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Lord Lea of Crondall moved Amendment No. 121:

(1) The Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52) is amended as follows.

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(2) In section 238A (participation in official industrial action)—
(a) in subsection (2) the word "(a)" and the words ", and (b) subsection (3), (4) or (5) applies to the dismissal" are omitted; and
(b) subsections (3) to (7) are omitted."

The noble Lord said: My Lords, at earlier stages of the Bill we have set out at length the reasons for abolishing the eight-week rule. Amendments Nos. 121 and 122 view the matter in complementary ways. Later this summer there will be a major review of a number of aspects of the Employment Act 1999 which in many other ways has bedded down well. The Central Arbitration Committee, for example, has looked at trade union recognition. Everyone agrees that one aspect of the 1999 Act, which in this amendment is amended technically as a schedule of the Trade Unions and Labour Relations (Consolidation) Act 1992, was never satisfactory. It means that in a difficult dispute, such as the current case at Friction Dynamics in Caernarvon, at the end of eight weeks the 87 workers who had taken lawful industrial action were dismissed.

I shall restate the question we have always posed: since when did a fundamental human right have a shelf life of only two months? We must address the problem. No doubt we shall not solve it tonight, but it is important that we start to feed some credible thinking into the review. The eight-week rule has to go. One of the perverse consequences of the current system is that the employer has no incentive to make a reasonable offer. After eight weeks he can simply get rid of the workers. That is one of the rights and wrongs of the matter, but surely it is not a position we can live with. It is a difficult problem to solve.

One way to make progress is to consider why, after eight weeks, workers typically do not want to go to arbitration or be forced into a less than satisfactory agreement and to return on the basis that it will save them money in the long run. That is to do with the emotiveness of many disputes, but surely it is not a process that we are looking for in the modern world. It is a question of public policy. We want to look at why satisfactory arbitration or mediation schemes do not come into effect within the present ACAS arrangements as much as they should. That would have to be side by side with the abolition of the eight-week rule because then we would have to deal with the canard that people could be on strike forever. Of course, that is a ridiculous way of looking at the issue, but it has been posed in that crude way.

In a civilised society we need not only to abolish the eight-week rule but also to consider in the review changes in public policy so that workers' right unilaterally to go to arbitration are built into public policy at an earlier stage. I beg to move.

7 p.m.

Lord Wedderburn of Charlton: My Lords, I rise to speak to Amendment No. 122, which has been grouped with Amendment No. 121 in the name of my noble friend Lord Lea of Crondall. Both amendments concern the dismissal of those who take part in lawful strike action.

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English law unhappily is still in the age of the dinosaurs when most other modern systems, especially European systems, have moved on to a different evolutionary stage. As has been said, since the problem will be addressed in the Government's long promised review into collective labour law issues, it is right to make a preliminary statement at this stage in the hope that we can be assured the Government will look at the problem in the round. It must be placed on the agenda.

We were confirmed in that belief by the remarks of my noble and learned friend Lord Falconer in Grand Committee:

    "We will begin the review in May or June this year"—

it is now quite late in June—

    "The Government will include within the review an examination of the Act's provisions on the dismissal of strikers".—[Official Report, 21/5/02; cols. CWH 291-292.]

Our amendment speaks of a stoppage of work, which is protected within Section 238A of the Trade Union and Labour Relations (Consolidation) Act 1992, as not constituting a breach of the contract of employment. It states that further provision would have to be made in our law that such lawful industrial action would have the effect of suspending the contract of employment and then exceptions would have to be made in regard to obligations arising under it. In the last respect, I refer to a suspension of the employer's obligation to pay wages, no doubt taking account of the continuance of certain obligations such as the obligation to preserve confidential information. That is a common part of systems that understand that lawful industrial action suspends the contract of employment.

The question of whether it is right that workers should be lawfully dismissed from their jobs by reason of taking part in industrial action even when that action is protected on the part of their trade union after a proper ballot, notice and all the other required procedures in the 1992 Act, must be looked at.

I must speak carefully to the amendment since its object is to put the issue on the agenda in a preliminary way. The case that I am arguing, which is that one needs to go a little further than the amendment in the name of my noble friend Lord Lea, is often met with misunderstanding, and sometimes misrepresentation. The matter would not raise an eyebrow in most jurisdictions, particularly in western Europe. It has been accepted in the 20th century by employers in Germany, France, Italy, Spain and elsewhere, but it has not really been confronted by employers in Britain.

When a worker takes part in collective industrial action, in the eye of a large number of international standards and in jurisdictions throughout the world that person does not by those standards break the contract of employment. The reason is that the right to take part in collective industrial action is regarded internationally and in those systems as a basic human right. Jurisprudentially it is difficult to see why the exercise of a basic right can be made into wrongdoing, especially by contractual obligation. The human right

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to take action to stop work collectively is to be regarded as something that inheres in the worker as well as the organisation.

The reason it is not recognised in the United Kingdom is that since 1906 our law has concentrated on the basis that it is adequate to promote the protection of those who organise and induce industrial strike action, leaving aside the individual and in effect not changing the old master and servant principle that industrial action is a breach of an obligation owed contractually by the worker; that the servant who goes on strike is guilty of a breach of contract and has no other rights. The individual worker is still essentially governed by the same principles as those springing from the Statute of Labourers 1351.

The difference between protecting the inducement or organisation of industrial action and protecting the action of individual workers remains fundamental in our law when it does not reign throughout most jurisdictions elsewhere. The definition of what constitutes industrial action or a strike varies in individual jurisdictions, but modern systems suspend the contract of employment in relation to normal, lawful strike action. The French principle in the Code du Travail and in the constitution since 1946 is that,

    "a strike does not break the contract of employment unless the employee is guilty of serious (other) misconduct".

That means misconduct apart from exercising the right to stop work. Similar legal consequences flow from the Italian, Spanish and German constitutions, and from elsewhere. In each system appropriate exceptions are made to the basic concept of suspension, as I mentioned earlier.

As our law stands, the breach of the contract of employment in Britain, as the Donovan report set out as long ago as 1968, will normally result from virtually all industrial action. It is time that Parliament debated the matter, and that the Government reviewed the issue in the round—in particular because the principle that a right to strike is a right and should not amount to a breach of the individual's contract of employment falls under many international standards by which we are bound. One needs only to mention the United Nations International Covenant on Economic, Social and Cultural Rights, the Council of Europe's Social Charter, and especially the International Labour Organisation's Convention on Freedom of Association (Convention No. 87/1947, as supplemented by the convention of 1948).

The bodies in the ILO—the International Labour Organisation—such as the Committee on Freedom of Association and the Committee of Experts—have held for decades that the right to strike is,

    "one of the essential means available to workers and their organisations for the promotion and protection of their economic and social interests as guaranteed by the Convention".

In their reports, the ILO's Committee on Freedom of Association and Committee of Experts have frequently shown that United Kingdom law does not accord with that standard. The governing body has accepted those reports. As government Ministers constantly point out, it is true that the governing body

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has not in fact adopted a specific paragraph on the United Kingdom. But it is impossible to read the ILO records without knowing that the governing body has accepted those reports from the committee and from the experts as meaning that UK law does not accord with that basic principle of a right, as opposed to a liberty, for trade unions to take industrial action.

The European Social Charter of 1989 affirmed:

    "The right to resort to collective action in the event of a conflict of interest shall include the right to strike".

In Article 28, the European Union's Charter of Fundamental Rights 2000 affirmed:

    "Workers and employers, or their respective organisations, have in accordance with Community law and national laws and practices, the right to negotiate and conclude collective agreements at the appropriate levels and, in cases of conflicts of interest, to take collective action to defend their interests, including strike action".

In that formulation of the Charter of Fundamental Rights to which we subscribe, it is true that the phrase,

    "in accordance with national laws and practices",

is included. But it is impossible to believe that that intends to abolish the basic right to take,

    "collective action to defend their interests, including strike action".

The Council of Europe's Social Charter has been interpreted as not including certain limited types of industrial action. It means a complete cessation of work. We have, therefore, included the words "stoppage of work" in our amendment to take account of that. But under the conventions of the ILO and the European charters of various kinds, the UK has also been much criticised—and this must be borne in mind in the review—in making illegal all forms of what are now called "secondary" and "sympathetic" industrial action. That principle does not accord with international standards, especially those of the ILO.

It is also true to say—this is a very serious issue for the Government—that the matter has been considered many times by the Council of Europe's experts and governing authorities, as well as by the bodies of the International Labour Organisation. The United Kingdom has been condemned in both bodies in respect of its failure to observe the fundamental principle of a right for workers to take strike action.

There is voluminous literature on the matter. But in a recent article in the spring edition of the International Journal of Comparative Labour Law and Industrial Relations for 2002, one of the many journals in which the scholarly literature has again and again brought this matter to light, Professor Tonia Novitz and Dr Paul Germanotta write:

    "UK defiance in the face of international criticism would seem to flow from two complementary and inter-related factors. The first is the limited status of international conventions under UK law: there are no means by which to seek the enforcement of ILO Conventions and the European Social Charter in the national courts. The second is the perception that economic dictates must take precedence over international obligations. This can be attributed to the pressures that UK governments have felt to attract and maintain international investment".

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They also refer to some of the excuses given for that failure. British Ministers have frequently defended our failure to institute a right to strike in the same manner as the other systems to which I referred.

In putting this on the agenda, one must face the fact, as my noble and learned friend Lord Falconer said when replying to a similar case made in Grand Committee, that:

    "This is a very radical step. It would in principle overturn long established law on the effect of industrial action on contracts of employment that my noble friend Lord Wedderburn set out in full for us. It would make it considerably more difficult for employers to protect what they would regard as their legitimate business interests during prolonged periods of industrial action. It is therefore not an approach that readily commends itself to the Government, but again I refer to the review".—[Official Report, 21/3/02; col. CWH 292.]

I very much hope that the Government will not approach the problem that Amendment No. 122 puts to them on that rather pre-judged basis. It would change a rule—an ancient master-and-servant rule—very fundamentally. Indeed, it would go beyond the amendment moved by my noble friend Lord Lea of Crondall; but, with great respect to him, I believe that it is a logical consequence of his correct argument that, at present, we have an arbitrary eight-week rule that limits what is a human right. An eight-week limitation on a human right is very odd. It is also very odd to say that individual strikers are in breach of their contract of employment but that for eight weeks the employer can do nothing about it. It would be much more sensible to face up to the core issue of the problem.

The Government cannot solve the problem tonight, but I very much hope that we shall receive an assurance that this logical consequence will be on the agenda for discussion in the review; that it will be fully argued; that the literature on the subject will be properly addressed—something that no British government have ever yet done; and that the arguments in respect of the international standards to which we do not conform at present will be looked out sensibly and without prejudgment by the Government. I know that this asks a lot of them, because it will not be a popular discussion among employers and their organisations. Indeed, the CBI, the Engineering Employers' Federation, and the Chambers of Commerce have already expressed alarm at the very fact that there will be a review. It is time for the United Kingdom to look at its law in a manner that takes regard of international standards, which other systems have not found it impossible to accommodate. I support my noble friend's amendment, but hope that the review to which he referred will take account of our Amendment No. 122.

7.15 p.m.

Lord McCarthy: My Lords, naturally I want to support Amendment No. 122, but it is important to begin by looking at what it actually says. It is an attempt to direct attention to what we believe to be the long-term solution, but it is also, in a sense, an attempt to specify how constructive the solution is. I draw noble Lords' attention to subsection (2) in particular, which reads:

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    "The Secretary of State shall make regulations by order to provide for such industrial action having the effect of suspending the contract of employment—

that is, the basic solution—

    "and, subject to such exceptions as are specified—

so we are saying that there can be exceptions, if they are agreed—

    "the obligations arising under it".

I should like to return to a comment made by my noble and learned friend Lord Falconer in Grand Committee. We put down an amendment designed to do something about the eight-week rule and he said at col. CWH 292 that we were seeking to disturb a "carefully constructed compromise". I do not believe that the eight-week agreement, or concession, or movement, was a "carefully constructed compromise". It was the best that the trade unions could get at the time. It was not that they liked it; it was all that they could get from an incoming Labour government. It was not a "carefully constructed compromise" which he suggested needed time to bed down. If the Government are saying that we have largely solved the problem by a "carefully constructed compromise" which must have time to bed down, then what chance is there that we are going to get any significant change in the promised review which is about to begin?

I believe that the Government must accept that it was the best that could be obtained at the time. As my noble friend Lord Wedderburn said, the whole issue goes back a very long way to 1351. I would rather that we go back at least as far as the struggle in the 19th century for the trade union movement to rid itself of the effects of common law liability. That struggle went on. Several times the trade union movement thought that it had achieved what it wanted to achieve by various statutes. Common law liability developed new forms of liability. That was a very long political struggle that has influenced our attitude to the whole question under review. It went on until the 1906 Trade Disputes Act which was a political struggle and a political victory.

In 1906 the trade union movement thought that it had established what it required—immunities for unions which lasted a long time—and that that would deal with the issue. At that time, if someone had asked about the workers who might be dismissed during the course of a strike, I believe there would have been several answers. One answer would have been that in collective bargaining—and this is an issue which arises in collective bargaining—one of our objectives at the end of a strike is to negotiate a no-victimisation understanding or agreement.

As the unions saw it in 1906, the solution to the problem was that if the union funds were beyond the reach of common law and if union action was covered by effective immunities, if there were problems—for example, if there were employers who were looking for victimisation of workers on strike—that could be settled as an issue at the end of the strike. No-victimisation was an important concern in industrial

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disputes. If one looks at the history of the 1920s, 1930s and beyond, many strikes and major disputes in this country dragged on longer than needed because the unions were refusing to return to work unless they could obtain some protection for their members.

If one had asked why there was not some form of suspension of the contract, the fact is that in that period there were no frameworks of individual rights at work of the kind we have today. Now we can look at the situation and say that if we have protection for discrimination, if we have protection for unfair dismissal, if we have a whole range of directives coming from Europe, then why do we not have individual protection for the individual worker in a strike situation? We have a different situation from that which faced the trade union movement, employers and the government in the years before the growth of individual rights.

In addition, the immunities no longer exist in the way that occurred after the 1906 Trade Disputes Act. Now the Government have accepted that and, in effect, the trade union movement, broadly speaking, has accepted that part of the Thatcher legacy. We must have balance before we have strikes. We now even have to tell the workers that they are breaking their contract, or that they may be breaking their contract, and they may be dismissed when they go on strike. They did not happen in 1906. We now have to give proper notice and, as my noble friend Lord Wedderburn said, in effect the protection which the trade union movement has is limited to primary action. There is no protection in secondary action.

Therefore, immunities provisions are considerably more narrow and more specified by law, and the whole of the worker's individual rights at work have been widened. As my noble friend Lord Wedderburn said, the world of individual rights is now an international world. It is the international norm that that situation should exist. Therefore, in effect, it is known everywhere that they exist except in America and this country.

That is why we asked for the review to consider the option of suspension. We have to ask ourselves why there is so much resistance among British employers. I do not want to set this aside as though it did not exist. I believe the answer is that many British employers have an exaggerated view of what suspension could mean. When one discusses it with some well informed people, they believe that it results in workers not only not being sacked but actually being paid during the period of strike.

First, nobody is suggesting that we have the doctrine of suspension; that people are going to be paid for sitting idle while the strike goes on. It is the absence of pay—the fact that the worker has no resources during the strike— which is the killer factor on the worker's side. Similarly, on the employer's side the killer factor is that he is denied supply. It is the interaction between the sanctions of supply denial on the employer's side and pay denial on the worker's side which brings most strikes to an end—not the question as to whether or not people have or have not got suspension.

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Secondly, I do not believe that most people who oppose this in the way that many employers oppose it actually realise that we can have restrictions in the labour force; that the employer would possibly be free to replace the workers on strike. We are not suggesting that there should be a suspension policy; that the employer cannot seek to replace the worker, or transfer the work outside the area of the worker. We are not saying that we would guarantee that nobody would be declared redundant after the strike. We are saying that the worker cannot be dismissed because he has broken his contract. However, if the strike lasts a long time then the worker may find that the job has disappeared. As specified in our amendment, we are also saying that we can consider the issue of exceptions.

Finally, there is no sign that where that right exists, where it is the case that the doctrine of suspension applies, that this transfers the power from the employer to the workers. It is merely a factor in the general mix; it is merely a civilised way of conducting industrial relations; it is a civilised way of dealing with the question of the status of the worker during the period of the strike.

However, one might ask, "Why make so much of it? It does not fundamentally affect the power balance. If it could be introduced with the use of exceptions; if it does not mean that the workers are sitting there being paid, why make so much of it? Why demand it? Why is it preferable to a change in the period of protection or any kind of idea that might be put forward?".

I believe that certain points can be made. Nowadays, loss of a job—especially loss of a good job, and especially loss of a good job where a worker has been employed for some period of time and hopes for further progression—is a much more serious matter than it used to be. We are trying to advance high wages and commitment to the organisation. That is dependent on continuity of a contractual relationship. That is why we want to protect it in a period of dispute.

Secondly, one has to prevent the unjustified assumption that people have been dismissed for misconduct. If we break our contract of employment, most people think we have done something reprehensible which strikes at the root of the contract. If someone loses their job in a strike, it is assumed it is because of some industrial misconduct. But a strike is not industrial misconduct. It is wrong to think of it as such. It is a perfectly lawful action. It should not be associated with the notion of breach of contract.

So there are many reasons why it is a positive action to change the Bill as proposed. It is the gateway to civilised industrial relations. And if we do not take this action, we are bound to get employers like Friction Dynamics who will exploit a situation. They will deliberately drag out the period of negotiations until they get into a strike situation. They will not advance any settlement. They will sit and wait for the eight weeks to run out and then dismiss the labour force. That is not a civilised way of resolving problems in industrial relations.

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We ask the Government, in their review, to look at this option very carefully. I have thought for a long time about the matter. I cannot see any long-term solution to the problem other than something based upon the notion of suspension. I support the amendment.

7.30 p.m.

Lord Sainsbury of Turville: My Lords, these three amendments draw us into a debate about the effectiveness of the protections against dismissal for taking certain types of industrial action. These protections were introduced in the Employment Relations Act 1999. We debated the same or similar amendments in Grand Committee and I shall therefore repeat the arguments my noble and learned friend Lord Falconer used then in resisting the amendments.

I begin with Amendments Nos. 121 and 145. These seek to re-write substantially the changes introduced by the Employment Relations Act 1999. They seek to make it unfair in all cases for the employer to sack those taking protected industrial action. That is achieved by removing various parts of Section 238A of the Trade Union and Labour Relations (Consolidation) Act 1992 which currently qualify the protection against dismissal in these circumstances.

As my noble friend Lord Lea reminded us, the Government are about to undertake a major review of the Employment Relations Act 1999. The comments of my noble friend setting out some of the arguments are a valuable input to that review. Although the review's terms of reference have not been published, we have made it known that the Act's provisions on the dismissal of strikers will be included within it.

The review gives us an opportunity to examine how the new law has operated in practice. It is certain that the experiences at Friction Dynamics will feature prominently. However, it is worth remembering that Friction Dynamics is but one example where strikers have been dismissed. There are very few others. Also, the Friction Dynamics case is as yet unresolved. Various complaints to tribunals have been made but those will not be heard until the autumn. It is difficult to judge how the new protections have worked until the complaints are heard.

We shall consult in detail during the review. This will allow all sides to express their opinion and feed in their evidence. Only then will the Government decide whether the law in this or other areas of the 1999 Act needs to be changed. However, if we conclude that legislative changes are required, we have promised to introduce the necessary legislation in the life of this Parliament.

I therefore ask my noble friends not to press their amendments. I am sure that they will have many opportunities to put across their views to the Government on this issue in the course of the forthcoming review.

Amendment No. 122 would in effect make it unfair to dismiss any person taking protected industrial action because it would remove the main grounds for

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dismissal; namely, that the striker had broken his contract of employment. As I said in Grand Committee, my noble friend is proposing a very radical step. I am sure he accepts that. In principle it would overturn long established law on the effect of industrial action on contracts of employment. It is therefore not an approach which readily commends itself to the Government.

In the light of my remarks, I am sure that my noble friend Lord Lea will understand that the Government cannot support the amendment.

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