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Lord Gladwin of Clee: My Lords, I rise briefly to support my noble friend Lord Lea. The Minister in another place rightly spoke of the measure in terms not only of reducing the number of cases which go to employment tribunals but of introducing organisation, discipline, opportunities and rights to about 6 million workers. That is an innovative and exciting prospect and we do not want it buried. We need to have a clear explanation of how the Government intend to handle the matter.

They cannot handle it themselves, except by drawing attention to it. However, I believe that it is the responsibility of employers' organisations, trade unions and other bodies to ensure that when the Bill becomes law everyone knows of it and their rights. We know that the Government will not accept the amendment and we hope that provision will be contained in regulations. However, when will discussions take place on when these 6 million people will be told of their rights and who will be consulted?

Lord McIntosh of Haringey: My Lords, I agree with a great deal of what has been said and the thinking behind it. When we provide statutory procedures for the first time we want to ensure that they will work. I have a great deal of sympathy with much that has been said about the amendment because—and I have bored the House with this previously—as an employer of about 35 people in the only unionised market research company in the country, I did exactly what the amendment proposes. I produced a draft—or rather it was produced by the union because it was much better qualified to do so. We provided the opportunity for comments and we finally provided a substantive version.

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However, when I consider the implications of writing such procedures into the Bill in the form suggested, I start to shudder. I was going to say that I could write a whole Bill on the subject, but I could not. I could give instructions to the departmental lawyers to give instructions to parliamentary counsel to write a Bill on the subject. It is enormously complicated and it requires a great deal more than what is provided in the amendment. Let us consider, for example, the issue of nominated individuals to whom complaints should be made. There is a wide variety of places of employment and of multi-plant organisations. I find it difficult to see how without injustice to a considerable number of employees one could produce a formula which could work for all of them.

However, we have the ACAS code. It provides guidance to employers about consulting their workforce before introducing their own procedures. That is what makes sense to me. I have no problem with that as guidance and we would encourage the parties to follow it voluntarily, as does ACAS. However, it is quite another matter to impose a new legislative requirement to consult. It would go beyond the effect of the ACAS code and it would take the Bill into different and controversial territory.

We have problems with the notion that employers of all sizes should be legally obliged to consult their workforce on their procedures. What would the cost be in terms of additional burdens on millions of employers, the majority of whom are in daily personal contact with their employees and do not need to go through statutory procedures for this purpose?

We are concerned with positioning the amendment within the statutory procedures. Schedule 2 specifies the statutory minima; it does not deal with the detailed application within voluntary procedures. The amendment takes the schedule into areas which it was not designed to cover.

The schedule does not provide an entitlement to employers to vary the procedures themselves. Yet the amendment seems to encourage employers to vary the procedures after consulting their employees—and quite right, too. It would even entitle employers to introduce procedures which were inferior to the minimum specified by the schedule, if their employees agreed. We had some difficulty with that when we considered Clause 39 in Grand Committee. Surely we do not want to open up that possibility.

We know that many employers already operate good procedures. We hope that many more will adopt their own procedures following the Bill's implementation and the introduction of statutory procedures. In many cases, employers will consult their workforce before introducing or changing the procedures. But we believe that such consultations are best taken on a voluntary basis without imposing any legal requirement to do so. We certainly do not want to cut across, for example, existing consultative arrangements with recognised unions, which might be the effect of these amendments.

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I am sympathetic to a great deal of what was said but I cannot accept the amendment.

Lord Lea of Crondall: My Lords, these issues will not go away; we have not heard the last word on the subject. Indeed, although my noble friend said that he shuddered at the implications of my amendment, perhaps he was shuddering at some of the issues which must be examined before the Bill is enacted.

When speaking to the amendment he used the expression "one size fits all". We are not talking about a single currency or a single interest rate and I shall not say that the penny has dropped because I shall mix my metaphors. Clearly, "one size fits all" is the nature of the Bill. As regards certain procedures, one size does fit all and I could say the same about any aspect of the Bill. The fact is that large firms, small firms, geographically dispersed firms, electronically based firms and so forth must introduce a procedure.

I welcomed the Minister's reference to the ACAS code and for one moment thought that my noble friend was saying that it would be a generally agreed point of reference. It is inevitable that people will have a good look at the code, but in order to avoid disputes about how a procedure is introduced we cannot deny that this is a procedure. It is a procedure, and they appear in the Bill, so let us not use words as though they have no meaning. We are discussing the unique occasion on which they will be introduced.

This has been a useful opportunity to highlight these issues for discussion. When the brainstorming is up and running between the DTI and everyone else, I hope that something will have come out of our discussion today. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6 p.m.

Lord McCarthy moved Amendment No. 62:

    Page 67, line 19, at end insert "and should as far as reasonably practicable further seek to agree with the employee, or with a recognised trade union, a mechanism for the conduct of appeals taking into account the recommendations of any relevant code issued by the Advisory, Conciliation and Arbitration Service.

The noble Lord said: My Lords, this is a modest and minor amendment. We are dealing with the general requirements which apply to Schedule 2, the statutory dispute resolution procedures, and we are trying to add to what it proposes should be done in respect of appeal.

Part 3(13)(3) states:

    "In the case of appeal meetings which are not the first meeting, the employer should, as far as is reasonably practicable, be represented by a more senior manager than attended the first meeting (unless the most senior manager attended that meeting)".

An element of an appeal mechanism is that the person taking the appeal was not involved in the first instance case. One must try to introduce an element of perceived independence or to bring a fresh mind to the issue. Part 3 is better than nothing but it is not enough—particularly for the millions of people who will never reach a tribunal.

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The Government want to discourage people going to tribunals but say, "It will be all right. Tribunals will have the full rigour of the ACAS code". That is all very well but the overwhelming majority of employees do not get to a tribunal. The employer might know the law and be aware that he only has to observe what is said in the Bill. We want to insert in Part 3:

    "and should as far as reasonably practicable further seek to agree with the employee, or with a recognised trade union, a mechanism for the conduct of appeals taking into account the recommendations of any relevant code issued by the Advisory, Conciliation and Arbitration Service".

The amendment specifies "any relevant code" because we are not certain what the Government will do about the present code, which they will have to change to take into account the Bill's provisions. The code that we know and can reasonably ask the Government to consider is paragraphs 27 to 31 of the ACAS code on discipline and grievances, which generally deal with appeals.

One would not necessarily have to take into account all those provisions but parts of the code are of particular importance. There is provision for time limits in the Bill but not for a hearing by a manager not previously involved. The Government may say that many small firms only have one manager but in most cases they could find someone within the organisation who was not previously involved—even if it is a member of the board. That will add to the feeling of equity.

If one does not want employees to go to tribunals, one must find an alternative to the employer's last word. The trouble is that the employer took the decision and was present. With an appeals procedure, one wants somebody who was not present and—says the ACAS code—someone who was not previously involved. If that proves impossible, the code says that one should seek an alternative form of perceived impartiality—which is recognised by the Better Regulation Task Force. The code states also that if new evidence emerges as a result of the appeal process, time should be allowed for investigation and comment. That might result in a slightly different decision.

I do not see why some, part or all of that should not be embodied in the Bill or regulations. I ask the Government to give me a friendly reply. I do not want them to say that we are trying to return to external dispute resolutions. We are not. We have given that up. We are saying that the employer should be asked to consider the possibility of bringing to the appeal process someone who was not previously involved because it would look better for the employer—who should investigate also getting agreement between the parties that the worker himself might accept. That would be in the spirit of the ACAS code but there would be no compulsion. The amendment is an attempt to focus the Government's attention on the need to engineer a shift, so that there will be an alternative to the employer's last word. I beg to move.

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