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Lord McCarthy: My Lords, I rise to support this amendment. In particular, I refer to our debate in Committee, in which we sought to discover why the Government objected to our amendment, which in many ways was similar to the amendment just moved by the noble Baroness.
As I understand it, the Government, and particularly the noble Lord, Lord Sainsbury, put it in this way:
- "Many employers expressed real concern that tribunals currently place too much weight on minor procedural breaches".
When this matter was debated in Committee, I sought to persuade the Government to say what evidence they had. After all, their view, as the noble Baroness has said, was quite contrary to those of people with experience of these matters. For example, Judge Prophet maintained that the reverse is the case—that insignificant, unimportant, minor breaches of procedure based on procedural inadequacy do not result in decisions of unfair dismissal. He said that tribunals will take into account only cases of significant and real issues of procedural inadequacy.
The noble Baroness has referred to one case that did not stand up. When we asked again for further evidence, we were told that it was not a matter of evidence, but a matter of principle. It seemed to me that the Government were saying that if there was no evidence, that it never happened, and that tribunals took into account only significant breaches, it would
still be wrong because there had been complaints from employers and because the Government said, "If we do anything about this, there will be many more cases". Of course, if we again ask what evidence there is of "many more cases", we cannot have that evidence, because there is none.I repeat that the Government do not appreciate why one has procedures at all. The procedures have an educative aspect. The fact is that by now most reasonable employers are quite prepared to discover what is said in the ACAS code so far as concerns substantive issues. If they have no good reason for doing so, employers do not want to sack people; they do not automatically want to dismiss people for unfair reasons. However, once they believe that they have a good case in terms of capacity or conduct, or some other substantial reason, they do not want to be held up and told, "You must get your records up, you must have had warnings, you must examine properly, you must have a proper appeals procedure". All those matters are contained in the procedural aspects of the ACAS code. They do not want to get involved in that procedure. From their points of view, it is unnecessary, because they have already made up their minds, and it is a procedure that takes time and represents an invasion of managerial prerogative.
If that is the case, as I believe it is, the Government want to lead us back, not into imaginary abuses of tribunals, picking up insignificant points, but to personnel managers telling themselves, "We now do not need to bother with the procedure". That is the very bad message that the Government would send out. Therefore, even at this late stage, I urge them to reconsider the matter.
Lord McIntosh of Haringey: My Lords, these amendments deal with that part of Clause 34 which provides that where an employer does not follow a procedure beyond the statutory minima; namely, those set out in Schedule 2, and he can show that doing so would have made no difference to his decision to dismiss, the procedural failure will not "by itself"—I emphasise those words, in line 17 of page 39 of the Bill—make the dismissal unfair. This is a limited, carefully-defined intervention into the unfair dismissal legislation. It deals with the criticism that it is too easy for employers who have a fair reason for dismissing an employee to be tripped up on trivial procedural grounds.
During our debate on the previous amendment, my noble friend Lord Wedderburn objected to my talking about slip-ups. However, it is true that what we propose does not undermine the fundamental tenets of the legislation. Even where an employer is able to show that following a procedure beyond the statutory minimum would have made no difference to his decision to dismiss, the dismissal must be fair in all other respects. The central issue here—
Lord Wedderburn of Charlton: My Lords, I thank the Minister for giving way. He has just advanced a most important proposition and it is important that we
should not misunderstand what he said. He said, "The dismissal must be fair in all other respects". Substantively, of course, that is obvious. However, since the clause states that a failure of procedure should not by itself count as a ground for unfair dismissal, if the employer shows that he would have dismissed anyway, how is it possible to say that it must be shown that it was procedurally fair as the clause stands? Our amendment introduces precisely the concept that my noble friend the Minister has suggested, namely, that it must be fair in all other procedural respects, for which the clause at present makes no provision.
Lord McIntosh of Haringey: My Lords, that illustrates very clearly the difference between us. My noble friend Lord Wedderburn and others seem to think that the fact that an employer can show that he would have dismissed anyway gets him off the hook. That is not the case. That is not what the Bill says. The issue is whether, as my noble friend and others seem to think, claiming no difference will by itself make a dismissal fair, because it has happened, because that is the fact of the matter, or whether, as we think, it must also be fair in all other respects. That is the situation. An amendment accepted at Commons Committee made that clear, although we at the time considered that it was implicit in the clause as originally worded.
That is the key to the difference between us. It has to be fair in all other respects. That is why we have the words "by itself" in the Bill. The amendment that we accepted in the other place made that clear, but I appreciate that the concerns remain, perhaps because the clause does not specifically refer to the need for the dismissal to be fair in other respects. Amendments Nos. 94 and 95 both suggest additional wording which specifically refers to fairness. The noble Baroness, Lady Turner, made that point quite legitimately in moving Amendment No. 94.
I hope that it will be helpful if I explain why this is unnecessary. To defend an unfair dismissal claim, an employer must first show that he dismissed the employee for one of the potentially fair reasons set out in Section 98 of the Employment Rights Act 1996. As I said to the noble Lord, Lord Lea, that is still there. Nothing in Clause 34 will change this. The employer who wants to plead "no difference" will still, in the first place, have to convince the tribunal that he had a fair reason for the dismissal.
Next, and finally, Section 98(4)(a) of the 1996 Act requires the tribunal to consider whether the employer acted reasonably in dismissing the employee for that reason. Clause 34 changes this only by saying that a failure to follow a procedure beyond the statutory minimum will not by itself be unreasonable for the purposes of Section 98(4)(a) if the employer can show that it would have made no difference to his decision to dismiss. The words "by itself" make it clear that the employer must still act reasonably in all other respects.
Other wording about fairness is therefore unnecessary to ensure the limited nature of the change, which we have always stressed is not only unnecessary, but unhelpful. The amendments introduce the words
"fair" and "fairness" without defining them. As my noble friend Lord Sainsbury said in Grand Committee, that would risk the development of a different test for new Section 98A from that which the tribunals otherwise apply in dismissal cases.The noble Lord, Lord Wedderburn, when winding up the debate on the previous amendment, described the Polkey case and a particular application of it. On the facts of that case, as he described them, there would have been a clear failure to follow the statutory disciplinary procedures and therefore there would have been an unfair dismissal.
4 p.m.
Lord Wedderburn of Charlton: My Lords, will my noble friend tell me which step in the disciplinary procedures would have failed on the Polkey case facts?
Lord McIntosh of Haringey: My Lords, I am going only on the example which the noble Lord gave. I am not going back into the whole history of that case. My point here is that it is for the tribunals, as I believe the noble Lord acknowledged, to make the decision on each case before them.
The noble Lord, Lord McCarthy, asked for examples. For a Minister to generalise in such matters would not be wise when, as we have always made clear, it is the responsibility of the tribunals to make the judgments.
Lord McCarthy: My Lords, before the noble Lord sits down, will he address or think about the point that I was making that it is not just how he interprets the Act, it is what employers believe him to be doing and the conclusions that they draw? The Government may be right and in five years' time this particularly narrow interpretation of the Act will prove to be right and my noble friend will be wrong. But it will not matter much because employers will say that they were told that they do not have to bother about procedure. It is not just about tribunals, but employer behaviour and sending the wrong messages.
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