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Lord Lea of Crondall: My Lords, in line with—

Noble Lords: Order!

Lord Lea of Crondall: My Lords, I am not attempting to move the amendment; I am merely commenting.

The Deputy Speaker: I am sorry. The amendment before the House is now Amendment No. 45. I understand that the noble Baroness, Lady Gibson, may have wanted to speak to Amendment No. 43A.

Baroness Gibson of Market Rasen: My Lords, I have agreed that I shall enter the debate when we reach Amendment No. 55A rather than Amendment No. 43A. I thank the noble Lord.

Lord McCarthy: With respect, my Lords, are we on the wrong amendment? I understood that I was moving Amendment No. 45 and speaking also to Amendments Nos. 56 and 65.

The Deputy Speaker: My Lords, that is the amendment before the House.

Lord Lea of Crondall: My Lords, there are some issues of different jurisprudences on which I should have commented in speaking to Amendment No. 44 but which can be addressed equally in relation to Amendment No. 45.

A number of different procedures may now be arising. We have ACAS and the role of the ACAS code. We have the interesting and relevant proposition of my noble friend Lord McCarthy in relation to this amendment. We have the question as to how procedures under the 1996 Act dealing with unfair dismissal work. There will no doubt also be procedures dealing with legal challenges to the grievance and discipline procedures within the Bill.

It might be convenient if the Minister could clarify one matter in his response to the amendment; namely, how we are going to make sure that there is some reasonable dovetailing between the procedures. We understand that before regulation there will need to be talks between ACAS and the DTI about the relationship between the ACAS code and the DTI. This question is more generally relevant in the light of the amendment moved by my noble friend Lord McCarthy in terms of making sure that there is a reasonable interface between the three or four sets of procedures which can be taken into account by an individual or by an employer. It would be useful to hear some comment on the matter at this stage. I believe that the House will be consulted at a later stage when regulations are introduced, but the question will arise of major points of the ACAS code being taken into account if someone wants to appeal

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in relation to either the grievance or the displinary procedure. That is a relevant problem on which it would be useful to hear some clarification today.

Lord Wedderburn of Charlton: My Lords, my noble friend Lord Lea of Crondall makes an important point. Later amendments will raise the question of where we stand with the ACAS code.

We were told in Committee in another place by my honourable friend Alan Johnson, the Minister of State, that the ACAS code would need to be rewritten once the Bill reaches the statute book. Therefore, it would be extremely useful, in the context of what my noble friend has just said, if the Minister could give us, either now or at some later stage, a conspectus of the changes which the Government's legislation will require in the ACAS code—not least in respect of the matter of mediation in the amendment moved by my noble friend.

I repeat what my noble friend said. This amendment is being debated with Amendments Nos. 56 and 65. The machinery that is proposed for mediation not only provides some step further than the employer's first and last word, which is what the Government leaves workers with; at the root of the unfairness of Schedule 2 is the fact that workers will be left with the employer's first and last word, especially in the modified procedures to which we shall come. My noble friend's amendments do not suggest some arbitrary or unilateral mediator. If one looks at Amendment No. 65, which deals with the machinery for the mediation, one finds that it suggests that employers should be encouraged to reach agreement with,

    "a recognised trade union of which the employee was a member . . . [or] an agreement made between the employer and such a recognised trade union [generally] . . . [or] in the absence of such a person",

to abide by the suggestions of the "Advisory, Conciliation and Arbitration Service"; in other words, the proposal is mediation by a machinery, or by a "person" who is agreed, or by someone who is put forward under an ACAS scheme.

It seems to me that my noble friend is proposing mediation as an added extra to the employer's "last word" on a most reasonable basis; namely, of agreement, or ACAS. Therefore, both points that I have made—the ACAS code and the place of ACAS in mediation—need to be made clear in respect of this group of amendments.

4.45 p.m.

Lord McIntosh of Haringey: My Lords, we spent time in Grand Committee debating whether the statutory procedures should be amended to give the employee unilateral access to third party involvement in the shape of mediation and arbitration. In this set of amendments, my noble friend is confining himself to the involvement of just the mediator.

As well as being an academic with unrivalled knowledge of this subject, which, as he says, goes back to the Greek city states, my noble friend is also an

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expert mediator and arbitrator. I do not want anything that I say to undermine or undervalue either his skills or those of other mediators and arbitrators. We simply maintain the belief that mediation should remain a voluntary activity. It should be entered into only where both parties agree. That is the position adopted by the ACAS Code, which invites parties to consider the scope for third party intervention where problems seem intractable or involve very senior management within organisations.

The amendments now before the House would compel the employer to accept mediation. I remind my noble friend, as he reminded us, that the amendment he moved in Grand Committee (Amendment No. 102), was about an arbitrator rather than a mediator. In that sense, it goes well beyond the existing guidance of the ACAS Code, which stresses that both parties should agree to third party intervention.

My noble friend describes his amendments as representing the only real alternative to the tribunals for resolving disputes. However, I doubt whether it would work that way. Compulsion would make the mediator's job much more difficult. It is possible that the employer would not collaborate with the mediator in his examination of the issue. It would certainly mean that employers would feel under very little moral obligation to accept the mediator's recommendations. I suspect that issues would remain unresolved because the mediator's advice would not be readily accepted in those circumstances. Many cases would still go to the tribunal, and the mediator's intervention would be wasted. Indeed, the reputation of mediators might suffer as a result.

Moreover, as I mentioned at Grand Committee, unilateral access to a mediator may create perverse incentives in the system. For example, it might dissuade the parties from bilaterally resolving their differences. My noble friend made some play of the comments of the Better Regulation Task Force. We place considerable reliance on the task force. Indeed, we take its recommendations most seriously. It has made recommendations for increased access to mediation. We accept the value of mediation, but nothing in the report of the task force supports the proposal for compulsory mediation, as proposed in the amendment. It would not only be compulsory, it would also be unilateral.

Before I conclude, I should like to return to the point properly raised by my noble friend Lord Lea of Crondall in Amendment No. 44, which we passed by rather rapidly. My noble friend's amendment would place a duty on employers to take the ACAS Code into account when arranging meetings under the statutory procedures, and when disciplining employees. Under Section 207 of the Trade Union and Labour Relations (Consolidation) Act 1992, employers are not placed under any direct requirement to observe the code. However, the section does require employment tribunals to take the code into account if it is relevant to any question before them.

It follows that employers who disregard the code in circumstances where it is applicable may well damage their prospects of success in defending tribunal

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proceedings. It is because of this that employers, and others, turn to the codes for guidance; they will do so whether or not there is a cross-reference in the schedule. For that reason, the cross-reference introduced by the amendment is unlikely to achieve anything that Section 207 does not already achieve.

My noble friend Lord Wedderburn pointed out that a Minister in another place had said that changes in ACAS may be needed as a result of this Bill. I do not deny that possibility. However, I believe that my noble friend asked me to give a "conspectus" of what changes would be required. It would be impertinent for me to do so. It is for ACAS to consider its code; it is not for the Government to suggest what changes might be made. No doubt ACAS will address that situation when it sees the Bill on the statute book.

The fundamental point is that the amendments would significantly change the approach adopted in these statutory procedures, which are being introduced into legislation for the first time. They are being made available to 6 million people who might not have access to them at present. They are meant to contain the basic core features of a dispute resolution system. These amendments would make the procedures much more prescriptive. We do not believe that we should move in that direction. The roles of mediation and arbitration should stay as they are.

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