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Lord McCarthy: I support the Government's projection of the amendment. There appear to be three good reasons, some of which have been mentioned. First, the noble Baroness said that she did not want to use imaginative hypotheses, but she did. There is no concrete case of the kind of thing of which she complained happening in the existing procedure. The two parties in the procedure, the people on the CAC, and the unions and the employers using the CAC have never said that. There is no sign that those, on either side, who operate the existing procedure want such a provision or that they believe that it would help.

Secondly, there are remedies. As the Minister said, if there are problems of this kind, additional remedies are being put on to the face of the Bill to deal with them. Clauses 9, 11 and 16, which concern unfair practices, are designed to deal with any significant coercion, and they do that.

Thirdly, many of us have said for a long time—even before we had this procedure—that it is very good but it is very long and very complicated. In fact, the procedure for recognition is 80 pages long. We do not need a longer procedure; we need a shorter one.

Baroness Miller of Hendon: I am sure that the Minister is delighted to have support from the knowledgeable noble Lord, Lord McCarthy. I want to make a few short comments but, first, I thank the Minister for his explanation as to why the Government will reject the amendment. I do not want the Minister to think that I am completely stupid, but I do not understand what is meant by "QIP". I understand the IP, but what is the QIP?

Lord Triesman: It is the qualified independent person.

Baroness Miller of Hendon: I shall read extremely carefully what the Minister has said. While he was speaking, he sounded very sensible, but when I moved my amendment, I thought that that sounded sensible too. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Clause 3 agreed to.

Clause 4 [Determination of appropriate bargaining unit]:

Baroness Miller of Hendon moved Amendment No. 3:

The noble Baroness said: In moving Amendment No. 3, I shall speak also to Amendments Nos. 4 and 5. This very small group of amendments gives effect to serious concerns expressed by the CBI and others that, as drafted, the Bill needs to establish a well balanced procedure for determining the appropriate bargaining unit.
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As the Bill stands, the CAC is rightly required to take into account,

However, this does not go far enough. It is possible to demonstrate that any size of unit, geographically situated within an enterprise, fits into the very broad description of being compatible with effective management. The CAC should be seeking out not the unit which is merely compatible with effective management but the unit which is the most compatible in the circumstances of the particular enterprise. That is the purpose of Amendment No. 3. It would have the effect of preventing manipulation by a union to establish a fragmented bargaining unit on the basis of where it has strong support within an enterprise.

The amendment would ensure that the bargaining unit was indeed more suited to the needs of effective management instead of possibly one unit in the country being under one regime and another elsewhere being under another. That would be the antithesis of effective management. Amendment No. 3 would ensure that the CAC factored the degree of effectiveness and the size, nature and geographic situation of the proposed unit into its calculations.

Amendment No. 4 would take into account another omission from the proposed new clause. New paragraph 19B(3)(a) rightly instructs the CAC to take into account,

However, there is no indication of the weight, or even the relative weight, that the CAC should attach to each of the opinions.

The CAC will be acting not merely in a supervisory or facilitating capacity in recognition proceedings; in the case of some of its decisions—the nature of the bargaining unit, for example—it will also be acting in a quasi-judicial capacity. While it will have to make a decision one way or another on any of the issues that it has to decide, and probably one or either side, or even both sides, may be unhappy with part of the verdict, it is essential that it should give equal weight to the views of both.

There cannot be a presumption in favour of the unions any more than there can be a presumption in support of the status quo, which the employer may very well prefer. Each case must be decided on its own merits, based on its own individual facts, with no preconceptions or presumptions either way. The onus of satisfying the CAC must be shared equally by both parties.

Amendment No. 5 seeks to remove the entirely superfluous word "small" from new paragraph 19B(3)(c), which at present talks about the desirability of avoiding "small fragmented bargaining units". Not all fragmented bargaining units are small; the size of the unit should be irrelevant. The bargaining unit should be a reasonable one, consistent with what the Government call,

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To sum up the reasoning behind these three very moderate, and I believe constructive, amendments, perhaps I may quote the Government's own words setting out the criteria to be applied over the constitution of a bargaining unit. In the White Paper Fairness at Work, the Government said:

The Government refer to "fragmented units" and not "small fragmented units". The White Paper continued:

I could not have expressed that concept any better myself. It is to give effect, as it were, to the Government's own stated objectives in the White Paper and their criteria that I have proposed these amendments. I beg to move.

Lord McCarthy: The problem with these amendments is that they do not take into account the fact that in a recognition claim of a kind which gets to the CAC, there is disagreement—probably very sharp disagreement between the parties, otherwise it would not get to the CAC. The employer is resisting organisation. One factor used by the employer in such resistance is the definition of the bargaining unit. An employer who is resisting organisation, particularly compulsory organisation, through the legislation is bound to look for a bargaining unit concept which would minimise the number of workers who will vote for recognition. He is bound to want a bigger representation, so that more people who are unlikely to vote for recognition will be in the bargaining unit. There is nothing wrong with that; that is what industrial relations are about.

Conversely, the union will be concerned to try to structure the bargaining unit in such a way that when the vote is taken—if the vote is necessary; they might hope they may get 50 per cent and not have a vote—it will get its 50 per cent. You cannot just dream all this away. This is what the parties will be seeking to argue. For example, when people restructure a constituency, the Conservative Party wants it to look like this and the Labour Party wants it to look like that because its party will get more votes. These are the facts of life.

The Bill is trying to steer a way through the middle, not weighing too much on one side or too much on the other. I think it has done that very fairly. If you change the provision in the ways that are suggested, each change would strengthen the position of the employer's side. If it was not just an "effective" bargaining unit, but the "most effective" bargaining unit, you would never achieve it. Anything defined could be challenged and the employer could say, "Well, I know a way it could be more effective than that".

Similarly, on fragmentation, if every bargaining unit could be said to be potentially fragmented, there would be endless arguments about fragmentation. But
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we have a fairly good balance in this legislation. It is no good one side coming along and trying to put special words in which could in general strengthen it in the debates before recognition. It is not a simple thing like that. It has to be a balance; and the balance is in the Bill.

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