Employment Relations Bill

Public Bill Committee, 3 February 2004.

Standing Committee D

Employment Relations Bill

Gerry Sutcliffe (Labour, Bradford South)

I beg to move,

That—

(1) during proceedings on the Employment Relations Bill (in addition to its first meeting at half-past Nine o'clock on Tuesday 3rd February 2004) the Standing Committee do meet—

(a) at half-past Two o'clock on Tuesday 3rd February 2004;

(b) at half-past Nine o'clock and half-past Two o'clock on each of the following days, namely, Thursday 5th February 2004, Tuesday 10th February 2004, Tuesday 24th February 2004 and Thursday 26th February 2004.

(2) the proceedings to be taken on the sittings shall be as shown in the second column of the Table below and shall be taken in the order so shown;

(3) the proceedings which under paragraph (2) are to be taken on any sitting shall (so far as not previously concluded) be brought to a conclusion at the time indicated in the Table;

(4) paragraph (2) does not prevent proceedings being taken (in the order shown in the second column of the Table) at any earlier sitting than that provided for under paragraph (2) if previous proceedings have already been concluded.

SittingProceedingsTime for conclusions of proceedings 1stClause 1, Clause 4, Clauses 2 and 3, Clauses 5 to 30— 2ndClause 1, Clause 4, Clauses 2 and 3, Clauses 5 to 30— 3rd Clause 1, Clause 4, Clauses 2 and 3, Clauses 5 to 30— 4th Clause 1, Clause 4, Clauses 2 and 3, Clauses 5 to 30— 5thClause 1, Clause 4, Clauses 2 and 3, Clauses 5 to 30— 6thClause 1, Clause 4, Clauses 2 and 3, Clauses 5 to 305.30 pm 7thClauses 31 to 42— 9thNew Clauses, New Schedules, Clauses 43 to 45, Schedules 1 and 2, remaining proceedings on the Bill— 10th New Clauses, New Schedules, Clauses 43 to 45, Schedules 1 and 2, remaining proceedings on the Bill5.30 pm

Good morning, Mr. Stevenson. I welcome you to the Chair and look forward to working with you and with Mr. Forth, who will replace you in due course. This is an important Bill and we look forward to the detailed discussions that we will have.

I am delighted to see the hon. Member for North-West Norfolk (Mr. Bellingham) in his place. Skill, charm and wit are among his attributes and, although I am sure that he will get it wrong in terms of substance, the Programming Sub-Committee has tried to provide ample time to ensure that the Bill is well

scrutinised. I welcome the hon. Gentleman to his place, as I do other Opposition Members, including the hon. Member for Gordon (Malcolm Bruce). On my own side, I am delighted to have my former colleague in the Whips Office, my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins), alongside me to keep the expert array of talent on the Government Benches in order as we go through the Bill.

I believe that there is ample opportunity to discuss a range of issues. I want to raise the issue of the union modernisation fund, which has hit the press since Second Reading. I assure the Committee that it will have the opportunity, despite what the press reports may say, to discuss the issue in full at the appropriate time. The Government are currently considering the proposals, but they will come before the Committee and I am sure that it will have wise words to say about the fund. We will give the Committee that opportunity.

Henry Bellingham (Conservative, North West Norfolk)

I endorse what the Minister has said in welcoming you, Mr. Stevenson, and your colleague, Mr. Forth, to the Committee. We in the Opposition look forward to working with you.

I am glad that we have agreed some alterations to the programme motion. Initially, we took the view that there was no need for a programme motion on the Bill. As the Minister has pointed out, it is an important Bill but not one that will involve our getting into long detailed arguments. I have said all along that we will be constructive and positive about many parts of the Bill, but will want to concentrate on one or two specific clauses.

I regret the principle of the programme motion, but I want to thank the Minister and the Government Whip for their flexibility in allowing us a little more time for discussion of part 1. There are quite a few amendments on part 1, and I am sure that Government Members will want to make various comments. The Minister mentioned the union consolidation fund. It is regrettable that the Bill is already being used as an opportunity to add a variety of new amendments. Although we find that regrettable, we will obviously await the substance and details and return to the matter in due course. However, we are content with the programme motion as it stands.

Malcolm Bruce (Liberal Democrat, Gordon)

I support the hon. Gentleman's remarks, and thank the Minister and the Government Whip for their courtesy in allowing consultation on the programme motion. It is both my personal view from experience and my party's view that an agreed programme that allows a Bill to be properly debated is far preferable to an elastic programme that has to be curtailed, leaving significant provisions undebated or undetermined.

We as a party broadly support the Bill; the Conservative Opposition's position is rather different. However, we would like to debate one or two issues and we will also be tabling amendments. I hope that we have the balance and the spirit right. We are here to do

a job of work and to debate the issues objectively and tirelessly. The consultation that has taken place in advance has been constructive.

Question put and agreed to.

George Stevenson (Labour, Stoke-on-Trent South)

I now move to a short announcement on Committee arrangements. Adequate notice should be given of amendments. As a general rule, my co-Chairman and I do not intend to call starred amendments, including any starred amendment that might be reached during an afternoon sitting. I hope that all Committee members understand that as I do.

Clause 1 ordered to stand part of the Bill.

Clause 4 - Determination of appropriate bargaining unit

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 1, in

clause 4, page 4, line 5, leave out 'compatible with' and insert 'conducive to'.

''Appropriate bargaining unit'' in the title of the clause refers to the unit of employees within a firm or group of companies that forms the bargaining unit for the purposes of the legislation. Our reason for wishing to substitute the words ''conducive to'' for ''compatible with'' is simple. Compatibility with effective management is too passive a formulation and ''conducive to'' is more positive. If we consider the role of management in the business and its right to create wealth, for the purposes of what the Central Arbitration Committee must take into account, the words ''conducive to'' are stronger and clearer than the words ''compatible with''. That is the essence of the amendment.

Michael Jabez Foster (Labour, Hastings and Rye)

Is it not a problem that the word ''conducive'' is subjective and therefore likely to lead to all sorts of disagreements, whereas ''compatible'' is objective and therefore easier to understand?

Henry Bellingham (Conservative, North West Norfolk)

I do not necessarily accept that; it is a debating point. However, I accept that our amendment would make it slightly fairer to management when it came to sorting out one small aspect of the equation. We are suggesting a change to a point of detail in a part of the Bill that is concerned with how the management structure in a particular company is able to run the business.

Let me also touch on amendment No. 16, which is grouped with—

George Stevenson (Labour, Stoke-on-Trent South)

Order. That is a separate amendment.

Henry Bellingham (Conservative, North West Norfolk)

In that case, I have finished.

Jonathan Djanogly (Conservative, Huntingdon)

In getting down to the nitty-gritty of the Bill, I have found it one of the harder ones to contend with, because only two of its clauses are stand-alone provisions. Otherwise, it relates to other legislation—the Trade Union and Labour Relations (Consolidation) Act

1992, the Employment Rights Act 1996, the Employment Relations Act 1999, the minimum wage legislation and so forth—and it is impossible to consider the Bill without referring to that legislation.

I was struck by the fact that there have been some 25 pieces of pro-union legislation, and this adds to them. The clause and part 1 make more changes, invariably in favour of the unions. I should like to ask the Minister about a matter that comes up throughout the Bill. I would appreciate it if we could address it in the early stages, rather than have it as an ongoing issue. Where did the proposals, including that dealt with in amendment No. 1, come from? Did the Government carry out a review of the changes that would be necessary to existing legislation, or did they ask the unions—

George Stevenson (Labour, Stoke-on-Trent South)

Order. I am a little worried that this is becoming a Second Reading debate or perhaps a clause stand part debate. Will the hon. Gentleman refer to the specific wording of the amendment?

Jonathan Djanogly (Conservative, Huntingdon)

I thank you, Mr. Stevenson, for your comments, which I respect, but this is an important issue, which will come up throughout our proceedings, so I thought that it might be appropriate—

George Stevenson (Labour, Stoke-on-Trent South)

Order. I respect what the hon. Gentleman says, and I shall try to reflect that in my comments, but I really would like him to get back to the amendment.

Jonathan Djanogly (Conservative, Huntingdon)

I shall, although I hope that the Minister has taken my point on board.

Clause 4 relates to the appropriate bargaining unit in cases where the parties have failed to reach agreement. I support amendment No. 1. Management's primary concern is the effective running of the company. It must be allowed to manage the units of labour, and that goes to the heart of the problem with much of the legislation, which is stultifying and ties down the units of labour. That makes management harder than it should be, by working against the adaptable allocation of labour. Perhaps the question that was posed earlier could be turned round, and the Minister could give examples of what compatibility means in this context.

Gerry Sutcliffe (Labour, Bradford South)

I thank the hon. Member for North-West Norfolk for moving the amendment in the spirit in which he did. The backdrop to the Bill is the 1999 Act; indeed, the Bill is a response to the way in which the Act is working. We said that we would review the Act after three years, and have done so. The review is an important document, and I suggest that those who want to contribute to the debate read it and take note of the consultation that we held to seek clarification on the many issues before us.

Jonathan Djanogly (Conservative, Huntingdon)

This is an early point at which to raise the issue, and I appreciate the Minister spending time on it, but can he explain where the impetus for the changes came from during the consultation? Very few, if any, of the changes in the Bill favour companies.

Gerry Sutcliffe (Labour, Bradford South)

If the hon. Gentleman reads the consultation document and sees how different organisations responded, he will find that there was a fair balance as regards the way in which the previous legislation was working. We need to clarify certain issues, so that it works even better.

Clause 4 deals with the way in which the Central Arbitration Committee reaches decisions on bargaining units. Determining the bargaining unit is, of course, a key stage in the statutory procedure, and the union and the employer are usually very interested in making their views on the issue known to the CAC.

The existing statutory procedure sets out a list of criteria that the CAC must take into account when assessing the appropriateness of bargaining units. Those criteria are set out again in new paragraphs 19B(2) and (3), and the description of them has not changed in any way. The need for bargaining units

''to be compatible with effective management''

is the most important of those criteria, and the others come into play only to the extent that they do not conflict with it.

We have been very encouraged by the way in which this part of the statutory procedure has worked in practice, and the CAC and the parties have found it to be workable and fair. Importantly, decisions about bargaining units have been taken quite quickly. The process has rarely led to significant delays, which is a great achievement, given the issue's potential complexity.

There is no need to make significant changes to this part of the statutory procedure—that was one of the findings of our review of the 1999 Act. Clause 4 merely sets out in greater detail, and in the interests of clarity, the processes that the CAC must follow when determining bargaining units—it does not change those processes.

The amendment would make a much more radical change by altering the wording of the key ''effective management'' criterion. That criterion already has a predominant position, and the amendment would elevate its status further. That is clearly the motivation of the hon. Member for North-West Norfolk. We see no reason why the balance should be changed; the statutory procedure has worked very well. The carefully crafted formula lists the main criteria, respects the genuine interests of the employer, and ensures that bargaining units respect the need for effective management. If the union's proposed bargaining unit were to undermine effective management, it should be replaced by one that is compatible.

I understand why the hon. Member for North-West Norfolk tabled the amendment, but I do not think that it would be right to change things at this stage. I hope that he will reflect on the matter, as the system works well. There is no case for the amendment. It would create an imbalance in key parts of the procedure and would produce uncertain effects. Therefore, I ask him to withdraw it.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister for that explanation. I do not entirely agree with it, but he has put forward a reasonably convincing case. We would like to return to this point either on Report or when the Bill goes to another place. With that in mind, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 16, in

clause 4, page 4, line 22, at end insert—

'19BA If more than 25 per cent. of the workers in a bargaining unit determined by the CAC do not wish to be represented by the union, they shall retain the right to negotiate separately from that union.'.

George Stevenson (Labour, Stoke-on-Trent South)

With this it will be convenient to discuss the following:

Amendment No. 17, in

clause 5, page 4, line 24, leave out '19B' and insert '19BA'.

Henry Bellingham (Conservative, North West Norfolk)

Amendment No. 17 is consequential to amendment No. 16, so there is no need to discuss it in any detail. Amendment No. 16 goes to the core of individual choice and the freedom of employees to do what they feel is right for them when a certain number of them do not particularly want to be represented by a union.

It is important to consider the background. For a trade union's application to the CAC to succeed, 10 per cent. of employees in the bargaining unit must be members and the CAC must be satisfied that the majority of employees are likely to favour recognition. If there is a ballot, there needs to be a majority of those who vote, plus 40 per cent. of those entitled to vote. That is straightforward. The amendment would mean that, once recognition had been established, if 25 per cent. of employees did not wish to be represented by the union, they should retain the right to negotiate separately. That goes to the core of the rights of individuals in a company.

The essence of any successful business is to have a happy, cordial relationship between managers, employers and employees. My experience of business—before I returned to this House, I had substantial experience of business—is that the relationship between management and employees is vital. Keeping people happy, motivated, absorbed and involved is vital to the conduct of a business. If a company has a hard core of employees who are not satisfied with the situation, and who wish not to be represented by that union, it would be in everyone's interests—

John Lyons (Labour, Strathkelvin and Bearsden)

Will the hon. Gentleman give way?

Henry Bellingham (Conservative, North West Norfolk)

I am going to sit down in a moment, so it may be better if the hon. Gentleman makes a separate speech.

We are going to the core of individual rights. I hope that members of the Committee will bear that in mind. The amendment is straightforward. I do not intend to

detain the Committee with unnecessary verbiage. I intend to be brief, short, sharp and to the point. With that in mind, I shall sit down.

John Lyons (Labour, Strathkelvin and Bearsden)

What the hon. Gentleman suggests would be a managerial nightmare. An organisation might have three or four bargaining units but, if the amendment were accepted, there would also have to be a shadow bargaining unit if there were trade union recognition. That would be impossible to manage. Managers throughout the country will be holding their heads in horror at the possibility of having to negotiate with a recognised trade union as well as a shadow bargaining unit.

Jonathan Djanogly (Conservative, Huntingdon)

I support my hon. Friend the Member for North-West Norfolk. It would be beneficial to introduce that right for a certain percentage of workers. The amendment suggests that 25 per cent. of workers who do not want to be represented by the union should have the right to negotiate separately from that union.

Several hon. Members rose—

Jonathan Djanogly (Conservative, Huntingdon)

I give way to the Minister.

Gerry Sutcliffe (Labour, Bradford South)

I hope that I will not pre-empt my hon. Friends' questions. Would that principle also apply to a group of workers who wanted to maintain union recognition? Would that group have the same opportunity?

Jonathan Djanogly (Conservative, Huntingdon)

The amendment addresses individual rights, not just management rights and union rights.

Bill Tynan (Labour, Hamilton South)

Will the hon. Gentleman give way?

Jonathan Djanogly (Conservative, Huntingdon)

No, I will continue on my course. An individual has the right to be a member of a union. That does not stop. The hon. Member for Strathkelvin and Bearsden (Mr. Lyons) spoke about a shower of bargaining units. However, what the amendment suggests already applies in most of the private sector. Individuals negotiate their terms with their employers. To say that business will come to grief and collapse because the company and the unions do not get together and wrap things up for everyone is a non sequitur.

Michael Jabez Foster (Labour, Hastings and Rye)

I presume that the hon. Gentleman is suggesting not that individuals should have an individual negotiating right, but that they should have a collective right if 25 per cent. determine it, thus, in effect, creating alternative bargaining units in a single organisation.

Jonathan Djanogly (Conservative, Huntingdon)

I am, indeed, suggesting that. Individuals should have the right to get together to maintain a bargaining position, whether or not they are represented by a union. Indeed, existing legislation gives them such a right. A company that is about to merge and has to consult its employees must help them to put together a form of bargaining unit if there is no trade union. I have a problem not with that, but with individuals being forced into collective bargaining against their will—a separate issue.

What Government Members are talking about is the old fashioned, get-back-to- the-1950s wrap-up, with management and the unions sorting things out together. I am not saying that that will not work in certain circumstances, especially in the larger, perhaps older industries. Circumstances are different. I maintain, however, that individual rights should be taken on board. This legislation ignores individual rights.

Bill Tynan (Labour, Hamilton South)

If we are protecting individual rights, and if an individual has the right not to belong to a trade union—a right that we support—surely that endorses the fact that the individual right exists. With regard to the collective unit for bargaining, does the hon. Gentleman believe that 25 per cent. or more would set up individual bargaining, and that that would be the best way for the employer to deal with an issue?

Jonathan Djanogly (Conservative, Huntingdon)

People have the right to get together to bargain in whichever way they wish. That is a human right, which the legislation should recognise but does not.

Peter Atkinson (Conservative, Hexham)

The problem that we will have in the debate is that many Government Members, as my hon. Friend rightly says, are still fixated on the 1960s and on the days of huge industries and individual companies employing many thousands of people. The reality for most businesses is quite different. Most employ a few dozen people.

Jonathan Djanogly (Conservative, Huntingdon)

The reality is that the people of this country do not realise what rights have been given back to the unions. If they did—I hope they will—they would react against it. I thank my hon. Friend for reiterating that fact.

We maintain that people have individual rights within the collective bargaining regime that the Government are so keen to maintain and to build upon. The question is: at what point should individuals have the right to be heard? The suggested figure of 25 per cent. may be too high. It was included as a conciliatory figure in order to create a balance, but it can be debated. I ask the Government to consider it, because we live in a different age from that being dealt with by the Bill.

Michael Jabez Foster (Labour, Hastings and Rye)

What is being suggested is a threshold of 25 per cent. for collective bargaining. The individual threshold is now one, in the sense that the individuals have the right to choose not to be a member of a union.

Jonathan Djanogly (Conservative, Huntingdon)

I do not suggest 25 per cent. for collective bargaining. I am saying that, if there is to be collective bargaining, the voices of the minority of workers who do not want to be involved should not be dismissed.

Michael Jabez Foster (Labour, Hastings and Rye)

As I see it, the Government seek to maintain the present position, which is that individual rights are wholly maintained for those who do not wish to be part of the collective bargaining unit. People have the absolute right not to be part of the union. It may

be extremely unwise to take that view, but it is a matter of conscience; it is a personal choice. The law is well established, and no change is intended under the Bill.

Jonathan Djanogly (Conservative, Huntingdon)

I do not think that that is correct. People have a right not to be a member of a union, but surely they do not have the right to avoid the collective bargaining arrangements. Perhaps I am wrong.

Michael Jabez Foster (Labour, Hastings and Rye)

People certainly do not have the right to change the collective bargaining arrangements. The individual contract is a matter for negotiation, but it cannot be contrary to or in opposition to the collective rights that have been negotiated. However, the amendment, with its threshold of 25 per cent., would result in the most dangerous outcome. Even if the union—the majority—has decided on a different course of action, the 25 per cent. could thwart the rights of the majority. In a democracy, the majority should not impose on the rights of the individual, but the majority should none the less have their way. That is what the Bill provides. To impose a 25 per cent. threshold to effective alternative bargaining would not only cause chaos but be unfair.

Malcolm Bruce (Liberal Democrat, Gordon)

I oppose the amendment. If only with its rhetoric, the Conservative party seems to be looking back to the dear, dead days of the 1960s. Conservative Members appear to want to reintroduce the potential to be confrontational and divisive. I am trying to imagine a possible scenario. A bargaining situation has been established, to which the majority of workers have agreed, but a substantial minority then say that they want to negotiate different arrangements. The idea that those workers will happily go on working side by side in the same environment with two different bargaining arrangements is nonsense. I cannot imagine that any responsible or sensible employer would regard that as conducive—the word used in amendment No. 1—to good management or good industrial relations.

I take the point made by the hon. Member for Hexham (Mr. Atkinson) that the structure of the labour market has changed radically over the past 20 to 30 years, and that as a result union membership declined and is only just beginning to recover. Indeed, smaller work places operate with a different dynamic. Later in the Bill, we shall be trying to define an appropriate size. In that context, the amendment seems inappropriate.

Jonathan Djanogly (Conservative, Huntingdon)

The hon. Gentleman talks as though everyone is happily involved in unions, that all companies talk happily with the unions and that what we propose is regressive. I hasten to remind him that only a tiny minority of people in the private sector are members of unions. The Bill is about enabling the unions to get in and represent the workers.

Malcolm Bruce (Liberal Democrat, Gordon)

The Bill is about the giving the unions the right to get in and represent workers, but it does not impose on workers the obligation to join a

union. I have been in the House for just over 20 years, and I voted for most of the Conservative reforms in the 1980s because they democratised unions that had become over-powerful and which abused their power. I would not support the Bill if I thought that it reversed the beneficial effects of those reforms. However, I believe that it is a genuine attempt to tidy things up and to get the balance right.

Conservative Members should consider carefully whether their approach suggests a party with a genuine interest in good, constructive industrial relations or one that is trying to load the dice so that bad management—we know that there are bad managers—can exploit a work force who have no effective power. We are trying to ensure that responsible managements and responsible unions—as well as individuals who do not want to be part of their arrangements—can operate peacefully and constructively, but the amendment would help to achieve that.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to those who have spoken. Labour Members and the hon. Member for Gordon outlined the objections to the amendments; these objections go to the root of our attempts to achieve a good balance in industrial relations. The context is that the world is changing in terms of demographics, organisation and the challenge of global competition and we need modern, effective and high-productivity workplaces.

We must ask who is living in a time warp. Industrial relations today are a matter of ensuring that people work together as productively as possible, that there is no exploitation and that businesses do well, but the amendments show a fundamental distrust of that way forward. The Government have technical concerns with the construction of the amendments. Leaving that aside, the hon. Member for Huntingdon (Mr. Djanogly) dismissed the point about what would happen with de-recognition to people who wanted to stay in a recognised union.

The amendments are dangerous—that is the word—and we hope that the hon. Gentleman will, on reflection, not press them.

Henry Bellingham (Conservative, North West Norfolk)

We have had a good, short debate. The only point that has not been made is that if the union that is recognised does its job properly and looks after its members, there will be no need to overturn that work. However, in the interests of maintaining the spirit of the Committee, and in the hope that we shall return to the issue, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Clause 2 ordered to stand of the Bill.

Column Number: 13

Duty of employer to supply information to union

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 14, in

clause 3, page 2, line 31, leave out '5' and insert '10'.

This is a simple amendment, which relates to an earlier point in the Bill. As so often happens, we are debating legislation in a logical but not strictly chronological order. The clause deals with the employer's duty to supply information to the union, and I am looking forward to discussing some important amendments to it in a moment. Amendment No. 14, however, is fairly short. Page 2, line 31, of the Bill states:

''Within 5 working days starting with the day after that on which the CAC gives the employer notice of acceptance of the application, the employer must supply the following information''.

Five days is not long enough. Consider the information that has to be produced; a list of the categories of worker in the proposed bargaining unit, a list of the workplaces and the number of workers that the employer reasonably believes to be in each category at each workplace. It will be easy for a company that operates on one site—perhaps a small manufacturing unit employing 30, 40 or 50 people—to supply that information.

However, there are many disparate industries in this country. Sectors such as haulage, which have depots around the country at which some employees are self-employed and the use of sub-contractors is prevalent, will find it much harder to pull the information together. In addition, some companies keep very good records, but others are less conscientious. I am in favour of anything that drives up business efficiency standards, but we must also have an eye on what is reasonable. Five working days is not long enough. In the circumstances that I have described, 10 working days would be more reasonable. That is why I have tabled the amendment.

Jonathan Djanogly (Conservative, Huntingdon)

After the union has applied to the CAC for recognition, the next stage of the process is for the CAC to determine the role of the bargaining unit. The clause imposes on the employer a duty to supply information, including a list of categories of worker, a list of workplaces and the numbers of workers in each category to the unions and the CAC. I support my hon. Friend; the time in which the employer must provide that information should be extended from five to 10 working days, starting with the day after that on which the CAC gives the employer notice. That obligation could put a considerable strain on the employer, depending on the size of the business in question. That touches on another issue that arises throughout the legislation. The Bill takes a one-size-fits-all approach. In other words, it does not account differently for the size of the company, so whether it is ICI—

Gerry Sutcliffe (Labour, Bradford South)

Just to help the hon. Gentleman, is he not aware that the statutory recognition procedure does not apply to companies of less than 21?

Jonathan Djanogly (Conservative, Huntingdon)

I am, indeed, aware, and I am coming to that very point. It is still the case that a bike shop employing more than 21 people will be subject to the same regulations as will ICI. That is a fundamental flaw in the Bill.

Having said that, I come back to the Minister's point, which is key. The CAC annual report notes that 54 per cent. of bargaining units have fewer than 100 staff, but it does not give any figures lower than that. There is a deficit of information in the public arena. If the figures are available, I should be grateful if the Minister said so. I do not know whether he has the information to hand now, but it would be helpful for the Committee if he said how many bargaining units there were with 21 to 25 workers, 25 to 30, 30 to 50, 50 to 75 and 75 to 100. If we had that information, we would be better able to understand the implications of the Bill for companies of different sizes. I have a feeling that the statistics will show that smaller companies are having a tougher time than large ones.

Gerry Sutcliffe (Labour, Bradford South)

Notwithstanding what the hon. Gentleman says about the figures, I shall try to get that breakdown for him. I do not know how long it will take. The amendment seems to extend from five to 10 working days the period within which the employer must supply information to the CAC and the union about the proposed bargaining units. The duty to supply this information is very important. It applies during the special 20-day period set aside in the process for the parties to try to reach a voluntary agreement between themselves on an appropriate bargaining unit. This negotiation period can be extended if necessary. The CAC steps in to decide the unit only if the parties fail to agree. That arrangement has worked very well; better, perhaps, than many people expected.

By the end of December last year, 79 bargaining units had been decided by agreement between the parties. That left only 73 cases in which the CAC had to determine the unit. We want to build on that success by easing the way for even more agreements to be reached. The clause achieves this by ensuring that all the parties share helpful information early in negotiation. The sooner a shared understanding of the shape of the work force can be achieved, the greater the chance that an appropriate bargaining unit will be agreed.

The clause introduces a duty on employers to supply the union with information on the number of workers in the union's proposed bargaining unit by category of worker and by workplace. The occupational and geographical compositions of the work force are usually key factors in determining bargaining units. The union cannot know this detail in advance of lodging its application. A level playing field is created in negotiations if the employer discloses that information. This will facilitate more constructive negotiations and more informed choices.

The amendment would allow an employer to delay negotiations by waiting until halfway through the initial 20-day negotiation period before supplying the information. That is too long. Five working days is a reasonable amount of time in which to expect the employer to supply the information. The information

required is restricted to basic employment data, and most employers should already have compiled it for other business purposes as a matter of course. Indeed, in many cases, the employer will have supplied much of the data to the CAC at the earlier admissibility stage, so the task will not be excessively time-consuming. Moreover, employers going through the process will know in advance what the procedure requires of them. This requirement will not be sprung on them suddenly. Employers will have plenty of time before they reach the bargaining unit negotiation stage to prepare the information.

The Government cannot support the amendment, as the clause does not place unreasonable demands on the employer. I have figures that I will share with members of the Committee. They are too difficult to discuss now, but I will ensure that hon. Members have the detail of the bargaining units by this afternoon's sitting. I ask the hon. Member for North-West Norfolk to withdraw the amendment.

Henry Bellingham (Conservative, North West Norfolk)

Will the Minister say what happens if the company cannot access information within the specified period? There will be exceptional circumstances. For example, records might be lost, or a company might have disparate business units with operations spread throughout the country. Is there any way in which we can try to help companies that genuinely cannot provide the information?

Gerry Sutcliffe (Labour, Bradford South)

As I said, the company will know what procedures are expected of it by the time it enters into negotiations. There will have been an attempt to try to reach a voluntary arrangement. The company will know that the statutory procedure will be developed and that the information will be required. The hon. Gentleman does, however, raise an interesting point about small failures or slight administrational hiccups, which we will discuss later. I am prepared to consider that question in return for a greater flexibility in the hon. Gentleman's approach to minor issues that affect the unions, which we will come to later in debate.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful for the Minister's suggestion. There may be scope for flexibility later, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 15, in

clause 3, page 3, line 5, at end insert—

'(6) If any of the information to be supplied pursuant to sub-paragraph (2) is commercially confidential or information which may affect the security of the company or its employees, the employer shall have the right to withhold any such information.'.

George Stevenson (Labour, Stoke-on-Trent South)

With this it will be convenient to discuss the following amendments: No. 20, in

clause 5, page 6, line 3, at end insert—

'(5) If any of the information to be supplied pursuant to sub-paragraph (2) is commercially confidential or information which may affect the security of the company or its employees, the employer shall have the right to withhold any such information.'.

No. 30, in

clause 12, page 11, line 40, at end add—

'(7) If any of the information to be supplied pursuant to sub-paragraph (2) is commercially confidential or information which may affect the security of the company or its employees, the employer shall have the right to withhold any such information.'.

Henry Bellingham (Conservative, North West Norfolk)

The Clerks have grouped the amendment with amendment No. 20, which relates to clause 5, and with amendment No. 30, which relates to clause 12. They are all worded identically and have the same raison d'etre, which is why they have been grouped together.

There are a number of issues that arise from the amendment, such as commercial confidentiality and the security of the employer and employees. Although we probably feel least strongly about commercial confidentiality, it could be significant. My hon. Friend the Member for Huntingdon has a lot of experience of corporate takeovers and corporate reconstructions from work in his previous incarnation as a partner in a firm of city solicitors. We respect his experience. He knows that there are times when commercial confidentiality is vital; in a takeover, for example, intellectual property or patents could be an issue. The company in question might be trying to register patents or intellectual property at a particularly critical time. Commercial confidentiality is vital in those circumstances.

Business today can also get pretty ruthless and determined at times, such as during a bust-up in a boardroom or a company. I am sure that members of the Committee have been following the story in the press recently about the row between the managing director of Manchester United and the senior shareholders John Magnier, J. P. McManus and Dermot Desmond. Those individuals have employed a firm called Kroll, an aggressive and ruthless security company, to delve into every aspect of Sir Alex Ferguson's business activities and private life. That is an example of the lengths to which people will go to get information when there is a serious boardroom bust-up. That is the background in business now. Tactics can be used that are different to those used in the past.

Gerry Sutcliffe (Labour, Bradford South)

As a Manchester United supporter, I understand, with great pain, what is happening at Old Trafford. However, I am a little lost and do not know where the hon. Gentleman is taking us. Could he explain how the statutory recognition procedure in question applies to the Bill?

Henry Bellingham (Conservative, North West Norfolk)

I will come to that. Ruthless tactics can be employed to obtain information in today's business world, so there will be times when a company wants to protect its commercial confidentiality. If companies must supply information to the CAC, there will be one more organisation with highly sensitive commercial information.

Michael Jabez Foster (Labour, Hastings and Rye)

Can the hon. Gentleman give an example? The information that companies are required to supply under the provisions is pretty limited. What situation does the hon. Gentleman

envisage—within the limitations of the list—that might involve confidential information liable to cause such embarrassment?

Henry Bellingham (Conservative, North West Norfolk)

It might be that the company in question is opening a new plant somewhere. The company might be working on a new patent or putting together a new group of employees to move into a plant. One could think of a number of examples. However, I would accept entirely that commercial confidentiality is probably the weaker of our two points.

We should consider the security of employees carefully. Employee security, which can involve giving up the details of home address, for instance, is usually not a critical factor. In most companies involved in manufacturing, engineering, the service industry, distribution, warehousing or logistics—we can all think of examples from our constituencies—the employees are probably quite relaxed about people knowing their home addresses and other such personal details. However, the work of other companies is much more controversial. One thinks of companies involved in the arms trade or the export of systems that could be used to repress human rights. In particular, employees of some companies that are involved in animal experimentation have been subject to the most appalling attacks. One thinks of Huntingdon Life Sciences, and I know that my hon. Friend the Member for Huntingdon is up to speed with that.

I have been robust in trying to reduce the level of animal experimentation in this country, and I have always been keen on animal welfare, but the experiments being done by HLS will advance the world of medical knowledge. However, we have seen appalling tactics being used to intimidate, bully and frighten that company's employees. Flowing from that was the recent announcement by Cambridge university that its proposed primate research centre would not be going ahead for exactly those reasons; it was worried about the security of employees.

Although we feel strongly about the matter, it is a probing amendment to flag up the fact that, in some circumstances, the security of employees should be considered. I do not know whether the amendment is the right way to achieve it, but the Minister is the expert and he has a team of experts advising him. I am sorry that our friend on the Liberal Democrat Benches is not here, because I think he would be interested in this debate.

Jim Sheridan (Labour, West Renfrewshire)

The hon. Gentleman's nostalgia seems to have taken him back to the days of GCHQ, when the Conservative Government saw the trade unions as a threat from within. Can he identify at least one example of a trade union or of individual members of a trade union having been given information that has damaged the employer?

Henry Bellingham (Conservative, North West Norfolk)

I do not for one moment believe that trade unions or other organisations connected with them would want to do anything to risk the security of employees. The information has to be sent not to trade unionists but to the CAC. I am not talking

about unions; I am talking about information being forwarded to the committee. That information may be sent by e-mail or by other methods, but the employees may be uneasy about disclosing such information to another body.

It is a probing amendment; we do not say that the wording is 100 per cent. correct. However, we are living in a world of global demonstrations and of individuals and single-issue pressure groups with substantial resources and commitment. Some of their members have unfortunately moved beyond the pale; from what we believe to be acceptable demonstrations to tactics against individuals that are completely unacceptable.

We are concerned that anything that might enable others to gain information about individuals and security arrangements could be a step in the wrong direction, unless it is properly protected. That is all that we seek.

Bill Tynan (Labour, Hamilton South)

I see this as a wrecking amendment. I can understand the proposition put by the hon. Member for North-West Norfolk, but the provisions of paragraphs (a), (b) and (c) are about providing information to the CAC. If we accepted the amendment, the employer would be able to refuse to give that information, and the CAC would not be able to appeal against the decision. That would wreck the whole concept of this part of the Bill.

My view is that we have to move forward. I believe that all parties should embrace consensus within the workplace, but amendments such as this would risk destroying any opportunity of employers and trade unions working together. I would ask the hon. Gentleman to look seriously at the proposition.

Jonathan Djanogly (Conservative, Huntingdon)

The hon. Gentleman said that he was concerned that the CAC would not have the right to appeal. If it did, would he support the concept?

Bill Tynan (Labour, Hamilton South)

The hon. Gentleman should consider the clause and examine why a company should need to withhold such information. If he considers it on that basis, he should realise that there is no need to change the clause, or to reach an agreement on the amendment.

Jonathan Djanogly (Conservative, Huntingdon)

The amendments relate to the confidentiality of information, each under slightly different circumstances. The selection of the amendments means that we are considering amendments to clauses 3, 5, and 12. As the confidentiality provisions would be different in each clause, I will have to stray into clause 5, in particular; I hope that that will not be a problem.

Employers must be given the right to withhold information on the grounds that it is commercially confidential, or that its release may affect the security of employees or the company. In relation to clause 3, we need to appreciate that unions will not have been recognised at that stage; they will not have held a ballot or decided whether there is a viable bargaining unit. The unions' position at that point is detached from the status that many hon. Members have attributed to them during our discussions, for example that they will

be in place and part of the team. That is not the situation that is envisaged at the point at which clause 3 will apply.

I am not entirely sure why information on categories of worker and numbers of employees in each place of work needs to go to the unions at all. Perhaps the Minister can explain that. I think that it was intimated that such information does not need to go to the unions and the CAC, but clause 3 says that it does. I agree with other people's assumptions. I am not sure why it needs to go to the unions at that stage; it could go just to the CAC, which will run the process.

I return to my point about confidential information. We live in a corporate world in which information is king, not that it ever wasn't. Information is much more accessible in this age of computers. The hon. Member for Hastings and Rye asked for an example in which the amendment would be relevant. The fact that companies do not need to disclose divisional strengths in their accounts is a good example; knowing the divisional strength of a company could be a competitive advantage for a competing company. Under the Bill, that information will need to be disclosed to the CAC.

Companies will be concerned about the release of such information to the CAC and the unions. I reiterate that, at that stage, the unions will not be on board, but will be outside parties with members in other companies in the same sector. Although the unions may not give information to competing companies, it may get to them through union members. I say that as an attack, not on unions, but on competing companies that would use it as a way of getting information on other companies in the same sector. I hasten to add that I am no expert on the law in this area, but I would be interested to hear from the Minister whether the unions would have a legal duty to keep confidential any information that they receive under the measures. What comeback would there be if such information got out to a competing company? Is it possible, within existing law, for the unions to guarantee to companies that the information that they receive will not go any further or be used for any purpose other than that for which the Bill provides?

Jim Sheridan (Labour, West Renfrewshire)

If I understand the comments made by the hon. Member for North-West Norfolk, the hon. Member for Huntingdon has vast experience of asset-stripping. He talks about ''the union'' in abstract terms. The union consists of the members and whether employees are members of a union or not, they can still pass on information that could be classed as highly confidential. On the principle of confidential clauses, does he accept that the Government have the right to say, whenever they feel like it, that they cannot disclose information because it is confidential? Would his party accept that?

Jonathan Djanogly (Conservative, Huntingdon)

Ignoring the hon. Gentleman's views on my previous work experience, I will say that he makes my point. The unions are not stand-alone

entities existing in law, although they are. They are also human beings and people who talk to each other and communicate and who will want to discuss an approach and a strategy. That will involve confidential information. That is why I am so concerned that the concept of confidentiality should be recognised and why we propose the amendment.

I want to go on to clause 5. Although the request is the same—that we provide for commercial confidentiality and security—in this particular situation we are talking about giving personal details such as names and home addresses to the CAC. That is a wider remit than under clause 3. Not only is it a wider remit, it is a more personal remit because personal information, particularly about people's homes and addresses, will go through.

Why should we be so concerned to protect information about people's homes and addresses? As my hon. Friend the Member for North-West Norfolk mentioned, I have a company in my constituency called Huntingdon Life Sciences. The Minister has probably heard the name of that company several times in the past—probably several times in the past week—and that company has a very significant problem.

Groups of people—I refer to them as terrorists—do everything that they can to find out the names and addresses of people who work for that company. Once they have the names and addresses they publish them on their website. That is apparently done quite legally; I hope that the Minister will address that issue and I have written to members of the Government about it. Those people then leave it to an assorted group of thugs and terrorists to go round and terrorise the homes of those whose addresses have been published. We are talking about some pretty terrible actions; from death threats, daubings and smashed windows to walking down the individual's street, knocking on every neighbour's door and telling them that a murderer lives three doors down. All that comes from the fact that the name and address of the individual escaped in to the public sector. That is why I am extremely concerned about the confidentiality of names and addresses.

We are talking about times when the union is not yet on board; times when although individuals may be members of the union, the union has not been accepted for the purposes of collective bargaining rights. However, under clause 5 the CAC will receive all such personal information. I am sure that the CAC has good confidentiality arrangements; it would be helpful if the Minister explained to the Committee what those are. That would certainly allay some of my concerns.

As clause 5 stands, the wording is not tight enough. Paragraph 19D(1) states that an employer revealing his employees' names and addresses to the CAC must do so only

''so far as it is reasonable to expect him to do so''.

The Minister might argue that that addresses the point about confidentiality. However, the idea needs to be developed. The Minister needs to explain what the reasonableness would involve. Would it be enough for a company to refuse to give the names and addresses

of its employees if, for instance, it was the focus of a known terrorist threat, as is Huntingdon Life Sciences? This is an important point, and I am happy to support the amendment.

Malcolm Bruce (Liberal Democrat, Gordon)

The amendment relates to two different issues that need to be treated separately. I have grave suspicions about commercial confidentiality, which is used as a catch-all excuse for not providing information. Governments also use it, and I would not want to build it into the Bill. Hon. Members have, however, raised legitimate concerns about confidentiality in relation to security. Whether that justifies an amendment is another matter. I deplore the fact that the sort of research carried out by Huntingdon Life Sciences has been driven out of this country and that many people who work in this field have been put under pressure. I also wonder how many public campaigners who oppose Huntingdon Life Sciences, even if they do not support the terrorism, would be willing to refuse treatment for their dying child if such research had produced a cure. That is the question that people must ask themselves.

The real point of the amendment is to say that we should interfere with the process of allowing unions to organise themselves legitimately because of a terrorist threat or a threat of violence against a business. It also slightly impugns trade unions to suggest that they would not be as concerned about the security of their members as the management would be. I do not dispute the points made by the hon. Gentlemen, but if they have a legitimate concern, the amendment needs to be more tightly drafted.

Jonathan Djanogly (Conservative, Huntingdon)

The hon. Gentleman very quickly moved away from the point about commercial sensitivity. His rationale, as I understood it, was that reference to commercial sensitivity could be a catch-all, and he dismissed it as a way forward. Would he be more partial to accepting the concept if the CAC could judge whether a situation was commercially sensitive?

Malcolm Bruce (Liberal Democrat, Gordon)

I would want to be more persuaded of the circumstances to be convinced that that was desirable. However, I suspect that the hon. Gentleman will acknowledge that the wording of the amendment does not stand up legally because it does not say who decides whether a situation is commercially sensitive, or it implies that the employer decides. There is no appeal or external reference. Conservative Members must concede that the amendment is not drafted tightly enough, even if one accepts the thrust of the argument. I maintain my suspicion of referring to commercial confidentiality in this context, and view it simply as a means of trying to block a process that would otherwise be acceptable.

The point about security may have legitimacy, but it would have to be defined much more tightly. Any of us would be appalled if we believed that information obtained in the process was misused in a way that put anyone's safety or security at risk. Huntingdon Life Sciences is a case in point, but there is no evidence to suggest that trade unions are the source of the information. There are many other ways in which people can find out who works where if they want to

get at them. In a free and open society, that is extremely difficult to prevent. Even then, I would need to be given a much more precise example of the sort of situation in which such a threat might occur. Some sort of external body might be able to judge whether reference to commercially sensitivity was appropriate, but I am not yet convinced that such cases are sufficiently frequent to matter.

Gerry Sutcliffe (Labour, Bradford South)

This has been a useful debate although, unfortunately, some of the issues raised are not relevant to the Bill. On the subject of Huntingdon Life Sciences, I agree with the hon. Member for Gordon about the activities of the people involved. The Government's position has been very clear, and I acknowledge the work done by the hon. Member for Huntingdon on behalf of his constituents to try to deal with an horrendous situation. I am not sure whether he has written to me, but I will ensure that ministerial colleagues respond in due course. However, that is outside the context of the debate.

As I think the hon. Member for North-West Norfolk acknowledges, the amendments are not technically proficient. On that basis, I hope that he will not press them, but let us go through some of the issues that they raise.

The hon. Member for Huntingdon asked why the union should get the information. The reason is that it must propose the bargaining unit to the CAC, which must then determine, in discussions with the employer, whether the unit is appropriate. I do not think that that a trade union would act in a way that damaged its credibility or its membership. Furthermore, the relationship between companies and unions is covered by data protection laws and, where necessary, confidentiality arrangements.

I agree with my hon. Friend the Member for Hamilton, South (Mr. Tynan) that the amendments could be seen as wrecking amendments in the context of the statutory recognition procedure. None the less, the hon. Member for North-West Norfolk raised issues about the Government's attitude, and we take seriously our responsibility to ensure that commercial confidentiality is protected. I hope to explain the issue to him.

As has been explained, all three amendments refer to different clauses, but it is appropriate that we take them together. Amendment No. 15 seeks to protect the employer's right not to disclose to the union and the CAC information that is commercially sensitive or which might affect its security and that of its employees. That would apply where the employer had to provide information about the numbers, categories and locations of workers in the bargaining unit, and we discussed those issues in relation to amendment No. 14. I am sure that the intentions behind it are admirable, but let me reassure hon. Members that clause 3 will not require the employer to provide information that is any more sensitive than that which most companies are already perfectly content to publish in their annual reports.

Jonathan Djanogly (Conservative, Huntingdon)

That is exactly my point; the information is not required to be published in the annual report.

Gerry Sutcliffe (Labour, Bradford South)

We must agree to differ on that point.

Clause 3 is not part of an underhand plot to allow unions to gain insider information about an employer. It applies only to the union's proposed bargaining unit and only once the union's application has passed the admissibility tests. Its purpose is to facilitate more constructive negotiations and more informed choices during the period of negotiations on the bargaining unit. The only information required will be the number of workers in the proposed bargaining unit, with the numbers broken down by category of worker and workplace. The union could not use that information to identify individual workers, and it is implausible that it could affect a company's trading position or endanger its security or that of its work force.

Hon. Members might be worried that the categories of workers might constitute sensitive information in certain circumstances. Indeed, I think that the hon. Member for North-West Norfolk raised the issue. However, we are not talking about such a detailed breakdown or about employers having to reveal how many, say, nuclear physicists or encryption experts they employ. For its application to be accepted by the CAC, the union must have given a satisfactory description of its proposed bargaining unit, and it will normally do so in terms of fairly broad occupational classifications. In virtually all cases, the employer's information will not need to go into greater detail. I should note that most employers already share such information with the union when negotiating on the bargaining unit. Our proposal will simply mean that information is shared more systematically and at the earliest appropriate point.

Amendment No. 20 applies to clause 5, which provides for union access from an earlier stage in the process than is currently the case. I hope to explain the clause in greater detail when we discuss amendments Nos. 18 and 19. The earlier union access envisaged will entail sending written material to workers' home addresses via an independent person. To facilitate the process, the CAC will need the employer's collaboration in supplying up-to-date lists of the workers in the proposed bargaining unit, together with their home addresses. That information will then be passed to the independent person who will, if asked to do so by the union, send to workers' home addresses any information with which it supplies him. Clause 5 does not give the union any right to have direct access to workers at their home addresses.

Jonathan Djanogly (Conservative, Huntingdon)

Will the Minister explain the CAC's arrangements for the security of the information that it receives?

Gerry Sutcliffe (Labour, Bradford South)

I shall come to that. Amendment No. 20 seeks to protect the right of the employer not to disclose to the appointed person commercially sensitive information or information that might affect the security of the company and its employees. There

has been some over-reaction on that issue. The information to be provided by the employer is merely the names and home addresses of the workers in the bargaining unit, whether it is that proposed by the union, agreed by the parties or decided by the CAC. I do not think that that information is likely to be commercially sensitive, or to endanger the security of the employees or the company. In any case, that is irrelevant because, as I have made clear, the information will be seen only by the CAC and the appointed person. Both are independent and respected.

The satisfaction rate on the way in which the CAC has dealt with such processes is over 80 per cent. That is high compared with that of many other organisations, and there are procedures within the CAC—

Jonathan Djanogly (Conservative, Huntingdon)

The Minister notes that 80 per cent. are satisfied. However, I saw the figures, and would point out that only some 40 per cent. replied. Considering that 20 per cent. of those were not satisfied, I would not over-egg the point.

Gerry Sutcliffe (Labour, Bradford South)

I hope that the hon. Gentleman is not attacking the CAC, an organisation that has done tremendous—

Jonathan Djanogly (Conservative, Huntingdon)

Did I attack the CAC?

Gerry Sutcliffe (Labour, Bradford South)

The hon. Gentleman gave that impression. We can argue about the concept but going by experience, by the number of cases that have been dealt with and by the way in which the CAC has dealt with them, there is a great deal of confidence in the way in which it operates and in the independent people concerned, who have passed tests of credibility and of ability to do the job to be on the list of qualified independent people.

Amendment No. 30 concerns the power in clause 12 to widen the number of methods whereby the independent person can communicate the union's material direct to workers in the proposed bargaining unit. It allows the statutory procedure to keep pace with technological developments, particularly the rise of electronic communication, and their increasing use. I hope that the Committee will agree that it makes sense to allow for communications under the statutory procedure to use such systems and technologies, once they are completely established. The power can be used to require employers to disclose information—for example, e-mail addresses—to the CAC to enable the independent person to communicate with the workers via the technology in question.

I believe that the aim of amendment No. 30 is to add a similar confidentiality and security provision to the supply of workers' non-postal addresses by the employer. The considerations that I have raised in relation to amendments Nos. 15 and 20 apply equally here. There is no suggestion that the information will be divulged to unions or anybody else by the CAC or the independent person, and there is no reason to believe that any of the information will be commercially sensitive or threaten the security of a company or its staff.

The debate has been important, although it is slightly out of context in terms of the statutory recognition procedure relating to the process that we are undertaking. I hope that, in the light not only of the points that I have made but of the technical difficulties with the amendment, the hon. Member for North-West Norfolk will withdraw it.

Jonathan Djanogly (Conservative, Huntingdon)

I am not entirely sure that, in the course of our helpful discussion, the Minister got round to explaining the security arrangements for the CAC or the person who deals with the information.

Mr. Sutcliffe: I will do that in writing, and circulate it to all Committee members.

Henry Bellingham (Conservative, North West Norfolk)

I have a couple of points to put to the Minister. The debate has been useful, and it has flagged up some important issues, to which the Committee was right to devote time. We are not talking about removing the right of any individual to be properly considered, or the rights of the trade union or the CAC to obtain details about a person and to find out whether he wants to participate in a ballot. All that we are talking about is protecting the person's home address. What happens if a particular employee does not want his home address to be revealed? He might not be in a company that is in a controversial field. It could be that he just does not want his home address to be revealed to anybody. Can that person be protected?

Gerry Sutcliffe (Labour, Bradford South)

I will double-check, but I think that the individual has to provide information about his name and address to the employer. These are issues relating to employer's insurance and other matters affecting the employee's rights. I will check on them and come back to the hon. Gentleman.

Henry Bellingham (Conservative, North West Norfolk)

The point is that some employees might want to insist that their address for all communications be that of the business. I can think of many reasons why they would not want their home address to be revealed if they have specifically requested it. For example, they may be under the witness protection scheme, or trying to escape the clutches of the Child Support Agency. However, it is important that their rights are respected if the individual has specifically requested it.

George Stevenson (Labour, Stoke-on-Trent South)

Order. There will be an opportunity to go into the matter in more detail in respect of clause 5. I have allowed the debate on the security element of the proposal to be stretched because it is important and I hope that the hon. Gentleman will take that into account.

Henry Bellingham (Conservative, North West Norfolk)

I will take it into account, Mr. Stevenson. In the light of our discussion and of some of the Minister's comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Column Number: 26

Union communications with workers after acceptance of application

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 18, in

clause 5, page 5, line 24, at end insert—

'(9) The CAC must at all times keep a list of persons considered to be suitable independent persons, which it must make available to employers, relevant workers and unions immediately on an application under sub-paragraph (2).'.

George Stevenson (Labour, Stoke-on-Trent South)

With this it will be convenient to discuss the following:

Amendment No. 19, in

clause 5, page 5, line 24, at end insert—

'(10) Unions, the employer and relevant workers shall have the right to veto the decision of the CAC following the appointment of the CAC of a suitable independent person. In this event, the CAC must appoint an alternative person as soon as reasonably possible.'.

Henry Bellingham (Conservative, North West Norfolk)

We are making very good progress under your chairmanship, Mr. Stevenson, which is extremely encouraging. We are racing ahead.

Clause 5 is a long clause about union communications with workers after the acceptance of the application. The amendments would add new subsections (9) and (10) to the clause. More detail is needed about who the independent persons are. I am not an expert, unlike some members of the Committee who know a lot about how these procedures work, but I do not have a real feel about the sort of people who have applied to go on the informal panel, or about the performance that has so far been achieved. The Minister said that there was an 80 per cent. satisfaction rate, but it was on a small poll of interested parties.

It would be helpful if the Minister told us who these suitable independent persons are. Is there a long waiting list to go on the panel? Is there a ready supply of such people? What sort of people are they? Are they academics, business men, retired trade unionists, ex-Conservative councillors or ex-Labour councillors? How does one get on the list? Does one have to be approved as an expert in labour relations? It would be useful to have more details. The Minister could enlighten us further on these matters. Amendment No. 18 is sensible and fair.

Gerry Sutcliffe (Labour, Bradford South)

I shall read out a list of the appropriate independent persons. They are the Association of Electoral Administrators, Election.com Ltd, Electoral Reform (Ballot Services) Ltd, which ran the 2001 Conservative leadership election, the Involvement and Participation Association, Popularis Ltd and Twenty-First Century Press Ltd.

Henry Bellingham (Conservative, North West Norfolk)

Presumably, we are talking about members of those particular groups. It would therefore be useful to know how many people there are to choose from. However splendid those people might be, it is possible that the employer, the relevant union or the employees might not be happy with the individual in question. If that were the case, it would be fair for the CAC to accept their opinion and to appoint someone different.

The amendment would give complete parity. It is constructive, pragmatic and fair. It does not detract from subsection (1) and the subsections related to it, but would add two extra subsections that made the appointment procedure much fairer. I doubt that the provision will be used, except in extreme circumstances. However, in some cases, there might be controversy surrounding an individual and, if so, why should not unions, employees or employers be able to object?

On subsection (9), we ask that the CAC should at all times provide a list of persons considered to be suitable and make that list available to all concerned. The Minister might say that that list is available anyway, but the amendment would ensure that that was the case.

Jonathan Djanogly (Conservative, Huntingdon)

Amendment No. 18 is important not only because it would provide that a list of independent persons should be kept, but because it implies that there should be transparency in the CAC, so that confidence in it is maintained. The list of such people, as my hon. Friend the Member for North-West Norfolk made clear, should be available not only to employers, but to unions and relevant workers. It would be helpful to hear from the Minister how the Secretary of State selects the pool of suitable independent persons, and about the controls that are exercised over who does the job. There is an important personal element in selecting a suitable person for a particular case.

Amendment No. 19 would extend the provision by giving the unions, the company and relevant workers the option to veto the appointment of a particular individual as a suitable independent person. I am sure that, in the vast majority of cases, the person selected will be suitable. However, there may be some situations in which one of the parties concerned objects to the appointment of a particular person. It might be that that person has a history in the particular sector that is not liked by one of the parties, or that they are thought to have some conflicts of interest in the case in question. Therefore, we feel that there should be the possibility of a veto. In such a situation, the CAC should appoint an alternative person as soon as reasonably possible. The amendments are straightforward and practical and should be acceptable to all parties involved in the process.

Gerry Sutcliffe (Labour, Bradford South)

I shall respond to amendments Nos. 18 and 19 together, because they both concern clause 5, which will give the union the right to communicate at an earlier stage with the relevant workers—the workers in a proposed or agreed bargaining unit. The union will be able to communicate with those workers from the point at which the CAC accepts its application. The statutory procedure already provides for unions to access the relevant work force during the ballot period. Access can take two forms. First, the unions' written material can be sent to the work force

by an independent person appointed by the CAC. Secondly, the unions are entitled to arrange workplace meetings.

By and large, those arrangements have worked satisfactorily. There have been few disputes about arranging such access, and businesses have not been disrupted as a result. The work force know more about the union's position, and are better placed as a result to make an informed decision when casting their votes.

Of course, that access is limited to the short period of the ballot—usually about 20 days. It is also late in the process. On average, ballots occur about four or more months after an application has been lodged with the CAC. The unions have argued that they should be entitled to some form of access at an earlier stage in the process. They point out that employers have unfettered access throughout the life of an application, and have many more weeks to put across their arguments.

The Government see the force of those arguments. Clause 5 therefore provides arrangements to ensure earlier access for the union. That access will start at the point when the CAC accepts a union's application as admissible. That is a sensible point at which to require access. Everyone will then know that the union's application is a runner and meets the basic criteria of the procedure. It will entail the sending of written material to workers' home addresses via an independent person.

It seems that Opposition Members are concerned about who those independent people might be. I gave them a list of appropriate companies and bodies. They are selected by public competition and are assessed on a variety of criteria, including their internal security systems and confidentiality procedures, to ensure that they are fit to undertake those tasks. They have to go through a rigorous process to be appointed.

I want to clarify an issue raised by the hon. Member for North-West Norfolk about the withdrawal of home addresses. I would not accept anyone having the right to withdraw their home address to try to escape from the Child Support Agency. It is vital that people honour their obligations. He chose a bad example, and I am sure that he will withdraw it. However, the question is whether it is reasonable for individuals to withhold home addresses. The CAC can have a view on that and, if a reasonable explanation is given, it can consider it.

Amendment No. 18 seeks to ensure that the CAC makes available to the employer, the union and the relevant workers a list of those persons or organisations qualified to act as independent persons for those purposes. I am sure that the hon. Member for North-West Norfolk will be pleased to be able to refer to the list. It includes the company that dealt with the Conservative leadership election in 2001—Electoral Reform (Ballot Services) Ltd.

During the ballot stage, a qualified independent person is appointed to conduct the ballot and to send written communications on behalf of the union to the workers in the bargaining unit. The Recognition and Derecognition Ballots (Qualified Persons) Order 2000,

statutory instrument 2000/1306, which was amended by SI 2002/2268, sets out the conditions that must be satisfied by an individual or a partnership in order to be a qualified independent person. Further, it names six professional balloting organisations as qualified independent persons. That information is obviously publicly available, and the organisations listed underwent a rigorous selection process for inclusion on that list. I hope that my explanation satisfies the hon. Member for North-West Norfolk about the quality and competence of those people.

Amendment No. 19 seeks to allow any of the parties a right of veto over the appointment of a particular independent person. Such an addition, I believe, is unnecessary. As I mentioned earlier, the independent persons are all professional balloting organisations with track records—in many cases, long ones—in conducting and scrutinising a range of ballots and elections. Those organisations take their independence extremely seriously. It is vital for their professional reputation that they are perceived to be impartial in the conduct of their functions.

Qualified independent persons have been sending written material on behalf of the union since the statutory procedure began in June 2000. 1 am not aware of any complaints about their handling of such communications. Of course, if any improprieties were ever to come to our attention, we would act swiftly to investigate and, if necessary, amend the order to which I referred to remove a person from the list. Indeed, the law states that, in order for someone to be an independent person, there must be no grounds for believing that that person's independence could be reasonably called into question.

Amendment No. 19 is therefore unnecessary. It is also undesirable. A right for any party to veto the appointment of a suitable independent person would introduce unwanted delay to the process. Indeed, an unscrupulous employer or union could, under the amendment as drafted, string out the process by simply vetoing the CAC's appointments repeatedly.

Amendments Nos. 18 and 19 are not necessary. Moreover, amendment No. 19 could be harmful by introducing delay. I hope that, in the light of that explanation, the hon. Gentleman will withdraw the amendment.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister for that explanation. He said quite a lot about the way in which the organisations are approved by the Government but there has been less detail about the individuals who are members of these organisations. How many are there and how are they selected by the organisations? When he talked about impropriety, did he mean that the organisation would be struck off, or would action be taken against the individual?

Gerry Sutcliffe (Labour, Bradford South)

The organisation would be removed from the list. It is important that the organisation's recruitment process is rigorous and meets the relevant criteria because the reputation of the company, not just the individual, is at stake.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister. I still feel that the amendments are totally balanced between all sides. I do not agree with him about the vetoing of the independent person, because it is highly unlikely that anyone would do that simply to waste time and to try to sabotage the process. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 2, in

clause 5, page 5, line 27, at end insert

'and so far as compliance is compatible with protecting the privacy of the relevant workers'.

George Stevenson (Labour, Stoke-on-Trent South)

With this it will be convenient to discuss the following:

Amendment No. 3, in

clause 12, page 11, line 24, at end insert

', so far as that requirement is compatible with protecting the worker's privacy'.

Amendment No. 23, in

clause 5, page 6, line 11, at end insert—

'(1A) Before sending out any information received from the CAC under paragraph 19D (4) the appointed person must ascertain from each of the relevant workers whether he consents to the disclosure of his details to the union.'.

I remind the Committee that amendments Nos. 2 and 3 deal with individual privacy. We have had some debate about that. Clearly, we will not want to repeat points that have already been made. I fully recognise that amendment No. 23 deals with consent.

Henry Bellingham (Conservative, North West Norfolk)

I will be brief. As I said that the outset I will try to be as concise as possible. The amendment would insert the phrase

''and so far as compliance is compatible with protecting the privacy of the relevant workers''.

As you rightly pointed out, Mr. Stevenson, it is linked with amendment No. 3, which amends clause 12. It is confusing and we are jumping around a bit, but we jumped around a bit when we dealt with the previous set of amendments.

George Stevenson (Labour, Stoke-on-Trent South)

Order. I accept and understand that. The Clerks' ways are sometimes weird and wonderful but they are invariably right.

Henry Bellingham (Conservative, North West Norfolk)

I agree 100 per cent. They do a superb job. I always defer to their wisdom and expertise. That is why amendment No.3 is identical to amendment No. 2. Amendment No. 23 amends clause 5 and it brings us back to the essence of privacy and the rights of individuals.

There is only one point that I would like to ask the Minister about. A particular employee may be adamant and passionate about his home privacy being protected. I was not trying to be flippant earlier. The CSA has the right to attach to someone's earnings but that would be through his place of employment. His place of employment and the details of his payroll would obviously be known to the CSA, but he might want to keep his private address confidential, for whatever reason. A female employee, for instance, might be concerned about her ex-husband coming to her address. There are many other reasons, each

private and specific to the employee in question. We are debating the broad issues concerning employee rights, which is why the amendment is important.

Jonathan Djanogly (Conservative, Huntingdon)

I support the amendment but, in deference to your request, Mr. Stevenson, I shall concentrate on amendment No. 23. In order to protect workers from intrusions on their privacy, that amendment would require the appointed independent person to

''ascertain from each of the relevant workers whether he consents to the disclosure of his details to the union''

before he disclosed the information. If management agrees to disclose the information, or even if management has a problem but the CAC forces disclosure, why should the individual's right to privacy be overlooked? The clause concerns union access before balloting but what if someone is not a union member? There are no collective bargaining rights at that stage. The individual who is not a union member may well resent the union being given his name and address for the purposes of mailshots, as I would. Why should that person not have the right to say, ''I don't want my personal details to go to the union''? Whether or not they want to join the union, that right is a stand-alone right that should be preserved.

Gerry Sutcliffe (Labour, Bradford South)

I am mindful of the fact that we partly discussed such issues in connection with earlier amendments. I should like to return to the relationship of the CAC and the independent person, which we need to deal with. The individual does not have to receive information directly from the union, because it comes via the qualified independent person. The independent person sends out information on behalf of the union, which makes amendment No. 23 redundant. Both the CAC and the independent person are quite strong on their independence and the way they protect data and the information that they divulge, for the reasons I mentioned earlier. We do not want to complicate the situation further, which is what the amendment would do, in that the qualified independent person would have to seek approval from individual workers to pass on their home addresses.

In the earlier debate, the hon. Member for North-West Norfolk asked whether the individual could just give the business address as the appropriate address. That would not comply with the employer's duty to disclose the home address, but it would be for the CAC to decide whether the failure to provide that address was reasonable. The question would concern the circumstances and factors surrounding the employer's request to offer another address, which the CAC has the power to consider.

The CAC takes seriously its responsibilities under data protection legislation, under which it is registered as a data controller. It adheres to all the provisions of the relevant legislation, including that personal data should be kept only for as long as it is needed and that appropriate technical and organisational measures should be taken to avoid any unauthorised use of such

information. All such work is evidence-based and conducted within the framework of the statutory recognition procedures, which have worked well.

The CAC has never received any complaints from a worker about unsolicited communications from a union. There is no need to add explicit references to privacy in the procedure. That could complicate matters further and lead to unnecessary disputes between the parties about the existence of any threat to privacy.

I notice that the amendment would ensure that no similar privacy considerations apply to the employer. The employer can send out as many written communications as he likes, regardless of whether the worker feels that such communications infringes his domestic peace and privacy.

Jonathan Djanogly (Conservative, Huntingdon)

Surely at that stage, there is a fundamental difference. The employer has a legal duty to the employee, whereas the union has no legal responsibility, because it has not been recognised?

Gerry Sutcliffe (Labour, Bradford South)

The employer has the names and the opportunity to give any material to the employees. A balanced, independent judgment will be made on whether individuals want to recognise the union. Employers have an unfettered right to write as many times as possible.

Amendment No. 3 concerns the power to widen the number of methods whereby the independent person can communicate the union's material directly to the workers in the bargaining unit. Employers have that power, too. This has been an important debate as it has highlighted the difference of attitude towards such processes between the Government and the Opposition. Amendment No. 23 is redundant because there is no direct communication between the union and the individual worker. As the debate has progressed, there seems to be some mistrust of the union's motives—it has recruited a number of members—in its consideration of the next stage. That is a fundamental difference that will scar our discussions. In the light of my explanations, I ask the hon. Member for North-West Norfolk to withdraw his amendment.

Henry Bellingham (Conservative, North West Norfolk)

That was a bit of a sour note from the Minister because we are not anti-union at all. We feel strongly that the current position is a fair balance between employers and employees. Any measures that would move the balance—even slightly, one way or the other—are a matter for debate. That, crucially, is what the Opposition are for, and we shall scrutinise the Bill. In the light of what the Minister said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 21, in

clause 5, page 6, line 5, after 'unions)', insert

', employer or non-unionised workers'.

George Stevenson (Labour, Stoke-on-Trent South)

With this it will be convenient to discuss the following:

Amendment No. 22, in

clause 5, page 6, line 10, after 'unions)', insert

', employer or non-unionised workers'.

Henry Bellingham (Conservative, North West Norfolk)

The amendments would impose and establish a fair balance. On page 6, line 5, the Bill reads:

''During the initial period, the appointed person must if asked to do so by the union (or unions) send to any worker . . . the information supplied by the union (or unions) to the appointed person.''

The amendment would add ''employer or non-unionised workers''. That seems perfectly fair, and is not particularly controversial.

Gerry Sutcliffe (Labour, Bradford South)

Yes, it is.

Henry Bellingham (Conservative, North West Norfolk)

It is not. It is a modest and sensible request. I should like the Minister to consider it sympathetically.

Jonathan Djanogly (Conservative, Huntingdon)

The amendments are basically about treating people fairly and equally. The right of unions to have the appointed independent person distribute information on demand should be extended to non-unionised workers. Let us assume that the company wants recognition. What if a group of workers do not want effectively to be unionised—they would not be union members, but they would be unionised through the recognition agreement—or forced into a deal between the company and the union? What if those workers do not like a particular union that is applying for recognition and want another? Why should they not be able to write to other workers and put their case forward? We keep returning to the point about carving up responsibility between unions and companies. The reality is that the situation is often more complicated, and the amendments recognise that fact.

Gerry Sutcliffe (Labour, Bradford South)

I can deal with that point quickly. The amendments intend to wreck the whole relationship between the union, which is the external force, and the employer and employees. The employer has the right to discuss recognition issues with his or her employees, and people who do not want to join the union have a right to discuss the issues with their colleagues.

Jon Cruddas (Labour, Dagenham)

That right is over and above direct communication, which includes face-to-face communication or visits to a person's home. A whole range of techniques could be deployed over and above whether there is parity on the direct communication of certain literature. The issue is the

imbalance in the system, which will continue to exist even with the Government's amendment of the process, rather than the search for bogus parity, which is a wrecking device for the whole procedure.

Gerry Sutcliffe (Labour, Bradford South)

My hon. Friend is entirely right and I need not say more. In light of that explanation, I hope that the hon. Member for North-West Norfolk will withdraw the spurious amendment. I do not want to continue on a sour note. I want to return to the original understanding that, even though we may disagree, we should do so in the right spirit. However, my patience is starting to wane with the spurious amendments being put forward.

Henry Bellingham (Conservative, North West Norfolk)

The last thing that I want to do is to sound discordant notes or to undermine the harmony of the Committee. However, there will be areas on which we feel strongly, and there should be parity on all sides. Amendments No. 21 and 22 sought merely to achieve balance. The Minister has made his point and I am a realist. As much as I would like to press the amendment to a vote, there is no point having a wipe-out in Committee because we may want to return to the issue on Report or in another place. Bearing that and the Minister's words in mind, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 24, in

clause 5, page 6, line 11, at end insert—

'(1B) If information is sent out by unions, employers or non-unionised workers which is subsequently proved to be inaccurate or to contain misrepresentations, the CAC shall declare the resulting ballot invalid and any resulting union recognition shall be quashed.'.'

I shall deal with the amendment briefly as the sitting is about to be adjourned. The amendment is perfectly fair and does not warrant lengthy discussion.

Jonathan Djanogly (Conservative, Huntingdon)

If the information is sent out by the unions, employers or non-unionised workers, and it is subsequently proved to be inaccurate or containing misrepresentations, the CAC should declare the resulting ballot invalid.

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

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

Stevenson, Mr. George (

Chairman

Atkins, Charlotte

Atkinson, Mr. Peter

Bellingham, Mr.

Bruce, Malcolm

Cruddas, Jon

Djanogly, Mr.

Foster, Mr. Michael Jabez

Lyons, Mr.

Owen, Albert

Picking, Anne

Sheridan, Jim

Stewart, Ian

Sutcliffe, Mr.

Tynan, Mr.

Williams, Hywel

Standing Committee D

Clause 5 - Union communications with workers after acceptance of application

Jonathan Djanogly (Conservative, Huntingdon)

We are debating a situation where a ballot has not yet taken place and the unions wish to send missives to workers. The purpose of the amendment is to ensure that if information sent out by unions, employers or non-unionised workers is subsequently proved to be inaccurate or to contain misrepresentations, the Central Arbitration Committee should declare the result invalid and any resulting union recognition should be quashed.

I concede that the drafting of the amendment is not of the high quality that we would expect from civil servants, but the principle is sound. Let me give a few examples. What if a union that is desperate for recognition makes misrepresentations about the company or other unions that could be competing with it for recognition, or about non-unionised workers in relation to statements or the positioning of non-unionised workers within that company? The basis of the ballot might be morally invalidated by those misrepresentations. The Bill does not deal with such an instance. As has been said, the Bill sits on top of many other Acts and I may have overlooked the legislation that deals with this issue. It is something that we should address.

Jon Cruddas (Labour, Dagenham)

Conversely, does the hon. Gentleman accept that if an employer spread false information during the three-month period before the ballot, there might be a procedure to grant automatic recognition? It could be an even-handed process of perceived misinformation that is transmuted through the process.

Jonathan Djanogly (Conservative, Huntingdon)

As the hon. Gentleman will note from the amendment, I have provided for employers and non-unionised workers to be included. Whether that should lead to automatic recognition is a leap; the one

does not equal the other. The situation should be addressed. The company has a legal relationship with the workers.

Bill Tynan (Labour, Hamilton South)

Does the hon. Gentleman accept that the proposal could enable an employer or a non-union member to deliberately mislead and have the ballot quashed, thus preventing natural justice?

Jonathan Djanogly (Conservative, Huntingdon)

No. If a misrepresentation is made, it should be addressed. The important point to make here is that the CAC has the duty to send out the information. That creates a complicated legal situation. What if the information that the CAC sends out is wrong? The CAC receives the information from the union, but what if it is wrong? Who is responsible? I am not sure and the Minister should address that. The union has no locus at that time.

Bill Tynan (Labour, Hamilton South)

Does the hon. Gentleman accept that an employer could deliberately provide misinformation for the CAC to send out, knowing that the ballot would then be disqualified?

Jonathan Djanogly (Conservative, Huntingdon)

The Minister may wish to clarify that issue. The employer does not have to send out information through the CAC. The employer has an existing legal relationship with his employees and can send them information at any time. If such information contains misrepresentations, the employee has a right of breach of contract. That is not the situation here; there is a fundamental difference.

At the pre-ballot stage that we are discussing, the union would not even have had a ballot. There is no legal contractual relationship between the union and the CAC, or between the union and those employees who might become subject to recognition in due course. It is a different legal relationship.

Jon Cruddas (Labour, Dagenham)

Does the hon. Gentleman accept that an employer could intimidate his work force prior to the implementation of the statutory recognition procedure for the ballot? What is his proposed remedy where there is intimidation of the work force in anticipation of statutory recognition of the ballot?

Jonathan Djanogly (Conservative, Huntingdon)

If there were serious intimidation of the work force, an employee could claim either constructive dismissal or unfair dismissal. There are existing remedies for an employee who is subject to intimidation, but there are no such remedies in the converse case; if a union were to put out misrepresentations about an employer. The issue of discrimination was included in an amendment that was not selected and will have to be inserted as a new clause later on.

Hywel Williams (Plaid Cymru, Caernarfon)

Does the hon. Gentleman accept that the amendment is flawed? Whoever is at fault, it is always the union that suffers. The amendment states that the

''resulting union recognition shall be quashed''

whoever is at fault.

Jonathan Djanogly (Conservative, Huntingdon)

That ties in with the previous question. The contractual relationship is separate. There is a contractual relationship between the employee and the company that provides remedies if, for example, there is misrepresentation or intimidation.

There is no such contractual relationship between the union and the people who are going to be balloted at that time. Can the Minister tell us who is answerable in such a case? Would the CAC be held responsible if it sent out information received from a union that was a misrepresentation or caused damage in some way? What other legislation answers that question?

No one carries the buck for misrepresentation in the Bill. The unions do not. All they have to do is pass on information—whatever it may be—to the CAC. The CAC does not have any responsibility either. In real life, I imagine that the CAC would look at representations that come to it from the union and, if any part of those were misrepresentations or could be damaging in any way, the CAC would probably have a word in the union's ear. But that is not included in the Bill in any way, shape or form. It is an omission. The amendment is aimed at bridging that gap.

Gerry Sutcliffe (Labour, Bradford South)

Mr. Forth, I welcome you to the Chair.

As my hon. Friends the Members for Dagenham (Jon Cruddas) and for Hamilton, South and the hon. Member for Caernarfon (Hywel Williams) indicated—and the hon. Member for Huntingdon (Mr. Djanogly) accepted—the technical aspects of the amendment do not follow through. It is technically inept. On all occasions, the guilty party would be the trade union. It would not matter whether it was the employer's fault, or anyone else's; the union would be left with the problem of the recognition procedure being stopped.

We are trying to establish the principle that there should be a code of practice for recognition ballots that makes it clear that parties should not use defamatory or provocative material, or undertake negative campaigning. The Government are concerned that there have been examples of employers using union-busting tactics by employing companies, mainly from the US and elsewhere, to intimidate workers into not participating in recognition—[Interruption.]

The Chairman: Order. Will hon. Gentlemen either not conduct conversations or conduct them outside? They certainly should not conduct them in between the Minister and the hon. Gentleman whose question he is answering.

Gerry Sutcliffe (Labour, Bradford South)

Thank you, Mr. Forth.

We will consider the issue that I have mentioned in debates on other amendments. The sanction in amendment No. 24 is very harsh. There would be only one guilty party—the union—even if the inaccurate information came from elsewhere. Once there was a mistake, even a minor one, that would be it. We must be careful to recognise what we are trying to achieve and the backdrop to that. The Government are trying

to make the situation easier and fairer on all sides. I hope that no side—union or management—would deliberately mislead a work force or make libellous statements about another party.

Jon Cruddas (Labour, Dagenham)

Does my hon. Friend the Minister anticipate a code of practice that is binding on both sides in the process to ensure a set of protocols that should not be breached? That would ensure that there were no intimidatory tactics by the union or the employer, and that employees were safeguarded from such activities during the totality of the recognition procedure.

Gerry Sutcliffe (Labour, Bradford South)

I am considering that with regard to the evidence that is coming to us from a variety of organisations. In relation to intimidation on either side, there is currently a code of practice, which will have to be updated after the Bill receives Royal Assent.

The measure is about a spirit of partnership and our objective in relation to information being balanced for both sides. The employer has the opportunity to give his or her employees as much information as possible. The non-union person has the right to speak to the work force, as we have said, but the union would be at a disadvantage under the amendment. We have accepted the principle that was set out and we would not want either side to involve itself in intimidation. There are sufficient safeguards with the existing code of practice. There could be recourse to the law on libel and other things could happen if either party went down that route. I think that there are sufficient safeguards to offset the concerns expressed by the hon. Member for North-West Norfolk (Mr. Bellingham). Also, the amendment is flawed, and I ask him to withdraw it.

Jonathan Djanogly (Conservative, Huntingdon)

The Minister has made some concessions, in so far as he sees that there is a problem, for which I thank him. However, I should like to pursue the point slightly, because I am still not entirely sure who takes responsibility for misleading information. The information goes from the union to the CAC and then on to the employees. Does that mean that the CAC takes responsibility if information is misleading, negligent or will create harm? That needs to be addressed.

My other point is that we keep hearing from Labour Members that this measure is about management and unions, but that is not necessarily the case. Unions often compete against one another in pre-ballot situations. I do not want to say that it is a case of them against us, because that is not how it is in real life. There are often conflicting parties, whether they are the unions, people who do not want to be unionised or the companies.

Gerry Sutcliffe (Labour, Bradford South)

The responsibility for the literature lies with the people who provide it. If that were the union, it would be the union's responsibility. If the literature were found to be libellous, the CAC would take a view and deal with the situation during the procedure. The union involved would have to watch out; if the CAC said that the process had been faulty, the union would be prevented for three years from

trying to apply for recognition again. It will need to be careful all the way through not to jeopardise the procedure.

As we discussed earlier, the CAC is a strong body in terms of how it safeguards its information and its responsibilities, as is the qualified independent person. If information flows that the employer sees as libellous, of course, they would have the right of reply. Few employers would not take up the opportunity to reply quickly to what they saw and to use it as a mechanism against the union in their dealings with the work force.

If a union does not go through the process properly, it will be prevented from applying again for three years. That is a strong sanction. I think that we have covered the issue and I ask the hon. Member for North-West Norfolk to withdraw the amendment.

Henry Bellingham (Conservative, North West Norfolk)

Mr Forth, I apologise for my slight misdemeanour a moment ago. I can see that you are going to put the stamp of firm authority on this Committee early on, and I will not transgress again.

The Minister has obviously made a number of interesting suggestions, and has given us some grounds for comfort. In the light of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Henry Bellingham (Conservative, North West Norfolk)

I have one particular concern. I should like to refer the Minister to proposed new paragraph 19C(5) to schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992, which says:

''The initial period is the period starting with the day on which the CAC informs the parties under sub-paragraph (7)(b) and ending with the first day on which any of the following occurs''.

Proposed new paragraph 19C(5)(d) says:

''the CAC informs the union (or unions) under paragraph 25(9) of the name of the person appointed to conduct the ballot.''

The union's right of communication continues throughout the period of the ballot by virtue of existing provisions in the schedule, so is not proposed new paragraph 19C(5)(d) superfluous? In the interests of trying to tighten up and sharpen up legislation, which I am sure, Mr Forth, is something that you would sympathise with and condone, surely we should take out anything that is not strictly necessary. Will the Minister please comment on that?

Gerry Sutcliffe (Labour, Bradford South)

The hon. Member may be right as regards the proposed new paragraph. There may be some truth in what he is saying. I will take it away and look at it.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful.

Jonathan Djanogly (Conservative, Huntingdon)

I thought that it was important to speak in this stand part debate because, unlike most of the other clauses, which build on existing legislation, clause 5 is new. There is a new right for unions to

communicate with workers after acceptance by the CAC of an application, but before the ballot process. My initial reaction on reading the clause was, ''Why is it needed? Let us table an amendment to strike it out.'' The Minister will notice that we did not table such an amendment, but we have not yet covered why the clause is necessary. It would be helpful if the Minister explained some of the background to that and said which representations led him to think that it should be included.

Jon Cruddas (Labour, Dagenham)

I just want to flesh out a couple of points that the Minister has made and raise a couple of points on which I seek a bit of clarity. The balloting period is relatively short but the recognition procedure can be quite protracted. That is the product of the agreements that were reached during work on the ''Fairness At Work'' White Paper, which were consolidated in the Bill.

The current code of access concerns the statutory 20-day period of the recognition procedure. However, the Minister talked about the possibility of a code of practice for the recognition procedure, addressing intimidation on the part of the union or the employer, covering access in excess of the 20-day period of the statutory recognition ballot.

As I understand it, the clause proposes access for the union only in terms of direct communication with the union members; it does not cover issues of access beyond that formal direct communication. Can the Minister clarify what he anticipates in terms of a new code of practice—covering, one would hope, the whole recognition procedure rather than the 20 days in the current code—and what that would mean in respect of addressing intimidation short of dismissal?

The hon. Member for Huntingdon mentioned remedies that were available in terms of unfair dismissal, but this covers issues of which the Department is aware, thanks to the submissions that were made to it during the review of the legislation, such as action that is short of a dismissal but which intimidates prospective union members as well as current union members, who might support a vote for the union in a recognition ballot. That covers a range of activities short of dismissal—visits to the homes of employees, activities outside the gate and the like; there is a range of possible intimidatory tactics. Does the Minister anticipate that the revised code, or discussions around it, will cover a period that exceeds the 20-day period of the formal statutory recognition ballot?

Gerry Sutcliffe (Labour, Bradford South)

I am considering the situation on the basis of the evidence—not only the 20 days, but the whole process. It is difficult to find the right solution. We are considering the matter and will come back to the Committee at an appropriate time. My hon. Friend is right to differentiate between the balloting period and the period of recognition.

The reason behind the clause is to create a balance. The basis of the debates has been that the statutory recognition procedure should work well. We have had evidence of that from the extensive consultation that has taken place with a variety of organisations. We

listened to the union argument that the employer had the right to speak to his or her employees at will, and that those within the work force who did not want to join the union had their opportunity. There was a need for the union to be involved at an earlier stage, and for that to be done independently through the CAC and qualified independent people.

Jonathan Djanogly (Conservative, Huntingdon)

There is a fundamental difference. The employee has contracted to work and provide services for the company, and might join the union. However, the employees who have not joined the union have no relationship with it. How can we, therefore, give the company and the union parity in terms of approach?

Gerry Sutcliffe (Labour, Bradford South)

The union will have had to recruit members and must be in a position to explain to the CAC that it has reached the cut-off point for the number of members recruited. It will have tried the voluntary route, and that will not have worked. It will then have gone on to the statutory procedure. Surely it is important, in a democracy, that people should get the maximum amount of information that is available from all parties concerned, so that they can make a balanced judgment about what they want.

We took cognisance of the force of the arguments put to us by unions, and the clause provides the arrangements for access. This is about modern industrial relations. The system is working well and we do not want to see intimidation on either side. There is no extra cost to the employer because the union covers the cost of the communications that go to the CAC through the independent person. It is right and fair that we strike a balance. I know that Opposition Members do not accept that for reasons that have been explained in the debate. I believe that this is the right way forward.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.

Clause 6 - Power of the CAC to extend notification period

Henry Bellingham (Conservative, North West Norfolk)

We have not tabled any amendments to the clause, which seems to be fairly straightforward. There is one point on which I would like the Minister to elaborate. The clause gives the CAC power to extend the notification period, amends paragraph 24 of schedule A1 and applies where the CAC gives notice under paragraph 22(3) or paragraph 23(2) that it intends to arrange for the holding of a secret ballot. Can the Minister give us some more details about that?

Gerry Sutcliffe (Labour, Bradford South)

I am happy to do that and thank the hon. Gentleman for making the point. The statutory procedure was designed to encourage voluntary deals

wherever possible and to act as a fallback where the parties cannot reach agreement. That has worked well with over 700 voluntary agreements since the legislation came into force. If the CAC decides to hold a recognition ballot, there are 10 working days for the parties to inform the CAC that they do not wish the ballot to go ahead. That gives the parties time to consider whether they want to go to the expense of holding a ballot. They may choose to withdraw, often because they have been able to reach a voluntary agreement.

Unlike most time periods in the process, the 10-day period cannot currently be extended by the CAC and the parties have no means of asking the CAC to delay the ballot for even a little while longer while they try to reach agreement. Of course, the parties could still call a halt to the ballot after the end of the period, but any agreement reached after that date would not qualify as an agreement for recognition under the schedule. That would mean that the three-year moratorium on the employer terminating the agreement did not apply. The parties would not be able to seek the assistance of the CAC in determining their bargaining method or addressing their failure to adhere to the agreed bargaining method. Where both sides agree, the clause, by extending the deadline, gives them an opportunity to reach a voluntary arrangement.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

Clause 7 - Postal votes for workers absent from ballot at workplace

Henry Bellingham (Conservative, North West Norfolk)

I have a small point to make. The clause makes it clear that the CAC may not decide that the ballot is to be conducted by a combination of postal and workplace voting unless special factors apply. What sort of factors are we talking about? What does the Minister have in mind here?

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to the hon. Gentleman for raising that issue. When the CAC calls a ballot, it must decide what method of voting should be used. It may choose between a postal ballot and a ballot held in the workplace. In certain circumstances where special factors apply, the CAC can decide that the ballot should be conducted by a combination of those two methods. In a postal ballot, the voting paper is sent to a worker's home address and he or she has a couple of weeks to return the vote to the balloting organisation. In contrast, a workplace ballot takes place on one or perhaps two designated days and workers must vote in person. The clause aims to ensure that no worker who has to vote at the workplace is prevented from voting because he or she is absent on the day of the ballot.

Currently, the law is inflexible. If the CAC decides that there should be a workplace ballot or a combination ballot with workplace voting, every worker who wishes to vote must do so in person at his

or her place of work on a single day. That means that workers who are off sick, on holiday or have taken other approved leave on the day of the ballot forfeit the opportunity to cast their vote. Every vote counts—I have said that on many occasions—and that is especially so when the outcome is subject to a minimum number voting in favour of recognition.

Clearly, it is undesirable for workers to miss out on the opportunity to vote on the important question of whether they should be represented by a union in collective bargaining, especially if they are unavoidably absent because they are on maternity or paternity leave, they are a magistrate sitting on the day of the ballot, or for any other good reason. The clause corrects the anomaly while allowing the CAC to arrange for a postal ballot for such workers. I am sure that the Committee will agree that it is a sensible and desirable measure.

Jonathan Djanogly (Conservative, Huntingdon)

I support the idea that ballots should be conducted entirely by post. The CAC annual report states:

''115 cases have now progressed to the balloting stage and 58 ballots have taken place. Of the ballots that have been concluded, 35 resulted in a majority voting in favour of recognition and in 23 the union failed to reach the required majority. The CAC has now commissioned 36 postal ballots, seven workplace ballots and 15 involving a combination of the two methods, most often a workplace ballot with the provision of a postal vote for those workers absent from the workplace on the day of the ballot.''

If any hon. Member thinks that I am quoting the report as a ploy to help the companies, I can assure them that that is not the case. The report continues:

''Postal ballots have nevertheless tended to provide the highest proportion of votes in favour of recognition.''

Despite that, I think that postal ballots should be in place in every circumstance. Things are moving that way, but I cannot understand why there are still any workplace ballots. If there will still be workplace ballots, will the Minister advise us as to whether there are regulations to deal with how those ballot are carried out?

Gerry Sutcliffe (Labour, Bradford South)

The answer goes back to the earlier point about the test that someone must pass to become a qualified independent person to run and to access ballots. Employees of the companies that I mentioned have all passed that test.

The hon. Gentleman clearly has a strong view on whether there should be workplace or postal ballots. I think that the CAC should attend to the issue in the context of the particular industry, the relationship between the trade union and employer, and what normal practice has been in that sector. The CAC has the power to examine that, but it does not have the power to have a combination of the two voting systems. Surely the hon. Gentleman does not want people to be prevented from voting through no fault of their own.

Jonathan Djanogly (Conservative, Huntingdon)

Even if a workplace ballot is used, why should voters not have the right to demand a postal ballot if they so wish? The legislation provides that, if they are sick or so on, they can use a postal

ballot, but why should they not have the right to demand one in any event? The law has been changed on parliamentary or local government ballots: if someone wants a postal ballot, they can have one. Why should workers not have the same right?

Gerry Sutcliffe (Labour, Bradford South)

They have the right if the CAC determines that to be the appropriate way to proceed through representations from the employer, trade union or individual. The CAC has that power. The difficulty with the old legislation was that it did not have the power to ensure that everyone was included, because the method of voting had to be one or the other. We are saying that a combination of the two is a fairer approach.

Question put and agreed to.

Clause 7 ordered to stand part of the Bill.

Clause 8 ordered to stand part of the Bill.

Clause 9 - Employer's notice to end bargaining arrangements

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 34, in

clause 9, page 9, line 11, after '(2)', insert ',(2A)'.

Eric Forth (Conservative, Bromley and Chislehurst)

With this it will be convenient to discuss the following:

Amendment No. 35, in

clause 9, page 9, line 14, at end insert—

'(2A) In sub-paragraph (3)(d), leave out ''5'' and insert ''14''.'.

Henry Bellingham (Conservative, North West Norfolk)

Clause 9 deals with the employer's notice to end bargaining arrangements. That notice may be given if the employer believes that he, with any associated employer, employed an average of fewer than 21 workers in any period of 13 weeks, and if three years have passed since the CAC awarded recognition. The CAC must decide if such notice complies with the requirements of paragraph 99(3) of schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992. The requirements are that the notice

''(a) identifies the bargaining arrangements,

(b) specifies the period of 13 weeks in question,

(c) states the date on which notice is given''

and—this is the requirement relevant to the amendment—

''(d) is given within the period of 5 working days starting with the day after the last day of the specified period of 13 weeks.''

We are saying that 14 should be inserted instead of five.

We are discussing small and medium-sized enterprises—for example, companies employing slightly more than 21 employees, or small manufacturing plants that we all visit in our constituencies, where the owner-manager is often under enormous pressure and strain and is reeling under the burden of substantial extra regulations on the business. The Federation of Small Businesses

recently said that most owner-managers spend at least 10 hours a week dealing with regulation and burdensome business.

Given those circumstances, and in the interests of making life easier—not trying in any way to stop unions and union members from enjoying their rights—we are considering the interests of small and medium-sized enterprises, and would like to substitute five working days for 14 working days. That is a reasonable request and I hope that the Minister will consider it. We have not had any success yet, although we have had a few nods and winks from him suggesting that he will reconsider some of our suggestions. I think that this is a reasonable and sensible suggestion and I hope that he will accept it.

Jonathan Djanogly (Conservative, Huntingdon)

Clause 9 is a series of new provisions that tighten the existing ratchet in favour of the unions, generally against the interests of the company. Amendment No. 35 is a small proposed change. I am not sure whether the Minister has yet found the information that I requested this morning dealing with sizes of companies compared with the number of applications. [Interruption.]. I am pleased to see that he has, which is marvellous. I do not have time to study it on my feet but I shall do so later because I am sure that it will be mentioned again.

If a significant company has a significant human resources department, it will be used to dealing with the unions. It will be used to and well advised on union procedures. In that case, five days might be adequate. However, for smaller companies, such as that mentioned by my hon. Friend the Member for North-West Norfolk, which have 21 staff, five days is a very short time in which to comply with the procedure, and will effectively block their rights to organised derecognition.

We must return to the basic principle that, if a company has fewer than 21 employees, it does not have to have recognition. This amendment would adapt that principle. We shall come on to the three-year rule, but we are talking here about five days to make notification after the 13-week period. An average small company, without a human resources department or knowledge of union law, will probably be massively disadvantaged and outgunned by the union's huge administrative and legal representation. The provision acts as a block to companies putting derecognition in place if staff numbers drop below 21. Fourteen days would go a little way—not very far, as it is a modest proposal—towards addressing that imbalance.

Gerry Sutcliffe (Labour, Bradford South)

I appreciate the spirit in which the amendments have been tabled, but I am always concerned when someone says, ''Help me a little; I am trying to help you.'' Amendments Nos. 34 and 35 are closely linked and would ensure a change to the time limit in the statutory procedure. That time limit is in paragraph 99 of schedule A1 to the 1992 Act, which deals with an employer wishing to derecognise the union or unions because employment has fallen below 21 workers.

The process begins with the employer issuing a notice to the union or unions concerned and copying it to the CAC. The notice must contain various pieces of information and specify the 13-week period when employment was on average fewer than 21 workers. The notice must be issued within five working days of the end of that period. The amendment would extend that period from five to 14 working days. It is possible that the hon. Member for North-West Norfolk was thinking in terms of calendar days, rather than working days, when he tabled the amendment, but the overall intention is to give more time to the employer to issue the notice.

I am far from convinced that that extra time is needed. Generally speaking, we are addressing a situation in which employment is falling from a point where 21 or more workers are employed to one where employment is below 21. That could be a short-lived phenomenon, but it is more likely to be longer lasting or even permanent. If so, a little slippage in the reference period should not severely affect the calculation.

For example, if an employer for some reason could not get the notice out in time for a reference period ending on March 1, he could always issue a slightly reworded notice the day after in respect of a reference period ending on March 2. In other words, it is unlikely that he would lose his ability to derecognise if a problem about the notice ever arose.

I see no obvious reason why the employer will not be able to issue the notice on time in virtually all situations. Most bargaining units are small, and we are not talking about intricate calculations. We do not agree with the case to increase the notice period from what will often be one working week to nearly three working weeks. Despite the hon. Gentleman's plea, I ask him to withdraw the amendment.

Henry Bellingham (Conservative, North West Norfolk)

The Minister is convincing in his inimitable, charming way, but I do not agree about how easy it will be for an employer to reissue another notice if he does not complete the paperwork and forms in the five days. We are talking about another burden on businesses, particular SMEs, and we will continue to remind the Minister of that. However, in the light of his remarks, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 25, in

clause 9, page 9, line 20, leave out '3 years' and insert 'six months'.

Eric Forth (Conservative, Bromley and Chislehurst)

With this it will be convenient to discuss the following:

Amendment No. 26, in

clause 9, page 10, line 5, at end insert

', and leave out ''3 years'' and insert ''six months''.'.

Henry Bellingham (Conservative, North West Norfolk)

These two amendments are important. I remind the Committee that the employer may apply for a notice to end bargaining arrangements three years after the arrangements are put in place. We must also bear it in mind that clause 9 provides that

any unsuccessful application or notice to derecognise the union by the employer or a worker renders any further such applications inadmissible for three years. That means that the period could last six years.

I want to reflect on a point made by my hon. Friend the Member for Huntingdon. The key to this part of the Bill is the 21-employee limit. I do not want to repeat what was said on Second Reading, but the Conservatives praised the Government for keeping to the 21-employee limit. Small firms are often under pressure, and their priority should be to expand, so it is fair that they are exempted from the measures.

Surely the principle is that, once the number of employees falls below 21, the employer should have the right to end bargaining arrangements if he so desires. The arrangements may be working well. Relations between the employees and owner-manager or plant manager may be harmonious and the union may be surpassing expectations and doing an excellent job of collective bargaining and representing the employees. It may be a happy situation all round, and the employer may see no need to issue such a notice.However, if the employer wants to issue the notice, it would be unfair for him to have to wait for three years. That is a point of principle, which I hope that the Liberal Democrats and other Opposition parties will support. If it is right and proper that firms employing fewer than 21 people are exempt, it is wrong to ask them, whether they be individual companies or subsidiaries of a large company, to wait three years.

Michael Jabez Foster (Labour, Hastings and Rye)

I am grateful to the hon. Gentleman for giving way, because I was interested to find out his view on how he would deal with a situation in which the numbers were on the cusp—perhaps 22 on one day and 19 the next. That is not unusual, particularly in industries such as tourism, where the labour force fluctuates all the time. How would he deal with that situation, without disadvantaging those who sought to be members of a union but happened to be working off-season at a given time?

Henry Bellingham (Conservative, North West Norfolk)

That is a fair point. However, I believe that six months, rather than three years, is a reasonable period. Three years is a long time. If the Minister said that he was prepared to consider the amendment and to reach a compromise of perhaps a year and a half, we might be more satisfied. That would answer the point made by the hon. Gentleman about seasonal businesses in which the numbers go up in the summer, or in the winter in some cases. For example, in a packing plant in East Anglia, the number of employees might increase in the winter, because they are dealing with potato packing or carrot topping.

We feel strongly about the matter. If the principle has been established that smaller companies should be treated differently, they should not be discriminated against through the clause preventing them from going through the process for a period of three years. In fact, the period could be up to six years because, as I pointed out earlier, the clause provides that any unsuccessful application or notice to derecognise the union by the

employer renders any further such applications inadmissible for three years. The period could be extended to five or six years, and in the meantime the company's staff numbers may have decreased to nine or 10. We are discussing giving small companies—micro-businesses—the right to manage their business and to run their affairs without undue interference or burdens.

Gerry Sutcliffe (Labour, Bradford South)

The hon. Gentleman tempts me to act, but not enough. We need to address the point about burdens on business. I hear that charge on many occasions from Opposition Members. Will the hon. Gentleman write to me listing the particular burdens on business that he considers to be a problem in employment relations terms? When we tried to raise the before in questions and debate, the Opposition gave no detail about which employment rights and regulations they did not want. I offer that challenge to the hon. Gentleman and, in the course of our consideration of the Bill, I am sure that he will write to me with details.

Peter Atkinson (Conservative, Hexham)

The Minister raised that question in the debate on Second Reading. I am sure that all members of the Committee and, no doubt, all Members of Parliament, visit small businesses in their constituencies from time to time. All those businesses make representations about the burden of red tape. It is not individual items of red tape but its proportionality that worries them.

We do not want to abolish the Health and Safety at Work, etc. Act 1974, but businesses complain that that Act is applied disproportionately hard in relation to certain firms. It would be difficult for us to list all those things, because the question is one of proportionality. I would not have thought that we needed to tell the Minister that, because he should already know it.

Gerry Sutcliffe (Labour, Bradford South)

The hon. Gentleman makes a good point, and has started making the list—no health and safety legislation.

Peter Atkinson (Conservative, Hexham)

I said—Hansard will have reported it—that we do not want to abolish the Health and Safety at Work, etc. Act 1974, but that companies complain about the way in which it is enforced.

Gerry Sutcliffe (Labour, Bradford South)

I understand what the hon. Gentleman says. I know that he has spoken in the House in favour of a number of issues concerned with employment rights. However, I made the general point that we are told that there is a big burden on business and that what we are trying to achieve will weaken its position.

Hywel Williams (Plaid Cymru, Caernarfon)

The Minister will know that the TUC has drafted a simplified procedure for recognition in small businesses, which would go a long way towards placating the concerns expressed by the hon. Member for Hexham (Mr. Atkinson) about cost and complexity. I commend such procedures and I hope that he will, too.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to the hon. Gentleman for making that point. The business case for many of the provisions is sometimes missed, in that there is a general view that they are a massive burden on business. However, given the demographic changes that are taking place and issues about skills and work force retention, most good employers recognise that some of the employment rights and regulations benefit them as employers and help their businesses. I recently attended the awards for parents at work, at which the business case for flexible working and the work-life balance was made. We heard how productivity and the bottom line had increased on the basis of the flexible working arrangements that the Government introduced.

Malcolm Bruce (Liberal Democrat, Gordon)

I have some sympathy with the amendment, but the Minister is arguing his case. The hon. Member for Hastings and Rye (Mr. Foster) made a point about businesses that are on the cusp. I am slightly concerned at the idea that a business with 22, 23 or 24 employees that has agreed to union recognition, but then drops to 19 or 20 employees will be more concerned about derecognising the union than managing the business. If the legislation works, as it does in most cases, a business will be helpful and co-operate with the union, rather than moving to derecognise it at a time when the business is clearly vulnerable. I would be slightly worried about a business that regarded derecognising the union as the most important matter that it had to address in such a situation.

Gerry Sutcliffe (Labour, Bradford South)

I thank the hon. Gentleman, who has made the point forcefully that it would be disconcerting if derecognising the union were the main focus of a company whose number of employees had gone below 21. The hon. Member for North-West Norfolk helpfully raised the issue on Second Reading and will know the concern felt by Government Members about companies with fewer than 21 employees. That is why I do not want to give in on the amendments. Both would shorten the period of debarment from three years to just six months. They would mean that, if the employer failed in an attempt to derecognise a union under the statutory procedure, he or she could try again after there had been recognition for a minimum of six months, rather than three years. That would be destabilising. With the Bill, we are trying to achieve stability and to look to the future, not the past, as I say at every opportunity.

Peter Atkinson (Conservative, Hexham)

The Minister gives me an opportunity to make a slightly oblique point. The assumption in the debate so far is that the employer will wish to derecognise the union. However, the employees could wish to derecognise the union, for various reasons. Perhaps they want to choose a different union. They could do so only by asking the employer to go through the process of derecognition. The long period for which the Bill provides may not be satisfactory for the employees of the company who want to change the union much more quickly.

Gerry Sutcliffe (Labour, Bradford South)

The employees could still do so under the provisions. They could also stop paying their subscriptions and withdraw from membership of the union. I think that that is how they would deal with the situation.

Peter Atkinson (Conservative, Hexham)

If the employees wished to change to a different union, that would be a different situation, because the recognition agreement would, I assume, be with the previous union—the one that the employees wish to leave.

Gerry Sutcliffe (Labour, Bradford South)

The whole process would have to start again, with fresh recruitment by the other union. From memory, I think that there have been issues within the TUC about inter-union situations, but the employees could withdraw from membership and there would not be a problem in that respect.

This is about maintaining trust. We think that the provision safeguards companies with fewer than 21 employees that want to give the notice. To change the three-year process would create further inequalities.

Jim Sheridan (Labour, West Renfrewshire)

Will my hon. Friend the Minister clarify exactly what a bargaining unit is? An unscrupulous employer—I have yet to meet one—could split the company up, so that there were fewer than 21 employees in order to circumvent employment legislation, as has happened in the transport industry. What situation would that create and what is the definition of a bargaining unit?

Gerry Sutcliffe (Labour, Bradford South)

There would be an application from the union to the CAC about its definition of a bargaining unit. The discussion would at that stage be with the employer about the bargaining unit and the appropriateness. If the circumstances that my hon. Friend mentioned arose, the union would be able to complain to the CAC about the procedure and take the matter further. However, that is against the spirit of the legislation and I hope that such circumstances would not arise. Although I recognise the hon. Member for North-West Norfolk's strength of feeling on the issue, I ask him to withdraw the amendment. If he does not, I ask my hon. Friends to vote against it.

Jonathan Djanogly (Conservative, Huntingdon)

I back up the incisive point that my hon. Friend the Member for Hexham made. I am not entirely sure that the Minister addressed my hon. Friend's point with the seriousness that it deserves, so I should appreciate it if he addressed it again. If workers do not want to have the union, perhaps either because they want to switch to another union or because they simply do not want the recognition agreement, why should they have to rely on the company for their derecognition? There may be a straightforward answer to that question, but I should be grateful if the Minister addressed it.

The three-year rule cements union rights no matter how low the number of employees goes. We suggest that the time limit be reduced from three years to six months. I accept that unions have a problem under the existing legislation in so far as they cannot put their views to the CAC against derecognition if the issue has come up in the past. I see no reason why the Bill should

not address that, although I note that the CAC annual report says that only one such case has been considered, so it is not as though what I describe happens every day of the week. However, instead of giving a fair balance to unions, the clause is reversing that situation. Unions are to get the representation rights that they wanted, but companies are to be far more restricted in making applications than they used to be.

Jon Cruddas (Labour, Dagenham)

Does the hon. Gentleman accept that, through the forging of the legislation, a balance has been struck on all those elements? As the legislation is currently constituted—it has not changed—the union must wait to make another recognition proposal to the CAC for three years in the advent of a failed procedure. That three years is equivalent to the three years on the other side, to which the hon. Gentleman has alluded.

Jonathan Djanogly (Conservative, Huntingdon)

That is not my reading of the Bill, although I may be wrong and would be grateful if the Minister addressed that.

The Minister said that he would not want the company to reapply every six months, but we know for a fact that that problem does not arise often in practice. We should also recognise that, for the most part, such circumstances will become an issue only if the company is doing badly. Companies normally do not like to get rid of staff simply to reduce the number to fewer than 21. If the number of workers falls below 21, it is likely that the company is having a hard time and looking to save itself. The flexibility that is provided for elsewhere is going to be restricted.

I return to the principle that my hon. Friend the Member for North-West Norfolk and I have maintained, which is that if the number of employees falls below 21, it should be possible to go for derecognition. Again, the provisions will restrict that. I get the feeling that the draftsman got a bit carried away on the clause, because it does not seem to recognise the reality of companies that face such difficulties.

I have had a quick look at the figures provided by the Minister. As I thought, only 15 per cent. of recognition applications are for companies with fewer than 50 employees. That probably has as much to do with unions not being bothered to recruit in smaller companies as it does with companies not wanting unions. That works both ways, but reinforces the point that one-size-fits-all legislation is not appropriate. There should be more tailored legislation, which should treat smaller companies differently from larger ones. For that reason—to do with the correct figure of six months—it would be worth while for the Minister to look again and perhaps bringing the matter back later.

Jim Sheridan (Labour, West Renfrewshire)

All that goes back to the point the hon. Member for Gordon (Malcolm Bruce) made. If a company's number of employees falls to fewer than 21, it is not necessarily the direct result of people wishing to join a trade union. Three years is an adequate period

to allow a partnership relationship to bed in, and the hon. Gentleman is himself an example, in that his constituents have four or five years to make a judgement on him.

Jonathan Djanogly (Conservative, Huntingdon)

It depends on the circumstances. If a company is incorporated, if people invest in it and it rapidly builds up members, if it is based on an idea and that idea does not work, the company can go downhill as rapidly as it had meant to go uphill. Circumstances dictate. In the Bill, however, there is no room for manoeuvre. It is fixed and static, and it creates rights that are not relevant to the size of the company or adaptable to circumstances.

Gerry Sutcliffe (Labour, Bradford South)

The hon. Member for Huntingdon makes his case and has his beliefs. He is wrong when he says that the Bill is one size to fit all. One criticism from some of my hon. Friends is that it would be better if it were. The threshold of fewer than 21 is quite clear, and points are made about numbers below 50. That is a matter for trade unions and how they set about their business, not a matter for the Government. The whole process would be devalued if it were. We are building on the success of arrangements so far and should not start to chop and change the period of debarment. The three years runs, as my hon. Friend the Member for Dagenham pointed out, from the period of negotiation by which we got to the Employment Relations Act 1999. I think it is entirely appropriate. It would be destabilising if we went back to six months.

The hon. Member for Huntingdon made the point raised by the hon. Member for Gordon, that recognition would not be the priority for a company going down to fewer than 21 employees. The hon. Gentleman pointed out that that would probably be because the company was going through hard times and having to shed labour. It would be concentrating on the issues around that.

Jonathan Djanogly (Conservative, Huntingdon)

Can the Minister quantify or describe why the arrangements have been a success so far?

Gerry Sutcliffe (Labour, Bradford South)

I can say so from the general attitude in consultation on the 1999 Act from the organisations we have spoken to about how the legislation has worked. People—not all people—in the full consultation exercise accept the appropriateness of the cut-off point for under-21s, but there is the issue around recognition on the cusp, at just above 21 employees. It is a balanced position. The amendment brings in a new six month-period, which we have not discussed or consulted on, and which would set the process back.

Jon Cruddas (Labour, Dagenham)

Does my hon. Friend concede that if the three-year threshold is moved down to six months, the moratorium of three years on a new trade union proposal for recognition within that bargaining unit could itself, conversely, be reduced to six months? If we reduce the thresholds from three years to six months, there will be consequential effects across some other elements of the package that was forged in 1999.

Gerry Sutcliffe (Labour, Bradford South)

My hon. Friend makes the case clearly about how we got to where we are. It would be difficult and unproductive to change things.

The hon. Member for Hexham talked about how people working in companies with fewer than 21 employees who are unhappy with their union could get out of the recognition agreement if they wanted to join another union. In addition to not paying their subs and leaving the union of their own volition, they could follow a procedure in which 10 per cent. of the employees could apply to the CAC for derecognition.

My hon. Friend the Member for West Renfrewshire (Jim Sheridan) spoke about companies that would cut their work force to fewer than 21 to try to get round the legislation. In relation to the union's application to the CAC and the bargaining unit, the threshold would apply to the employer and any associated employees, which is how that problem could be dealt with.

I accept the strength of feeling of Opposition Members, but we do not agree. I ask the hon. Member for North-West Norfolk to withdraw the amendment. If he is unwilling to do so, I will ask my hon. Friends to vote against it.

Henry Bellingham (Conservative, North West Norfolk)

The amendment contains an important principle, so we will press it to a vote.

Malcolm Bruce (Liberal Democrat, Gordon)

Although my intervention made this clear, I think that the debate was a perfectly good one to have. I say that while supporting the Government on the 21 level, as I believe that that exemption is still necessary. We seem to have got into a nitpicking argument about how to deregister in a cusp situation, which is not constructive. If the Opposition press the amendment to a Division, I shall not support them.

Question put, That the amendment be made:—

The Committee divided: Ayes 3, Noes 12.

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 27, in

clause 9, page 9, line 29, at end insert—

'(3) As soon as there are fewer than 10 workers employed in a company, the employer can end all bargaining arrangements at any time at 35 days' notice.'.

The amendment simply reinforces the point that we made earlier about companies whose number of employees decreases quite substantially. It makes it clear that as soon as fewer than 10 employees are

employed in a company, the employer should be able to end all bargaining arrangements at any time at 35 days' notice. That makes a great deal of sense, because we are talking not about numbers falling to 18, 19 or 15; that is, we are not talking about companies that are on the cusp. They may be seasonal businesses whose numbers fluctuate at different times of the year. We are talking about the halving of a work force, in the case of a company that is employing only 22 or 23 people.

According to the note that we received at 2.30 pm, many companies that will go through the recognition procedure will be employing 21 to 30 people. They account for 4.7 per cent. of companies. The biggest percentage—25 per cent.—employ 500 or more people. Very few companies would be affected, but it could be absolutely vital to them. When a company's staff levels are as low as 10, surely they do not want the burden of any extra administrative hardship or pressure. The amendment seeks to relieve such pressure on small companies and businesses.

The Government keep stressing their small business credentials and claim they are very proud of what they are doing for small businesses. The Minister for Small Business and Enterprise and I share a common agenda of trying to aid wealth creation and the vital role of business in our economy. He and I have shared a platform many times up and down the country talking about this issue, and I know he believes that small businesses are the lifeblood of the economy. Such businesses are absolutely crucial to our future, particularly in areas such as hi-tech, as well as in regenerating various parts of the inner cities.

The amendment is reasonable and very pro-small firm, makes a great deal of sense and will affect few companies. I remind the Committee that, according to the CAC caseload statistics, the percentage of applications from companies employing under 21 workers was 0.4 per cent., while last year there were just five cases where a ballot was held in companies with a bargaining unit of 25 workers or fewer. The vast majority of those cases concern companies with many more employees, so this amendment will affect only a small number of companies, to whom it will nevertheless be very important. I urge the amendment on the Committee.

Jonathan Djanogly (Conservative, Huntingdon)

Earlier, I referred to the Government's figures and said that under 50 workers, the figure was 15 per cent. I am sorry to say that I made a mistake—the figure was actually 11 per cent. That reinforces my hon. Friend's point that, when it comes to unions applying for recognition, they do not seem to be very interested if there are fewer than 50 workers.

Going back to the legislation, I think it entirely appropriate that if there are fewer than 10 workers, employers should be able to go for derecognition. Other than that, I merely reinforce the points made by my hon. Friend.

Michael Jabez Foster (Labour, Hastings and Rye)

There is a great difference between seeking recognition and being removed from recognition. The starting point, surely, is the principle that all workers should have the right to be represented by a union—but that view is the difference between our

two sides. There is a practical problem for small companies in setting up the machinery, dealing with the cost and conducting all the procedures necessary to enable individuals to be represented by a union. For that reason, I think the 21 target threshold for moving into recognition procedure is reasonable.

Unfortunately some hon. Members on the Conservative side seek to remove the union possibility at every opportunity. Yet, when it comes to moving out of recognition procedure, unless one does so as a matter of principle, what is the saving to the employer company in moving out of a system that may have been working well? That is particularly relevant at a time that may be difficult for the company—not because of the union, but perhaps because it is losing staff. Surely that is the point when the workers would find the use of the union most helpful—for example, in negotiating redundancies. I venture to say that employers would find it more useful to deal with a recognised negotiating body than with individuals. Of course the amendment allows the employer to make a choice in such a situation on 35 days' notice. As a principle, it depends at what end one is looking at. Therefore, while I support the 21 as a starting point, when one comes in the other direction, that figure does not have quite the advantages that the amendment may suggest.

Jim Sheridan (Labour, West Renfrewshire)

Following on from what my good friend has just said, it is unfortunate that the hon. Member for Huntingdon has left, but I would encourage him to break out of this negativity and to take a leap into the dark. Can I share my experience of working in industry? Small and medium enterprises are the lifeblood of the country and we must do everything we can to support them. They aspire to be big companies. Some of the more successful large companies that have had to downsize have done it with the assistance and partnership of trade unions. I see the matter from the point of view of someone who has walked the walk and talked the talk. There is nothing to fear from being members of a trade union. I suggest only that we look at some of the major employers and successful companies in this country, most of which, if not all, have recognised trade unions on their premises.

Malcolm Bruce (Liberal Democrat, Gordon)

Conservative Members are persisting with the theme of the previous amendment. At no time have they given us any practical examples of where the problem has arisen. I might be more prepared to engage in the debate if they could give us examples of companies that were inconvenienced and disadvantaged by the measure. If they could, perhaps we would take it seriously. I fear that the Conservatives, having looked for ways to reduce union recognition in the Bill, have decided to take a cut-off point.

That is a pity because there is a cross-Committee agreement, which the hon. Member for Hastings and Rye has just articulated. We understand the problems of small businesses and the difficulty of dealing with unions. Most of us accept that the 21 threshold is desirable. When one comes from the other direction,

one is talking about a company that has been through the process, has had union recognition and has worked within the framework of that union. I should have thought that in most cases it is not the union that is the problem, but the marketplace.

The reports we get are that the mechanism has worked on the whole. It can help the company to deal with these difficult problems. It may even be that, by introducing an extraneous issue about a trade union, one compromises the sense of solidarity—if I can use that expression—between management and their work force in dealing with an external problem. It behoves hon. Members who support the amendments to give some practical examples.

Peter Atkinson (Conservative, Hexham)

I do not propose to give individual examples; I do not know of any. Representations that we have had from various employers' organisations, the CBI and others have expressed concerns about the matter and those are the concerns that we are quite properly articulating.

Malcolm Bruce (Liberal Democrat, Gordon)

I do not complain about hon. Members articulating them. We are having a debate in Committee and they are perfectly proper issues to bring forward. I have also consulted various employers' organisations and I have not detected a real angst about the issue. They have some concerns. The same applies to red tape. My party and the Conservative party are actively looking for areas of regulation that could be done away with or simplified. Whenever businesses tell me that they are overburdened with regulations, I say, ''You are hitting at an open door. Tell us what it is and if we can work with them we will.'' We have published some proposals. More often than not when one gets down to it, they are most concerned about tax complications rather than individual regulations. There are regulations that could be simplified or abolished. That is fine but, in this case, without substantive evidence that there is a real practical problem, I am not persuaded.

Jonathan Djanogly (Conservative, Huntingdon)

The point was made before, but it is worth reiterating, that there have only ever been five cases where the size of the bargaining unit has been zero to 25, so the hon. Gentleman is not going to find many examples of companies dropping below 21 and, if he does, they will be companies on the way out.

Malcolm Bruce (Liberal Democrat, Gordon)

I think in a way that the hon. Gentleman makes my point, which is why we should terminate the debate. Otherwise, it is in danger of becoming a large sledgehammer to crack a possibly non-existent nut.

The rest of the debate is in Hansard.