Employment Bill

Public Bill Committee, 13 December 2001.

Standing Committee F

Clause 27 - Practice directions

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 41, in page 34, line 20, at end insert—

'(2A) Where employment tribunal procedure regulations include provisions enabling the President to make directions about the procedure of employment tribunals they shall also include provision requiring the President to consult with such users and representatives of users of the employment tribunals as appear to him to be appropriate before making such directions'.

The amendment would require that, where employment tribunal procedure regulations include provision to enable the president to make directions about procedure, they should also require the president to consult representatives of users of the tribunal service. I understand that tribunal user groups are established in all tribunal regions in England and Wales, so bodies are available to be consulted.

I hope that what I propose is not controversial. In the past couple of years I have been used to dealing with health and social services Bills in Standing Committee. Most, if not all, of those Bills have from the outset included provisions—which are not terribly onerous—requiring the Secretary of State to consult those who appear to him to be relevant, before issuing the orders in question. That approach is at least a gesture towards open government and an attempt to take into account the properly expressed views and interests of those likely to be affected by an order. It goes some way towards dealing with a problem that we have with respect to the practice directions.

The principle of practice directions can be discussed on clause stand part. However, the Minister will appreciate that, while the Opposition have a natural concern about secondary legislation, which does not receive the same scrutiny as primary legislation, the practice directions are tertiary legislation. Once the regulation to allow practice directions has been debated here, the directions themselves will not be subjected to parliamentary scrutiny. It is therefore important to ensure that, in making such directions, the president takes account of the legitimate views of user groups and others who will be affected by them.

I am prepared to concede that the matter in question can properly be dealt with in regulations. However, once again, the architecture of the Bill forces the Opposition to explore issues by way of an amendment. I hope that the amendment will enable the Minister to provide a categorical assurance that the regulations

will include a requirement for the president to undertake consultation before issuing a practice direction.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Clause 27 is important to ensure the use of existing best practice throughout the country. In the ruling on Eurobell Holdings plc v. Barker, the employment appeals tribunal stated that it was undesirable for different directions to apply to different employment tribunal regions. At the moment, presidents cannot issue practice directions. The responses to ''Routes to Resolution'' were overwhelmingly in support of giving presidents the power to issue practice directions, to help provide consistency in different tribunal regions.

Only one of the organisations that responded even mentioned consultation, but I accept that, on some occasions, practice directions will not seek to extend existing best practice and will cover new ground. Sometimes, presidents may think that it is appropriate to consult. However, it is for them to judge, just as it is for employment appeal tribunals, which can issue practice directions, to decide whether to consult. Nothing in clause 27 prohibits consultation, but presidents should not be required to consult on each and every occasion, as amendment No. 41 clearly requires them to do. The regulations will clarify the position, so the amendment should be withdrawn.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am deeply disappointed by the Minister's response. He says that practice directions will not always merely seek to extend best practice. However, it is not obvious that it is unnecessary to consult on practice directions that do seek to extend best practice, and people may not agree on what extends best practice. Subsection (2) of proposed new section 7A explicitly states:

''Employment tribunal procedure regulations may, instead of providing for any matter,''--

that is, rather than the substance of the matter being included in regulations that will be subject to the, admittedly lame, parliamentary scrutiny procedure for statutory instruments—

''refer to provision made or to be made about that matter by directions''.

As I understand subsection (2), we can go from primary legislation to substantive regulation without any further parliamentary scrutiny. That is a serious issue. I anticipated that the Minister would say that he would expect presidents to consult users of tribunals, as a matter of course, before introducing practice directions. It is extraordinary if the Minister envisages that the tribunal president should ever want to make a practice direction without talking to the recognised and established user groups, who represent all parties who use the tribunals. I should have thought that the Minister would readily concede that in principle, even if he does not want to be bound by including a provision to that effect in the Bill.

The Minister did not say that, even in principle, he would expect presidents to consult as a matter of course. That is an extraordinary position for a Government who are apparently committed to

openness and accountability to take, so I am deeply disappointed by his response. However, looking around me, I am not minded to press the amendment to a Division.

Mark Prisk (Conservative, Hertford and Stortford)

Quality is more important than quantity.

Philip Hammond (Conservative, Runnymede and Weybridge)

Indeed, but unfortunately our voting procedure does not recognise that simple truth. I am minded to withdraw the amendment, but I ask the Minister to reflect on what I have said. I genuinely did not believe that my amendment would be controversial and I expected the Minister to deal with it in two minutes by saying that he would, of course, expect presidents routinely to consult recognised user groups, but that it was unnecessary to include such a provision in the Bill. I am alarmed that the Minister seems to suggest that consultation will not be normal practice, and I shall probe the Government again on that issue on Report. I hope that he will consider the logistics of such a consultation procedure with the presidents, and perhaps conclude that the requirement would not be terribly onerous. It would certainly satisfy user groups that have expressed concern about having an opportunity to make their views known on any proposed directive.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Philip Hammond (Conservative, Runnymede and Weybridge)

I revert to the important point of principle raised by the clause. In practice, the directions will be under tertiary legislation and not subject to parliamentary scrutiny. That is bad enough, but proposed new section 7A(2) of the Employment Tribunals Act 1996 appears to enable the practice directions to be used as a substitute for regulations, and thus to allow substantive procedural regulation to be imposed without the opportunity for scrutiny in the House or another place.

The regulations may provide that practice directions rather than the regulations themselves substantively deal with certain matters. If so, we need to press the Minister to tell us what he intends to delegate to the presidents in that way. We shall definitely not have an opportunity to scrutinise those matters, as statutory instruments on them will not come before the House. We could discuss those matters now if he would let us know why proposed new subsection (2) was needed and what subjects he wanted to deal with under it.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I hope that I can set the hon. Gentleman's mind to rest. He raises an important point that I will consider further. However, the provision was supported widely. We do not intend to interfere in any way with how presidents decide that they can ensure best practice throughout their jurisdiction. There is one president for Scotland, and one for England and Wales.

The explanatory notes give a couple of examples of what we are thinking of. According to them,

''rule 4 of the main Employment Tribunals Rules of Procedure''

allows discretion and

''says that a tribunal may issue directions''.

Rule 17 states that tribunals

''may extend certain time limits''.

It is our old friend ''may'' rather than ''shall''. Discretion is allowed. The explanatory notes also state that, in the case of Eurobell Holdings plc v. Barker, the employment appeals tribunal said that it was undesirable that the employment tribunals service

in Birmingham, for instance, should take that discretion, issue a set of directions and set a precedent in an area that was not followed by the employment tribunals service in London. We are considering such problems.

I shall consider the point about tertiary legislation further, but we have nothing to fear. In the case of Eurobell Holdings plc v. Barker, the employment appeals tribunal said, according to the explanatory notes,

''that it was undesirable that employment tribunals should adopt different practices...in different regions''.

Unlike the third president—the employment appeals tribunal president—employment tribunal presidents are not currently allowed to issue practice directions, but the Bill deals with that inconsistency.

The provisions are sensible. On occasion, presidents will consult user groups. Although I shall consider the matter further on Report, I hesitate to say that I believe it right in principle for them to consult in such circumstances. We would not want to interfere in an employment appeals tribunal process that worked perfectly well. We see the need for the provision—indeed, an EAT ruling suggested it. Everyone who responded to the consultation supported it and only one organisation mentioned consultation. The hon. Gentleman raised an important point, and it is proper for him to do so, but after the explanations that I have given him he should feel reasonably relaxed that no huge issue of principle is involved. However, I will consider the points that he made further on Report.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am grateful to the Minister for addressing the issues that were raised in the last short debate about consultation, but will he confirm that it is not envisaged that the scope of delegating power to the discretion of the president through directions will be any wider in relation to employment tribunals by virtue of proposed new subsection (2) than the areas currently covered by the directions in the employment appeals tribunal? Proposed new subsection (2) could mean—if it were taken to its most ludicrous extreme—that the employment tribunal procedure regulations said simply that the president of the tribunal may make directions as to procedure. If that is to be the case, we need to know.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I can give the assurance that the hon. Gentleman seeks on that point. The other important point is that the regulations will empower tribunal

presidents to issue practice directions, which will be the subject of debate. The affirmative procedure will be the proper procedure for that.

Philip Hammond (Conservative, Runnymede and Weybridge)

All that the affirmative procedure means is that the Opposition do not have to keep their eyes open as we would otherwise. We will still have only 90 minutes to debate the provisions. Although we will not be dependent on the Government's largesse in agreeing to the debate, the period for scrutiny will be short.

Let us be explicit. Is the Minister saying that the area delegated to directions made by the president under employment tribunal procedure regulations will be no wider than the area delegated to directions under existing employment appeals tribunal procedures?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Yes.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am grateful to the Minister.

Question put and agreed to.

Clause 27 ordered to stand part of the Bill.

Clause 28 - Pre-hearing reviews

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 42, in page 34, line 31, at end add—

'(2) In section 9(1) of the Employment Tribunals Act 1996, after paragraph (a) there is inserted—

''(aa) for enabling the Tribunal to strike out any case which is found by a review conducted under paragraph (a) above to be without merit and where in the opinion of the Tribunal, no purpose would be served in allowing the case to be determined at a hearing, and''.'.

The clause removes the expression ''preliminary'' from the reference to the review procedure in existing legislation. The explanatory notes state that the purpose is to be crystal clear about the fact that the review procedure can be the end of the line in some cases and does not always have to be preliminary to a full hearing. The history and examples quoted by various organisations suggest that that is a sensible route to take.

The explanatory notes make it clear that the pre-hearing review as a result of the changes introduced by the Bill can lead to the dismissal or striking-out of a case. That may be crystal clear to parliamentary draftsmen but to anyone else reading the Bill, it would be as clear as mud. The clause inserts powers

''for authorising an employment tribunal to carry out a review of any proceedings before it at any time before a hearing held for the purpose of determining them''.

It says nothing about striking out or dismissing a case at that review.

The amendment would make the purpose of the change to section 9 of the Employment Tribunals Act 1996 crystal clear by stating that there will be a power to enable the tribunal to strike out a case and clarifying the grounds on which it can do so. This is a probing amendment in the sense that I have set out my view of what those grounds should be. If the Minister's view is different, I should like to hear it. If he will not accept

the amendment, I should like him to clarify how the grounds will be specified and how the provision to strike out a case will be written into the Bill.

The amendment states that a case that the review finds to be without merit could be struck out, where

''in the opinion of the Tribunal, no purpose would be served in allowing the case to be determined at a hearing''.

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

If I may anticipate the hon. Gentleman, would the pre-hearing review not need to have access to all the evidence and papers before turning a case down along the lines in the amendment?

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman is right. Perhaps he should not anticipate, because I was not going to mention that point and we are now all looking forward to him making a short speech about it when I sit down. His point does not relate to the thrust of the amendment, but it is interesting. It takes us back to an aspect of the conciliation issue that we touched on at our previous sitting, which you will be disappointed to have missed, Mr. Benton—[Interruption.] I see that not all Labour Members agree, although I have found our proceedings riveting. There may be a reason for that, but we can discuss it another time.

We discussed the extent to which documents needed to be discovered at the beginning of the conciliation process. The hon. Member for Weston-super-Mare (Brian Cotter) mentioned discovery in the context of a pre-hearing review, and he will want to explore that further.

The amendment may not be perfectly drafted, but will the Minister confirm that it raises an issue with which we must deal? Will he confirm that there will be a power to strike out a case on review and tell us how that power will be delivered? Will it come through regulations or does it exist elsewhere, in which case I have simply missed it? Will the Minister also give us an estimation of the basis for striking out a case? Will regulations set out the type of cases that can be struck out or will the tribunal be left with a large degree of discretion?

To give the Committee an understanding of the real issue, will the Minister tell us what estimates he has made of the likely number of cases that will be struck out as a result of pre-hearing reviews? Does he expect 5 per cent., 10 per cent. or 20 per cent. of cases to be struck out? The Committee would see the matter quite differently if the figure was 0.25 per cent., not 25 per cent.

I look forward to the Minister's comments and to returning to some of the issues once we have had the benefit of his words of wisdom.

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

I shall take the opportunity presented to me by the hon. Member for Runnymede and Weybridge (Mr. Hammond). I shall make the point again, because although the Minister will respond, it was directed at the hon. Gentleman. The hon. Gentleman has proposed a way to make it clear that if a case is found to be without merit, it could be ruled out. The concern is that it would be unsatisfactory if the pre-hearing did not have full access to the papers and the case was ruled out.

Philip Hammond (Conservative, Runnymede and Weybridge)

Do the hon. Gentleman and his party support the principle that cases without merit should be capable of being struck out at a pre-hearing? I accept that he wants to ensure that proper information is available, but subject to the that caveat, does he support the principle of striking out cases that have no merit?

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

It is an area of concern that they should be struck out. I am not absolutely happy that the tribunal would have all the evidence at that juncture.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I shall try to offer the hon. Member for Runnymede and Weybridge the words of wisdom that he asked for. We intend to amend the employment tribunal regulations to include a strike-out power at the pre-hearing stage. At the moment, the tribunal cannot do that because section 9(1)(a) of the Employment Tribunals Act 1996 implies that pre-hearing reviews are preliminary considerations. That term suggests that they must be followed by a full hearing, no matter what the circumstances.

Misconceived applications—in answer to the hon. Gentleman's question, that is application that have no reasonable prospect of success—can be struck out at the pre-hearing stage. Clause 28 removes the implication that that cannot happen because the pre-hearing is a preliminary consideration and that it must be followed by a full hearing. That is the important element of the provision. The hon. Gentleman also asked whether we envisaged the power being used to a huge degree. We do not envisage it being used other than in extreme cases.

We should not forget that tribunals still have the power to order a deposit. The deposit used to be £150, but we increased it in July to £500 by statutory instrument. Tribunals can still insist on a deposit, but the main reason we do not expect the power to be used frequently is that touched on by the hon. Member for Weston-super-Mare. Pre-hearings do not take evidence, so people are not able to exchange all details of the case. Although it will be a matter for regulation, it would be unwise to suggest that giving employment tribunals the right to strike out such cases at pre-hearings would mean that they would use it to a huge degree.

Philip Hammond (Conservative, Runnymede and Weybridge)

Presumably the Minister has identified a certain percentage of cases where deposits are required, but that is an inadequate response in cases that are so futile that they ought to be struck out. What percentage of cases that require deposits would he envisage being struck out under the new powers?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I cannot give a percentage because there are so few cases. Of the 299 pre-hearing reviews held during 2000-01, none of which were struck out because the power did not then exist, only one that was won by the applicant ended up before an employment tribunal. The vast majority were withdrawn or settled before the hearing. We are not talking about huge percentages. We are talking about a tidying-up amendment, because we believe that employment tribunals should have the power to strike out cases that

have no reasonable prospect of success, as well as having the power to order a deposit to be paid before a case goes to a hearing.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am slightly mystified. I presume that in proposing an amendment the Government are responding to a mischief that they have identified. The Minister seems to be telling us that he wants to give himself an additional power, but when asked what he will do with that power, he replies that there is no problem to address. I am therefore mystified about the motive for introducing the power.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

The motive is that many of those 299 cases, although not the majority—the majority will have been withdrawn on the basis that a deposit was ordered and the people involved decided not to take the case any further—will be struck out before the hearing.

The number of employment tribunal applications has trebled in the past 10 years. There is some tidying up to do, and we might as well address an anomaly at the same time. This amendment to the 1996 Act might help if the number of cases continues to rise. It would be quite wrong of us to create a system wherein cases could be struck out at pre-hearing reviews, which do not hear evidence, when the judiciary think that there is an arguable case that should not be struck out at a pre-hearing. To do so would be to deny people justice. Furthermore, if a case is struck out at the pre-hearing stage, the applicant or respondent will have the right of appeal to an EAT. That might answer some of the concerns that were voiced on Second Reading and by my hon. Friends.

Rob Marris (Labour, Wolverhampton South West)

The Minister's use of the word ''respondent'' raises another issue. Does that mean that the regulations will provide a two-way street such that the cases of respondents as well as applicants can be struck out for having no reasonable prospect of success, as is currently possible under the civil procedure rules?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

That important point needs to be clarified. My hon. Friend is correct: the procedure would apply to both respondents and applicants.

Mark Prisk (Conservative, Hertford and Stortford)

It is not clear whether the Minister is saying that the system of demanding a deposit is not operating sufficiently well, or that it is but the deposit is not high enough so the power to strike out cases is required.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

We increased the deposit from £150 to £500 only in July, so it is too early to ascertain what effect that is having on the number of cases that go forward. It is ludicrous to have a system in which it can be decided at a pre-hearing that a case has no reasonable prospect of success, but the tribunal nevertheless has to allow a full hearing to take place, although it can insist on a deposit. It should have the power to strike out the case at that stage if it believes that there is so little chance of success that it is not

appropriate even that a deposit should be paid and the case heard. That it does not is an anomaly in the system.

We are not making a radical change. We are tidying up employment tribunal procedures. It is questionable whether there was ever an intention to prevent employment tribunals from striking out cases at the pre-hearing stage. However, the reference in the Bill to preliminary consideration implies that there must be a full hearing, irrespective of how unreasonable and misconceived the case is. We are trying to tidy up that anomaly.

Philip Hammond (Conservative, Runnymede and Weybridge)

I do not wish to be pedantic, but the Minister made a significant slip of the tongue. He spoke about striking out a case that has so little prospect of success that the tribunal does not think it reasonable to allow it to proceed. I assume that he meant to say that it would be reasonable to strike out where there is no prospect of success.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I am happy to indulge in semantics—the hon. Gentleman is right and I apologise for my slip of the tongue.

While I am apologising I may as well mention a previous slip of the tongue. I am pleased that the hon. Gentleman said that there was very little difference between the affirmative and negative procedures, because I was thinking that the Committee had moved on to part 3. We are still discussing part 2, which is all dealt with under the negative procedure. I know that he will not worry about that, given that he perceives very little difference between the two, but it is important that I set the record straight.

The power to strike out exists at other stages in employment tribunal proceedings, but not at the pre-hearing stage. That is another aspect of the anomaly. It is important to stress that it will be appropriate to strike out cases in which the facts have already been either subject to litigation or settled, and the applicant has no fresh or different evidence but insists on pursuing the case. It is appropriate to strike out cases in which the facts are not in dispute, but the interpretation laid upon them is wrong. It is also appropriate to do so in cases in which a party's application is not itself sufficient to lead to a successful outcome and that party has stated at the pre-hearing review that no further evidence or witnesses will be called.

Those are examples of where tribunals could reasonably strike out the case. The clause will remove the anomaly. Amendment No. 42, which I think is a probing amendment, is unnecessary in that respect. I assure the hon. Gentleman that the strike-out provision will be in the regulations and I hope that on that basis he will withdraw the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister has given the assurance I sought. It is still not entirely clear to me how prescriptive the regulations will be on the question of when a case should be struck out and how much discretion the tribunal will have, but I suspect

that that might more appropriately be debated when the regulations have been published. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Philip Hammond (Conservative, Runnymede and Weybridge)

It is right that it should be possible to strike out or otherwise deal with vexatious or trivial cases in a way that does not impose huge burdens on either the tribunal system or on a respondent who is forced to prepare a proper case against an application that may be entirely without merit. We have heard a lot during our deliberations about the growth of the compensation culture—although I do not think that anybody apart from me has used that term. The idea that whatever happens, someone is always responsible and must compensate for it lies behind many of the problems.

To many people, bringing a case before the tribunal system appears at times to be an opportunity with a potential upside, but little potential downside—a lottery ticket for anyone who feels that he has a grievance to exploit. That is not to denigrate the large number of people who have genuine cases founded on real issues that need to be dealt with, but I do not think that the Minister is trying to deal with such people. The Bill is aimed at those at the margin who are abusing the process. The proposal is sensible, but the Minister's remarks do not make clear to what extent it will be used. I should have expected there to be a significant number of cases that could be struck out.

Let me make a suggestion to the Minister. He recently raised the maximum deposit from £150 to £500—no doubt that caused consternation in certain quarters. If the only weapon is a deposit of £150, to raise it to £500 is a dramatic change in the structure of the playing field. However, if another weapon—that of striking the case out altogether, so that the applicant and the respondent have no opportunity to put their case—is available, I question whether placing a maximum limit of £500 on the deposit makes sense.

If the tribunal holds the nuclear option of striking out the case altogether, should it not have a wider range of intermediate options such as higher deposits—or even unlimited deposits, at the tribunal's discretion? In such circumstances the tribunal might think, ''We could justify striking out this case, but we will instead set a high deposit''. If a company is involved and the case appears to be 99 per cent. cut and dried but a scintilla of doubt remains, should not the tribunal have the capability to say, ''We think this case could very well be struck out, but if the respondent is prepared to put up a substantial deposit because he believes that he has a case to present, let us allow him to do so''? I understand why the increase was limited to £500 maximum when a deposit was the only remedy, but I invite the Minister to ponder whether in a world where strike-out is a remedy, a higher cap on the deposit or an unlimited deposit at the discretion of the tribunal might be a solution.

Rob Marris (Labour, Wolverhampton South West)

The hon. Gentleman's suggestion is interesting but potentially counterproductive. I can envisage tribunals setting the larger deposit he suggests rather than striking out cases that should be struck out. The case would then go to a hearing and the applicant or respondent might lose that deposit. It is the nature of things that applicants and, perhaps to a lesser extent, respondents go to a tribunal only once. They might learn lessons, but in doing so they will clog up the tribunal system.

Philip Hammond (Conservative, Runnymede and Weybridge)

It might be counterproductive, but the clogging of the tribunal system is linked to resources, so the question of who gets the deposit might become interesting. If the tribunal system is reimbursed for its time and trouble, perhaps no harm is done. I make the suggestion because I cannot see the logic of having—if I may use a military analogy—on the one hand the nuclear bomb of strike-out and on the other hand a 1895 Lee Enfield self-loading rifle, with nothing in between. I wonder whether the Minister thinks a better-graded range of options should be available to the tribunal.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I am pleased that the hon. Gentleman recognises the value of clause 28. My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) is right. It is an enlightening statistics that the number of deposits ordered last year before the £500 limit came into effect—we are therefore talking about the £150 deposit—was 234, of which 48 were paid. On being told that they could take the case forward but that there was a deposit of £150, the majority of other applicants did not make the deposit. That statistic does not suggest that there is a problem, now that the limit has been increased to £500.

The hon. Member for Runnymede and Weybridge raises the interesting question of whether in the new situation where we have the nuclear option, we should do something else with the deposit. That matter would best be considered by the employment tribunal system taskforce, where reference can be made to precedence, users, representatives of small businesses, the TUC, the CBI and the Advisory, Conciliation and Arbitration Service. We have asked the taskforce to look at the good operation of the procedures, including the effect of the new procedures. I do not think we need to explore that idea; it is on the record and the taskforce is best equipped to consider it.

Question put and agreed to.

Clause 28 ordered to stand part of the Bill.

Clause 29 - Statutory dispute resolution procedures

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 79, in page 35, line 9, leave out subsection (b).

Joe Benton (Labour, Bootle)

With this it will be convenient to take the following amendments: No. 50, in page 35, line 16, at end insert—

'(c) make provision for the Standard Procedures to apply in classes of cases specified for that purpose in the order and for the Modified Procedures to apply in classes of cases specified for that purpose in the order.'.

No. 51, in page 35, line 16, at end insert—

'(c) make provision for the Schedule not to apply to certain classes of cases'.

Philip Hammond (Conservative, Runnymede and Weybridge)

Clause 29 provides for schedule 2 to have effect and subsection (2) gives the Secretary of State certain powers in relation to the way it takes effect. Schedule 2 provides the minimum statutory dispute resolution procedure. One of the abilities that the Secretary of State is given in subsection (2) is, in effect, to extend the application of the statutory dispute resolution procedure beyond employees.

That brings us to the now familiar debate about workers versus employees, which by the end of our proceedings will no doubt have become even more familiar. The subsection uses the rather bizarre means that were described in one of the briefings that I have received as ''impenetrable''. It provides, as only legislation can provide, that for the purpose of the Bill a person who is not an employee can be an employee and the person who is not his employer can be his employer. We move into an Alice in Wonderland world in which people are what they are not for the purposes of legislation.

It is not a small matter to treat someone as an employee when he is not, or to treat someone as a person's employer when he is not. I expect that other hon. Members will comment on the broader issues. I simply want to ask the Minister what classes of non-employees he intends to make employees for these purposes. Does he want to extend the scope of the clause to all workers? The term ''worker'' is perfectly well defined in law and we know what it means: we have had these debates before and we have legislation that refers to workers. If he is going to use the power to apply the statutory dispute resolution procedure to workers rather than to employees, and to the people for whom they work rather than to employers, he should have the courage of his convictions and say so now.

It is disingenuous to produce a Bill that refers to a procedure applying to employees and employers and that contains a clause that allows the Secretary of State to redefine the terms ''employee'' and ''employer'' so that they include people who are not employees and employers. If the Minister intends to use the power only at the margin to deal with hard cases or specific exceptions, we must understand precisely what he has in mind. If he intends to use it on a much broader scale to change the fundamental effect of the clause, we need to know that now, not later.

All of us as non-employee workers and Members of Parliament would like to know whether we will be caught within the scope of the clause. Many others who are not employees will also be interested to know that. To be honest, even more people who are not employers might be interested to know whether, for example, contractors to them will be brought within the remit of the statutory dispute resolution procedure. That would quite a startling change if it were to happen.

When we consider schedule 2, procedural questions may be raised about how the steps it describes would be carried out. We need to exercise our minds about the types of people who might be covered by any extension and how the procedure would deal with them. The Minister should—in the words of a trade union leader whom I quoted earlier—come clean about what he intends to do. If he intends to apply the procedure to workers rather than employees, he should use the word ''worker'' in the Bill.

Tony Lloyd (Labour, Manchester Central)

I am delighted to hear the well-argued case for extending the scope of the schedule made by the hon. Member for Runnymede and Weybridge. We are right behind him. That statement—I will not say U-turn—on behalf of the official Opposition is welcome. He has come clean and I congratulate him.

Philip Hammond (Conservative, Runnymede and Weybridge)

If I thought that the hon. Member for Manchester, Central (Mr. Lloyd) was right behind me, I would be exceedingly nervous. I have not made a case for extending the definition in the clause to workers. I have made a case for honesty in legislation and for the Government to come clean. It would be sneaky of the Minister to use the term ''employee'' and then redefine the word so that it incorporated a group of people who are not employees. That is not how legislation should be produced. I look forward to hearing the hon. Gentleman's contribution to the debate.

Amendment No. 50 deals with cases in which the standard procedure or the modified procedure are used. Schedule 2 contains a standard and a modified procedure for dispute and dismissal proceedings and grievances. It is not clear in the legislation—as opposed to the TUC brief, which may be authoritative but does not have the status of legislation—when one procedure or the other should be applied. Given the warnings that I issued to the Committee, I should be more careful, but I shall risk quoting the Law Society brief:

''The circumstances in which the Modified Dismissal and Disciplinary Procedure will apply are not specified in the Bill and this should be clarified. The government's response to Routes to Resolution suggests that it will apply in cases of gross misconduct. If this is the case then it is thoroughly misconceived. It mistakes what should be an exception for a very limited class of dismissals for gross misconduct for a general rule for all such cases. There will be cases in which it might be appropriate for an employer to dismiss without holding a hearing such as violence by the employee. But this will not be the case in the overwhelming majority of gross misconduct cases. In many cases the reverse will be the case—the very severity of the sanction of summary dismissal will require higher standards of procedural fairness before action is taken.

Again, the circumstances in which the Modified Grievance Procedure will apply are not clarified in the Bill and should be. The Government's response to Routes to Resolution suggests it should apply where the person raising the grievance no longer works for the employer.''

Those are important issues. Other bodies have expressed other concerns, but the Minister should place on record when the modified procedure will apply. Members of the Committee may then wish to probe the effect of that.

Amendment No. 51—perhaps slightly provocatively—provides a power for the Secretary of State by order to make provision for the statutory dispute resolution procedure not to apply in certain cases. I note that there is a power in subsection (2)(a) to amend schedule 2 which would enable the Minister to apply or disapply it to any classes or groups. The purpose of amendment No. 51 is to probe whether he intends to exclude from the provisions of clause 29 either any class of employees or employer—the Crown, for example—or any class of application or jurisdiction. There will be more to say about all those matters after we have heard from the Minister.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Let me start, as the hon. Member for Runnymede and Weybridge did, with amendment No. 79,which deletes subsection (2)(b). The statutory procedures currently refer to the ''employee''. As such, they do not apply to workers who are non-employees. The subsection gives the Secretary of State the power to issue an order that will extend the application of the statutory procedures to non-employees. On Second Reading, she announced that she would begin reviewing the law on employment status early next year. The Employment Relations Act 1999 says that the confusing distinction—generally, only decided by employment tribunals—should be reviewed.

The review will examine why certain parts of employment law apply to employees only, whereas other parts apply to the broader category of worker; sometimes there is no obvious reason for such a distinction. The review will give us an opportunity to consider the issue in its entirety. The hon. Gentleman asked me to come clean; I am coming clean about the review. The House has agreed to legislation that states that there should be a review.

The review could make recommendations about the application of the statutory procedures, or it could conclude that there should be no recommendations. As the Minister, I have no views at this stage. However, if it decides that the category of employee should be widened to include workers, it makes sense to retain flexibility in the Bill to cater for that situation.

Philip Hammond (Conservative, Runnymede and Weybridge)

I understand the logic of what the Minister said, but I disagree with his conclusion. If the upshot of the review is a decision that the term ''employee'' should be replaced with ''worker'' in all employment legislation, legislation will be needed to make that change in a whole raft of different statutes. There is no need to include a specific power in the Bill to make the change by order, because more general legislation will be needed if that is the review's conclusion. Independent of the review, does the Minister plan to make any order that would make someone who is not an employee subject to schedule 2?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

We are setting out a procedure for people to pursue discipline and grievance cases in every workplace. Schedule 3 sets out what the grievance and discipline subsections may cover. Some cover workers, and others employees. Someone could be pursuing a case through the statutory three-step procedure, which currently applies to employees,

about a grievance that applies to workers. They would fall outside the statutory three-step procedure, which is why we must have the order-making power.

To give an example, the right to be accompanied at discipline and grievance hearings applies to workers, as does the national minimum wage. We have framed the legislation in accordance with all the employment tribunal legislation for employees, who are those who have a contract of employment. This is a murky area. The order-making power is designed so that, if the review recommends it and we decide to extend ''employees'' to cover ''workers'', we do not have to make a different provision on who can pursue grievance and discipline cases through the three-step basic procedure.

Philip Hammond (Conservative, Runnymede and Weybridge)

I do not agree with the logic of the Minister's position. Is he saying that no order will be made under subsection (2)(b) until the review is completed?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Yes, I am. The clause is focused on a review that will commence early next year.

Amendment No. 50 concerns the application of the standard and modified procedure, and the hon. Member for Runnymede and Weybridge raised pertinent questions about how we intend to deal with them. It is important that I take a little time to explain this. Schedule 2 contains four statutory procedures. Two deal with dismissal and discipline matters, and two with grievances. Within each pair of procedures, there is a standard three-step procedure and a modified two-step procedure. We recognise that grievance and disciplinary issues come in all shapes and sizes. One set of minimum steps may not fit all circumstances, which is why there is a need to set out two types of procedure. The modified procedures are shorter and reduce the need to meet or, in the case of grievances, cut out the need to meet altogether.

The schedule does not specify in which cases the standard or modified procedure acts as the minimum. That will be set out by the regulations under clauses 30 and 31. The hon. Gentleman is right, and it would help the Committee if I explained Government thinking on the circumstances in which the two types of procedure will apply.

With grievances, we feel that the modified procedure should apply to former employees. Cases, most notably for constructive dismissal, are often taken after people have left their employment. It is impractical to insist that people in that group should return to their former place of work to discuss the issues in person. We must also recognise the fact that both parties will feel less need to invest time in dealing with grievances after the employment relationship has ended. For them, an exchange of correspondence should be sufficient as a minimum. That is the two-step procedure.

On dismissal procedures, the modified two-step procedure comes into play in dealing with the special case of instant, summary dismissal resulting from

extreme cases of gross misconduct. The circumstances may involve violence or serious criminal wrongdoing and will require an urgent response. The question at issue will be the fairness of the decision to dismiss. Reflecting that fact, the modified procedure provides for an appeal meeting to take place at the request of the employee concerned to review the decision. As I said, the regulations made under clauses 30 and 31 will define the circumstances in which the two sets of procedures will apply. The powers are contained in subsections 30(3) and 31(5)(a).

The hon. Member for Runnymede and Weybridge talked about impenetrable language. All of us who have to grapple with Bills would sympathise with that, but the powers are clearly set out. There is no need to use the order-making power in clause 29 for that purpose and the amendment is therefore unnecessary.

Amendment No. 51 deals with circumstances in which an employer or employee should not be obliged to follow the statutory procedures. Again, it is important to set out our thinking on that. The statutory procedures merely set out a minimum, and the schedule should therefore be seen as setting out the core elements of procedures that should be applicable in all or nearly all circumstances—I say ''nearly all'' because there will be rare cases in which it is inappropriate for parties to use even those minimum procedures. For example, it might be unreasonable to expect people to meet face-to-face in cases where a manager has assaulted or otherwise seriously harmed the employee—or vice versa, for that matter, since the exemption could work in the opposite direction, where the employee has acted violently towards the manager.

Exemptions might apply in other areas and we do not want to create unnecessary duplication of procedures. If an issue has been raised as a collective grievance, we see no reason why we should force parties to raise individual grievances on the same issues, such as in a sex discrimination case where a group of employees share a grievance about the employer's policy towards training or promotion, which has been taken up by their union as a collective grievance. In such circumstances, it would be more efficient to deal with the linked grievances collectively. In such cases, we would not want to require individuals to use the statutory procedure to bring separate cases.

We intend to set out special exemptions in regulations, again using the regulation-making powers in clauses 30 and 31 for that purpose. There is therefore no need to use the order-making power in clause 29, as the amendment seeks to do. All the orders and regulations in the clauses are subject to affirmative scrutiny. I am sure that no correction on that will be forthcoming; this time, I have the right part of the Bill. I hope that the hon. Gentleman will, in the light of my explanation, withdraw his amendment.

Tony Lloyd (Labour, Manchester Central)

I hesitated about whether I should follow the hon. Member for Runnymede and Weybridge in discussing workers and employees because it might be more appropriate to do so at another stage, but it is an important debate. The purpose of the clause, and of schedule 2, is to provide a regime under which disciplinary and grievance

procedures can go ahead. The definition of employee and employer is narrow and restrictive under the present law. A broader definition is used in other legislation, such as on the minimum wage.

My hon. Friend the Minister gave a commitment to the hon. Member for Runnymede and Weybridge on timing, stating that he does not intend to use subsection (2) before the review is completed. That commitment has been given to the Committee and is now in the public domain. All of us recognise that those who fall outside the definition of an employee are often the most marginalised people in the work force—although other non-employees can be among the best paid and best protected. There is a huge range of conditions among workers who fall outside the formal definition of being employed. However, those who are entitled to only minimum levels of protection are among the most marginalised people in the workplace.

I hope that hon. Members on both sides of the Committee agree with that point. When the hon. Gentleman winds up, perhaps he will say whether he accepts that there is a need to consider carefully whether we have adequate disciplinary and grievance procedures for those who will not be covered if my hon. Friend does not at some point use the subsection.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am grateful to the Minister for clarifying the issues raised by amendments Nos. 50 and 51. That was helpful, but he did not address the point raised by the Law Society. I deliberately quoted its brief, rather than paraphrasing it, because I wanted to put the Law Society's view in the forum of the Committee in the hope that the Minister would respond. I was not necessarily endorsing its view, but I quoted it in the pursuit of knowledge. The issue is still dangling and needs to be addressed.

I was interested in what the hon. Member for Manchester, Central said about amendment No. 79, and I was pleased that he raised a concern that Conservative Members have had for some time. There is a myth that everyone who is a worker but not an employee is part of the downtrodden and oppressed. I could give examples of people who fall within the definition of worker and are not employees who are far from downtrodden and oppressed, as the hon. Gentleman made clear.

In an increasingly flexible and fast-moving economy, there will be people who, for their own interests and those of the companies for which they work, wish not to be employees. Admittedly, the Paymaster General recently made the attraction of not being an employee somewhat less than it was for a number of those people. If we are going down the route of reviewing the distinction between worker and employee, I agree with the hon. Member for Manchester, Central that there needs to be a clear distinction between people who, according to any reasonable interpretation, have the character of employees but have been excluded from that definition by subterfuge, and people who are genuinely not employees.

The National Minimum Wage Act 1998 uses a definition of worker. Although interesting philosophically, the issue is not particularly important

in practice, because by definition those highly paid people who are not employees but are workers will not be caught by the minimum wage. As I recall, we had various interesting discussions about whether people such as computer programmers were covered by the minimum wage, which will always be of purely academic interest unless the supply and demand balance in the market changes dramatically.

When we consider employment law more generally, however, that point will become more important. My colleagues and I resist the temptation offered by some Government Members to go with the broader definition of worker for everything. However, I think that I can safely say that in doing so, we are not seeking to defend those who artificially exclude people from the protections of the status of employee by subterfuge that the Inland Revenue should be seeking to unravel.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

IR35.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am sure that you would not welcome a broad debate on IR35, Mr. Benton, but it is massively over-simplifying matters to suggest that that debate is only about people trying to avoid tax.

Our concern is primarily to avoid creating sclerosis in a fast-moving economy in which sectors are changing and evolving quickly, and where employers need to engage the services of highly skilled individuals in a flexible way but, for all sorts of legitimate reasons, may not be able to burden themselves with the continuing obligations of employment imposed by the full panoply of employment protection laws.

One would hope and expect that those individuals would be suitably remunerated for not having the kind of protections and security that someone with employee status would have. That concern with maintaining flexibility at the cutting edge of the economy drives Opposition Members' arguments.

Tony Lloyd (Labour, Manchester Central)

I am tempted to ask whether the debate on the minimum wage was academic, as the hon. Member for Runnymede and Weybridge said. I freely confess that I did not sit through consideration of the Bill in Committee, but I am well aware that tortuous debates took place. I could ask whether that was a valuable use of parliamentary time, but let us move beyond that.

The Opposition are often characterised as being hostile to those in the work force, whether they are called employees or workers, as they seek to offer levels of protection to those in an employment role. I do not want to get involved in the legal definition of ''employment role''. We are making progress this morning, and it is helpful to place that on the record.

I concede that there is an argument about how we maintain flexibility in the work force and what is the right balance. In what circumstances would the hon. Gentleman consider it right and proper for someone, who by all reasonable definitions has an employment relationship with someone who seems to be an employer, to buy access to adequate disciplinary and grievance procedures? That is a worrying issue. Disciplinary and grievance structures are fundamental

to the workplace, as is the right to protection against abuse, whether someone is well paid or badly paid, flexible or inflexible.

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman makes an interesting point. I have no doubt that we will have the opportunity to debate it in some depth. One would expect a self-employed contractor—for example, an information technology specialist—to have a contract that gave him the protection that he needed and that defined his obligations. That contract would not be a contract of employment, but would give him appropriate remedies. Those remedies would not be available through an employment tribunal, unless the Minister were to use the powers under discussion to broaden dramatically the scope of the definition of employee, but they would be available to him through the usual operation of contract law.

Opposition Members may not have argued the case in the past, but we have reached a consensus that where the contract is a contract of employment, it is proper for the general law to underpin the standards and procedures that will be followed in that relationship. In other words, there is a broad acceptance that statute law should intervene and override the contract between the employee and the employer. The Bill also implies something that is defined in a statute into the terms of a private contract between employer and employee. I hope that we will not start implying all sorts of general law into the terms of other types of contracts.

I am not a lawyer, and I stand to be shot down, but my perception is that where our continental colleagues have gone wrong is in the introduction, through the commercial codes that many European countries have as part of their civil law, of certain implied conditions and rights into contracts that are in this country freely negotiated between parties—for example, by the supplier of a specialised service to someone who wishes to contract that service. I have worked in Germany, and on one occasion benefited from the fact that the German commercial code in civil law gave me rights that I had not negotiated in my contract, but I do not think it is a helpful route to follow.

I should be happy to have a debate with the hon. Member for Manchester, Central about where the boundary should be between employee-employer relationships that are properly regulated by statute, and relationships that should not be invaded by statutory interference in terms of the right to enter into a private contract bargain. I suspect from the tone of our exchanges this morning that that debate might not be as acrimonious and adversarial as some might expect.

Tony Lloyd (Labour, Manchester Central)

Let us put it to the test, as this is a good time to have that part of that debate. Most people would understand intellectually what the hon. Gentleman said. I suppose that his defence of amendment No. 79, which I accept is a probing amendment, would be that it is an objection in

principle to widening arbitrarily the scope of the law, not necessarily specifically about schedule 2 and grievance and disciplinary proceedings.

The hon. Gentleman makes an important statement on behalf of the Opposition in the reasonable tone that he has used throughout our proceedings. Is he saying specifically that he would accept—this is the nub—that a minimum grievance in disciplinary procedure should be there for all people in the workplace who have something that looks like an employee-employer relationship, whether that is defined by law or otherwise? Should that be one of the minimum basic standards? That is not a trick question, and the hon. Gentleman may want to reflect on it and answer it on Third Reading. It would be an important part of progress because my experience is that Conservative Governments were not of that benign view. There was a concerted attempt to erode standards, and disciplinary and grievance processes were open to erosion like everything else. It would be helpful to all sides of the political debate.

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman is asking one question that is easy and one that is difficult to answer. The easier question is whether people who are employees have certain minimum standards of protection, and the answer is clearly yes. There is consensus on that issue. The more difficult question is where is the boundary. When the hon. Gentleman talks about people in the workplace who have the characteristics of an employee, we may be in some difficulty.

I said during the National Minimum Wage Bill debates that having been a self-employed person, I am acutely aware that the body with the greatest and most penetrating interest in where the division lies is the Inland Revenue. It was difficult for Ministers during the passage of that Bill to argue that a person whom the Inland Revenue was prepared to regard as a self-employed contractor was, for the purposes of that Bill, more akin to an employee. I know from experience that the Inland Revenue is fairly aggressive in seeking to define out self-employed people if it thinks that they have the characteristics of being employed. The Inland Revenue has a fairly long checklist that one is supposed to use to test whether the relationship is one between employee and employer or pertains to a self-employed contractor.

My starting point would be that of the Inland Revenue, which has clear fiscal self-interest in defining people as employed. If it concludes that a person is self-employed, it would be difficult for the Minister or the hon. Member for Manchester, Central to argue that he should be treated as an employee. IR35 notwithstanding, the Inland Revenue has sought to extend that boundary for reasons related to national insurance contributions.

Mark Prisk (Conservative, Hertford and Stortford)

For people who are earning a living to have the best standards, the challenge must be to improve best practice, not seek more legal processes. The Industrial Society says:

''The best means of ensuring management improves its performance is to promote awareness of the cost benefits of good management and to provide guidance on good practice especially among small employers.''

Does my hon. Friend agree that promoting best practice is often the better way?

Philip Hammond (Conservative, Runnymede and Weybridge)

My hon. Friend makes a good point that applies across the piece. On Second Reading, the Secretary of State told us that business should not worry about the new procedures because they would be good for business, despite the fact that they resembled burdens. That is patronising. It is incumbent on government to persuade. I am sure that my hon. Friend the Member for Hertford and Stortford (Mr. Prisk), who has knowledge of small business, will agree that changes in management practice beneficial to employers and employees create a win-win situation. The Industrial Society is dedicated to promoting those changes and we welcome that.

Joe Benton (Labour, Bootle)

I have gone on at some length—

Ian Pearson (Labour, Dudley South)

Yes.

Philip Hammond (Conservative, Runnymede and Weybridge)

It is disappointing to hear the Government Whip say ''Yes'' in such a grudging tone when I make self-deprecating remarks.

I say to the hon. Member for Manchester, Central that we have started the debate on a sensible basis and that I look forward to furthering it without relying on the dogmatic positions that have characterised debate in the past. I hope that we can find a solution that deals with the mischief of employees being otherwise categorised for dishonourable purposes. Furthermore, I hope that we can do so without creating inflexibility in the economy, which I have experienced elsewhere in Europe. I shall withdraw the amendment so that we may debate that later.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

My very good and hon. Friend the Member for Dudley, South (Mr. Pearson) was being mean-spirited. That is a prerequisite of working in the Whips Office, so we do not blame him for that. It was an interesting debate. For a moment, I thought that if we could lock the doors and carry out the review of employee versus worker, we could reach a good settlement. Unfortunately, we cannot.

The hon. Member for Runnymede and Weybridge will be aware that the law of contracts predates the Inland Revenue, and taxation itself, by several centuries. The Inland Revenue is not going to help us in that area. My hon. Friend the Member for Manchester, Central raised a crucial issue in relation to the grievances and discipline procedure. Previously, groups of workers have been treated like second-class citizens in the workplace. This applies to both sides. My former union categorised part-time workers as class B members. Full-timers were class A; that is a message about how much those workers were valued.

Philip Hammond (Conservative, Runnymede and Weybridge)

As the Minister is talking about the recategorisation of workers, perhaps he would like to say something about the Post Office's proposal that some of its employees should become self-employed if they wish to remain in service.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

No, I would not like to, though I am tempted. It has nothing to do with amendment No. 79.

I was interested to hear the hon. Member for Runnymede and Weybridge say that workers should have basic minimum standards of protection; that is certainly progress on the previous approach from Conservative Ministers and Opposition spokespeople. My hon. Friend the Member for Manchester, Central raised the important point that if we agree that people in the workplace should have recourse to airing grievances and resolving discipline cases because it makes them feel valued as part of the work force, we must ensure that we do not exclude certain groups.

We are making this provision on the basis of a review that has not yet taken place. An important facet of that review must be where and how those currently categorised as workers, not employees, who are therefore not covered by some of the provisions set out in schedule 3, deal with a grievance. How does a discipline case apply to them? That is why the Secretary of State has made this provision to ensure that we can feed the review's conclusions into the basic three-step procedure.

Mark Simmonds (Conservative, Boston and Skegness)

Will the Minister mirror the review's conclusions in the regulations or will he make a decision based on its conclusions?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I have given an assurance that we will do nothing before the outcome of the review. Where that review goes and how we deal with it is a matter for another debate. That would come under the Employment Relations Act 1999 rather than the Bill. The hon. Member for Runnymede and Weybridge raises an important point. We have had a fascinating debate on a matter to which we shall probably return at a later stage. I am pleased that the hon. Gentleman has agreed to withdraw his amendments. We can proceed on that basis with my categorical assurance that I will not pre-empt the review's outcome.

Joe Benton (Labour, Bootle)

I take it that the hon. Member for Runnymede and Weybridge still wishes to withdraw the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am sorry, Mr. Benton. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 45, in page 35, line 18, at end add

''and any other organisation representing persons appearing to the Secretary of State to be likely to be affected by the order.''.

On reflection, I am not entirely sure that I agree with the Minister's assertion that the law of contract predates taxation. That would be pushing it a bit. It takes us into another philosophical debate that goes back about 10 centuries.

Amendment No. 45 is simple and in line with the previous amendment. It would require the Secretary of State, before making an order under clause 29, to consult not only ACAS, but those representing persons or classes of persons likely to be affected by the order. In practice, that would be employers' organisations, tribunals user groups, and so on. I suggest to the Minister that, in the spirit of openness and consultation in framing secondary legislation, that is entirely reasonable.

If we are to depend increasingly on secondary legislation, as apparently we are, there must be a process of consultation with outside bodies. When a Bill receives its Second Reading, outside organisations are galvanised into sending briefings to Members. By and large, regulations do not provoke the same awareness and interest outside this place. Admittedly, even Bills do not always provoke the awareness that they should. In the past two weeks, I have spoken to two senior governing members of one of the country's major employers' organisations, neither of whom was aware of the proposal to introduce extended statutory maternity leave, which is in the Bill, although their organisation has said that it will accept the proposal. We have a problem with awareness among people outside the House who might have useful and important views to put forward.

That problem is even worse when it comes to regulations and secondary legislation because of the lower profile. Therefore, the Secretary of State should be obliged to consult those whom it appears to him would be likely to be affected. That is not terribly onerous or prescriptive. Indeed, I am picking my words from my memory of—I think—the Care Standards Act 2000, in which the relevant State of State was comfortable with the concept of having to consult those who would be affected by the order before making it. The Secretary of State does not have to follow their recommendations, but we believe that he should consult them as well as ACAS before introducing proposals. That is reasonable, sensible and in the spirit of conciliatory employment relations. It recognises that ACAS is not the only player on the field.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I am sorry to tell the hon. Gentleman that I will resist the amendment, although I understand the logic behind it. We consulted widely on the proposals and the three-step procedure, and it is rather depressing to hear his comments. The statutory procedures represent a major innovation. This is the first time that such procedures have been set out in statute, and we recognise that we may need to amend them in future.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister is making my case for me. He just said that he consulted widely on the procedures in the Bill. I am objecting to him having the ability to amend them without consulting widely again.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I wish that the hon. Gentleman would be patient and let me finish the various points that I have to make. It was important to make it clear that there was wide consultation before we set the three-step procedure in legislation. It is important also to emphasise the radical change that is taking place. About 900,000 micro businesses will be affected by the change, as well as many small businesses.

If the Secretary of State wants to change the procedure, he or she would have to consult ACAS before introducing an order. ACAS has unparalleled knowledge of employment relations practices. Its views and procedures are always instructive and rooted in its wide experience of workplace behaviour. I am not suggesting that the hon. Gentleman is saying that there is anything wrong with that, but he is suggesting that the Secretary of State should consult more widely on every change. As a general rule, I would expect the Government to consult other organisations as well when exercising the powers. That would certainly be the case if major changes to the procedures were envisaged. However, the amendment would require us, unnecessarily, to undertake such consultation on each and every occasion that changes were made. Consulting business about minor drafting changes would impose an unnecessary burden, to coin a phrase. We wish to avoid consultation overload—that is an expression that we can all understand.

We also have practical problems with the broad-ranging wording used in the amendment, which requires us to consult any organisation that represents people ''likely to be affected.'' Our intention is to undertake consultations with as many affected groups as we can identify. However, many thousands of organisations—large and small, national and local—could fall into the category.

Any Government would almost certainly fail to meet a statutory consultative requirement such as the one in the amendment. In principle, there is nothing wrong with the suggestion that we should consult widely, particularly if major changes are taking place. We will always consult ACAS, which has representatives from business and a variety of groups and organisations. However, we do not feel that the amendment helps at all; instead, it would create problems. With those assurances, I ask the hon. Gentleman to withdraw his amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister spoke about consultation overload. The Opposition are more concerned about legislative overload. If he would address that, consultation overload would take care of itself.

The Minister quoted selectively from our probing amendment. Its purpose is not to require the Secretary of State to consult every person who might be affected—that would be absurd—but to consult

''any other organisation representing persons appearing to the Secretary of State to be likely to be affected'',

which is less onerous. I did not expect the Minister to accept the amendment. However, I hoped that he would say that, in practice, his intention would be to undertake appropriate consultation whenever an order was proposed, not only with ACAS but with others. I accept that he cannot consult with every organisation and person, but he should try to get views other than those of ACAS only.

Furthermore, consultation should take place before an order is drafted, not when it is a fait accompli. In a completely different area of the brief, I have recently become aware of a statutory instrument that had been drafted in final form and was ready to be laid. It had not been discussed with a major player in the industry, which identified a serious flaw in it. I understand that negotiations are taking place to amend it. We must bring expertise from the outside world into the process at an early stage to avoid badly drafted regulations.

The Minister has not assured me that he will consult appropriately whenever a substantive change is proposed. If he were to confirm that, I would be happy to withdraw my amendment.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Let me say again that the Government would expect to consult other organisations if major changes to the procedures were envisaged.

Philip Hammond (Conservative, Runnymede and Weybridge)

That invites the question of what is a major change. However, I suspect that we will have to be content for the time being. The amendment has served its immediate purpose of getting the Minister to confirm that consulting ACAS is not an alternative to broader consultation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Philip Hammond (Conservative, Runnymede and Weybridge)

I do not question the definition of a minimum statutory procedure. However, several briefs supplied to Committee members raise the question of interaction between statutory procedures and the ACAS code. Before the Committee agrees that the clause stand part, the Minister should explain how the statutory procedure and ACAS code will interact.

The consensus is that the statutory procedure is weaker than the ACAS code, which is as it should be because that procedure provides a minimum acceptable baseline. The explanatory notes were particularly unhelpful on that. The parliamentary Labour party brief, which is occasionally illuminating, states explicitly that the ACAS code will have to be modified to include the statutory procedure. Will the Minister outline the modifications to the ACAS code? Will he also explain how the two systems will work in tandem, given that the statutory procedure relates to employees and the ACAS code relates to workers? How will those difficulties be resolved?

I am unhappy with the Secretary of State's power in subsection (2)(a) to amend schedule 2 by order. I did not table an amendment because my unhappiness did not arise until after the rise of the House on Tuesday. That power makes a mockery of including the original procedure in the Bill, because the Secretary of State can delete and replace it. He could delete the contents of schedule 2 and replace it with the ACAS code. Some of his hon. Friends may urge him to do so. We must know whether the Minister has such radical intentions. We are considering the minimum statutory procedure in schedule 2, but lurking in clause 29(2)(a) is the power to amend by order the whole procedure. The Minister should be up front about his intentions. If he intends to bow to pressure placed on him and the Secretary of State to go further than schedule 2, or extend it in the direction that I suggested, the Committee must know. Schedule 2 is the procedure intended, which makes me nervous about the powers in subsection (2)(a).

Rob Marris (Labour, Wolverhampton South West)

The hon. Gentleman referred earlier to the risk of sclerosis in industrial relations and the economy. Schedule 2, when the Bill is enacted, will be implied in every contract of employment for every employee. If for reasons unenvisaged in the House or Committee it was found not to work, we would face sclerosis unless the Secretary of State had the power to amend it. It would be quicker for him to use such a power than to go through the procedures of the House.

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman makes an interesting point. The power to change things by diktat is always quicker than the power to change them by persuasion and democratic discussion. It is that balance that we must address. Some of us on the Opposition Benches feel that the tendency over the past four years to include provision for Secretaries of State to amend virtually everything in every Bill is quite dangerous. The hon. Gentleman makes a valid point. If something is not working or circumstances have altered and it is agreed that a change is needed, powers for the Secretary of State are an efficient means to rectify that. Democracy is often the enemy of efficiency and we must ensure that we get the balance right.

The purpose of raising the issue, and it has not been raised as an amendment, even a probing one, is to invite the Secretary of State to make it clear that he has absolutely no intention of using subsection (2)(a) to make wholesale changes to schedule 2 and that it is a reserve power to deal with minor changes that might be required. Ideally. I should like to hear that the Secretary of State would regard it as morally wrong to use that power to come back with changes to schedule 2 that changed its effect, meaning or impact. It is right to use the powers to make marginal and technical changes, but it would be wrong to use them to change things in a way that is so fundamental that it renders our consideration of the Bill meaningless.

Rob Marris (Labour, Wolverhampton South West)

When the hon. Gentleman responded to me earlier, he talked about the balance between democracy and efficiency. I do not accept that there is one, although there can be a difficulty striking a

balance between democracy and speed. My understanding is that under the proposed subsection the Secretary of State would make any changes to schedule 2 by order. Perhaps the Committee will forgive me as I am a new Member, but I thought that that meant, since we are on part 3, that the affirmative procedure would have to be used.

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman is right, technically. Changes would be subject to the affirmative procedure. I do not know whether the hon. Gentleman has attended any Standing Committees on a statutory instrument but once he has he will realise that it is not an effective scrutiny process in any meaningful sense. Taking 90 minutes in a Committee Room is not the way to scrutinise any substantive changes in legislation. That method is quick and effective for minor technical and tidying-up amendments or when a problem has arisen and there is a consensus about the solution.

The Minister would help the Committee a great deal if he could confirm that he will rule out using the power under subsection (2)(a) to perform any dramatic transformation of schedule 2 that would upset outside bodies that have said that they are broadly happy with it. I do not want the Committee's unopposed approval of the clause to sanction a Bill that says on its face, ''We will do X but we reserve a power to change X into Y if the Minister has any intention of doing that.'' I know that the Minister has come under pressure to look at that point. Does he have any plans to use the power to amend schedule 2 to substitute parts of the ACAS code for the schedule?

Tony Lloyd (Labour, Manchester Central)

I am probably doing the Minister a favour by rising now. I doubt whether he will be able to answer those questions before we adjourn. The hon. Gentleman has raised a number of important issues—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee F

Clause 29 - Statutory dispute resolution procedures

Tony Lloyd (Labour, Manchester Central)

We have had an interesting debate on clause stand part. The hon. Member for Runnymede and Weybridge (Mr. Hammond) took an interesting line and I would be pleased if my hon. Friend the Minister would respond to that because there is genuine concern about the gap between schedule 2, which becomes the basic minimum standard of disciplinary and grievance procedures, and the Advisory, Conciliation and Arbitration Service's existing code of conduct. That code of conduct does not have statutory backing, but has similar force in that any industrial tribunal would consider itself bound by it.

The hon. Member for Runnymede and Weybridge referred to the legitimacy or otherwise of secondary legislation being used to introduce amendments to the schedule. I hope that my hon. Friend the Minister will resist the temptation to say that it is illegitimate to make changes in that way. I heard that argument deployed many times when my party were the Opposition, only to be rebuffed, and probably more casually rebuffed than the way in which my hon. Friend will rebuff the hon. Gentleman.

It is right and proper that there should be parliamentary scrutiny and the interesting question is whether that should be done in secondary legislation or in a similar way to the ACAS code, which has no backing from debate in the House. Most people believe that the ACAS code was well discussed and I am the first to argue that it is not always necessary for such matters to go through the House, but it would be an improvement for the provision to be discussed through the secondary legislation mechanism.

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman is addressing the question of whether secondary legislation is more or less legitimate than primary legislation and I shall not pretend that I have never argued that case. However, my specific point to the Minister was that it would be dishonest to introduce a schedule if the Minister intended soon to use his powers to amend it by order to change it radically and fundamentally. I was asking for an assurance that he had no such intention and, for example and specifically, that he was not minded to replace the schedule before us with the ACAS code as an amended schedule 2.

Tony Lloyd (Labour, Manchester Central)

The hon. Gentleman made precisely that point earlier and I am not trying to impute words to him. I had hoped that, as with our debate on workers and employees, when the hon. Gentleman seemed to be moving our way, he was urging the Government to go beyond the schedule towards the ACAS code, as I shall urge the Minister to do.

It is absolutely legitimate for my hon. Friend to place before us the opportunity to debate changes. The hon. Gentleman was a little dismissive as to whether 90 minutes' scrutiny in Committee would make a difference, but the important point with majority governance, as in this country, is not whether Governments get their business through—they do, as they should, because they have a majority—but whether they must put it to proper scrutiny with the possibility of full public knowledge of what has taken place. That is the important issue and the Minister has ensured that there will be adequate opportunity for the Opposition to pick up any sleight of hand. Changes will not simply slip through bureaucratic mechanisms. The hon. Member for Runnymede and Weybridge will have every opportunity to debate them.

The important issue is the disparity between the new schedule and the existing ACAS code. As the Committee is aware, the ACAS code has an effective force and the tribunals are presently bound by it. It has what is tantamount to legal status. There is certainly a gap between the present schedule 2 and the ACAS code. I would be grateful if the Minister could tell us why that gap exists, and why the code was not adopted as schedule 2. Many of us would argue the code has provided the status quo in tribunals in the past, so why not simply lift it across so that everyone knew where they stood.

We could have had a debate with Opposition Members about how they wanted to diminish the ACAS code. It would have seemed right to me to have had a debate that looked at the ACAS code, and to have said where it was too luxurious and where it was too protective of employers or employees. We could have also considered where we needed to reduce the code. Instead, we got something rather different.

The fundamental point is that, if it is legitimate to offer something different to the existing code, the change will, for the first time—and I applaud it—oblige all employers to offer a disciplinary grievance system to their employees. Our concern, however, is that not only does it fail to come up to the ACAS standard, but that it may be used in place of the ACAS code before the tribunal. Anybody arguing for either party in the tribunal is bound to argue that Parliament has decreed that schedule 2 is the basic standard. They will say that the ACAS code goes beyond that standard, and it is no longer legitimate. Yet the tribunal must now be bound by the ACAS code, and that is a real concern.

My overall point, then, is to ask why the ACAS code has not been put into the Bill. Will that not result in the erosion of use of the ACAS code before the tribunal?

My final point, as I promised the hon. Member for Runnymede and Weybridge, is that I must urge the Minister to make it clear to the hon. Member for Runnymede and Weybridge that he will introduce the ACAS code at the earliest opportunity in place of the existing schedule.

George Osborne (Conservative, Tatton)

May I say, Mr. Conway, what a delight it is to serve under your chairmanship in this Committee? No doubt, I shall serve under your chairmanship on many more Standing Committees during my career.

I wanted to pick up on some of the points that the hon. Member for Manchester, Central (Mr. Lloyd) made about the ACAS code, and to expand on the points made by my hon. Friend the Member for Runnymede and Weybridge. No doubt the Minister has received the briefing notes sent to the Standing Committee, so he will know that the Engineering Employers Federation says:

''As currently drafted, the proposals are unclear, complicated and might prove counter productive. For example, the relationship between the new statutory procedures, the existing law on unfair dismissal and existing ACAS Codes of Practice is confusing and therefore unsatisfactory.''

The Law Society said:

''We are concerned that the new procedures . . . will undermine the ACAS Disciplinary and Grievance Procedure Code.''

The Trades Union Congress expresses its concern, with others,

''about the confusion between the proposed minimum standards and the widely supported ACAS Code.''

In my view when the Engineering Employers Federation, the Law Society and the TUC agree on something, the Government have a problem. I would be very interested to hear how the Minister proposes to reconcile the problems with the ACAS code.

That does not necessarily mean that I agree with the hon. Member for Manchester, Central, that the ACAS code should take the place of schedule 2. In fact, I welcome the more streamlined approach set out in schedule 2.

I have other specific questions on schedule 2, the first of which concerns cases of sexual harassment. Figures from the Equal Opportunities Commission—I am relying on my memory here—suggest that 30 per cent. of sexual harassment cases involve a case against the individual's line manager and a further 30 per cent. of cases involve the boss of the company against whom the person is bringing a sexual harassment case. Are the Bill's procedures correct for such cases? It would be distressing for someone bringing such a case to find themselves going over the mechanics of what had happened with the very person against whom the case had been brought.

Later, we shall discuss how the Bill will apply to small businesses. How would schedule 2 operate for a company of only two people? Many small businesses are that size—one employer and one employee. A person could be a situation in which he or she had a grievance, discussed it with the employer and had to go through the charade of a formal dispute resolution process with the person against whom the complaint had been brought. Although schedule 2 may be applicable to larger companies, how can it possibly work for very small ones?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I welcome you, Mr. Conway, to Standing Committee F for fun, and look forward to serving under your chairmanship. I am pleased that the hon. Member for Tatton (Mr. Osborne) raised such an important point. As my hon. Friend the Member for Manchester, Central said, many hon. Members have raised concerns about how the basic three-step procedure will sit alongside the ACAS code.

We are introducing basic discipline and grievance procedures for every workplace in the country. As the hon. Member for Tatton said, the workplace with one employee would be covered. In that circumstance, we believe that setting minimum standards is right. The ACAS code has 66 clauses as opposed to the Bill's 53 and currently, 48 per cent. of employers who go to an employment tribunal do not have internal procedures. Jumping straight from that situation to the best practice of the Bill would be wrong and difficult for small business to cope with. We have set out a minimum three-step procedure because that is the right direction in which to move; it provides a minimum standard, just as the minimum wage sets a minimum yet is not intended to bring everyone down to that wage. There is no evidence that setting a minimum wage or any other minimum standard drags everything down to the minimum.

Philip Hammond (Conservative, Runnymede and Weybridge)

Having listened to my hon. Friend the Member for Tatton, the hon. Member for Manchester, Central and the Minister, I want to ask whether the Government have considered, at any stage, whether a different minimum procedure should exist for larger employers than for smaller ones. Has the Minister considered that the ACAS code could be appropriate for larger employers, but schedule 2 would be more so for smaller ones?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

We considered that, but it would be unnecessary because employment tribunals draw such a distinction. At the moment, we have a best practice code. My hon. Friend the Member for Manchester, Central said that there was no parliamentary element to that, but the regulations are laid before Parliament and must go through the affirmative procedure. That happened as recently as last September for the revised code. We live in a world where many employers do not have basic minimum standards. The employment tribunals service makes a distinction between large or medium-sized employers, which should have recourse to best practice, and small employers, which it understands move in a different world for the reasons mentioned by the hon. Member for Tatton. There is no need for us to take a sledgehammer to crack that particular nut.

The hon. Member for Runnymede and Weybridge asked about secondary legislation, and I am glad that my hon. Friend the Member for Manchester, Central picked up the point. It is the Opposition's job to bemoan the fact that the Government introduce so much secondary legislation, and I have no doubt that they will continue to do so for many years.

The hon. Member for Runnymede and Weybridge said that his point occurred to him after business closed last night, which is why there is no amendment, but it would have been impossible for us, as I am sure that he will accept, to set down a power to make minor changes because we either have the power or we do not.

The hon. Gentleman asked whether we have plans to change the minimum standards to the ACAS code once the Bill is through. We have no such plans. We have consulted widely and we believe the minimum standards to be correct and fair because they resolve the lacuna in the legislation concerning the right to be accompanied. We are dealing with that issue in a way that is fair to all sides, provides a light touch and takes small businesses' problems in account. The Bill will not undermine the ACAS code, which will continue to be the benchmark for companies in cases in which the employment tribunal believes it to be appropriate.

Tony Lloyd (Labour, Manchester Central)

That is one of the nubs of my concern. I am proud to say that I am not a lawyer, but I have been briefed by my hon. Friend the Member for Wolverhampton, South-West on the intricacies of the case. The Law Society brief on the matter states:

''A failure on the part of any person to observe any provision of this Code of Practice does not of itself render that person liable to any proceedings. In any proceedings before an employment tribunal any Code of Practice issued under sections 199 and 201 of the Trade Union and Labour Relations (Consolidation) Act 1992 is admissible in evidence and any provision of the Code which appears to the tribunal to be relevant to any question arising in the proceedings is required to be taken into account in determining that question.''

My hon. Friend the Minister tells us that there is no evidence that minimum standards erode better standards, and that many good employers will continue to operate the ACAS code. The question is whether the tribunal, which has a responsibility to consider the ACAS code, will be supplanted by a new Act of Parliament that will make it explicit that the tribunal must consider schedule 2 as the minimum standard. It seems obvious to me as a non-lawyer that people will argue that the tribunal must ignore the ACAS code and instead operate schedule 2.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

That is an important point, and the Government will ask ACAS to revise its code, which will be set before the House and be subject to affirmative procedures, to take account of that development. We must do that because many aspects of the ACAS code must be changed as a result of the Bill. ACAS draws up its code in absolute independence, which is an important element that must be preserved. When the Bill becomes law, it will significantly change the legal framework within which the code is set. It will therefore be essential to revise the code to reflect that new framework.

I envisage the revised code providing practical advice on these three issues. First, it can give practical advice on how to follow the statutory procedures on, for example, ensuring that meetings are reasonably conducted.

Secondly, ACAS guidelines can identify where other procedural actions might be beneficial, for example, how informal discussions can be handled or investigations instigated. Thirdly, I hope that the code can be revised to give more tailored advice to small organisations entering the field for the first time.

Norman Lamb (Liberal Democrat, North Norfolk)

From the description that the Minister has given of what he envisages the amended code as containing, it seems that it will in many ways amount to a downgrading of what is presently in the ACAS code. Does he agree that it is bound to be downgraded given that, in future, a failure to follow procedural steps beyond the basic statutory ones will not render a dismissal unfair unless it would have made a difference to the outcome? That reverse of the Polkey point must be a downgrading of the ACAS code.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I do not accept that at all. That point refers to clause 34, but it is relevant. I would turn it round the other way. To dismiss without recourse to the three basic steps under the Bill will automatically be unfair. Those steps cover the major reasons why the Polkey case is used at the moment: there was not an appeal or an explanation of what the offence was. This is only a partial change of Polkey, but we will debate that when we come to clause 34.

I do not accept at all that this will drag everyone down to the minimum standard. I can understand the concern, or I would understand it were ACAS to have no further role, but it will have a role. It will revise the code of practice that will come before this House. The ACAS advice is still relevant to consideration of disciplinary issues, and the tribunals can take the code into account when assessing the fairness of dismissals.

Had we tried to introduce the ACAS code as the basic three-step procedure, it would have caused a great deal of concern. Businesses, to a large extent, accept that. They are not pleading it as another burden on business. They understand the point but they need some help with the issues because they too often end up in front of an employment tribunal when they could have sorted matters out domestically. To start with the basic minimum three-step procedure, to continue to have ACAS involvement and to have the best practice guidance for the new situation drawn up by ACAS will pull things up to the best practice, not drag them down to the minimum standard. I do not think that we should be concerned.

Mark Prisk (Conservative, Hertford and Stortford)

I want to clarify something. From what the Minister says, do I understand that any small employer—we have talked about small businesses, but there are many small employers such as small charities that are not commercial businesses—will have to comply both with the procedure under the Act and with the code? The Law Society briefing states:

''Given that in any proceedings before an employment tribunal any code of practice issued is admissible in evidence''.

Any small employer must therefore make sure that they comply with both the proposals before us and the code as it may, or may not, be changed.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

That is an important point although, again, more relevant to clause 34. The hon. Member for Tatton had a touching faith in my having read all the briefs, and perhaps I should have done, but I tend to stick to the briefs that I receive from the people who know about such things.

On the point made by the hon. Member for Hertford and Stortford (Mr. Prisk), there would be a danger, in terms of Polkey, if we did not include clause 34 and this change, that employers who decided to move beyond the minimum—small employers just coming to terms with the brave new world—and wanted a more sophisticated grievance and discipline procedure, would be disencouraged from doing so because any minor procedural error above the minimum could lead to their losing the case outright. The two things must be seen together in providing protection.

Tony Lloyd (Labour, Manchester Central)

I take it that when the ACAS code last went through Parliament, on 7 June 2000, it was my hon. Friend the Minister who introduced the relevant statutory instrument. I ask him something, which is a trick question. I have not had the chance to read the relevant Committee Hansard, but an important point arises. Given that all employers taken before a tribunal up till now have gone before one that had to take account of the ACAS code, and given that that applied to small employers with or without disciplinary and grievance procedures of their own, the category of employers that the Minister seeks to protect in schedule 2 would have been, potentially, called before a tribunal by the ACAS code in the past.

The Minister must accept from me that, given that tribunals could have considered the ACAS code in the past, he is diluting the impact of tribunals on that class of employers, who will use schedule 2 as their baseline. I do not think that there is any other interpretation, but does he agree with it?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I am getting trick questions from my own side now. As it is a trick question, I will be very careful how I answer it. There are many jurisdictions, but dealing, for the moment, with discipline procedures, the point about the ACAS code in relation to tribunals is that employment tribunals do not apply it to every dismissal in every company, large, small or indifferent. They take into account all circumstances, including the nature of the business with which they are dealing.

On what happens after the Bill becomes effective, an employer who simply follows the procedures and minimum standards rather than the relevant provisions of the ACAS code will not necessarily be held to have dismissed fairly. The statutory procedures are a minimum that ought to be applied to every formal complaint. However, we recognise that they might not be sufficient in all cases to ensure fair treatment. Additional procedural steps, tailored to particular circumstances, might sometimes be necessary.

I believe that the employment tribunal service and ACAS will, between them, reach a position where the implementation of minimum procedures alongside best practice will meet the concerns that we all have to ensure that people are treated fairly, whatever their workplace.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am conscious that we are straying into the territory of clause 34, but this is an important point. The Minister appears to be saying that an employer, however well meaning, might not know whether he has conducted the procedure fairly until he gets to a tribunal and finds out whether it regards him as someone who should have followed something more than the minimum procedure set out in the schedule.

The Minister seems to be saying that following the procedure in the schedule will be all right for some employers but not others and that tribunals will decide which employers fall into which category. As a general principle, I do not like the idea that a well-intentioned, law-abiding person cannot determine a priori whether his behaviour will comply with the requirements of law and procedures. Does that not concern the Minister?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

It is not a concern in the sense that currently, an employment tribunal takes into account the ACAS code of practice when reaching its decisions. It does not suggest that the corner shop with one employee should have followed every dot and comma of the ACAS code, and we do not intend to make that the case. We intend the ACAS code to be best practice guidance, as at the moment.

Philip Hammond (Conservative, Runnymede and Weybridge)

I accept what the Minister says, but he is being slightly disingenuous in using the extreme example. We all understand that the corner shop with one employee falls into the category of an employer who, by following the minimum procedure, does what he is supposed to. Equally, we understand that Rolls-Royce or BAE Systems will have to do something much more substantial, but where is the cut-off point? Is it five employees, 10, 25, 50 or 100? How does the person running a small or medium-sized business find out what he has to do to comply with the requirements of the legislation?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

The employment tribunal will take into account all the circumstances. In a sense the hon. Member is right. The one thing that will be absolutely clear from this Bill is that if the basic minimum procedures have not been followed, dismissal is automatically unfair. Lots of other elements apply, such as whether the case was investigated properly. That is not part of the minimum procedures, but it would be something that an employment tribunal would take into account. Unless the hon. Gentleman is suggesting that every dot and comma of every eventuality should be covered, I am afraid that employers will to a certain extent be required to follow the basic three-step procedure and, since every case is different and involves different elements, employers will know whether they have carried out the procedures properly only when they get to a tribunal.

Philip Hammond (Conservative, Runnymede and Weybridge)

May I take a different tack? I understand what the Minister is saying, but it seems to me that there is a danger here of an unintended consequence, in that employers may believe that what is being introduced is an absolute standard and they will be in the clear if they comply with it. Indeed, I suspect that many employers who are aware of the Bill already believe that. Larger employers may understand that they will have to behave somewhat differently, but I am concerned that many smallish firms with 10 or 20 employees will believe that they will henceforth have a very clear set of obligations to comply with and, provided they do that, they will have met their obligations. It would be unfortunate if they were misled by the Bill into finding that when they got to a tribunal they were then penalised for not having complied with something that, on the face of the Bill, they did not think they had to comply with.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

The problem is that the hon. Gentleman suggests that some employers could think that if they just go through the motions, they will be okay at an employment tribunal.

Philip Hammond (Conservative, Runnymede and Weybridge)

No.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

The hon. Gentleman shakes his head, but the point about the ACAS best practice guide and the point about the employment tribunal looking at all the circumstances in every individual case, is that it is not just about going through the motions. It will not be a case of, ''I sent the letter at the right time, I had the appeal, and it did not investigate''. The circumstances of an incident will be considered. I do not think that there is any way to cater for all eventualities in the Bill. What we can do, and are doing, is to ensure a basic minimum standard and to ensure that the ACAS code of practice sits alongside it.

Tony Lloyd (Labour, Manchester Central)

My hon. Friend should be pleased: he has managed to unite the Opposition with at least some Government Back Benchers. The hon. Member for Runnymede and Weybridge has a legitimate concern.

Perhaps the Minister can help us in another way. Can he talk us through the discretion that the tribunal will have? It seems to me that the tribunal will be faced with what will be extant on the face of the Bill. It will also have to take account of the ACAS code of conduct. My hon. Friend is saying that somewhere in between, the tribunal will be able to negotiate which parts of the ACAS code and which parts of the Act are relevant. Frankly, that seems unclear to me and the hon. Member for Runnymede and Weybridge. The Minister would help enormously if he clarified how the tribunal will be charged. It must rely on the force of law in making its decisions, but where will its discretion kick in? Both sides of the tribunals, the applicants and the respondents, are entitled to know where that discretion lies.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

At the moment, the discretion of employment tribunals is wide. They have to take into account the size and resources of the employer. They have to take into account the different circumstances of every individual case. There is not a procedure for every case. We cannot devise a procedure that provides complete certainty for employers in all circumstances, because this is a matter of individual incidents and they vary greatly with different circumstances applying to them all. Although I am uniting a coalition of forces both in front of and behind me, we cannot give absolute certainty to employers that if they follow whatever mechanism we set out in this schedule they will, no matter what the circumstances, be all right at an employment tribunal. The code of practice is important and so will be the revised code of practice once the Bill has been taken into account. However, we are labouring under a misapprehension if we think that the employment tribunal does not currently have the discretion to take into account the size of the company and the resources available to it. It has that discretion now, and that will still be the case when the Bill is enacted.

Rob Marris (Labour, Wolverhampton South West)

Welcome, Mr. Conway. The point being made on both sides is that if schedule 2 goes through as the minimum, some employers will end up with what might be termed a double vagueness. First, are they subject to ACAS at all and secondly, if they are, which bits of it are they subject to? I appreciate the Minister's point that we cannot introduce certainty, but I should prefer a single vagueness, which is what currently exists with ACAS, rather than a double vagueness.

We can cut that Gordian knot by introducing the ACAS code as the statutory minimum under amended schedule 2, which clause 29 would give us power to do. However, the Minister is clear that he has no plans to do that. Is he prepared to say that after a specified period he and his Department will review the operation of the double vagueness and other aspects to see whether the Bill is leading to better industrial relations or to more confusion?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I do not accept that single vagueness is better than double vagueness. We are providing a procedure for every work place in the country—900,000 micro-businesses. The people in each company will have a basic three-step procedure. Most of the problems that occur at the moment, as my hon. Friend the Member for Wolverhampton, South-West knows, are due to people not having the chance to appeal, not being told clearly what offence they are supposed to have committed and not having a meeting face to face with a manager.

To pick up the point made by the hon. Member for Tatton, we recognise that if there is only one manager, the meeting will be that with manager at both stages of the procedure. To cover those circumstances, we have introduced the enormously beneficial concept that not following those minimum standards means that dismissal is automatically unfair. Employers therefore know where they stand. However, they should not then think that the process is mechanistic. We need the ACAS code of practice to sit alongside that. I do not think that that will introduce a double vagueness. My problem is that although it would be useful if I could give an example, I cannot, because no two cases are alike.

My hon. Friend asked whether we would review the change shortly. We have no plans to do so. We plan to ask ACAS to draw up the code of practice and to put the revised code, including the new circumstances included in the Bill, before Parliament for affirmative procedure. Who knows whether we shall need to review the length of time over which it will be allowed to operate?

Philip Hammond (Conservative, Runnymede and Weybridge)

Will the Minister give way?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I do not want to give the hon. Gentleman any fresh fears. He is looking quite calm at the moment; I want him to think that there is going to be an immediate change. When we have introduced the procedures and have had an opportunity to see how the two elements sit alongside each other, we shall be better placed to deal with the issue. However, at the moment we are looking at shadows that do not exist.

George Osborne (Conservative, Tatton)

The Minister referred to the corner shop situation. Would we not end up with a farce, where there were two people behind a counter, one employing the other, but where the employer would still be obliged to send the employee a letter, passing it across the counter, to invite him to a meeting that would take place in the shop, behind the counter? The employee would then have to take all reasonable steps to attend the meeting, even though it would take place behind the little shop counter. Endless procedures would be conducted in writing, with two people playing an elaborate charade because one was trying to take disciplinary action against the other.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

If it were an elaborate charade, my hon. Friends would not be raising the points that they are raising. The hon. Gentleman is arguing against the basis of the schedule, which has been widely welcomed. One has to take account of the circumstances. The ACAS code does, and I believe that the schedule does, too. If there is no manager at a higher level, it is clear that one should not be appointed just for the purposes of the Bill.

The hon. Gentleman also referred to an amendment concerning how much of the procedure is to be conducted in writing, which the Committee will discuss later. I am not sure which party is behind that amendment, so I will not comment on it now. In the circumstances that the hon. Gentleman suggests, it would be sensible for the employer to tell the corner shop employee what the offence is in writing. If the employer is considering dismissing the employee, they should sit down and talk about the issue, and the same manager must make the final decision. When the company has another manager higher up the line, the second manager should deal with the appeal.

Norman Lamb (Liberal Democrat, North Norfolk)

I certainly would not describe this as an elaborate procedure, and I think that there are advantages to introducing something so basic into many workplaces that have no such procedure. I accept the principle, but I would like to ask about the impact of compensation. The Minister is effectively introducing automatic unfair dismissal. If a person does not follow the basic procedure, the dismissal is automatically unfair. At the moment, if there were a failure to follow procedure, there would be an unfair dismissal finding; but the tribunal has the power to reduce compensation to take into account the fact that, had the proper procedure been followed, the dismissal would still have occurred. Often, tribunals reach findings of unfair dismissal, but end up imposing very little compensation because, apart from its procedural weakness, the dismissal was fair.

What will happen under the new provisions? A finding of unfair dismissal may be automatic because the basic procedure has not been followed, but perhaps in all other respects the basis for dismissal was fair. In that situation, will the tribunal be able to reduce compensation as it does now, or will it have to award the full amount against the employer for failing to follow the basic standard procedure?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

The hon. Gentleman is on the wrong clause. I have said enough about that clause and I do not want to steal anybody's thunder for when we get on discussing those matters. His point is relevant, but not to this clause.

Philip Hammond (Conservative, Runnymede and Weybridge)

I have not forgotten the point that I was going to make, although I wanted to intervene rather a long time ago. Our debate shows that there is a real issue here. The Minister will not be surprised to hear that I am not tempted by the solution of the hon. Member for Wolverhampton, South-West. He suggested that the ACAS code should be imposed in all cases. The alternative extreme would be to impose the minimum procedure in all cases.

That brings me back to the suggestion that I made to the Minister half an hour ago. I asked whether he had considered the possibility of different procedures for different sizes of employer. At the time, he said that that was unnecessary. I suggest to him that our debate since then implies that it is necessary, and that such variation might be a way of resolving the issues raised without going to the extreme advocated by the hon. Member for Wolverhampton, South-West of imposing something like the ACAS contract on micro-businesses?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

These are my last remarks on the issue, because we have spent a long time on it. The hon. Gentleman's suggestion would make matters much more complex and much worse for employers. By law, tribunals are required to take into account the size and resources of the employer. That is an important discretion of the tribunal. If we stipulated different procedures for companies with 100 employees as against those with 90, 11 redundancies would mean adopting a different procedure, as would the recruitment of 10 more staff. That is not a solution.

We have had an interesting and wide-ranging debate, and some important points were raised. However, the employment tribunal service and ACAS do a splendid job. I believe that when we look back in our dotage, we will say that we did the right thing, and that although it was right to express those fears and to say those things, the envisaged scenarios did not emerge. I hope that the Committee will agree to the clause standing part.

Question put and agreed to.

Clause 29 ordered to stand part of the Bill.

Schedule 2 - Statutory dispute resolution procedures

Norman Lamb (Liberal Democrat, North Norfolk)

I beg to move amendment No. 29, in page 57, line 8, after 'writing', insert

'in the form of a statement.'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss amendment No. 30, in page 57, line 12, at end insert—

'(3) Where the employer contemplates dismissing or taking disciplinary action against the employee for a reason other than redundancy, then the employer must investigate fully before preparing the statement.'.

Norman Lamb (Liberal Democrat, North Norfolk)

Welcome to the Chair, Mr. Conway. I am not sure whether protocol dictates that I should have welcomed you when I intervened earlier. I hope that it will be a pleasure to serve under your chairmanship, although if I make to many mistakes, I may regret saying that.

Amendment No. 29 is a tidying amendment. Paragraph (2) of step 1 of the standard procedure refers to ''the statement''. Paragraph (1) of step 1 states:

''The employer must set out in writing the employee's alleged conduct or characteristics'',

but it does not refer to a statement. I am sure that the statement referred to in paragraph (2) is what the employer would have written down under paragraph (1), but it would achieve greater clarity if paragraph (1) included the words

''in the form of a statement''.

Amendment No. 30 deals with the inter-relationship between the ACAS code and the standard procedure. As the Minister said, the standard procedure sets out the minimum standards that employers must comply with—the bottom line, as it were. We believe that, as well as what is already included, the bottom line must include the principle of investigation. The standard procedure already sets out certain basic requirements. For example, there must be a meeting, and something must be set out in writing beforehand, but the procedure says nothing about the need for an employer to investigate the matter before calling the meeting. We would all agree, I am sure, that that must be a requirement of a fair procedure. It would give sensible and helpful guidance to small employers as well as large.

Philip Hammond (Conservative, Runnymede and Weybridge)

Perhaps, taking up the example given by my hon. Friend the Member for Tatton, the hon. Gentleman could explain what could be investigated if the basis for dismissal was that the employee had punched the employer. What investigation would he expect the employer to undertake before giving the employee a written statement saying that he was on his way?

Norman Lamb (Liberal Democrat, North Norfolk)

The schedule deals with the law that the tribunals already work under. The level of investigation will inevitably vary, depending on the facts of the case. I agree that there have been some stark examples of misconduct—for instance, of someone being hit in the face—but those people may have been provoked. For a tribunal not to investigate the facts that surround such an incident may render a dismissal unfair under existing law. Is the hon. Gentleman suggesting that it is not appropriate to investigate?

George Osborne (Conservative, Tatton)

To build on the point raised by my hon. Friend the Member for Runnymede and Weybridge, would the hon. Gentleman expect the employer to investigate a serious case of sexual harassment in a two-person company where there is only an employer-employee relationship?

Norman Lamb (Liberal Democrat, North Norfolk)

The hon. Gentleman is referring to an employer who sexually harasses an employee, and that employer would hardly bring disciplinary proceedings against himself. I am not sure that I understand the hon. Gentleman's point, but I suspect that it is rather trivial. We all understand that there is a basic principle of investigation.

Philip Hammond (Conservative, Runnymede and Weybridge)

I accept that we are using slightly absurd examples, but the underlying issue is important. In amendment No. 30, the hon. Gentleman seeks to require an employer to investigate every case. Although investigation will be appropriate in many cases, it clearly will not be appropriate, or even possible, in every case.

Norman Lamb (Liberal Democrat, North Norfolk)

In all my experience of employment law over about 10 years, I have never come across a case in which it was not appropriate to investigate the circumstances of an allegation against an employee before conducting a meeting to determine his guilt. The level of investigation inevitably varies from case to case—sometimes it is quite complex, but sometimes it can be completed without much delay. It must, however, be appropriate to investigate all cases.

Step 1 makes it clear that we are talking not simply about dismissals that could result from an allegation of misconduct, and the wording of the schedule suggests that we are talking about dismissals for a whole range of reasons. All the appropriate steps must be followed, whether an employer contemplates dismissal on the grounds of redundancy, performance, sickness absence or incapability. The Minister is nodding, which is helpful, but I would be grateful if he could confirm the position in his response.

I am concerned about how the schedule's procedural requirements compare with, for example, case law guidance on consultation with an employee over redundancy. The schedule says nothing about consultation, although it talks about a meeting and an appeal. We need much greater clarity about how the schedule compares with existing case law guidance on consultation on redundancy, and the Minister's response would be a good place to start.

The purpose of the ACAS code is primarily to deal with misconduct, and it talks about disciplinary proceedings. As I suggested, however, dismissal under the Bill could be for a range of reasons. The Employment Rights Act 1996 sets out five potentially fair reasons, including redundancy and incapability, either through poor performance or ill health. I need to understand better how the standard procedure in the Bill compares with existing case law guidance on dealing with dismissals other than those envisaged in the ACAS code, which deals with misconduct. As I said, the procedure applies to many different reasons for dismissal.

To return to the amendment, the basic statutory minimum procedure for dismissal and disciplinary matters has been widely welcomed. The schedule forms the basis for an improved approach. I accept what the Minister says about all those workplaces that have no procedures in place. The schedule would impose basic procedures on contracts of employment. The Confederation of British Industry commented that the new procedures would be of great benefit to small businesses, many of which have no procedures in place. The existence of the new minimum resolution procedures should help to encourage the resolution of disputes in the workplace and, hopefully, reduce litigation.

Although the TUC generally welcomes the introduction of the new procedures, it has spoken of its fears that the new minimum procedures may supplant the ACAS code of practice, as has the National Association of Citizens Advice Bureaux. Their concern is that, with the reversal of the Polkey principle, employers may be likely to run through the minimum statutory procedures with little or no reference to existing additional procedures or little adherence to basic principles of natural justice. That is why incorporating a requirement for investigation is important. The NACAB states:

''In our view, any move away from the present widespread use of the ACAS Code and Handbook as a 'benchmark of what the employer should have done' would be a retrograde step.''

Yet from an employer's point of view, the fact that an employee will not win an unfair dismissal claim simply because of a procedural failing beyond the basic requirements of the standard procedure is a welcome step and has the advantage of making clearer to employers what they should do.

In a recent survey conducted by the Forum of Private Business, one small business owner commented on the reversal of Polkey:

''Small businesses now live in fear of inadvertently falling foul of employment law through the lapse of procedure rather than by bending the rules or purposely flouting them. Any amendment to reduce time wasters will be welcome.''

Another said

''Most small employers do not have the resources to deal with unreasonable employees. The growing burden of employment legislation is as frightening to a well meaning employer as a minefield.''

Our dilemma is how to reconcile the rights and needs of both employer and employee. Amendment No. 30 is designed to reconcile those interests by imposing a requirement on employers to investigate fully the circumstances surrounding an employee's dismissal before preparing a written statement, as required in schedule 2, outlining the employee's alleged misconduct, behaviour, poor performance or sickness absence.

I am not especially proud of the wording of the amendment, but it is a probing amendment to urge the Government to consider further what provisions the standard procedure should contain as the bottom line. The requirement to investigate will remind employers about the need for basic fairness and the need to comply with natural justice. The fact that they will no longer be in fear of litigation as a result of a failure to adhere to a technical detail of their more extensive procedures is welcome, but the requirement in the standard procedure for an investigation must be enhanced, other than in circumstances of redundancy where investigation is inappropriate.

Philip Hammond (Conservative, Runnymede and Weybridge)

Perhaps the hon. Gentleman will forgive my ignorance as a non-specialist, but it is not immediately apparent to me why investigation would be inappropriate in cases of redundancy but appropriate in every other case. Presumably, on the hon. Gentleman's logic, it would be necessary to establish that the redundancy was genuine.

Norman Lamb (Liberal Democrat, North Norfolk)

What we are driving at is that in any dismissals that involve the conduct of an employee, whether it is the extent of their sickness absence, poor performance or misconduct, the employee's actions need to be investigated. That is already a principle of law, and it should be enshrined in the Bill.

With regard to redundancy, the employee's conduct is not an issue. It is more a question of looking to see whether the business has a reduced need for employees. Therefore, the concept of investigation is not appropriate in cases of redundancy, although it is appropriate in other circumstances.

Tony Lloyd (Labour, Manchester Central)

I support the inquiring nature of the comments made by the hon. Member for North Norfolk (Norman Lamb). He raises an important issue, which I suspect has not been thought through by many hon. Members. Although this aspect of the provisions was probably regarded as applying mainly to disciplinary procedures, it can apply to redundancy. It is important that the procedures relating to redundancy, like those relating to all other forms of action, are fair, although redundancy contains no disciplinary element. Therefore, I hope that the Minister will respond to the hon. Gentleman's comments.

I want to concentrate on the need properly to investigate. The wording of the amendment is clumsy, which the hon. Gentleman conceded. I appreciate that some of us have our doubts about whether the ACAS code is all that it should be, but its wording is helpful. It states:

''The employer must establish the facts promptly.''

Opposition Members raised the issue of the one-employee business. In the case of sexual harassment, where the employer harasses the employee, it is beyond doubt that the grievance procedure would apply. However, if the employee harasses the employer, disciplinary procedures would apply. It would not be an unreasonable defence for the employer to say that, as the victim of harassment, he or she was aware of the facts. That would be a copper-bottomed defence before a tribunal.

Employers must know that they have a responsibility properly to establish the facts. It would be astonishing if an employer were entitled to take disciplinary action without knowing the facts. That relates to the Minister's statement in a previous debate that, although the requirement to investigate is not included in schedule 2, tribunals would most certainly consider whether the employer had properly investigated. That is a paraphrase, but I am sure that the Minister will tell me if I am grossly misquoting him. However, if that is the case, there is genuine merit in employers knowing that there is such a requirement.

I accept that we should not overload small businesses or give them any unthought-through surprises in the legislation. Frankly, I think that most reasonable employers would assume that they had a responsibility to establish the facts before acting. That is simply common sense, and I hope that we can all agree on that.

Philip Hammond (Conservative, Runnymede and Weybridge)

The hon. Gentleman uses the term ''establish the facts'' rather than ''investigate fully''. I am far more tempted by the idea that any reasonable person would want to establish the facts before they committed anything to writing.

I want to probe the hon. Gentleman on the matter, because he may have some knowledge of it. There is nothing obvious to suggest that the piece of writing in which the employer described the employee's misconduct would be privileged. Therefore, the employer would be prudent to establish the facts, because he might be sued for libel if he accused the employee in writing of doing something that he had not done.

Tony Lloyd (Labour, Manchester Central)

As ever, I seek to be well briefed. I think that I heard the word ''privilege''.

Rob Marris (Labour, Wolverhampton South West)

Perhaps I can describe a hypothetical scenario. If I were on a one on one with the hon. Member for Runnymede and Weybridge—just the two of us were in the room—and I told him that he was the biggest thief that I had ever come across, he could not sue for defamation because the situation would be one on one. I would not be lowering the esteem in which he was held in the minds of right-thinking people. Therefore, a letter from an employer to an employee that said that his conduct was dishonest could not give rise to defamation.

Tony Lloyd (Labour, Manchester Central)

Of course, the intervention was directed to me, although the allegation of lying was directed at Opposition Members.

Norman Lamb (Liberal Democrat, North Norfolk)

I can add to the explanation just given. When something is written down as part of a disciplinary procedure, qualified privilege applies. That means that unless it has been written down from malice, no claim can be made against the employer who has written it down. Therefore, there is no great threat to an employer who writes something that turns out not to be true.

In addition, few employees have the wherewithal or financial clout to pursue defamation actions, which tend to cost tens of thousands of pounds. There is simply no sufficient control on the employer to prevent him from writing down things that turn out not to be true.

Derek Conway (Conservative, Old Bexley and Sidcup)

Order. Before the hon. Gentleman responds, I remind the Committee that, although we can debate broadly in Committee, if hon. Members intervene they must direct their remarks to the hon. Member who has the Floor. If that is not done, I will be disciplined by the Speaker.

Tony Lloyd (Labour, Manchester Central)

That was a dynamic demonstration of the flexibility of our procedures. The hon. Member for Runnymede and Weybridge posed a question and my two legal advisers took it up on my behalf. The words were mine, but they came from other mouths. However, we can make some progress if we examine the intention here. The hon. Gentleman said that he was more tempted by one interpretation than the other—I do not know how tempted he is. Perhaps he will tell us.

We have established the simple point that any reasonable person would assume that an employer or employee would take steps to establish the facts if it were necessary, or would at any rate be privy to the facts. In terms of the hypothetical and real cases that we have discussed when the employer was the victim, one would assume that he would be well aware of the facts. The alternative would be that the employer could act without knowing the facts, which would be unreasonable, and, one hopes, would be judged unreasonable by the tribunal.

If it is obvious that if the situation is universal and all employers find themselves bound in the same way, we are no longer discussing an area about which a tribunal may come to a judgment. If that is the case, in fairness to all parties, there would be genuine merit in having the duty on employers in the schedule. That would not merely be a device—there would be genuine merit in the amendment. After all, it is an easy and a common-sense duty, but having it there would remind them that if they failed to subscribe to it, they would find themselves judged by the tribunal, which would find against them. I urge my hon. Friend the Minister to consider not the form of words—it is defective in that ''establishment of facts'' is better than the wording of the amendment—but the spirit of the amendment, which should command support across the Committee.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Our debates have become much more exciting under your chairmanship, Mr. Conway. We have had a debate full of sex and violence. My pulse is racing and I shall try to calm down. All amendments are well meaning. Some, as George Orwell might have said, are more well meaning than others. Amendment No. 29 is particularly well meaning. Our common aim is to ensure that schedule 2 is clear and unambiguous, and the hon. Member for North Norfolk thinks that paragraph 1 of the schedule gives scope for confusion. The paragraph refers to the written communication that the employer must send the employee under the standard statutory dismissal and disciplinary procedure. That communication is described as a statement in paragraph 1(2) but that term is not used in paragraph 1(1), where the employer is required to set out the issue in writing. The amendment therefore seeks to introduce a further link between the two sub-paragraphs, so it is well meaning.

I do not agree that a problem exists; the statement mentioned in paragraph 1(2) can have only one meaning in the context. No one could infer that two documents would be involved. The wording is clear. It will not cause any confusion to employers, employees or tribunals. It is unnecessary to include the additional wording. I hope that the hon. Gentleman will accept that and will withdraw his amendment.

The excitement concerned amendment No. 30, which also deals with schedule 2. That sets out the statutory dispute resolution procedure. Once again, I stress that we are talking about minimums. We know that the ACAS code also assigns a role to investigation and most existing procedures are more detailed than the proposed statutory minimums. The amendment seeks to introduce a compulsory investigatory stage into the standard dismissal and disciplinary procedure. I understand the points made by the hon. Member for North Norfolk and by my hon. Friend the Member for Manchester, Central.

Sitting suspended for a Division in the House.

On resuming—

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I can understand why the amendment has been tabled. Investigations, the discovery of facts and the taking of evidence are all important and we do not argue with that. However, I am not convinced that they have a place in the statutory procedure and I will explain why.

The standard procedure currently requires the employer to set out the problem in writing, then there is a requirement to meet and discuss the issue, after which the employer must inform the employee of his decision. The next step involves an appeal, after which the employer must reach his final decision and inform the employee accordingly. Those are clearly defined actions given that they are statutory minimum procedures that will affect how far the employment tribunal system can be entered into. They will also determine whether a case is automatically unfair. Later, we will explain that procedures have to be met or dismissal will automatically be unfair.

If those steps have been taken and applied to individual cases, that should be relatively easy to verify. That is integral to the operation of clauses 31 to 34. We want to avoid having the tribunal system bogged down by the consideration of endless complex disputes about the application of statutory procedures. We want clarity for employers and for employees. Wherever possible, we have avoided introducing general and unspecific statutory obligations and the amendment would frustrate that aim.

Norman Lamb (Liberal Democrat, North Norfolk)

I accept that there is a case for keeping things simple, but does the Minister acknowledge that without a requirement for investigation, there are bound to be endless cases in tribunals where no investigation has taken place and the employers will argue that that had made no difference. They will say that they would have dismissed the employee anyway, and that might make the outcome a case of fair dismissal. It will be difficult for tribunals to reach a proper view on whether the additional procedural requirement, which is not set out in the standard procedure, would have made a difference. Many cases will therefore end up with the finding of fair dismissal without an investigation having taken place because the employer has managed to persuade the tribunal that an investigation would not have made a difference.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I do not accept that. We are talking about the statutory minimum and about what is necessary, not about what might be sufficient when the case comes before the tribunal. We have avoided introducing general unspecific obligations, and the amendment makes unclear the precise actions that employers would need to undertake fully to investigate a case. How should evidence be assembled and does investigation always require the taking of witness statements? Should fellow employees, as well as line managers be interviewed? Should a third party—say, customers—be involved? Should the accused individual be interviewed, and if he is, how would that square with the step 2 meeting?

I accept that the hon. Member for North Norfolk said that the amendment is not perfect, but it still implies that investigations should be full and that suggests that they would occur solely at the start of the process and before the employer writes to the employee. In practice, that would be undesirable. Often further investigations are required later in the process as other issues are raised by the employee in his or her defence. I am sure that the hon. Gentleman would not want to limit investigations in that way, but that would be the effect of the amendment. That illustrates how difficult it is to draft a clear, yet flexible set of investigative duties for the employer.

Of course, we do not want to discourage parties from fully investigating complaints or to dissuade employers from using more elaborate and customised procedures. We expect many parties, especially but not exclusively large organisations, to go beyond the minimum. That will be largely a matter for them to determine, drawing on the ACAS code.

I am afraid that I cannot accept the amendment. The schedule should be seen as establishing the core elements of procedures that should be applicable in a wide range of circumstances. We do not object to investigations or to fact-finding in themselves, but to the inadvisability of explicitly placing them within the statutory procedure. I hope that in the light of that explanation the hon. Gentleman will feel able to withdraw the amendment.

Rob Marris (Labour, Wolverhampton South West)

I want to explore further what the Minister said in response to the hon. Member for North Norfolk. I am concerned that an employer who does not investigate and ends up before a tribunal could say, ''Well, I complied with the schedule 2 statutory minimum, so I didn't have to investigate. If Parliament had intended that an investigation should take place, it should be stated in the schedule.'' The applicant may then say, ''Ah, but you should have investigated under the ACAS code,'' because, as the Minister said, if the investigation is not carried out under schedule 2 the matter will be considered by the employment tribunal. The employer could respond, ''But under clause 34 it would have made no difference anyway, so I am off the hook on that one as well.''

I urge the Minister to reconsider investigation. When one tries to establish a simple and straightforward procedure in an Act, there is a danger of making it too simple, leaving oneself open to the attack at an industrial tribunal that, ''If Parliament had intended that, it would have stated it.''

Philip Hammond (Conservative, Runnymede and Weybridge)

I am interested that the hon. Gentleman has adopted the language that the hon. Member for North Norfolk used in the amendment—that is, investigating—rather than the Minister's term, establishing the facts. Is that a conscious decision on his part and, if so, can he explain why?

Rob Marris (Labour, Wolverhampton South West)

The exact words used are not important. I used the word ''investigate'' because that is the word in the amendment. If there were some other formulation encompassing a spirit of inquiry, I would be happy to use it.

The ACAS code says that the employer must establish the facts promptly and, where appropriate, have taken statements from available witnesses. That brings us back to the establishing of facts that my hon. Friend the Member for Manchester, Central mentioned. I would be pleased to see such a formulation included in the schedule. I am worried that an employer may be able get round schedule 2 and clause 34 and avoid an investigation by saying that it would have made no difference anyway. That goes against the whole spirit of what the Government are trying to do as a statutory minimum.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

It would be a foolish employer who would take that view. Let us be clear about this. We are talking about what is necessary, not what may be sufficient. Every element of the system is discernible because it is so important. Clause 34 provides for the no difference test and other clauses deal with admissibility. The whole ethos and thrust of our proposals is that these are internal procedures and they should be used. Mitigation is involved if one has not used them and cannot establish that one has done so.

This is a simple three-step procedure that can be verified at each stage. Was the letter sent? Did they have the meeting to discuss the issues and convey the decision to the employee? Did they have the appeal? To bring in the question of whether there was an investigation clouds the whole issue at an important point in the procedure. Are they to be given a three-month extension to enable them to complete the proceedings? The employer would be foolish in those circumstances because the facts of the case would come out at the tribunal. The ACAS code is clear, and there is no doubt that the tribunal would insist that the size of the company should be taken into account in all cases. It is unlikely that the code would not apply in terms of establishing the facts.

If the need to investigate were part of the statutory procedures, one would run the risk of employers thinking that they are protected because they have gone through the motions. It would be possible to argue that one has investigated a particular case by considering it for two hours on a Thursday afternoon, but once the case was explored in more detail at tribunal it would become apparent that the investigation was a perfunctory exercise in going through the motions. The duty to investigate and establish the facts is in section 98(4) of the Employment Rights Act 1996, and it ensures that a dismissal will be unfair if an employer has not taken adequate steps to find out the facts. It is not the ACAS code that is at issue, although it may be relevant. There is no need to add an element of uncertainty to the statutory procedures.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister has described a perfunctory investigation as going through the motions, which introduces an interesting concept. Is he saying that in order to comply with the standard procedure the tribunal would want to look behind the mere fact that the meeting took place, and inquire into the state of mind in which individuals approached that meeting? Would he describe a meeting as perfunctory if the employer did not approach it in a genuine spirit of trying to resolve the matter? I am curious as to whether the concern about perfunctoriness that he has raised pervades the whole of the procedure.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

No. The three-step procedure must be complied with otherwise the dismissal is automatically unfair and one does not get past first base. Whether the employer conducted the meeting in the way suggested by the hon. Gentleman would come out at the hearing stage as the case progresses through the employment tribunal. There is no argument between us on the principle, but there is a point about how we should frame the statutory procedures. The wording of the amendment is deficient because it suggests that one must have a full investigation. In many cases, the investigation would take place at other stages in the process. The amendment is unnecessary in terms of the concerns expressed by my hon. Friends because of section 98(4) of the 1996 Act. The hon. Member for North Norfolk should withdraw the amendment, and if he does not do so the Committee should oppose it.

Norman Lamb (Liberal Democrat, North Norfolk)

I am happy to withdraw the amendment. Amendment No. 30 was a probing amendment. In the case of the tidying-up amendment, I agree with the Minister that it is sufficient to refer to the statement in schedule 2(1)(2). However, I would like him to consider the issue further and take account of the concerns expressed by both Government and Opposition Members.

The Minister states that everything in the standard procedure is discernable. In the sense that a meeting is a meeting that is true, but a meeting that ended in three minutes would allow an employer to say, ''I have complied with the standard procedure.'' However, in all other senses, and certainly under the ACAS code, it would not amount to a fair dismissal because of the deficiency of that meeting. Something that is ''set out in writing'' could establish in detail allegations against, or concerns about, an employee, or it could be very perfunctory. The standard procedure appears discernible, but there is considerable latitude, so it would seem sensible to set out a basic requirement of investigation. I concede that the hon. Member for Manchester, Central has thought of a much better way of establishing the facts, and the wording in the ACAS code would indeed meet our concerns adequately.

I urge the Minister to consider establishing a basic requirement to ascertain the facts. He has mentioned measures that go beyond the standard procedure, but in our view—many on the Government Benches seem to agree—part of the bottom line should be a basic requirement to establish the facts. As I have said, employers will be able to argue endlessly at tribunal that, because they followed the standard procedure, the dismissal was fair and the failure to establish the facts properly made no difference.

My amendment draws a distinction between dismissal on the ground of redundancy and other types of dismissal. I should like the Minister to explain further how the new standard procedure overlays existing case law guidance on procedures that must be followed in a proposed redundancy case. Neither the explanatory notes nor anything that has been said today has made that clear. It is terribly important that employers and employees understand the requirements for future redundancy cases, and if such clarification were given I would be prepared to withdraw the amendment.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I am sorry that I did not answer the hon. Gentleman's point—I meant to. The provision will apply in all circumstances, including individual redundancies. It will not apply to collective redundancies or to other collective procedures.

Norman Lamb (Liberal Democrat, North Norfolk)

Why would it not apply in cases involving more than one redundancy? I recognise that other statutory requirements apply in collective redundancy cases, but for the individual being made redundant, it makes no difference whether 10 people or 100 people are being made redundant at the same time. Under schedule 2 as drafted, it will make no difference whether it is a single or a collective redundancy; the requirement presumably applies to the individual.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

It will not apply to collective redundancies that are dealt with collectively by a trade union or other body.

Norman Lamb (Liberal Democrat, North Norfolk)

Where does the schedule say that?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I do not know, but I know a man who does—[Laughter.] I shall post him a letter in a minute.

Norman Lamb (Liberal Democrat, North Norfolk)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 69, in page 57, line 17, after 'employee', insert 'in writing'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this we may discuss the following amendments: No. 70, in page 57, line 21, at end insert 'in writing'.

No. 71, in page 57, line 27, after 'employee', insert 'in writing'.

No. 72, in page 58, line 2, at end insert 'in writing'.

No. 73, in page 58, line 6, after 'employee', insert 'in writing'.

No. 74, in page 58, line 19, after 'employee', insert 'in writing'.

No. 75, in page 58, line 23, at end insert 'in writing'.

No. 76, in page 58, line 27, after 'employee', insert 'in writing'.

Philip Hammond (Conservative, Runnymede and Weybridge)

I shall attempt to brief, and I shall not mind in the least if the Minister seeks in his reply to answer the last question raised by the hon. Member for North Norfolk. It was an interesting one and I, too, would be pleased to hear an answer to it.

The amendments probe the Minister on the question of whether all the steps in the procedure have to be dealt with in writing. The initial statement by the employer in the case of a dismissal or discipline procedure, and the initial statement by the employee in the case of a grievance procedure, clearly has to be in writing. It says so in the schedule. But it does not say that each of the subsequent steps must be in writing. After the appeal meeting, when, according to the schedule, the employer must inform the employee of his final decision, it seems self-evident that that must be in writing.

Without wishing to be over-bureaucratic, I would be horrified by the idea that a procedure that starts in writing can end up with the employer saying at the end of the appeal meeting, ''Right, that's it Fred, I have made my decision, you are still fired,'' with nothing appearing in writing. I hope that the Minister will tell me that this is unnecessary and that I have missed something, and that each of the steps will be in writing. I look forward to hearing that from him.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

No, I am not going to tell the hon. Member that. What I am going to explain is that we have to be clear and avoid being over-prescriptive. This is a concern that has been raised by my hon. Friends, and one in particular.

We have considered the matter carefully previously. The philosophy behind this is that we should give scope to the parties to choose whichever method of communication, written or verbal, suits them best, for some of the reasons that the hon. Member for Tatton mentioned in a previous debate. We have to remember that these procedures will apply to 960,000 micro-businesses employing between one and four people. Many of those businesses will not use written communication to any great extent. Indeed, some may have limited clerical facilities. The employer or the employee may also have poor literacy skills. Therefore, we have limited the written part of the standard procedure to step one, the definition of the issue—what is the issue, in terms of a grievance by the employee, or a discipline case by the employer against the employee? That is such a basic aspect of the entire process that it must be put in writing. Both parties will then share, as far as possible, a common understanding of the complaint.

Norman Lamb (Liberal Democrat, North Norfolk)

I entirely understand and accept what the Minister says about the importance of starting off with something in writing, but is it not equally important that there is clarity of understanding between the two sides as to the outcome of the investigation? If it is any step short of dismissal, not to have the next stages in writing, seems to be a recipe for a total lack of clarity and something that should be avoided. The Minister refers to the fact that small businesses may have limited clerical facilities, but if they can write one letter at the start, surely they can write a confirmation later.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I will go through that, because it is crucial to the issue. We have agreed that the basic point, in principle, has to be in writing, and then there is a common understanding of the issue. The modified grievance procedure is shorter, but it actually has more obligations to communicate in writing. We envisage that the modified grievance procedure would apply to a situation where an ex-employee wants to raise a grievance with a former employer, probably in terms of a constructive dismissal case. The practicalities of this special situation make it difficult to envisage that face-to-face communication would have much of a role. We make no provision for meetings to occur in the modified two-step procedure on a grievance. In this context it makes sense to require communication to be in writing. So, in the modified grievance procedure, it is in writing at both of those steps, because the employee has left the company and there is no face-to-face communication.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am surprised by what the Minister is saying. Does it not strike him that since it will be necessary to establish that standard procedure has been followed, that task will be made infinitely more difficult if there is no written evidence of the outcome of each step? The Minister spoke about people with limited literacy; there will also be those with limited language understanding capabilities. Does the Minister not think that having a written decision is the ultimate safeguard against misunderstanding? If nothing is in writing, is he not creating a situation in which there will almost inevitably be more dispute and misunderstanding? Even someone with a poor command of English can be given something in writing and have the opportunity to go away and have it explained to them. If they receive something only aurally, there will be every future opportunity for misunderstanding and dispute.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

It is a judgment. That would be going too far given that we are applying the legislation to all businesses, particularly very small ones in which there is an informal relationship between an employer and one or two employees. At the beginning of the process, information would have to be in writing because there is a reason to get to the core of the argument, the grievance or the discipline. I fully acknowledge the point made by the hon. Member for Runnymede and Weybridge that written communication has obvious advantages. It may help to avoid uncertainty, which could help employment tribunals if unresolved disputes are eventually referred to them.

The point about the dispute procedure is not how we roll the wicket for an employment tribunal case, but how to resolve disputes in the workplace. We want to help those who employ one or two employees to resolve issues before they reach tribunal. We must not lose sight of that.

George Osborne (Conservative, Tatton)

How is a tribunal supposed to establish what took place in the in-work disciplinary procedures if no written evidence of it exists beyond the original piece of writing? My worries about the burdens on small business would be neatly dealt with if the Government accepted the amendment to clause 36, which will be moved later, dealing with removing small companies from the procedures.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

That would not be welcomed by small business. However, we will discuss clause 36 after we have dealt with clause 35. The hon. Gentleman raises the point that we must consider the situation at an employment tribunal. May I drag us back a little and emphasise that the three-step procedure is to help the employer and employee avoid getting to a tribunal in the first place? We are not always talking about cases of discipline and dismissal; all kinds of things come before an employment tribunal.

If I was an employer and the hon. Member for Runnymede and Weybridge was my one employee—[Interruption.] It may happen one day, although it would be unfortunate. A point is put in writing and I, as the employer, consider it. In my two-manned garage workshop in which we are repairing a car every day, it should be enough for me to say, ''You are quite right. Problem settled.'' To say to an employer that because we have a certain procedure he must find a word processor—I understand that that is something that is still used, although it is very 20th century—or a typewriter or pen and paper and be forced to complete every stage of the procedure, would be unnecessary and over-burdensome. Our proposals will not stop people from going through those steps, or from following the ACAS code that advises written communication.

Norman Lamb (Liberal Democrat, North Norfolk)

To continue the analogy, would not the Minister's employee be left entirely confused, since, under standard procedures, his misconduct would require the service of a written warning? Established disciplinary procedures, with guidance from the ACAS code of practice, clearly require employers to go through a process of verbal warning, written warning and so on. The confusion for both the employee and the employer will be that that imposes no requirement to put anything in writing, yet ordinary, established procedures clearly indicate that a written warning is appropriate. Where does the employer stand?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

If a written warning is appropriate, a written warning is appropriate. We are talking about the three steps in the procedure: whether one would need to convey one's decision, having looked at the case, and having had the interview with the employee; whether one would need to write to say either that everything was fine or that the case was to be taken forward; and whether, having had an appeal hearing, one would need to inform the employee—again in writing—of the outcome of that hearing. ACAS would say that that was best practice; so would I, and so would everyone in the Room.

However, do we want more than 900,000 micro-businesses to have to put everything in writing on every occasion? Including that in the Bill would be onerous. We recognise that the balance between written and oral communication is a matter of judgment. We have opted for an approach that limits burdens on business, especially on small businesses, and provides reasonable flexibility. Employers have broadly welcomed that approach.

I should like to take advantage of the invitation to return to something that we discussed earlier. Although it is not in the Bill, we intend to ensure in the regulations that dismissal and disciplinary procedures will be used unless 20 or more redundancies are occurring and the law on collective redundancies applies. That is in the law already, as the hon. Member for Runnymede and Weybridge well knows. We also intend that in cases where fewer redundancies arise and the matter has been dealt with as a collective issue between the employer and the union. I hope that that clarification helps and that the hon. Gentleman will withdraw the amendments. If he does not, I hope that the Committee will resist them.

Rob Marris (Labour, Wolverhampton South West)

I have some sympathy with the amendments. There seems to be a contradiction in what the Minister is suggesting. Given the procedure as a whole, at some point an employer needs to put something in writing and at some point an employee needs to put something in writing. We are expecting employees and employers either to be literate and to feel capable of communicating in the English language or, to use the Minister's words, to know a man who is. If we are thinking in terms of preventing cases from going to employment tribunals, the results of disciplinary procedures, in particular, should be put in writing.

For many of my constituents, English is not their first language—it might be one of the Asian languages or British sign language or whatever. Sometimes, both as Member of Parliament and as a solicitor before that, I have seen people in high dudgeon about an action that some authority has taken against them, and they bring a sheaf of papers when they come to see me. When one goes through the papers, one finds that the action about which they are incensed has not actually taken place; they have misunderstood. However, because they have the papers, one can explain that the problem that they thought they had is either a different problem or one that does not exist.

I could envisage, although I would not favour it, a whole procedure with nothing in writing. However, when bits are required in writing from both sides, that presupposes some kind of literacy and access to pen and paper or whatever at some stage on each side. In chapter 2 of part 2 of schedule 2, it is envisaged that the modified grievance procedure will come into play when the employee has been dismissed. In step 2, the decision of the employer has to be put in writing because a meeting is less likely, since the employee is no longer at the work premises. Why have that? Why not say that the employer could telephone the employee? It seems to be a contradiction and calls into doubt the clarity of schedule 2. Returning to what the Minister said earlier about giving another three months' extension to complete procedures, almost nothing in the procedures refers to any time limit at all.

George Osborne (Conservative, Tatton)

I am delighted to see the hon. Gentleman take a broad approach to the role of a Government Back Bencher in a Standing Committee. Does he agree that if the case reached an employment tribunal—the Minister is right to say that we want to prevent cases from reaching that stage—it would be difficult for the tribunal to establish whether the procedures under schedule 2 had been correctly followed if there was nothing in writing?

Rob Marris (Labour, Wolverhampton South West)

I agree with the general proposition that an absence of anything in writing might make it more difficult for an employment tribunal to establish that procedures had been followed. It might also take much longer at an employment tribunal to establish what had happened and what provisions had been complied with. The Government rightly seek to tackle not only the rising number of employment tribunal applications, but the time that each takes and, therefore, the waiting list for access to that procedure. Justice delayed is justice denied and costs business more. Indeed, it can cost the applicants more, as there may be more preparation time, to echo an earlier debate.

More procedure in written form might lessen the chances of the issues reaching employment tribunals at all. Cases that went to employment tribunals would be easier to decide if matters were in writing, and would probably be less time consuming. The lack of time limits is a related point. I appreciate that the Minister wants a fairly straightforward procedure, does not want to add all 24 pages of the ACAS code and has tried to strip the provisions back to their basics. I suggest that he has stripped them back too far. They need to be a little longer. The words ''in writing'' need to be added in various places, as does something to do with time limits, so that employees are certain what they should do and by when.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am interested in what the hon. Gentleman says. I imagine that he is telling the Committee that he will support my next amendment, No. 77, which deals with time limits.

Ian Pearson (Labour, Dudley South)

I hope that my hon. Friend will not speak to it.

Rob Marris (Labour, Wolverhampton South West)

As ever, I shall wait until we reach that debate and listen to it before I make up my mind.

Philip Hammond (Conservative, Runnymede and Weybridge)

The debate has been interesting, and has genuinely surprised me. I did not table the amendment thinking that it would be highly controversial. I toyed for a moment with not bothering to table it, partly because there are so many points at which one would have to insert ''in writing'' that it would tedious to draft them all, and also on the assumption that the Minister would simply dismiss it and say that it was obvious that everything had to be in writing.

The Minister has made much of the idea that the amendment would impose yet another burden on small businesses, as they would have to find a piece of paper and a pen so as to write letters stating, ''Dear Mr. Bloggs, Having considered your case at our meeting last Thursday, I remain of the opinion that you are dismissed. Yours sincerely.'' The Minister seems to think that the amendment is adversarial, and that he can get to me by saying that it would impose a big burden on business. I do not agree.

The matter is one of principle, and is about rather more than placing a minor burden on one person or another. If a procedure is to be carried out, it should be seen to be carried out fairly, and everyone should be able to understand what has happened. If a degree of formality has been introduced through the original complaint from the employer having to be in writing, it seems outrageous, absurd and unthinkable that the process would not conclude in writing. Anything less is bound to lead to confusion and create the potential for genuine misunderstanding, clogging up the tribunal system with yet more cases.

It seems to me self evident that a process that begins in writing and involves communication between the parties must end with a written confirmation of the final decision. To have that communicated verbally at the end of the hearing is surely inadequate. Apart from anything else, it suggests to me a lack of consideration. I would expect the employer to confirm his position in writing following the appeal meeting, much as in the legal system a court hearing takes place and a judgment is delivered later.

I am not at all satisfied with what the Minister has said. It is a lay notion of a basic principle of justice that people should have the ultimate finding against them recorded in writing so that they can refer to it. The hon. Member for Wolverhampton, South-West made a good point about people whose first language is not English having a definitive document to which they can refer. If the decisions at each step of the process are conveyed in writing, there is no scope for misunderstanding, misinterpretation or the rewriting of history, which so often occurs when procedures are conducted orally.

There is no question in my mind that the procedure ought to be conducted in writing and that the additional burden that it will impose on someone who has already had to make a statement in writing at the beginning of the process is modest and worth bearing in the interest of ensuring that the process is fair and seen to be fair. The outcome must be incontrovertible, so that there is no scope for disputes to arise about what someone did or did not say during a process that was begun in writing but continued orally.

Therefore, I will urge my hon. Friends to support the amendment, which I will press to a Division. I urge Labour Members to consider carefully where they stand. The issue is not party political, it is simply a question of whether the Minister has struck the correct balance between convenience and justice. I would say that it is essential that the entire procedure be carried out in writing, in order to ensure that justice is done and seen to be done.

Norman Lamb (Liberal Democrat, North Norfolk)

As a new Member, I had very little idea of what to expect when attending my first Standing Committee. I had assumed, in my naivety, that the Government would accept an amendment that clarified the Bill and was generally perceived to be a common-sense measure. That was, perhaps, a naivety too far.

The process starts admirably and, as the Minister said, with clarity. It is disappointing that there is every chance of it descending into chaos and confusion, because it ends with no one quite knowing what has been said in the workplace, or with different parties interpreting it differently. Remarks could have been made in a few rushed moments, perhaps to someone who does not completely understand English, or whatever language the employer is using. The amendments would provide clarity for both the employer and the employee, and I support them.

Tony Lloyd (Labour, Manchester Central)

I hope that my hon. Friend the Minister is able to say that he recognises the thrust of the argument, even if he is not happy with the amendments as drafted. A reasonable case has been made. The Minister would help Labour Members if he were to tell us, even in rejecting the amendments at this stage—and I support him in that, if he thinks it right—that he will, nevertheless, accept the spirit of what is proposed? Will he think hard about what is, on the face of it, a reasonable argument from both sides of the Committee?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I appreciate that a reasonable argument has been put forward. When the hon. Member for North Norfolk has served on Standing Committees for a while, he will appreciate that what we do here is not for the sake of our health. I engaged in debate with my hon. Friend the Member for Wolverhampton, South-West on this matter. Whether to accept amendments is a matter of judgment. I assure the Committee that I shall consider the matter further and dwell on the points that have been made.

Opposition Members should be wary. We have been very concerned about what bureaucratic burdens we place on micro-businesses in particular, given that we want disputes to be resolved in the workplace. That was our starting point, and we consulted widely on the three-step procedure. The response was not that more of it should be in writing. The Small Business Council responded:

''I am very pleased that our ongoing pressure on this issue has led to these very clear measures, which are fair both to small businesses and their employees.''

The Confederation of British Industry stated:

''We are encouraged by the draft procedures laid down in the consultation document which are very straightforward in their approach and would urge the Government not to go beyond them.''

The Chartered Institute of Personnel and Development welcomed the proposals, and the Federation of Small Businesses said that they were clear.

I urge Opposition Members not to upset the fine balance of the three-step procedure. That will be a major concern for hon. Members on both sides, but the Opposition regularly raise such considerations. My hon. Friend the Member for Wolverhampton, South-West said that he preferred nothing in writing to a mish-mash. It is crucial that the first stage should be dealt with in writing. I am repeating myself, but this has been a long debate and the issue is important.

The first step must be dealt with in writing because an employer needs to know the grievance; alternatively, the employee needs to know the accusation. Should every stage after that be in writing? That would apply to employees as well. The employee who might struggle to put a case in writing would have to struggle again to put the decision to appeal in writing. The hon. Member for Runnymede and Weybridge says that only two lines would be needed. It should be remembered that when people are trying to resolve a dispute in the workplace, every time someone must sit down and write out the grievances, it spurs matters on—[Interruption.] These are important points that came up in consultation.

It is crucial to establish the first point in writing. Whether that approach is used in further stages of the procedure is a question of judgment.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am sorry to interrupt the Minister. He suggested that the requirement to inform the employer in writing of a wish to appeal would require the employee to restate the grievance. That is nonsense. If the process is already under way, all that the employee would have to do would be to write a letter stating, ''I have received your letter of the 10th; I wish to appeal.''

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I did not say it was required. I was commenting on the nature of the sort of events that we are considering and what would happen if, while an attempt was being made to solve a dispute in a workplace with one or two employees, the person concerned said, ''I am still unhappy with your decision'', before the appeal. After the first formal stage, that person would once again have to put something in writing.

We are considering what would be statutory requirements. Not adhering to them could, under the Bill, result in one's case being mitigated by 10 to 50 per cent. It is a matter of judgment whether it would be necessary to proceed in writing at later stages. ACAS advises that people should put such matters in writing, but as we have said before, there is a difference between what is necessary and what is sufficient.

We are trying to set down what is necessary and to frame the measure in such a way as to encourage the resolution of disputes in the workplace. I do not want hon. Members to think that I am being perverse. I would be delighted to accept some amendments—it would give me an easy life—but we have a duty, having consulted, to point out why it is important not simply to have a quick debate and move on. Having given that assurance, I shall reflect further. I hope that the Committee will reject the amendment.

Charles Hendry (Conservative, Wealden)

I speak for the first time in this Committee. I believe that the Minister misunderstands the interests of small business. I record my interest as an employer, albeit on a scale rather smaller than Johnson Motors of Hull. The Minister said that he seeks to help small business, but the people most protected by this measure will be small businesses.

I have worked for companies large and small, and I have had my own small business. I do not know whether the Minister has ever worked for a small business—although, the way it is going, the Post Office will soon become one. However, the Minister will understand that the facilities available in different sorts of organisation can vary enormously. Such an issue in a large company would be handled by the personnel department, and everything would undoubtedly be committed to paper. Such a professional organisation would be capable of handling that, but small companies do not necessarily have such facilities.

One would hope that such disputes happen only once in an employer's career—it will not happen year after year—and both sides will certainly find it distinctly traumatic. The most traumatic part of all will be the first letter—for instance, to the person in Hull who services the Deputy Prime Minister's Jaguar—that says, ''Something has gone wrong, and you're not doing what we expected you to do. I am sorry to say it, but this is the end of our relationship. It is a matter for dismissal.'' That would fundamentally change the relationship between two people working in a small business.

Thereafter, the trauma will drive friendships apart, and it will sometimes be impossible for two such people to work together again. It is in the interests of both parties that everything thereafter that is crucial should be put in writing. Human nature dictates that if we have something deeply painful to say, we try not to say it face to face. It could be that the end of such a meeting, the employer may say, ''Let me think about this a bit more, and I'll see if we can find a way through it.'' A little while later, he may telephone his employee at home and say, ''I am sorry; I have thought about it more and the answer is no, we cannot resolve this.'' Or, worse, he may leave a message with that person's partner or on the answer phone, which the employee may say he never received, or he may leave a message with someone who works at the employee's home who does not have a good command of English. We are not told how the employee should be informed, but it is not adequate to leave it like that. The only way to protect both sides when a key decision is made is to commit it to paper.

The Minister says that he seeks to protect small businesses, but he is wrong. The people who stand to be most damaged are small business people; they may go through this only once but, if it goes to a tribunal, they will want to be able to show that they have done everything properly and that they have taken every possible precaution. Even at this late stage, I urge the Minister to think again.

Philip Hammond (Conservative, Runnymede and Weybridge)

My hon. Friend has made his case admirably. What the Minister proposes will leave uncertainty. There is good reason for doing things in writing, especially if proceedings are likely to be controversial or if anything needs to be referred to again. That practice is well established, and the Minister has not made a case for departing from it.

The hon. Member for Manchester, Central suggested that he would be satisfied if the Minister indicated a willingness to reject the amendment but to return to the principle later. That is a common device, which I accept, for dealing with amendments on a complex subject or amendments that are poorly drafted that need to be abandoned and dealt with by the parliamentary draftsman. In the present case, the amendments would insert the words ''in writing'' into each provision. There is no scope for the parliamentary draftsman to improve the wording. It would be disingenuous of the Minister to say that he was sympathetic to the idea but not the phrasing of the amendments—[Interruption.] I accept that he has not said that.

In this case, I would withdraw the amendment only if I were persuaded that it required redrafting. I have not been persuaded, so I must press the amendment to a Division.

Kevin Hughes (Labour, Doncaster North)

I urge the Minister to consider throwing a life belt to my hon. Friend the Member for Wolverhampton, South-West. He is a new Member who has given a gift to the Opposition. As soon as he agreed with the amendment, the Conservative Whip, the hon. Member for Wealden (Mr. Hendry), scurried to Members of other parties to stack up enough for a Division. That put my hon. Friend in a bit of a predicament.

My hon. Friend the Member for Manchester, Central counselled the Minister well: the Minister should consider the amendment seriously before Report. If he does not, my hon. Friend the Member for Wolverhampton, South-West will be in a dilemma, because Opposition Members have set a trap for him. Will the Minister consider the amendment seriously? That would allow us to discover whether the Opposition are serious about it.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

As always, I am grateful for my hon. Friend's advice, which I intend to take. If the hon. Member for Runnymede and Weybridge presses the amendment to a Division, we should reject it. I have made an important point, which we should pursue. The Committee is a good one; it should not be divided.

We consulted widely with small businesses. None of those that examined the simple three-step procedure asked for the procedures to be in writing. The hon. Member for Wealden (Mr. Hendry) made an eloquent speech, although I was slightly offended by references to the Post Office, Jaguars and Hull. The detail of his speech did not reflect our experience of consulting organisations. Although the hon. Gentleman may not be persuaded by the argument, and he is joined in that by a few Government Members, he should accept that we shall return to the issue after touching base with the small businesses that returned submissions in good faith.

I am also informed that an extra hour for each case would cost business £3 million. I know that hon. Members will take that into consideration; I work very quickly in my mental calculation on such matters. I assure the hon. Member for Runnymede and Weybridge that we will consider the amendment, but we will do so on the basis of our initial principle of light-touch regulation that does not add to bureaucracy. Some eloquent arguments have been made, but certainty is in the interests of small businesses. Whether the amendment is defeated or withdrawn, I will give it further informed consideration.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 12.

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 77, in page 59, line 10, after 'taken', insert

'within one month of the previous step or action and in any case'.

Opposition Members are used to winning the argument but losing the vote. However, we are not used to winning the argument so convincingly but still losing the vote, so I am disappointed with that result.

I hope that this amendment will appeal to the hon. Member for Wolverhampton, South-West, because it would do precisely what he suggested was needed. It would beef up the reference in paragraph 12 of the schedule that steps in the procedure

''must be taken without unreasonable delay.''

In framing the amendment, I sought not to undermine the principle that no unreasonable delay should be the primary requirement. However, I seek to underpin that slightly nebulous concept with a fixed maximum period of one month between steps in the process. The amendment would ensure that each step and action was taken within one month of the previous one and in any case without unreasonable delay—in simple language, whichever period was the shorter.

I hope that the Minister might be persuaded that the amendment is a good idea. I am not persuaded that the phrase ''without unreasonable delay'' should be deleted and replaced with a fixed time, because in different cases, different periods will be reasonable or unreasonable. Ultimately, the individual circumstances of a case must be considered, but underpinning that with a fixed period would be the right way to make a statement about the speed of the process and the longest acceptable period.

I hope that the Minister will either accept the amendment or tell the Committee what he understands by the phrase ''without unreasonable delay''. He might want to put a shorter or longer period around that concept, and I look forward to hearing what he has to say.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

We have no wish to impose set time limits within the process, because that would create inflexibility. The hon. Gentleman says that the provision's wording is needed but insufficient. As the amendment recognises, in some cases, a month may be longer than a party needs to undertake a simple action. Indeed, taking a month might constitute an unreasonable delay. For example, why should an employee have to wait as long as a month after lodging an appeal before the employer arranges an appeal meeting?

However, just as importantly, the amendment fails to recognise that there may be cases in which it is reasonable to allow more than a month between actions in the process: for example, after their initial meeting, the parties in complex cases might agree that some form of detailed investigation should be undertaken, which might involve a third party or the establishment of a joint union-employer working group. Such steps outside the statutory procedure might be sensible in some circumstances.

We do not want to close off opportunities for parties to agree. Our ambition is that the procedure will resolve problems in the workplace, so we do not want to be overly prescriptive. The wording of paragraph 12 achieves the objective in a way that provides the necessary flexibility. I hope that the hon. Gentleman will withdraw the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

Will the Minister issue guidance indicating how speedy the process should be in normal cases, allowing for the point that he just made?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

No, but ACAS undoubtedly will. Timing is an important element of its code, and it will now have to take into account the new circumstances. ACAS is the best source of such guidance.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am somewhat persuaded by what the Minister says. Obviously, even in framing the amendment, I was acutely conscious that there could be cases in which a much longer period would be reasonable: for example, if one of the parties was seriously ill, it might be necessary to postpone a step.

The purpose of tabling my probing amendment was to ask the Minister for a definition of reasonable delay and how he intends to enforce the measure. Employers' groups have raised concerns about the vagueness of the term ''without unreasonable delay.'' ACAS guidance on best practice would be helpful. In the interest of—dare I say it?—speeding up the debate so that we can move to a more interesting part of the Bill, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Norman Lamb (Liberal Democrat, North Norfolk)

I beg to move amendment No. 31, in page 59, line 13, at beginning insert 'Notice,'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this, it will be convenient to take amendment No. 47, in page 59, line 19, at end add—

'(4) The right referred to in section 10 of the Employment Relations Act 1999 to be accompanied by a single companion applies to meetings under this section.'.

Norman Lamb (Liberal Democrat, North Norfolk)

Part 3 of schedule 2 states the general requirements that apply to meetings. Paragraph 13(1) states that

''Timing and location of meetings must be reasonable.''

Inevitably, there is a certain amount of latitude in interpreting ''reasonable''. None the less, the requirement is imposed on the employer. As well, the conduct of such a meeting must allow both parties to explain their case. That, too, is reasonable.

However, a requirement to give an employee sufficient notice of such a meeting should also be included in the Bill. It must be recognised that the employee, like the employer, will probably need time to prepare his or her case so that the complaint can be dealt with fairly. Such a requirement is particularly relevant because the employee has the right under other legislation to be accompanied at such meetings by a chosen representative, who also would need time to prepare for the meeting. Given that the Bill already refers to the requirement that the timing and location of meetings must be reasonable, it seems sensible for it also to say that notice must be reasonable. I refer again to my earlier argument. This is a perfectly sensible amendment, and I urge the Minister to respond constructively.

Amendment No. 47 would detail the right to be accompanied in the Bill. Although the right to be accompanied to a formal hearing is contained in section 10 of the Employment Relations Act 1999, there is a clear concern that if the right to be accompanied in meetings under the new procedures is not set out as a basic requirement, employees will be unaware of their rights and employers left in doubt about the requirements on them.

The amendments are intended to provoke the Minister into considering the requirements. The requirement of notice is clear and straightforward. The concept of detailing in the Bill that employees have the right to be accompanied should add clarity. I urge the Committee to accept the amendments.

Rob Marris (Labour, Wolverhampton South West)

Amendment No. 47 is perhaps a question of interpretation. My reading of section 10 of the 1999 Act is that when Parliament—of which I was not then privileged to be a Member—passed the Act, the word ''hearing'' was used. To most people, both lay and professional, ''hearing'' imports something different from ''meeting''. I am not sure about the amendment's wording for the reasons that I will lay out, but I am speaking to its spirit.

Will the Minister clarify whether the word ''hearing'' might be better used for step three, which is the appeal? I appreciate that, early in the procedure, there might be a meeting between two people over the bonnet of a Jaguar for example. However, for an appeal scenario, ''hearing'' would be better used and would import with it the right to be accompanied, which is not evident as the Bill stands. As I said in an earlier debate, if this were to become the subject of a legal dispute of tribunal proceedings, whichever party it suited is likely to say that, had Parliament intended this to be a hearing with the attendant right to be accompanied, it would have used ''hearing'' not ''meeting''. If ''hearing'' were used at certain points in the schedule, that would remove the need for amendment No. 47.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

The amendment would ensure that employers had to give reasonable advance notice of meetings held under the statutory procedures. I sympathise with the aim, and I would not encourage employers to hold at short notice meetings for which the employee and accompanying person had no time to prepare. However, that point is covered by the existing wording. Paragraph 13(1) requires that the timing of meetings should be reasonable, which should mean that meetings could not be arranged at times that are seriously inconvenient for employees or their accompanying colleagues. Notice would be of the timing of the meeting, and if it arrived only a short time before the meeting, it would not be reasonable. Similarly, it would be unreasonable to arrange meetings at times that would seriously disadvantage the employee because there was inadequate time to prepare. The amendment is unnecessary. The point is already covered sufficiently in the wording of the schedule.

The right to be accompanied by a trade union official or a fellow worker is crucial and we need to be clear about this. It will apply to virtually all meetings held under the statutory procedure. The relevant provision of the Employment Relations Act 1999 will therefore apply to these meetings. Among other things, that Act sets out arrangements to ensure that meetings are not called at times when the accompanying person cannot attend. In effect the provisions also provide a further set of protections to ensure that meetings are arranged at suitable times. We will look to ACAS to revise its code of practice on disciplinary and grievance procedures. The existing code already provides some guidance on the arrangement of meetings. We will be asking ACAS to see whether that advice could be refined to give guidance on the application of part 3 of the statutory procedures. The hon. Member's point about notices could be addressed in the revised code.

Tony Lloyd (Labour, Manchester Central)

The Minister makes it clear that the principle of the right to be accompanied remains the same. My hon. Friend the Member for Wolverhampton, South-West simply expressed the concern that ''hearing'' might be interpreted by the tribunal in a narrow and restrictive sense and that ''meeting'' would not cover that. Lawyers and those familiar with tribunal proceedings have expressed concern about this. It is imperative that there is certainty in the Bill and that it enshrines the right to be accompanied.

If there is any doubt, will the Minister consider the wording? Words in Parliament are cheap enough. I am sure that there are many alternative wordings. We must ensure that every worker has the right to be accompanied. That is the spirit of the Employment Relations Act 1999. We must also ensure that no employer is unaware of that right. That may be done through the ACAS code or some other means.

I accept what my hon. Friend the Minister says today and I will support him, but it is imperative that he gets it right.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

I agree with my hon. Friend. On amendment No. 31, the right to be accompanied, which once again follows ACAS guidance and is now part of the code, reinforces the point about notices. I am now coming on to the more crucial point about amendment No. 47.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am anxious to probe the Minister on that point. Was he saying that there is a right to have the meeting arranged at a time that is convenient to the representative accompanying the person, or merely not impossible for him? If he is saying that one cannot arrange a meeting in the middle of the night in the pub down the road that is obviously perfectly sensible. But is he saying that if a person wishes to be accompanied by a specific representative, the meeting has to be arranged around the availability of that representative? If so, he is introducing additional complexity into these arrangements, which he sought to reject when we dealt with notices in writing.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

That is an interesting point, but it is a different law. I was quoting from the Employment Relations Act 1999. That Act and its accompanying guidance states that if a person is to be accompanied to a meeting, to which they will be entitled under these procedures, the employer must ensure that meetings are not called at times when the accompanying person cannot attend.

Philip Hammond (Conservative, Runnymede and Weybridge)

Would that apply to this?

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

It would certainly apply to this.

I turn to amendment No. 47, which would ensure that the statutory procedures carry a specific reference to the right to be accompanied. That right is set out in legislation and applies to most meetings that are held under the grievance and disciplinary procedures. The exceptions are less important meetings that deal with grievances that do not affect statutory or contractual rights, and meetings in a disciplinary context that cannot lead to disciplinary action against a worker. That is the existing law on the right to be accompanied, although the Act did not require employers to adopt procedures. The Bill changes that. As I said, from last July, workers had the right to be accompanied to a grievance or discipline hearing, but did not have the right to have such a meeting to be accompanied to.

The Bill will require employers to have procedures and will give clear incentives to employers and employees to use them. Consequently, more meetings will be held under such procedures than would otherwise be the case, so more meetings will be held to which the right to be accompanied will apply. However, we intend to leave the right unchanged by the Bill, which is why there is no explicit reference to it in the schedule. We have avoided the risk of unintentionally changing or diluting the right.

Amendment No. 47 seriously runs that risk because its precise effects are unclear. It may mean that the right to be accompanied applies to all meetings held under the statutory procedures. An employee may have a grievance that his employer does not provide a car park. Employers do not have a statutory duty to provide car parks, and it makes no material difference to the employee's terms and conditions. The 1999 Act states that an employer would not have the right to be accompanied to pursue that grievance. The amendment highlights the danger that problems may be created if one tinkers with provisions. It suggests that the right that we want to preserve would be changed. If the amendment were accepted, the right may apply to meetings about trivial grievances that could not be the subject of a tribunal complaint. That would extend the ambit of the existing right. Even if the amendment does not affect the right, I am not convinced that it should be in the Bill.

I shall deal with the point of my hon. Friend the Member for Wolverhampton, South-West, which he raised with me last week. The words ''meeting'' and ''hearing'' have the same meaning in this context. The right to be accompanied will apply to virtually all meetings under the statutory procedure. We are absolutely clear about that. There are no mistakes in the wording meaning that a person would lose the right to be accompanied. There are no legal terms to refer to the right in the statutory procedure. The right will apply to meetings held under the statutory procedures as it does now to meetings held under the voluntary procedure.

I understand that the hon. Member for North Norfolk may want to include a reference to the right for presentational reasons because he thinks that more people will learn about the right from including it in the Bill. However, he did not mention that during his remarks. The law serves to define rights and responsibilities, not to publicise such rights. We must ensure that people understand fully the interaction between the right to be accompanied and the statutory procedures.

Rob Marris (Labour, Wolverhampton South West)

May I take the Minister back a little way? When he clarified the right to be accompanied, he appeared to be quoting. I do not have the Employment Relations Act 1999 in front of me. However, I recall that section 10 refers to the right to be accompanied to a hearing. It would assist me greatly if he would indicate a different part of that Act or other legislation that refers to the right to be accompanied to meetings.

Alan Johnson (Labour, Kingston upon Hull West and Hessle)

Perhaps I can write to my hon. Friend on that matter. The point raised was whether ''hearing'' and ''meeting'' had a different legal context, and I am absolutely satisfied that they do not. In terms of the terminology that we are using, ''meeting'' would be much better than ''hearing''. That does not dilute or change the right to be accompanied. In many ways, it strengthens that right, because there are measures on IT1 and IT3 forms, which would provide a useful opportunity to make sure that people are aware of their right to be accompanied. We will undertake a major publicity campaign alerting employers and others of the existence of the statutory procedures, which will publicise the existence of related law, especially the right to be accompanied. That is the proper way to raise awareness of that important statutory right. For all those reasons, the Government cannot accept the amendments.

Norman Lamb (Liberal Democrat, North Norfolk)

I am happy not to press the amendments, which were probing. It is helpful to have it on record that the Government intend that the right to be accompanied should apply to these provisions. Equally, although I would have preferred a very clear provision, it is helpful that the Minister has made it clear that the Government intend to interpret the word ''timing'' as including a requirement for the notice of the meeting to be reasonable. Given that Hansard can be used in interpreting provisions, that goes some way towards satisfying my concerns. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Further consideration adjourned.—[Mr. Pearson.]