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Lord Wedderburn of Charlton: I am very sorry. My noble friend or his advisers must have misheard me. I was not asking about the European Convention on Human Rights and the Strasbourg court; I was asking about European Union directives and I specifically mentioned the Luxembourg court. It has nothing whatever to do with the Human Rights Act.
I ask again: are the Government happy that the Secretary of State should have power to diminish and effectively make much less valuable the rights of workers under the three items in Schedule 5 that depend upon their implementing European Union directives?
Lord McIntosh of Haringey: I believe that the record will show that, when I was referring to human rights legislation, I was doing so as an analogy, that I said specifically that it was not the same point, and that, having made the point about human rights legislation, I went on to say that clearly we would be extraordinarily foolish if we were to bring forward secondary legislation that brought us into conflict with the European Union directives and therefore with the Luxembourg Court. The answer to my noble friend is "Yes". We are conscious of the importance and effect of European Union directives and of the jurisdiction of the Luxembourg Court. We will take that into account, as necessary, when drafting secondary legislation.
Lord Razzall: I have listened carefully to what the Minister said. He is, of course, right that the background to this amendment touches on a number of points that were raised when we debated Amendment No. 192A. I have not been totally persuaded by what he said. Bearing in mind the importance of Clause 38 and Schedule 5, it is incumbent on the Government and their draftsmen to put into Schedule 5 a comprehensive list of sections and pieces of legislation that are covered. As regards the past, they ought to be satisfied, before the Bill is enacted, that they have included such a list. Therefore as regards the past, this provision should not be necessary and as regards the future, any new legislation should have built into it the provision involving Schedule 5.
I am not persuaded that this is anything other than simply protection of the Government draftsmen, in case they have got something wrong. However, I will obviously read carefully what the Minister has said and think about the matter before Report. Until then, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 198 not moved.]
Noon
On Question, Whether Clause 39 shall stand part of the Bill?
Lord Wedderburn of Charlton: My noble friends and I have given notice that we resist Clause 39 standing part of the Bill. It is of some importance to deal carefully with the clause. I shall do so as briefly as possible, but since it has never been explained to Parliament, it must not proceed to the statute book without a most careful consideration in Committee and, if necessary, on Report.
I am sorry that the noble Baroness is not in her place. I wanted to make it quite clear to her, in view of her somewhat remarkable remarks, that we on this side deal with these matters as we were asked to do and as we would in the Chamber, subject to there being no Divisions. We shall do so in relation to Clause 39. Nowhere is it more true than in this clause that before the industrial relations implications can be understood, the cloud of legal technicalities must be understood and swept away. The camouflage of the Explanatory Notes—in this case, as is so often the case with regard to the Bill, that is what they are—should be cast aside. The clause crosses a Rubicon into the new territory of managerial prerogative, which will enable employers to keep workers from enforcing their rights in the tribunals.
That is a strong claim and I must justify it. From the time of the foundation of the modern law of employment rights in the great Bill of my noble friend Lady Castle of Blackburn, to whom I pay tribute in the history of workers' employment rights, it has been a fundamental provision of legislation that those rights cannot be excluded by supposed agreement between worker and employer. Translated into real life, that means that the employer cannot lawfully lean on the employee to make his employment or the offer of a job dependent on his surrendering his employment rights. That prohibition is now in a series of provisions, which are listed in Clause 39(2). They relate to race discrimination, sex discrimination, disability discrimination, minimum wage, working time and employment rights generally in Section 203 of the 1996 Act.
It has always been the case that the settlement of a dispute with the assistance of an ACAS conciliation officer can be exceptionally one where the employee may lawfully surrender those rights. The conciliation officer is a guarantee of fairness in such a settlement,
which is often called, in practice, a COT3 compromise, because COT3 is the heading of the forms and documents in ACAS practice.The Explanatory Notes to the Bill, in a masterpiece of obfuscation, state that Clause 39 ensures, and I quote:
- "that compromise agreements are as effective and as wide in extent as ACAS conciliated settlements".
Technically, conciliation-officer-prompted settlements can allow, in a COT3 agreement, the exclusion of future rights of action. However, I have consulted various experienced practitioners and they tell me that, although technically that is correct, they have rarely, if ever, in practice encountered it. Nevertheless, this clause—and this has never been explained to Parliament, not a word was said about it in Committee in another place—does that by removing a vital condition from these legislative provisions.
At present, a compromise agreement is allowed only when two major conditions are fulfilled. First, the employee must have independent advice. Initially this had to be from a legal practitioner, but the Conservative government gradually widened the exception to include certified trade union advisers—I hasten to interpret that that means advisers of the trade union certified by the trade union—and advisers from the citizens advice bureaux. That is the first condition.
The second condition is that the compromise must relate to particular matters or particular complaints or proceedings. That links it to past, or at most present, events. The Explanatory Notes suggest that there has been uncertainty involved here. The DTI has never produced any evidence of special or unusual uncertainty. There have, of course, been arguments about whether a so-called agreement has compromised particular rights, or all rights in existence, or only a section of them. However, the uncertainty has been no greater than in any other area of the law, and practitioners accept that that is so at present.
I challenge the Government to produce one single quotation from any commentary or text criticising that aspect of the provisions set out in Clause 39(2) or (3) of the Disability Discrimination Act 1995 on compromise agreements.
However, the clause would remove the second condition. That means that a worker or employee, and the employer, could make a so-called agreement at any time, whereby the worker would sign away all his employment protection rights, past, present and future. That is what the Government intend. Indeed, in their response to consultation on the Bill, they declared, and I quote at paragraph 39:
- "The consultation document proposed that the scope of compromise agreements should be widened so that they equal ACAS COT3 in terms of their ability to allow individuals to contract out of their employment rights".
The government response of 2001 continued:
- "This was well received by the CBI,"
- "However the TUC considered the proposal unnecessary".
- "The Government will amend the legislation to widen the scope of compromise agreements".
No good reason has ever been given for this extraordinary change, except that the CBI is well disposed towards it, as drafted by its agents in the DTI. However, it will be said, "You overlooked something". I always try not to do that. It will be said, "You still have the guarantee of advice for the employee from a lawyer or a union adviser or an advice centre". In practice, you do not.
If you have ever tried to advise on a COT3 agreement, you know that when you are advising a worker whether to give up rights about particular proceedings or particular complaints, the adviser can calculate what it is the worker is surrendering. He or she can say, "Yes, that is a fair price for giving up that particular complaint on unfair dismissal". Or he or she can even say, "Yes, in view of the circumstances of what has happened, or what is happening, I think that is a fair deal in regard to the harassment you have suffered by way of sex discrimination". Or it can be said, "That is not a fair deal at all"; or, "As a disabled person you are being fairly recompensed by the failure of the employer to adjust the circumstances to your case".
However, an adviser faced with a worker who is being asked to sign away all his or her rights, or all his or her rights on particular matters, in the past, present and the future, is faced with a quite different problem. How can he possibly advise the young woman who says—and this is what the Government must face—"I need the job, I need the money, I am a single parent and my boss says I can have the job if I sign a compromise agreement agreeing not to go to the tribunals ever in the future. And by the way, just pop round to the CAB adviser and see if he won't approve it."? How can the adviser possibly know whether that is a good deal or not? He needs to know much more about the employer. How does he know whether the employer will ask her out for a drink every Friday? How can he know whether, if he tells her she can sign the thing and safely take the job for the money she needs, he is not selling her into a world at work of permanent and unremitting harassment without remedy? How can he possibly know that?
Once the second condition limiting compromise agreements to particular and known circumstances is removed, the position of the adviser—however independent—becomes impossible, and advice is in all conscience impossible to give in many cases. In my discussions with experienced practitioners, I have found that that is a situation which they well understand. Indeed, the experience of the Law Society prompts it to say on this clause—I quote from page 19 of its brief:
- "We are concerned that, as drafted, unscrupulous employers could make the signing of a compromise agreement a condition of employment and use this mechanism as a way to avoid their statutory obligations to their employees".
What do the Government think they are doing? There is no suppression of research material here. There is no wilful misinterpretation of the statistics. There is no false perspective to the parliamentary Human Rights Committee, all of which my noble friends and I have shown on previous matters, in Part 3 of the Bill. I interpose the remark that we shall be writing to the Joint Committee on Human Rights, asking it to reconvene on the Bill as so many matters referring to human rights have arisen which are more than doubtful.
Why do the Government want to give—and they know they are giving it because they said so in their response to the consultation—a power for employers to lean on people as workers, either before the job or when they are in the job, to contract out of all their employment rights? Is it because the CBI received the idea well? That is apparently so. What is the extent of the savings from this extraordinary provision? On conciliation as a whole, in their response to consultation, the Government comment on various matters, such as the new fixed conciliation periods. On the new fixed conciliation periods, they say that,
- "the number of hearings is likely to fall between 1,700 and 3,400 each year".
It may be said—this is the final point of great importance—that the courts simply would not accept such injustice. However, the courts would have no option because, as a matter of pure chance—I imagine that the Government's advisers must have noticed this—just at the time that they were drafting the Bill, there came before the Judicial Committee of the House of Lords in 2001 the case of BCCI v Ali (ICR 337). In that case, the Law Lords dealt with a COT3 settlement. They insisted that compromise agreements
strictly cover only the claims which the wording of the agreement has in mind and is in the contemplation of the parties at the time.The noble and learned Lord, Lord Bingham of Cornhill, said in the leading speech:
- "It is no part of the court's function to frustrate the intentions of the parties once those have been objectively ascertained".
- "entitled to bring a claim after leaving his employment on the ground that he was suffering from repetitive strain injury",
- "The bank might be entitled to say that it paid the extra money in return for not having to hear from [the claimant] again".
- "at the difficult age of 49",
- "But this is regrettably a very common occurrence".
I hope that Ministers will not reply to this argument by reading out briefs which are irrelevant to the argument. That has so often marred this Committee stage, for all its other moments of great jollity. Clause 39 is a low point of moral turpitude in Part 3 of the Bill. It should be struck out if this Committee has an ounce of decency that can stretch beyond fox hunting, badgers, salmon and deer because it concerns 25 million human workers. I see that that point does not meet with approval from the Opposition. I shall put it more moderately: this is matter which concerns 25 million human workers. I should not mention other animals as that always gives rise to dissent across the Floor.
However, for those workers, and especially for those who do not have jobs or who do not have the protection of an effective trade union—there are many, unhappily—this clause could become a bosses' charter for the exploitation of the vulnerable. Those who have newly taken up on their flag the case of the vulnerable should give careful thought to the effects which Clause 39 could have in practice. I believe that I have described them accurately. Clause 39 should, therefore, go from the Bill.
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