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I believe that the denial of someone’s trade union membership should test those with the power and authority to take that decision. I see no test whatever attached to the trade unions. What test have they got to meet? It is important. My noble friend Lord Lester of Herne Hill referred to the consideration of the Joint Committee on Human Rights. The Joint Committee has considered the matter but has not gone beyond the report that it published. However, there are serious doubts whether there is a breach of the Human Rights Act. There are concerns that Articles 9, 10 and 11 may well be breached. Those articles cover freedom of conscience, expression and assembly. I ask the Minister to have another look at whether the human rights situation is adequately addressed.

In conclusion, I hope the Minister will say what criteria the decision to exclude or expel will be based on. How can a trade union be accountable for the decision? We must all be accountable for our actions. Finally, what procedures will be put in place to ensure that natural justice and legal redress are available to the individual?

4 pm

Lord Campbell of Alloway: My Lords, with respect, the noble Lord is saying—and he will correct me if I am wrong—that the procedures ordained by the Strasbourg court are “unfair”; he used that expression. He wants to introduce procedures which he thinks are fair, in substitution for the ordained procedures of that court. I am only trying to understand what the noble Lord is up to and what he is saying. Is that his case?

Lord Morris of Handsworth: My Lords, in this instance the Brussels procedures are the Strasbourg court. It has spoken, and I respect its conclusions. I am arguing for the conventional and traditional route that we have always applied to our industrial relations procedure in this country. It is a principle of natural justice that if you are charged with, and are to answer, an offence, you have a right to know what the charge is. I stand by the principle that you are entitled to fair representation and to scrutinise the results by way of an appeal. I do not in any way, shape or form, cast any aspersions on what the Strasbourg court might or might not have said. The response of the British

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Government, your Lordships’ House and another place will resolve this issue. In these circumstances, the responsibility rests with us. In your Lordships’ House today, I argue for what we believe to be fair and just, measured against what Strasbourg might have said.

Baroness Perry of Southwark: My Lords, I speak to my Amendment No. 34A, an amendment to subsection (b) in Amendment No. 33. It is on the supplementary list for the simple reason that I thought for a long time that the amendment of the noble Lord, Lord Lester, covered sufficiently my concerns about this issue. However, the more I thought about the phrase “exceptional hardship”, the more that I thought that it was a rather sterner requirement of proof than I would have wished. My amendment does not take anything from the noble Lord’s words, “exceptional hardship”, but adds the words, “any financial disadvantage”.

The noble Lord, Lord Morris, cited the example of the lorry driver who might lose his licence and, therefore, his livelihood. My examples are from the profession that I know well: teaching. It is little realised that, in the last year for which statistics were published, more than 1,800 teachers were accused of either sexual harassment or physical violence towards children, of which accusations less than 1 per cent were afterwards upheld. That is a huge number of people, whose lives were disrupted terribly. Often their marriages fell apart; they were denied access to their work for long periods while their case ground through the courts; and so on. It is a very serious matter. Now let us imagine the financial hardship of their having to pay for legal representation. As long as they were members of a recognised trades union, as the noble Lord said in his example of the lorry driver, they were entitled to free representation, which was paid for by their union. I remember being told when leaving university that I should join up to the teachers’ union fast. In those days we did not think of sexual harassment, but in case I was accused of hitting a child, the union would represent me and it would cost me nothing. These are important financial benefits, quite apart from health insurance and everything else. I quoted the statistics about teachers because that is the world I know. The financial benefit of free representation with the union’s financial help enabled people to survive. Let us remember that 99 per cent of cases proved to be blatantly unjust and only 1 per cent of cases were upheld.

As has been rightly pointed out by the noble Baroness, Lady Turner, the union would have to look ahead at the point of excluding someone to see whether such exclusion would cause “exceptional hardship”. I hope that my more modest words, “any financial disadvantage”, would be clearer. We are all at risk of sympathising too much with the trades union and not enough with the individual because the case to which the European Court judgment gave rise was against people with whom we have very little sympathy. They were not very nice people in their political views, but it can happen to others whose views might be less distasteful. The rights of individuals and those of trades unions, as the later amendments of my noble friend Lord Campbell emphasise, must be got right in this legislation. My modest additional amendment, which would point out the financial disadvantage that loss of union membership could bring, might help us in our debate.

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Lord Bach: My Lords, this is a large and important group of amendments that enables us to address the issues raised by Clause 18 at an early stage in our deliberations today. Clause 18—formerly Clause 17—has aroused much debate throughout the Bill’s passage to date. The amendments give me a welcome opportunity to explain how the Government intend to reconcile, as far as we can, the differing views that have been expressed. It has been well worth having such a debate at this stage.

I shall start with Amendment No, 33, in the name of the noble Lord, Lord Lester, and talk to the others in the group as well. All the amendments relate directly to Clause 18. A similar amendment was moved by the noble Lord in Committee, and this latest version certainly addresses one of the specific points that my noble friend Lord Jones raised in that debate—that the effect of the previous amendment was not restricted to exclusions or expulsions on grounds of political party membership alone, but included any decision to deny membership based on a person’s conduct. Although that was not the noble Lord’s intention, I am grateful to him for drafting a new amendment, which takes note of that point.

We also made it clear in Committee that we wished to engage further with the noble Lord and his advisers before Report to see whether we could agree the way ahead. I thank him for making himself available. We have had detailed discussions with him at both ministerial and official level. My noble friend Lord Morris of Handsworth has also attended these meetings, which included a meeting with the honourable Pat McFadden MP, the Minister responsible for employment relations, and I think that everyone understands the position better as a result. I believe that significant progress has been achieved. The noble Lord has already said that his Amendment No. 33 is informed by the detailed discussions that he and my officials have held in the weeks and months since Committee.

In a spirit of compromise—noble Lords have wanted to know the Government’s view on this since the start of the debate—we have offered to introduce an amendment to this Bill that would centre on the second of the two options presented in last year’s consultation document. Noble Lords will recall these two options. We know that this approach, option B, is preferred by the noble Lord, Lord Lester, and by many others who oppose the current version of Clause 18, which is based on what we describe as the deregulatory option A. We intend to present the government amendment at Third Reading.

The noble Lord, Lord Lester, made it known that he wanted three types of safeguard to be clearly reflected in any government amendment. These safeguards are expressed in proposed new paragraph (a) of his present amendment and in paragraphs (a) and (b) of the new subsection 4C that proposed new paragraph (b) of his amendment would insert. Let me assure the House and the noble Lord that the planned government amendment contains these three categories of safeguard. The second of these safeguards concerns the procedures that unions follow when excluding or expelling members on these grounds. I know that procedural fairness has been a concern of the noble Lord, Lord Campbell of

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Alloway. I am very grateful to him for having met my noble friend Lord Jones, the Minister and myself during these proceedings. I hope that our proposed amendment, when it appears, will satisfy him, too.

The Government need to assure themselves that each safeguard is appropriately expressed in terms that are neither too strong nor too weak. This takes time and is the reason why we could not table our amendment for consideration today. We want to ensure that our amendment is clear and provides the level of union autonomy that the ECHR judgment requires. It should also impose reasonable requirements on trade unions and reflect the principles of better regulation. In particular, we want to minimise the scope for politically inspired litigants to use imprecise wording as a basis for making vexatious complaints to the employment tribunal. I believe that the House shares this view.

I will not go into detail today. If the noble Lord were to press Amendment No. 33, we would be concerned that it does not fully meet these tests, although we think that it goes a long way in the right direction. We continue to work on alternative wording and we will continue to consult the noble Lord during that process. I hope that we will be able to share the amendment with other noble Lords, including the opposition Front Bench, the noble Lord, Lord Campbell of Alloway and other noble Lords—I am not discriminating between any of them—perhaps later this week, so that they can see our proposed amendment before it is tabled. If possible, we would like to see a compromise amendment, commanding the broad if not universal consent of this House, going to the other place, where the Bill has yet to be considered.

We have held discussions with the TUC about the same issues and we will continue to talk to it. The TUC has also made it clear that it opposes any move to legislate for option B but, when our compromise appears, we will have to see what attitudes are taken by all parties in this House and outside. I believe that there is every prospect of finding a satisfactory compromise in time for Third Reading. Therefore, when the noble Lord comes to decide what to do with his amendment, I urge him to be good enough to withdraw it so that further consultation can occur.

4.15 pm

The other amendments in this group were spoken to and therefore I need to respond to them, but I shall do so as briefly as I can. Amendment No. 34 would ensure that trade unions could not exclude or expel a person in any circumstances on the basis of his or her former political party membership, the vital word being “former”. I am afraid we believe that this would limit still further a union’s autonomy in setting and applying its rules—the very point that the European Court of Human Rights was trying to uphold. There was no hint in the ECHR judgment that a limitation of union autonomy of this type was necessary or called for.

Of course, we understand the argument advanced by the noble Lord, Lord Henley, that individuals may change their views and should not be punished for once holding a particular set of political beliefs. I am

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sure that unions will be alive to that point and will not wish to deny membership to a person who, from their viewpoint, is a reformed character. However, there will be cases where that has not occurred. As we know, people frequently move into and out of party membership but their political outlook remains unchanged. In fact, their views can harden. Unions should therefore be capable of acting against such individuals, subject to the general safeguards provided by option B.

Amendment No. 34A was spoken to by the noble Baroness, Lady Perry, and I thank her, as I did in Committee, for her part in this. However, we fear that the amendment would widen too far the test in Amendment No. 33 relating to the scale of the detriment which must occur in order to make it unlawful to expel or exclude. Amendment No. 33 refers deliberately to “exceptional hardship”—a term used within the key judgments of the European Court of Human Rights. Amendment No. 34A would widen that to include “any financial disadvantage”. We absolutely understand where the noble Baroness is coming from on that. She echoes a point made by my noble friend Lord Morris: the fact that there is no longer a closed shop does not mean that there is no financial disadvantage in not being a member of a trade union.

Our problem with the noble Baroness’s amendment is that it would, in effect, prevent a union expelling or excluding on those grounds if even one penny of financial detriment resulted. I am afraid that from a practical point of view that goes too far. It would virtually reduce union autonomy in this area to zero and it might well mean—although I shall not be absolutely decisive about this—that we would fail to comply with the European Court’s judgment. Therefore, I am afraid that we cannot support her amendment.

Amendment No. 35 seeks to define what type of organisation qualifies as a political party. We have not had a definition of this kind since these provisions were first introduced in 1993. I have not been aware that any problems have arisen as a result, so I want to advance the case that we should be very cautious about adding wording of this kind to the text. We think that the amendment in the name of the noble Lord, Lord Henley, contains a specific and serious problem; namely, that political parties are defined as UK ones only. Many members of British trade unions are foreign nationals and their numbers, we are delighted to say, are increasing. Some of those individuals will be members of political parties in their own countries, and of course political extremism can be found in all countries. Trade unions must be free to take action against such individuals, subject, again, to the sort of general safeguards that option B provides. Therefore, we cannot support that amendment either.

Amendment No. 36 is in the name of my noble friend Lord Morris of Handsworth, and many of the arguments that I addressed in relation to Amendment No. 33, which I know he supports, apply to his amendment. I hope he will be satisfied with what I have said about the Government attempting to come up with a consensual compromise on this. Amendment No. 37 is, in effect, the same as Amendment No. 35, and relates to Amendment No. 36.

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I shall deal with the amendment tabled by the noble Lord, Lord Morris of Handsworth. The report of the Joint Committee on Human Rights underscores our view that this complex issue requires careful drafting of a legislative solution, to ensure that we comply with the European Court’s judgment while avoiding the potential for unwelcome side effects. As I stated in response to the amendment tabled by the noble Lord, Lord Lester, we are actively engaging with him to find a suitable compromise, and I hope that approach satisfies not only my noble friend but the House.

Lord Lester of Herne Hill: My Lords, I thank all noble Lords who contributed to this important debate. I particularly thank the Minister for the detailed and careful way he replied to the various points that have been raised. I also thank the noble Lord, Lord Morris of Handsworth, who was kind enough to refer to me as his noble friend. I regard myself as his friend.

This is a matter that transcends parties. It is cross-party, and one of the great virtues of this House is that it is possible, on issues of this kind, to deal with matters beyond political tribalism. I also commend the noble Lord, Lord Henley, and the Official Opposition for the conspicuously fair and moderate way in which they approached this matter during our debates. I am grateful for that.

The noble Lord, Lord Morris, referred to a pathway for protection. As I understand what was said by the Minister, he has given an assurance to the House that the three general safeguards in my amendment and the amendment tabled in the name of the noble Lord, Lord Morris, will be translated into proper statutory language by parliamentary counsel before Third Reading. I fully appreciate the complexity of that task, and I entirely accept that the Government will give effect to that assurance by producing language before Third Reading that will incorporate those three safeguards. That will be a victory for Parliament, this House and common sense. I am reminded of what Isabella said in “Measure for Measure”—that,

There are situations where Governments, trade unions or other bodies may have a giant’s strength, but it is tyrannous to abuse those powers. These safeguards are designed, as the noble Lord, Lord Morris, indicated, to write protection into the Bill as well as remedies. I believe it is entirely probable, and maybe even certain, that we will reach a consensual compromise at Third Reading, having made good use of the procedures of this House in Grand Committee and now. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Minister of State, Foreign and Commonwealth Office & Department for Business, Enterprise and Regulatory Reform (Lord Jones of Birmingham) moved Amendment No. 3:

The noble Lord said: My Lords, in moving Amendment No. 3 I shall speak also to Amendments Nos. 4, 5, 6, 7 and 8. These amendments cover various aspects of determinations without a hearing.

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Amendments Nos. 3 and 5 ensure that determinations without a hearing in employment tribunals can be made only where there is express consent in writing from all the parties, save for those circumstances in which a default judgment can be issued without a hearing, as happens at present. Over 70 per cent of consultees in our dispute resolution consultation favoured the implementation of such a mechanism. These views are summarised in our response to this consultation, which we are publishing today. I am arranging for copies to be placed in the Libraries.

Powers have existed since 2002 to enable regulations to provide for determinations without a hearing in employment tribunals. At present, this only happens in circumstances where the respondent does not present a response—or a valid response—in the proceedings, where the case is not contested, or where the claim is withdrawn and the proceedings dismissed. These are known as default judgments.

Clause 4 seeks to circumscribe further this power to make such regulations, as my noble friend Lord Bach described in Grand Committee. In this context, it is important that the power is clearly described and limited. Clause 4, as originally drafted, would establish in law that determinations without a hearing could take place only where there is consent from the parties, but that consent could be either express or deemed. It would also—and this was not the intention—remove the tribunals’ ability to issue default judgments in circumstances where no response is submitted and where the case is uncontested.

We debated the consent issue in Grand Committee on 4 February and my noble friend Lord Bach undertook to consider further the case for requiring the expression of consent to be made in writing. He also undertook to reconsider the drafting of the second arm of Clause 4, which would permit determinations without a hearing to take place on the basis of deemed consent where parties had been given the opportunity to request a hearing of their cases but had not done so. My noble friend Lord Wedderburn firmly argued that deemed consent was not an appropriate mechanism in this situation. Other noble Lords expressed similar concerns. I subsequently met him and my noble friend Lady Turner to discuss their concerns on this point. The House will join me in wishing him a speedy recovery, as he cannot be here today.

On reflection, we are persuaded that it is appropriate that the law should limit the order-making power enabling determinations without a hearing to situations where express consent in writing has been secured from all the parties. This will give certainty that such an important decision—to waive the right to a hearing—has been made by all the parties. This amendment therefore removes from the Bill the provision that would have enabled regulations to establish deemed consent as a sufficient basis upon which to proceed with a written determination. It also carves out default judgments from the requirement for consent, since clearly consent could not be obtained from both parties in the circumstances I described earlier where default judgments are issued.

It is our intention to consult publicly, later this year, on regulations providing a legal framework for enabling determinations without a hearing in five jurisdictions—

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national minimum wage, holiday pay, breach of contract, redundancy pay and unlawful deductions from wages. Determinations without a hearing, in such cases, will only be possible where all parties consent, and an employment judge, considering the papers, considers that no hearing is required to make an informed determination in that particular case. I beg to move.

Baroness Turner of Camden: My Lords, I speak to the amendments in my name and that of the noble Lord, Lord Wedderburn—unfortunately, he cannot be here today because he is ill—and the amendment from the Government. We heard some discussion about Clause 4 in Committee. We were concerned at what appeared to be an increase in the number of cases of a judge sitting alone without lay members. We were concerned that this might indicate a desire to phase out the work of lay members on tribunals, but we accept the assurance given to us by the Minister that the Government recognise the valuable role of lay members and are fully committed to the continuation of the existing tripartite structure.

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