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On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 106:

Clause 50, page 24, line 25, leave out paragraph (a)

The noble Lord said: We now move to the thorny subject of compliance notices. The Explanatory Notes give an example of cases where the employer might be required to change an advertisement or an application form for a job, which is fair enough. However, that is surely covered in subsection (2)(b). Paragraph (a), however, is a little different. It states that the employer must remedy the contravention. Will the Minister again tell me how employers are expected to remedy such a contravention without changing the application form or advertisement? Surely they would have to replace their original paperwork and explain to the potential employee that the first form had been sent in error. That, in my book, would be a remediation, but perhaps Clause 50 has a wider effect than I have supposed or is suggested in the Explanatory Notes. I hope that the Minister can help me. I beg to move.

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Lord McKenzie of Luton: I shall certainly try to help the noble Lord. Clause 49 prohibits certain forms of employer behaviour during the recruitment process that indicate that the job on offer is conditional on the applicant agreeing to opt out of a pension scheme. Although we do not expect the vast majority of employers to try to screen out job applicants in this way, an effective compliance regime must be in place to manage the risk that some might try.

Clause 50 gives the Pensions Regulator the power to issue compliance notices where it believes that a contravention of the prohibition in Clause 49 has occurred. The proposed amendment would prevent the regulator issuing a compliance notice requiring a current or past contravention to be put right.

We recognise that there will be circumstances in which a contravention of the prohibition has happened and there is nothing that the employer could do retrospectively to put it right. In those situations, we want the regulator to be able to issue a penalty notice to penalise and deter such behaviour in the future. However, there may be other circumstances in which the regulator might want to require employers to put right what they have done wrong. It would be useful for the regulator to be able to issue a compliance notice specifying what the employer needed to do and by when to remedy the situation or to prevent it being repeated. For example, the regulator might require an employer to change a specific job advertisement or application form that is in contravention of the prohibition or to issue a retraction. The clause gives the regulator the power to issue such notices. I hope that that has clarified matters for the noble Lord and that he appreciates that it will not be possible in all circumstances for what has happened retrospectively to be put right, but that there will be circumstances where it can be the appropriate remedy. That is why the clause is structured in this way.

Lord Skelmersdale: I said in my remarks that I fully understood subsection (2)(b), which relates to the contravention being remedied. The Bill states,

“prevent the contravention being repeated”.

However, I am still confused. It would help if the Minister could give an example. He said that paragraph (a) covers situations where there is nothing that the employer can do to put the contravention right. I am surprised by that, because I should have thought that in virtually every case there was a possibility of putting a contravention right.

Lord McKenzie of Luton: There could be a one-off situation, with the recruitment of one employee when the prohibition had been breached. Let us say that a decision was taken and somebody had been appointed, but the individual concerned had not been appointed. The ability to remedy that by making that appointment retrospectively is unlikely to be available. That is one circumstance in which it may not be possible to remedy the contravention of the prohibition; in other cases, it might. If, for example, there is an ongoing recruitment exercise and the literature for all that has been produced and that literature falls foul, that is a circumstance in which it could be the case. It is obviously a question of degree, but it is right that both are catered for in the

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clause, so that a remedy in the circumstances where that is possible can be dealt with.

I should clarify also that the reference to remedying a contravention in this clause does not mean that the Pensions Regulator would be able to require employers to give unsuccessful applicants a job. That simply is not the case. The emphasis here is simply on trying to prevent employers avoiding their new employer duties from the start by screening out candidates who might want to assert their new rights to join a pension scheme.

Lord Skelmersdale: The last point I certainly readily understand. I congratulate the Minister at this time of night on failing to use the word “flexibility”, which subsection (2) of course gives the Pensions Regulator. But I am not going to pursue the point at this time of night. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 50, as amended, agreed to.

Clause 51 [Penalty notices]:

[Amendments Nos. 106ZA and 106ZB not moved.]

Clause 51 agreed to.

Clause 52 agreed to.

Lord McKenzie of Luton moved Amendment No. 106A:

After Clause 52, insert the following new Clause—

“Inducements

(1) An employer contravenes this section if the employer takes any action for the sole or main purpose of—

(a) inducing a worker to give up membership of a relevant scheme without becoming an active member of another relevant scheme within the period prescribed under section 2(3), or(b) inducing a jobholder to give a notice under section 7 without becoming an active member of a qualifying scheme within the period prescribed under section 2(3).

(2) Section 31 applies in relation to a contravention of this section as it applies in relation to a contravention of section 2(1), and sections 34 to 39 apply accordingly.

(3) But the Regulator may not issue a compliance notice in respect of a contravention of this section unless the contravention occurred within the prescribed period before—

(a) the time when a complaint was made to the Regulator about the contravention, or(b) the time when the Regulator informed the employer of an investigation of the contravention, if no complaint was made before that time.

(4) A compliance notice in respect of a contravention of this section may direct the employer to take or refrain from taking specified steps in order to prevent the contravention being repeated.

(5) For the purposes of this section a worker gives up membership of a relevant scheme if the worker—

(a) takes action or makes an omission by which the worker, without ceasing to be employed by the employer, ceases to be an active member of the scheme, or(b) requests or authorises the employer to take such action or to make such an omission.

(6) In this section, “relevant scheme” means—

(a) in relation to a jobholder, a qualifying scheme;(b) in relation to a worker to whom section 8 applies, a scheme which satisfies the requirements of that section.”

On Question, amendment agreed to.

Clause 53 agreed to.

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Clause 54 [Enforcement of the right]:

Lord McKenzie of Luton moved Amendments Nos. 107 and 108:

Clause 54, page 26, line 13, leave out “a worker’s contract and”

Clause 54, page 26, line 20, after “employee” insert “within the meaning of that Act”

On Question, amendments agreed to.

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Clause 54, as amended, agreed to.

Lord Tunnicliffe: I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at 9.58 pm.

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