---

Baroness Miller of Hendon: I simply say to the noble Lord that America is creating more jobs than are being created in Europe and has been doing so for many years. Germany is presently having a very bad time. I make that remark as an aside but it is a matter to bear in mind.

11 Apr 2002 : Column CWH515

When I started this amendment, I quoted the preamble,

"for the purpose of implementing Council Directive 99/70/EC".

In fact the Government have gone beyond what was necessary for the purpose of implementation, as I said to the Minister. If one starts extending pension rights to fixed-term employees, what would be the minimum length of a fixed-term employment contract that would enable that employee to get involved in the company's pension plan or whatever it was, and to get the pension? How would that work? I think that it is quite a serious issue. At the moment, because of the problem that the Chancellor of the Exchequer became involved in with pension plans, many companies now are closing down their pension plans because they cannot afford to fulfil their undertakings under them. This provision goes beyond anything which is required, beyond anything that is happening in Europe and, I would submit, can only add to that particular problem.

The Minister may or may not feel able to answer on that point now. However, I intend to withdraw the amendment, but will most certainly think again about it because I think that it has a lot of merit and I am worried about the consequences of doing what the noble Lord suggests in the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 232:

Page 49, line 33, at end insert—

"( ) An employee on a fixed term contract shall not be deemed to be "treated less favourably" if he is receiving an adequate amount of money or money's worth in lieu of benefits received by permanent employees of the same employer which cannot reasonably and practicably be accorded to him."

The noble Baroness said: I should like to speak to Amendment Nos. 232 and 238 together. The amendments are identical. They relate to Clauses 45 and 46 respectively, the latter of which relates to Northern Ireland while the former relates to the rest of the United Kingdom, rather like the two previous amendments.

In speaking to my other amendments to these clauses, I referred to the European Council Directive 99/70/EC. As the Explanatory Notes state:

"The . . . framework agreement is to apply the principle of non-discrimination to those in fixed term employment . . . contracts or relationships."

I do not think that I have quoted that particular one previously.

As I have already pointed out, the Government are attempting to goldplate that directive. Subsection (2) in each of Clauses 45 and 46 sets out a definition of what may or may not be less fair treatment of fixed-term employees, and indeed who those employees may be. We find nothing intrinsically wrong with the definitions in paragraphs (a) to (f) of subsection (2).

11 Apr 2002 : Column CWH516

However, there is absolutely nothing in the powers granted to the Secretary of State to limit the contents of the regulations, so that he can stipulate all sorts of benefits that must be included in the contract of a fixed-term employee. This would be whether they are practical and reasonable or not, or whether the employee on the fixed-term contract, in freely negotiating his terms, wants them or not.

The Government have referred to pensions. There are cases where absolute identity between a fixed-term contract employee and a permanent employee is simply not practical. I touched on that on the previous amendment. The Government's objective of equal pension rights is a case in fault. Many pension schemes require a minimum length of membership before any benefits can accrue—sometimes as long as two years.

If an employee is engaged on, say, a six-month contract—perhaps temporarily to act as a locum for an employee on maternity, paternity or adoption leave—the actual benefit that the temporary employee would receive would in any event be minimal. How is it practicable for an employee on a six-month contract to, say, set up a computer network, to be given two weeks' holiday out of that term?

Government Ministers at the Dispatch Box opposite sometimes unjustifiably accuse me of being "over prescriptive". In this case, I am trying to avoid the necessity for the Secretary of State to be over prescriptive in the regulations that she is to make. I am trying, helpfully, to avoid the Secretary of State having to think up every possibility that could arise in contracts of employment, or to have to come back to Parliament when she discovers that there is something that she has left out, or some loophole she has left in.

As we saw recently, pronouncements by the Government on the subject of the possibility of two-tier employees in the public service show that new Labour has a superstitious and irrational fear of two workers in the same employment being paid differently from each other. Perhaps that is the reason the Government are seeking to dot every "i" and cross every "t" in every contract, even with temporary employees.

My very simple and short amendment makes things very easy for the Secretary of State. It permits employers and employees to come to their own arrangement about the terms of the contract. And it permits the only two parties who are involved to decide for themselves how much the absence of a pension, the lack of holiday time or the fact that a company car will not be provided is worth in terms of hard cash to be paid to the employee in lieu.

The amendment anticipates and meets two possible objections. First, the amount of money, or money's worth, to be given to the employee must, of course, be adequate. What is adequate will depend upon the facts of the case and not upon rigid guidelines set out in a regulation. Secondly, the ability to substitute money, money's worth or benefits received by long-term

11 Apr 2002 : Column CWH517

employees applies only when it is not reasonable and practical to grant the same benefits to the fixed-term employees. I beg to move.

Lord Sainsbury of Turville: I shall speak to Amendments Nos. 232 and 238. I believe that Amendment No. 238 is the same as Amendment No. 232, except that, again, it applies to Northern Ireland. Again, the arguments are similar in both cases.

The noble Baroness's amendments seek to ensure that the regulations state that fixed-term employees are not to be considered to be "treated less favourably" if they receive an adequate amount of money or money's worth in lieu of benefits received by permanent employees of the same employer which cannot reasonably and practically be accorded to him or her. That would allow employers to take a "package" approach to the equal-treatment principle.

We recognise that both employees and employers may choose to take a package approach to equal treatment. The draft Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, which have been placed in the House Library, provide for a package approach.

The draft regulations state that an employer can treat fixed-term employees less favourably than comparable permanent employees where the treatment is objectively justified. Whether treatment is objectively justified will depend on all the circumstances of the case. However, the draft regulations provide in particular that less favourable treatment in relation to particular contractual terms will be justified where the fixed-term employee's overall package of terms and conditions is no less favourable than the comparable permanent employee's.

Employers will therefore be able to balance a less favourable condition against a more favourable one, provided they ensure that a fixed-term employee's overall employment package is not less favourable than that of a comparable permanent employee. Our approach already offers flexibility because it does not require a package approach to be used in every case whether the employer wants to use it or not. We

11 Apr 2002 : Column CWH518

consulted widely with employers and employees, some of whom prefer a package approach and some of whom do not. There will sometimes be a very good reason why a particular benefit is not given to a fixed-term member of staff; it would be time-consuming and irrelevant to make a tribunal consider every aspect of employees' employment packages in all cases.

I hope that the noble Baroness is satisfied that the draft regulations already allow a package approach to equal treatment and therefore will be happy to withdraw the amendment.

Baroness Miller of Hendon: As I cannot divide the Committee, I shall certainly have to withdraw my amendment. However, I should tell the Minister that I am not happy to do so because I do not agree with what he has said. My amendment does not mean that the employee has less favourable terms. In fact, it states that he,

"shall not be deemed to be 'treated less favourably'".

If, instead, he received adequate money in lieu, he may well not want the pension. If he is on a very short-term contract, the pension may provide him with practically nothing at all. Thus, if he had extra money, he might well be better off. That is why it is a question of the matter being sorting out between the parties. Sometimes, insisting on including something that would be of no benefit to an employee is not helpful to the employee.

However, despite the fact that I am not happy to withdraw the amendment, I am delighted to do so because it is the end of the evening's proceedings and we can finish our business of the day. It has been a very long day, and I am sure that the Minister has had an equally hard one. For me, in many respects, it is perhaps time to call it a day on this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

---