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Lord Wedderburn of Charlton: My Lords, I am grateful to my noble and learned friend. If he checks, he will see that I said that any worker who is faced with that kind of obstruction from the employer will say, "Last Tuesday you prevented me from exercising my right of carrying out trade union activities in the paint shop". What other basis for that complaint has to be set out? What has to be said that is extra to "Last Tuesday you prevented me from exercising my trade union activities in the paint shop and, of course, as a union member, I object to that"? What else has he got to say?

Lord Falconer of Thoroton: My Lords, subject to confirming that he is a union member and identifying shortly what happened in the paint shop, nothing more would be required. There would be an adequate basis there laid for such a complaint. Nothing more would be required. I do not believe that that would cause any difficulty in relation to resolving complaints by employees. Indeed, it would be helpful for such a short description to be given.

Perhaps I may deal with the point made by my noble friend Lady Gibson. She asked why not include the word "promptly". She emphasised, quite rightly, that time is important in relation to this. Under the heading "General Requirements", paragraph 12 of Schedule 2 to the Bill deals with this point. It states:

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It does not contain the word "promptly", but it seeks to achieve broadly the same result.

We have worked up practical proposals on this topic which are consistent with the style of the statutory procedures, which provide flexibility in their application and which apply to a wide range of issues and complaints. The statutory procedures are improved by these amendments as a result.

Of course it can be said that parties could still fail to undertake any investigation or review of a case. They could meet these new requirements of the statutory procedures by simply providing no or very little information. That would be a very foolish way to proceed for either the employer, in the case of a disciplinary matter, or the employee, in the case of a grievance. It would show that they had acted with no forethought or on no basis of fact. This would immediately suggest that their case was weak. Certainly tribunals would tend to draw that inference. We therefore believe that in practice we are creating sufficient and significant pressure on the parties to assemble full information on the issue.

Let me deal with the points made by the noble Lord, Lord Sharman, in relation to Amendments Nos. 38 and 50. These amendments deal with the two types of dismissal and disciplinary procedures. They seek to ensure that the scope of the Step 1 letter is widened and must include the evidence on which the employer relies when initiating action against an employee. I do not believe that our approaches are very dissimilar, especially in respect of Amendment No. 50 dealing with the modified procedure. These amendments follow our approach in that they require the employer to disclose information of a type which will indirectly encourage the employer to investigate a case before proceeding.

I believe that our approach is to be preferred. Amendment No. 38 would always require information to be set down in writing as part of the Step 1 letter. This has the advantage of establishing a clear record of the employer's views and this might, in turn, assist the tribunal if a case is subsequently brought. However, on balance we believe that more scope should be given to the employer to convey information in different forms at different times. We believe that this particularly helps small business, a section of our economy which the noble Lord often seeks to champion. Indeed, we consulted the Small Business Council when constructing these amendments and it advised us unequivocally that we should try to create this flexibility.

We also believe that the wording of Amendment No. 38 is focused too much towards conduct cases. It is not clear to me how it would apply to the case of individual redundancy. The reference to all of the evidence is too inflexible and would lead to the possibility of technical failure. Amendment No. 50 achieves much the same effect as our Amendment No. 47. Our amendment has the advantage of using consistent wording across both the standard and modified procedures.

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I deal finally with Amendment No. 37. My noble friend Lord Lea has indicated that he will not move it, subject to hearing what I have to say. He tabled a similar amendment at Grand Committee. His amendment draws on the wording used in the ACAS code. That was drafted as a means of providing guidance. I am not sure that it is sufficiently precise and unambiguous for a statute; for example, what facts should be established? Does that mean each and every one which might have some relevance or does it mean just the salient facts?

As I have stated, the Government seek to achieve a very similar aim to that of my noble friend Lord Lea. I believe that our amendments are to be preferred because they particularly apply to both conduct and non-conduct cases and also provide greater flexibility.

I hope that my remarks have dealt with the points made by my noble friend Lady Turner. I entirely agree with her that dismissal for misconduct is an extremely serious matter. Bearing that very much in mind, we have sought to ensure that there is a proper basis before the procedure is used. I apologise for a long explanation. I commend Amendments Nos. 41, 47, 54 and 58 to your Lordships and ask the movers of the other amendments in that group to consider withdrawing them.

Lord Lea of Crondall: My Lords, the past few minutes have provided some very useful clarification as to what the Government amendments mean. There has always been a degree of symmetry in this Bill between the discipline procedure on the one side and the grievance procedure on the other. Sometimes the symmetry does not really work. Nevertheless, the points made by my noble friend Lord Wedderburn and others have probed that matter. However, we are moderately satisfied with the Government's explanation. More work needs to be done before the regulations are published. In a later amendment we suggest that the realities of introducing these two historically important procedures for every firm, however small, in the country requires a great deal of detail for them to make sense in the workplace, whether large or small. With those remarks I withdraw Amendment No. 37.

Amendment, by leave, withdrawn.

[Amendment No. 38 not moved.]

Lord McIntosh of Haringey moved Amendment No. 39:

    Page 65, line 11, leave out "a copy of"

The noble Lord said: My Lords, we now move to a group of technical amendments which improve the drafting of the statutory procedures. In moving Amendment No. 39, I shall speak also to Amendments Nos. 40, 51, 52, 53, 59 and 60. I am very grateful to the noble Lord, Lord Wedderburn, for identifying at Grand Committee an anomaly in the statutory procedures. In the Bill as drafted, the statutory procedures require the parties to write to each other by sending a copy of the letter, but not the original. We

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have brought forward these amendments which ensure that the relevant party is allowed to send either the original or a copy of the written communication.

Amendments Nos. 39 and 40 achieve that effect for the standard dismissal and disciplinary procedure. Amendments Nos. 51 and 52 deal with the reference to a written communication in the standard grievance procedure. Amendments Nos. 59 and 60 deal with the second reference to a written communication in the modified grievance procedure.

For completeness I point out that Amendments Nos. 47 and 54, which we have just debated, achieve the corresponding effect for the modified dismissal and disciplinary procedure and the first reference to a written communication in the modified grievance procedure.

Amendment No. 53 removes inconsistent wording from the standard grievance procedure. Where the statutory procedures require parties to meet, they refer to the holding of "a" or "the" meeting. However, in step 2 of the standard grievance procedure the text refers to the holding of at least one meeting. This use of different wording is unintended and the amendment ensures that the meetings are described in a consistent fashion. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 40:

    Page 65, line 11, after "statement" insert "or a copy of it"

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 41:

    Page 65, line 15, at end insert—

"( ) The meeting must not take place unless—
(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.

On Question, amendment agreed to.

[Amendment No. 42 not moved.]

[Amendment No. 43 had been withdrawn from the Marshalled List.]

[Amendment No. 43A not moved.]

[Amendment No. 44 not moved.]

Lord McCarthy moved Amendment No. 45:

    Page 65, line 28, at end insert—


    Where the employee does not accept the final decision of the employer, at his request the issue shall be referred to a mediator appointed in accordance with Part 3 (general requirements)."

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 56 and 65. The House will remember that in Grand Committee I moved eight amendments to provide forms of ex parte mediation or arbitration to cover all four forms of the statutory procedures. We covered

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everything in those amendments at Grand Committee. But the Government could not accept any of them so we return with something which is more modest. We are simply asking for mediation; that is to say, for a third party to recommend that a dispute might be settled in a particular way. We argue that this is a way of not going forward to a tribunal. If one reaches the point where a worker refuses to accept what is on offer by the employer, one can go to the tribunal or add something at that point. We say that we should include not arbitration but mediation.

When dealing with those amendments in Grand Committee, the noble and learned Lord, Lord Falconer—it is a pity that he is not in his place—used a series of bewhiskered arguments against all forms of third party intervention in dispute resolution. In fact, I counted five objections; namely, that third parties complicated disputes; they reduced the incentives of the two parties to reach a settlement; third parties are often thrown over by the stronger party; there are not enough skilled people to reach third party dispute settlements; and that such settlements cost a great deal of money.

I shall be most pleased to be corrected on this, but I know of no research in industrial relations which provides one single fact to support any of these ancient, bewhiskered excuses for external dispute resolution. I would like to have it because I would give it to my students. All they read are arguments to show that it works very well on the whole. In fact, it has been going on since the Greek city states. I dare say that most of the bewhiskered arguments were used by those who were against such a procedure when settling ancient quarrels. The procedure has been used since the 16th century to settle maritime disputes. There was a growth in commercial arbitration in the 18th century. In the 19th century the pioneers of arbitration and mediation in the cotton, iron and steel industries and in the mines avoided a whole series of industrial upsets. Most recently, third party involvement has been used as a much cheaper way, particularly in the United States, of settling family disputes. There is absolutely no evidence that it does any of the things that the noble and learned Lord trotted out to me in Committee.

Indeed, it is beginning to be accepted—I hope that the noble Lord who responds will be able to keep me up to date—that in the highest possible regions of this Government a change is taking place in regard to the notion of third party dispute resolution. The Prime Minister—who, as we know, has been against all forms of third party involvement since he was the Labour Opposition spokesman—said the other day that he thought it would be a very good idea if we could have arbitration in relation to the railways. Perhaps that is a sign. Perhaps it means that the Government will at last allow a reference to the Civil Service Arbitration Tribunal. So there is a sea change.

I want to draw to the attention of the noble Lord a point that I mentioned in our previous debate, so he cannot say that he does not know about it. I refer to the report of the Better Regulation Task Force—a body set up by the Government. It is a very interesting

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body. It has, for example, 46 members. They include a few academics, a few consultants and an overwhelming proportion of employers and employer groups. There is one trade unionist, one general secretary, Mr. Simon Petch. This is a typical representative body.

The terms of reference of the Better Regulation Task Force are to examine the problems, particularly of small firms, in coming to terms with this legislation. The task force says nothing about the problems of workers who may or may not get their legal rights. It is concerned with employers, and particularly with small firms. After the usual rubbish about the SETA report, the task force states at page 28 of its report, under the heading "Access to mediation":

    "The Task Force welcomes the proposals in the Employment Bill, but would like to see more done for employers and employees where there is no line management chain. This will often be the case in small businesses where the employee's manager may also be the most senior person in the business. When the manager is also the owner of the business there is no one higher"—

as we have said many times—

    "to whom the complainant can appeal. In such small firms the only way of reaching a resolution without recourse to a tribunal would be to provide an external mediator".

That is the statement of the task force, with dominant employer representation and one trade union representative. So those stakeholders who were consulted—who are, of course, employers—said that in such situations access to mediation would be welcome. The report goes on to state:

    "ACAS should be brought into the dispute process before a tribunal application is made. In businesses with less than 50 employees, where there is no management chain, either party should be able"—

this is ex parte arbitration, or mediation—

    "to call upon mediation services ... the service should be piloted, and if successful either provided free of charge or subsidised. The mediation service should save on the tribunal service budget".

Of course it will save in that way. Recommendation 11 under the heading "Access to mediation" is as follows:

    "ACAS should pilot a mediation service for businesses of less than 50 employees. If successful, the service should be either free or subsidised".

I ask the Government: what about it? I take it that the Minister has read the detail of the report. I take it that is has been read all over Downing Street. This a body set up by the Government. It looks after the interests of employers and has consulted with employers. The employers, particularly the small employers, say: "We do not want to go to tribunals, but we are sensible enough to realise that if we do not want workers to go to tribunals, they must have some alternative"—some alternative to the last word of management.

Finally, I understand that the Better Regulation Task Force has to have an answer by Christmas. So why do we not have the first indications of the answer now? I beg to move.

4.30 p.m.

The Deputy Speaker (Lord Brougham and Vaux): My Lords, exceptionally, I think that we need to refer

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back, because I omitted to call Amendment No. 43A standing in the name of the noble Lord, Lord Lea of Crondall.

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