the remedy there. However, that does not explain the astonishingly small number of orders for reinstatement or re-employment in our system.

In Italy, reinstatement is the primary remedy and in enterprises of above 15 workers, where it applies at the moment in full, that is effective. Let me underline what we are talking about; a very large number of workers who are unfairly or arbitrarily dismissed. We are talking about workers who are just shoved out without justificatory motives, as the Italian system puts it—justified motives. It really works there and that is why Sylvio Berlusconi has put forward a programme to decimate the remedy under pressure from employers in Italy. There is more than an echo in the Bill of a stony Berlusconi approach. I am perhaps assuming too much. Perhaps I am assuming that the Minister will resist this amendment. We have to become accustomed to such things.

I want to put to the Minister a case in which an employer has dismissed a worker without regard. Let us take a really bad case. The employer has ignored the

26 Mar 2002 : Column CWH393

discipline procedure and he has not investigated the case. That happens and there are cases in the law reports. I can think of a case where the employer simply said, "Go and clear your desk in the office and get out. Be off the premises in five minutes". When the worker was not, he was escorted out.

The worker may say, "I want to pursue the primary remedy of reinstatement". He may be misguided and if it were me I would not go near the place again. However, there may be all kinds of reasons—for example, continuity of employment and pension rights—why he wants an order of reinstatement. Surely, in such a case he should receive it. I beg to move.

Lord Sainsbury of Turville: The amendment deals with the part of Clause 34 which will make it automatically unfair to dismiss an employee without following the new statutory procedures. The effect of the amendment would be to replace the discretion which tribunals have to order an employee's reinstatement or re-engagement, if that is what he wants, with an obligation to make such an order where the dismissal is found to be unfair because the minimum procedures have not been followed.

I cannot agree that this should be the case. Whether reinstatement or re-engagement is desirable can depend on many variable factors that are unrelated to the reason for the dismissal being unfair. It would not therefore be wise to require these remedies to be ordered simply on the say-so of the employee where one particular reason for the dismissal being unfair applies.

There is a very simple case here as to whether one replaces the discretion of the tribunals or not. We do not wish to do so, and I therefore ask the noble Lord to withdraw the amendment.

Lord Wedderburn of Charlton: I am not sure whether that was the short answer or the long answer. In my submission and with great respect, it is a pretty inadequate answer. The Government do not think it is wise to give a worker this right and yet he is a worker who has been put out on the street without regard to the dismissal procedures and the disciplinary procedures on which the Government place so much reliance to improve industrial relations. I refer to people who do not improve industrial relations but dismiss workers arbitrarily. It would not be wise to give an automatic remedy of re-employment against them, because, of course, the remedy of re-employment or reinstatement may have legal consequences, quite apart from the reality of any reinstatement.

The Government do not seem to want to bother about such cases. They tell us that is not wise and that the tribunal has a discretion. Of course, the tribunal has a discretion; that is why we moved the amendment. But in this case there should be no discretion in terms of application of the primary remedy and consequences which flow from it.

26 Mar 2002 : Column CWH394

However, I see once again that any improvement in the worker's position is to be resisted. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wedderburn of Charlton moved Amendment No. 181:

Page 39, line 12, leave out "in relation to" and insert "connected with".

The noble Lord said: Amendment No. 181 is a drafting amendment which we hope the Government will accept. With Amendment No. 181 are grouped Amendments Nos. 185 and 187.

Amendment No. 185 relates to Section 112 of the Employment Rights Act 1996 which deals with remedies, orders and compensation in the case of unfair dismissal. Where the employee is unfairly dismissed by reason of the failure of the employer to observe discipline procedures, the employment tribunal is told to make a special award of four weeks' pay to be paid by the employer to the employee.

This raises a very central point. The Government's case is that their new structure improves industrial relations—in our view an admirable objective—by getting a settlement of cases rather than litigation (an objective which we have shared and said so) by a variety of provisions, especially those in Clauses 25 and 30, Schedule 2 and Clause 33, and now Clause 34.

When we come to the particular point in Clause 34 of an extension of what is regarded as automatically unfair dismissal and the remedies for that, the purpose of the sanction—and no right is worth much without an adequate sanction—must be to deter the employer from ever doing such a terrible thing. It is our case that throughout the Bill—and I just make the general point—the sanctions which are inserted by the Government are wholly inadequate to be a deterrent against these acts which are regarded as disruptive of employment and industrial relations.

Here, the additional award is to be four weeks' pay for an automatic unfair dismissal which breaks even the most minimal rules of civilised employment life. First of all, we ask whether the Government have done any research as regards who is deterred by one, two, three, four, 10 or 12 weeks' pay as an award? Have they done any work on the question? There has been work done in the past. It may be that that is some time ago and they have better research.

Quite frankly we are a bit sick and tired of being told that it is a matter of judgment, or it would not be wise to do anything different from what the Bill does. Those are semantics of the lazy. The semantics of the lazy always advance their arguments as wise and tell you nothing else. What I want to know is whether the Government have done any social research on the effect of sanctions. Perhaps I have missed it; I would be delighted to know about it as it would extend my knowledge.

If the Government do not have the results of inquiries on the reasonable period of an award, whether that is four weeks' or 10 weeks' pay, they must tell us what other reason they have for referring to the

26 Mar 2002 : Column CWH395

period of four weeks. Our belief, looking at the work that has been done on unfair dismissal cases generally, is that for these very bad employers—we are talking about an employer who cannot even operate minimal civilised standards on the Government's own hypothesis—an award of four weeks' pay is not likely to have a deterrent effect.

A good employer, of course, will not want to behave in this manner anyway, quite apart from the matter of an award of four weeks' pay. However, bad employers have to be deterred by something rather large. Our amendment seeks to replace the figure four with 12 because we could not think of a better figure. It could be 24, or it could be higher. There are systems in western Europe which impose penalties much larger than this for certain types of unfair dismissal. Indeed, there are some that go beyond the award of compensation but that is not our culture and custom.

What led the Government to say "four weeks" here? In connection with that, what thinking about sanctions generally informs their proposals in the Bill? I beg to move.

---