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Employment Bill debate

4th November 2008

Jonathan Djanogly tells MPs that this Bill is a "missed opportunity" to cut red tape for British business and outlines his oppostiion to new clauses giving more power to the unions.

Mr. Djanogly: This Government have so far introduced some 18 Acts and more than 280 statutory instruments dealing directly with employment laws and regulations, and we are now debating another one. Their continual tinkering with employee rights and employer duties has left business and individuals confused. The Bill was originally called the employment simplification Bill, so the change was fully justified given that it involves no simplification whatsoever. It is hardly surprising that if one reviews the figures for employment tribunal cases, it is clear that small businesses make up the overwhelming majority of respondents. Many small businesses are no more sophisticated than the employees claiming against them. They do not have the large human resources departments or teams of lawyers that are needed to decipher the tangled web of employment laws that the Government continue to create.

Even while the Bill has been making its way through the House, a further, under-the-table deal was done between Labour and the trade unions to tamper with the laws on agency workers in a way that could be very damaging for our already over-burdened businesses. While that is hardly surprising from a Government who are almost entirely funded by the trade unions, it has got to a point where even the ex-Secretary of State for Business, Enterprise and Regulatory Reform seems to have recognised that the Government have gone too far. Prior to his promotion, he admitted that there was a

"need to challenge the automatic assumption that the only way to deal with exploitation in the workplace is by passing new laws."

I hope for the sake of employers across the country that Lord Mandelson has read his handover brief thoroughly, not least because, given the Labour amendments tabled, it looks as if we will need to prepare for a union legislative onslaught as the TUC calls in its Warwick II promises. Just to recap: we heard proposals today to protect employees taking industrial action from dismissal; to prevent trade unions from being sued by employers suffering loss as a consequence of industrial action; to provide union members with a dual award-damages and reinstatement-where they are dismissed for striking; to shift the responsibility for ensuring ballots are properly conducted from unions to employers; to prevent businesses using so-called strike breakers; to provide special privileges not to work for so-called union workplace environmental reps; and to abolish all restrictions on trade unions' rights to expel or exclude members-

Madam Deputy Speaker: Order. May I just remind the hon. Gentleman that on Third Reading we are discussing the contents of the Bill, not what might have been in it?

Mr. Djanogly: I thank you for that guidance, Madam Deputy Speaker. With that in mind, I would now like to discuss the provisions of the Bill.

The Bill was extensively debated in another place, as well as in Committee. I put on record the thanks of all hon. Members for the work that the other place did on the Bill. It was substantially reviewed by the time it came to us. However, we have some problems with aspects of it. Mention was made of how the Government have taken us back to the position before the earlier provisions came into force. Our concerns focused on clause 3, and the changes that it would make to the employment tribunal system. The new ACAS code would remove the overly legalistic system that arose, despite the Government's assertions to the contrary, from the Employment Act 2002. The ACAS code is now principle-based, but we could be in danger of elevating procedure over substance. Tribunals have the power to vary awards based on non-compliance with procedure and we think that there could be a dichotomy. If one acts in the spirit of a principle-based code, could one never fall foul of that procedure? In Committee, we asked the Minister to give us some statistics, and to discuss the various awards that the tribunals had granted, but those were not forthcoming. There is a perception among businesses that tribunals are disproportionately inclined towards the employee, and we share some of those concerns about the Bill.

The second part of the Bill deals with the national minimum wage. We support the national minimum wage, and a continual monitoring of legislative provisions that deal with it. We also support action to ensure that workers who receive the minimum wage do not lose out in real terms when they are owed arrears as a result of underpayment. The previous law gave almost no deterrent to underpayment, so the change in the Bill is welcome.

We had various concerns about the extension of powers of Her Majesty's Revenue and Customs, and we still have those concerns. While the proposal to allow enforcement officers to remove documents under clause 10 is accepted, we do not accept that the balance in the Bill is as good as it could have been.

I urge the Minister to give maximum publicity to the changes in the implementation of the national minimum wage provisions. All employers must be given full opportunity to assess their companies and correct any failings in payment of the minimum wage before the new penalties are imposed.

We had a full debate during all stages of consideration of the Bill, including this evening, on clause 19, which relates to the European Court of Human Rights judgment on the ASLEF case. Although we believe that it was appropriate for the Government to respond to the decision of the European Court of Human Rights, we continue to have genuine concerns about clause 19 as it stands. Only time will tell, but I predict that court cases will derive from the provisions with which we have ended up.

The definitions of "membership of a political party" and of "political party" remain outstanding issues, which will lead to further court cases. The debates on the Bill's progress through both Houses show that the Government have been slightly inclined to burrow their head in the sand when faced with reasoned argument. Worse, they legislate for perceived threats or concerns, without hard evidence to back up the need for legislative intervention. That could not only be expensive in terms of taxpayers' money and the House's time, but has made for a weaker Bill than it should be.

Although we agree with the Bill's overall aims, concerns remain about its scope and implementation. Moreover, the Government have failed, once again, to address properly the concerns of business when they are mounting by the day. As it stands, the Bill will be a fitting testament to a vacuous and empty Government, who have taken a short-term view and failed to push forward genuine change.

British business has been crying out for reform to employment laws, which are making them increasingly uncompetitive, and for protection from vexatious employee claims. Surely we could have done more than simply give unions the power to expel members for their political beliefs. To that extent, the Bill is a missed opportunity.

9.36 pm



Protection of those participating in lawful industrial action or a lawful strike
Employer's duties in relation to industrial action ballots
Agency labour replacing those taking lawful industrial action

Mr. Jonathan Djanogly (Huntingdon) (Con): The Bill has wound its way between our two Houses for some time now-I believe since 7 December last year-with more or less agreement between the various parties on its contents, albeit with a difference of emphasis. We feel that the Bill is also a lost opportunity in failing to relieve the regulatory burden on business in respect of employment. As to these pro-union new clauses, the mood changes somewhat, as we totally oppose them. Here the true face and belief of the hard left of the Labour party is exposed and it is not a pretty sight for business.

The starting point of all modern industrial relation law is-and has been for well over 100 years-that industrial action is unlawful unless protected. In effect, participants in authorised industrial action have protections against being sued, making industrial action lawful. As such, the new clauses would represent the most fundamental change to industrial relations law for a century and could catastrophically unbalance industrial relations in the UK, empowering trade unions to bring our economy to its knees.

Section 238A of the Trade Union and Labour Relations (Consolidation) Act 1992 was inserted by the Employment Relations Act 1999. As it currently stands, the section provides protection to a striking employee within a framework. There is no sense that the employee is to be considered unfairly dismissed through an arbitrary action in statute. The new clause would allow striking employees to hold companies to ransom. It would serve as a brake on commercial enterprise and return us to the dark days of the 1970s-three-day weeks and perpetual strike action.

6 pm

Ian Stewart (Eccles) (Lab): The hon. Gentleman clearly does not understand industrial relations or the law. What he refers to was originally set up to ensure that when employers face a ballot for industrial action, they have good-quality information. It runs side by side with provisions such as cooling-off periods, which were introduced so that the employer and the trade unions could negotiate to try to resolve the problem and the ballot would not need to be put into action. He is wrong to tell the House that the problem is striking employees. They do not strike until after all the law on balloting has been implemented. He is wrong.

Mr. Djanogly: I appreciate what the hon. Gentleman says. Indeed, the Bill is reforming the law in relation to ACAS, and we have for the most part supported the provisions on that. However, with this new clause we are staring down the barrel of a return to the old nasty days. Given that 90 per cent. of the Labour party's funding comes from the very trade unions that the new clause would empower, perhaps Labour Members would welcome such a change-or they are at least unable to prevent their arms from being twisted by their party's sponsors.

The hon. Member for Hayes and Harlington (John McDonnell) needs to put the new clause in context. For starters, will he say what unions have been promoting it? Does it form part of the Warwick II agenda, for instance?

John McDonnell: I shall send the hon. Gentleman a copy of my speech when it appears in Hansard. I referred early on to the support of every trade union affiliated to the TUC and said that the new clauses were unanimously carried by the TUC and its general council.

Mr. Djanogly: It is nice to hear the hon. Gentleman make clear the support of his party's paymasters.

Rob Marris: I rise to declare my interest as a long-term member of Unite and a member of the GMB. Will the hon. Gentleman care to declare his interest, as registered, as a partner in a large law firm, SJ Berwin?

Mr. Djanogly: My interest is clearly stated in the Register of Members' Interests. It forms no part of the debate because a law firm would act for either party in a dispute.

What has happened-hon. Members may agree with this-is that the Government have presided over a period of greed and arrogance on economic matters. The Labour Government have come to represent the zenith of boom and bust. They have taken the nation to the brink of recession. Businesses across the UK now face difficult decisions as a result. Jobs will be lost and businesses may fold. The last thing the Government should do is hand the power to self-interested employee groups to hold companies to ransom. The Government would be wrong to do anything that more than simply dismisses the new clause. If they do not, it would add yet further weight to the rumours that the "beer and sandwich" culture of the 1970s has worked its way back into Downing street.

Mr. Drew: I understand that Mr. Richard Balfe has been talking to trade unions on behalf of the Conservative party. I would be interested to hear whether he has delivered the same message as the hon. Gentleman is setting out, because I am not sure how long those discussions would have lasted had Mr. Balfe given that speech to the trade unions. What have those discussions been about?

Mr. Djanogly: The purpose of the debate is not to go through our private discussions with trade unions. However, we are more than happy to talk to trade unions. We have been doing that and will continue to do so because we want to have a smooth industrial relations policy when we get back into power. That does not mean that we will go to the extremes set out in the new clauses.

Ian Stewart: If the Opposition have been talking to the trade unions, have the trade unions never explained why they want the new clause?

Mr. Djanogly: The trade unions have not personally approached me to discuss the new clause, but it seems as though they have approached a lot of Labour Members.

Let me mention the worst aspects of the new clause from the Conservatives' point of view. It would be virtually impossible to dismiss a worker conducting industrial action under proposed new section 238A(1) and (2). Currently, employers can only fairly dismiss workers who are conducting union-approved industrial action where, first, there has been no proper ballot; secondly, they have made reasonable steps to resolve their trade dispute; thirdly, they dismiss every striking worker; and fourthly, they do not re-engage any of them within a three-month period. Although that scenario is extremely rare, the provisions are vital. They ensure that an employer can ultimately get on with business when striking workers are making unreasonable demands. In our view, the provisions clearly already provide reasonable protection to those who are conducting authorised action.

Industrial action short of a strike would be legalised by proposed new section 238A(3) and (4). The effective legalisation of action short of a strike, such as work-to-rule or a sit-in, would empower unions in a way not seen since the 1970s, when work-to-rule formed part of the action taken by unions intent on crippling the economy. Unbelievably, unions would no longer be liable for the consequences of their actions under the new clause. That is of fundamental importance. Under the current law, injunctions can be granted against trade unions by the courts and damages awarded where actions that they have endorsed are viewed as unjustified or disproportionately damaging to the employer. That provides an important check and balance against inappropriate behaviour and is mirrored by a substantial body of law restricting an employer's conduct in a trade dispute. By removing liability on a worker engaged in industrial action, the unions would no longer be liable either. That would fundamentally unbalance industrial relations in our country.

Mr. Parmjit Dhanda (Gloucester) (Lab): Does the hon. Gentleman not in any way consider that what he has just said could change the mood of the relationship between employers and employees and might encourage more people to work to rule rather than take the risk of strike action?

Mr. Djanogly: I simply disagree. The hon. Gentleman is not right.

Proposed new section 238AA(2) and (4) would mean that staff are entitled to full pay when conducting industrial action, removing any disincentive from taking such action. Proposed new section 113A to the Employment Rights Act 1996 would make it impossible to make redundancies wherever industrial action occurs, even if the whole business would collapse as a result. Requiring employers to provide the detailed information necessary for ballots would place an unfair administrative burden on them during tough times. Moreover, the new clause would shift responsibility for conducting a proper ballot from the unions to employers, effectively giving the union someone else to blame if there are flaws in their paperwork or ballot conduct.

In general, the new clause has a number of fundamental flaws. It calls for the continuation of employment as well as an award for damages where an individual has been dismissed for industrial action. That is in effect a double bite at the cherry-an opportunity that would not be offered to normal employees in any other unfair dismissal proceedings. Hon. Members who have tabled the new clause either hope to carve out a preferential niche for striking workers or they should have consulted more widely on it.

Mr. Binley: Let me declare an interest. I have been the managing director of a company employing 140 people who has been the target of vexatious claims. I hope that that interest is well understood by Labour Members.

I draw my hon. Friend's attention to the statement in proposed new section 238AA(2):

"A worker has the right not to be subjected to any detriment by any act, or deliberate failure to act, by his employer".

Does that not give an employee who has not been promoted a year and a half after industrial action the right to claim constructive dismissal on the basis that he was denied promotion because he had taken part in that strike?

Mr. Djanogly: I think that my hon. Friend's point is very arguable, and is of huge concern in the context of the real impact of these provisions.

The new clause goes on to offer striking workers immunity from dismissal proceedings by the company. That too goes one step further than the current provisions of section 238A, thus pushing the new clause further into the category of what we see as unacceptable. I am afraid that, from a pro-business standpoint, it loses none of its initial unreasonableness as it proceeds. Taken as a whole, the new clauses would tie the hands of business in an unacceptable manner, at a time when we should be unburdening businesses to allow them to survive these turbulent times.

What I have said about new clause 1 could just as easily be applied to new clause 2. Again, trade union representatives are seeking preferential treatment for those on strike, or, in this particular case, those about to strike. On a fundamental level, I find the new clause difficult to swallow. It would place a duty on an employer to assist in an action that would harm their own business, which is akin to asking a condemned man to tie his own noose.

Section 226 of the 1992 Act requires unions to hold a ballot before industrial action is taken for it to fall within the category of "protected action", and the Act goes on to secure a union's right to strike. That right should not be further extended to impose a duty on companies to assist union members in bringing their action within the protection of the legislation. If union officials cannot do that themselves, and also need the company to supply the details of their own members, I cannot see why they deserve the protection that the new clause would provide.

New clause 3 would prevent companies from employing workers to fill the places left by those taking industrial action, which I think the hon. Member for Blyth Valley (Mr. Campbell) called a scam.

Mr. Ronnie Campbell (Blyth Valley) (Lab): That is what it is.

Mr. Djanogly: The new clause would hamstring businesses and prevent them from continuing their business during such action, which in turn would artificially exacerbate the effect of any industrial action, and would hand a powerful bargaining tool to the unions.

Given the anti-business rationale of the new clauses, we in the Conservative party oppose them wholeheartedly, and strongly suggest that the Government do the same.


Time off for Workplace environmental representatives

Mr. Djanogly: Looking at new clause 4, I wonder whether its promoters actually understand the meaning of work. The hon. Member for Hayes and Harlington (John McDonnell) seems to suggest that trade union members should be given special treatment, and that, where they take on more responsibilities, they should make excuses not to do their normal work in order to fulfil them. We find that unacceptable. Moreover, I received a letter dated 28 October 2008 from a Chris Baugh, the assistant general-secretary of PCS, in which he said that PCS had tabled an amendment to the Bill. I must say that I did not know that unions could table amendments in this place. Would the hon. Gentleman, who, presumably, is the PCS mouthpiece for this purpose, care to enlighten the House on the process that one must go through to become a workplace environmental rep?

John McDonnell: Can we just take one step back to respond to that statement? I outlined how a trade union was acting constructively to tackle an agenda that the whole House has supported, namely climate change, and preparing for consideration by Members an amendment that we might wish to promote to ensure that the union was able to do so. I am the chair of the parliamentary PCS group, which is an all-party group. We promote the union's views with which we obviously agree, and we consult unions. A number of Members from all parts of the House are members of various trade union groups, as I am, and, on an all-party basis, they listen to the views of the unions and, if they agree with them, bring them before the House. I thought that we should encourage organisations outside the House to engage constructively in the development of legislation. On that basis, I promote the new clause.

Mr. Djanogly: I appreciate the hon. Gentleman's clarification of the position regarding the letter, but it is still pretty unsatisfactory to hear that unions are talking about suggesting amendments to legislation in this place.

Mr. Graham Stuart (Beverley and Holderness) (Con): On that point, my hon. Friend knows that more than 90 per cent. of the funding of the modern Labour party comes from unions, so it is perhaps not surprising that they think they own those representatives who sit in this place.

Mr. Djanogly: Yes. Perhaps the payroll has become so big that they now think they can-[ Interruption.]

John McDonnell: On a point of order, Mr. Deputy Speaker. I think that allegations are being made that may relate to me personally. The allegation is that I have promoted a new clause on the basis of some financial link-up between the Labour party and PCS. That trade union is not affiliated to the Labour party, and the PCS parliamentary group is an all-party group.

Mr. Deputy Speaker: Order. Perhaps the House could moderate its language a little. I am sure that the remarks were not directed directly at the hon. Gentleman. These really are not matters for the Chair; they are matters for debate.

Mr. Djanogly: Thank you, Mr. Deputy Speaker. We will return to the new clause.

Ian Stewart: Will the hon. Gentleman give way?

Mr. Djanogly: If the hon. Gentleman will allow me, I shall make some little progress.

We need to look at whether appointments to the position would be handed down from the trade union headquarters, or whether members would be encouraged to volunteer. If it was the latter, which I suspect it would be, would trade unions advertise the fact that the role would be in addition to an employee's usual duties, or would they promote the idea that the employer would be so pleased to have the employee acting as the union's green policeman that he or she would be given time off?

Ian Stewart: The hon. Gentleman has demonstrated his lack of understanding of the real world and, in particular, of industrial relations-once more. Does he not accept that plenty of voluntary organisations send suggested amendments to Bills to the Conservative party as well as to other parties? And, does he not accept that enshrined in law, now, is an arrangement whereby health and safety representatives are allowed reasonable time off to carry out their duties? What is the difference?

Mr. Djanogly: I shall come to the difference in my later comments.

There are several problems with the new clause. First, every business should be involved with environmentally sound practices, but we fail to see why employees who have trade union membership should have time off work for environmental issues when their colleagues at the next workstation simply have to get on with their work. Secondly, we do not appreciate the way in which the new clause attempts to unionise environmental issues in the workplace. "Workplace environmental reps" smacks of Orwellian, Big Brother tactics by unions. By bringing the issue within their remit, they seem to be attempting to secure preferential treatment for their members and, at the same time, to give their union a point of leverage over the business. Finally, we fail to see why the actions in proposed new section 43A (2) of the Employment Act 2002 would be better carried out by a trade union than by a company. If the proposal is for the workplace environmental rep to be there to oversee the company's own efforts, the new clause needs redrafting.

Alan Simpson (Nottingham, South) (Lab): The Conservative party gave their support to the Climate Change Bill, in which it was spelt out that the direction of change would specifically include the setting of annual carbon budgets, and that at some stage they would have to be translated into sectoral and company targets, so will the hon. Gentleman be kind enough to explain to the House the role that Conservative Members expect trade unions in a workplace to play in constructing the carbon budgets that the company seeks to introduce?

Mr. Djanogly: I am sure that trade unions can make constructive comments and talk with management and other third parties about how they think the workplace should be improved environmentally; that does not mean that we should legislate for time off.

I received a letter from the PCS in the run-up to today's debate. It saw the role of the workplace environmental rep as

"ensuring that employers meet their carbon reduction targets, raising awareness of green issues in the workplace and ensuring that environmental issues are included in the bargaining agenda".

I am still somewhat confused: what will the reps do that a company should not be doing anyway to bring itself in line with the Climate Change Bill? In these times of economic uncertainty, we must be careful in respect of the fundamental necessities. Continued employment, economic growth, financial stability and so on are all factors that must line up alongside the environment when we strike the balance. We support responsible, environmentally sound business practice, but we also support business efficiency and businesses' freedom of choice on how best to reach their overall environmental targets. That is why we oppose the new clause.

I turn to clause 19, which deals with trade unions' right to exclude people because they are members of certain political parties.

7.30 pm

Mr. Deputy Speaker: Order. I am not sure that we are dealing with clause 19 at the moment.

Mr. Djanogly: Mr. Deputy Speaker, may I come back in at a later stage of the debate?



Mr. Djanogly: Is not the more fundamental problem that there is no definition of what a political party is? It does not have to be a political party at all; it could be a lobbying organisation.

Tony Lloyd: It could indeed be a lobbying organisation if, as in the case of ASLEF, it is a membership organisation that is fascist. That touches on what we are seeking to achieve. The ASLEF rulebook was consistent with its ambition to drive racists out of the union because they are incompatible with the rest of their members. It is important that it can so proscribe, which is why we do not want to build into the Bill the need to name the BNP or whatever. There is obviously a dispute between us as to whether that is necessary.


Mr. Djanogly: Does the hon. Gentleman not agree that not having a definition of a political party will lead to a lawyers' feast? For instance, Militant Tendency was not a political party-it was a newspaper. Does he think that should be captured?

Tony Lloyd: That is not relevant in this case.


Mr. Djanogly: I am simply going to qualify the hon. Gentleman's remark on what he thinks I believe, which is not at all correct. We simply say that the clause will catch all organisations: fascist, communist or Greenpeace. Even Conservatives and Liberal Democrats could be banned under the clause.

Mr. McCartney: It is plus plus then.


Mr. Djanogly: The hon. Gentleman said that we opposed clause 19-that is not the case. The Conservative party appreciates and respects the finding of the European Court of Human Rights. Indeed, the clause that we are discussing is a compromise provision that Liberal Democrats and Conservatives in the other place proposed. Our opinion is that it still needs refining.

Tony Lloyd: We are at one about that, but I do not know whether the hon. Gentleman's definition of refinement and mine are the same.

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