Employment Bill

Public Bill Committee, 22 January 2002.

Standing Committee F

Employment Bill

John Healey (Labour, Wentworth)

On a point of order, Mr. Benton. On Thursday, the hon. Member for Runnymede and Weybridge (Mr. Hammond) requested certain factual information that I have been able to provide to him and other members of the Committee in the form of a short letter.

Joe Benton (Labour, Bootle)

Thank you.

Philip Hammond (Conservative, Runnymede and Weybridge)

Further to that point of order, Mr. Benton. I am grateful to the Minister for making that information available in such short order that it can be brought to bear on today's debate.

May I draw your attention to the fact, Mr. Benton, and ask you to draw it to the attention of the relevant authorities, that, in spite of previous commitments, the new clauses have been printed without line numbers? In the case of a new clause, such as new clause 2, that runs to several pages, that makes it difficult for hon. Members who want to table amendments to identify the line in which such amendments should be inserted, and it makes matters more difficult for the Clerks who have to marshal the amendments. I have raised this issue on several occasions in Standing Committee, and I have been assured that it is has been agreed with the printer that line numbers will be printed the first time new clauses appear. As that would seem to be for everyone's convenience and would inconvenience nobody, I ask once again whether you might raise the matter through the channels of the Chairmen's Panel and see whether anything can be done.

Joe Benton (Labour, Bootle)

That point of order is noted, and I shall pass it on.

Ordered,

That the Programming Order of the Committee of 6th December 2001 be amended—

by the substitution in paragraph (5) (time for conclusion of remaining proceedings) of the words '11.25 a.m. on Thursday 24th January' for the words '7 p.m. on Tuesday 22nd of January'. —[Alan Johnson.]

Clause 43 - Union learning representatives

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 221, in page 45, line 33, after '(2)' insert

'and has obtained a nationally recognised qualification relevant to those activities'.

Joe Benton (Labour, Bootle)

With this we may discuss the following amendments: No. 220, in page 45, leave out lines 35 to 41.

No. 222, in page 46, line 1, leave out subsection (6).

No. 226, page 47, line 4, at end insert—

'(aa) the training condition referred to in section 168A(4) of this Act is met in relation to him.'.

Philip Hammond (Conservative, Runnymede and Weybridge)

The amendments primarily deal with qualifications and training for the job of union learning representative. We are all clear that the union learning rep is not a nominal appointment or reward to be given to somebody for long and diligent service in the cause of their union. It is a functioning post that, in best practice examples, will perform a vital function as part of the overall training and learning scheme in a firm. It is therefore essential that the people who fill the posts are properly qualified, which means appropriate qualifications and training to do the job in question.

The Government envisage that union learning reps will be appointed, or perhaps elected in some cases, and, once appointed, will undertake some training to fit them for the job. That is counter-intuitive because we are discussing a particular function for which someone will need a clear knowledge and understanding of the training process and the opportunities available to members of the work force. Opposition Members consider it reasonable for employers to expect that if they pay people to carry out duties during working time, the people who carry them out will be competent and qualified. That is so self-evidently necessary and uncontroversial that I am curious about the Government's objection to the inclusion of a requirement for a nationally recognised qualification for somebody to be eligible to be appointed as a union learning rep.

The rejection by the Government of amendment No. 221, which recommends that a ''nationally recognised qualification''—something like a national vocational qualification—should be required to make a person eligible for appointment as a union learning rep will suggest to employers that the Government see union learning reps less as contributing in a specific function, and more in terms of an award, reward or recognition. I cannot begin to imagine the argument that the Minister will make to suggest that people who are wholly unqualified should be eligible for these posts. The system will be brought into disrepute if people who are eminently qualified to act as learning reps in a workplace are passed over and people who are eminently unqualified are appointed.

If the Minister is unable to accept the amendments, I hope that he will indicate that there will be a requirement in guidance or regulations for appropriate qualification at the time of appointment. If an employer is to be required to recognise the appointment of a union learning rep, there should be a requirement for that person to have appropriate qualifications. The other amendments flow naturally from what I have just said.

John Healey (Labour, Wentworth)

All the amendments refer to the training condition. Many respondents to our consultation exercise, especially employers, wanted

assurances that union learning reps would be sufficiently trained to carry out their specialist duties. There was majority, if not unanimous, support for that and one or two voices, such as that of the Trades Union Congress, were unhappy that we should insist on a training requirement. However, that is the decision that we have come to. Clause 43 requires employees to be sufficiently trained to carry out their duties either at the time that they begin functioning as a union learning representative or within six months of that date.

Amendment No. 220 seeks to remove subsections (4)(b) and (c) from new section 168A. Those subsections deal with the position of a union member who wishes to become a union learning rep but is, as yet, untrained in that role. Such individuals would find it difficult to gain the necessary expertise unless they had time off work to undergo the required introductory training. Indeed, evaluation of the existing union learning reps demonstrates that one in three find that an inability to have time off is a barrier to carrying out the role. The subsections make provision for that by allowing a new but untrained union learning rep to fill the position for an initial six-month start-up period. During that period, the union learning rep would receive the same time off rights as an established rep. However, if the person did not receive the required training during the six-month period, that person would no longer qualify for that right to time off.

Philip Hammond (Conservative, Runnymede and Weybridge)

Does the Minister acknowledge that there is a difference between training and qualification? The amendments propose that the provision that the training condition is met by training after the appointment be deleted and that, in its place, a recognised qualification is required as a condition of eligibility for appointment. That is, in practice, how we work across the piece. I am sure that his Department does not generally appoint people on the basis that if they undergo appropriate training, they might be capable six months later of fulfilling the role assigned to them. We tend to look for people who are capable of fulfilling it from day one.

John Healey (Labour, Wentworth)

I accept that there is a difference between training and qualification and I shall come to that when I come to amendment No. 221. Equally, I expect the hon. Gentleman to accept that some forms of training and learning include learning on the job. During the six-month start-up period, new union learning reps will gain important experience in doing the job as part of their development in the role.

Subsection (5) ensures that a disqualified person—a union learning rep who did not take up the initial training within the six-month period—could not immediately requalify for time off by starting a second six-month period. Thus, there is a real incentive for the new union learning rep to undertake the initial training at the earliest opportunity.

If there is to be a training condition, we must give all union members an opportunity to meet it. The two subsections are vital if we are not to exclude many people from the opportunity to undertake this role in the workplace in future.

Amendment No. 221 seeks to define the training condition as the attainment of a nationally recognised qualification relating to a union learning rep's activities, as the hon. Member for Runnymede and Weybridge explained. At present no national vocational qualification covers all aspects of a union learning rep's role. Some units of existing advice and guidance non-vocational qualifications may well be applicable to that aspect of a union learning rep's role. In addition, there are specially designed courses for union learning reps who need them, which are accredited through the Open College network. It may be possible to design a national qualification in this area, but it is a totally different matter to insist rigidly, as the amendment does, that all union learning reps should obtain such a qualification.

George Osborne (Conservative, Tatton)

If the Minister is not prepared to accept the amendment, how can we establish whether someone has undergone insufficient training? Normally, in our education and employment system, we establish that people are sufficiently educated or have undergone sufficient training if they have achieved a qualification. How can we prove that if the Minister does not accept the amendment?

John Healey (Labour, Wentworth)

The hon. Gentleman will recall from our discussions last week that a code of practice is proposed. The clause enables either the Advisory, Conciliation and Arbitration Service or the Secretary of State to produce a code of practice that will help to define the training condition. The hon. Gentleman will also recall that we have discussed the balance between specifying provision in the Bill and the need for flexibility of application, workplace by workplace. The same principle applies to my argument about a qualification.

These courses, or a single, formal qualification, may not suit everyone. Union learning reps, like Members of Parliament, come in all shapes and sizes: they have different aptitudes and prior skills and widely varying personal characteristics, and people learn in different ways. We know from experience over the past three or four years that some of the most effective union learning reps are those who have come to learning late; a formal course may not be suitable for them, just as a formal course and the full qualification may not be suitable for someone who may previously have been a careers guidance expert or, indeed, a teacher. If we go down the hon. Gentleman's route, we risk, first, introducing rigidity and, secondly, denying the possibility of becoming a union learning rep to a number of people who might otherwise be able to serve in that capacity and help their workplace colleagues.

Philip Hammond (Conservative, Runnymede and Weybridge)

I want to put two points to the Minister. First, is he telling us that someone who does not have a qualification at NVQ level is the right

person to advise others on how to obtain such qualifications? That seems to me to be counter-intuitive.

Secondly, as I understand it, the paragraphs in subsection (4) should be read disjunctively, so subsection (4)(b) stands alone. It therefore says:

''The training condition is met if—

(b) the trade union has in the last six months given the employer notice in writing that the employee will be undergoing such training''.

There is no reference to training being done or being done by a specific date. If the trade union simply gives the employer notice in writing that the employee will undergo the training, that will satisfy the training condition and force the employer to recognise that person as a learning rep. That is entirely unsatisfactory.

John Healey (Labour, Wentworth)

On the latter point, as I have already explained, the training condition will be met in those circumstances in order to give new union learning reps six months during which they have the right to paid time off to take the initial training required to bring them up to speed as a fully effective trade union learning rep. If they fail to take up that entitlement, the training condition lapses and cannot be reapplied for by the same person. That is why the provision is in the clause.

On the hon. Gentleman's first point, I urge him to look at some of our evaluation evidence of the experience of union learning reps over the past four years. He may know that one of the biggest problems facing Britain today is that up to 7 million adults do not have the reading, writing and maths skills that we expect of our 11-year-olds. Of those 7 million, at least 3 million are already in the workplace. Our experience has been that some union learning reps with poor basic literacy and numeracy skills are in a perfect position for colleagues with similar difficulties to confide in them and to trust their advice and information about how, after many years in many cases, they can begin to tackle their basic skills problems. The value of union learning reps is that they can move among their colleagues and be someone whom both the employee and the employer can trust to raise the commitment and the motivation to tackle some of the learning and skills deficits that we face in workplaces today.

George Osborne (Conservative, Tatton)

In the situation that the Minister is describing, union learning reps have considerable responsibility, because they are dealing with people, as the Minister says, who may have poor literacy and numeracy skills, be poor at articulating themselves and need all the help that they can get. Surely that is even more reason why union learning reps should have a basic qualification for advising people? If they do not, we may find that someone with no qualifications, who may honestly be trying to do the best job he or she can, may give poor advice simply by not being qualified to help those people.

John Healey (Labour, Wentworth)

The hon. Gentleman makes a persuasive case, but it supports the case for training if a union learning rep is to do an effective job, and not necessarily the case for a single qualification, which

may lead to problems of rigidity and may rule out those who would otherwise have a valuable role to play as union learning reps. Above all, I have made it clear that we want to avoid the danger of a one-size-fits-all policy, which would not work in practice.

Mark Prisk (Conservative, Hertford and Stortford)

I think that all members of the Committee respect the argument that many people struggle to read and write—indeed, this morning I am struggling with my own words—but we must not confuse the pastoral role to which the Minister refers with the need for a qualification. Can the Minister explain whether the stance that he has taken this morning contradicts his Department's stance on, say, teaching in schools, which is clearly a comparable situation? The Government have rightly argued that qualified teachers are needed to provide the leadership, qualifications and skills necessary to do the job, and the same is surely true in the workplace.

John Healey (Labour, Wentworth)

The situation is different. We are talking about lay people who are prepared to undertake extra duties to help their colleagues at work, and we are keen to ensure that such people have the support, information and basic training that they need to do so effectively. That could include diagnostic techniques, the ability to carry out skills audits, basic information advice counselling skills, and knowledge about the type of learning provision that might be available and appropriate. We look to our union learning reps to have such training, information and skills, but as I have contended that is not the same as a formal qualification.

Hywel Williams (Plaid Cymru, Caernarfon)

In terms of previous experience and learning skills, will there be a system of accreditation for those who might not have formal qualifications? Such a system is quite common in other areas of training.

John Healey (Labour, Wentworth)

For those who are new union learning reps, the proposed code of practice and the provisions that introduce it will cover such matters by defining the training conditions and the circumstances in which they will be met.

Amendment No. 222 would remove the clause's definition of ''sufficient training''. It would also remove the power of ACAS or the Secretary of State to introduce a code of practice that gives guidance on what constitutes sufficient training—the matter on which the hon. Member for Caernarfon (Hywel Williams) pressed me a moment ago.

As I argued in response to amendment No. 221, the Government recognise that the experience, attributes and prized skills that individuals bring to the job will vary greatly. I am therefore keen to avoid an unnecessarily prescriptive definition of ''sufficient training'' that treats all individuals as if they need to be, and are, the same. In practice, some individuals may need formal training, but others who learn best in different ways could pick up the necessary expertise by shadowing an experienced union learning rep, or through similar individual coaching and mentoring. Indeed, some may have already gained teaching or

training experience through their employment. For them, such previous experience might mean that they need little or no further training to undertake the role effectively.

We would expect the code of practice to discuss and deal with those varying circumstances, giving guidance on what should be taken into account in deciding whether an individual is indeed sufficiently trained. I expect the code of practice to be produced by the Secretary of State, although no final decision has been taken on that. It is within the power of ACAS to produce it, although this particular field is perhaps outside its expertise. In either case, a draft code would be put out for full consultation, and it is clear that it would be particularly important for us—or for ACAS—to receive the views of employers, unions and training specialists on its contents.

Amendment No. 226 seeks to ensure that trade union members have the right to access a learning rep only if that rep meets the training condition, and I agree with that aim. There should be no entitlement to time off—although such time off would be without pay—where the rep is a self-styled union learning rep with no backing. However, I believe that the clause will achieve that. It will insert proposed new subsection (2)(b) into section 170 of the Trade Union and Labour Relations (Consolidation) Act 1992, and provide an employer who is also a union member with the right to unpaid time off for the purpose of accessing the services of a union learning rep. Proposed new subsection (2)(c), however, provides that that right will apply only if the union learning rep qualifies for paid time off under subsection (1) of proposed new section 168A. To so qualify, a union learning rep will have to meet the training condition, and an entitlement to time off will exist only where the union learning rep has indeed met that condition.

I hope that that somewhat lengthy explanation has given hon. Members the reassurance that they seek, and that, in the light of my comments, the hon. Member for Runnymede and Weybridge will regard the amendment as unnecessary. Through the consultation exercise, we have carefully weighed views on the question of requiring training and qualification. We have responded to employers' requests that a training condition be attached to the union learning rep role, and in a way that avoids over-prescription by catering for a wide variety of circumstances and for the wide range of individuals who might take up that role. A code will be introduced, giving more detailed guidance. We have also ensured that all qualifying members of a union will have a reasonable opportunity to become union learning reps themselves.

The provisions are sensible and I invite the hon. Gentleman to withdraw the amendment. If he will not, I must urge my hon. Friends to resist it.

Norman Lamb (Liberal Democrat, North Norfolk)

I shall be brief. I have already expressed concern about the potential for abuse of this new right—we had that debate last week—and if it is to work, it must include an element

of flexibility. The amendments are overly prescriptive and could disqualify a number of people who genuinely want to contribute to improving education and skills among union members in the workplace. It would not be helpful to deny such people the opportunity to play a role, and on the whole I prefer the approach in the Bill as drafted. A code of practice that defines how the training should work is preferable to an overly prescriptive system that would deny opportunities to many potentially laudable representatives.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am not soothed by the Minister's explanations. The issue is important, and it goes to the heart of the question of the Government's motivation in pursuing this measure. Generally speaking, the Government are pretty much wedded to objectively measurable standards, qualifications and thresholds. They like to measure, and to ensure that things are being achieved in a measurable way. Here, however, the woolly suggestion is made that those who are unqualified will be appointed unqualified. They will perhaps undergo some training—I shall return in a moment to the question of how we can be sure that such training will take place—at the end of which the assumption will be made that they are fit to do the job. As I understand it, there will be no test at the end to establish whether such people are competent, capable and qualified to preach to their fellow workers. There appears to be no mechanism for challenging the appointment of a union learning rep if it becomes self-evident during training that he is unsuitable or not committed to the role.

We have fundamental questions about the Government's real intentions. There is no debate about the need to encourage training and learning, or to secure co-operation between employers and those who work for them. The debate is about whether the exercise on which the Minister is embarked is genuinely intended to achieve that objective, and focused towards achieving it, or whether there is an alternative agenda.

Norman Lamb (Liberal Democrat, North Norfolk)

I am absolutely with the hon. Gentleman over the need to ensure that the new right works as it ought to and is intended to, according the terms of the Bill, rather than being abused in the way that he suggests. Does he not concede, however, that in any given workplace the learning rep might be dealing with a human resources person, employed by the employer, who is equally unqualified, although perhaps very good at the job? It would be a little bizarre to impose a requirement of a specific training qualification on the union side of the workplace, but not on the human resources, employed, side.

Philip Hammond (Conservative, Runnymede and Weybridge)

An employer dealing with a unionised work force, which is what we are talking about, who appoints a completely unqualified human resources manager is taking a pretty big risk with his business. I certainly would not recommend anyone to buy his shares, but that would be his risk.

Something very important came from the Minister's response to the amendment. I do not think that we need to have a party political confrontation on the point, but it became apparent to me as he was speaking that part of the problem is that we are trying to address two issues at once. In the Minister's recent remarks about union learning reps, he referred to dealing with illiteracy and the 3 million people who cannot read or write and who do not possess basic numeracy. Of course, that is a major problem in society, which must be addressed. He is right that someone with no formal qualifications and no educational background but who has sorted himself out might be in a better position to take the message to a younger colleague that he needs to focus on acquiring those basic skills. I do not disagree with that.

However, when we were talking about union learning reps at the start of this series of debates, I had in mind something a little more ambitious and exalted and I think that employers have that in mind when they examine the positive role that union learning reps can play. The United Kingdom has to fight its corner in the world, so we need highly skilled people in our workplaces. Skills are becoming outdated at an ever-accelerating rate and we need to encourage in the workplace a culture of learning, relearning and relearning again so that people constantly update their knowledge base and keep ahead of the game. That is where my legitimate concern about unqualified people comes in.

There are two different roles here and one of them is for the chap with no education but a good evangelical line for basic learning who can persuade others in the workplace that they need basic literacy and numeracy. However, the reality is that if someone is employed in a role that he can satisfactorily hold down without basic literacy and numeracy, it is unlikely to be of material value to the employer in the workplace to upgrade those skills. Of course, there is a huge benefit to society at large. I do not deny that, but that is different from trying constantly to persuade higher-skilled and medium-skilled people to test the ceiling of their capabilities by upgrading.

I do not have a solution off the top of my head, but I suggest that the latter role will not be adequately filled by someone with no recognised qualification in that area. I do not think that the Minister intends union learning reps to deal only with the rump end of the problem, the people left behind by the employer's skills and training schemes. I think that he intends those people to mesh into the training and learning schemes that employers develop.

We know that training will be defined in the code to be issued by the Secretary of State, but we have been told nothing about how long it should take or whether there should be any defined, measurable outcome at the end of it. I asked the Minister about that before and did not receive an answer. It seems to me that the training qualification will be satisfied, and that an appointment as a learning rep will therefore stand, if the condition in subsection (4)(b) alone is satisfied. That says that the training condition is met if

''the trade union has in the last six months''—

that is, the six months prior to the rep's appointment—

''given the employer notice in writing that the employee will be undergoing such training''.

It does not go on to say, ''and the employee actually undergoes such training.'' As I understand it, the mere giving of a notice by the trade union to the employer is sufficient to satisfy the training condition. That cannot be the intention, and I suggest to the Minister that there is an unintended loophole.

Employers will not take the scheme seriously and at face value, as the Minister would wish them to, if learning reps are to be imposed on them by statute. It will be in everybody's interests if they can take the scheme seriously. An objective measure of qualification must be achieved—the amendment suggests before appointment, but we could come to a consensus that it should be afterwards, once the training has taken place. Otherwise the scheme could be discredited by patently incompetent and unqualified people filling the role of learning reps years down the line following their appointment.

I should like to hear the Minister's response to those points before I decide how to proceed.

John Healey (Labour, Wentworth)

I shall try to deal with the hon. Gentleman's concerns.

First, he is right to argue that we need a more highly skilled work force that is constantly and regularly reskilled. However, that can happen only if people have the basic skills on which to build such additional training. That is the fundamental problem that has bedevilled so many of our employees in terms of their ability to reskill. It is a block on business and on the opportunities of those individuals. The hon. Gentleman was right to mention the need for different roles. I remind him that that was precisely my argument in response to an earlier amendment that sought to limit the number of union learning reps that could be appointed in any one workplace or bargaining unit.

Secondly, the hon. Gentleman is worried about the interpretation of subsection (4)(b). As I tried to explain, we are talking about a one-off temporary period of six months during which the newly appointed learning rep has to undertake training to meet the training condition. The key word is ''last''. If the condition is not met after six months, the right to time off to undergo that training, and the rights that accrue from being a recognised union learning rep, fall. Subsection (5) makes it clear that it is a one-off opportunity for a new learning rep to acquire the training to meet the training condition in order to be able to take up the rights for which the rest of the clause provides.

Thirdly, the code of practice and the consultation that will help us to confirm it will cover precisely the range of matters that the hon. Gentleman outlined.

Finally, the hon. Gentleman was worried about the situation of an employer who believes that the training condition in respect of a union learning rep has not been met after the initial six months. If an employer was worried that the training condition had not been met, he would not give time off to a learning rep to carry out duties or fulfil the rights that will flow from

this clause. It will be incumbent on the union and the learning rep to ensure that sufficient training, and evidence of it, are such that the employer's concern is settled. Ultimately, if the learning rep could not satisfy the employer that the training condition had been met, that would be tested in an employment tribunal. I hope that I have settled the hon. Gentleman's concerns and that he will withdraw the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister has not settled my concerns about subsection (4)(b). I have heard his comments, but my reading of the Bill is different. I am not a lawyer, but it seems that nothing requires the condition in (4)(b) to be conjoined with another condition that requires training to take place. The Minister has talked about the code of practice; it is not clear that that code will override the Bill. The code of practice will simply enable an employer to define sufficient training, and that is its essential purpose. That is relevant to subsections (4)(a) and (c) but does not seem relevant to 4(b).

I will withdraw the amendment with a view to tabling similar amendments on Report in the hope of probing the important matter of qualification. It is the key remaining issue for employers who recognise that the Government are determined to impose, by statute, union learning reps. Employers want to ensure that those who are appointed will contribute positively to training and learning in the workplace and will be appropriately qualified to do so. 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. 228, in page 45, line 43, at end add—

'(5A) This section shall not apply to an employer who has obtained and who maintains ''Investors in People'' status'.

I will not dwell on the drafting of the amendment—the Minister will probably have a hundred reasons why it is technically defective—but it probes the Government on why it is necessary to impose the model of the statutory union learning rep on an employer who is already exercising best practice in relation to training and learning in the workplace.

Many times the Minister has, using one of my favourite phrases, said that we cannot impose a one-size-fits-all solution. However, the clause offers precisely that. The statutory union learning rep is being imposed not where there is no training, or where training is inadequate, but where the training, by the Government's own standards and tests, is first class. The employer may have been certificated for being at the leading edge, yet the Government want to impose, in an unhelpful fashion, a statutory provision.

George Osborne (Conservative, Tatton)

Is my hon. Friend aware that the Department for Education and Skills effectively applies the amendment because, as can be seen from the copy of the Minister's letter, it has Investors in People status? The letter also states that there are no formally designated or accredited union learning representatives in the Department.

Philip Hammond (Conservative, Runnymede and Weybridge)

There we are; the Minister's conduct as an investor in people is so excellent that he has no need of learning reps. That is obviously his conclusion, because he has not appointed learning reps voluntarily in his Department.

John Healey (Labour, Wentworth)

May I ask the hon. Gentleman what he understands about whose job it is to appoint union learning reps? Surely it is the union's job, not the Department's or the management's. It is a fundamental misunderstanding to assert otherwise.

Philip Hammond (Conservative, Runnymede and Weybridge)

It is not a fundamental misunderstanding, but a slip of the tongue. What I meant to say was that, as I understand it, the Department for Education and whatever it is—it changes its name every few weeks—has not introduced a voluntary scheme offering union learning reps paid time off work. Perhaps the Minister will tell me that it has offered such a scheme and that the unions declined to take it up, but that seems unlikely and would call into question what the Minister proposes to do through the legislation.

The point is a serious one. We recognise that not all employers are best practice employers where training is concerned, although we still have doubts about whether imposing the statutory model will deliver any benefits even with non-best practice employers. Clearly, however, it cannot be helpful to impose a statutory model on someone who is already performing in that area and is recognised officially as doing so. I invite the Minister to think about the underlying substance, and not to dwell too long on the imperfections of the amendment.

Mark Prisk (Conservative, Hertford and Stortford)

I favour the amendment, especially as it highlights the benefits of the Investors in People programme. I am sure that various Committee members have had experience of that in the business world, as have I, both directly and indirectly. In a sense, the Investors in People programme typifies the best practice that there can be in industry, and raises the question of whether the statutory approach with which the Government are trying to proceed is necessary and being imposed in the right way.

Investors in People is popular because it allows individuals to learn and go on learning, with an ethos of continuous learning essential for all individuals at various levels. It also encourages firms to create teams. The creation of a real sense of teamwork is at the heart of the IIP programme. IIP contrasts with the Government approach because it is about collaboration between employer and employee, which we should promote if we can. A joy of the programme is that it allows individuals and firms to go at their own pace. The Minister's Department clearly understands that, because it is involved in the programme. The stages in the programme allow organisations, public and private, to move at their own pace. That is essential. For example, manufacturing is deep in recession and the many firms that wish to pursue IIP

are able to do so at a pace that suits them. If market conditions are difficult, the scheme allows them to reflect those conditions.

The great joy of the amendment is that it would give that programme a tangible boost. It would be a real advantage to many organisations—especially those that the Minister wants to encourage to become involved in training and learning—to give IIP a status with tangible benefits. It could be a real boost to the programme. Given that the Minister's Department and others are involved, why does the Minister believe that it needs to be promoted and supported? Why does he feel the need to take the statutory, imposed approach? I worry that that will cut across the real benefits of IIP.

John Healey (Labour, Wentworth)

I shall start with my own Department. We are proud to have the Investors in People standard. We have found that it contributes enormously to our ability to manage and develop our work force effectively. It is a good tool, encouraging best management practice and good organisational development. We are, in policy terms, strongly behind the promotion and expansion of IIP. It happens to be a policy area that is my responsibility.

The question of union learning reps in my Department was raised on Thursday. What the hon. Member for Runnymede and Weybridge described as a slip of the tongue in fact betrayed a misunderstanding of proper relations in the workplace and the operation of union learning reps. It is the union that decides the appointment, development and deployment of union learning reps.

In my Department, the principal union is the Public and Commercial Services union. It has more than 200 accredited learning reps throughout the civil service, and I understand that its priority has been to concentrate development of its union learning rep network on Departments with large field-operations staff, rather than those, such as the DFES, that have a relatively small headquarters staff. I hope that the factual information that I have provided in my letter is useful.

The question posed to me is certainly useful. Union learning reps work with employers. They are not the creature of employers and it is not an employer's role and responsibility to see them appointed. It is the proper responsibility and right of a union to do so. The hon. Gentleman may say that his remark was a slip of the tongue, but I see it as a fundamental misunderstanding by the Opposition of the nature of trade unions and relations in the workplace in Britain today.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister is making a ridiculous meal out of this light snack. Surely the point is—and there would be no point to the legislation if the Minister did not agree with me—that the employer, under a voluntary system, has to make paid time off available before the appointment of a union learning rep who can operate in working hours becomes a reality. What I should have referred to was not the

appointment of union learning reps by his Department, but whether it had made available paid time off to facilitate that.

John Healey (Labour, Wentworth)

Making paid time off available for union learning reps is, of course, the fundamental purpose of the clause. Evidence shows that, under entirely voluntary systems, there are real barriers to union learning reps being able to do their job effectively. They do not all get a right to time off to undertake their duties or the initial training that will make them effective.

George Osborne (Conservative, Tatton)

In his letter, the Minister states that more than half of all trade unionists are employed in the public sector, but that only 37 per cent of union learning reps work in the public sector workplace. Does that suggest that public sector employers and Government Departments are less good than many private sector employers at providing time for union learning reps to work with them in a voluntary way? Should not the Government put their own house in order before imposing rules on the rest of society?

John Healey (Labour, Wentworth)

Neither the hon. Gentleman nor I can explain precisely the reason for that pattern. I can only say that he should pose his question to the unions. As I explained earlier in response to the hon. Member for Runnymede and Weybridge, the unions decide where they want to prioritise the development and deployment of union learning reps. In the first three or four years of the operation of union learning reps, those places happen to be where unions have developed the network most strongly.

Philip Hammond (Conservative, Runnymede and Weybridge)

There seems to be a real issue here. Perhaps I am wrong, but my understanding is that under the present voluntary regime, the question is not where the unions decide that they want to prioritise, but where employers agree voluntarily to make paid time off available. That is the point that my hon. Friend the Member for Tatton (Mr. Osborne) made. Are we to deduce from the figures that the availability of paid time off offered by employers on a voluntary basis has been less forthcoming in the public than in the private sector?

John Healey (Labour, Wentworth)

The figures relate to the number of union learning reps and where they are deployed in British workplaces. They do not relate to where those union reps also have a right to time off, voluntarily ceded by employers. I have already explained the problems that many reps experience in gaining those, which is the reason for the clause.

As the hon. Member for Runnymede and Weybridge has explained, amendment No. 228 seeks to exempt employers with Investors in People status from the scope of clause 43. IIP is a status sign. It is a sign that employers have reached an important standard in respect of training and work force development. The hon. Gentleman rightly described them as leading-edge employers. The hon. Member for Hertford and Stortford (Mr. Prisk) gave an eloquent and cogent explanation of the value of IIP. IIP is a sign that employers have procedures and practices in place that allow for training and learning issues to be

regularly reviewed and developed continuously throughout an organisation. Anyone who has been a manager, as I have, of an organisation that has sought IIP status will know that it is about achieving and then sustaining that status. It is not a one-off effort.

Many companies with IIP status are unionised. Indeed, unions are usually very much engaged with those employers in helping them to attain and then retain IIP status. The CBI, in its response to the consultation, took the trouble to confirm that employers believe that union learning reps can be particularly helpful in supporting business training and development strategy and, in particular, can help to gain staff co-operation and help for initiatives such as Investors in People. It is therefore a somewhat bizarre idea that union learning reps should be less appropriate in such organisations than in those where the commitment to training is less pronounced. Indeed, the opposite is the case. In our experience, union learning reps help to reinforce the training message throughout an organisation, can improve the training performance of all organisations—the good, the bad and the indifferent—and can bring the poor up to a reasonable standard. All organisations, including those with IIP status, can improve.

Mark Prisk (Conservative, Hertford and Stortford)

By enhancing the benefits of Investors in People status from the employer's point of view, the joy of the amendment is that it can encourage and widen that status to employers who are not involved at present. That is the aim of the amendment.

John Healey (Labour, Wentworth)

It may interest the hon. Gentleman to know that the amendment is not supported by Investors in People UK, which clearly does not see it in the terms that he does.

Mark Prisk (Conservative, Hertford and Stortford)

Who are they?

John Healey (Labour, Wentworth)

Investors in People UK are the people responsible for the IIP standard and its promotion elsewhere.

Arguably, there is more scope for union learning reps to achieve positive results where the employer is committed to training. For that reason, I see no logic for the exemption proposed in the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

As the Minister is citing Investors in People in support of his position, can we be clear who constitute the board of Investors in People and who appoints that board?

John Healey (Labour, Wentworth)

Investors in People is a non-departmental public body. The appointments are made according to the due process of Government appointments. Its members clearly are the experts in the standard, its application, its promotion and its use by employers.

The amendment would also send a curious signal to unions. It would undermine their existing support for IIP initiatives. What incentive would there be for unions to co-operate and help employers to gain the

IIP standard if their status as union learning reps were removed as a result? I encourage the hon. Gentleman to seek to withdraw his amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

I sometimes feel as though I am banging my head against a brick wall. No one has suggested that union learning reps are less appropriate in an environment where the employer has Investors in People status. We are suggesting that the statutory imposition by the state of union learning reps is not necessary in an environment where everything is working well. That has been our consistent argument throughout the debate, coupled with the secondary argument that we do not believe that the benefits achieved in those better workplaces will be achieved in environments where things are not working well and where relationships are not good. All that we are proposing is: if it ain't broke, don't fix it. That is the bottom line.

There is no suggestion that there would not be union learning reps. It is common sense to say that if something is working well, there is no need to interfere by statute. In cases where all is not well, the organisation presumably would not have Investors in People status. If it is working, why fix it? The Minister's answer is that he wants the statutory right to appoint union learning reps, whether or not the situation is working well. Why does he want that right? It is because it is on the tick-the-box list drawn up by the Trades Union Congress for supporting the Labour Government with its muscle and its money at the general election.

The Minister made some good arguments, but his refusal to listen at the margin to our suggestions for sensible exclusions and modifications convinces me that the agenda of the Minister and the Government has been written elsewhere. He is not listening to anything that we are saying.

I shall not press the amendment to a Division; that would be wasting the Committee's time, because the Government have made their position perfectly clear. However, employers who have Investors in People status—more importantly, those who were considering investing substantial time, money and effort to attain it—will draw their own conclusion from the Minister's comments. 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. 227, in page 47, line 8, leave out subsection (6).

I hope that the Minister will deal quickly with the amendment and set our minds at rest. Subsection (6) invests extraordinary powers in the Secretary of State:

''The Secretary of State may by order amend section 168A for the purpose of changing the purposes for which an employee may take time off under that section.''

In other words, a section that allows an employee to take time off to perform union learning rep duties could, by order of the Secretary of State, be amended to allow the employee to take time off for something

completely different. Taken at face value, subsection (6) gives the game away. It creates a new class of union official who may or may not be engaged in training.

Clearly, if the scheme is to have credibility, the people who are appointed must be engaged in training and its promotion, and nothing else. I hope that I misunderstood the clause and that the Minister can point us to some other part of the text that will reassure us that the powers cannot be used by the Secretary of State to change the fundamental purpose for which union learning reps are appointed.

John Healey (Labour, Wentworth)

The amendment seeks to remove entirely the order-making power in subsection (6), which would allow, by order, for alteration to the definition of the union learning representative's functions. The power would not be used to change the definition or nature of the union learning rep in the way that the hon. Gentleman fears.

Let me explain the reason for the provision. Union learning reps, a relatively new creation, have developed over the past four years as unions have widened their activities in the workplace, their services to members and their contribution to the success of the businesses with which they work. As partnership in the workplace has increased under the Government, the range of responsibilities and functions that union learning reps undertake has become clearer and is well defined in section 168A(2). However, it is possible that their activities may evolve with experience and that they may change in ways that are outside the purposes of union learning representatives as defined in subsection (2).

I will give an example that may help settle the hon. Gentleman's concerns and indicate the provision that we are trying to make under subsection (6). Union learning representatives may become more involved in organising child care arrangements for workers who are being trained, and subsection (2) may not capture such an activity. That may be an important area, especially for single parents. If there is an increase in that or another unforeseen demand on union learning representative services, we want to be able to respond without having to resort to primary legislation.

Philip Hammond (Conservative, Runnymede and Weybridge)

I understand the Minister's explanation, but will he confirm that nothing in the Bill would prevent the powers in subsection (6) from being used to include, in subsection (2)(a) for example, the purpose of promoting membership of the trade union, the general interests of the members of the trade union or collective bargaining with the employer?

John Healey (Labour, Wentworth)

The clause could not be used to create an entitlement for a trade union to bargain collectively on training.

Philip Hammond (Conservative, Runnymede and Weybridge)

Why not?

John Healey (Labour, Wentworth)

The provisions would not permit that, as I explained, and I am happy to reiterate that. On the narrow question of the evolution of the functions of union learning representatives, it is prudent to introduce an order-making power that will give us the

flexibility to deal with changes that we may need to make in the future. I ask the hon. Gentleman to withdraw the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

I thank the Minister for making it clear that the Government do not intend to have a sweeping power to change fundamentally the role of union learning representatives. I hope that the Minister will be aware of the sensitivity of employer organisations to training becoming a part of collective bargaining. That issue in particular has prompted the concern that the provision could be used to broaden the remit of union learning representatives and to make them a part of a bargaining team.

The Minister appears to be telling us that there may be matters ancillary to the carrying out of their proper duties as union learning representatives that are not sufficiently covered by subsection (2)(a), and that he wants to give himself a power to deal with that issue as it arises. As usual, the instinct seems to have been to reach for the largest possible sledgehammer rather than the daintiest chisel. There are better ways of dealing with the issue. An additional category relating to matters incidental to the carrying out of the principal activities could be included in subsection (2)(a), or subsection (6) could be limited to make it clear that the Secretary of State's power could be exercised only in a way that broadened the fundamental role without changing it completely. The Minister clearly does not favour our amendment. Given what he said, I hope to be able to work on an amendment for Report that even he would consider, so that the Government can tighten the clause to ensure that it remains crystal clear that trade union learning representatives will always have a role that deals primarily with learning and skills and that activities are added only when necessary for carrying out their principal activities. I have noticed that the Government tend to favour amendments on Report dreamt up by them rather than by the Opposition, even when the wording is identical. I therefore hope that the Minister will table such an amendment. If he does not, I will try to do so for him and to have this discussion again on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill:—

The Committee divided: Ayes 13, Noes 4.

Clause 44 - dismissal procedures agreements

Philip Hammond (Conservative, Runnymede and Weybridge)

What does the Minister intend to do with the power that the clause gives him?

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

There has been only one agreement in relation to the clause, which was in the electrical contracting industry. Both sides agreed to withdraw the agreement after discussion last year. Once we enact the legislation, which is compliant with the Human Rights Act 1998, and introduce the new measures that the clause allows, it will be up to that and other industries to decide whether they want to set up a similar scheme, the purpose of which is to resolve disputes in the workplace rather than at employment tribunals. Incidentally, the ACAS arbitration scheme is fully compliant with the new terms.

Clause 44 ordered to stand part of the Bill.

Clause 45 - fixed-term work

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

I beg to move amendment No. 213, in page 47, line 28, leave out 'employees' and insert 'workers'.

Joe Benton (Labour, Bootle)

With this we may discuss amendment No. 214, in page 48, leave out lines 37 to 39 and insert—

'''worker'' means an individual who has entered into or works under (or where employment has ceased, worked under)—

(i) a contract of employment, or

(ii) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker's contract shall be construed accordingly.'.

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

Clause 45 will implement the European Union fixed-term work directive, which was introduced following negotiations between the social partners. The explanatory notes that accompany the Bill state:

''The purpose of the . . . agreement is to apply the principle of non-discrimination to those in fixed term employment and to establish a framework to prevent abuse arising from the use of successive fixed term employment contracts or relationships.''

The amendment would address that matter.

The Government have chosen to extend the directive also

''to prevent pay and pensions discrimination against fixed term employees'',

which we shall address later. In one sense, the Government have gone further than the original fixed-term directive requires, but in another, it is questionable whether they will implement the directive correctly.

In the framework agreement, the social partners rejected the term ''employee'' and instead used the wider term ''fixed-term worker''. The employer's side had originally wanted to use ''employee'', but conceded that point. The Law Society briefing states:

''Clause 2 of the agreement states that it should apply to fixed-term workers who have an employment contract or employment relationship as defined in law, collective agreements or practice in each member state.''

On the basis of that framework agreement it seems that a proper implementation of the directive into UK law means that the rights should be extended to both employees, as defined in the Bill, and workers as defined in existing anti-discrimination legislation or the Employment Rights Act 1996.

By limiting the scope of the Bill to cover merely employees, the Government could create a number of difficulties and deny protection to those who may be likely to be discriminated against, such as casual or temporary workers. The TUC points to those who are employed in the hospitality industry and cites the case of an agency worker who is employed by an off-shore crewing agency but works on a P&O ferry that sails from Portsmouth. She is employed on a weekly basis, meaning that officially she is laid off once a week when she comes ashore. She has been employed on that basis for three years. She receives the same hourly rate as equivalent permanent employees, but as she is an agency worker she is paid only for the time that she is on the ship. That means that she receives just £9,000 while her permanent colleagues receive £18,500 a year. Because she is not legally defined as an employee, she will not benefit from the measures introduced in the clause, a seemingly unjust state of affairs.

Another union officer who represents workers from Park Lane hotel refers to the case of a banqueting waiter who has worked 40 to 50 hours a week for 23 years and has been employed as a temporary worker throughout that time. Under the clause he, too, would not be entitled to treatment equal to that of permanent full-time staff.

In addition, the TUC says that temporary work is becoming ever more widespread: 1.7 million people, including many women and part-time workers, are employed on a casual basis in the UK. Under the Bill, employers would continue to have no obligation to provide similar pay rates, sickness leave or holiday pay to temporary workers. According to the TUC, 50 per cent. of employers pay temporary workers on pay rates different from those of permanent workers.

It is argued that those employed on a casual basis accept the lack of equal treatment because of the flexibility that temporary employment gives them and that they get a fair deal in that respect. What use is that to those temporary workers who find themselves

placed on temporary contracts in the same employment over a number of years? What rights do they have under the clause? The answer seems to be none. That needs to be rectified. In addition, by failing to apply the Bill to workers—which would be a correct interpretation of the EU directive—the Government are creating a situation in which decisions by the courts on the definition of an employee are likely to be overturned. That would create uncertainty for employee and employer.

George Osborne (Conservative, Tatton)

The hon. Gentleman is reading very well from the various briefs. However, he did not quote the excerpt from the Law Society brief that reads:

''We are concerned that provisions under clause 45 to introduce regulations outlawing discrimination against fixed term employees will not comply with the European Directive they are designed to implement.''

That is surely the key question. If the clause does not implement the European directive, it is pointless. Will the Minister make a clear statement that, in his view and in that of the Government lawyers, the clause complies with the European directive that it is trying to implement?

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

The hon. Gentleman is correct. I have made that point but he emphasised the concern that lies behind our debate. If the Government feel that this is not the right forum to solve that uncertainty about employment rights, I ask the Minister at the very least for a commitment today that the Government's overdue review of employment status, which was to have commenced by the end of last year, should be commissioned as a matter of priority, to clear up the situation for employers and employees. As my hon. Friend's intervention emphasised, there is grave concern about the rights of workers and about whether we will meet the directive. I hope that the Minister will consider the point carefully. We may wish to return to it later.

Judy Mallaber (Labour, Amber Valley)

I welcome the proposals and their extension to cover discrimination in relation to pay and pensions. Fixed-term contracts are appropriate in some circumstances, but that is no reason why people with such contracts should be dealt with less favourably than if they were in permanent employment.

Such a problem can become endemic—in higher education, for example, where quality suffers because of the prevalence of fixed-term contracts, as pointed out in the Betts report; the relevant union has concerns about the draft regulations that I hope will be discussed with the Minister.

I am concerned about the worker-employee definition and think that clarification from my hon. Friend on several points would be helpful. As the hon. Member for Weston-super-Mare (Mr. Cotter) said, according to the labour force survey there are about 300,000 part-time casual workers in the UK. I have received differing interpretations of whether the proposals would cover such workers and enable them to claim the protection of the clause. It would be

helpful to have clarification from the Minister about whether they are covered and, if so, about the extent of the coverage.

I have been told of several examples—such as that in the Park Lane hotel, mentioned by the hon. Member for Weston-super-Mare—in which there is confusion about the implementation of the law and the exact terms of the employment relationships. I ask my hon. Friend whether that would be clarified if the broader definition of worker rather than employee were used, which would enable the clause to deal clearly with slightly unusual employment relationships. I welcome the Government review on the inconsistencies and use of the definitions of employer and employee under the Employment Rights Act 1996; while I would prefer it if that were made clear in the Bill, I hope that the Government will look seriously at the worker-employee definition. We need consistency.

In the background documentation, the Government draw a parallel between the provisions affecting fixed-term workers and those affecting part-time workers. The explanatory notes specifically refer to part-time workers being protected by legislation, although fixed-term workers are not. In drawing up provisions related to fixed-term contracts, the regulatory impact assessment draws on the provisions concerning implementation of the part-time workers regulations.

My hon. Friend the Minister will recall that when he appeared before the Select Committee on Education and Employment in 2000 on the implementation of the EU part-time workers directive, we argued that if the worker definition is used for the minimum wage, sex discrimination and equal pay legislation and the working time directive, it was logical to use the definition to deal with the problems facing part-time workers. As highlighted by the hon. Member for Weston-super-Mare, we argued that the terms of the EU part-time workers directive were such that the wording should cover the broader definition of workers, not employees. At that time, I was pleased that the Minister accepted the force of the Select Committee's recommendation that the part-time workers directive should extend to workers.

In the background documents, the Government have made a clear connection between part-time workers and those on fixed-term contracts. I hope that the Minister will consider the worker definition. I realise that other European directives have the same wording as the part-time workers directive and the fixed-term workers directive, which have been transposed into UK law under the employee definition. That demonstrates some of the confusion that exists.

The Government have made a close connection between the part-time workers directive, in which they accepted the worker definition, and the directive in question today. There is some confusion on who would be excluded under one definition rather than the other, and I seek particular clarification on whether the vast number of casual part-time workers would be covered by the employee definition. If they are covered only by the part-time workers directive, is there any reason for allowing confusion caused by their presence

in both directives? In several other cases, confusion is caused by the nature of their employment relationship. It would be better to clarify matters by including the worker definition. If the problem would not affect many people, and few would be excluded through use of the employee definition, would extending that create problems?

I understand that there is a problem concerning agency workers, for whom there is a complex three-way relationship, which might create problems for implementing the changes. It would be helpful to receive some clarification.

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

Does the hon. Lady accept that increasing numbers of people are employed in the categories that we are discussing?

Judy Mallaber (Labour, Amber Valley)

Indeed, there is a strong possibility that those numbers are increasing. That is why the Select Committee considered part-time work and the implications of greater casualisation. I am asking the Minister whether the law covers many people under the employee definition, of which I have heard differing interpretations. I am not clear about whether there is a major problem. The legislation clearly creates confusion about where ''worker'' is used and where ''employee'' is used.

If that cannot be clarified in the legislation in relation to fixed-term work, would the Minister make some commitment on the section 23 review timetable? At the moment, even if casual workers are covered by the part-time directive, they would have to work out which legislation applied. That can be quite complicated for somebody in the work place. It would be helpful to know what the timetable might be when for applying the section 23 provisions.

Philip Hammond (Conservative, Runnymede and Weybridge)

I suppose that I should start by observing that I, like every other member of the Committee, am a fixed-term worker, my reappointment being dependent on things almost completely beyond my control.

It is self-evident that, partly as a result of the things that the Government are doing in this Bill, there will be an increase in fixed-term work. We are seeing the extension of statutory leave rights, for longer periods and to more people. It will become increasingly necessary for employers to appoint people for specific fixed periods to carry out work that is permanent work in their workplace but, because of the rights that permanent employees have to take long periods of time off, will have to be done by people who will not acquire rights to remain by virtue of having been appointed to that role. This is in addition to the large number of genuinely fixed-term positions that already exist.

The figures from the latest labour force survey suggest that the overwhelmingly largest number of fixed-term workers are employed for a fixed period or for a project, as opposed to being seasonal or casual

workers. There are a significant number of casual workers, but fixed period or project workers are the largest group.

Perhaps it is no surprise that whenever we see legislation being reached for to deal with a perceived problem we find that the good old Government are in fact the largest employer involved in the problem. As I understand it, at the time of the last labour force survey, out of the 797,000 fixed-term or project workers, 441,000 were employed in public administration, health and education. There is clearly a sense that if there is a problem it can be addressed by the Government in their role as an employer or a funder of public sector employers, rather than reaching for the sledgehammer.

George Osborne (Conservative, Tatton)

Let me reinforce the point that my hon. Friend is making. According to the brief from the Library, the public sector also accounts for over 70 per cent. of the fixed-term workers who have been in their jobs for over two years. One of the things that is missing in the regulatory impact assessment—perhaps, through my hon. Friend, I can ask the Minister about this—when it talks about costs to employers—indeed, it says that the cost is between £19 million to £29 million for pay and somewhere between £33 million and £38 million for pensions—is how much of that cost will actually be borne by the taxpayer because the employer in question is a public sector employer.

Philip Hammond (Conservative, Runnymede and Weybridge)

My hon. Friend raises an important point and no doubt the Minister will address it in his response.

We are essentially talking about two different things here. We are talking about non-discrimination against fixed-term workers—which is the essential purpose of the Bill—and the Government's decision to extend that parity of treatment significantly beyond the EU directive requirements. In this amendment we are talking about the definition of fixed-term workers or employees that should be covered by the provision.

Some examples of fixed-term workers have been given. Although it is dangerous to make snap judgements without knowing all the facts, on the face of it, these examples look like abuse. It appears that people are being called fixed-term workers when they are clearly permanent workers. We are not in the business of supporting abuse or artificial mis-categorisation of employees or workers, simply to avoid them receiving what they should, or preventing them from receiving what other members of the permanent work force are entitled to.

People should be treated as fixed-term workers only when they are fixed-term workers. The public sector example is good, and I will use the health service as the classic example. It is irresponsible for a public, or private, body to appoint someone permanently if it does not have the funding to support the position. However, it is common in the health service and, I am sure, other parts of the public sector, for funding to be made available for a specific period of time. If there is two years' funding, why not appoint someone for two years? It would be grossly irresponsible to offer

someone a permanent job if a body knew that the budget funding for that position lasted for only two years.

That is the principal reason why people are appointed to fixed-term positions in the national health service, and why there are many people who have carried out repeated fixed-term contracts for a long time. When it comes to the point of letting X thousand nurses go, the Government rightly realise that they have to put up more money, and the nurses get another fixed-term contract. Unless long-term budgets are permanently raised, there is not the scope to make those positions permanent. I ask the Government to consider the problems that they have in dealing with those issues and realise that private sector employers will have them as well.

The issue goes beyond those employment areas in which one would expect to find fixed-term workers—for example, construction projects, which often have a fixed lifespan of one, two or three years. In the case of some construction infrastructure projects, it would be perhaps more realistic to appoint people on a permanent basis, but let us take the millennium dome as an example. If the project is supposed to last two and a half years, it makes sense to appoint a person involved in its management for a fixed term of two-and-a-half years.

A flexible work force is in the interests of UK plc, and consequentially the greater work force in the country. We must have the ability to deploy a flexible work force, and a fixed-term work force will be a part of that. That does not mean that we will stand by and condone or allow abuse of the system. If the Minister is focused on dealing with cases of abuse, we will support him in that, but I have not seen evidence of a substantial problem. The consultation document does not appear to find any evidence of substantial abuse.

The examples quoted have typically been people in low-paid employment. If we examine the TUC survey from last year and the breakdown between different occupations, we discover that 27 per cent. of fixed-term workers are managers, administrators or professionals. A further 9 per cent. are associate professional and technical staff. Those are not typically the people who find themselves abused by employers. Indeed, I have spoken to employers who are given the run-around by highly skilled professional people who are in short supply, particularly in information technology, and will simply not become permanent employees. They want to work on fixed-term contracts, and they extract a high price from the employer for the privilege of being able to employ them.

George Osborne (Conservative, Tatton)

May I reinforce my hon. Friend's point? The Department of Trade and Industry's own regulatory impact assessment says that outside the public sector—about which my hon. Friend has already spoken—the industry sector with the largest number of fixed-term employees is the banking, finance and insurance sector, which is not one noted for paying its employees nothing.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am grateful to my hon. Friend for reinforcing my point, and I hope that the Minister will tell us where the abuse is with which he wants to deal. Just to continue the numbers: a further 19 per cent. of fixed-term workers are in clerical and secretarial roles—that is not too surprising—and, interestingly, 15 per cent. are in personal and protective services. I do not know quite what those services are, but the Minister may be able to help us. I guess that it does not just include the bouncer at the nightclub door. That is an interesting mix of occupations, and many of those people will be at the upper end of the income scale.

On the worker-employee debate, the Government have substantive legal advice that the Bill complies with the terms of the European Union directive. The TUC has legal advice to the contrary, which just goes to show that if two lawyers spot the opportunity to earn a fee, people can get as many opinions as they want to pay for. My understanding is that the TUC intends to challenge the Government on the issue in court. As public money is involved, if the Government take on the TUC, I hope that they are marginally more successful than the last time. They stared down the TUC on the parental leave directive and then settled on the steps of the court, agreeing to pay costs and fees without having the strength of their position tested. The Minister will remember that.

The substantive worker-employee point seems to concern the question of abuse. It has been suggested that there may be attempts to use captive employment agencies to avoid the scope of the legislation, and if the use of the term ''employee'' allows abuse of what is intended by people being recategorised, that would seem to be abusive. If extending the legislation to all workers captures those whom it would not be proper or appropriate to include—in particular, people who are employed by an agency for a fixed-term period to fill a gap in an employer's work force—the case is much more suspect. I am not an absolutist; we are at the margin. We want to ensure that the intention is properly implemented so that there is not scope for massive evasion, but I would not want the measure to be extended to all workers, because that would go much further than what is required to deal with the kind of abuse that was mentioned by the hon. Member for Weston-super-Mare, who described how two workers employed by the same employer and doing the same work could have different conditions of employment.

We do not support the Liberal Democrat amendment because it would take a blanket approach, which is inappropriate. I have no doubt that the Minister will tell us that he is sensitive to the concern that is being raised and that it will be addressed in much more detail in the review that is about to be undertaken. I hope that there will be a good opportunity for parliamentary debate on its findings before any legislation is proposed.

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

The whole argument revolves around several issues, some of which were mentioned by the hon. Member for Weston-super-Mare. I want to cover them to explain why we believe that the amendment is misguided and should be withdrawn.

The first point, which was made by the hon. Gentleman, is that we are not interpreting properly the European directive. We are clear that we are. The directive requires us to legislate in respect of

''fixed term workers who have an employment contract or employment relationship as defined by national law and/or practice''.

The Law Society says that we are following an incorrect interpretation of the directive. We used the same words in the parental leave directive that applied only to employees. The point made by the hon. Member for Runnymede and Weybridge was not about that aspect of our sensible settlement out of court, but about children born before 15 December 1999. We are implementing the legislation in the same way in which we implemented a directive almost three years ago, and we are sure that it covers the directive. I would love to chat with the man in the hotel on Park lane, as he has been mentioned so many times in dispatches. We should all troop up there afterwards to talk to him, like a jury that goes to the scene of a crime.

The hon. Gentleman gave the example of an agency worker. We must be clear that the directive not only used the wording that I quoted about the interpretation of national law, but specifically excluded agency workers, half a million of whom are, by definition, on fixed-term contracts. Many Government Members were brought up to believe that agreements are always abided by once they have been made. The social partners' framework agreement states:

''This agreement applies to fixed-term workers with the exception of those placed by a temporary work agency at the disposition of a user enterprise''—

in other words, agency workers.

''It is the intention of the parties to consider the need for a similar agreement relating to temporary agency work.''

The social partners considered what they classified as atypical workers: part-time workers, agency workers, and fixed-term workers. Agency workers were specifically excluded. Pay and pensions were specifically excluded but are included in the Bill. It would be foolish for us to include employment agency workers with all the problems that that would bring when another directive will address the issue. Negotiations broke down between the social partners, but the European Commission is taking it forward. The amendment would include agency workers.

Philip Hammond (Conservative, Runnymede and Weybridge)

I do not disagree with the Minister, but does he not see a problem? The NHS is trying increasingly to hire short-term cover staff directly rather than going through agencies, to avoid paying enormous sums. Is there not a danger that such sensible moves will be undermined and that employers will be tempted to pay agencies' sometimes large margins to have fixed-term staff who are clearly outside the scope of the legislation?

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

I do not see such a danger, but I will come to the NHS shortly. I confirm that the legislation complies with the directive, which specifically excluded agency workers. On the question of whether there is a problem, we all believe that no one should be exploited just because of the category in which they work, as my hon. Friend the Member for Amber Valley (Judy Mallaber) elegantly put it. In all our consultations on the issue, there was no evidence of that sort of abuse. The numbers of fixed-term workers are lower in this country than in most other European Union countries. Only 7 per cent. of workers in this country are on fixed-term contracts. The figure is double in France and is around 33 per cent. in Spain. Most employers use fixed-term contracts as they should be used, and do not abuse the system. Nevertheless, the purpose of the directive is to stop abuse—one is too many—where employers are using fixed-term contracts as a substitute for permanent employment. We are addressing the problem of employers repeatedly extending fixed-term contracts to deny individuals the rights that they would receive as permanent employees.

We have found no evidence of the problem that the hon. Gentleman describes. When we examined the use of casual workers—for instance, in agriculture—those workers were employed on a daily or hourly basis, with no obligation on the worker or hirer to work or provide work beyond that day or hour. They should be regarded as employees and covered by the directive, in the same way that Christmas casuals would be.

Norman Lamb (Liberal Democrat, North Norfolk)

Does the Minister accept that grey areas, such as the description that he just gave, cause concern? A legal argument could be made that a mutuality of obligation sufficient to constitute a contract of employment exists between the employer and the worker. It would be more sensible to use the term ''worker'', which would clarify whether such a person came within the scope of the legislation. One could still exclude agency workers if they were subject to a separate directive.

I do not understand the Government's thinking on the terms. In the national minimum wage legislation, and the working time regulations, the Government used the description ''worker''. In this case, they have used ''employee''. Using different terminology simply adds to confusion for worker and employer. I realise that a review is under way, but it would make sense to simplify the Bill by using the same term.

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

With respect, that added nothing to the debate. I have said repeatedly that there are complexities, and that is why we introduced section 23 of the Employment Relations Act 1999 to review the whole area. Maternity leave applies to employees and not workers. The taskforce that we set up recommended that flexible working arrangements should relate to employees and not workers. Different regulations and directives require different definitions. I agree with the hon. Gentleman that we need clarification in this case, but I am sure that the review will assist that process.

Judy Mallaber (Labour, Amber Valley)

Is the issue of agency workers the only reason that the legislation is being implemented with a different definition? Is that why the worker definition is not included, as the Minister conceded when we were arguing about part-time workers?

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

That is a substantial reason—it is not the only one—but hon. Members can see the logic of not including agency workers when they are specifically excluded in the preamble, and a directive and review of the terms ''worker'' and ''employee'' are on the way. That is why the amendment is not feasible.

I appeared before the Select Committee when we were in consultation and suggested that the part-time workers directive ought to apply to employees and not workers. My hon. Friend the Member for Amber Valley made a powerful case, as did other members of the Select Committee, including a Conservative Member—I cannot remember his constituency, but he was one of the most eloquent on the issue. We were persuaded by the argument, first because of the clear overlap with sex discrimination: 80 per cent. of part-time workers are women and we would exclude all of them if we did not have the definition of worker. Ironically, the 200,000 or 300,000 casuals do not need the protection of these regulations because they are already protected by the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. That is another reason why we would be wise to stay with the definition in the Bill.

Another argument is about the review. I gave an assurance, as did my right hon. Friend the Secretary of State on Second Reading, that that review would be under way early this year. The mechanics for it are under way as we speak. Hon. Members on both sides have made valid points. The review is the place to look at this matter, not a debate on the back of an amendment. I think that I have covered most of my hon. Friend's arguments.

The hon. Member for Runnymede and Weybridge made the point that, in a way, we are all on fixed-term contracts in a way. Ministers have another fixed-term contract—

Philip Hammond (Conservative, Runnymede and Weybridge)

Not so fixed.

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

Indeed, and of indeterminable duration. One of the reasons why many Conservative Members did not have their fixed-term contract renewed in 1997 was their approach to these issues. They refused to sign up to the social chapter as a matter of principle. They abolished wages councils and any protection for young workers. Those are serious issues. Perhaps I am in tune with the hon. Member for Buckingham (Mr. Bercow) in feeling that the Conservatives were simply not on the side of vulnerable workers.

The further and higher education sectors cannot be lumped in with the public sector. Although they receive public funds, they are self-governing and would not qualify as public sector institutions in the strictest sense. Some 5,560 people in the civil service, including specialists, economists and senior officials, are on fixed-term appointments, which are often for two to five years. When we came into office the figure

was 11,817. There are 12,260 casuals and there were 19,320 when we came into office. All those casuals and all those on fixed-term contracts are covered by this legislation. We have more than halved the number of people on fixed-term appointments and considerably reduced those on casual appointments.

Philip Hammond (Conservative, Runnymede and Weybridge)

Could the Minister remind the Committee by how much his Government have increased the total establishment of the civil service? It may be that rather than reducing the level of casual and fixed-term appointments they have established those posts in their massive expansion of Government bureaucracy.

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

No. The fact that we are so superbly governed has a lot to do with the skills and numbers of the civil service. I am not talking about percentages here.

Joan Humble (Labour, Blackpool North and Fleetwood)

I am sure that my hon. Friend is aware that about 10,000 civil servants, many of them my constituents, are employed on the Fylde coast. Many of those who had casual jobs on fixed-term contracts and are now on full-time contracts are pleased and proud to be civil servants.

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

My hon. Friend makes an important point. Under the previous Government, there was evidence that people on fixed-term contracts could have been on permanent contracts, and those who were defined as casuals could have had more stable terms and conditions. We are addressing that.

In the national health service—the hon. Member for Runnymede and Weybridge has some experience of that from his previous job in Opposition—junior doctors are employed on fixed-term contracts because a series of developmental postings form part of their training. However, the general NHS Executive policy is to encourage the use of permanent contracts, not least to encourage recruitment and retention.

I hope that the hon. Member for Weston-super-Mare will withdraw the amendment and that members of the Committee will understand why we do not think it necessary. First, we are complying with the directive. Secondly, the directive specifically excludes agency workers, and we are discussing a directive that deals with that group. Thirdly, we have uncovered no evidence of a problem. Fourthly, most of the groups quoted and mentioned and most of the people who are considered casuals—in agriculture, in the Post Office at Christmas, and so on—would be covered by their contracts of employment. Finally, and most importantly, we shall review the issue soon and address the anomalies that have been mentioned.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister said that the consultation uncovered no evidence of a problem in respect of fixed-term employees. I understand that the Government have to comply with EU directives even in the absence of evidence, because that is the way the world is, but why do they wish to gold-plate the directive?

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

I meant that there was no evidence of an abuse in the particular circumstances. However, 5 per cent. of employers in the Department of Trade and Industry's 1998 review did not give the same pay to fixed-term contract staff as to permanent staff, and 10 per cent. did not give the same pension provisions. Some of the evidence submitted in our consultation by the Equal Opportunities Commission and by the TUC, from people working on the shop floor, so to speak, suggested that the problem was greater than that.

We cannot find evidence of the problem for workers—the term used in the amendment—because they are non-employee workers who would not be covered by the directive. We expect most non-employee staff to be covered by the directive.

Norman Lamb (Liberal Democrat, North Norfolk)

Is the Minister at all concerned about a legal challenge? We hear of that from various trade unions, and it happened with the parental leave directive. The Government had to change the regulations, which resulted in wasted time and money for them and everyone else and confusion for those who try to claim their rights. There may be a legal challenge, given that the word ''worker'' was used in Europe, although I accept the point about agency workers. Would it be sensible to use the same terminology to ensure that there is proper compliance with the European directive?

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

I do not accept that. Let me digress briefly to discuss parental leave. We were among the first three countries—Luxembourg, the Republic of Ireland and the UK—to introduce the directive. We all read the directive as not being retrospective.

On the issue of workers, the words of the directive are:

''fixed term workers who have an employment contract or employment relationship as defined by national law and/or practice.''

We are confident that we are complying with the directive. If we worried about legal challenges to legislation on public policy concerns, we would never do anything for fear of a challenge. The threat of legal action always exists. I do not have concerns on that matter, and I hope that members of the Committee, having heard my explanation—particularly on agency workers—will withdraw the amendments.

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

I thank the Minister for covering the contributions of other hon. Members. I was interested by his comment that there is no real problem. I take it that the forthcoming employment review will consider that point more closely. I sat this morning on a deregulation committee dealing with the registration of births and deaths. A proposed Government deregulation had to be withdrawn because there had been no proper consultation or investigation over a long period; the official solicitor had not been consulted at an early stage and the matter had been left to a late stage. Sometimes consultation and investigation is said to have been done, but the details are overlooked. I urge the Minister to look into the problem much more closely.

Having said that, I wholeheartedly support the point of my hon. Friend the Member for North Norfolk (Norman Lamb) that there seems to be a mish-mash so that we cannot include workers or a standard designation. I do not understand all the different regulations and rights that have to be addressed but it seems disconcerting that we cannot find a standard term. I accept that the Minister believes that we will comply with the EU directive, and we all hope that that is correct. I also accept that another directive will deal with agency workers. Bearing in mind all those points, and those made by the Minister, and in anticipation of addressing the issues later, 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. 230, in page 47, line 33, at end insert

'of an employee by an employer where the employment has the nature and characteristics of permanent employment and where the successive periods have, in aggregate, exceeded two years'.

Let me first say something about the architecture of the clause. The whole clause is effectively permissive. It allows the Secretary of State to make regulations for the purpose of preventing abuse from arising from the use of successive periods of fixed-term employment. The amendment seeks to narrow the scope of the Secretary of State's interpretation of what constitutes an abuse of successive periods of fixed-term employment. In cases under subsection (1)(b) where the Secretary of State acts to prevent abuse, we would support measures to prevent abuse by the incorrect categorisation of a person's status.

The amendment proposes two tests. First, the person has to have been employed for successive fixed-term periods, which, in aggregate, amount to a period of not less than two years. Secondly, the employment has to have the nature and characteristics of permanent employment—that is a woolly phrase but I do not think that, given the way in which legislation works, there would be any problem with it. In plain English, that means someone who has been in post for two years on successive six-month fixed contracts and who is to all intents and purposes—according to an objective, common-sense look at the way in which they work, their relationship with their employer and the way they operate in the work place—part of the permanent work force. The Secretary of State would have the power, for example, to treat a shorter period of continuous employment by successive fixed-term contracts as an abuse. She should not, however, have the power to treat as an abuse all cases where somebody has worked for more than two years under fixed-term contracts, if the nature and the character of the work do not suggest that it is abusive. For example, someone may be appointed for 18 months to manage a construction project on the clear understanding that the employment would terminate when construction finished. Let us assume that we are talking about a public sector, Government-funded construction project, that it ran over, as they are wont to do. If it became apparent that it would take not 18 months, but two and a half years, the employee would have two further six-month periods. I suggest to the Minister

that there is no evidence of abuse in that example, because all the circumstances tell us that that would be a proper fixed-term employment.

I seek to narrow the scope of discretion, so that we can actually achieve some consensus and get away from fighting over these issues. We are all committed to addressing genuine abuse of the system, but we will have to make sure that the Secretary of State's discretion is constrained where practices are not abusive.

I have suggested some definitions in the amendment. If the Minister accepts the principle, but has a problem with specific definitions, I would be very interested to hear his thoughts about what would be an abusive situation.

Mark Prisk (Conservative, Hertford and Stortford)

I support the amendment, not least because my hon. Friend has said that the clause is very open-ended, and he has raised one of the dangers. The amendment is right in the sense that two tests lie at the heart of its purpose. First, it is right because it would be fairer in applying the first steps of the second test that my hon. Friend just referred to, namely that the employment has the nature and characteristics of permanent employment. The amendment genuinely seeks to equate like with like, which is an important principle that seems to be absent from the clause as it stands.

My second reason for supporting the amendment is that it would make the process far more manageable. In that sense, it would try to tackle the real problem that I believe the Government have in their sights, namely situations in which someone is, to all intents and purposes, providing a permanent contribution to an enterprise or an organisation, but is on ever-renewing contracts and is not being treated fairly.

There is also the issue of the third sector. We have heard in this debate, and in previous debates about the public sector and the private sector, but I would like to raise the issues of the third sector—not the third way, but the voluntary sector. One of my concerns about clause 45, is that in excess of 60,000 people work in the voluntary sector for local charities. By the very nature of their work, they depend on small grants and their contracts tend to be short. They are able to look ahead only six or 12 months. As the clause stands, a local charity—for example, one that I am pleased to support: the East and North Hertfordshire breast cancer appeal—would struggle under the clause if it applied for a grant. The danger is that it would not be able to provide permanent employment, yet the clause would require it to make a commitment that it genuinely cannot finance. For those reasons, the amendment makes considerable sense. It brings the nature and characteristics of permanent employment into the clause and sets a limit of two years, which I think is manageable and reasonable.

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

I have listened to those arguments. The hon. Member for Runnymede and Weybridge comes at this point from a different direction than we do. I do not want to send Members Opposite into fits

of apoplexy, but the amendment would probably not comply with the directive. However, let us deal with it on the basis of the arguments.

The amendment refers to a period in excess of two years. Last week, the Government circulated to Committee members draft regulations, which suggest a four-year limit on the extension of contracts. We can argue about two or four years, but the right place to deal with the issue is in regulations, not the Bill. He also talked about putting things into plain English, but inserting the phrase

''the nature and characteristics of permanent employment''

would be a recipe for far more complicated regulations.

The hon. Gentleman talked about the spirit behind the amendment. However, the regulations already achieve his aim and in a way that meets the needs of different sectors without unnecessary complexity. We intend the regulations to ensure—this is the major point, which we mentioned in the previous debate—that fixed-term employees are not employed on a long succession of fixed-term contracts as a substitute for a permanent post. That is our objective.

The power already allows us to define successive fixed-term contracts and to limit their use to prevent abuse. As I said, the draft regulations, on which we are consulting, suggest that the limit should be four years unless the use of such contracts can be objectively justified beyond that point.

Judy Mallaber (Labour, Amber Valley)

What might constitute objective grounds? Various issues have been raised with me, particularly by the Association of University Teachers. As we know, fixed-term contracts are endemic in further and higher education. One example is someone who has been employed for many years but cannot get a permanent contract, because he cannot get a research grant to do the work that will prove he is qualified for a permanent contract. Equally, he cannot get a research grant because he is on a fixed-term contract. What objective grounds will there be for still allowing such a situation? That person is stuck: he will never get a permanent contract because of the terms that the university imposes on researchers.

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

I am enormously grateful to my hon. Friend for asking that question; I thought that it might arise at some point. The phrase ''objective grounds'' is also used in the part-time workers directive, under which a part-time worker cannot be paid a different rate unless there are objective grounds for doing so. In one case involving a part-time worker and performance-related pay, it was established that there were objective grounds.

I think that, in the previous debate, the hon. Member for Runnymede and Weybridge talked about an organisation or charity having funding for a specific period and the possibility of objective grounds. It is difficult for me to place every eventuality on the record, because the situation depends on the circumstances that apply at the time. However, in the sector mentioned by my hon. Friend, I think that the directive will resolve the issues. The employer will have

to start by asking himself whether he is using fixed-term contracts as a substitute for permanent employment. His objective grounds must be able to stand up, particularly at a tribunal if the case ends up there. We should not spend our time considering examples of objective grounds. The directive allows for that, and we are implementing the directive. Over time, we shall see that the clause works well.

We shall make provision for a limit to the duration of successive contracts, but it will be four years rather than two. As I said, that should be done in regulations rather than the Bill. Adding a provision to limit the use of successive fixed-term contracts only where the employment has the nature and characteristics of permanent employment would result in regulations that were either vague or extremely complicated. If the regulations simply repeated the requirement, employers and employees would be left to work out what the ''nature and characteristics'' of permanent employment might be. Specifying what was required would produce complex and inflexible regulations. The provision is unnecessary in any case, because the draft regulations provide that fixed-term contracts may be renewed beyond the statutory limit if their use can be justified. That ensures that where employment is of a genuinely fixed-term nature, employers and employees can continue to agree fixed-term contracts.

The mechanism in the draft regulations for preventing abuses of fixed-term contracts takes into account the diverse use of successive fixed-term contracts in different sectors. We appreciate that they are used in a wide variety of sectors that range from catering to construction. We had already accepted that separate arrangements needed to be made in the theatre and in sport. It should be possible to tailor the part of the regulations that limits the use of successive fixed-term contracts to match the requirement of different sectors. The clause and the regulations allow employers and groups of employees to agree an alternative mechanism for preventing abuses of successive fixed-term contracts by means of collective or workplace agreements that can displace the statutory mechanisms. The agreements must specify the duration of successive fixed-term contracts and the objective reasons for their renewal. Nevertheless, the industry and the work force are entitled to draw up such agreements according to the sector in which they work.

We believe that the regulations are sufficiently flexible and that we have adopted the right approach. I understand the points made by the hon. Members for Runnymede and Weybridge and for Hertford and Stortford, but we would do employers a disservice if we accepted the amendment.

Philip Hammond (Conservative, Runnymede and Weybridge)

I do not disagree with much of what the Minister said. When I moved my amendment, I should have said that it was tabled before he issued the draft regulations to members of the Committee. I erred on the side of caution in my attempt to table a consensual amendment that might catch his attention. I could have included four years instead of two years.

The Minister has reassured me that the intention is to deal with abusive cases, and the draft regulations show that the number of such cases should be relatively small. As far as I can see, nothing will stop an employer who is intent on avoiding permanent employment from employing a succession of people under fixed-term contracts. The restriction will be against employing the same person on successive short-term contracts, but it will be impossible to stamp out all practices that the Minister does not like. One must take a pragmatic approach, and the evidence of the problem is small. However, the Minister's approach will deal with the bulk of it, and I shall be happy to withdraw the amendment.

The Minister said that employment that had the ''nature and characteristics'' of permanent employment was difficult to define in regulations. That may be so, but it is an awful shame that something that is a common-sense definition that we can all understand apparently cannot be translated into legislation. Sometimes the common-sense definition works, rather than the tightly defined legal definition through which someone finds a loophole precisely because it has been so tightly defined. 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. 215, in page 47, line 33, at end insert:

''(1A) For the first two years of an employee's fixed term employment the regulations will not apply to occupational pension schemes.''

Clause 45 goes further than the fixed term directive requires because it extends the remit of the legislation: fixed-term employees cannot be discriminated against in their pay and pension benefits. I appreciate that the first draft of the provisions did not cover those benefits, and was changed by the Government. We welcome that, but recognise that the inclusion of pension benefits could create unnecessary costs for employers. Employer organisations have expressed concern about that. We support measures that encourage people to invest in second-tier pension provision. We welcome the fact that the Government are legislating to improve workers' rights to access occupational pension schemes.

The situation for fixed-term employees is more complicated. Under clause 45, employers must provide all fixed-term employees with access to occupational pension schemes. However, if scheme members leave with less than two years pensionable service, they have no statutory rights to future benefits or to transfer value. The employer is not obliged to do anything with the contributions that it pays in, but any employee contributions would have to be returned.

The CBI has pointed out that the majority of fixed-term workers are employed for less than two years. In such cases, employers would be required to provide access to an occupational scheme that would carry administration costs, but have no benefit to employees. They would not see their money grow because it would remain static in the fund and be returned to them on leaving employment. They would

be better off investing elsewhere, without expense to the employer. To override that problem, the CBI has suggested a two-year exemption before fixed-term workers were brought into the scheme, which is the purpose of the amendment. That is not an ideal solution, because it would mean that any fixed-term worker remaining for more than two years would lose out on two years of contributions. We are keen to stress the difficulties that employers might face concerning the rights to occupational pensions for fixed-term employees who leave after less than two years of employment. The benefit to the employees would be non-existent and they would be better off not being part of such a scheme.

The amendment is a probing one, but employers and employer organisations are concerned about an extra administrative burden that carries no benefit for employees.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am most grateful to the hon. Member for North Norfolk for sitting down at two minutes to 1 o'clock. He has handed me the poisoned chalice of having to remember where I got to in my sentence at 4.30 pm.

I reiterate our principled objection to the Government gold-plating the EU directive. The original intention was to exclude pay and pensions, as the hon. Gentleman pointed out. The trade union movement had an agenda to include pay and pensions in the scope of the legislation. Suddenly, we discover that the Government have decided to adopt the measure. I see that the Minister is marking my card: something nasty is going to happen to my postal deliveries, I suspect.

We cannot ignore the fact that the Government were re-elected following an election campaign supported, through silence on several issues and by substantial financial donations, by organisations that have a public agenda to secure several of the Bill's provisions, including the matter we are discussing. The Government's agenda did not include pay and pensions, but they included them somewhere along the line. The Minister will forgive me if we are suspicious about that sudden change of heart.

It being One o'clock The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

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