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In our last debate, I was much persuaded by the view of the noble Lord, Lord Lester, that it is better to have something to protect than leave it to the vagaries of the courts. In that sense I ask whether it is a Conservative Party view not only that there are there warm words to be said about the value of trade unions, but that the party does not believe that Conservative trade unionists are in any danger whatsoever from the trade union movement.
Lord Henley: I am sure that with reasonable trade union general secretaries such as the noble Lord—my noble neighbour, if I can put it that way, since he has now come to live in Cumberland—there would be no danger at all. Moreover, I am sure that the noble Lord is right to say that Conservative Ministers have been members of the NUM, and so on. It is really a question of making sure that we get the law right in case something happens in the future.
Lord Lester of Herne Hill: I am grateful to the noble Lord. Is he aware that the BNP has registered itself as a trade union? While that does not deal with the point that has just been raised, it indicates how trade union registration can lead to some rather strange results at the fringe.
Lord Henley: What the BNP does in terms of registering itself either as a political party or a trade union is a matter for the BNP. I cannot speak for it, and its purpose in doing so is a matter on which the noble Lord or anyone else can make their own guess.
Lord Bach: I thank all noble Lords for contributing to what in some ways is a repeat discussion on Clause 17, and in other ways is new. Quite understandably, the clause raises points of concern for Members of the Committee on all sides. It was particularly refreshing to hear the contribution of the noble Baroness, Lady Perry. I cannot say that the Government agree with every word she said, but it was a valuable addition to our deliberations today.
If I heard the noble Lord, Lord Henley, right, we seem to have a consensus that the Government are obliged—as the noble Lord, Lord Lester, has pointed out on more than one occasion—because Article 46 of the convention requires the UK to abide by such a judgment. It is an important principle, as it is important that it should be accepted by the Official Opposition. The Liberal Democrats have agreed with us on this for a long time. What is more, it is the policy of this Government to make sure that our law does comply with convention rights. We believe that the judgments of the European Court of Human Rights should not be disregarded.
I shall be as brief as I can, but it is important that I should put the Government’s case for Clause 17 as it stands. The clause makes the changes to trade union law which are necessary to ensure that we adhere to
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As in so many of these cases, the ASLEF case involved several competing rights. On the one hand, the expelled individual had the right to associate with others and the right in a free country to hold and express his beliefs. On the other hand, there are the rights of other members of the union to associate with people of their own choosing in conformity with their union’s membership rules. The court acknowledged that our law had tried to strike a balance between these competing rights. In 2004, Parliament considered these issues in some detail. Section 33 of the Employment Relations Act 2004—some Members of the Committee will bear the scars of that particular operation; I use that word because “discussion” does not quite capture it—amended the relevant provisions by giving more freedom to trade unions to expel or exclude political activists. However, the court determined that the UK law still did not strike the right balance. The judgment acknowledged the importance of individual rights but explicitly stated:
It is important to remember that, in making its decision, the court was mindful that the BNP member involved did not suffer any material loss as a result of losing his union membership. By that I think it meant that there was no closed shop any more; he did not lose his job as a consequence. Of course, the noble Baroness talked about rights in terms of advice and other benefits that come with trade union membership. The court argued that his ability to express his political views was not significantly affected. We have to consider the court’s judgment and it should be foremost in our minds when we consider this clause.
Last summer we held consultation on the appropriate way to respond to this important judgment. We put forward two options on how to amend the relevant legislation. Our proposals implement the simpler option—option A—favoured by the large majority of respondents, not just trade unions but also independent legal organisations such as the Law Society of Scotland and the Employment Lawyers’ Association.
Clause 17 removes all reference to “protected conduct” in those two sections of the 1992 Act. Section 174 sets various limitations on the ability of trade unions to expel or exclude individuals, one of which relates to protected conduct. Clause 17(2), which we are busy debating, repeals the provisions in Section 174 relating to protected conduct. Section 176
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Therefore, Clause 17 increases the freedom of trade unions to set and apply their own membership rules, but we argued that the clause leaves important safeguards in place. Where individuals believe that a union has applied its membership rules wrongly or arbitrarily, then such individuals can take legal action against a trade union for breach of rule. Expelled members can also make a complaint to the certification officer about such alleged breaches of rule. As noble Lords know, the certification officer is a specialist authority in trade union matters and his or her powers to act as a speedier and cheaper alternative to the courts were significantly extended in 1999. I point out that Clause 17 in no way affects those protective arrangements.
Some noble Lords may be concerned that, despite the court's judgment, Clause 17 provides too much freedom to trade unions and that, hypothetically, this freedom would create the potential for abuse. This has to be approached sensibly, as I believe my noble friend Lord Brett did in his remarks a few minutes ago. Let us recall that the origin of the provisions which Clause 17 repeals can be found not in common law or in previous legislation going back decades, but in the Trade Union Reform and Employment Rights Act 1993. We are not talking about some fundamental or long-standing feature of our trade union law.
I agree with my noble friend that there is no evidence at all, either before—in other words, when the position of trade unions was exactly as we intend it to be if Clause 17 comes into law—or after 1993, that trade unions have sought to expel or exclude individuals for belonging to mainstream political parties. The hypothetical threat of union abuse is entirely without precedent. This is hardly surprising. Trade unions are very keen to attract members. They are not in the business of making wholesale expulsions or exclusions. Therefore, we must not legislate against a hypothetical threat; we have to make a rational assessment of the evidence which exists in the industrial relations context of today. In other words, we must apply better regulation principles when considering this issue. By the same token, we must guard against overcomplicating the law. We want to avoid creating scope for uncertainty to arise, and for vexatious, politically motivated, complaints to be made against trade unions.
As my noble friend Lord Jones said the last time the Committee met, on 13 March, we amended the relevant parts of trade union law in 2004 to make it clear that it was lawful for trade unions to expel or exclude political activists. That was an important change, and was probably more significant than the provisions in Clause 17. There is no evidence that the 2004 Act has led to abuse or politically motivated purges by unions. Clause 17 provides further freedom for trade unions in accordance with the ASLEF judgment and would allow unions to use political-party membership as a potential criterion for determining their own membership.
Apart from this clause, this Bill does not deal with trade union law. Its place in the Bill reflects the importance the Government attach to human rights
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Lord Lester of Herne Hill: Is the Minister aware that most of the arguments against what he has just said were deployed by the Government themselves in their argument before the European Court of Human Rights? If he reads that judgment he will see why those arguments will not do. He might also wish to reflect on the fact that the court itself said, in paragraph 52 of its judgment that,
- “in the absence of any identifiable hardship suffered by Mr Lee or any abusive and unreasonable conduct by the applicant, the Court concludes that the balance has not been properly struck”.
Would the Minister not therefore agree that it is extremely important to deal with what is left out—that is, a case in which there is identifiable hardship or abusive or unreasonable conduct by a union? In the light of that, if we took the Minister literally and the Government followed his speech, that could be exploited by the BNP. Is that not something that should be further thought about rather carefully?
Lord Bach: A number of matters need to be thought about carefully between now and Report; that is what I was coming on to say. But it is important for the Committee to hear the Government’s case, robustly put, as to why we opted for option A, and why that appears in Clause 17. That said, I take absolutely the points that the noble Lord makes. We are aware that there are other ways to change the law in response to this judgment and recognise that there are respectable arguments in support of alternatives. Of course, I hardly need to use “respectable” as we have heard them put forward with great persuasiveness at Second Reading and in Committee.
We remain open to others’ views on the clause. As we have already been told, there have been meetings in relation to this matter and the Minister for Employment Relations, my honourable friend Mr Pat McFadden, met the noble Lords, Lord Lester and Lord Morris, to discuss these complex issues. My honourable friend is obviously considering the matter, as one would expect with something as serious and important as this. This matter goes way beyond party—it is about getting it right for the future. So we intend—and I hope that the Committee takes note of this—to continue this dialogue in preparation for Report. But for the mean while, I suggest that the clause does stand part.
Lord Campbell of Alloway: Before withdrawing, as is inevitable in these circumstances, I want to say a word of gratitude to the Grand Committee for the manner in which it has dealt with the problems today. The fundamental problem has been dealt with. We cannot just ignore ASLEF. The judgment is binding and we are under an obligation to see that our domestic law is compatible. That is the fundamental reason for my analysis.
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It is a matter of relatively minor importance whether my noble friend Lord Henley or my party, when they have heard the merits of my Amendment No. 26A, written in plain English, want to support it or whether the House on Report wishes to support it. It has not considered it yet, and I shall be moving it. But I would not dream of taking your Lordships’ time by speaking to it now. Nor, indeed, can I do other than ask my noble friend if, at some time, he could let me know why he prefers his course, which apparently is to keep Clause 17 and oppose Amendment No. 26A or whether he prefers Amendment No. 27. I am still uncertain about what he is doing because I do not understand his reasoning. But this is a matter of minor consequence which can be sorted out, I hope, before Report stage.
I thank my noble friend Lady Perry of Southwark, who made a very helpful and knowledgeable speech, which was derived from experience. I hope that Members of the Committee will forgive me if I do not entertain any form of argumentative dissertation with the noble Lord, Lord Lester. We can go into that on Report.
Lord Wedderburn of Charlton moved Amendment No. 27A:
In any claim made to an employment tribunal by an employee or worker, which relies upon or involves a contract of employment, the tribunal shall take no account of the fact that the contract is, either in its formation or in its performance, unenforceable by reason of illegality, except where that employee or worker either—
The noble Lord said: This is not a party matter. It rests on the basis of the Law Commission paper of 2005. It deals with the following kind of situation: you are my employer and you sack me, let us say, quite arbitrarily; I bring my claim for unfair dismissal to the employment tribunal and you say, “You cannot rest on your contract of employment because I did not pay any PAYE or any national insurance contributions and, therefore, the contract is affected by illegality. Certainly in its performance, if not in its formation, it is an illegal contract, so you cannot rely on it in a claim for unfair dismissal”.
There have been a number of judgments in this area. Some judges use the old law to say that the employee could not sue on an illegal contract, either as concluded or as performed, because that would be contrary to public policy. I am sure that all Members of the Committee have an adequate legal education to know that they relied on the old maxim “ex turpi causa non oritur actio”—you cannot rely on an illegal base to set your action going. Other, perhaps a little more modern, judges noted not only that the parties cannot contract out of the employment protection legislation concerned—which is an important point—including unfair dismissal, but that the law of
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Four cases are the basis of that approach, which I shall mention simply to get them on the record. They comprise the Enfield Technological Services case, 2007; James v Greenwich Council, Court of Appeal, February 2008; New Testament Church of God v Stewart, 2007; and perhaps the basis of the approach of those cases, Percy v Church of Scotland, 2006, House of Lords Appellate Committee. The Committee will notice that a number of those cases involve religious employers, as we would now put it. The courts had to grapple with the early assertion of certain judges that no clergyman, pastor, priest and so on could possibly be a servant of any organisation because he was a servant of God.
These bizarre judgments had to be overcome by later reasoning in the appellate courts. We shall note cases of that sort when we come to the rather extraordinary Amendment No. 28, which I am very surprised to see on the Marshalled List in view of my knowledge and activity with my noble friend Lady Turner in relation to what is appropriate to have on the Marshalled List and what the Companion tells us should be done, which we have followed to the letter.
I hope that Amendment No. 27A can be accepted by the Government, at least in principle. I am quite sure that its drafting is inadequate. The Government will obviously use the normal offices of the parliamentary draftsman to make it better. But the reason for enacting it is to get over what is still a doubt—despite those cases to which I referred, which are all in the Industrial Relations Law Report—as to just how the court will go. Our amendment—I am grateful to my noble friends for putting their names to it—says that the doctrine of illegality, such as the employer who does not pay national insurance contributions, either in performance or in conclusion of the contract of employment, is not to be taken into account in claims such as unfair dismissal where it is needed for the basis of the claim,
That leaves the court a discretion which I think is absolutely necessary. Of course, it will be an employment tribunal or, on appeal, the Employment Appeal Tribunal and then the Court of Appeal. They will have discretion when an employer says, “You knew that I did not pay national insurance contributions”, and when they find that the employee knew about that, or participated in that to such a degree that he or she should not have any remedy. It will still be open to the court to deny a claim, such as for unfair dismissal.
The reason for enacting that is to make it quite clear which of the two views that I described to your Lordships is correct and to provide for that discretion of the court in addition. That should appeal to the Government, because it is aimed at having less litigation
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Baroness Turner of Camden: I support the amendment, to which I have put my name, because it seemed to me that my noble friend Lord Wedderburn had identified what you might call a gap in procedures and attempted to fill it. It struck me, when I first heard about it, that this would be a particular help in many instances to migrant workers who are here legally, but who have no idea whether the employment contract that they are employed under is technically legal. They would not know about PAYE deductions or national insurance deductions; they would simply be very glad to have the job and take the payment when they got it. However, if they later face dismissal which they think is unfair, they might find that they are not deemed to have a legal contract and, therefore, would not be entitled to sue for unfair dismissal, even though they might have been dealt with very unfairly.
The amendment makes it clear that if there has been connivance by the employee in illegality, that should count against the case, and it makes it clear that it would not be equitable to grant him any remedy. In other words, if they knew what was going on and decided not to say anything about it and not to pay the insurance contributions or have deductions made, that would be a sort of connivance, and they would not then be entitled to a remedy. There are very many cases when people simply do not know. If they are employed on that sort of basis, it may be that, when they want to sue for unfair dismissal because they feel that they have been unfairly dismissed, they do not have a case because they do not know the situation, whereas perhaps a worker who was born here and lived here does. Therefore, we hope that this wording will commend itself to the Government and that they will be prepared to accept what we have said.
Lord Borrie: I, too, support the amendment. It appealed to me to a considerable extent, and therefore I wanted to put my name to it. It seems to be a helpful opportunity to clarify the law in a difficult area which, as my noble friend Lady Turner said, may be particularly relevant for practical purposes to immigrant workers who are even more uncertain of the law and of their rights and could be harshly deprived of those rights if the law is not changed.
There are sometimes amendments to a Bill that are just about inside the Long Title and the wording of the Bill. In this case, it seems to me absolutely right that one should try—my noble friend Lord Wedderburn has properly seized the opportunity—to improve the law in the way in which he has described. The law is in a mess at the moment, because different courts and different tribunals at different levels have come to contrasting views on the incidental illegality that the noble Lord described. For example, there are cases
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Lord Razzall: We agree with the amendment in the name of the noble Lord, Lord Wedderburn. To take the point that the noble Lord, Lord Borrie, made, it is clearly appropriate with a Bill whose Long Title begins with making provision,
to take an amendment that clearly improves the procedure regarding resolution of employment disputes, even though it goes a bit wider than the substance of the Bill.
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