Employment Relations Bill

House of Commons, 29 March 2004.

New Clause 4 — Disapplication of Qualifying Period and Upper Age Limit for Unfair Dismissal

Gerry Sutcliffe (Labour, Bradford South)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss new clause 15 Burden of proof on employer to show reason for dismissal in trade union related cases

(1) Section 154 of the 1992 Act (exclusion of requirement as to qualifying period, etc) is amended as follows.

(2) After subsection (2) insert

"(3) On a complaint under section 152 or section 153 it shall be for the employer to show the reason (or, if more than one, the principal reason) for the dismissal." .'.

Gerry Sutcliffe (Labour, Bradford South)

Both new clauses relate to protections provided for by section 152 of the Trade Union and Labour Relations (Consolidation) Act 1992 against dismissal on grounds of trade union membership or activities. Section 153 of the 1992 Act provides similar protections against being unfairly selected for redundancy on grounds of trade union membership or activities.

Currently, those important protections apply to all employees. In other words, the usual qualifying period of one year's service for bringing an unfair dismissal application does not apply in those cases. The usual upper age limit for unfair dismissal does not apply either. The disapplication of the qualifying period and the upper age limit is achieved by section 154 of the 1992 Act. It works by disapplying the qualifying period and the upper age limit "if it is shown" that the sole or principal reason for dismissal, or selecting the employee for redundancy, was an inadmissible reason under section 152 of the 1992 Act.

The protections against dismissal on trade union-related grounds are long-standing rights. Indeed, they were among the first "day one" employment rights ever introduced, in the mid-1970s. Perhaps as a result, the language used in section 154 to disapply the qualifying period and upper age limit is peculiar to that section. It has not been followed by later provisions that have created day-one rights against unfair dismissal on other grounds.

The wording of section 154 has caused problems. It has been interpreted by the courts as placing the onus on the employee that is complaining of unfair dismissal and who has under a year's service, to show that the employer's decision in dismissing him was taken for an inadmissible trade union reason. In other words, the burden of proof is on the employee to show the employer's reason for dismissal. That is intrinsically difficult for the employee to do, given his lack of detailed knowledge of the employer's behaviours and motivations. That approach contrasts sharply with all other cases of unfair dismissal where the burden of proof is on the employer to show the reason for the dismissal.

In other words, the peculiar wording of section 154 has created an anomaly. Indeed, the burden of proof would vary where two employees one with more than 12 months' service and the other with six months' service complained of being dismissed for belonging to a trade union. In the first case, the burden of proof would rest on the employer and in the second it would rest on the employee. There are no justifiable reasons for such differential treatment. It is basically an accident of history.

New clause 4 will rectify the anomaly by replacing the current version of section 154 with a new one that uses different wording drawn from other day-one rights to disapply the qualifying period and upper age limit. The new wording ensures that the burden of showing what the reason for dismissal was will now rest on the employer.

New clause 15 also attempts to rectify that anomaly by inserting a new subsection into section 154 that provides that the burden of proof for the reason for the dismissal is on the employer. It does not, however, replace the "it is shown" wording that has caused difficulties for the courts. For that reason, the wording of new clause 4 is to be preferred.

The number of individuals affected by the change is small. I am glad to say that cases of alleged dismissal on trade union grounds are few, but that is no reason why we should leave the current imperfect wording of section 154 as it is.

Henry Bellingham (Conservative, North West Norfolk)

As the Minister pointed out, the new clause reverses the burden of proof and we do not necessarily have any difficulty with that, but we are very unhappy at the complete lack of consultation on the new clause with any of the key bodies.

The Minister said that the so-called anomaly dated back to 1992, and if his legal advice has persuaded him that there is indeed an anomaly he is right to correct it. However, although there has been a lot of consultation on the Bill it was published a long, long time ago and there have been various White Papers and endless discussions with organisations and bodies most of the employer organisations did not see the new clauses until today. The Government tabled the new clauses only on Wednesday and did not tell those organisations, so they had only two and a bit working days to discover that the provisions had been tabled, which is not good enough.

The Minister made great play of the fact that the Bill was about partnership and that there was a consensus-building process. He talked about always getting everybody on board and discussing things with all parties and when we began our consideration of the Bill the atmosphere was reasonably positive, because everyone felt that they had been consulted. However, as my hon. Friend the Member for Eddisbury (Mr. O'Brien) pointed out, the Government are hanging new provisions on this measure as though it were a Christmas tree. Such provisions could do not only positive things, as the Minister claims for the new clause, but many other things. The Minister told us not to panic because the Government would do nothing that was untoward or would break the spirit of consensus built up with the various organisations, yet unfortunately that is exactly what has happened.

We are not especially enamoured of the changing of the burden of proof under new clause 4. As the Minister explains, it will be up to the employer to show that it was not trade union activity or involvement that led to either discipline or dismissal. He claims that there is an anomaly, but any change in the burden of proof is a serious matter, as it is a precious component of our legal system. Why did the Government not consult the employer organisations? Why were they left in the dark until this morning? He has created much ill will owing not to the substance of the new clause and the other proposals but to the lack of consultation.

How many tribunal cases will be affected every year by the change in the burden of proof? That is a serious matter.

John Gummer (Conservative, Suffolk Coastal)

Does my hon. Friend agree that when the Government make a superficially sensible proposal it is even more important to discuss it with those who have to deal with it? Although they think that they are producing something that will be very good, something might have been missed, which is why consultation is so important, even though most people might feel that the proposal seemed perfectly sensible.

Henry Bellingham (Conservative, North West Norfolk)

My right hon. Friend is right. He brings a huge amount of experience to the discussion, having done an excellent job not only when he served in the Minister's place some years ago but in more senior positions. The key is consultation working things out with the various organisations. It is obvious that lawyers for various trade unions have been pushing the matter, so will the Minister tell the House why he did not properly consult the Institute of Directors, the Engineering Employers Federation, the British Chambers of Commerce and the CBI?

John McDonnell (Labour, Hayes and Harlington)

I welcome new clause 4, which is better worded than my proposed new clause 15. In the spirit of consensus, I merely point out that, in unfair dismissal cases that are trade union related, the new clause simply maintains consistency with other cases, where the burden of proof is with employers. It is on that basis that we should move forward. Whatever lack of consultation there may have been, there is general approval for such a provision and an awareness that it was required, especially since the case of Smith v. Hayle town council. It is an improvement in the law and should be greatly welcomed.

Jonathan Djanogly (Conservative, Huntingdon)

In relation to the comments that have just been made, I merely point out that although new clause 15 includes the words, "After subsection (2) insert", section 154 of the 1992 Act does not have a subsection (2).

Gerry Sutcliffe (Labour, Bradford South)

I am sorry that we have started off in a different vein from our time in Committee.

The point about consultation was well made. We want to hold full consultation with everybody who is affected by the Bill, but Members will be aware that we held an important debate about the Wilson and Palmer judgment and its effect in bringing about significant changes in the rights to trade union membership. That also relates to issues such as those dealt with by new clause 4. The provision is not a bauble on a Christmas tree, as the hon. Member for North-West Norfolk (Mr. Bellingham) claimed earlier and during the debate on the programme motion last week. He ended his contribution to that debate by saying that he was not a happy camper, but I hope that we can make him a happy camper this evening by explaining that there were appropriate reasons for our proposals. A small number of tribunal cases are affected and I shall write to him with the number. In fact, we informed the CBI, the EEF and TUC that we would be tabling the provisions.

I am grateful to my hon. Friend the Member for Hayes and Harlington (John McDonnell) for not pressing new clause 15. It is entirely sensible to put the burden of proof on employers for reasons that have been outlined and accepted, so I ask the House to accept the motion.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 5 — Additional Duties on Employers Informed of Ballots

Gerry Sutcliffe (Labour, Bradford South)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss the following:

Government new clause 6 Unfair practices in relation to recognition ballots.

Government new clause 7 Unfair practices in relation to derecognition ballots.

Government new clause 8 Unfair practices: power to make provision about periods before notice of ballot.

New clause 2 Intimidation

After paragraph 51 of Schedule A1 to the 1992 Act insert

"Intimidation

51A If during the union recognition procedure a union uses undue force or intimidating measures to get recognition then the CAC shall have the right to investigate this at the request of the employer or any worker and if such measures are found to have been used the CAC shall terminate the recognition procedure immediately.".'.

Government amendments Nos. 4 to 6.

Gerry Sutcliffe (Labour, Bradford South)

The intimidation of workers during recognition and derecognition ballots has been repeatedly raised with the Government, both during the review of the Employment Relations Act 1999 and during the consideration of this Bill. Both unions and employers have brought to my attention cases of alleged intimidation and have called on the Government to act to prevent such behaviour.

At the last sitting of the Standing Committee, I gave notice of our intention to move these amendments on Report. This is undoubtedly a difficult aspect, and many issues had to be considered before we could table the amendments. It has inevitably taken some time to complete the process, which explains why we could not table them sooner.

Jonathan Djanogly (Conservative, Huntingdon)

In response to my question about this matter in Committee I think that it was on 2 March the Minister said that he would table a new clause shortly, so can he explain why we did not see it until late last week?

Gerry Sutcliffe (Labour, Bradford South)

I have tried to outline the difficulties involved and I hope that when the hon. Gentleman has heard what I have to say he will accept the reasons.

The word "intimidation" covers a wide range of possible conduct, and new clauses 5, 6 and 7 deal with the main behaviours that cause offence, at the time when most intimidation is likely to occur namely, during the period of a recognition or derecognition ballot. New clause 8 allows us to deal with behaviour at other stages of the recognition or derecognition process should that be thought necessary.

Our objective, however, is not to stifle all campaigning activity. It is important that the workers concerned should hear from both the union and the employer in order to reach an informed decision on the important issue of recognition. However, that campaigning activity should be fair, and parties should not use underhand methods to influence the voting behaviours of the relevant work force.

New clause 5 and amendment No. 4, which is consequential to it, deal with intimidatory behaviour by the employer at, or concerning, access meetings between the union and workers in the bargaining unit during the ballot period. Those are meetings held to enable the employer to satisfy the duty imposed upon him to allow the union reasonable access to workers in the bargaining unit.

When an employer is informed by the Central Arbitration Committee that a ballot is to be held, he must comply with three duties, which are set out in paragraph 26 of schedule A1 to the 1992 Act, inserted by the 1999 Act. The first is to co-operate generally with the union and the qualified independent person appointed to conduct the ballot; the third is to give the CAC the names and home addresses of the workers in the bargaining unit, so that ballot papers can be sent to them; and the second is to give the union reasonable access to the workers in the bargaining unit, so that the union can inform the workers of the purpose of the ballot and seek their support and their views on the issues involved.

New clause 5 deals with the potential for problems to arise when such access is granted. Unions have alleged that employers have sought to interfere with access meetings: for example, I have received complaints that employers have offered higher rates of overtime to workers to stay at their posts rather than attend an access meeting, or an employer may give workers the option of going home early when such a meeting is scheduled. There have also been complaints that employers have monitored who attended and who said what at access meetings. It is not for me to assess the accuracy of those allegations, and I do not want to be drawn into specific cases.

Jonathan Djanogly (Conservative, Huntingdon)

Is the Minister honestly saying that if an employer allows an employee, of his own free will, to go home, that will be a breach of the legislation?

Gerry Sutcliffe (Labour, Bradford South)

The key element is the employer's purpose the reason the individual was allowed to go home. If the hon. Gentleman allows me to continue, he will hear our reasons, and I am sure that he will fully support our aims.

There is evidence that plainly shows that there is the potential for the sort of problem that I have described to arise. It has always been the Government's intention that access meetings should be private between the union and the workers in the bargaining unit, unless the employer or his representatives are invited to attend by the union. Likewise, at the time of the 1999 Act, we envisaged union access being free from the sorts of interference that I have just described. The statutory code of practice on access to workers during recognition and derecognition ballots, which we produced at that time, clearly sets that out, but the code merely provides guidance, which parties might take into account and which the CAC might consider when determining whether an employer has failed to allow access in accordance with the duty imposed on him. The code does not have the force of law and, in the light of experience, we feel that we need to provide explicit statutory provisions on those points.

New clause 5 inserts into paragraph 26 of the recognition schedule new provisions that make it plain that interference with union access arrangements is not permissible. The clause places on employers during the ballot period two new obligations in addition to the three existing duties. They appear in the clause as the fourth and fifth duties. The fourth duty, set out in new sub-paragraph (4ZA) of the recognition schedule, is to refrain from making offers to workers to induce them not to attend a union access meeting. We recognise, however, that there might be circumstances in which it might be reasonable for employers to make such offers; the clause therefore allows for such exceptional circumstances at new sub-paragraph (4ZA)(b). For example, if the employer wanted to send workers on a training course that was important for their career development, or if it was essential to maintain a minimum staffing of machinery during access meetings, it might well be reasonable to make offers to the workers in question to attend training or monitor the machinery. The CAC would examine all the circumstances of the case and decide whether such behaviour was reasonable. We intend to issue a new code of practice that will give more detailed guidance on these matters, which the CAC must take into account. We will, of course, consult on the code in draft.

The fifth duty is not to take action or make threats against workers for attending a union access meeting or for indicating that they plan to attend a meeting. Again, we have built in some necessary flexibility for employers by ensuring that action that was primarily taken for other reasons would not constitute a breach of the fifth duty. That would enable the employer to take action against a worker for their unacceptable behaviour damaging the employer's property, for example when attending a meeting.

The new clause inserts a new sub-paragraph (4ZD) into the recognition schedule to ensure some privacy for access meetings. This makes it clear that an employer is in breach of his duty to provide reasonable access if he or his representative attends a meeting without being invited. It also makes it clear that the employer is in breach if he seeks to monitor what goes on at a meeting. Again, the provisions contain some necessary flexibility to provide for cases in which such attendance or monitoring is reasonable. Let me give an example of what might constitute reasonable behaviour in these circumstances. In some workplaces, it might be impossible, or even dangerous, to switch off security cameras in the room where an access meeting is held; so, if the union was prepared to hold the meeting in such a room, it might indeed be reasonable for the event to be filmed. Subsections (6) to (10) of new clause 5 impose the same duties in respect of derecognition ballots.

The sanction for a failure to comply with either of the new duties is the same as the existing sanction for a failure to provide reasonable access. The CAC may order the employer to remedy the failure by taking whatever steps it considers appropriate. If the employer does not comply with that order, the CAC may award the union automatic recognition.

Amendment No. 4 makes a consequential change to clause 5. Access allows the workers to get both sides of the picture, so that they can make a well informed decision when they come to cast their vote. Any attempt to undermine that access is unjustifiable. The majority of employers who go through the recognition procedure already observe the duties. The amendments will make it clear beyond doubt to the minority that certain behaviour is unreasonable in those circumstances.

New clauses 6 and 7 and amendments Nos. 5 and 6 are closely linked and deal with standards of conduct during recognition and derecognition ballots. I have received complaints and evidence from both unions and employers about conduct that they believe is intended to frighten and intimidate workers into voting a particular way in the ballot. For example, I have received allegations of employers dismissing a union activist to undermine the union's campaign and to intimidate other workers; of union representatives making threatening visits to workers at their homes; of employers threatening reprisals such as the withdrawal of certain benefits if workers vote for recognition; and of both employers and unions making statements that grossly misrepresent, denigrate or even libel the other party. According to research for the TUC, US-style union-busting tactics are rare in this country; none the less, I am sure that intimidation can and does occur. I am concerned to make sure that it does not increase and to send a message that such behaviour is reprehensible and will not be tolerated.

Our policy is based on a number of general principles. First, and importantly, the provisions are double-edged they apply to both the employer and the union. As I have said, I have received representations from all sides of the debate. I note that the hon. Member for North-West Norfolk also believes that this is an important issue. I believe that it is only right and fair that the same standards of behaviour apply to both parties. Secondly, in identifying these practices, we have in part drawn upon rules of conduct for public general and local elections set out in the Representation of the People Act 1983. The unfair practices set out in new clause 6 are a reflection of conduct that is prohibited under that Act. I think the House will agree that the standards that apply in the elections that return us as Members of Parliament are an excellent starting point when setting standards of behaviour for democratic ballots in other settings.

New clause 6 deals with recognition ballots. It introduces a duty on both employers and unions to refrain from engaging in unfair practices during the ballot period. A party will have committed an unfair practice if, with the purpose of influencing the ballot, it does any of the things listed in new paragraph 27A(2)(a) to (f). These are: offering inducements or bribes to workers to vote in a particular way or to abstain from voting; coercing or attempting to coerce workers to reveal how they intend to vote or how they actually voted after the event; dismissing or threatening to dismiss a worker; taking or threatening to take disciplinary action against a worker; subjecting or threatening to subject a worker to a detriment; or using and attempting to use undue influence.

Let me make it clear that the Government support the right of all the parties employers, unions and workers alike to campaign for their preferred result in a recognition or derecognition ballot. We are not seeking to limit the right to engage in legitimate campaigning activity. The unfair practices that I have listed do not preclude people from legitimately trying to influence the result of the ballot, but they are designed to prevent people using conduct such as threats or deceit, rather than persuading people by the strength of their arguments. Nor are the Government suggesting that employers should not be able to dismiss or otherwise discipline workers during the ballot period if they are guilty of misconduct or poor performance. A dismissal or other disciplinary action will be an unfair practice only where it is done with a view to influencing the result of the ballot. Furthermore, for the CAC to find that a complaint is well founded, it must be satisfied that the practice in question changed

Jonathan Djanogly (Conservative, Huntingdon)

Is the Minister saying that even if there is gross intimidation, violence or other totally unacceptable behaviour, the ballot will not be affected that it will all be forgotten? What will happen in such circumstances?

Gerry Sutcliffe (Labour, Bradford South)

No, I am not saying that. I have made it clear that we expect people to behave reasonably. If someone acts inappropriately or there is gross misconduct during the ballot period, the employer will be able to use his normal procedures to deal with the matter.

We are saying that it works both ways. If the employer is doing things that are not proper in terms of the ballot, the union has the right to complain to the CAC.

Jon Cruddas (Labour, Dagenham)

I welcome the clauses but I raise one point under paragraph 27B(6). Does my hon. Friend think that the provision could create an incentive for the employer to take action against the union, even where it had done nothing wrong, merely to protract the process?

Gerry Sutcliffe (Labour, Bradford South)

That is why we have placed great faith in the role of the CAC in determining motivation and the purpose for the actions of either the employer or the trade union. On that basis, the CAC will come to a decision. It is interesting that we have taken powers to go further in the period before the ballot if we feel that there is overwhelming evidence so to act.

The CAC must be satisfied that the practice in question changed, or was likely to change, the voting intentions or actual voting behaviour of a worker. This is intended to discourage frivolous claims. We do not want either employers or unions to be punished for very minor transgressions that are unlikely to have affected anyone's vote. The Government will issue a code of practice that will give detailed guidance to the parties on what is acceptable conduct and what is not.

Hon. Members will note that new clause 6 does not contain remedies for cases where a complaint of unfair practices is upheld by the CAC. Paragraph 27C contains instead a power for the Secretary of State to provide for sanctions and remedies by order. The Government's intention was to set out those sanctions in full in these new clauses and amendments. However, this is a complicated area. The sanctions will, among other things, allow the CAC to re-run a ballot where appropriate, and we want to consider further a number of complexities associated with that. It is my intention that, following more detailed consultation with stakeholders, the Government will propose amendments in the other place to put these sanctions in the Bill.

Jon Cruddas (Labour, Dagenham)

Is my hon. Friend able to say now whether the sanctions or remedies could include automatic recognition, which he mentioned earlier, in respect of activities before the 20-day ballot period?

Gerry Sutcliffe (Labour, Bradford South)

That is one of the things that will be considered during consultation. I am told by Opposition Members that they want to see consultation take place. [Interruption.] However, I am hearing noises that perhaps they do not want it to take place.

New clause 7 introduces identical provisions making it an offence to use unfair practices in ballots on derecognition. Amendments Nos. 5 and 6 make consequential amendments to clause 11. They insert cross-references to the powers to make sanctions in new clauses 6 and 7.

In addition, the Government have tabled new clause 8. It provides an order-making power for the Secretary of State to extend these rules of conduct to the earlier stages of the statutory recognition process.

Alleged intimidation has occurred, in the main during the ballot period. This is understandable. That period is the critical point where workers decide whether they want union recognition. We recognise that parties, perhaps as a result of the protections that we are introducing for the ballot period, may be tempted to bring forward any intimidatory conduct to an earlier stage. That is why we want to be armed with the tools to respond quickly. Let there be no doubt that if evidence emerges of this happening on any scale, we will not hesitate to introduce further measures to ensure that workers can exercise their choice freely and without fear. Of course, if and when we exercise this power, we can draw on the experiences gained from the operation of these provisions during the balloting period.

New clause 2 was tabled by Conservative Members but it has been grouped with the Government's new clauses and amendments. I am pleased that Opposition Members also recognise the importance of tackling intimidation during recognition applications. Of course, as always, their interest is one-sided. The new clause does not deal with the more prevalent form of intimidation by employers against workers and union members. As I have said, the Government believe that intimidation by any party is unacceptable. I hope that the hon. Member for North-West Norfolk agrees. I urge him not to press the clause.

I have spoken for a long time and I am grateful to the House for its patience. However, these are detailed new clauses and amendments and I wished to explain them to the satisfaction of the House. The Government's new clauses are major amendments. I believe that they strengthen the Bill and safeguard the integrity of the statutory procedure. The issues that they address are of concern to everyone involved and I believe that the solutions that they present are balanced and reasonable. I am pleased to commend them to the House.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister for explaining the new clauses and amendments in some detail. The hon. Gentleman rightly points out that they are extremely complicated. It is a great pity that we did not have them at an earlier stage, a view that is shared by many outside this place. Even at this stage, as the Minister said, they are not complete, as he has not finished his detailed work on some of them.

As for new clause 5, as the Minister explained, there are at present three duties on the employer once the CAC has decided that there should be a ballot. The first is to co-operate with the ballot, the second is to provide access to the workers and the third is to supply names and addresses. There are two further duties. The first is to refrain from making any offer, and the second is to refrain from taking, or threatening to take, any action against a worker because he attended the meeting.

The clause then sets out various other matters regarding the conduct of employers in respect of meetings to discuss recognition and derecognition. Most of that is pretty reasonable but I shall raise a couple of points. Sub-paragraph (4ZB) refers to the threat of action on the ground that the employee "attended . . . any relevant meeting". Let us take a situation in a small or medium-sized company where a trade union activist may want to attend a number of meetings. In addition, there may be two or three other activists in the company who also want to attend meetings. There might be three, four or five meetings. What would happen if the company said to perhaps two of those people who were attending the meetings that that was affecting their performance at work and that only one should attend? As the law stands, the employer would not be allowed to do that, even though he took the view, in good faith, that consistent attendance at the meetings by a number of employees was affecting their performance at work? Perhaps the Minister will comment on that.

Sub-paragraph (4ZD) applies to the situation where an employer

"seeks to record or otherwise be informed of the proceedings".

What happens in a small or medium-sized company? It may be a family-owned business, where relations between management and employees are excellent. What happens if a managing director asks, en passant, "How did the meeting go last night?" Technically, he would be in breach of the new clause. What is the Minister's view on that? We are trying to stress the trust that is so often built up in small companies between management and employees. Often, in close-knit family businesses, there are no stand-offs. There is no suspicion. Unfortunately, in our judgment, the clause could make things worse. Perhaps the Minister will comment on those two points.

New clauses 6 and 7 relate to unfair practices during ballots. The Minister said that paragraph 27A(1) and (2) is based on the Representation of the People Act 1983. I am slightly concerned about sub-paragraphs (a) to (f), where "undue influence" is mentioned. What exactly is undue influence? It is difficult to define. There is huge potential for litigation. Someone making an allegation to the CAC does not do so on oath; they merely make an assertion. We are concerned that the term "undue influence" may lead to a great deal of confusion and trouble.

Apart from those comments, the two clauses may appear reasonable, but, as the Minister said, we are being asked to agree to clauses in which there is no mention of any penalties. The Minister says that he will return at a later stage to tell us what the penalties will be. It seems extraordinary that the Minister has brought the clauses forward we are being asked to pass them without there being any indication of what the penalties will be. For example, if the employer is at fault, presumably the penalty will be the CAC ordering immediate recognition. What happens if the employee is at fault? Will he have immediately to withdraw the application? If there has been a serious breach and there is a serious example of intimidation, would employees not be allowed to apply again for a certain period? None of that is answered.

Paragraph 27C(1) is drawn extremely widely. It is the part of the clause that will enable the Secretary of State to come up with penalties in due course. Will that be even handed? We just do not know. It is a little shabby of the Minister to ask us to accept two important new clauses when the detail is not to hand. Why cannot the Government get it right? They have had long enough.

Malcolm Bruce (Liberal Democrat, Gordon)

Does the hon. Gentleman agree that if the matter is to be resolved by means of a statutory instrument, it would be useful if the Minister gave us an undertaking to provide a draft statutory instrument so that we could debate it and possibly amend it, rather than being faced with an unamendable instrument?

Henry Bellingham (Conservative, North West Norfolk)

The hon. Gentleman is right. This part of the clause is very widely drawn and there is no indication of the Government's intentions. It would be extremely helpful if they gave a commitment along those lines.

On new clause 8, the Minister spoke about research into intimidation. He mentioned that there was no large-scale intimidation, such as that which occurs in America. He believed there was research indicating that some firms used intimidatory practices. If he cannot tell the House what that evidence is, will he put a brief in the Library or write to my hon. Friend the Member for Eddisbury (Mr. O'Brien) to tell him what the evidence is?

We are discussing complicated new clauses. The Engineering Employers Federation, the CBI and many other organisations that have not been properly consulted are not yet convinced. They do not say that the new clauses are bad. They merely ask whether the provisions are a sledgehammer to crack a problem that is not nearly as serious as the Minister maintains. If the Minister wants to persuade us, will he put some research material in the Library, or at least write to me?

Jim Sheridan (Labour, West Renfrewshire)

If the hon. Gentleman is looking for evidence of employer intimidation, I can give him tangible evidence of employers telling employees that if they wish to join the union whose representatives are standing outside handing out the leaflets, they should let the employers know and those employers will help the employees on with their jackets. Is that not intimidation?

Henry Bellingham (Conservative, North West Norfolk)

I think the hon. Gentleman is talking about the Wilson and Palmer situation. We are discussing intimidating employees not about joining a union, but about voting in ballots. The Minister said that there was not widespread evidence, but he believed that malpractice was going on. He needs to sustain and justify his case.

Gerry Sutcliffe (Labour, Bradford South)

I have just remembered the meeting that the hon. Gentleman had with the TUC. He was good enough to tell me that they had had an excellent debate. I am sure they told him about "Bargain or Bust? Employer responses to union organising", a discussion pamphlet published by the TUC in October 2003. That contains examples of the cases that have been outlined. No doubt the Library will get the hon. Gentleman a copy.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister for pointing that out. My hon. Friend the Member for Eddisbury and I will look carefully at that document. For the record, we had a positive and constructive discussion with the TUC, with Brendan Barber and some of his colleagues. There are many issues on which we fully agreed. We intend to work together. They have asked our views because they want to work with us on a positive basis, although we told them that there are obviously some issues on which we probably will not agree.

Finally, the Minister was rather scathing about new clause 2 and said that we cared only about the employer. In fact, we are trying to be even-handed. The penalty in our new clause is mild. It states that if there is intimidation by trade unions against employees or by employees against other employees,

"the CAC shall terminate the recognition procedure immediately".

We could easily have proposed a much tougher penalty. It is a mild new clause with limited scope, and it is intended to be even-handed.

Bill Tynan (Labour, Hamilton South)

Will the hon. Gentleman give way?

Henry Bellingham (Conservative, North West Norfolk)

No. I shall draw my remarks to a close, as there is much debating to do over the next couple of hours. We are not happy with Government new clauses 6 and 7, and we shall press new clause 2 to a Division, if need be.

Frank Doran (Labour, Aberdeen Central)

I welcome the new clauses. They deal with an important gap that the operation of the 1999 Act has thrown up in practice serious intimidation, of which there is clear evidence in the case of a few employers.

The principal case with which most of us are familiar concerns Sky Television at Livingston where employees were intimidated to the extent that they were threatened by the employer with relocation of the factory, wage reductions and a series of unscrupulous measures. On initial CAC examination, a majority of the work force was in favour of union recognition, but that became a thumping defeat for the union when the ballot went ahead. That is unacceptable, given that the relevant provisions of the 1999 Act were intended to operate as a disputes resolution procedure, to keep such cases clean and fair and to give everyone the opportunity of a say.

I share the concerns expressed to the Minister by the TUC about how the Government have chosen to apply the intimidation processes. They have treated the trade union side and the employee side in exactly the same way as the employer side. The TUC presented a dossier to the Government, to which the Minister referred, as did the spokesman for the Opposition, the hon. Member for North-West Norfolk (Mr. Bellingham). The dossier details various abuses found by the trade union side. I know that the employers have made allegations against the union, but, as far as I am aware, no specific evidence has been presented against the union side or the employee side in any particular case, simply vague allegations. Yet the same regulations are to be applied on both sides.

The union side is happy to accept that there should be a law against intimidation on both sides. The issue is how that should be applied. What the Government propose sounds fair and equitable, but it ignores the underpinning imbalance in the workplace between the employer, who owns the premises and employs the work force, and the union, which has only limited access to the work force in the case of a recognition ballot. One need only consider the Sky Television case in Livingston to see how that operates in practice. The employer was able to make threats and get information circulating round the work force that completely transformed the view of the work force.

The employer can say that union recognition will mean lower wages, and he has the power to put that into practice. The union cannot do that. A union can only speculate that union recognition will increase wages. To introduce a clause that hits both sides equally on every point will have unintended, unfair consequences. It will always be the union that suffers from any delay in the balloting process.

David Hamilton (Labour, Midlothian)

Surely it can be recognised that a worker approaching a fellow worker has no power other than the power of persuasion, whereas a manager has the power to promote or demote an individual worker? That is an important distinction.

Frank Doran (Labour, Aberdeen Central)

That is exactly my point. All the power is with the employer, not with the union. If an employer says such things to an employee, the employee knows that the employer has the power to carry it out, which the union does not.

There is no question but that intimidation by unions is unacceptable, but different wording is needed to capture it if it happens. I urge my hon. Friend the Minister to reconsider the matter and see whether a different form of words can be found to deal with that different problem when the Bill is debated in another place.

Malcolm Bruce (Liberal Democrat, Gordon)

We have had a useful debate and a number of important points have been raised. It is interesting that there is some slight tension between the Minister and his hon. Friends. The Minister says the Government must be even-handed and make the provision apply to any party, but, not surprisingly, Members, particularly those with a strong union connection, are trying to shift the balance more favourably towards the unions, and they quote some fair examples where that would be justified.

Right from the start of the Bill, we have all acknowledged that the climate of industrial relations in this country has been transformed in the past 10 or 15 years, partly because of legislation that has democratised the trade union movement. Given the consultation that has taken place to bring the Bill to the House, and if the evidence was available, it is surprising and a little unfortunate that such detailed new clauses have had to be introduced so late in the process. I am not saying that that is not justified, but it puts those of us who are trying genuinely to scrutinise legislation in a slightly invidious position.

The hon. Member for North-West Norfolk (Mr. Bellingham) referred to the example of a company in which there is no animosity and in which the natural tendency of a manager who knows that a recognition debate is going on is to say "How's it going?" The wording gives the impression that that could become an offence. The legislation has just arrived, and we have not had time to test out how it could apply and whether it could lead to slightly silly litigation that gets in the way of good employment relations.

David Hamilton (Labour, Midlothian)

The hon. Gentleman is drawing an important distinction. As a former trade union official who became chief executive of a small company, I remind him that the determining factor rests with the chief executive or the employer. I knew, when I spoke to an employee as an employer, as opposed to a trade union official, that I could intimidate them off the cuff. However, let me make this distinction: if the relationship between the employer and employee is good, there will never be a situation in which the employee takes the employer to task.

Malcolm Bruce (Liberal Democrat, Gordon)

I agree entirely, but we are entitled as legislators to look at what the Bill says and how it might be applied. It has already gone through my mind that I doubt that anybody will want to go to law in a good business with a constructive atmosphere, although it may take only one malicious individual to cause damage. All that I am concerned about is ensuring that the measure is not sloppily drafted and that it means what it says and does not create unnecessary problems. I think that that is a perfectly fair role for us to play in the House.

I wish to repeat what I said in intervening on the hon. Member for North-West Norfolk about the orders, which the Minister said he would return to. The Minister made two points. The first was that further details would be brought before another place. I am afraid that that is a weary old comment. Even though we consult, we pass too many laws rather hurriedly at the end of the process, which is simply not a good way of making law. That is all that I am saying. Such a way of proceeding does not necessarily produce bad law, but it certainly does not help to produce good law; indeed, it is more likely to produce bad law, because proper consideration is not given.

The more particular point relates to new paragraphs 27C(2) and 119C(2) to schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992, which both state:

"An order under this paragraph may . . .

(a) amend this Schedule;

(b) apply any provision of this Schedule with such modifications . . .

(c) confer functions on the CAC;

(d) make provisions about the arrangement and conduct of further ballots;

(e) include supplementary or incidental provisions;

(f) make different provision for different cases or circumstances."

A pretty substantial statutory instrument is being envisaged. As the Government have introduced the provision at such a late stage, it is reasonable to seek assurances. I welcome the Government's practice of publishing draft statutory instruments that can be scrutinised and debated by Select Committees and hon. Members, so that when the final secondary legislation comes before the House it will have been subjected to a form of preliminary scrutiny. We all agree that the weakness of the statutory instrument as it is proposed of course, this is the case from the point of view of the House, not the Government is that it is not amendable and that we can only vote yes or no. Given that the provision is being introduced late in the process and that it is fairly extensive, it is reasonable for us to ask the Government to give it further consideration.

I understand the Minister's response to new clause 2, but, having considered it, I find it hard to take issue with what is proposed. In dealing with intimidation, it points to the "employer . . . or worker", so it contains reference to that point. One of the essential things that we are trying to do this is a classic position for those on the Liberal Democrat Benches is to get the balance right, as the Minister himself also said was necessary. If I may say so, that is something on which my party has a contribution to make.

Jim Sheridan (Labour, West Renfrewshire)

Does the hon. Gentleman share the views of the Conservative Front-Bench spokesman, who said that it was perfectly acceptable to tell an employee that attending a trade union meeting could affect their performance? Many of us on the Labour Benches have heard those chilling words before and then suffered the consequences.

Malcolm Bruce (Liberal Democrat, Gordon)

I do not think that the hon. Member for North-West Norfolk made that remark, although he has not contradicted the hon. Gentleman. I do not accept such views, but I accept the comment that an employer is, by definition, in a different situation. Let us be clear. Historically, there have also been situations in which trade unionists and trade union activists have used intimidating processes and put pressure on people in other ways. The reality is that the faults have arisen on both sides, but the situation has improved enormously.

When we finish our proceedings on the Bill we support it and are not changing our position we should not introduce legislation that upsets that balance, especially so late in the process. I am saying not that the measures before us upset the balance, but that they raise in my mind some legitimate and proper concerns that we should address.

Bill Tynan (Labour, Hamilton South)

My hon. Friend the Minister is to be congratulated on introducing the Government new clauses, which I think are a response to the discussion that took place in Committee. When we discussed intimidation in Committee, hon. Members in all parts of the House recognised that it was unacceptable. As the hon. Member for Gordon (Malcolm Bruce) said, the balance has to be got right. At present, the employers have all the cards and all the opportunities to intimidate people if they so wish. Only a small minority of employers need to be dealt with on that basis.

I would like to make a point about definitions and to add to the request made for an explanation of the phrase "undue influence". I, too, would like the Minister to explain that term, but I would also like the Opposition spokesman to explain something. I tried to intervene on him in respect of new clause 2, which refers to circumstances in which

"a union uses undue force or intimidating measures".

I would be interested to hear what "undue force" and "intimidating measures" are. I have found that when a union tries to win a ballot, it will do everything it possibly can to convince people. That is usually done in a sensible way and on the basis of argument. If there was intimidation by a trade union, hon. Members in all parts of the House would say that it was unacceptable.

I think that the balance must be got right, as has been said. In that respect, we must examine Government new clause 6 carefully, as there is a concern that it goes too far the other way and will create a situation in which the union will be unduly punished without having been involved in intimidation. I ask the Minister to look at that point.

Jonathan Djanogly (Conservative, Huntingdon)

Having heard the debate thus far, my opinion is that a lot more work needs to be done on the new clauses in terms of their form and purpose. That view comes from having heard contributions from all parts of the House. I hope that the Minister will take that point away when the Bill heads to the Lords and think about it further.

I wish to speak in support of new clause 2. There is more sense in the four lines of that new clause than in the four pages taken up by the Government's equivalents new clauses 6 and 7.

Bill Tynan (Labour, Hamilton South)

If the hon. Gentleman believes that there is more sense in the four lines of new clause 2 than in the other provisions, will he explain the meaning of

"undue force or intimidating measures" ?

Jonathan Djanogly (Conservative, Huntingdon)

The Minister himself gave the straightforward example of intimidatory visits to people's homes. That is a good example, and I accept it.

The point about new clause 2 is that it does not deal with all aspects of work. It is very specific about the recognition procedure, and it applies only during the period when it is under way. Rather than dealing with a range of areas and issues, it is again specific about undue force and intimidation. As my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) said, it is fair and concentrates on not only the company, but the workers, and is therefore balanced across the workplace.

Importantly, the remedy introduced by new clause 2 is simple and does not relate to criminal or civil damages. I can see the complications for the Minister, but I still say that it is unacceptable not to introduce remedies. If new clause 2 bites, it is a declaration that the recognition procedure has ended, which is a simple, straightforward way to deal with the issue.

In Committee and during today's debate, certain hon. Members have implied that unions never use violent or intimidatory behaviour, but the behaviour of certain unions over past years has shown that, if anything, militancy is again starting to increase dramatically. There were, for example, suggestions that retained firefighters were intimidated during the miners' strike. [Interruption.] I mean the fire strike. Wildcat, unofficial strikes have occurred at, for example, British Airways and the Post Office. The climate of industrial relations has changed over the past year, but few people would say that it has changed for the better. A new generation of union leaders has come to the fore, and they are, perhaps, less conducive to the Government's way of thinking than their predecessors.

John McDonnell (Labour, Hayes and Harlington)

British Airways headquarters is in my constituency, as is Heathrow. The unofficial action at Heathrow was voluntary action in which employees left their workplaces without any union policy or directive. Can the hon. Gentleman provide me with any evidence of intimidation, because none has been reported?

Jonathan Djanogly (Conservative, Huntingdon)

The hon. Gentleman did not hear where I was coming from. The climate has changed dramatically, and I gave the Heathrow case as an example. It is bizarre that, despite 65 pieces of employment and union legislation, the unions are not grateful, but the more they get, the more they seem to retreat into militancy, which must create a conundrum for the Government.

Jim Sheridan (Labour, West Renfrewshire)

On the Minister's example of union intimidation, I should be interested to hear what steps, if any, the trade unions took to sort out that business. Will the hon. Gentleman accept that the question of intimidation is enshrined in most, if not all, trade union rulebooks? There is ample evidence of members or potential members of trade unions being disciplined for taking any intimidatory action whatsoever.

Jonathan Djanogly (Conservative, Huntingdon)

I have given a couple of examples, and I have some more, but they can wait the GMB comes to mind.

I want to address the Government new clauses, and in particular new clauses 6 and 7, which are extremely complicated. My particular concern is that new clauses 6 and 7 cover not only intimidation, but the effect of intimidation. If there has been intimidation but it does not affect the ballot, it will be ignored by the new clauses, which is conceptually wrong. Indeed, there should be disincentives to intimidation, and I cannot see how disincentives can be introduced unless intimidation has negative consequences.

The second main point, which has been addressed previously, is that the Bill does not contain any remedies for intimidation, and I do not see how we can examine the effect of one without the other. Will the Minister at least clarify what the Government are thinking? Is the object to invalidate the ballot, not to allow the person or union that is doing the intimidation the chance to have a re-ballot or to punish the person who is doing the intimidation? Will the Government go down civil or criminal lines of remedy?

It is particularly unfortunate that new clauses 5 and 8 were tabled towards the end of last week, because they contain totally new concepts. The Government have at least said that they accept in principle the idea of an intimidation clause, but new clauses 5 and 8 have come out of the blue. The Minister should tell us why those new clauses have been introduced, because I can see no reason for them.

Gerry Sutcliffe (Labour, Bradford South)

The debate has been interesting, and it clearly sets out the differences between the parties' attitudes towards employment relations and industrial relations. Intimidation, whether it is from unions or employers, will not be tolerated and we do not want to see it. As on Second Reading, my hon. Friends have exposed cases of intimidation, but Opposition Members have failed to come up with details of unions behaving badly.

The example that I gave of a union visiting workers' homes was raised with the Government by the CBI, which provided anecdotal evidence. It said that it could back up that claim, and we wait to see whether it can. The unions have given evidence to me and to the publication in the Library, which is available if hon. Members want to pick it up.

Bill Tynan (Labour, Hamilton South)

Will my hon. Friend indicate the volume of evidence from the trade union against the volume of evidence from the CBI? I would be particularly interested to know what action was taken on intimidation in someone's home, which, as far as I am concerned, is a criminal offence, and I would have thought that criminal charges would have been brought.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to my hon. Friend, whose background makes him well versed in such matters. I do not want to be drawn down the line of who did what, because intimidation from either side is unacceptable.

On giving notice of the new clauses, my hon. Friend the Member for Hamilton, South (Mr. Tynan) and other hon. Members were in Committee when I said that the Government would introduce new clauses on intimidation and that the matter would be complex. As the hon. Member for Gordon (Malcolm Bruce) says, we are trying to achieve a new attitude towards employment relations in the UK, and I think that he accepts that the Bill goes a long way to doing that. We are trying to move away from the existing adversarial culture to a culture in which people work together and understand the requirements of business. The trade unions play an increasingly large part in that process, which is evidenced by the number of FTSE 100 companies that are union organised, so the unions are generally a force for good.

On union recognition procedure, we would initially like to see more voluntary agreements. So far, there have been more than 1,000 voluntary agreements, and it is a step in the right direction when employers and employees come together and go down the voluntary route. The statutory procedure covers situations in which that cannot happen, and is included as a minimum standard. It is reasonable to expect and accept that the Government's role should be to facilitate the smooth running of the statutory procedure, which is why I have said throughout that we must examine intimidation.

In response to my opening remarks, the hon. Member for North-West Norfolk (Mr. Bellingham) said that the Government new clauses are pretty reasonable, but then he told us why they are unreasonable, and he did not make the case.

Stephen O'Brien (Conservative, Eddisbury)

Scrutiny.

Gerry Sutcliffe (Labour, Bradford South)

It seems to me that the spirit of scrutiny in Committee is different from the spirit of scrutiny on the Floor of the House perhaps that is because of this environment.

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend the Member for Eddisbury (Mr. O'Brien) was not on the Committee.

Gerry Sutcliffe (Labour, Bradford South)

The hon. Gentleman says that his hon. Friend was not there. I would expect the Front Bench spokesperson to read about how the Committee developed and learn from interventions on both sides of the House about where we are going with employment relations and the new attitude that we are trying to achieve. As I said in response to the hon. Member for Gordon, the key purpose is to stop intimidation, whether on the union side or the employer side.

The hon. Member for North-West Norfolk asked whether an employer can be penalised if he takes action against a worker for attending a meeting organised by the union at a time when he should be working. When the union and the employer make an access agreement, they will set out how many meetings should take place, when and where they should take place, how long they will last and which workers are entitled to attend which meetings. The new clause makes it clear that an employer can be penalised only if he takes action against a worker for attending a meeting that that worker was entitled to attend. The CAC would have a role in stopping frivolous cases and would consider the circumstances and the reasonableness of the situation, but initially the union and the employer would set out what meetings should take place.

I was asked why an employer should not be allowed to attend a meeting with his staff held on his premises during working hours, because surely he has such a right. In many cases, unions are happy for employers to attend access meetings. Indeed, the code of practice on access makes it clear that, where possible, joint meetings can be beneficial. However, we must accept that in some cases workers will not want their employer to know that they support a union's campaign. They might not even want their employer to know that they are going along to a meeting to find out about recognition. They may fear that their employer will brand them as disloyal if they do so, and may be afraid to ask the questions that they really want answered if the employer is there. Unfortunately, the evidence is that on occasion anti-union employers victimise union members and supporters. That is why it is important that meetings between the union and the workers in the bargaining unit should be private.

David Hamilton (Labour, Midlothian)

Within that, there is a recognition that not employers, but management, attend union meetings along with workers because they are part of the structure. It is up to the local branch of the union to determine what is right. There are many thousands of cases where senior management attend meetings with the workers because they are part of that union.

Gerry Sutcliffe (Labour, Bradford South)

I agree entirely with my hon. Friend. In fact, I would advocate that, because that is where the case can be put freely as to the union's campaigning activities and the employer's view of those activities. It is likely that that relationship exists in most go-ahead companies that look to the future. Another crucial part of the Bill is the information and consultation directive, which opens up the opportunities for dialogue to take place and moves away from the adversarial situation.

The hon. Member for Gordon suggested that surely it is okay for the employer to ask how a meeting went. Clearly it is, if his question is reasonable. If he says, "Did the meeting go well?", that is acceptable and there is no problem, but he may go further to ask for the names of the workers who were there and details of how the meeting went. The CAC would question the motivation behind that.

I was asked to explain the definition of "undue influence." Undue influence is a concept borrowed from the Representation of the People Act 1983. It includes: the use of, or threat to use, force, violence or restraint; the infliction of, or threat to inflict, injury, damage, harm or loss; and the impediment of the free exercise of the vote by fraudulent device or contrivance. The term is designed to pick up a range of behaviours from violence and threats of violence to libellous statements. Whether a particular action constitutes undue influence will depend a great deal on the circumstances and manner in which it was taken and whether it was demonstrably intended to influence the ballot. The Government intend to bring forward a code of practice following consultation with interested parties to provide clear guidance to all the parties involved.

We have been very conscious of the need to ensure that the jurisdictions of the CAC and the employment tribunal should remain separate. That is why we took care to ensure that the question that each court will have to consider is different. If a worker suffers detriment or dismissal for supporting or opposing recognition, he or she may seek individual redress at the employment tribunal. The union may seek collective redress from the CAC if that dismissal or detriment changed or was likely to change voting behaviours.

We intend to consult in detail on sanctions. Consultation is the whole basis of this and previous Bills. We have a good reputation with employers and trade unions in terms of taking that approach. I accept that there is a fear that we have not gone through the full process, but we have tried to do so on all these matters. We propose adopting a structure that is very similar to that already in place for breaches of a union's access duties. Where the CAC finds that a complaint is well-founded, it will be able to issue an order against the guilty party that they should desist from the unfair practice in question and take steps to remedy the harm done. For example, they may be ordered to repudiate an earlier statement or to restore to a worker any loss incurred through a detriment. Once the CAC has issued a remedial order, if that party subsequently breaches the remedial order or commits another unfair practice, the CAC can issue a second sanction. If the employer is at fault, that second sanction, as for access, will be that the union is automatically recognised. If the union is at fault, the sanction will be that the union's application fails that is the same sort of sanction that applies for other detriments. I believe that we are acting in a proper and responsible manner in relation to those few times when intimidation takes place.

My hon. Friend the Member for Aberdeen, Central (Mr. Doran) asked us to go further of course, we keep such matters under review but generally welcomed our proposals. My hon. Friend the Member for Hamilton, South asked for the evidence on either side, and I hope that I explained what is being achieved.

The performance of the hon. Member for Huntingdon (Mr. Djanogly) is ever consistent in that in most cases, unfortunately, he sees only one side of the argument. New clause 2 is not balanced it applies only to the employer side, and even it is weak in terms of the definition of available sanctions.

Hon. Members will be aware that the Joint Committee scrutinises statutory instruments. I will try to give as much notice as possible in that respect, as I have throughout the passage of the Bill. I hope that hon. Members accept my assurances that when they are available they will have the opportunity to look at them.

This has been a good debate. Intimidation is wrong in whatever form it appears. The new clauses represent a balanced set of measures that meet the requirement of telling employers or unions who want to use underhand tactics that that is inappropriate. I commend the new clauses to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 6 — Unfair Practices in Relation to Recognition Ballots

New Clause 7 — Unfair Practices in Relation to Derecognition Ballots

New Clause 8 — Unfair Practices: Power to Make Provision About Periods Before Notice of Ballot

New Clause 1 — Dignity at Work

Valerie Davey (Labour, Bristol West)

I beg to move, That the clause be read a Second time.

The need for the Government to be more proactive in promoting and ensuring dignity at work for all employees at every level has been reiterated from the Back Benches of this Chamber and the House of Lords since at least 1996. I am pleased to have the opportunity briefly to consider new clause 1 and raise again the serious anxiety about the widespread nature of bullying in the workplace.

All Members of Parliament must know through their surgeries of cases of constituents experiencing bullying at work and being unable to voice that experience and seek a resolution. When we first heard about those often desperate cases, most of us were unaware of the scale of the problem. In November 2001, the Manchester school of management and the university of Manchester institute of science and technology published the report entitled, "Destructive Conflict and Bullying at Work". Five thousand people in 70 workplaces responded to the survey, which showed that one in 10 people 10 per cent. had experienced bullying in the previous six months and that one in four 25 per cent. had experienced bullying in the previous five years.

Subsequent evidence from trade unions confirmed that, despite years of campaigning against bullying, it remains a persistent and extensive problem. I want to identify and thank especially Amicus-MSF and Chris Ball, the national secretary, for persistently bringing the matter back to public attention, for producing good material for the use of members and officers and for drafting policies for employers and organisations. That experience led to the union concluding:

"The size of the problem cannot be overstated."

Amicus, and the Andrea Adams Trust, which is the only charity that responds to the counselling needs of those who have been bullied, encouraged the all-party dignity at work group to seek statutory action. I want to put on record my appreciation of the work of both organisations.

Further, more recent evidence has come in response to the new clause from the Royal College of Nursing, which offers its support and reports that its "Working well" survey showed that, in 2002, one in six nurses had been bullied in the workplace. It wants

"additional protection for employees and redress for those who suffer bullying in the workplace."

Until last week, the Government's response on each occasion had been concerned words but limited action.

In response, dare I say it, to the new clause, which I tabled only a fortnight ago, the reaction was almost instantaneous and remarkably proactive. I offer my sincere congratulations to my right hon. Friend the Secretary of State on her announcement last week that, together with Amicus, the Government will launch the world's largest project to stamp out bullying and discrimination at work.

Alongside the need to support individuals, the Government have recognised that some 5 million people are affected, that 13.5 million working days are lost through stress and that the cost to the economy is £4 billion every year. The project has been launched to provide supportive advice and training to organisations that are trying to tackle bullying, train employees as counsellors, devise and promote a voluntary charter on dignity at work, promote examples of excellent employers in the United Kingdom and produce a benchmark that enables organisations to measure their success in achieving dignity at work and a "ban bullying" pack. The Government are working initially with Amicus and 10 leading employers, including British Aerospace, Royal Mail, Legal and General and British Telecommunications.

Although I understand that another 180 employers will join the project in the autumn, it is voluntary. However, it is far-reaching and extensive. The partnership with Amicus means that great experience will be brought to it, and that will be invaluable.

I remind the Government that other European countries have followed the legislative route and I hope that the project will be compared with the work in other countries. However, in the light of what the Government have produced and are doing, I would seek to withdraw the new clause on the understanding and with an assurance from the Minister that the project will be monitored and that, should good practice not prove as infectious as we all hope, the Government will reconsider the possibility of legislation and revisit the new clause or a similar provision later.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. The hon. Lady cannot move and withdraw the clause in the same speech. I have to take it that she is moving the clause in the speech. We can then put the Question, on which the Minister and perhaps other hon. Members may wish to comment. Has the hon. Lady concluded her speech?

Valerie Davey (Labour, Bristol West)

May I simply say that I am minded to withdraw the new clause and thank you for your advice, Mr. Deputy Speaker?

Eleanor Laing (Conservative, Epping Forest)

It may not have been in order for the hon. Member for Bristol, West (Valerie Davey) to mention at this stage her intention to withdraw the new clause, but since she has expressed it, I welcome it. Although I entirely agree with her sentiments and intentions, I disagree with the idea that passing further legislation will achieve them. The new clause is too prescriptive. Clearly, I do not have to make that argument because she acknowledges its validity.

New clause 1 would place an enormous burden on employers and employees to understand what constitutes a dignity at work policy and the way in which it would be enforced. That applies especially to a small workplace in a small or medium-sized firm that does not employ many human resources people. It cannot be good for industry to employ more people to deal with further regulations than it does to manufacture goods and services. Business and industry should be about the latter, not keeping to the letter of complicated laws.

I commend the hon. Lady for presenting the matter for discussion in the House and drawing it to the Minister's attention. The thrust of her comments is right. She has outlined the problem well but, unfortunately, new clause 1 is not the solution would that it were. If the solution to the enormous problem that she described was passing such a law, we would all be pleased. Employers and employees alike would be pleased if we could eradicate the dreadful problem of bullying by merely writing something in statute.

Most employers want to be good employers and most employees want to be good employees because it is far preferable if everybody gets on well. Employers want to encourage their employees by being good employers because that is how to get the best out of their work force. It is as simple as that.

The hon. Lady was right to talk about dignity. How terribly undignified, therefore, that many people heard last week on radio and television that they would be made redundant. On Second Reading, the Secretary of State said:

"I am not prepared to have our workers hear on the radio that they will lose their jobs or find that they have already lost their jobs through a text message." [Official Report, 14 January 2004; Vol. 416, c. 821.]

So it is not all right for workers to suffer the indignity of hearing about the loss of their job by text message or on the radio or television, but it is all right if they hear it in the Budget. That is hardly a dignified way for the Government to treat large parts of their work force. If the Government backed their words with actions, many of the problems that we have been discussing throughout the passage of the Bill could be eradicated immediately.

It would be bad jurisprudence to pass new clause 1 into law, as it would be difficult to enforce. It is bad in principle to make laws that cannot be enforced and would be unclear. However, I join the hon. Lady in asking the Government to take seriously the problem that she outlined, which we would all like solved.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to my hon. Friend the Member for Bristol, West (Valerie Davey) for tabling the new clause and for commending the Government's decisions over the last couple of weeks to work with the trade union Amicus on bullying. I agreed with a great deal of what the hon. Member for Epping Forest (Mrs. Laing) had to say, but if she is so keen on information and consultation, she will have explain to employees why her party will vote against the principles and proposals surrounding those issues later this evening. I am happy to give my hon. Friend the assurance that she seeks, and I ask her to withdraw her new clause.

Valerie Davey (Labour, Bristol West)

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 2 — Intimidation

New Clause 3 — Appeals

Henry Bellingham (Conservative, North West Norfolk)

I beg to move, That the clause be read a Second time.

The only route of appeal from the Central Arbitration Committee is judicial review. My argument is simple and I shall not go into great detail: surely there is a need to build a simple mechanism into statute to allow appeal to the High Court. After all, an appeal to the High Court can be made from the Employment Appeal Tribunal.

One of my concerns is that the CAC is being asked to do more and more. With the inclusion in UK law of the EU information and consultation directive, there will be many more referrals to the CAC. I take the view, as do my hon. Friends, that more protection should be given to employers and, indeed, employees and trade unions alike in taking appeals to the High Court. I appreciate that things are improving, but I looked at some CAC cases from the past few years and I have to say that often the CAC does not spell out its decisions clearly or comprehensively.

On a number of occasions, all that the CAC has said is:

"In our industrial relations experience, this is our decision".

If we are not to have a right of appeal to the High Court, the Minister should certainly ask the CAC to be much clearer and to spell out in much more detail the background to and reasoning behind its decisions. I ask him to consider the new clause carefully.

Jonathan Djanogly (Conservative, Huntingdon)

I support the new clause, which would give unions as well as all companies and all workers for that matter the right to take an appeal against a CAC decision to the High Court. The workings of statutory recognition are complex and the procedures, as we have deduced over the past two months, can be complicated.

In deciding between the parties, the CAC sometimes has to make value judgments. I accept that the CAC is a worthy body and that it normally gets it right, but in those less frequent examples where one side is not happy with the decision presumably in an industrial conflict there should be a right of appeal.

In Committee, the Minister said that the CAC annual report notes that it has a satisfaction rating of 80 per cent. That is borne out in the report, which also notes that the response rate to the survey was only 40 per cent. In considering the judicial powers of the CAC, the people consulted might not want to go too public on their attitudes towards it, because it could judge them. Does the Minister know whether the CAC or an independent third party collected that data? That would be relevant to our consideration of whether an appeal would be fair. From what my hon. Friend has said, and from the statistics as given, such an appeal would be right.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful for the hon. Gentlemen's contributions to the debate.

As the hon. Member for North-West Norfolk (Mr. Bellingham) explained, the new clause concerns whether there should be a mechanism for appeals against decisions of the Central Arbitration Committee in addition to the possibility of seeking a judicial review on any such decision. While in many areas of law it is useful to have a right of appeal to a higher authority when one party feels aggrieved about a court's decision, the Government think that it would be inappropriate in this case, in which there are statutory recognition procedures. The CAC must make a large number of judgments in the course of its consideration of an application. An additional right of appeal against individual decisions of the CAC would introduce serious delays into the process, particularly if it had to be halted until the appeal was heard. It would encourage legalism and the type of legal wrangling that undermined recognition procedures in the 1970s. Such delays are not neutral and in most cases favour the employer.

Most importantly, the CAC is a specialist body operating in a specialist area, as hon. Members have accepted. Its decisions often turn on the application of its members' industrial relations expertise and experience. No appeal court—including the High Court—could match that. That view was judicially endorsed in both the High Court and Court of Appeal in the Kwik-Fit judicial review. In the High Court, Mr. Justice Elias stated that

"courts do not have the relevant expertise, nor is it desirable that these procedures should become a happy hunting ground for lawyers."

In the Court of Appeal, Lord Justice Buxton agreed with this statement and added that

"the CAC was intended by Parliament to be a decision making body in a specialist area that is not suitable for the intervention of the courts."

Of course, the CAC's decisions can be challenged through judicial review. There have been only six applications for judicial review, four of which proceeded to a full review. In only two of those cases was the CAC found to have acted improperly in any way. The outcome of those few cases demonstrates that the CAC has used sound judgment in interpreting the extent and nature of its powers.

In addition, the amendment is defective in that it refers to the "company'" not the "employer". It thereby ensures that employers that are not companies have no right of appeal. The hon. Member for Huntingdon (Mr. Djanogly) asked about the response rate to the survey on the CAC. Unless I receive some in-flight information, I cannot give him that answer now, but I will write to him in due course [Interruption.] I think that the CAC has its own information, but I will clarify that, as he also asked that question in Committee.

The new clause would damage the smooth functioning of the recognition procedure for little discernible benefit, and is also defective. I hope that I have answered the hon. Gentleman's concerns and that he will withdraw his amendment.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful for the Minister for those remarks. In his customary charming way, he has explained why he does not like the amendment and feels that it is technically undesirable. I forgot to declare my interest as a barrister he mentioned a happy hunting ground for lawyers, and I take on board his point. I reject his criticism of the High Court, which is made up of a large number of judges with huge expertise. In the light of what the Minister said, however, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 9 — Right to Strike

John McDonnell (Labour, Hayes and Harlington)

I beg to move, That the clause be read a Second time.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this it will be convenient to discuss the following:

New clause 11 Dismissal in connection with participation in official industrial action

(1) Section 238A of the 1992 Act (dismissal in connection with participation in official industrial action) is amended as follows.

(2) In subsection (1) for "employee" substitute "worker".

(3) For subsections (2) to (8) substitute

"(2) For the purposes of subsection (1) above a worker takes protected industrial action if he reasonably believes he is so doing.

(3) The obligations on the worker to work and on the employer to give consideration therefore under the contract under which a worker works shall be suspended by operation of law for that period during which the worker takes protected industrial action and shall in no circumstances be or be regarded as broken by reason of his taking protected industrial action.

(4) The Secretary of State shall make regulations which shall apply to deal with the consequences of suspension of contracts in accordance with subsection (3) so as to protect the various interests of workers and employers and in particular to ensure the preservation of the contract and the restoration of the obligations thereunder when the protected industrial action concludes.

(5) Loss of pay during industrial action (whether protected or not) shall never be greater than the sum which the worker would have earned had he not taken the industrial action.".'.

New clause 12 Right to strike (No.2)

(1) The 1992 Act is amended as follows.

(2) Before section 219 (but after the cross-heading immediately preceding that section) insert

"218A Right to strike

(1) A trade union has the right, and it shall be lawful, to call for or to support or encourage workers to take industrial action as a means of resolving or seeking to resolve any dispute or as a means of achieving or seeking to achieve any object which relates to any workers' interests at work including (without prejudice to the generality of the foregoing) economic and social matters which affect any workers or the trade union or on which the trade union has a policy.

(2) Every worker has the right, and it shall be lawful, to take industrial action as a means of resolving or seeking to resolve any dispute or as a means of achieving or seeking to achieve any object which relates to any workers' interests at work including (without prejudice to the generality of the foregoing) economic and social matters which affect any workers or the trade union or on which the trade union has a policy.

(3) In this Act industrial action' shall include the act of peacefully assembling and of picketing or refusing to cross a picket.".

(3) Omit sections 219, 220, 222 to 235A and 240 to 246.'.

New clause 13 Ballots on industrial action

(1) The 1992 Act is amended as follows.

(2) Before section 226 (but after the cross-heading immediately preceding that section) insert

"225A Ballots on industrial action

(1) The rules referred to in section 3(2)(a) shall contain provisions requiring a ballot to be held (save in exceptional or emergency situations) of members which the trade union reasonably identifies as those likely to be invited by it to take industrial action and those rules shall be approved by the Certification Officer as reasonable, and such approval shall not be unreasonably withheld.

(2) No person or body other than a member of the union concerned may bring legal action which relies to any degree on an allegation that the balloting obligations of the union have not been met.".

(3) Omit sections 226 to 234A.'.

New clause 17 Industrial action: deduction from wages

When a worker has taken part in official industrial action, the employer may not make a deduction from the worker's wages in respect of that action which exceeds the amount which the worker would have earned if he had not taken part in that action.'.

Amendment No. 10, in page 18, line 38, leave out Clauses 21 to 23.

Amendment No. 11, in page 48, line 47 [Schedule 2], leave out from beginning to end of line 3 on page 49 and insert

Sections 219 and 220.Sections 222 to 235A.Sections 240 to 246.'.

Amendment No. 12, in page 48, line 47 [Schedule 2], leave out from beginning to end of line 3 on page 49 and insert

Sections 226 to 234A.'.

John McDonnell (Labour, Hayes and Harlington)

I realise that we have less than an hour left in this debate, so I shall try to be as brief as possible, as I know that Members want to reach amendment No. 1, which is the last on the selection list.

This group represents an attempt to place in British law the right to strike. New clause 11 looks at the right to strike, new clause 12 is on secondary action and picketing, new clause 13 is on balloting, new clause 17 reiterates new clause 11 on deduction from wages, and new clause 9 relates to issues about injunctions.

The basis of the discussion leads on from the Second Reading debate, to which many Members contributed. As Members are aware, the right to strike does not exist in British law. The only protections that strikers have are as a result of breaches of individual contracts of employment by industrial action, which is based on a legal immunity built up over time. That is in complete contradiction to the international agreements signed by successive Governments the International Labour Organisation conventions, the Council of Europe social charter, and the international covenant on economic, social and cultural rights.

This is an attempt to address in some way the extension of the immunities allowed to people who take industrial action. It does not strike at the heart of the Government's failure to abide by international conventions, which would require the right to strike to be legislated for in this country. In most European countries, lawful strike does not break the contract of employment but merely suspends it, so it is unlawful to sack a worker on lawful strike, and the courts will prevent it. Were that the law here, there would be no need for the complex unfair dismissal rules to protect strikers that we have debated at length over the last 15 to 20 years. New clause 11 attempts to arrive at a clarification of the right to strike.

In the last debate in 1999, there was an attempt to extend immunities with the eight-week rule. The Friction Dynamics dispute demonstrated that that protection was inadequate. This Bill yet again applies further conditions to ameliorate the eight-week rule and enhance the protections, but in my view will also prove inadequate. In the Friction Dynamics case, it was demonstrated that many of the protections outlined in this Bill were already taken into account by the appeal tribunal. What we really need is an amendment to delete section 238A and provide that, when a worker is engaged in industrial action called by a trade union lawfully, of course pursuant to section 219, such industrial action shall not in any circumstances be held to constitute a breach of the contract of employment, but instead shall suspend the obligations under the contract of both the employee and the employer during the currency of the industrial action.

Since the industrial action breaches the contract of employment, the worker is not entitled to be paid for time while taking industrial action. That would obviously equally apply if the contract were suspended during the action. Nowadays, however, employers often deduct wages on an unfair daily basis when the sum deducted is more than the worker would have earned had she or he performed all her or his duties that day. The new clause provides for a worker taking industrial action not to be penalised by losing more than the sum that would have been earned had he or she not taken such action. That, indeed, is the purport of new clauses 11 and 17.

At present, the immunity allowed to a worker taking strike action protects that worker from specific torts in common law. One protection that it does not give is the ability to take action very specifically unrelated to the worker's direct employment. Industrial action is protected against that limited range of torts only if it is in contemplation of furtherance of a dispute that is wholly or mainly related to the terms and conditions of employment, or to other matters specified in the legislation such as job losses, disciplinary issues and trade union recognition or derecognition. If, according to a court, the union's predominant motive falls outside such statutory trade dispute issues, the immunity will be lost.

New clause 12 would extend the immunities. Sections 219 and 244 of the 1992 Act would be deleted, and it would be provided that

"A trade union has the right, and it shall be lawful, to call for or to encourage workers to take industrial action as a means of resolving any dispute . . . to any workers' interests at work including . . . economic and social matters which affect the worker or the trade union or on which the trade union has a policy."

In other words, when a trade union was pursuing a particular policy not specifically related to the company involved but more widely related to the economic and social conditions in an area, such action would be lawful.

Under current UK law, a trade dispute must be between employees and their own employer. If the relevant dispute is between another employer and his employees, it is unlawful for a union to call for sympathetic or so-called secondary action. My proposals support the ILO and the Council of Europe, which have condemned that blanket ban. The new clause would enable secondary action to take place, and workers taking such action would be protected from unfair dismissal.

The Government have written into British law a guaranteed ability to assemble peacefully, under the Human Rights Act 1998. New clause 12 would enable pickets to assemble peacefully to attempt to persuade people not to cross a picket line. The Bill does not deal with that problem. Section 222 of the 1992 Act should be amended to give workers the right to assemble peacefully under the Human Rights Act, and to picket any place of work.

New clause 13 deals with ballots. Even when industrial action falls within the narrow statutory definition of a trade dispute, a trade union will lose immunity if it fails to comply with the highly complex procedures requiring a fully postal strike ballot and so forth, which we have discussed in the context of a series of employment and trade union-related measures over the last six years. Pre-ballot and pre-strike notices in due form must be sent to the employer in a dispute, in accordance with the strict timetable set out. The employer will therefore be able to injunct the union if the procedures are not adhered to.

The Bill goes some way towards overcoming a number of problems of detail relating to balloting procedures, but it should be for workers and their unions to decide how best to ascertain collective views. Workplace ballots might be more suitable in some circumstances, but in emergencies a ballot might have to come after action had taken place. That is demonstrated by industrial action in my constituency at British Airways and elsewhere. My new clauses would place the onus on the certification officer to clarify and verify the procedures set out in the union's rules to ensure that they allowed for democratic participation by members in decisions on industrial action, but would not allow employers themselves to intervene to injunct individual unions or prevent action. It would be up to individual trade unionists to injunct or take up the issue with their unions.

A range of restrictions already exist to impede fair deliberation about industrial action. A further problem in current industrial action law is the use of interlocutory injunctions. That emergency procedure does not require the claimant to prove the alleged facts either beyond all reasonable doubt or on the balance of probabilities. It is sufficient for the employer to assert facts that, as long as they appear credible, will be accepted by the court, notwithstanding that the union has evidence to the contrary. The employer need not even demonstrate that its case is stronger than the union's; it is enough to show a serious issue to be tried. If credible facts are asserted and an arguable case under law is demonstrated, the court will more or less automatically grant an injunction if the balance of convenience favours it. In practice, the court will almost invariably grant the injunction to stop the industrial action, unless the union shows that the employer's legal argument is unsustainable, because the balance of convenience invariably tilts in the employer's favour.

The Council of Europe's economic and social rights committee has condemned that lack of balance between employer and trade union, as has the International Labour Organisation's committee of experts. The Bill does not deal with that matter, but new clause 9 would ensure that

"No injunction or interdict shall be granted to restrain exercise of the right to strike by a trade union or any workers"

unless there is a full trial.

Much has been said about the need for balance between employer and worker. These new clauses and amendments would endorse the legal right to strike, which the Government have accepted in one international treaty after another, and balance the legal strengths of employer and worker in the discussions and deliberations leading up to industrial action.

Jonathan Djanogly (Conservative, Huntingdon)

Injunctions have probably saved an enormous amount of time and cost for all parties concerned. New clause 9 would allow a strike to go ahead and its rights and wrongs to be considered later. That would be a recipe for mayhem, albeit legal mayhem, and would involve enormous costs probably the bankrupting of unions with very little being achieved.

I take it that, however long a strike lasted, workers' rights would be fully protected, presumably even if the company went into insolvency as a result. New clauses 12 and 13 would give a right to strike on the broadest possible terms. I think that they technically maintain the difference between official and unofficial action, but the concepts are merged to such an extent that there is little difference between them. Given that the ballot could be undertaken by the union with no one except its own members able to complain to the courts about the ballot process, I do not see how it would be meaningful at all.

Having briefly addressed the new clauses, I can safely say that I am not in favour of any of them.

Hywel Williams (Plaid Cymru, Caernarfon)

I rise to speak briefly about the experience of my constituents involved in the Friction Dynamics strike, to which the hon. Member for Hayes and Harlington (John McDonnell) referred earlier. I shall not go into the details of the strike, but it pointed up the weaknesses of current legislation, especially the eight-week rule. At an earlier stage, I welcomed clause 21 as a partial answer, and the extension period in relation to lockouts is certainly welcome. However, I suspect that if clause 21 is passed, bad employers will continue in their intransigence up to and beyond a period of 16 weeks. If that had happened in the case in my constituency, I presume that my constituents would still be picketing today, three years after the start of their strike.

I tend to think that the abolition of the eight-week rule would encourage bad employers to come to the table, which is what good employers do anyway. No commercial undertaking wants to extend a strike unless it has a particular motivation for doing so, as we saw in the case of Friction Dynamics. As I said, where there is no lockout, the eight-week rule will still apply. Had Friction Dynamics' management played their cards rather more carefully, the strike would have continued and they would not have been found guilty by an industrial tribunal. So the situation would have been the same as before the various discussions that took place about the Friction Dynamics strike. Plaid Cymru's position remains the same: if a strike is lawful for eight weeks, we see no reason why the protection should not be applied during the ninth and further weeks, and we regard the Employment Relations Act 1999 as a compromise that needs to be looked at again.

Gerry Sutcliffe (Labour, Bradford South)

I thank my hon. Friend the Member for Hayes and Harlington (John McDonnell) for the brevity with which he spoke to the new clauses and amendments, notwithstanding the seriousness of the issues that he raised. I am grateful to him for recognising that time is against us.

This is a large group of new clauses and amendments that would radically change the law on industrial action, and the law on the consequences to the individual of taking industrial action. As my hon. Friends have said, the amendments would rewrite the law on industrial action. At a stroke, they would delete virtually all of part 5 of the Trade Union and Labour Relations (Consolidation) Act 1992, substituting it with a few new sections that provide rights to trade unions and their members, but which systematically ignore the interests of employers and society at large.

I do not intend to address the detail of the new clauses and amendments as we have little time. Instead, I shall address the more fundamental question that my hon. Friend is really asking me to address: whether a total reworking of these provisions is required. This body of law was mainly constructed during the 1980s, but its basic principles have been in place for a great deal longer. We know that unions resisted these changes when they were introduced. Some resented the interference in their internal affairs and the resulting democratisation of their decision-making procedures; many resented the more limited immunities against legal action that were introduced. However, unions have generally learned to live with the provisions. Their members have benefited from the greater control over their unions' decisions that the law has required. Employers have benefited from knowing that they cannot be dragged into industrial disputes that have nothing to do with them; and, more generally, society has benefited from less widespread and less damaging industrial action.

The new clauses and amendments seek to take us back to the days of the 1960s and 1970s, when strikes significantly damaged our economy and the way in which we lived. They would reintroduce an entitlement to take secondary action, and would encourage wildcat strikes and other forms of damaging unofficial action. We want to frame the law in a way that deals with the realities of today's labour market, so it would be a profound mistake to turn the clock back. For these reasons, the Labour party made it plain in its 1997 manifesto that it would retain the key elements of the changes introduced in the 1980s. We will honour that commitment.

Some might argue that the current law is imbalanced and puts unions in an impossibly weak position vis-á-vis the employer; I do not believe that that is the case. If that were so, employers would never deal with unions or choose to settle their disputes with them voluntarily. The evidence suggests that the strike weapon remains a potent one if union members really support it. Only in a minority of cases is a successful vote in favour of industrial action actually followed by a strike or another form of industrial action. Employers prefer to resolve their differences voluntarily, rather than incurring the cost and disruption of industrial action.

My hon. Friend pointed to the International Labour Organisation's conventions and similar international instruments. It is fashionable in some quarters to interpret our international obligations in this area in the widest possible way. The truth is that the various treaties are drafted in very general terms and are capable of a wide range of interpretations. Those interpretations vary with each member state's industrial relations practices and traditions. Although it is true that some ILO advisory bodies have criticised our law on industrial action, we have always tried to answer those criticisms with reasoned arguments. We are convinced that we comply with our international obligations. The ILO gives due regard to our opinions, and understands that it is perfectly possible for different parties to interpret in good faith the implications of its conventions in different ways. As a result, the ILO's governing body has never formally reprimanded us for failing to comply with key conventions 87 and 98. Our standing with the ILO is as high as ever.

New clauses 11 and 17 and amendment No. 10 deal with the consequences for individuals of taking industrial action. New clause 10 and amendment No. 10 would delete the provisions in the Bill that strengthen the protection for employees taking lawfully organised, official industrial action. In their place, new clause 11 introduces an entirely new protective regime.

The basic aim of the new clause is to ensure that the protection is indefinite. We have already debated that issue many times, during our consideration of the Bill and during the passage of the Employment Relations Act 1999. Indeed, the issue was looked at in detail during our review of that Act. Our position is that we need to put a time limit on the period during which it is automatically unfair to dismiss someone taking industrial action. In industrial action law, we need to balance the legitimate interests of the employer and those of union members. That might not immediately appeal to my hon. Friend, but the Government want to create a fair regime for all interested parties and not just for one. Eight weeks is, in our judgment, a fair period. It covers the overwhelming majority of stoppages, 98 per cent. of which are dealt with within that period.

The case of Friction Dynamics was mentioned by the hon. Member for Caernarfon (Hywel Williams), who supported us in Committee by recognising that we were tidying up the position on lock-out days and by accepting that we were asking both sides to take reasonable steps to resolve the dispute. We wanted to toughen up the position so that a Friction Dynamics situation could not happen again: both sides would have to prove that they tried reasonably to resolve the dispute. The action that took place has been condemned on both sides of the House.

The Bill will strengthen the protections introduced in the 1999 Act in a targeted way that will resolve problems that have arisen in practice. The provisions may not meet everyone's aspirations in the union movement, but I believe that they are generally seen as an advance.

New clause 17 places limits on the deductions from pay that employers may make when their employees take industrial action. That issue arose in the tertiary education sector, where the unions believe that employers made excessively large deductions. I think I am right in saying that the issue has not affected many other sectors, so it is not a matter that was highlighted in the representations that we received in preparing the Bill or during the review of the Employment Relations Act.

I am not yet convinced that the issues need to be specifically addressed in industrial action law. Of course, there are already entitlements for workers to complain to employment tribunals about unauthorised deductions from pay. I hope that those existing protections would help the workers concerned in those cases, although I recognise that the breach of contract that occurs when workers take industrial action might complicate the position.

The new clause contains a simple rule of thumb for deductions, but I am not sure that it provides the right answer. For example, there may be a legitimate case for employers to make some proportionate reduction to holiday pay or to make some adjustment to the calculation of an employee's length of service for pension purposes.

In conclusion, I am not yet convinced that there is a problem that needs to be dealt with or, if there is, that new clause 17 provides the right solution. However, I would be happy to meet my hon. Friend if he believes that it is a sufficiently serious issue.

For reasons that I have explained, I do not wish to speak to the amendments in any further detail. Unfortunately, I find myself in agreement with many of the comments made by the hon. Member for Huntingdon (Mr. Djanogly), which is an unusual occurrence in this place. I ask my hon. Friend to withdraw his new clause.

John McDonnell (Labour, Hayes and Harlington)

With such a resounding welcome for the new clauses, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 10 — Collective Bargaining

John McDonnell (Labour, Hayes and Harlington)

I beg to move, That the clause be read a Second time.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this we may take the following amendments: No. 8, in page 9, line 3, leave out Clause 8.

No. 9, in page 49, line 10 [Schedule 2], after paragraphs', insert 7'.

John McDonnell (Labour, Hayes and Harlington)

The new clause and associated amendments deal with a problem that has arisen in several disputes, which I would like briefly to outline. It first occurred in a dispute leading to the case of OILC v. Wood Group Engineering (North Sea) Ltd. in August 2003. Despite the fact that the overwhelming majority of the core workers on the Brent oil platforms were OILC members and wanted the union to negotiate with their employer, Wood Group Engineering (North Sea) Ltd. on their behalf, the application was refused on the ground that the employer set the workers' terms and conditions by reference to a collective agreement between the Offshore Contractors Association and the Amalgamated Engineering and Electrical Union and the GMB. That was held to debar the OILC from seeking recognition.

The same problem occurred in the case of NUJ v. Mirror Group Newspapers plc, where a claim for recognition by the National Union of Journalists at the Racing Post was rejected by the Central Arbitration Committee. As in the previous case, the NUJ was about to finalise a deal with the employer, who decided instead to make a recognition deal with the British Association of Journalists a tiny union that at the time had not a single member at the Racing Post. It claimed to have one, whose name it had forgotten, at the time of the CAC hearing some months later, despite the employer circulating letters from the BAJ begging journalists to join and offering free subscriptions. At the time of the hearing, the BAJ had not carried out any collective bargaining on behalf of the workers in that firm, who shunned the BAJ. In the view of many, that was a breach of article 11 of the European convention on human rights, which allows workers the right to be heard via their trade union. The new clause would ensure that a trade union that has a majority of a work force as members is not frustrated by an employer rushing into agreement with another organisation, which may have no membership or a minuscule membership in that firm, in advance of a CAC hearing and decision.

As the law stands, it grants representation to the first comer, not to the most representative organisation. The amendment would put the Government's legislation in line with international law, but at the same time would accept the democratic wishes of the majority of the individuals working for a particular company who could demand to be represented by the union of their choice.

Jonathan Djanogly (Conservative, Huntingdon)

On a technical point, I do not believe that there is a paragraph 7 or 35 to schedule A1 to the 1992 Act perhaps the hon. Gentleman was referring to the Employment Relations Act 1999; he may wish to clarify that point. At present, the recognition process applies only when a company has at least 21 workers and the new clause would open up union recognition in any company, however few workers it had. That would be an utter disaster for most small businesses, and for the competitive state of our economy.

In any event, the statistics do not show union recognition in small companies to be a relevant consideration. The Minister told us in Committee that only 12 applications for statutory recognition came from companies with 21 to 30 employees less than 5 per cent. of the whole. Barely 10 per cent. of applications came from companies with between 31 and 50 employees. Companies do not appear interested in union recognition with that number of employees, and neither do the employees. Unions might not be interested in becoming involved at that level, probably because of the cost implications with so few members. For companies with fewer than 50 employees, none of the parties appears interested in recognition and to that extent, instead of the figure of 21 being struck out of the legislation, it should be raised to 50.

Bill Tynan (Labour, Hamilton South)

In a way, I support the proposition that has been put before us. Everyone is nasty about trade unions, and, at present, if companies have fewer than 21 employees they are excluded from trade union recognition. However, if Opposition Members recognised the value that trade unions can bring to a company, they would better understand industrial relations in this country. We start from different points of view. It is thought that unions are bad if they are involved in a small, family company, because that is not the way business should be done.

In my former life as a trade union official, I often found that small companies recognised the worth of trade unions and negotiated with them, on not an official but an ad hoc basis. They had no objection to their employees being members of a trade union. If we exclude companies where there are fewer than 21 workers, we do a disservice to those who want union recognition. Union recognition is not bad it can be a good thing.

Jonathan Djanogly (Conservative, Huntingdon)

No one is saying that people should not be members of a trade union that is their right; we are talking about recognition.

Bill Tynan (Labour, Hamilton South)

That is where we differ from Opposition Members. If 20 people in a company want to join a trade union and we are agreed that they have that right, I can see nothing wrong in the employer recognising those 20 people as a bargaining unit. Perhaps we should consider extending bargaining rights where there are fewer than 21 people in a business, although I realise that is not on the agenda tonight.

There has been considerable discussion with the TUC and employers, but we need to send the message that in future we shall continue to look at the needs of workers in companies. There are some very bad small employers and a trade union is needed to defend their workers, who are treated very badly. I hope that Opposition Members do not condone bad employers who treat their workers badly.

David Drew (Labour/Co-operative, Stroud)

Rather than looking at the negatives, does my hon. Friend agree that we should look at the positives? For example, the Government's policies on stakeholder pensions could offer trade unions in small companies a valuable way to organise the work force to help employers understand why pensionability is vital for their workers.

Bill Tynan (Labour, Hamilton South)

I do not disagree with my hon. Friend.

In Committee, we discussed a range of issues relating to trade union membership and how we would deal with them. We accepted that the Bill is a good one. Yes, there is room for amendment, and we should be signalling to the Minister that we may have to revisit some aspects in the future. I support the new clause, but I hope that it is withdrawn, because I understand the points that have been made. The Minister should take careful note of what has been proposed, however; perhaps we can move in that direction in the future.

Malcolm Bruce (Liberal Democrat, Gordon)

When the hon. Member for Hayes and Harlington (John McDonnell) introduced the new clause, he gave two examples. The second seemed to be a blatant illustration of the abuse that the provision would address, but I was rather puzzled by his first example, which sounded more like an inter-union dispute; indeed, the North sea problems rose from it. Operational working is such that contractors move on and off platforms. I am not arguing for or against the Wood offshore case, but the company presumably argued that it already had an established agreement with a trade union and was on the platform for the duration of a particular contract, but that the OILC was trying to get in on the act. That may not have been so, but that is how it sounded.

John McDonnell (Labour, Hayes and Harlington)

No one was aware that the union agreement actually existed.

Malcolm Bruce (Liberal Democrat, Gordon)

Presumably, the management were aware of it. The point is that there are particular problems for the organisation of North sea workers.

The hon. Gentleman's second example was central, however. It is important that the Minister acknowledge the fact that there was a wholly self-interested attempt to destroy the legitimate aspiration of the work force to have the union they wanted. We must address the fact that managements could undermine not only the spirit of unionism but the fundamental principle that people have the right to belong to the union of their choice.

Gerry Sutcliffe (Labour, Bradford South)

In view of the time, I shall race through my response, although that is not to underplay the seriousness of the issues that my hon. Friend the Member for Hayes and Harlington (John McDonnell) has raised.

Let me say to the hon. Member for Huntingdon (Mr. Djanogly) and my hon. Friend the Member for Hamilton, South (Mr. Tynan) that the Government do not oppose recognition in companies with fewer than 21 workers. The argument is whether there should be statutory procedures in respect of such companies, and the evidence given to the hon. Gentleman exposes the position in that respect. However, I am sure that we shall return to the matter, in connection with rights to have a companion during dispute resolution procedures and so on.

The hon. Member for Gordon (Malcolm Bruce) spoke about offshore oil rigs and he is right to say that we should not be drawn into inter-union disputes. The case is or used to be governed by the TUC's Bridlington principles and is a matter for the TUC.

As for the case involving the NUJ and Mirror Group Newspapers, my hon. Friend the Member for Hayes and Harlington will know that judicial review is likely, so I cannot say anything at this stage. However, I acknowledge the issues that have been raised.

On collective agreements, we in the UK have a culture of voluntary procedures that does not exist elsewhere. There are matters to examine for example, sweetheart deals with employers but I hope that, having put the issues on the record, my hon. Friend will withdraw his new clause.

John McDonnell (Labour, Hayes and Harlington)

I am happy to beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 14 — Effect of Continuation of Contract Order on Transfer of Undertakings

John McDonnell (Labour, Hayes and Harlington)

I beg to move, That the clause be read a Second time.

I seem to be trying to write the next piece of Government legislation on employment relations. Let me zip through this new clause as well.

Several hon. Members have continuing problems with the operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981. Section 129 of the Employment Rights Act 1996 provides for a special form of relief in the case of dismissal for trade union-related activities, and a person who claims unfair dismissal on those grounds may also make an application to the tribunal for interim relief. On an interim relief application, if the tribunal considers that the individual has better than even chances of success at the full hearing, the tribunal can make a continuation of contract order under section 129. That means that the contract is deemed to continue and the employer must continue to pay wages and other benefits due under the contract from the date of termination of the contract until the complaint of unfair dismissal is determined or settled.

That is an important remedy for those who are dismissed on trade union-related grounds, especially as claims for unfair dismissal can take many months to be determined in tribunal. However, in the recent case of Dowling v. M E Ilic Haulage Ltd., the business was sold on after a continuation order was made. An application was made to join the transferee the business that had bought the business as a respondent, but the tribunal accepted the transferee's argument that the effect of a continuation of contract order was limited to the payment of pay and benefits, and continuity of employment; it did not mean that the contract continued, so the applicant's employment did not transfer on the business being sold and the transferee could not be joined as a respondent.

The Employment Appeal Tribunal has upheld the decision and there is no application to appeal. Therefore, as the law stands, where a continuation of contract order has been made, the employee is extremely vulnerable if the business is sold on. We must bear in mind the fact that the transferor may have only small funds or even be insolvent, whereas the transferee will generally be viable and able to meet any awards or even to reinstate the employee if he succeeds in his claims. The new clause stipulates that the continuation of contract order has effect for the purposes of the TUPE regulations. That, in turn, means that the transferee can be joined as a respondent, and if the application is successful, the employee can be reinstated to or claim compensation from the transferee.

Although it would make a minor amendment, the new clause could bring great relief and overcome a technical problem.

Gerry Sutcliffe (Labour, Bradford South)

As my hon. Friend says, the new clause is designed to extend the effect of a tribunal order made under section 129 of the Employment Rights Act 1996. The effect of an order under section 129 for the continuation of a contract of employment is dealt with in section 130, which provides that the contract should continue in force for the purposes of pay, pension rights, continuity of employment and other such matters. The new clause would add another category to those specified in section 130 by providing that a contract that a tribunal orders to continue in force would do so for the purposes of the TUPE regulations. In my opinion, the addition is unnecessary. The TUPE regulations already have the effect of preserving rights that arise pursuant to the contract of employment. That protection extends to statutory employment rights arising pursuant to the contract of employment.

I sympathise with the spirit in which the clause was tabled, but, as I have already explained, there is no need for it. I respectfully ask my hon. Friend to withdraw it.

John McDonnell (Labour, Hayes and Harlington)

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 16 — Exclusion or Expulsion from Trade Union

John McDonnell (Labour, Hayes and Harlington)

I beg to move, That the clause be read a Second time.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this it will be convenient to discuss amendment No. 26, in page 48, line 40 [Schedule 2], at end insert

Section 174(4).'.

John McDonnell (Labour, Hayes and Harlington)

I shall be exceedingly brief. The new clause and the amendment deal with the right of trade unions to exclude members. That obviously relates to the case of Mr. Steff and ASLEF. Mr. Steff was a member of the British National party.

The new clause gives effect to article 11 of the European convention on human rights and fundamental freedoms, which is part of UK law by reason of the Human Rights Act 1998. Article 11 explains that a person can be excluded from an association as long as that does not result in a disproportionate penalty or unlawful discrimination. The only right to prevent somebody joining a union is if that would result in a disproportionate penalty for example, loss of employment or if it would be contrary to the law on discrimination on the grounds of race, sex, gender and so on. The purpose behind the new clause is to put into the Bill, simply and clearly, the ability of a trade union to determine which person can join. At the same time, it prevents a union from discriminating against people if it would result in loss of employment or offend existing legislation.

Gerry Sutcliffe (Labour, Bradford South)

My hon. Friend will know that in Committee I introduced a new clause—it is now clause 28—to give unions the latitude to deal adequately with political activists who pursue a racist or xenophobic political agenda. Our main aim was to ensure that unions could deal effectively with the kind of far-right political activists who are infiltrating their ranks and sowing the seeds of hatred and intolerance. At the same time, we wanted to protect the essential freedom of individuals to belong to a political party. I believe that there is widespread support for the Government in tackling this issue.

Amendment No. 31 deletes the existing clause 28 so that new clause 16 can take effect. New clause 16 aims to achieve some of the same effects but does so in a different way. The new clause aims to give unions greater latitude by ensuring that they can exclude or expel individuals as long as it is within the union's rules to do so, and as long as it is lawful to do so and the exclusion or expulsion does not result in the individual being denied or deprived of employment.

Both clause 28 and my hon. Friend's amendments cover similar territory. In many respects, we share common objectives. However, I believe that our clause is to be preferred. My hon. Friend's amendments go too far and would threaten important freedoms.

New clause 16 would give unions a wide-ranging freedom to exclude or expel. However, the amendment would take no account of the need to protect essential freedoms for individuals to belong to a political party. Our proposals provide for unions to expel on grounds of political party activities. We believe that is fair. New clause 16 would provide for unions to expel or exclude on those grounds or on the grounds of just belonging to a political party.

I recognise that this issue has a number of human rights implications. It concerns rights of association both for existing union members and aspiring union members. It also raises issues about rights of expression. This is a delicate area. As I have said, I believe that our proposals strike the right balance.

The new clause also refers directly to the "rules of a union". In Committee, questions were raised as to whether the use of this term, in relation to the remedies that are available when an individual is excluded or expelled, is broad enough to cover the aims and objectives of the union in promoting diversity and opposing discrimination. Such objects or aims are not always expressed as union rules. We think that this is an issue that needs to be addressed in clause 28. We are therefore holding discussions with the TUC with a view to bringing forward amendments in the other place. I urge my hon. Friend to withdraw the new clause and related amendments.

John McDonnell (Labour, Hayes and Harlington)

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 18 — Protection of Journalists

John McDonnell (Labour, Hayes and Harlington)

I beg to move, That the clause be read a Second time.

Journalists have come under pressure in recent times with regard to their employment, as a result of their courage in standing by their code of practice as agreed by the Press Complaints Commission. A number of journalists have made it clear to their employers that they wish to uphold the status of their profession by adhering to the code of practice, which ensures, for example, that they do not misrepresent, that they do not identify or in any way contribute to the identification of victims of sexual assault, and that they protect their confidential sources.

The new clause introduces into British law a conscience clause to protect that area of employment. The clause would ensure that any attempt to dismiss a journalist for refusing to break the Press Complaints Commission code of practice would be unlawful and therefore actionable in law in respect of compensation. The issue has come up on a number of occasions. There is a case that is currently sub judice so we cannot refer to it, but the National Union of Journalists believes that the matter should be debated adequately and that we should return to it later.

Gerry Sutcliffe (Labour, Bradford South)

Let me stress that the Government always deplore arbitrary and unfair dismissals. The unfair dismissal legislation, which is generally considered to be working well, has been carefully drawn up to ensure that employees are protected against unfair treatment. For a dismissal to be fair, an employer must not only have dismissed the employee for a fair reason, but must have acted reasonably in doing so. As hon. Members know, the legislation also specifies certain particularly serious reasons for dismissal that are regarded as automatically unfair. These include, for instance, pregnancy or maternity, and trade union membership, non-membership or activities. My hon. Friend seeks to add to these reasons.

Before any additions to the list of automatically unfair reasons are considered, however, we must be clear that they are both necessary and appropriate, and I do not believe that the addition proposed by my hon. Friend fits either criterion, although I am sympathetic to his underlying concern. I understand that the Press Complaints Commission code of conduct applies to editors and publishers, as well as to those who work for them. A publisher or editor's dismissal of a journalist for declining to breach a code of conduct that applies equally to both parties is most unlikely to be considered a fair one by an employment tribunal, and to that extent the amendment is unnecessary.

I also understand, however, that exceptions to some of the code's provisions can be made in exceptional circumstances, and to that extent the amendment is inappropriate. It assumes, in effect, that no breach is ever defensible, and thus that no journalist should ever be called to account by his employer for refusing to depart from its recommendations. That goes too far in constraining employers. I hope my hon. Friend will accept these points. In view of the ample protection provided by the existing legislation, I invite him to withdraw the new clause.

John McDonnell (Labour, Hayes and Harlington)

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 5 — Union Communications with Workers After Acceptance of Application

Clause 11 — Power to Amend Schedule A1 to the 1992 Act

Clause 24 — Inducements Relating to Union Membership or Activities

John McDonnell (Labour, Hayes and Harlington)

I beg to move amendment No. 15, in page 21, line 8, leave out from (1) to of' in line 9 and insert

An employer shall not make an offer or a threat to any worker with the purpose or the effect'.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this it will be convenient to discuss the following amendments: No. 16, in page 21, line 35, after worker', insert or a trade union'.

No. 22, in page 21, line 36, leave out his' and insert the worker's'.

No. 17, in page 21, line 36, leave out him' and insert the worker'.

No. 18, in page 21, line 39, leave out

which is recognised by his employer'.

No. 19, in page 22, line 14, after worker', insert or a trade union'.

No. 21, in page 22, line 15, leave out his' and insert the worker's'.

No. 20, in page 22, line 15, leave out him' and insert the worker'.

No. 23, in page 24, line 32 [Clause 26], leave out subsection (2) and insert

(2) For subsection (1) substitute

"(1) A worker has the right not to be subjected to any detriment as an individual by any act, or any deliberate failure to act, by his employer done on the ground that

(a) he was or sought to become a member of an independent trade union,

(b) he took part or sought to take part in the activities of an independent trade union at an appropriate time,

(c) he made use of or sought to make use of trade union services at an appropriate time,

(d) he failed to accept an offer made in contravention of section 145A or 145B, or

(e) he was not a member of any trade union or of a particular trade union or one of a number of particular trade unions.".'.

No. 13, in page 24, line 32, after (1),' insert

after "purpose" insert "or with the effect", after "part" in paragraph (b) insert "or seeking to take part",'.

No. 14, in page 24, line 34, after use', insert

or seeking to make use'.

No. 24, in page 25, line 4, leave out worker's "making use" ' and insert

worker having "made use of or sought to make use of".'.

No. 25, in page 25, line 9, leave out from "as' to end of line 10 and insert

subjecting the worker to detriment on that ground is to be treated as subjecting him to a detriment within subsection (1)(c)'.

No. 28, in page 25, leave out lines 11 to 14.

No. 29, in page 25, line 15, leave out (2C)' and insert (1)(d)'.

No. 7, in page 25, line 18, at end insert

(4A) After subsection (4), insert

"(4A) The payment of higher wages or higher rates of pay or overtime or the payment of signing on or other bonus or the provision of other benefits having a monetary value to other workers employed by the same employer shall not constitute a detriment to any worker not receiving the same or similar payments or benefits so long as

(a) there is no inhibition in the contract of employment of the worker receiving the same from being a member of any trade union, and

(b) the said payments of higher wages or rates of pay or overtime or bonuses or the provision of other benefits are in accordance with the terms of a contract of employment and reasonably relate to the services provided by the worker under that contract." .'.

No. 30, in page 25, line 20, at end insert

(5A) In subsection (1) of section 148 of the 1992 Act, before the word purpose' insert "grounds on which, or, as the case may be,".'.

John McDonnell (Labour, Hayes and Harlington)

Time does not permit a full debate of the issues covered by the amendments, so I shall refer to only one element. It was pointed out on Second Reading that, as the Bill is framed, it is almost impossible to interpret the meaning of "purpose". An employee would have to demonstrate that an employer was subjecting the employee to a detriment for the purpose of preventing or deterring the worker from performing a protected activity or penalising the worker for doing so. Already we struggle in courts of law to demonstrate the purpose. The employer need only give some vaguely plausible reason in order to wriggle out of the provisions of the current legislation. I urge a re-examination of the clause to see whether we can tighten it and incorporate in the legislation the true spirit of the judgment in the Wilson and Palmer case.

Gerry Sutcliffe (Labour, Bradford South)

I appreciate my hon. Friend's brevity in dealing with a major issue in respect of the judgment in the Wilson and Palmer case.

The Government believe that we have clearly set out our position in clauses that were discussed earlier. We think this is an issue around purpose. I was happy to meet Mr. Wilson of the Wilson and Palmer case, who is satisfied with what the Government have done. I ask my hon. Friend to seek leave to withdraw the amendment, as while I accept that there is a variance between us, the Government have moved some way towards incorporating the Wilson and Palmer judgment.

John McDonnell (Labour, Hayes and Harlington)

I met Mr. Wilson as well on Friday, and I think that he has set his video recorder for this debate. I do not think that he is completely ecstatic with the Bill as it is now proposed, and I am sure that he would back further amendments. Perhaps we can discuss that at a later time. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Henry Bellingham (Conservative, North West Norfolk)

On a point of order, Madam Deputy Speaker. My hon. Friend the Member for Epping Forest (Mrs. Laing) would like to speak to our amendment No. 7. [Interruption.] She was present at the start of the debate. Would it be possible for her to speak to amendment No. 7?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

I did not see the hon. Lady in her place trying to catch my eye.

Jonathan Djanogly (Conservative, Huntingdon)

On a point of order, Madam Deputy Speaker. Not only did my hon. Friend the Member for Epping Forest (Mrs. Laing) stand up to catch your eye, but so did I, so I would appreciate it if that could be put on the record as well.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Both hon. Members were standing, but it was at the point when the hon. Member for Hayes and Harlington (John McDonnell) was withdrawing his amendment. I thought that we were moving to the next debate.

Eleanor Laing (Conservative, Epping Forest)

On a point of order, Madam Deputy Speaker. I fully appreciate that the hon. Member for Hayes and Harlington (John McDonnell) was withdrawing amendment No. 15, but it was my intention to propose amendment No. 7, which stands on the amendment paper in my name and those of my hon. Friends.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

I have to advise the hon. Lady that we have now come to amendment No. 3, and although she stood up, it was not clear that she wished to speak. There was no indication that she wished to speak on that particular amendment. I have to say that we have now reached amendment No. 3.

Clause 34 — Information and Consultation: Great Britain

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

I beg to move amendment No. 3,

in page 30, line 9, at end insert

(1A) The Secretary of State shall consult such persons as he considers appropriate on the establishment of works councils as an arrangement suitable for informing and consulting employees and shall publish the responses received pursuant to those consultations, together with guidance on best practice for works councils, before making the regulations referred to in subsection (1).'.

I wish to mark a card for this amendment, which the Liberal Democrats consider extremely important. As the Minister will know from discussions in Committee, we consider that works councils are important not only for employees, but for employers, in ensuring that companies are run well and with the full co-operation and help of their employees. In view of the lateness of the hour, I say to the Minister that I hope that he has taken on board our arguments and that he will accept that we have a valid argument and at least recognise that the works council approach has merit and is worth consideration.

Gerry Sutcliffe (Labour, Bradford South)

There are two aspects to the amendment. On the consultation aspect, the implementation of the information and consultation directive has been the result of extensive consultation, as the hon. Gentleman knows. The amendment would impose a statutory requirement not only when the regulations are made initially, but whenever they may be amended in future, which would not be desirable. The Department already follows Cabinet Office guidelines on public consultation and publishes the results of such consultations, so a statutory obligation would not improve things in practice.

In the case of the information and consultation regulations, we are well aware that the implementation of the directive represents a particularly significant landmark in UK industrial relations, so it is very important that we approach the implementation in a positive and constructive manner. For the first step, we published the discussion document in July 2002, and we held a series a round-table discussions up and down the country with a wide range of individual businesses and their representatives, unions and employment experts, to discuss how best to approach implementation of the directive in the UK. Building on that initial consultation, the Government held discussions with the CBI, the TUC and a range of other organisations about the details of implementation.

An agreed framework for implementing the directive was published on 7 July 2003, together with draft legislation, on which we invited comments, and a further series of round-table discussions were held around the country with a similar mix of experts. I attended five of those discussions myself, other Ministers were present at other events, and copies of the responses to the two consultations are available in the Department of Trade and Industry library. The responses indicate strong and broad support for our approach to implementation, and since the second consultation closed in November officials have been working with a range of stakeholders to refine and improve the regulations. We intend to publish a Government response to the consultation before the summer.

I am grateful to the hon. Member for Weston-super-Mare (Brian Cotter) for raising guidance. The Government have always intended that regulations should be accompanied by guidance. We know that it is very important to all the parties who will be affected by the Bill that guidance is available in advance of the legislation coming into force. We therefore intend to publish draft guidance that will explain how key concepts in the legislation are intended to work in practice. In addition, ACAS will produce best practice guidance that is designed to help information and consultation practitioners get to grips with some of the main issues involved in setting up and running information and consultation procedures. In those circumstances, and notwithstanding what the hon. Member for Weston-super-Mare has said about the importance of works councils, which may be included in the consultation process, I ask him to withdraw the amendment.

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

I thank the Minister for his answer. We still feel that works councils are important, but, in the light of his comments, 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. 1, in page 41, line 5, leave out Clause 46.

Conservative Members are not against union modernisation, and we are certainly not against trade unions in fact, we are making a real effort to reach out to them. As I pointed out earlier, the Minister got wind of a meeting that my hon. Friend the Member for Eddisbury (Mr. O'Brien) and I had the other day with Mr. Brendan Barber. The meeting was constructive, and we have a great deal in common.

The Minister has said on a number of occasions that the unions have shown remarkable resilience. They are modernising, but the key point is whether the state should fund the process. The Chancellor made it clear in his Budget that the country's finances are fully stretched borrowing is soaring and a black hole is opening up but the Government still spend our money with irresponsible abandon. The original budget for the Scottish Parliament was £44 million, but the cost is now more than £400 million, and there are also the Electoral Commission, the supreme court and now the modernisation fund.

Our concern is that there is no ceiling or limit on the money for the modernisation fund. Clause 116A states:

"The Secretary of State may provide money".

The Minister has stated that the sum will be between £5 million and £10 million over several years, but the commitment is open-ended.

Furthermore, the Minister said in Committee that the money may be spent only on specific items, and the clause mentions various items and initiatives that it can be used for. Clause 116A(3) states:

"Money may be provided in such a way as the Secretary of State thinks fit".

Gerry Sutcliffe (Labour, Bradford South)

The hon. Gentleman will surely remember the partnership fund and the working partnership fund, which his party supported. We have set out the union modernisation fund in exactly the same way as the partnership fund.

Henry Bellingham (Conservative, North West Norfolk)

The DTI partnership fund discusses match funding, but there is no match funding in the Bill. If the Minister were following the rules of the partnership fund, the unions would have to put up a pound for every pound the Government put up.

Gerry Sutcliffe (Labour, Bradford South)

Just to be clear, we followed not the rules of the fund, but the way in which it was introduced.

Henry Bellingham (Conservative, North West Norfolk)

We are still not satisfied. There should be an equal pool of money. We do not want clause 46 to go ahead, but, if it does, it should be even-handed. Many employer organisations want to modernise, reach out to their members and introduce new ways of communicating and dealing with their members, but there is no money for them. The clause is in no way even-handed: it is completely one-sided. The Minister has said on many occasions that the essence of the Bill is even-handedness, but this provision is not even-handed; it is biased and unnecessary. How do we know that the money is not a sop or a bung to the trade unions? That is why we tabled the amendment to delete the clause.

Rob Marris (Labour, Wolverhampton South West)

The hon. Member for North-West Norfolk (Mr. Bellingham) set out three concerns: first, the way in which the money might be spent; secondly, the amount of money, there being no cap; and, thirdly, the lack of even-handedness. It surprises me that he did not table an amendment to that effect instead of one that would delete clause 46 altogether. That suggests to me that his true motives are not those that he specified and that he has another agenda to do down the unions.

Jonathan Djanogly (Conservative, Huntingdon)

To answer the hon. Gentleman's last point, the reason such an amendment was not tabled is that the Government inserted the provision in Committee at the last minute, so we had no alternative.

I am grateful to be able to speak on this bung clause the sort of law that most people would not believe could be introduced. It is unbelievable that the Government are not saying how much they will give to the unions. Will it be £5 million or £10 million? Presumably £6.4 million would be the benchmark, as that is the amount that the unions provided to the Labour party last year.

John Mann (Labour, Bassetlaw)

The money that unions give as donations is governed by their political fund ballot rules. Is the hon. Gentleman aware of those rules?

Jonathan Djanogly (Conservative, Huntingdon)

I am indeed.

Do unions need modernisation in the first place? They probably do. In January, ASLEF wrote to 40 of its employees listing penalties, including the sack if they went on strike, and derecognition of the GMB union. It looks as though ASLEF does need a bit of modernisation. Last year, the GMB had its own problems. A leaked report shows that 60 employment tribunal cases lodged against the GMB cost it some £4 million. They included cases of sexual harassment, bullying, discrimination, and unfair dismissal; and it had a £19 million deficit in its employee pension fund to boot no wonder The Guardian reported that it must rank among the worst employers in Britain. Unions probably do need a bit of modernisation, but the question is: should the taxpayer pay for it? My answer would be no.

John Mann (Labour, Bassetlaw)

I appreciate that the hon. Member for Huntingdon (Mr. Djanogly) is rather too young to recall some of the activities of previous Governments, but it may help him if I remind him of the moneys given in the late 1980s by the Department of Trade and Industry under Lord Tebbit for the modernisation of trade unions. The hon. Gentleman may also be interested to know that from 1979 to 1992, under successive Governments, the education Department gave money for the modernisation of trade unions.

Henry Bellingham (Conservative, North West Norfolk)

During the course of the Conservative Administrations, well over £20 million was given to the trade unions for specific ring-fenced items such as running secret ballots, but this money is completely open-ended.

John Mann (Labour, Bassetlaw)

The hon. Gentleman is not too young, but again he gets it wrong. When I applied for money from those two Departments and from others such as the Department of Employment, there was no ring-fencing. The forms were absolutely clear that it was money for modernisation. This is a fine tradition, and I back the proposal.

Gerry Sutcliffe (Labour, Bradford South)

I am pleased that we reached the amendment because the discussion demonstrates again the Conservative party's prejudice against trade unions. Conservative Members talk about being pro-trade union. They have held two meetings with Brendan Barber, and I am pleased that they have got into dialogue but I wonder whether they spoke to the unions about modernisation.

Conservative Members' attitude is unsurprising but deeply disappointing because the Bill has tried to foster a new mood of co-operation and a culture change. However, we have the same old Tories saying the same old things about trade unions. I tried to give assurances and explanations in Committee, and I believed that Opposition Members agreed with me about the structure that we were trying to achieve. That certainly applied to Liberal Democrat Members, who opposed the money resolution but accepted some of the points that I made about the culture.

Some trade unions have amalgamated for a variety of reasons. We require a modern approach to employment relations, and that means that trade unions must have the skills to deal with the modern environment. The idea that the money will be used for donations to trade unions is not correct. The suggestion that the money is a bung is simply untrue and part of the scare stories that Conservative Members have presented.

Rob Marris (Labour, Wolverhampton South West)

Will my hon. Friend clarify a point that the hon. Member for Huntingdon (Mr. Djanogly) made? He appeared to suggest that Conservative Members had not had time to table a reasoned amendment to clause 46 commensurate with their views of it.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to my hon. Friend for raising that point. From day one of the Committee proceedings, the hon. Member for Huntingdon (Mr. Djanogly) attacked the trade union movement in any way that he saw fit. He stuck to the employers without speaking to them. If he had spoken to them, he would realise that they are impressed by the new culture that the Government are introducing. There is a framework agreement on information and consultation.

The law on political forums is contained in the Trade Union and Labour Relations (Consolidation) Act 1992, which was tightly drawn. Neither the clause that we are considering nor any provisions in our previous Bill have changed that legal framework. Unions cannot spend money on political objects, including donations to political parties, unless they have established a separate political fund for that purpose. They are prevented by law from using money from their general fund for such purposes. I therefore ask the hon. Member for North-West Norfolk to apologise for describing the money as a bung.

Henry Bellingham (Conservative, North West Norfolk)

I shall not apologise because the Minister said that approximately £6 million would be paid to the unions for modernisation. Would not it be better if the £6 million that the trade unions pay the Labour party were used for that modernisation?

Gerry Sutcliffe (Labour, Bradford South)

I do not understand the hon. Gentleman's point. It is clear that we are entering a new era of employment relations.

I must apologise to the House because I made a slip of the tongue in the debate on the money resolution when I said that employers' organisations, especially the EEF, had received money for structural changes. That was not correct, and I apologise for it. They had received money for projects. Indeed, £500 million has gone into developing business projects, and that is right. It is a commendable exercise by the Government to enhance and develop business and its activities.

However, we also need to tackle the other side of the equation. As I said earlier, the number of amalgamations between unions has meant that they have experienced a reduction in numbers. It is important that union officials can understand company balance sheets and work out the issues that affect the future of companies, especially, for example, the information and consultation directive.

It is vital to approach the matter in an adult and consensual way and for the fund to be set up in the same way as the partnership fund. It is also vital that there should be much consultation in the summer with employers and employers' organisations. Their representatives will sit on bodies to determine the allocation of the funds in the same way as happened with the partnership fund. The yah-boo-sucks politics of Conservative Members shows that they do not want to have a serious look at the fund; they simply want to scaremonger. They do not support the need for modernisation. They have approached the issues in this part of the Bill in a very negative way, and have not understood the opportunities that exist for a modern approach to employment relations by ensuring that both unions and employers have the same capabilities, and that the highly productive, high-performance workplaces that we want can be achieved. We are going through a critical period of global competition, and the union modernisation fund will be a positive step towards ensuring that trade unions

Patricia Hewitt (Labour, Leicester West)

I beg to move, That the Bill be now read the Third time.

I shall begin by drawing attention to the Register of Members' Interests. Like all my hon. Friends, I am proud to be a member of a trade union. I am also proud of the fact that in Britain today there are more people in work than ever before 28 million. We have slashed long-term adult unemployment to below 140,000. In 1986, it stood at nearly 1.5 million. We have slashed long-term youth unemployment to about 20,000. Back in 1986, 300,000 young people were on the dole. We have lower unemployment rates than any other G7 economy, and in the last seven years 1.8 million new jobs have been created in our economy, seven out of 10 in the private sector. That has confounded all our critics, including Conservative Members who said that our policies to re-regulate the labour market would be a disaster for jobs. The opposite has proved to be the case, and the measures that we introduced in our first term are working well. We are building on those measures in the Bill.

John Redwood (Conservative, Wokingham)

Can the Secretary of State tell us what has happened to manufacturing jobs since the Government took office? Does that not demonstrate just how much damage some of their regulations have caused?

Patricia Hewitt (Labour, Leicester West)

That is a bit much, coming from a former Minister in a Conservative Government who devastated manufacturing industry and manufacturing jobs in constituencies up and down the country and did not give a toss for the workers who were thrown out of work. I regret to say that, in many sectors, manufacturing employment has continued to fall. As the right hon. Gentleman is no doubt aware, there has been a global downturn, which has made life for manufacturing exporters exceedingly difficult. I am glad to say, however and I hope that the right hon. Gentleman welcomes this that manufacturing is now turning the corner. With a strong and stable economy, historically low interest rates, specific measures such as investment assistance and our wonderful Manufacturing Advisory Service, we are helping more manufacturing companies to become competitive. The right hon. Gentleman's party failed to provide such help.

Getting people into work is essential, especially after the unemployment created by the Conservative party, but far more is needed in the modern world. We must have the conditions that will create more good jobs, better jobs and better workplaces. We know that the best businesses in our country operate on the basis of partnership between management and the work force partnership with a recognised trade union where there is one, but partnership in every case. Among the most important of the Bill's provisions are the measures on information and consultation. They give effect to the information and consultation directive but do so in a way that suits our particular circumstances in the United Kingdom. Our provisions on information and consultation will help to create, in larger workplaces, a culture of partnership in which employees are informed, involved and committed to the success of their business.

Jonathan Djanogly (Conservative, Huntingdon)

What the Secretary of State says is not reflected in the Bill. The fact is that under the Bill, all that information and consultation is to be done by statutory instrument. She has not said how consultation or the directive will be put into effect, and if she would like to say now how that will happen, I should be grateful.

Patricia Hewitt (Labour, Leicester West)

The hon. Gentleman must surely notice that the Bill provides precisely the statutory authority that will bring information and consultation into effect and, in so doing, will end the absolute scandal that too many members of our work force have had to put up with: that of hearing from the radio in the morning, or, as in one notorious case, by text message to their mobile phone, that they are to lose their job. We will not put up with that. We have worked with the CBI and the TUC to agree a framework for the implementation of the information and consultation directive, and I very much welcome the fact that Digby Jones has said on that:

"We have reached this agreement . . . through constructive dialogue and discussion. It's exactly the spirit in which we all want new rules on information and consultation to operate in workplaces across Britain."

That approach with the social partners is a model of the approach already being used by the best businesses, which we want more of our businesses to adopt. I pay tribute to the work of both those organisations in reaching that agreement.

I also express my gratitude to hon. Members for their close interest in the Bill and the energy that they have displayed during its passage.

Henry Bellingham (Conservative, North West Norfolk)

On both sides?

Patricia Hewitt (Labour, Leicester West)

There have been many constructive contributions, and I had the pleasure of reading the contributions that the hon. Gentleman made in Committee. I pay tribute to him for the spirit in which he moved, and then withdrew, several amendments. I also pay tribute to the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) for the excellent work that he has done in shepherding the Bill through.

We have had an extensive consultation process on the Bill, and we will continue to listen, particularly as we finalise some of the clauses that we have added more recently. We have never lost sight of the need to keep the costs to business to a minimum, and nothing that we have added to the Bill during its passage will add significantly to those costs.

I shall highlight the changes that we have made to the Bill since its introduction. First, we are absolutely clear that we will not tolerate intimidation or bullying by employers or, indeed, by trade unions during recognition ballots. We will not have in Britain the kind of union-busting tactics that I am afraid have become all too commonplace in the United States. They are, fortunately, rare in our country, but we have listened to concerns raised during the Bill's passage, and we have responded with the new clauses, moved by my hon. Friend the Under-Secretary, that have been added today.

Secondly, we are not prepared to allow racists to hide behind membership of a political party to infiltrate trade union ranks. Clauses now in the Bill provide greater scope, quite properly, and in a way that complies with the Human Rights Act 1998, to root out that pernicious element and to exclude and expel it from trade union membership.

Thirdly, we will not allow rogue employers or, indeed, trade unions to flout the rules on lawfully organised industrial action. I promised on Second Reading that we would look closely at the Friction Dynamics case. That case was not only unusual but, fortunately, unique, and as a result of our consideration of the experience of the Transport and General Workers Union members at Friction Dynamics we have now tightened the legal definitions so that we will not see a repeat of employees being locked out of their workplace while the employer pays little more than lip service if it can even be called that to their statutory obligations. Again, we have strengthened the Bill in that respect.

Fourthly, we recognise the valuable role of modern trade unions in the modern workplace. They play a crucial role in helping to raise productivity, skills levels and the quality of our businesses' output. They can be partners with business in creating high performance, high productivity workplaces. Those are the only kind of workplaces that have a long-term future in an increasingly competitive global environment.

The modernisation fund that we have just debated on Report will give trade unions targeted funding to help them keep up in the rapidly changing labour market, and to make step changes in the way in which they work. I want to add my assurances to those that my hon. Friend the Member for Bradford, South has given both this evening and in Committee: this is not money for trade union recruitment, or money that can be used for industrial action. Nor can it be used for the political purposes covered by the political funds, which are entirely separate, separately constituted by law, and cannot receive money from a trade union general fund.

As my hon. Friend said, we shall of course consult fully on the plans for the fund, in order to ensure a robust set of rules, proper procedures and accountability, and so on. We will draw on the excellent existing model of the partnership at work fund, through which an independent advisory board makes recommendations on bids for money. We will not pre-judge the consultation process, but that model certainly provides a transparent and accountable method of allocating funds. The modernisation fund will account for between £5 million and £10 million, spread over several years. It will help trade unions to plan better for the long term, to think more strategically and to contribute better to our long-term economic success as a multiracial and diverse society.

The Bill takes another important step towards accomplishing our vision of full and fulfilling employment, and it reinforces the framework of fair standards at work that we have established over the past five years. It builds on the vital achievements of the national minimum wage, which was recently increased again, protection for part-time workers, paid paternity leave, the doubling of the length of maternity leave, the new rights to family friendly working, and the trade union recognition to which I have referred. It also leaves untouched the fundamentals of the trade union recognition system that we put in place in our first term: the small firms threshold, the voting threshold and the voluntary agreements.

We consulted extensively on those arrangements before the enactment of the Employment Relations Act 1999, and we know from our review that they are working. They have significantly increased, and are continuing to increase, the number of workplaces and workers covered by collective agreements, thereby helping to protect those workers, and helping even more importantly to create the partnership at work that I spoke of earlier. Business and employees are happy with them, and the number of stoppages at work due to labour disputes is at a record low. There were a mere 133 stoppages in 2003 the lowest figure since records began in 1920. I cannot go back quite as far as 200 years, as my right hon. Friend the Chancellor did recently, but it is a pretty good record, given the history of industrial relations in our country.

Jonathan Djanogly (Conservative, Huntingdon)

That record sounds excellent until one considers the number of unofficial days off for last year. On doing so, 2003 turns into the worst year since 1997.

Patricia Hewitt (Labour, Leicester West)

I notice that the hon. Gentleman does not make a comparison with the number of days lost under the Conservatives, especially in respect of the Royal Mail, for which I have a particular responsibility. Industrial relations are continuing to improve, despite all the scare stories from the Opposition at the time of the 1999 Act. We know that, crucial to success in a competitive global economy is the ability of Government, business, employees and their trade unions to work together on skills in high-performance workplaces and to ensure that we sustain the economic stability that has underpinned the extraordinary achievement on employment that we have delivered.

I believe that it is an excellent Bill and I commend it to the House.

Stephen O'Brien (Conservative, Eddisbury)

I draw the House's attention to my entry in the Register of Members' Interests. I should also like to say that I draw on many years of experience in manufacturing industry, working positively and constructively with all those in the business in which I was engaged including union members, union officials, individual employees and employers. It gives me great pleasure to thank my hon. Friends the Members for Huntingdon (Mr. Djanogly), for Epping Forest (Mrs. Laing) and for Hexham (Mr. Atkinson), who served so diligently in Committee, and I pay tribute to the extraordinary hard work and scrutinising effectiveness of my hon. Friend the Member for North-West Norfolk (Mr. Bellingham).

There are real and urgent problems facing British industry today, and it is against that background that we must debate Third Reading. Productivity has halved since 1997, the total trade deficit rose to an unprecedented £18.8 billion last year and the British Chambers of Commerce informs us that the cost of regulation has shot up by an astonishing £9 billion in the last 12 months alone. The annual cost of poor skills amounts to an estimated further £10 billion.

In that context, it speaks volumes about the priorities of the Government and the Secretary of State that we are not debating any of those vital issues, but another Employment Relations Bill, for which there is scant demand, least of all from those engaged at all levels working in British business. We know that there is little demand because the Bill arose from a Government-commissioned review of the Employment Relations Act 1999. According to the regulatory impact assessment published alongside the Bill,

"The main conclusions of the review are that the legislation is generally working well".

If the Government's own conclusion is that the current legislation is working well, is it not strange that they have decided to use primary legislation essentially to fine-tune an Act passed just four years earlier?

The Employment Relations Bill that we are debating today is not the Bill that we saw on Second Reading. It is not the Bill whose tepid endorsement from the CBI and others was based on relief at its basic insubstantiality and on what it did not contain rather than what it did. We voted against it on Second Reading because it was an unnecessary Bill in its own terms.

Precisely as I predicted in my Second Reading speech, the Bill has turned out to be a Christmas tree an unadorned framework on which interest groups, specifically the unions, have been invited to hang their favourite baubles. Precisely because that was my original suspicion, I asked the Secretary of State on Second Reading whether she would

"assure the House that additional measures will not be introduced by Government amendment, or conceded by them, with the exception of those that she has already flagged and on which we have had a constructive exchange" [Official Report, 14 January 2004; Vol. 416, c. 832.]

Let me place on record, before Labour Members attempt to make any potentially mischievous or even grossly misrepresentative points, that what was then flagged was the Government amendment introduced after Second Reading, which resulted in what is now clause 28, dealing with the exclusion and expulsion from trade unions of racists. We said then that we would consider that positively, particularly when we had a chance to explore the detail, because Conservative Members are equally determined to root out racism. However, the clause does not refer to the British National party, only to "a political party" and to "excluded conduct" of an individual. That could have been achieved either through union rules or, failing that, by a statutory instrument brought under the authority of the 1999 Act. It does not justify the Government in bringing in wholly new primary legislation.

The Secretary of State refused to give me the guarantee that I sought on introducing or conceding additional measures. Instead, we have seen a host of late amendments, a great many of which were tabled just five days ago in a deliberate attempt to downgrade the House's opportunities for scrutiny and for outside organisations such as the CBI, the British Chambers of Commerce, the Engineering Employers Federation, the Federation of Small Businesses, the Forum of Private Business and many others.

Let me say to all those who study the record if asked, those who worked with me when I worked within a large unionised industry, would confirm it that I am not, nor have ever been, anti-trade unions or anti-trade unionists.

Because this is a short debate, I have time to focus only on the most scandalous of the late amendments the Government's bung to the unions. The regulatory impact assessment accompanying the Bill states that the quantified benefit to the unions is between £75,000 and £108,000. The RIA was signed off on 3 December 2003. On 10 February 2004, the Minister for Employment Relations, Competition and Consumers announced that he was tabling a new clause that would

"make funds available to independent trade unions and federations of trade unions to modernise their operations."

He also said that he envisaged that

" the size of the fund would be in the region of £5 million–£10 million in total, with expenditure spread over several years, probably beginning in 2005–06." [Official Report, 10 February 2004; Vol. 417, c. 67WS.]

That happens to coincide with what we understand to be the £5 million to £10 million that the unions, from the hard-won earnings of trade unionists, give to the Labour party. Such a fundamental alteration to the Bill, so vaguely phrased and coming after the signing off of the RIA, constitutes a total abuse of the parliamentary process.

Furthermore, it is evident that the Government have proposed this measure at great, uncapped cost to the taxpayer, having given no thought to the nature, structure, mandate or time limit of the so-called union modernisation fund.

John Redwood (Conservative, Wokingham)

Will my hon. Friend comment on how wide-ranging clause 46 is? As I understand it, the money can be applied for any existing purpose or any new, unspecified purpose. It could not be any wider.

Stephen O'Brien (Conservative, Eddisbury)

My right hon. Friend puts his finger on the inadequate opportunity that the House has had to scrutinise the proposal. The proposal is vague, it was introduced after Second Reading and I am sure that the other place will wish to scrutinise it with great care and consideration.

If I am wrong in what I have said, I invite the Secretary of State to intervene to correct me. Would she care to clarify the expenditure limit of the fund? Or will she confirm that effectively it has none? What is the time limit of the fund? Or will she have to confirm that it has none? As the Government know, it is not possible to amend a new clause in Committee. Why are the Government so reticent about providing a clear and accountable definition? Is it all part of the Government's embarrassed desire to avoid spelling out the extent of the bung?

Archie Norman (Conservative, Tunbridge Wells)

Does my hon. Friend also accept that this case is a clear illustration of the need for some form of external, objective audit of regulatory impact assessments? It is a classic case of the regulators assessing their own performance, being vague and, in this instance, virtually negligent in so doing.

Stephen O'Brien (Conservative, Eddisbury)

My hon. Friend anticipates my tribute to his ten-minute Bill on the issue, to which the Government have paid no attention. It would ensure a degree of independence and impartiality so that the Government could not up the benefits of a Bill but seek to diminish the costs.

What is the justification for subsidising union modernisation but not a charity or voluntary organisation? Come to think of it, what is the Secretary of State's definition of modernisation, besides its habitual use by new Labour to mask yet again its absence of principle? It defines everything it sees as rotten so that it can justify the use of precious parliamentary time on it as necessary and useful. What processes will the Secretary of State put in place to ensure that the unlimited quantity of money goes exclusively towards the purposes of modernisation, whatever they may be? I am not surprised that we have heard no satisfactory answers to any of those questions. What is clear is that the only calculation that the Government have made is a cost-benefit analysis of throwing a sop to their friends and paymasters in an attempt to tame them ahead of the general election. That is the real regulatory impact assessment at the front of ministerial minds, not the version that they have provided for display in the Library.

I note that the Government have made great play of the support of the CBI for the Bill. However, the CBI has made clear its views on the union modernisation fund, which was of course introduced after Second Reading and after it had given its approval to the contents of the Bill. The CBI believes that

"the Government should not subsidise inefficient unions or union recruitment campaigns through its proposed union modernisation fund."

The Minister attempted to suggest that such purposes have been excluded, but the Government have not defined what is included. Lack of precise definition is part of the problem. The CBI also says:

"It is disappointing that the Government has taken this step given the low incidence of union membership in both the private and public sectors."

That gives rise to the question of how much information the Government provided about the amendment and how much consultation took place between the Government and the CBI. Was it about as much as the Chancellor provided for the civil servants he summarily dismissed in his Budget address?

The Secretary of State has rightly expressed her opposition to employees being sacked by text message, but what about a Government desperate to stay on-message on tackling public sector waste, which the Chancellor has now admitted amounts to £20 billion of taxpayers' money? I invite the Secretary of State to have a quiet word with her right hon. Friend the Chancellor about the importance of leading by example in a "no surprises" culture in the workplace. Does she not feel even a tiny pang of conscience, given her Under-Secretary's edict? On 2 December, in a DTI press release, he said:

"I want to see an end to the climate where people only hear out of the blue about job losses from the media, or by text message. I want to see a "no surprises" culture at work where employers and employees discuss common ground and find solutions to mutual problems."

Only yesterday, however, we learned in The Sunday Telegraph that the Government are to slash or relocate at least 1,500 jobs in an overhaul of the Department of Trade and Industry. It reported:

The headcount at the DTI's headquarters will be reduced by a third, with about 650 jobs cut and around 850 relocated to the regions."

Patricia Hewitt (Labour, Leicester West)

I hope that the hon. Gentleman will accept that we have been talking to our trade unions for several months about our plans to make our work force more efficient and to relocate some of our jobs.

Stephen O'Brien (Conservative, Eddisbury)

It may be of some comfort to know that a fairly Chancellor-led surprise announcement was actually in train and that there were discussions with what the Secretary of State calls "our trade unions" rather than "the trade unions", which would be a more proper way of putting it. That is important.

Despite the Secretary of State's attempt to reassure us, it is equally important that, when the Government issue announcements about job cuts in the public sector, including the way that they slip out news about sackings from her own Department, they should be judged by their deeds. At the very least, they should adopt for their Departments the standards that she seeks to impose through the Bill on other employers, especially those in the private sector who are risk takers as opposed to the non-wealth-creating public sector [Interruption.] Labour Members hate hearing that. They do not like to be rumbled, because the Bill is an effort to dress up something to do with their electoral advantage, as they define it, rather than a true concern for good business, good employment and good, safe jobs.

The other highly flawed provision in the Bill is the incorporation of the information and consultation directive in UK law. In that regard, I refer again to the regulatory impact assessment published in conjunction with the Bill. Incidentally, I make no apologies for my repeated references to the impact of regulation. On the Opposition Benches, we take that very seriously indeed, although I confess that I would have more faith in the reliability of RIAs if even one burdensome regulation had been aborted as a result of that procedure. I asked the Secretary of State about that in a written question, but she relied on her Cabinet Office colleague, who declined to give even one such example. The Minister for the Cabinet Office stated:

"There are no cross-government figures on the number of RIAs that resulted in decisions not to proceed with new regulations." [Official Report, 2 February 2004; Vol. 417, c. 715W.]

Even the tentative quantification of the RIA cannot disguise the fact that the one-off costs to business of implementing the measure will be £45 million and that the recurring annual costs will be £46 million. This single measure alone accounts for more than 75 per cent. of the recurring regulatory costs of the entire Employment Relations Act 1999, which was itself a costly piece of legislation for British business. I hope that the Secretary of State will reconsider the belief, which she expressed on Second Reading, that the costs of the Bill to employers are broadly "insignificant". In her speech this evening, she said that the amendments subsequently proposed would not add a significant cost to businesses.

Patricia Hewitt (Labour, Leicester West)

I am puzzled. I understand that the hon. Gentleman is against the union modernisation fund; that is a clear dividing line. But is he also telling the House that he is against the information and consultation provisions?

Stephen O'Brien (Conservative, Eddisbury)

Perhaps the Secretary of State should hold her breath. I am just about to develop why the Government have chosen to implement the information and consultation directive in a form much broader than was sought in respect of its imposition on this country. As the director general of the CBI has noted, the directive is

"a poor piece of EU legislation".

The fact that the Government lack the will and the influence in Brussels to refine an evidently crude directive at its inception is therefore regrettable, as is their lack of a requirement for a full regulatory impact assessment of that or any other EU regulation while it is being drawn up despite the fact that it is at that stage that the Government can do most to influence a directive's nature and outcome. Theirs is an oddly relaxed attitude, given that about 40 per cent. of UK regulations that originate in Brussels are more costly to British business than those that originate in this place.

Even more galling is the way in which the Government manage to make the worst of a bad situation by transcribing burdensome directives into UK law with disproportionate zeal. There is no reason why the information and consultation directive should not have been introduced via a statutory instrument indeed, it is unusual to introduce such a directive by primary legislation and to give the Secretary of State significant powers to

"make any provision which appears . . . to be necessary or expedient".

Why have the Government taken such wide-ranging powers when they did not want the directive in the first place? Lord Sainsbury of Turville a DTI Minister is on the record as saying that

"a general framework for informing and consulting employees in the European Community . . . is difficult to reconcile with subsidiarity and would cut across member state traditions to no benefit." [Official Report, House of Lords, 5 March 2001; Vol. 623, c. WA 14.]

If the Government are capable of so vigorously to the tune of £45 million a year gold-plating legislation of which they do not even approve, it is terrifying to consider how they implement regulation that they endorse. That goes some way to explaining the BCC figure I mentioned earlier that the cost of regulation on British business has rocketed by £9 billion in the past 12 months alone.

What began as a non-Bill has ended up as a stealth Bill, which will serve to strengthen the unions' power and the Labour party's purported links to them, and to weaken both British business and Parliament. It is an abuse of taxpayers' money and of the scrutiny procedures of this House. One of the few positive notes that can be struck is that it represents a powerful and definitive argument for the two excellent ten-minute Bills recently presented by Back-Bench Members of the official Opposition, my hon. Friends the Members for Huntingdon and for Tunbridge Wells (Mr. Norman).

The Bill presented by my hon. Friend the Member for Huntingdon was designed to eradicate precisely the thoughtless bureaucratic gold-plating of EU directives that the Bill embodies in relation to the information and consultation directive. The European Communities (Deregulation) Bill declares that provisions of regulations will not have to be enforced if it can be proved that they will impose higher compliance costs or a heavier sanction for failure to comply than in other EU member states. That is a constructive and commendable approach to over-burdensome EU regulation, and any Government interested in our British national interest should take my hon. Friend's Bill seriously.

John Bercow (Conservative, Buckingham)

My hon. Friend is delivering a racy and intoxicating speech to which I hope I can add. Does he agree that it is most regrettable that the pioneering stance on sunset regulation adopted by the right hon. Member for Tyneside, North (Mr. Byers) when he was Secretary of State for Trade and Industry, as reflected in the Electronic Communications Act 2000, has since been abandoned and the Government are now adopting a tepid and reactionary attitude that fails to give the proper opportunity to minimise regulation in the way that the example of the United States teaches us is beneficial to industry and commerce?

Stephen O'Brien (Conservative, Eddisbury)

I am grateful to my hon. Friend. It is nice to know that a speech can be intoxicating, although I assure the House that, at this stage of the day, I have not had the benefit of anything intoxicating to help me along. More important, he can be reassured that a presumption in favour of sunset clauses is a plank in the official Opposition's proposals to aid the British economy and British business, and that presumption will not be ditched for the sake of expediency.

The Government ignored the Bill presented by my hon. Friend the Member for Huntingdon. Yet again, they displayed their indifference to the needs of British business. With reference to the disgraceful way in which the union modernisation fund was announced, it is clear that the suggestion made by my hon. Friend the Member for Tunbridge Wells of a system of post-implementation audits for RIAs, as set out in his Regulatory Impact Assessments (Audits) Bill, would prevent Ministers from getting away with the shameful practice of signing off RIAs, only to table amendments later that impose potentially vast additional costs on the taxpayer. Indeed, my hon. Friend also provided for the fact that those who promote a Bill and who argue in favour of its benefits cannot be expected to be trusted to be impartial about the costs. Again, there was no squeak of interest from the Secretary of State or her Government colleagues. I know that my colleagues in the other place will be interested in pursuing all these points.

As presented on Second Reading, the Bill was unnecessary. Now, as predicted by the Opposition and feared by British business, it has become costly, nannying, preachy and burdensome. It is highly unlikely that it will influence a few bad employers. It will increase burdens on already good employers and give comfort to the few bad unions. The Bill is a product of the distorted priorities of those who sponsored it a Government who are desperate to curry favour with their paymaster unions and a Department that is structurally indifferent to the flexible and fair needs of British business and wealth-creating small businesses, especially those employing fewer than 50 people. Above all, it is not even-handed between employer and employee. Had we been able to debate amendment No. 7, I know that that issue would have been taken seriously in another place. It is appropriately known as the Miller amendment.

It is no accident that the resource budget for employment relations of the Department of Trade and Industry has more than tripled since 1998, while the allocation for innovation has fallen by 7 per cent. over the same period. It is a matter of fact that the Secretary of State, like her Department, is on the side of the regulators and against enterprising British entrepreneurs and innovators. Unless and until there is a re-evaluation of the purpose and priorities of the Department, I believe that businesses will continue to suffer. The Bill is the latest in a litany of measures that the Government have introduced to burden British business. Unless it is defeated this evening I urge my colleagues and all other Members to join me in the No Lobby it will sit as another glaring indictment on the charge sheet against this Labour Government and this Secretary of State.

Jim Sheridan (Labour, West Renfrewshire)

It is unfortunate that, once again, those who spoke from the Front Benches took most of the time that was allocated to an important debate.

As a long-standing member of the Transport and General Workers Union, I am proud of the Government for introducing legislation that protects and enhances the role of trade unions. I would argue that another term of Conservative government would have sounded the death knell for trade unions. In that event, we would have been talking today about the reinvigoration of trade unions instead of helping them to expand.

The T and G was much involved in my education and assisted me in getting to this place, for which I am extremely grateful. Many Labour Members have experience of working through the trade union movement and in so doing getting their education. There is an argument that we need more people of the same background and experience in the House if it is to be representative of the work force.

The most chilling comment that I heard during the debate came from the hon. Member for North-West Norfolk (Mr. Bellingham), the Opposition Front-Bench spokesman. He said that employees' performance could be affected if they had to attend trade union meetings.

Henry Bellingham (Conservative, North West Norfolk)

I was making the point that when more than one member of staff went consistently to meetings perhaps three, four, five or six meetings that could affect performance, particularly in relation to health and safety.

Jim Sheridan (Labour, West Renfrewshire)

I thank the hon. Gentleman, but it was chilling to hear him say that the performance of employees could be affected if they had to attend a trade union meeting. Many members of the Labour party have experience of attending trade union meetings and of being discriminated against because they did so. Many of them are still on the dole as a result of being blacklisted. They are still looking for a job. In some instances, that is the result of the legislation that the Tory Government brought in.

Not much mention has been made of the foot soldiers in the trade union movement shop stewards. There are young shop stewards, and I have in mind particularly the young females in the trade union movement, which is trying to encourage more women to become representatives. That is something that the Labour party would welcome.

I would put employers into three categories. There is the progressive employer who has nothing to fear from the Bill. The company that I have recently left is already engaged in consulting and helping trade unions, especially with training. It offers resources to help shop stewards to be trained. It recognises that that adds value to the company and helps to increase productivity. There is no problem with that.

Secondly, there are negative employers who wish to take advantage of inexperienced young shop stewards. They keep them waiting in corridors. They misinform them and treat them as idiots. Finally, there is the altruistic employer, whose attitude is, "If you do what you're told, if you're a good boy or a good girl, you'll be here for ever. Just do what I tell you." In my experience of working with the trade unions, I have never yet met a bad employer. I look forward to the day when I do.

On the modernisation fund, it is only right that trade unions should be given money to enable employees to negotiate on a level playing field with employers.

Anne Picking (Labour, East Lothian)

On the money going to modernise trade unions, I am sure that my hon. Friend will agree that it is no surprise to us that the Tories were against that. They are always anti-union and always will be. Is he as surprised as I am that the Liberal Democrats and the Scottish nationalists, who claim to be friends of the trade union movement, abstained or voted against it?

Jim Sheridan (Labour, West Renfrewshire)

My hon. Friend makes a good point. As a former president of Unison, the public services union, she knows what she is talking about. She is right. In my area, Renfrewshire, the Liberals claim to be the allies of the trade unions, but when it comes to giving the trade unions the resources to do the job, what do the Liberals do? They vote against it. The SNP say they stand up for Scotland. Where were they when it came to resources for the trade unions? They were not here. They could not be bothered to turn up. That explains why the people of Scotland should reject the nationalists, and why people throughout Britain should reject the Liberals.

Negotiations on pensions are complex, as are negotiations on health and safety. It is important that we have proper health and safety legislation that shop stewards and health and safety representatives are aware of and can deal with. We need people to know what employment law is about and how to relate that to the members. The same applies to company law. I know that many on the Opposition Benches do not understand why shop stewards should be involved with company law. They would rather keep that for the lawyers and the courtrooms. On redundancy packages and productivity pay, why should people not receive the best advice?

It would be remiss of me not to mention gangmasters. In that connection I pay tribute to the hon. Member for North-West Norfolk for his assistance and for recognising that legislation is needed to stop people being exploited by unscrupulous gangmasters, especially in agriculture. A private Member's Bill is going through the House and I hope that, with the support of hon. Members of all parties, it will become law.

We have tried voluntary codes and we have tried free markets, but they have not worked, so we need to try something else. Legislation is not a panacea for all the inequalities in the workplace, but it will go a long way towards stopping them. Effective employment legislation is needed particularly in agriculture, where current practice is nothing more than modern slavery and should be outlawed at every level. In addition to effective legislation, we need ministerial responsibility and financial resources to deal with unscrupulous employers.

Jonathan Djanogly (Conservative, Huntingdon)

Will the hon. Gentleman give way?

Jim Sheridan (Labour, West Renfrewshire)

My nipples are about to explode in anticipation of what the hon. Gentleman has to say.

Jonathan Djanogly (Conservative, Huntingdon)

Does not the hon. Gentleman recognise that the Bill is about squashing individual rights? We have the bosses getting together with the unions, and it is back to the 1950s. The people who suffer are individuals who want to have their own say.

Jim Sheridan (Labour, West Renfrewshire)

The Bill is about affording people the right to decent work and to dignity at work. When I spent time with the hon. Gentleman in Committee, it was nostalgic to hear him talk about trade unions, particularly when he talked about the 70s, 80s and 90s. Perhaps he was not around at that time, and he was basing his comments on what his parents or somebody else has told him. It was definitely nostalgic to listen to him talk about trade unions, his knowledge of which is somewhat limited.

Malcolm Bruce (Liberal Democrat, Gordon)

On a point of order, Mr. Deputy Speaker. As you know, the time constraints meant that you were not able to call me in the debate on Third Reading. I make no complaint about that I appreciate the rules of the House. However, that means that, in relation to a programmed debate, our reasons for supporting a Bill and our qualifications are not on the record. Secondly, I wonder whether you and/or Mr. Speaker could review the speaking rules for programmed and timetabled Bills to ensure that all major opinions in the House are properly heard.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

I sympathise with the circumstances in which the hon. Gentleman found himself. The Chair always nurses the hope on occasions when time is limited that hon. Members will somehow share out the time in a way that satisfies all points of view. Sometimes the Chair's hopes are not fulfilled.

Patrick McLoughlin (Conservative, West Derbyshire)

Further to that point of order, Mr. Deputy Speaker. Would it not be useful on such occasions if the party that complained did not support the programme motion?

Alan Haselhurst (Deputy Speaker, Saffron Walden)

The hon. Gentleman should not try to draw the Chair into a matter of debate. DELEGATED LEGISLATION

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With the leave of the House, I shall put together motions 3 and 4.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Northern Ireland

Terms and Conditions of Employment