(11 years, 11 months ago)
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The Deputy Chairman of Committees (Baroness McIntosh of Hudnall)
My Lords, I remind the Committee that, in the event of a vote in the Chamber this afternoon, the Committee will adjourn for the duration of that vote. If it occurs while the Committee is debating the first two matters on the Marshalled List, we shall have to adjourn until the noble Baroness, Lady Stowell, returns from the Chamber, where she will be a Teller, which may take slightly more than 10 minutes. If the vote or votes occur at another time, the Committee will adjourn for 10 minutes from the sound of the Division Bell.
Clause 57 : Equality Act 2010: third party harassment of employees and applicants
Baroness Thornton
My Lords, in opposing Clause 57 standing part of the Bill, I thank the noble Lords, Lord Lester and Lord Low, and my noble friend Lady Turner for supporting me in doing so. Clause 57 seeks to repeal Section 40 of the Equality Act 2010. Section 40 makes an employer liable for repeated harassment of their employees by a third party, including customers, clients and service users. The liability is triggered only if an employee has suffered such harassment on three or more occasions, the employer knew of the previous incidents and the employer has failed to take reasonable, practicable steps to prevent its recurring. The Government have stated that there is no real or perceived need for this protection but we believe that that simply is not true.
I am grateful to Thompsons Solicitors, who specialise in such matters, for their views and for a copy of the evidence that they submitted to the GEO as part of the consultation on this matter. What is clear from their considerable experience is that the majority of such claims are settled before a hearing happens, which is all to the good. Thompsons point out in that evidence:
“The government’s logic for repealing the provision is contradictory. On one hand the consultation states that the provision is a burden on business and on the other hand it states that it is only aware of one case in England and Wales where a claim relating to this provision was determined at an employment tribunal hearing”.
Given that the provision has been in place for all protected characteristics for less than two years, the Government are not in a position to make an assumption about the effectiveness of the provision within such a short period. Neither do we understand the logic that just because there are not many claims relating to this provision, it is somehow bad law.
It is not in the interests of society to remove from employers the responsibility for protecting workers against harassment from third parties. Workers should be entitled to carry out their duties and engage with third parties without fear of harassment. Do we really want workers to be exposed to harassment on the grounds of one of the protected characteristics without having the force of statutory protection from such harassment? For example, surely a nurse treating a patient should be entitled to expect protection from their employer against harassment by that patient on one of the protected grounds. Losing the provision would be inconsistent with the equality directive, as per EOC v the Secretary of State for Trade and Industry, in that the directive sets out associative protection. This would lead to further litigation. Can the Minister confirm that this is indeed the case? Even if it could be argued that the current legislation goes beyond the requirements of the directive, to amend the legislation by removing the provision would breach the non-regressive provisions of the directive—that is, the equality and recast equal treatment directives. Could the Minister please say whether this is true?
Is there a need for Section 40? We would argue that, yes, there is. A 2008 study by the University of Warwick for the NUT, of 2,575 teachers across 13 local authorities, found that one-third of the respondents experienced threats on at least a monthly basis. A survey for the NAS/UWT found a similar third of teachers suffered prejudice-based harassment and bullying. The EHRC has also found evidence of the prevalence of third-party harassment and its impact, demonstrating a widespread need for the law to provide protection. The people most likely to be affected by the abolition of this provision are some of the most vulnerable and poorly paid people, who are least able to defend themselves. For instance, a recent report on the treatment of care workers by clients comments:
“A survey of public sector social services staff found ethnic minority staff had experienced racist verbal abuse from service users; inappropriate questioning of their authority by users or relatives; users not wanting to be touched by them or asking to be dealt with by a White person (most frequently occurring in the user’s own home); and physical attacks perceived to be racially motivated. Inappropriate remarks from colleagues were also experienced”.
Thompsons say that they have advised and represented unions and union members in third-party harassment claims. With their kind permission, I will mention two such cases. The first involves three claimants who were constantly racially abused by patients in a mental health hospital where they worked as nurses. The perpetrators were two individuals on the same ward. The claimants requested to work shifts where they would not be in contact with the two individuals. The employer refused to change the claimants’ shifts or to take any action against the perpetrators. The claims were settled prior to a full hearing for £3,000 for each claimant, with an undertaking from the NHS trust concerned that action would be taken to protect the claimants from further acts of harassment.
Thompsons also report that their transport union clients are regularly asked to advise when members have been subject to racist abuse by passengers. The TUC certainly asserts that the introduction of Section 40 of the Equality Act has already led to a step change among employers, with actions undertaken to make it clear to service users that harassment of their staff will not be tolerated. Moreover, there may be hidden costs to business for not prioritising action against third-party harassment. Harassment can have a significant effect on the physical and mental health of the workforce, and be a major cause of work-related stress, affecting work performance and absence levels.
The proposed repeal of third-party harassment provisions has been introduced following the Government’s Red Tape Challenge. However, there is no publicly available evidence of concerns being raised about them during the first stage of the challenge. When the Government asked specifically for views on prohibited conduct, not one of the 214 of those who responded opposed the third-party harassment provisions, and a number specifically supported them. When the Government consulted specifically on third-party harassment, 71% of those who responded were opposed to repeal. Moreover, due to the familiarisation costs associated with the change in legislation and the minimal savings to business that are expected as a result of the repeal, the Government’s own impact assessment calculates that this repeal will be an additional burden to business, and not a saving. The assessment admits:
“Provisions for third party harassment may have had a wider impact on reducing discrimination in the workplace, outside of specific third party harassment claims, so the repeal may lead to more instances of workplace discrimination”.
At Second Reading in the House of Commons, Ministers gave a categorical assurance to my honourable friend Kate Green MP that this Bill would not be used to take forward proposals as featured in the Beecroft report on employment law, relating to employer liability for third-party harassment.
In conclusion, I put the following case to the Minister. A employs B. C interacts with B during the course of their employment. C harasses B on the basis of a protected characteristic—race, sex, sexual orientation or disability. A either fails to take adequate steps to minimise the risk of harassment—policy signage, risk assessment, preventive steps and so on—or fails to do so after being specifically alerted to C’s behaviour and prior to a repeat of it. B and C could be a nurse and a patient, a nurse and a family member, a receptionist and a customer, benefits agency staff and a claimant, a taxi dispatcher and a customer, a teacher and a parent, a warehouseman and a delivery driver, a guard on a train and a passenger, a council officer and a service user, a member of an MP’s staff and a constituent and so on.
A third-party harassment provision saves tribunal time and focuses employers’ minds. It also ultimately saves legal costs. Other legal avenues—direct race discrimination or sex discrimination claims, for example—are not available. Establishing that the employer is responsible for the harassment by allowing or failing to prevent a hostile environment at work is time-consuming and difficult. Good employers who are prepared to take reasonable steps to protect their staff from abuse have nothing to fear from the current provisions. Will the noble Baroness please explain to the Committee how such a matter might be resolved without this part of the legislation?
Baroness Turner of Camden
My Lords, I put my name to this question when I first read the Bill and I have recently had some contact with the TUC in regard to this particular clause.
As we have just heard, Clause 57 repeals Section 40 of the Equality Act, which makes an employer liable for repeated harassment of their employees by third parties, such as customers, clients or service users. The liability is triggered only if an employee has suffered such harassment on three or more occasions and the employer knew of the previous incidents and had failed to take reasonable practical steps to prevent it recurring. This is an important protection. I am opposed to the repeal unless the Government can justify it. I do not think that they can.
Trade unions have provided us with many examples of their members in publicly funded and service sector jobs, such as care work, teaching, and rail and bus transport. These people routinely suffer prejudice-based harassment in the course of their work. The introduction of Section 40 of the Equality Act led to a step change among some employers, with actions undertaken to make clear to service users that harassment of their staff would not be tolerated.
The one tribunal case of which I am aware was brought under Section 40 and demonstrates the importance and workability of this provision. A care worker in a residential care home suffered repeated sexual harassment by a resident. When she complained to her employer she was told just to be patient and to wait for the resident to stop touching her. The tribunal, however, held that the employer could have taken a number of reasonable steps to protect the care worker, such as ensuring that she was always accompanied by another member of staff, speaking to the resident’s social worker or psychiatrist for advice, or adjusting the rota to minimise contact with a particular individual offering this sexual harassment. That is an example where, quite properly, this provision in the legislation worked.
People should be able to work in an environment in which they are free from harassment, whether from fellow workers, managers, employers, customers, clients of their employers or others who come on to their employer’s premises. After all, the Government accept that it is necessary to provide protection from harassment in relation to fellow workers, managers or employers, so why should employees be unprotected from harassment by customers, clients of their employers or others who come on to their employer’s premises?
Furthermore, we should bear in mind that many public sector workers face harassment from members of the general public, often from those with grievances. For example, I remember going to an office where a lot of advice on social benefits and so on was provided. The staff there were quite concerned about the way in which members of the public with grievances would make threats against them. That was a government office and steps to protect the staff there were taken. Why should that not apply in the private sector? Why should we not ensure that people acting often on behalf of public issues, sometimes on legislation that we in Parliament have introduced, are protected from members of the public who feel that they have grievances? I hope that the Government can justify what they are doing but I do not think that they can. Therefore, I oppose inclusion of Clause 57 in the Bill.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Baroness, Lady Thornton, and others who have put their names to this clause stand part debate today. It gives me an opportunity to make clear that Clause 57 does not diminish people’s right to equal treatment, or their access to justice, when they believe that they have encountered discrimination. The aim of this clause is to achieve these outcomes in a more straightforward and cost-effective way.
Clause 57 removes the specific but arbitrary “three strikes” test for employer liability. I should like to reassure the Committee that it does not remove protection for employees who have been harassed by third parties at work. The noble Baroness, Lady Thornton, asked me a specific question about whether the repeal is consistent with the equal treatment directive. I can confirm that it is.
The ruling of the court in the case of Equal Opportunities Commission v Secretary of State for Trade and Industry in 2007 stated that,
“there is nothing explicit, or even arguably implicit”,
in the European equal treatment amendment directive,
“requiring a Member State to impose vicarious liability on an employer, or indeed liability for negligent failure to take steps”.
However, under the Equality Act 2010, employers are vicariously liable for the harassment of one employee by another. We maintain that the general harassment provisions in the Act can provide protection for an employee who has been harassed by any other third party. If the harassment causes the employee alarm or distress, a claim may be possible under the Protection from Harassment Act 1997. Where it is such that the employee feels there is no alternative to leaving the job, a claim for constructive dismissal can be brought. All this protection will remain, and that is why the third-party harassment provisions in Section 40(2) to (4) of the Equality Act are not needed.
Indeed, introduction of the “three strikes” test was itself unnecessary because a change in the legal definition of harassment in 2008, following a judicial review, allowed a wider range of claims. The then Government added the “three strikes” test to the harassment provisions in the Sex Discrimination Act 1975 specifically to address a set of facts referred to in the judgment. In our view this introduced an additional legal test that is both arbitrary and unnecessary.
The new definition of harassment following the change in the law in 2008 referred to unwanted conduct “related to” the sex of a person. That was instead of “on the grounds of”. This specific change extended the scope of protection against harassment to apply to wider circumstances than before, including potentially by a third party. This formulation now exists in the Equality Act 2010 and therefore applies to all the relevant protected characteristics, not just to sex.
The “three strikes” test was introduced to cover only the situation where, knowing that an employee is being repeatedly harassed at work, the employer does not take any reasonable steps to prevent that employee being harassed again. However, the extremely limited scope of these provisions is widely misunderstood and some businesses have also told us that they find it impossible to comply with the provisions in practice, no matter how they try. Most businesses recognise that they must not let their employees be harassed or ill treated by other employees or by third parties. Where this is not the case, the other legal protections that I have set out will continue to exist. However, they see the unique “three strikes” test as onerous, arbitrary and unfair. It expressly makes the employer liable for a specific number of actions—three—by a third party. In most cases the employer will have no control over the nature or number of events or the third parties concerned. The uncertainty over what exactly is required in order to avoid being caught out by the “three strikes” test makes it difficult for employers who want to comply and at the same time will not deter employers who may be less concerned about their obligations to their staff.
Baroness Thornton
I am wondering where the evidence for this is. I really need to know where this evidence is because certainly, as far as we can tell from the impact assessment and the evidence that I recalled in my speech, this did not seem to be the case. Perhaps the noble Baroness can write to me and list the cases to which she has referred because I certainly have not been able to find them.
Baroness Stowell of Beeston
The point in some of the cases that I shall come to is that people have been able to bring cases of third-party harassment without using the clauses to which we are referring. The response to the consultation by members of the industry has been clear that this part of the legislation is confusing and is very difficult for them to comply with. However, I will of course follow up in writing and provide further information to the noble Baroness.
As long as this test remains, employers can face claims from their employees of liability for third-party harassment on the basis of an arbitrary number of events, but taking no account of context. This approach cannot be right. Influencing employers’ behaviour is neither the primary role nor the intention of most provisions in discrimination law, and this is certainly not the reason why the Section 40 third-party harassment provisions exist. This confusing legislation is not the most effective way of achieving cultural change. Nor does it appear to have had any significant legal effect. As far as we can determine, only one case brought under these provisions has actually been heard by a tribunal in the four years since they were first introduced. The other examples of cases successfully alleging third-party harassment of which we are aware were brought before the “three strikes” test was introduced. That is the point that I made before; it is clear that it is possible for people to bring forward claims of third-party harassment because they have done so, even before this change in legislation was introduced. We believe that a better way to encourage employers to protect their employees from harassment at work, which as the noble Baroness, Lady Turner of Camden, said is an important matter, is through education and good practice guidance.
I turn to the question put to me by the noble Baroness, Lady Turner, who referred to the case of Blake and how protection for employees such as those in that case would be protected. Depending on the particular facts and circumstances of the case, it should be possible for a claim for third-party harassment to be brought under the general harassment provisions under Sections 26 and 40(1) of the Equality Act. Nothing in the Blake case would exclude it from that statement. Noble Lords will bear in mind that this is the only case known to have been decided by a tribunal during the lifetime of the “three strikes” third-party harassment provisions.
I commend Clause 57 to the Committee, but I will follow up on the points that the noble Baroness raised.
Baroness Thornton
I thank the Minister for her reply, but the Committee needs more evidence than she has been able to produce. She started by saying that this provision does not diminish people’s rights to equal treatment. Some of the experts, particularly those in the trade unions and the lawyers that I have quoted, believe that that is certainly not the case and that it does reduce people’s equal treatment. This piece of law has been in place for only two years. Does the Minister accept that, as Thompsons have said, its existence has prevented tribunal cases? That is rather an important matter.
I am not surprised by the answer that I received from the Minister, but it is not satisfactory, both in terms of equal treatment and because she has not made the case for this provision to be in the Bill or for Section 40 to be deleted from the Equality Act on the Government’s own terms of business effectiveness, enterprise or the Red Tape Challenge. The Minister has not refuted the facts that I gave about there being no majority in favour of getting rid of this provision; she managed to quote one case which, she said, caused confusion. So the Government have not made their case. Then you have to wonder why this is in the Bill, which leads only to the supposition that it is for reasons not to do with equality but more to do with politics—a sort of trawl to see what they can put in the Bill. That is very sad. On that basis, I shall not press my question but we will return to the matter later in the Bill.
Baroness Thornton
My Lords, I had hoped that the noble Lord, Lord Lester, would have been with us today to move this Clause 58 stand part debate, which stands in both our names and those of the noble Lord, Lord Low, and my noble friend Lady Turner. Unfortunately, the noble Lord has been struck down. He has been in touch with me and the Minister about the fact that he is unable to be here and I am sure that the Committee will wish him a speedy recovery.
Noble Lords may recall that at Second Reading the noble Lord, Lord Lester, spoke with passion about the importance of this clause and his commitment to making his Government change their mind. I expect that between now and the next stage of the Bill that is exactly what the noble Lord will be doing, supported by other noble Lords, including those on these Benches.
Clause 58 repeals the question and answer procedure. The impact assessment states:
“Section 138 of the Equality Act 2010 requires a Minister of the Crown to prescribe forms in order that a person who thinks that they may have been unlawfully discriminated against, harassed or victimised, can obtain information from the person (employer or service provider) they think has acted unlawfully against them”.
This procedure has been a vital part of ensuring access to justice for victims of discrimination since our first discrimination and race relations Acts were passed nearly 40 years ago. Information obtained through this process is intended to help an individual understand why he or she was treated in a particular way and whether they have a legal basis for making or continuing a claim in court or a tribunal.
In the Government’s own Red Tape Challenge, not one concern was raised on the questionnaire procedure. When the Government then issued a specific consultation on questionnaires, that too provided little case for change. Around 80% of respondents opposed abolition of the questionnaire procedure. There is no evidence to support the Government’s claim that these questionnaires are used for fishing exercises.
Case law makes it clear that businesses and other respondents are not required to answer questions that are disproportionate and that a poor response should not lead automatically to a finding of discrimination. Instead, the question and answer procedure is widely regarded by employers and employees as valuable. There is anecdotal evidence that it helps individuals to access evidence at an early stage that can lead to an early clarification of the issues and, if the case proceeds to a tribunal, to greater efficiency in the tribunal proceedings. Indeed, judges and tribunal members regard this procedure as a useful way of establishing the facts and clarifying the issues in contention. The questionnaires have also been known to prompt a quick resolution either through an early settlement or by demonstrating that no discrimination took place, helping to prevent unnecessary proceedings.
The current question form guides claimants to set out their allegations of discrimination in a clear way. This allows the person responding to understand what is being alleged and to provide an explanation of what happened. The absence of a structured standard form may result in some claimants issuing proceedings where they would not otherwise, increasing costs to tribunals and businesses alike. Moreover, removing the standardised structure of these forms, which most businesses are already familiar with, may place some onerous demands on businesses dealing with discrimination claims. Indeed, the Government’s own impact assessment fails to provide any empirical support for removing this “regulatory burden” on business.
Moreover, the financial assessment, which finds a net benefit of just £800,000 to businesses from implementing this measure fails to take into account both the non-monetary costs to the individual employees, who may be further marginalised by the retraction of their employment rights, and the additional cost to businesses and individuals of finding other means by which to obtain information in disputes.
The Discrimination Law Association, whose members comprise lawyers, advice workers and trade unionists supporting victims of discrimination said that,
“without the kind of information which individuals can only obtain through written questionnaires under Section 138, in many cases it will be almost impossible to prove discrimination”.
Indeed, without the questionnaires, an individual who suspects they have been discriminated against will have to institute formal proceedings before they can seek disclosure of documents from the employer. From summer 2013, it will cost £250 to issue a discrimination claim and a further £950 for a hearing. Many victims of discrimination will never bother to seek justice and that will give unscrupulous employers a green light to discriminate at will, I would suggest.
The questionnaire procedure facilitates access to justice, helps both parties to assess where a claim lies and enables them to reach an early settlement where that is appropriate. Therefore, it is crucial that the Government should not repeal Section 138 of the Equality Act.
Baroness Whitaker
My Lords, I support my noble friends and the noble Lord, Lord Lester, in opposing that the clause stand part because of my experience as a member of employment tribunals. Far from being a piece of red tape, the questionnaire speeds up and simplifies tribunal procedure. Briefly, the problem with discrimination is that it is very hard to prove. It is easy to understand why. You are trying to pin down a mental attitude which has resulted in unfair treatment. Employers, naturally enough, give all sorts of plausible reasons for this treatment. No one wants to admit that they have been unfair or racist.
Quite often the person bringing the case does not know how to expose discrimination in cross-examination. Sometimes they do not have a case, just a grievance or perhaps even an obsession. The questionnaire is vital in this process. It is the best way to deter hopeless cases and it elicits, in a very simple way, proper grounds of discrimination when they exist. It is a pity that we cannot know how many cases are deterred, with a great saving of public money. Can the Minister help on this? Do we have any figures?
In short, cases go better, faster and more cheaply with the questionnaire. That is why such a large proportion—83%—of consultees support it, including, as my noble friend Lady Thornton said, judges and tribunal chairs. Parliament would surely be misguided in accepting this clause. The questionnaire has stood the test of time and ordinary, day-to-day justice would be the poorer without it.
Baroness Turner of Camden
My Lords, originally I put my name down in support of the clause not being included. As we have heard, Clause 58 repeals the statutory procedure for obtaining information to support discrimination proceedings under the Equality Act. The TUC opposes this clause. This procedure has been a vital part of ensuring access to justice for victims of discrimination since our first sex discrimination and race relations Acts were passed more than 35 years ago. Legislators back then understood just how difficult it would be for an individual to enforce their rights without access to information about how others were treated in a similar situation or statistics on the impact of policies or practices of different groups. This is information that the employer holds, hence the importance of questionnaires.
In trade unions’ experience, these questionnaires help individuals to access evidence at an early stage, which leads to an early clarification of the issues involved and, if the case proceeds to tribunal, greater efficiency in the tribunal proceedings. The questionnaires have the added benefit that they may prevent claims going to tribunal because they often lead to early settlement of any potential claim or they produce evidence that shows that discrimination was not actually the reason for the individual’s treatment. Therefore, it seems to me that these questionnaires are of value to the employers as well as to the employees. I have no idea why the Government should think it a good idea to exclude them in future.
The Discrimination Law Association, whose members comprise lawyers and people who work on behalf of trade unionists and workers, has said that without the kind of information that individuals can obtain only from written questionnaires, in many cases it would be almost impossible to prove discrimination. It should be noted that 83% of those responding to the consultation that proposed repealing this provision, opposed the repeal, including unions, equality NGOs, the judiciary and members of the public. This seems to be a really strange stance for the Government to take. This provision helps both sides in a dispute and I cannot really understand why the Government should be proceeding against it, when it is against the recommendations of the TUC and the unions who are very active in this area.
Lord Ouseley
My Lords, I support the question and seek to clarify the context in which I offer support. It is one in which we have seen light-touch regulation being promoted by the previous Government and by this Government to get us to a point where, as has already been stated, we want employers to be in a position to hire and fire as they wish. That in itself will add greater discrimination for those who are likely to be discriminated against, on no reasonable basis.
The context is also one in which we see increasing tribunal fees being imposed along with the cutting of legal aid and funding for advice agencies to help individuals, who are relatively powerless in seeking to get redress if they feel that they have been discriminated against in employment. The situation with discrimination is that the employer always has the whip hand and the employee has very little knowledge, other than a feeling of being treated unfairly. Sometimes it is with evidence but they are unable to have information which places them in a position where they can argue and justify their claim for compensation.
The discrimination often occurs, in my view, for three main reasons. First, employers are lazy and it is a very quick fix to get rid of someone. Secondly, it is incompetence or, thirdly, it is just straightforward prejudice and bias. Those are the three main areas that appertain to discriminatory claims. The victim can move forward only with evidence and the respondent would like to be in a position of not having to disclose any information.
Usually, in my experience, most employers—particularly small employers—have no policies or procedures. Of those who have, the moment that you go back to them to try to explain that they may have breached anti-discrimination legislation and to ask them whether they have complied with their procedures, if they have any, they usually find very quickly that they want to come to an arrangement to conciliate or settle with a claimant. That is because they recognise that they are being challenged on a basis which has justification and that they have clearly failed to follow their own procedures, where they exist. In the case of very small employers, hiring and firing takes place very informally. There is usually a lot of nepotism, with family and friends being involved in the employment within small firms.
That said, it is quite important that we recognise that, notwithstanding all that I have mentioned about context, this repeal has come forward based on inaccurate and misleading information. There is no evidence of the burdens that have been created for employers. The original purposes of the questionnaires, from the Sex Discrimination Act 1975 and the Race Relations Act 1976, have been fulfilled because they enabled assessments to be made on the basis of facts and information provided. That enables that assessment to determine the strength or weakness of a case and may seek to persuade a complainant to withdraw because their case is so weak, or at least to put pressure on an employer to demonstrate that they are in an unsustainable position of seeking to defend the indefensible.
Evidence has shown throughout the years that the use of the questionnaires has helped us to reduce the costs and the burdens on both employers and employment tribunals. Without a questionnaire, a claimant could bring proceedings themselves and apply for disclosure or further information and such an order, when made, will bring considerably greater burdens on an employer. That is something that we should consider as a counterbalance to getting rid of the questionnaire—the real burdens that would be placed on employers if that process was pursued.
It cannot be overstated how crucial statutory questionnaires are to enable people to prove genuine discrimination claims. They offer a structured, time-bound way for a potential claimant to find out the employer’s or service provider’s reasons for taking certain action, and to gather evidence that the claimant cannot access in any other way. Without this kind of information, which individuals can obtain only through written questionnaires, in many cases it will be almost impossible to prove discrimination or a breach of an equality clause. The many individuals who have approached me about cases of alleged discrimination are at their wits’ end and give up in frustration. This will put us back many years, to the situation that preceded the Sex Discrimination Act 1975 and the Race Relations Act 1976.
Questionnaires are not a problem for employers who have nothing to hide. They are alerted at the earliest stage to the strengths and weaknesses of a possible discrimination or equal pay claim and generally take action swiftly to settle the case if need be. Conversely, repeal of the questionnaire procedure will mainly serve the interests of employers or service providers who do not wish to expose their potentially discriminatory policies and practices or cover up the misdemeanours of individuals in their employment. That is why it is important that we consider again whether this repeal has any justification and whether there is no better way in which to enable us, if necessary, to modify the questionnaire where it may be seen to be excessive and reduce it in a way that employers may see it as less burdensome, if that is the case, as a way of retaining it. In that way, we can ensure that we maintain the basis of helping to determine which cases have no basis to go forward to an employment tribunal, and persuading those complainants to withdraw, and seeking to impose the maximum pressure on those employers to settle with those complainants.
Lord Low of Dalston
My Lords, I came along this afternoon to support the opposition to Clauses 57 and 58 on the part of the noble Baroness, Lady Thornton, but I hung back in relation to Clause 57 because I was waiting for the noble Lord, Lord Lester, to intervene, as I knew that he had views on these matters—so I missed my turn. However, now that I know that the noble Lord is not here this afternoon, I shall say just a few words very briefly on Clause 58, although I fear that I shall not be able to speak with the same unrivalled knowledge and expertise on the subject as the noble Lord would have brought to the matter. But perhaps we will be able to hear from him in a later point in the debates on this Bill.
I was fourth on the list of those who put their names to this question, so I shall speak very briefly, but there are a couple of points that I would like to make. The Government have argued that the questionnaire procedure imposes considerable costs on business of nearly £1.5 million a year, with questionnaires becoming overlong and technical. However, research carried out by the Government Equalities Office has found that only 2% of private sector employers have had to complete a questionnaire in the past three years and most of those who did so agreed that responding to it had been straightforward. That does not sound like a great burden on business to me.
There is a great deal of concern out there in the legal profession about the prospect of the questionnaire procedure being done away with because, as others have indicated, it has been a very valuable part of the procedure in discrimination cases in enabling those cases to be dealt with more smoothly and expeditiously. As an example of this concern, the president of the Employment Tribunals Service, in responding to the Government’s consultation, went so far as to say:
“We further consider that the questionnaire procedure is very much in line with the pre claim resolution processes that are currently a consideration in primary legislation before Parliament. To remove this assistance to such a facility seems to the Employment Tribunal judiciary to be contrary to the overall policy of early resolution of claims or claims not proceeding where there is little merit. The proposed amendments to the Equality Act are considered by the Employment Tribunal judiciary to be retrograde steps in the administration of discrimination claims”.
That is a very strong statement coming from a very senior judicial official. The Government would be extremely unwise not to take very seriously advice coming from that quarter. Bearing in mind that kind of advice and the evidence to which I referred, which suggests that it is not nearly so much of a burden on business as the Government make out, I very much hope that the Government will think again and not proceed with Clause 58.
Baroness Howe of Idlicote
My Lords, I would like to say a brief word on this. I am particularly glad that my noble friend Lord Low has spelt out some of the concerns. It is particularly sad that we do not have with us the noble Lord, Lord Lester, who was so effective in designing the Sex Discrimination and Equal Pay Acts and who watched them through all their additional adaptations and changes. If anybody knows anything about the legal side of this, it is the noble Lord, Lord Lester.
I must admit that I was hoping for rather more information on the first debate, but I decided to say nothing and to see what happened. Both this and the first debate suffer from what I would call a reflection of the debates that we had on the general duty and on removing the duty to promote good relations. I find it very sad indeed that we have reached this situation after only two years, if that. It has taken so long to achieve advances in the area of equal opportunities, equal treatment and fairness, and two years is far too fast. One should let it be bedded in and create an atmosphere that can facilitate a rather faster flow towards equal opportunities on race and different religions, between men and women—whatever it happens to be. Had we let such an Act settle in for another five years, it might then have been worth while having a go.
We are being asked simply to strike out these sections. I may of course find that the noble Baroness is able to totally convince me with the detail that she gives that this really is not necessary. I hope that there will be an arrangement that will enable the noble Lord, Lord Lester, to have a say at a later stage in the debate on this subject. Frankly, without it we would be doing ourselves a disservice, quite apart from anything else.
Baroness Oppenheim-Barnes
My Lords, I hope that this is not too light a note, but this is an apology that I owe to the noble Baroness, Lady Howe, of some 40 years standing. I remember that she wrote to me making a complaint about the Caledonian girls. I do not know whether noble Lords are old enough to remember that there were pretty dolly girls in the advertisements. The noble Baroness will remember that she found them offensive. I found myself on “Any Questions” when the whole matter erupted again and I said that I rather liked to see these nice brisk young girls. “Who wants to be served by old bags?” I said, only to receive at least 20 letters from members of the public saying, “You’re on the radio. How do we know that you’re not an old bag yourself?”. At this point I apologise.
Baroness Stowell of Beeston
I do not know how to follow that.
I join other noble Lords in wishing the noble Lord, Lord Lester, a speedy recovery, although I know that had he been here he would not have been speaking in support of the Government today. I know that he would have brought his own great expertise to these discussions and I am sure that he will return to us very soon and we will have the benefit of his expertise. Certainly, he was kind enough to give me some of his time over the past few weeks to discuss this matter in great detail and I am very much aware of his position on this and the history of his involvement over a long period.
Clause 58 does not diminish people’s right to equal treatment or their access to justice where they believe they have encountered discrimination. Let me be clear: repeal of the obtaining information procedure will not reduce an individual’s right to pursue a discrimination case or the remedies available to those who are successful. Our intention is to simplify the whole pre-claim process so that all parties achieve the right outcome in the most straightforward and cost-effective way. I will discuss in more detail what we propose as an alternative before I sit down.
I will not rehearse the whole process involved in obtaining information except to make the point that Section 138 provides that Ministers must prescribe forms to be used for the procedure in secondary legislation. Business and the Government now believe that, over time, enshrining this process in legislation has led to it being out of date, burdensome and to some extent one-sided.
Let me be clear from the outset that not one single employer or business organisation told us that they saw value in the questionnaires. I know that the noble Baroness, Lady Thornton, and others requested information to that end. I will happily ensure that that is provided after today’s debate. As noble Lords have said, this process has been in anti-discrimination legislation for nearly 40 years. I must say to the noble Baroness, Lady Howe, that while I know that some of her remarks were about more recent legislation, this practice of obtaining information is now very much something that has been with us and has been tried for a very long time, but I would add that the process of obtaining information is only in anti-discrimination legislation; it is not replicated in other areas of employment law.
During the past 40 years, much has changed. The procedure was initially created to help to level the playing field between individuals and employers or service providers through a simple question and answer process to help to establish basic facts to determine whether discrimination had occurred. This was necessary in 1975. At that time, no one had brought a sex discrimination claim or knew whether it would be possible to do so successfully without any assistance. However, in recent years, 10,000 to 20,000 have been accepted by tribunals every year.
In 1975, when the legislation was being debated in Parliament, the Government included the obtaining information procedure, because they did not wish to make changes to the arrangements governing the burden of proof. As was said then, the procedure was,
“likely to tilt the balance somewhat the other way”.
The Government continued that they were,
“enabling the woman complainant … to … write a letter or to use a prescribed form”.—[Official Report, Commons, 18/6/1975; col. 1603.]
Since then the legislation on the burden of proof has changed to make it explicit that the complainant has to put forward only facts from which discrimination could be deduced, and it is for a respondent to prove that their actions were not, in fact, discriminatory. From the point of view of a respondent, it therefore seems that both aspects of the law are now, in their minds, stacked against them. Employers believe that over time the process has become heavily legalised and is frequently misused as a means of gathering detailed information, whether it is relevant or not. Such information is frequently sought in cases where the individual has already taken the decision to take their case to a tribunal and is simply forcing as much pre-claim disclosure as possible.
Baroness Thornton
Can I query what the noble Baroness has just said about getting information prior to a claim? Is that not a good thing? Does it not mean that the process will be sped up and settled, and possibly not even go to a tribunal if there is more information available? I am not sure why there is a problem and why the noble Baroness seems to think that this process is being misused. It collects lots of information. Is that not the whole point?
Baroness Stowell of Beeston
Obviously I was not being clear. The point that I was trying to make is that, while the purpose of the legislation is to help people to obtain information so that they can decide if they have a case, it is apparent that some individuals have already decided that they are going to take their case forward and are using this process for gathering information in a pre-claim disclosure arrangement.
Baroness Thornton
I am sorry to pursue this point. How many cases like these are there? The noble Baroness may not be able to tell me now but I would like to know from where the evidence for this has come. How many were there as a proportion of the consultation process?
Baroness Stowell of Beeston
I will endeavour to provide further information in that area and follow up in writing to the noble Baroness.
Noble Lords have argued against Clause 58 from the perspective of claimants, so may I put forward the arguments from the perspective of employers and the business community, which it is important for us to take account of? Collating this information can be onerous for employers, particularly where 20, 40 or even 100 additional questions are asked. They can often see that the information requested has little or no merit to a claim. However, they feel bound by the legislation and by the legal advice, which they feel is necessary to engage with and respond to, and within the statutory time frame. These exact concerns the then Opposition raised during the 1975 debate on the Sex Discrimination Bill, where it was said:
“There is no limitation on what can be asked. There is no screening process”.
If the respondent,
“decides that it is unsafe not to answer them, his answers to those questions may be admitted as evidence”.—[Official Report, Commons, 18/6/1975; col. 1602.]
Now, as then, the problem is not just simplifying the questionnaire form, which is simple and straightforward; the problem is ensuring that the questionnaire does not get used as the starting point for rafts of detailed and leading questions. Clearly we cannot and do not want to restrict the dialogue between parties where they are trying to explore and perhaps resolve their differences. That is why we are proposing a different approach altogether, based on conciliation and guidance, which I shall come on to.
The noble Lord, Lord Low, referred in the context of the questionnaire form to some 2009 research and said that employers had responded to it by saying that the questionnaire was straightforward. The GEO research in 2009 concerned only the layout of the questionnaire and not the whole process of dealing with the completed set of questionnaires from a claimant. Often the extra material is the problem.
Those arguing in favour of retaining these provisions—obviously they are speaking today—claim that they are often helpful in weeding out potential claims that are unmeritorious, or those based on mistake or misunderstanding. The noble Baroness, Lady Whitaker, was very specific on that point. She asked whether there were any statistics available to show how many cases this process had avoided coming to court. I do not have any statistics available, but I know that we have not received any from the Tribunals Service. I am not clear about whether we have asked for them, but it has not been able to provide them, or perhaps it just has not put any forward. If it is the latter, then obviously I shall follow that up. However, not a single response that we have received from our consultation, from an individual business or representative body, endorses the view put forward by the noble Baroness and others.
Baroness Whitaker
I am sorry to interrupt the noble Baroness. I am grateful for her answer about the statistics, as far as it goes. As regards what the employer stands to gain from retaining the questionnaire, which was the case that I was also trying to argue, would she comment on the British Chambers of Commerce survey which showed that none of the businesses questioned raised concerns about the questionnaire procedure? In the Government’s survey of 2009, when I think they examined 811 businesses, was it not the case that only one organisation said that the questionnaire had been a time-consuming exercise? Could she comment on that?
Baroness Stowell of Beeston
If the noble Baroness is referring to 2009, I think I have already answered that point by explaining that that was about the layout of the questionnaire and not the whole process of dealing with a full set of questions from a claimant. However, I am clear that the response to our consultation from the business community was clear. As I said at the beginning, I am very happy to follow up, in writing to the Committee, with further information to support that point. I should add that in some cases the cost to business, including legal advice, often runs to several hundreds of pounds and that is before any costs associated with defending the case at a tribunal.
Having said that, I turn to what is a more constructive alternative way forward. We are agreed that there is value in the aim of encouraging a pre-claim dialogue and exchange of information. There is merit in establishing the facts of a potential discrimination case, and this is certainly what our proposed early conciliation of certain employment claims is intended to achieve. Noble Lords who followed this Bill in debates on earlier clauses will be familiar with the sort of changes that we are proposing. I think those clauses have attracted considerable support.
People thinking of bringing proceedings could still seek information from an employer or service provider about an alleged breach of the Equality Act 2010, either verbally or in writing. As I read that out, I should make it clear that that can be done orally or in writing because I am not aware of anyone writing without using words. That point was stressed by several of those responding to the consultation. This is in a climate where, compared to 40 years ago, businesses are on the whole far more transparent about the information they disclose. I am speaking generally but I think organisations understand the importance of transparency in the way they operate, and that attaches to their reputation. Employers or businesses who refuse to respond to reasonable requests for information will continue to run the risk of this being taken into account by a court or tribunal when deciding whether a basic case of discrimination has been made out. They will be more conscious of that risk than in the past for the reasons that I have just given.
Even if the parties do not in the end agree to conciliation taking place, a conversation with ACAS will give them a better understanding of the issue and of the tribunal process. The Government Equalities Office is in discussion with ACAS with a view to producing approved guidance which would help set out for employers and potential claimants in discrimination cases—
Baroness Thornton
For my own clarification, because I have not heard this process described in quite this way, am I right in understanding that if somebody wants information because they think they have been discriminated against by either their employer or a service provider, they have to go to ACAS first? Is that right?
Baroness Stowell of Beeston
They do not have to go to ACAS first but in the conversations that the Government are having with ACAS about this process, ACAS is suggesting that it would be preferable for somebody who is considering making a claim to go to it first as it would much rather have that initial conversation without the burden of a lot of information so that the parties do not get bogged down in the detail of, “He says, she says” at that stage of the process.
Baroness Thornton
Does the Minister not think it likely that ACAS will fill in a form?
Baroness Stowell of Beeston
The noble Baroness may be more familiar with the processes followed by ACAS than I am. I cannot speak for ACAS and I do not know what it would undertake to do. I am just reporting to the Committee what ACAS advises is the best way forward in this context.
If I may conclude the point that I was making, ACAS seeks to produce approved guidance which would help set out for employers and potential claimants in discrimination cases both the scope and requirement for disclosure of pre-claim information. This will be an ACAS-led approach, with the TUC and equality stakeholders as well as employers invited to participate in ensuring that the guidance is right.
I have indicated that I will follow up in writing to some of the points that have been made, but I hope that I have provided the Committee with sufficient assurances to make clear that the repeal of Section 138 of the Equality Act 2010 will not affect any individual rights under law, will command business confidence and will be followed up by a lighter-touch process in consultation with key parties, which will deliver, as I said at the start, the outcome that everybody has a right to expect if they feel that they are in any way at risk of discrimination.
Baroness Thornton
My Lords, I thank the noble Baroness for that useful and helpful explanation. I also thank the noble Lords, Lord Low and Lord Ouseley, the noble Baronesses, Lady Turner and Lady Howe, and, indeed, the noble Baroness, Lady Oppenheim-Barnes, who is not in her place, for their interventions, which I look forward to reading in Hansard so that I can fully understand the insult that was meted out to the noble Baroness, Lady Howe.
My noble friend Lady Whitaker rightly said that we probably have not done justice to what the noble Lord, Lord Lester, would have said. I say to the Minister that this is the beginning of this process rather than the end. We will need to have further discussions on this issue, for which she always makes herself available. I think that the Minister made the false assumption that we were talking only about employees. In fact, I referred in all my remarks to employees and employers because we think that this form is useful to everybody concerned. The Government’s proposal to abolish it fails on almost every ground, including that of cost. Further, I do not think that their proposal will be any more efficient. The noble Baroness described what she thinks people will do in going to ACAS. However, it seems to me that that makes the process more complex. That does not feel like a light touch process to me. I am happy to have a discussion about that but it feels like a more complex process.
The noble Baroness is deceiving herself if she thinks that ACAS will not go into drafting guidance and forms, and do many things based on what already exists. This fails in terms of efficiency, it does not add anything to the aims of enterprise in this Bill, and it certainly fails in terms of the test of fairness and access to justice. I am afraid the Government have not made the evidence available to the Committee today to convince us that this is a necessary clause. On that basis, I will not proceed with my question. Even if I do not return to this, the noble Lord, Lord Lester, can probably be trusted to do so.
Clause 58 agreed.
Clause 59 : Primary Authorities
Amendment 28ZDA
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I beg to move Amendment 28ZDA and to speak to Amendment 28ZDB. These are probing amendments and I doubt that they will delay the Committee for very long. I should be clear that we strongly support the primary authority scheme, which was set up, of course, under the previous Labour Administration following the Hampton review. Despite its short life to date, it has been a success, and we further support the sensible extension of the scheme. When I last checked the numbers back in November, the scheme encompassed some 602 businesses, 93 local authorities and more than 58,000 premises, with 1.6 million employees and nearly 2,000 partnerships. The Minister may have an update on that.
The current criteria for participation require a business to operate across council boundaries, and the regulatory functions covered are health and safety, environmental health, trading standards, food safety and petroleum licensing. There are two main aspects of the scheme: the primary authority will provide assured advice to businesses, and the primary authority and businesses can prepare a national inspection plan. Clearly, the overall benefits to business come from a consistency of approach and the prospect of reducing the regulatory burden and improving regulatory efficiency.
So far as extending the scheme is concerned—as proposed by the report of the noble Lord, Lord Young, and provided for in Clause 59—there are three main dimensions: first, extending the eligibility rules so that more businesses can be included; secondly, strengthening the provisions relating to primary authority inspection plans; and thirdly, widening the range of regulatory areas covered by the scheme. The first of these is dealt with by Clause 59 and the second by Clause 60. As I understand it, the third will be accomplished by way of statutory instrument, and the Government are currently consulting on a specific proposition. We will clearly have the opportunity to consider these in due course, but I have no particular problem with the areas proposed. However, I ask the Minister if there is anything else in the pipeline, and to confirm that regulation of sunbeds is still included now that the noble Lord, Lord Marland, is no longer part of the team.
Amendments 28ZDA and 28ZDB apply to Clause 59, which looks to extend businesses which might be included in a primary authority scheme. The impact assessment identifies situations where this might be accomplished, and in particular identifies corporate groups, franchise arrangements and trade associations. The test for inclusion provided for in the clause depends upon entities having a shared approach to compliance. Amendment 28ZDA is a probe to better understand the Government’s views on the meaning of this phrase. Of course, the provision is not restricted to just those areas identified above. Clause 59 gives a wide power to the Secretary of State to determine whether the shared approach test is satisfied. The Secretary of State may from time to time publish guidance about what is to be taken into account.
Amendment 28ZDA seeks a better understanding of the Government’s interpretation of a “shared” approach to compliance. The Minister in another place said that it simply means that businesses consistently followed the same centrally issued guidance to fulfil their regulatory obligations. I suggest that this is a bit thin; anyway, it seems to focus on the assured advice benefits of the scheme rather than on the national inspection benefits. I offer the Minister the opportunity to put more on the record about the scope of this. As for the development of guidance, our amendment requires this to be done after due consultation and that this requirement should be in the Bill. When is the first guidance to be available and what consultation is planned for this? Perhaps the Minister can let us know. I beg to move.
Lord Deben
My Lords, I support the tenor of these amendments and wish to say how strongly I support this part of the Bill. I have no direct interest in it because the companies with which I am associated do not tend to go across the county border in quite the way in which it might affect them. However, if I do have an interest I will declare it.
The issue I want to raise is that this has been a very successful extension of a system that was in operation even before the previous Government. Other examples included how the supermarkets were able to have a lead council that would help them to get the basis upon which they would apply elsewhere, so this has been a growing piece of work. I was pleased to hear the noble Lord put forward his support for this system because it really makes a difference and is not a way of avoiding anything. It is merely a way of ensuring that there is a continuity and consistency in the implementation of law. It also enables companies that want to do the right thing to do it and then not find that they are asked to do something different somewhere else in the country. I think all of us, right across the board, have found embarrassing situations in which in one place you are asked to do the opposite of what you have been asked to do next door in a particular kitchen or over a particular kind of presentation.
This is an extremely important change, which was amplified by the previous Government and is being amplified here. I, too, would like to hear from the Minister whether this is the beginning of a continuous process and whether it will be much deeper than it is in the Bill. Can we hope that more and more areas will be covered, not in a way that reduces the efficacy of regulation but one which increases its efficiency? It is not that I want people to get away with anything; I just want people to know where they are, wherever they are. This amendment points to that and I hope that the Minister will be able to help us see this as a continuing and growing trend in government regulation.
Lord Curry of Kirkharle
My Lords, I declare an interest in that I chair the Better Regulation Executive, which was very much part of recommending these changes. I am delighted that the noble Lord, Lord McKenzie, recognises the value of the scheme and I pay tribute to the previous Government for having introduced it because it is a valuable tool and has reduced significantly the burden on businesses that have participated in it. My concern about the proposed amendment is the definition of “to a material extent”. It will create a lot of debate and potential confusion around how one defines “material extent”. The trade associations that have been consulted and would be keen to participate in this scheme have members who all have a common interest. I see this as providing a real opportunity to take a significant regulatory burden away from businesses that are members of a trade association and would wish to participate in such a scheme, so I have a problem with Amendment 28ZDA.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, before I turn to these amendments I would just like to thank the noble Lord, Lord Stevenson, for his very kind and extensive words of welcome at the previous Sitting of Committee. I look forward to a continuing and fruitful dialogue with the noble Lord. As he said himself, we sing in the Parliament choir together, although I hazard a guess that his tunefulness is somewhat superior to my own. I look forward to working closely with him and other noble Lords over the coming weeks on this Bill. I also confirm that I intend to propose meetings on the various matters where it was suggested this would be helpful at earlier stages of the Committee.
Turning to this group of amendments, I thank the noble Lords, Lord McKenzie and Lord Stevenson, for their amendments to Clause 59 concerning eligibility for the primary authority scheme, which I shall respond to in turn. This scheme was of course introduced by the previous Government, as the noble Lord, Lord McKenzie, mentioned, and has been much welcomed.
Clause 59 broadens the criteria for businesses to be eligible for the primary authority scheme. It will mean in practice that many small businesses that operate in only one local authority area will be able to join, together with similar businesses which share an approach to compliance. I hope that I can answer the question from the noble Lord, Lord McKenzie, about what that means.
The Government see a shared approach to compliance as one that a business consistently follows in order to fulfil its regulatory obligations. Such an approach should result from guidance or procedures issued from a single point, such as a head office or a trade association. This will mean that franchises of the same brand or members of the same trade association, for example, could qualify. They will be able to enjoy the valuable assurance that a primary authority partnership can bring.
The new eligibility criteria have been intentionally drafted broadly. This is to ensure that as many small businesses as possible can benefit from reduced regulatory burdens. A business will be able to join the scheme only if the Secretary of State is satisfied that the business meets the eligibility criteria, and statutory guidance will provide more detail about the matters likely to be taken into account in assessing eligibility under the new criteria.
It is intended that further detail as to the circumstances likely to constitute a shared approach to compliance will be included in statutory guidance. Adding further detail to the drafting of the clause could inadvertently restrict participation in the scheme for the very businesses that this clause is attempting to help.
Of course, having a broad definition of a shared approach to compliance in the legislation means that a wide variety of groups of businesses could qualify for the scheme and the nature of the resulting partnership will rightly need to vary. For example, where a trade association acts purely to distribute information to its members, the primary authority partnership will be very different from one which involves a trade association that provides a fully audited accreditation scheme for its members.
This type of detail will also be given in the statutory guidance and the statutory mechanism for scrutiny of proposed new partnerships by the Secretary of State provides assurance that shared approaches to compliance will be handled appropriately.
Amendment 28ZDB seeks to impose a statutory requirement for consultation before the Secretary of State issues statutory guidance on shared approach to compliance. Guidance for businesses and local authorities will be very important to provide detail of how the extended scheme will work in practice. The views of all interested parties will be vital in making the scheme work as well as it possibly can. For this reason, a commitment was given during Committee debates in the other place that,
“any guidance published as a result of the clause will be developed in consultation with stakeholders, including businesses, local authorities, trade associations and business groups”.—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/12; col. 606.]
I should like to pick up on a number of the comments raised. My noble friend Lord Deben asked about continuing the process. The Government are committed to the primary authority scheme. It is a key tool in reducing red tape and ending the tick-box culture of regulation.
The noble Lord, Lord McKenzie of Luton, asked at the beginning of the debate whether there were any extensions to primary authorities in the pipeline. I can confirm that the Government are consulting on extending primary authorities to include several new regulations, including those on sunbeds, if I read the noble Lord correctly. He also asked about statutory guidance and consultation. The Secretary of State already issues statutory guidance in relation to the primary authority scheme, and Clause 59(5) provides that the Secretary of State can also issue guidance on the matters likely to be taken into account in assessing whether a business meets the new “shared” approach to compliance test. In Committee in the House of Commons, a commitment was made to develop guidance in consultation with stakeholders, including local authorities. I can confirm that the existing statutory guidance will be updated to include further content relating to these proposals. This will be in place, in time for the proposed extension of eligibility becoming effective.
In summary, I hope that noble Lords will not press their amendments, because I hope that I have provided sufficient reassurance that these matters will be dealt with by guidance, taking into account the views of interested parties.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply, which has helpfully taken us forward a little bit. The extension proposed is much more focused on the assured advice component of the primary authority, rather than inspection plans. But I will not pursue that at the moment. I welcome the repeated reassurance that consultation will precede any issue of guidance. That is helpful. I am certainly pleased to see the enthusiastic support of the noble Lord, Lord Deben, for this approach, and indeed that of the noble Lord, Lord Curry.
The wording “material extent” was simply a peg on which to hang an amendment so that we could have the discussion that we have just had. I accept entirely that if it appeared in its current form in the Bill it would not be particularly helpful. I thank the Minister for his comments and I beg leave to withdraw the amendment.
Lord McKenzie of Luton
“(3B) Where functions equivalent to relevant functions are carried out by other regulatory bodies, any inspection plans shall have regard to the way in which such other bodies exercise their functions.”
Lord McKenzie of Luton
My Lords, in moving Amendment 28ZDC I shall also speak to Amendment 28ZDD.
Amendment 28ZDC is a probing amendment designed to focus on the issue of health and safety and the split responsibility between the HSE and local authorities. This was another issue raised by Professor Löfstedt in his independent review of health and safety legislation. The HSE is the national regulatory body responsible for promoting better health and safety and setting the parameters for enforcement activity, but enforcement and inspection activity is split between the HSE and local authorities. The HSE is responsible for traditionally high-risk places and local authorities for those that have less risk.
As Professor Löfstedt’s review points out, there have been many good examples of joint working and co-ordination between the HSE and local authorities, including joint inspections and flexible warranting. An engagement of primary authorities in this process certainly enhances outcomes. Professor Löfstedt identifies that, despite improvements, there remain inconsistencies across local authorities’ implementation, with some local authorities assigning a lower priority to health and safety than, say, food safety. He also drew attention to the problem that the premises that are considered relatively low-risk within the HSE areas of responsibility are now not subject to proactive inspection at all as a result of the government edict, but may nevertheless be riskier than workplaces falling within the local authority orbit. That is accentuated by the fact that local authorities undertake more inspections than the HSE—nearly 200,000 to the some 33,000 of the HSE—although the latter is of course to reduce.
With greater emphasis on HSE responsibilities and engagement, the primary authority route would be one means of improving the situation, as this probing amendment suggests. However, the professor has a more radical proposition, which is to have a single body directing health and safety across all workplaces, and that this responsibility should pass to the HSE. Can the Minister offer a government view on that proposition?
Amendment 28ZDD touches on the extent to which local authorities may exercise their inspection functions outside the primary authority plan and co-operate in providing feedback. Clause 60 makes following the plan mandatory unless prior written permission has been given. The LGA argument is that this mandate is unnecessary and that encouragement to co-operate will increase the effectiveness of inspection plans. We will hear more of this in a moment.
Our amendment is an attempt—perhaps not a very refined one—to find a middle way. Can the Minister outline circumstances in which the Government consider it reasonable for a local authority to seek and be granted an easement from the inspection plan provided by the primary authority? The impact assessment states that 5% of primary authorities currently use inspection plans, which is a surprisingly low percentage. What are the Government’s estimates of the likely increase in this percentage in the period ahead? I beg to move.
Viscount Younger of Leckie
My Lords, I thank the noble Lords for their amendments to the inspection plans clause, to which I shall respond.
Clause 60 strengthens inspection plans so that local authorities must not deviate from a valid plan without prior agreement from the primary authority. This will ensure that inspection plans can have maximum impact to reduce the burden of regulation for businesses and regulators, and target scarce resource where it is most needed. Amendment 28ZDC proposes that the legislation should require inspection plans to have regard to the way other regulatory bodies exercise equivalent functions.
This is an interesting idea and it gives me the opportunity to underline the Government’s view that it is paramount for regulatory bodies to work together consistently within the system. That said, we do not feel that this amendment is necessary. The legislation already requires primary authorities to take into account relevant recommendations of other regulators relating to inspections when developing inspection plans. The statutory guidance reinforces this requirement.
Further, processes have been agreed with the regulatory bodies, which ensure that national regulators have the opportunity to comment on draft inspection plans before the Secretary of State gives consent. There are support mechanisms that allow primary authorities to raise queries and assure themselves that their course of travel is in line with policy and best practice in the area.
Amendment 28ZDD proposes that an exception be made to the binding nature of inspection plans where a local authority believes that it is not appropriate in the circumstances to carry out particular inspection activity in accordance with an inspection plan. The Government agree entirely that there may be circumstances where it is not appropriate for inspection activity to follow inspection plans.
The underlying statutory guidance accordingly makes clear that inspection plans apply only to routine inspections carried out in a proactive way by the local authority. An inspection plan would not impede a local authority in responding to specific complaints or local intelligence. In fact, a plan is likely to strengthen an officer’s ability to react by providing important information about the company and its approach to compliance.
I should like to make it clear that there is nothing in the proposed changes to the operation of the primary authority scheme or inspection plans that would prevent or delay local authority action in response to complaints or specific local concerns. The Government firmly believe that primary authority inspection plans must become binding and I shall give detailed reasoning for that in the stand part debate, which we will come to in a few moments.
I will pick up on a point raised by the noble Lord, Lord McKenzie, concerning the Health and Safety Executive’s role in relation to local authorities. As the noble Lord described in detail, the Health and Safety Executive worked through local authorities for categories of businesses considered as low-risk. I should clarify that “primary authority” applies only to local authority regulators. The Health and Safety Executive responded to Professor Löfstedt’s recommendations separately. I hope, therefore, that noble Lords will not press these two amendments as the existing scheme for inspection plans contains the necessary safeguards.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for his response. I certainly do not propose to press these amendments or take them forward on Report. I am not sure that the Minister’s reply, which was generally helpful, fundamentally dealt with the position of the HSE and the split enforcement role of health and safety between local authorities and the HSE, particularly with the quite clear proposal that came from Professor Löfstedt’s report. I suspect that this is a debate for another occasion and not for the content of this Bill. Accordingly, I beg leave to withdraw the amendment.
Baroness Greengross
My Lords, listening to the Minister, I felt rather sad that I was going to stand up and say what I intend to say. It is because these primary authority partnerships are such a good thing and have not been around very long that I want to oppose Clause 60 being part of the Bill.
I spoke briefly about this at Second Reading to say exactly that; that they need to be encouraged and that they should not be overturned, through this Bill, by central government when they intervene in local partnerships by directing councils to follow inspection plans. I declare an interest as a vice-president of the Local Government Association and I speak in that capacity. In these difficult times, we know that councils use a wide range of tools to ensure that businesses receive the tailored support that they need. The primary authority is one of the key tools that councils can use when they want to provide individual businesses with tailored support, and when they want to reduce red tape, promote consistent advice from councils and ensure that the limited enforcement resource is risk-based and focused on priorities. I would like to see the removal of this clause, which would make it compulsory for enforcing authorities to abide by the content of inspection plans, which I know is the opposite of what the Minister was saying.
The LGA—I declare an interest—recognises the important role that inspection plans can have in informing enforcement activity but councils are already required by law to have regard to these plans. There are many examples of inspection plans being used to inform the work of councils with companies that have multiple business outlets. Primary authority has only been running since 2009 and has only very recently gained a critical mass of business involvement. It is therefore far too early to identify more than initial findings about the scheme and certainly too early to make wholesale legislative changes. In fact, the evaluation of primary authority involved discussions with only 24 businesses and there are only 11 inspection plans in place.
Furthermore, the evaluation showed that of those councils that had used inspection plans, fewer than 50% found that they enabled a more targeted inspection. It is therefore simply not necessary for central government to intervene in these local partnerships by directing councillors to follow inspection plans. Central direction will reduce flexibility and innovation at a local level. More than that, it will introduce a layer of bureaucracy for both primary authorities and enforcing authorities that fails to accommodate local circumstances and the judgment of competent enforcement officers.
This step also contradicts the Government’s commitment to reduce red tape for councils. It might mean many more delays, in spite of what the Minister suggested. It is an unnecessary use of legislation. I know that the Local Government Association would be happy to discuss opportunities for increasing awareness of inspection plans and how they can be used to achieve more focused and targeted inspections, which would help to achieve the intended outcome without tying councils in unnecessary red tape.
Lord McKenzie of Luton
My Lords, I look forward to the Minister’s response. I am bound to say to the noble Baroness, with whom I normally agree wholeheartedly, that I remain unconvinced of the case that has been made. There is an easement for local authorities that want to go down a different route to that provided for in the Bill. As the Minister said in response to my previous amendment, local authorities are free to react to emergency situations or local complaints should they arise. The inspection plans apply only to routine and proactive inspections. I wait to hear the Minister’s response, but this is not a proposition with which we can align ourselves.
Lord Curry of Kirkharle
My Lords, I will also try to reassure the noble Baroness, Lady Greengross. Under the new governance arrangements that exist for the primary authority scheme with the Better Regulation Delivery Office, there is significant representation from local government on that governance body. I therefore hope that she will be reassured that there will be considerable discussion between the Better Regulation Delivery Office and local government on how the scheme will be implemented.
Viscount Younger of Leckie
My Lords, Clause 60 strengthens primary authority inspection plans. Its effect is to make it binding for local authorities to act in accordance with a plan which is in force. Strengthening inspection plans in this way is a crucial measure for the Government’s aim of,
“ending the culture of ‘tick-box’ regulation”.
Under the current provisions, primary authorities and businesses can work together to establish an inspection plan. Several businesses have done so, and report more informed and better targeted enforcement as a result. As things stand, local authorities must have regard only to plans, and are not bound by them. We have been told by primary authorities that plans and requests for feedback are not being followed in many cases. This means that the full benefits of inspection plans are not being realised, and many businesses are put off developing them because they do not have confidence that they will be followed.
With this clause, it is our intention to remedy this problem and to improve inspection plans. We are giving them the teeth that they need to deliver as much benefit for businesses as possible. This will ensure that businesses and primary authorities have certainty that inspections will be carried out in accordance with the plans in which they have invested. It will also mean that essential, timely feedback is received to keep the business informed of its key risks. Inspection plans are a crucial tool in enabling businesses to earn recognition for their compliance procedures and to reduce the burden of regulation. They also allow firms to focus on the key risks to their business and optimise their procedures, saving valuable time and wasted effort and allowing them to provide a better service to their customers.
Baroness Greengross
My Lords, I thank the Minister, who has reassured me to some extent. I am not brave enough to argue with the opinion of an authority such as John Lewis—nobody can. However, there are quite a lot of questions for the Local Government Association to consider carefully. The views that I presented to the House were directly received from that body, and I know that it has some further concerns. I will come back later on this if necessary. I thank the Minister and the Committee.
Viscount Younger of Leckie
My Lords, these three government amendments have the effect of removing new Section 47(2B) of the Health and Safety at Work etc Act 1974, and any references to it from Clause 61. New Section 47(2B) is a new regulation-making power. The effect of the power is to enable the Secretary of State to make regulations, subject to affirmative procedure, which make changes to the extent to which,
“other health and safety legislation”,
is actionable.
“Other health and safety legislation”,
is defined as,
“any provision of an enactment which relates to any matter relevant to any of the general purposes”,
of Part 1 of the 1974 Act.
The general purposes of the Health and Safety at Work etc Act include securing the health, safety and welfare of persons at work; protecting persons other than persons at work against risks to health or safety arising out of, or in connection with, the activities of persons at work; and controlling the keeping and use of explosive or highly flammable or otherwise dangerous substances.
In its report published on 15 November 2012, the Delegated Powers and Regulatory Reform Committee, although content with the other regulation-making powers in Clause 61, was concerned that the power in Clause 47(2B) appeared to be very far-reaching, particularly since the purposes of the 1974 Act went beyond the health and safety of people at work. The committee considered that the power was inappropriate and recommended that the new power in Section 47(2B) should be removed from the Bill.
The Government have reflected on the comments of the Delegated Powers and Regulatory Reform Committee and, on further consideration, accept that it is not necessary to take such a wide power to amend other legislation as there are no current plans to extend the policy to other legislation. I am happy to say that we have therefore accepted the recommendation of the Committee. These three amendments give effect to that recommendation. I trust that noble Lords will support this improvement to the clause. I beg to move.
Lord McKenzie of Luton
My Lords, we are happy to support these amendments. They seek to remove a very extensive power which could draw a wide range of circumstances into the ambit of duties which cease to be actionable. As the Delegated Powers Committee put it, there is no discernible policy objective to the inclusion of the proposed new Section 47(2B). The scope could be incredibly wide: any provisions of any enactment which link to any matter relevant to any of the general purposes of the 1974 Act—that is the Health and Safety at Work etc. Act. The Delegated Powers Committee has pointed to just one example: the control and keeping of dangerous substances. It is therefore absolutely right that the Government have backed off on this; they are very wise to do so. It is illustrative of a dangerous desire to accumulate draconian powers, but I am pleased that the Government have stepped back from that on this occasion.
Lord Deben
I welcome this, and ask the Minister to carry back the message that it is extremely valuable for people to listen to the advice given by committees. He may be involved in the forthcoming Bill which is entirely incorrectly called the Growth and Infrastructure Bill, in which there are some very uncooked suggestions. It would be of great help to the Committee were he to give an assurance that he will do his best to make sure that the Government listen with the same care to some of the suggestions that come from other committees as they appear to have done on this occasion in listening to the specialist committee that has advised this particular action.
Viscount Younger of Leckie
First, I thank the noble Lord, Lord McKenzie, for his support in this respect. I also take note of the comments that have been made by my noble friend Lord Deben.
Baroness Turner of Camden
My Lords, I have listened with interest to the exchange that we have just had, but it really does not make much difference to the way I feel generally about Clause 61. If the Health and Safety at Work etc. Act 1974 is amended in accordance with this clause, the laws relating to workplace health and safety could be returned to where they were almost a century ago. Since a landmark case, the law on claiming compensation for workplace injury where the employer has breached his statutory duty has been very clear. If this change is implemented, the law will return to being complex and uncertain. It will be more difficult and more risky for people who have been injured just because they went to work to claim proper redress. More meritorious cases will be lost, which means that the burden of caring for those injured workers will be borne by themselves, their families or the state, rather than by the wrongdoer. The litigation process will be more protracted and expensive, which is exactly what the Government are trying to avoid. The costs of bringing claims will inevitably increase, which means that there is every chance that insurers will increase premiums—something which I think that the Government are also anxious to avoid.
Currently, Section 47(2) of the Health and Safety at Work etc. Act states:
“Breach of a duty imposed by health and safety regulations shall, so far as it causes damage, be actionable except in so far as the regulations provide otherwise”.
In practice, this means that if a worker is injured and he can prove that the employer has breached his statutory duty, he is entitled to claim compensation. This is the basis on which workplace injury claims are usually brought. The law on this is clear, it is well understood by all parties, and legal appeals in this field have been almost unheard of in recent years. It has also been the basis upon which health and safety legislation has been drafted and passed by Parliament, with a dual purpose of setting out the criminal law, and giving people injured as a result of breach of that law a right to compensation.
Without this legal provision, the injured person would be obliged to rely only on the law of negligence to claim compensation. However, the law of negligence is much more complex, as the burden of proof lies with the injured worker, when it is the employer who holds all the knowledge about the workplace systems, tools, procedures and so on. This means that much more evidence has to be gathered, more witnesses interviewed, and more documents provided if the case is to succeed. This is time consuming, and can be a very difficult situation in which to succeed, because the guilty employer holds all the cards.
Baroness Brinton
My Lords, there is a balance in these cases. I accept the points that the noble Baroness, Lady Turner of Camden, has made, but an issue has concerned me for some time about there being no defence for breach of duty for organisations that have done their absolute utmost to prevent an accident.
Let me give the Committee an illustration. An organisation with catering facilities for conferences has an extremely good record in public hygiene, effective written policies for staff at all levels and good training in management oversight of practices in its kitchens. A casual chef was employed from an agency. The chef was briefed that he was not to use raw egg in a mousse. He was given a written recipe to follow as well as the policy about why raw egg should not be used in such recipes. He disobeyed the order and, as a result, a conference delegate became seriously ill and had a miscarriage. That is a dreadful outcome from a single thoughtless incident by someone who was not even an employee but an agency worker not following instructions.
The lack of defence for the breach of duty legislation meant that the organisation itself was sued both civilly and criminally, but so were the people who had put in place the policies and monitoring, even though they had explicitly told this particular individual not to follow that course. As a result, individuals further up the organisation were extremely concerned that there was nothing further they could have done. Everything that the managing director, for example, had asked to happen had been carried out by those working beneath him. The organisation was rightly fined and compensation was rightly paid. However, the point is that there has to be some defence for breach of duty.
Baroness Whitaker
I apologise for interrupting so early in the noble Baroness’s speech, but it is important to say first of all that almost all provisions in the Health and Safety at Work etc. Act include the little phrase,
“so far as is reasonably practicable”.
Some have strict liability but there are very few. I hope that the noble Baroness will accept that, on the whole, lack of prior knowledge and lack of control does not mean that you will be judged to have committed a criminal act.
Baroness Brinton
I am grateful for the intervention by the noble Baroness, Lady Whitaker. Unfortunately, that was not true in this case. Only at the last minute were the managing director and someone else removed from the criminal action, which was helpful, but it was only after months of papers going between the Health and Safety Executive and others.
The point that I am trying to make is the one that I started with: there is a balance. I accept the undertaking that employees need to be protected, but there are occasions when there should be a defence for a breach of duty. I believe that new subsection (2D) in Clause 61 attempts to do that. The concerns that the Baroness has raised should be looked at and I hope that there will be some scope for the Minister to address them. But I would not want the record to show that concern was only one-sided. Certainly, some organisations do their utmost to make sure of something and they appear still to fall foul of legislation.
Lord McKenzie of Luton
My Lords, I added my name in support of my noble friend’s proposition that Clause 61 should not stand part of the Bill. Notwithstanding the Government’s amendments, which have removed what the Delegated Powers and Regulatory Reform Committee described as a power so far-reaching in its effects as to be inappropriate, what remains is a significant and unacceptable change in the law. It overturns what has been in place since 1898 as a result of the landmark decision Groves v Lord Wimborne. It will radically change the way that injured workers can claim compensation from their employers.
The clause was slipped into the Bill on Report in another place without prior consultation. The Government have claimed that it was the recommendation of Professor Ragnar Löfstedt in his independent review of health and safety legislation. But as my noble friend Lady Turner said, his report stated:
“I recommend that regulatory provisions that impose strict liability should be reviewed by June 2013 and either qualified with ‘reasonably practicable’ where strict liability is not absolutely necessary or amended to prevent civil liability”.
I have spoken with the professor, a distinguished academic, directly about this and he told me, as he would tell others, that his report speaks for itself on this matter. He recommended a review; he did not recommend what is included in Clause 61.
We have received a number of representations from authoritative bodies: the Personal Injuries Bar Association, the Association of Personal Injury Lawyers, the Bar Council, the Law Society, the Scottish TUC, the TUC, Thompsons Solicitors, UNISON and the NUT, to name but a few. They all have the same consistent message about the impact of this clause and the deep concerns it engenders.
The current position is clear. Regulations issued under the Health and Safety at Work etc. Act 1974 contain the vast majority of duties that the law imposes on employers to create and maintain safe workplaces. Some of these—a minority—impose a strict liability on employers, others a less strict liability. In the latter case, an employer will not be held to be in breach of a statutory duty if an accident could not have been foreseen or it was not reasonably practical to avoid it. Those situations fall outside strict liability. However, if a breach of duty is established, an employee is entitled to claim compensation.
Where strict liability applies, the employer is liable for injury caused without proof of fault or failure. As the Personal Injuries Bar Association points out, strict liability applies, for example, to the Provision and Use of Work Equipment Regulations. It is justified because the employee has no control over the selection, buying or maintaining of equipment, so the employer who provides it takes the risk if the equipment injures somebody and is defective. If it is not the employer in those circumstances, who will bear that risk, and where is the fairness if it is the employee? There is a separate issue of the employer being prosecuted by the HSE for committing a criminal offence although such prosecutions are few and far between.
However, Clause 61 does not deal just with strict liability. If enacted, it would remove all the opportunities for an injured employee to seek compensation from an employer for breach of statutory duty. Employers will no longer be liable in the civil courts for the offence of a breach of health and safety at work regulations, so, as my noble friend Lady Turner said, the only remedy available to the injured employee would be to prove that the employer was negligent. We are advised that this situation arises because Clause 61 would reverse the presumption in Section 47 of the Health and Safety at Work Act, with the consequence that no health and safety regulation would impose civil liability unless express provision was made for them to do so. The regulations carry no such provisions and, unless the Minister can tell us otherwise, there are no plans to introduce any. Will the Minister confirm that there are no such plans?
Will the Minister also confirm that Clause 61 therefore goes considerably further than the recommendation in the Löfstedt report, the most far-reaching consequence of which, and one which we could not support, would be the removal of strict liability from those regulations to which it applies?
Indeed, the impact assessment shows the Government declined to follow the recommendations of Löfstedt on the grounds that identifying strict liability duties is complex and would require amending a large number of regulations. However, the Personal Injuries Bar Association and others disagree with this and make clear that instances of strict liability are limited and it is imposed only where it is necessary to do so. Therefore, the Government’s justification for this draconian change is spurious. Can the Minister tell us how many regulations are considered subject to strict liability? Will he explain why the Government have chosen to overturn this long-established position and to do so without prior consultation? Why is it considered that to transfer the risk in no-fault situations from employers— more accurately, the providers of employer liability insurance—to employees, their families and/or the state is justified?
Clause 61 will also mean that the route to justice and compensation where the employer is culpable is far less certain. Because an injured worker’s course of action for breach of statutory duty is removed, the available remedy, as my noble friend has said, is to seek to prove negligence. However, the reality is that negligence and breach of statutory duty are not equivalent avenues to justice and compensation.
Indeed, the Government’s own impact assessment identifies that negligence is a more nebulous concept and more difficult to prove, with the burden of proof switching to the employee. The PIBA briefing on this matter explains this in some detail:
“In order to establish liability for negligence at common law, an injured person must establish: … The existence of a duty of care … The scope of the duty … Breach of the duty … That the breach caused injury … That the resulting injury was reasonably foreseeable”.
These are nebulous concepts indeed, to which even the Government refer in their evidence base.
Baroness Donaghy
My Lords, I declare an interest as the author of a report in 2009 to the then Secretary of State for Work and Pensions on the underlying causes of construction fatal accidents.
My first question is to ask the Minister why this clause was inserted into the Bill at Report on 16 October last year without proper scrutiny. The clause will not take away an employer’s obligation to take health and safety seriously. It will simply make it virtually impossible for a worker who is injured or whose family breadwinner is deceased to go through the complex and uncertain process of claiming compensation. It is a charter for rogue employers to avoid their obligations. Make no mistake about it: if a cowboy is not afraid of sanctions he will carry on behaving like a cowboy. The government Amendment 28ZE was an attempt to head us off at the pass and does not deal with the fundamental change which is being proposed.
As the All-Party Parliamentary Group on Occupational Safety and Health has said:
“Since 1898 the law on claiming compensation for work-place injury, where the employer has breached their statutory duty, has been very clear. This change will not only put the clock back over 100 years, it will create considerable legal uncertainty”.
Strict liability was introduced over a century ago for good reason—to recognise that there was a different balance of power between employee and employers. It would be entirely unfair and most likely impossible to expect an injured employee to be able to show that their employer had not taken reasonable care leading to injury from defective or hazardous equipment. Such duties have helped to prevent future workplace deaths and injury. This is particularly the case on a building site, where the majority of people are sub-contractors and/or self-employed. If the principal contractor were not strictly liable, there would be even greater carnage in the construction industry.
The amendment will not reduce compliance costs for the prudent employer but bizarrely may well have the unintended impact of benefiting the unscrupulous employer. Breaches of workplace regulations are currently almost invariably currently enforced through civil claims procedures, as has been said. Due to limited resources, the Health and Safety Executive is able to prosecute only 0.1%, if that, of breaches and health and safety law. This clause should be removed from the Bill on the basis that the Government should review and consult on the issues of strict liability in an open and transparent manner, inviting submissions from all affected parties.
I am also concerned that the good work carried out by Professor Ragnar Löfstedt has been prayed in aid for this shoddy piece of work. We all know the phrase, “if you give an inch they will take a mile”. In this case Löfstedt recommended that regulatory provisions that impose strict liability should be reviewed by June 2013. He took the view that regulation should be qualified with “reasonably practicable” where strict liability is not absolutely necessary, or amended to prevent civil liability from attaching to a breach of those provisions. He did not recommend a blanket removal of strict liability from health and safety law. The review that he recommended does not seem to have been conducted beyond a simple impact assessment by officials. There was no consultation on the proposals before they were introduced in Clause 61.
As the noble Baroness, Lady Whitaker, has said, health and safety regulation has always contained a balance between different types of obligation, including a majority qualified by “reasonably practicable”, as well as some that are strict. This balance has existed since the Factories Act 1937 and been considered to represent a fair balance. Although “reasonable practicability” has been the main driver for health and safety regulation it has always contained a balance between different approaches to liability.
With some regulations, if a worker is injured and can prove that the employer has breached their statutory duty, the worker is entitled to claim compensation. This is the basis on which health and safety legislation has been introduced by Parliament, with the twin aim of setting out the criminal law and giving people who have been injured as a result of breach of that law a right to compensation. Without this legal provision the injured person would be obliged to rely only on the law of negligence to claim compensation. It is unclear territory. More importantly, cost moves from the employer to the worker.
As I have said, the amendment will not change the fact that the employer will have broken the criminal law. They will still be liable to prosecution in court. All that changes is that the victim will now be denied the right to compensation. The All-Party Parliamentary Group on Occupational Safety and Health is very concerned that this will have a negative effect on preventing injuries in the workplace, as compensation claims have always helped to drive forward improvements to help to ensure that such incidents are not repeated.
Let me turn to the transient nature of the construction industry, where the majority of workers are self-employed—either genuine or bogus self-employed. In London and the south-east it is about 90%. This adds risk to the industry because the self-employed can never be genuine apprentices nor could they take on the role of safety representatives. Some claim that under-reporting of accidents is because the self-employed tend not to report them as they do not receive benefits. The cost of any permanent injury to a self-employed person is probably met by the state and some claimed that they were less likely to report unsafe practices because they wanted a job next Monday. In other words, they were less secure in their employment.
I met a number of families of workers who had been killed on construction sites. Their dignity was impressive and their proposals were centred on future prevention rather than vengeance or compensation. Let me quote two of them: “I brought up my son to be law-abiding. You go to work for the things that you want. They were killed by someone more interested in money. People think that they are safe at work. Sometimes I would have to get him up at 4.30 am”. Another person said, “Everyone was responsible for every bit of the site except the bit my husband was on. I am sure responsibility would have moved if it had been a different part of the site; 350 men have died since my husband died. In any other profession there would have been an outcry.”
I firmly believe that this legislation keeps people alive on building sites. I equally believe that it is not strong enough and yet the Government are attempting to weaken it. One young woman, Jennifer Deeney, lost her husband Kieron after only five months of marriage. The employer accepted liability and so it was only a question of compensation. It took five years for the case to be heard at the Old Bailey. I was privileged to attend the hearing, at the end of a long process, where some justice was done. There were delays at the coroner's office and obstruction from solicitors acting for the employer. The judge in the case said,
“Somebody needs to address these long delays … In essence it is not a complex case”.
I wish we could find a better procedure.
If it took five years to settle this case, which was not complex and where the employer had accepted liability, imagine the impact of having to go through an initial process of proving negligence. This will be a green light to some employers to further evade their responsibilities. At the time of my report, around 50 construction workers died on-site each year, not counting the injured and not counting the 20 tradesmen, electricians and plumbers, and so on, who die every week from asbestos-related disease. A further 12 construction workers die every week from silica-related lung cancer and will continue to do so over the next 40 years unless we increase our health and safety vigilance and not downgrade it.
There was no sense of shock at the regular toll of fatalities in the industry. This clause shows that the Government are not shocked either. I should like to ask the Minister what assessment the Government have made about the impact of amending Section 47 of the Health and Safety at Work etc Act on the ability of an employee to enforce a civil claim for workplace injury. I should also like to ask: will the Government commit to look again at the impact of the Bill on health and safety at work practices to ensure that we are delivering maximum protection for employees?
To conclude, this is not a debate about the compensation culture. It could be a matter of life and death. If strict liability is taken away, it will not be just a few workers affected in terms of compensation; it will affect whole industries, which will take it as a signal to relax vigilance.
Jennifer Deeney did not just collect her compensation for losing Kieron and move on; she has campaigned ever since for improved safety on sites. She was also selected as one of the torchbearers in the lead up to the Olympic Games. I hope that the debate that she is now witnessing will show that her efforts have not been in vain.
Lord Browne of Ladyton
My Lords, I draw the Committee’s attention to my entry in the Register of Members’ Interests. I am a non-practising member of the Faculty of Advocates of Scotland. I have not practised for in excess of 15 years and I have no pecuniary interest in this piece of legislation. However, I have some knowledge of the application of the duties imposed by the Health and Safety at Work etc. Act 1974 and regulations made thereunder. I support the question in the name of my noble friend Lady Turner for many reasons, most of which have already been articulated.
My noble friends have produced valid arguments about the effect of the Government’s proposed change to the Health at Safety at Work etc. Act. It will shift the burden of proof in a significant number of cases following almost a century of struggle to establish a fair division of the burden under the law. As we have heard, it will—I may come back to this in a moment and pose some specific questions to the Minister—in future shift the burden of supporting many people who are injured in accidents at work from the private insurance industry and compulsory employer’s liability insurance on to the state. That seems to me significantly at odds with the Government’s overall ambition in relation to where the burden of costs should lie in the long term in relation to the public and private sectors.
Given my own practice and the information that many of us have obtained from those who still practise in this area, I believe that the measure will have a significant effect on the complexity that faces anybody who is injured in many accidents at work in the future. I think that the actual numbers are in dispute, but I will come back to the specific figures that have instructed this change. I understand from the Government that the relevant figure is 20,000 cases but I have no idea where that figure came from. As the Minister will realise in a moment when I draw his attention to some of his own publications, the Health and Safety Executive also has no idea how many cases this measure will affect but it will certainly shift a burden of complexity on to people. It will result in much more complex cases coming before the courts.
The information we have been given from the Association of Personal Injury Lawyers indicates that the measure will affect many thousands of cases, which will put a significant burden on the courts. We are already aware of the challenges faced by the courts in delivering public services and the delays that are being incurred. As I say, all the arguments that have been made are valid and I do not intend to repeat them. I certainly do not intend to repeat the argument made so effectively by my noble friend Lady Donaghy who mentioned the terrible circumstances in which people may be left, with no opportunity for redress in terms of placing the responsibility for compensation where it ought to lie following the sort of accidents that routinely happen in our workplaces.
The noble Baroness, Lady Brinton, is absolutely right: there needs to be a balance. However, with respect to her, I am not sure that the case that she brought to our attention had anything to do with the Health and Safety at Work etc. Act 1974. I am not sure that the individual case was exactly relevant, but that was not the point that she was making; her point was that there needs to be a balance. I agree with her, and would argue that, broadly, the balance is struck in the right place in relation to health and safety at work legislation between those duties that lie on employers for which the principle of reasonable practicability applies and those duties where there is strict liability.
The reason why it lies broadly in the right place is that this area of law has developed over a century. The HSE and all those who have worked in this area over that century have a real sense of where that balance should lie, broadly. It is not that difficult to explain why it is necessary. As my noble friend Lady Donaghy made clear, the relationship between employers and employees is not one of parity. There are very few workplaces where employees can say, “I’m worried about that machine and I’m not going to use it”, or alternatively, “I’m not going to use this piece of equipment you’ve given me, or these materials”. That is not how workplaces work; they work, normally, on the basis that people have an assurance that their employers will comply with the law and, if they are asking them to do inherently dangerous things, there will be a strict liability on them and the employer will carry the can if it goes wrong—maybe criminally, but certainly in terms of civil liability. Because that may be an unfair burden on an individual employer, we pool the responsibility. All employers accept all these responsibilities, and we have a principle called employers’ liability compulsory insurance. It is compulsory; you have to insure yourself for millions of pounds in possible liability to your employee. So we share the burden across society by that process.
Interestingly, over the years of employers’ liability compulsory insurance, the information that the HSE has published indicates that in 2010 it cost in total about £800 million, out of about £30 billion of general insurance in this country. So it is a comparatively small amount of money and the insurance industry has never made any money out of it. In fact, when I was Minister for Employment in 2004, it was in crisis, because the industry sought to do something with it that it had not done for some time and disaggregate it from the package of insurance that it was selling employers. The industry discovered that it was not making any money and that it was a loss leader. But it made a lot of money off the rest of the insurance, so they sell employers’ packages.
There is no reason to believe that from the point of view of any one individual employer the shifting of this burden from strict liability to reasonable practicability will make a jot of difference to any individual employer in terms of the regulatory burden of having to pay his insurance premium. It will not go down, because he is already getting it for less than it costs the industry. So we will not reduce regulation in any way by shifting this burden. All that we will do is shift the cost of the consequences of these accidents from that part of the market on to the public purse, which will have another consequence for the Government. I am sure that they have thought about it and that the Minister will be able to tell us his assessment of it.
At the moment, we have a set of laws in this country that mean that if you have an accident and you become a burden on the public purse for a period and then settle the claim, you have to pay back the benefits. So we have a Compensation Recovery Unit. In the last year for which there are statistics, 2011-12, the unit recovered £75,245,271.28 from accidents involving employer-employee relationships. In total, it recovered about £138 million, and some of those may also have been health and safety at work claims. But somewhere between £75 million and £138 million is being recovered by the Government from compensation that is paid because of health and safety at work claims. How much of this will now not be recovered because the claim cannot be made? Apart from the possible burden on the National Health Service and on local authorities in caring long-term for people who are injured, how much will that cost? How much of the Compensation Recovery Unit’s £75 million to £130 million a year will not be recovered by the Government because of this change. What estimate did they make of that?
Another point is: why are the Government doing this? We are given different arguments. One of them is that there is a compensation culture. I have made some references already to what the Health and Safety Executive has said about these changes but I draw your Lordships’ attention to the document I have in my hand, which is an impact assessment, Strict Liability in Health and Safety at Work Legislation. It is by the Health and Safety Executive itself. I assume that this document, which I got from the net, was presented to Ministers in the process of their assessment as to whether they should proceed with this change. It is not clear whether it was, because it is not signed or dated by the responsible Minister where it should be, but at the top it is dated 11 June 2012. It is a very instructive document because it goes through and assesses, in some detail, not only all the arguments for this possible change but all its potential consequences and tries to estimate them. It fails in every single regard.
I will read just one paragraph for the erudition of the Committee to make my point. It is paragraph 34, which is very germane. The Health and Safety Executive said:
“We assume in the absence of robust evidence that the existence of strict liability duties may contribute towards any over-compliance that exists as a result of the general perception of a ‘compensation culture’. We are however also aware that the network of influences on attitudes and behaviour towards risk is complex”.
In that one sentence, it shoots the feet from the only argument that the Government have to date put into the public domain as to why this is necessary. It is not that there is a compensation culture, because the Health and Safety Executive says in the introductory paragraphs of this report to the Government—and it is the Government’s agency—that it is not clear whether this actual culture exists. Paragraph 2 says:
“The ‘compensation culture’ (or the perception of it) in the UK has been the subject of several reviews over the last few years, but no clear evidence has been presented for its existence”,
so it kicks into touch the idea of a compensation culture and then says that it is a perception of that culture that is the argument.
As I understand it, the argument from Professor Löfstedt, which the Government have adopted, is, first, that even if there is not a compensation culture there is a perception among some employers out there that there is. They are overcomplying in relation to health and safety legislation, where there is strict liability, because they are concerned about the possibility of a compensation culture that they think exists. We are starting off on the basis that there is no proper evidence for the fundamental underpinning of this argument in the first place—at least, there is none that the Health and Safety Executive can find in the almost 40 pages of its impact assessment report to Ministers.
Secondly, if the problem is that some employers, particularly those whom Professor Löfstedt spoke to, have a perception that there is such a culture and that that is affecting the way they behave, the answer is to educate them. Of course, that is part of what Professor Löfstedt recommended. What is conspicuous by its absence in response to Professor Löfstedt’s report is a serious programme of educating employers not to be afraid of a compensation culture, which apparently does not exist, but to apply the law in the way in which they ought to.
What is the consequence of this? It is that Professor Löfstedt says, “There is a perception of a problem here”, and that if the problem is right we need—
Lord Browne of Ladyton
My Lords, I was at the point in my argument where I was making the case for the basis for this change in the law being a perception of a set of circumstances which the Health and Safety Executive argues does not exist, or at least, if it does, there is no evidence that it exists. In order to reinforce this point, I refer the Minister to the Compensation Recovery Unit statistics, which he will find in the performance statistics on the DWP’s website. They show that, in relation to health and safety law, there is no compensation culture in the sense of an acceleration of claims by employees against employers. There has been an increase in claims for which benefits have been recovered, but they appear more to be motor accident claims, and there has been an increase in clinical negligence claims but claims under the employer category have gone down. Settlements recorded by the Compensation Recovery Unit have gone down from 215,000 in 2006-07 to 89,000 in 2012-12. So there are fewer than half of the claims that there were only five or six years ago. The number of cases registered by the Compensation Recovery Unit have gone from about 198,000 to 87,000 in the same period. If anything the trend is significantly down—not marginally—in relation to claims of this nature. There is no statistical evidence or other evidence that there is such a thing as a compensation culture out there in relation to health and safety at work.
Indeed, the contrary is the case, as my noble friend Lady Donaghy has made clear and as was alluded to by my noble friends. In fact, the civil process polices the health and safety at work regime because, for the very small number of cases that are prosecuted in the criminal courts as regards those accidents that happen in the workplace, the regime is policed and enforced by the ability of individuals to be able to claim against their employers. That is another shift that I suggest will happen. If this strict liability is removed, there will be significantly greater pressure on the Health and Safety Executive to prosecute cases in the criminal courts because people will demand some answer to what happened to their relatives who were either killed or injured at work. We see that in almost every other area of public life: a demand for an investigation, a trial or some form of proof. That will increase if we lose the ability for the civil courts to be able to police the health and safety legislative structure.
When Professor Löfstedt looked at this, he drew our attention to something that is very important: that we may not have precisely got the balance between reasonable foreseeability and strict liability absolutely right. Under the 1974 Act, we now have a regime in which, when regulations are made, they are strict liability regulations, unless the contrary is stated. I accept that maybe that has allowed some regulations to slip under the wire and we may have failed the test of the noble Baroness, Lady Brinton, to get the balance at precisely the right place. This is why the good professor made his recommendation that we review those regulations of strict liability. They are either in the tens, or at the very most 200; the Health and Safety Executive’s impact assessment which I referred to earlier suggests that there about 200 of them. If it is as many as 200, is that really too much of a burden for accepting the implication of the first part of his recommendation? That is, that between publication of the professor’s report and June 2013, the Government look at each regulation and see whether it was appropriate for a duty to carry the burden of strict liability, or whether we could appropriately apply reasonable forseeability to it, and therefore provide a form of defence for an employer.
The Government decided without any review, further discussion or consultation, that faced with the two options —one being to look at each of these either 20 or 200 regulations, depending on who you believe, and to decide how many of them needed still to be strict liability—they would take strict liability away from them all. They did this because it was perceived to be easier, but also because this process was all in the health and safety challenge, aptly named staff chamber process. This is apparently a process for deregulation set up by the Government in order to minimise the level of consultation on deregulation and to accelerate beyond the point of the early review to the point of decision and change. That is the answer to the questions of my noble friend Lord McKenzie of Luton about why the Government did not, after apparently accepting the professor’s recommendation, implement it. They were fixed on this staff chamber process.
I would like to be able to share with members of this Committee what really happened, but I cannot find out. Despite the fact that one can go on to the Cabinet Office’s website and click on “Health and Safety Challenge Starts Here”, “The Process, and “How it Works”, when one later clicks on something that says “Health and Safety”, it says that this consultation is now over and Professor Löfstedt has reported. It goes on to cover some other stuff that is ongoing, none of which is of any relevance to any of this. It does not say, in these circumstances of open government, what the Government actually did during the period between apparently accepting Professor Löfstedt’s review recommendation and deciding that they were not going to have what anybody else would call a review, but were just going to jump on to one of two possible alternative solutions to this problem that he suggested existed. That solution was the draconian measure of in the future taking away from a significant number of people the right to any compensation when injured at work through absolutely no fault of their own, and probably because they had been asked to do something inherently dangerous by an employer who is already insured for it and is already paying the insurance.
Candidly, I do not understand why after 100 years of progress, we are now in this situation following months of no proper discussion or consultation. I suggest that apart from a very small number, most people in this country have no idea of the significant effects that this change could have on their working circumstances. It may be inappropriate to do this, but I asked somebody from the House of Lords Library to research this for me. He immediately said that this will have an effect on our working circumstances, and that he had been unaware of this. He is absolutely right. Almost everybody who is in a working environment could be affected by this. If this law goes through and you are asked to work a dangerous and complicated piece of machinery, which probably your employer does not understand properly, and it goes wrong because of some latent defect that nobody could reasonably have foreseen, you will have been put in an inherently dangerous position and, if you are left with a life-changing disability, you could be in the position of not being able to get any compensation. I do not want to be responsible for that sort of change in the law and I venture to suggest that not one Member of the House wants to be responsible for that sort of change in the law, so why is this being pushed through in this way?
If there is a legitimate issue—a question of restriking the balance—why do we not work together in an open and transparent fashion to move the balance to the appropriate point, releasing employers from any quantifiable burden so that they can get to this great new world in which they will create lots more jobs because they do not have strict liability in relation to some of their employees? Why do we not work together to achieve that, because we all agree with those objectives?
I could make many other arguments, but I am conscious that I have spoken for too long. This Health and Safety Executive impact assessment is a veritable mine of arguments against this legislation. I recommend it to the Minister. I am certain that we will return to this issue on Report and I suggest to him that there is a way forward.
I have a series of questions, some of which may already have been asked, but the Minister needs to be able to answer them. One of them is: what is the evidence base for this change? It is not apparent in the impact assessment, so what is the actual evidence base? The question is not what the perception is; it is what the evidence is. What assessment have the Government made about the number of claims that will be affected? Is it a comparatively small number or is it a substantial number, as we are told by the Association of Personal Injury Lawyers? Are the Government in exactly the same position as the Health and Safety Executive in saying, “We haven’t a clue and we do not know; in preparing the impact assessment, unless we put a disproportionate amount of work into it, we have no way of working out how many claims are affected by this change in the law”?
What is the Government’s assessment of the cost of shifting the burden to the NHS and local authorities, as well as the loss of money for cover by the Compensation Recovery Unit? What is the Government’s assessment of the effect that this will have on employers’ liability compulsory insurance, if any at all? My view is that it will have none, so to that extent it will not reduce the burden or the regulation on employers. If the Government believe that it will reduce premiums that are already not covering the claims, what is the argument for that? Are there employers out there who believe that their insurance premiums will go down if they live in this brave new world? If they do, they are kidding themselves.
All these questions need to be answered but, much more important, the Government need to go back to Professor Löfstedt’s report and say, “There are two alternatives here. We could take a scalpel to this and we could identify and change the regulations that are inappropriate for strict liability, thereby creating the assurance and certainty that employers need to be able to move into this world of deregulation that apparently they told Professor Löfstedt they wanted. Alternatively, we could just take it away from everybody”. What is the argument for taking it away from everybody when it means taking it away from sets of circumstances in which that is an entirely inappropriate thing to do and where it will create massive injustice, as my noble friends have made clear? What is the argument for that? I say with respect to the noble Lord, who I know will try to answer these questions, that if he cannot answer them he is not entitled to change the law in this way.
Lord Monks
My Lords, I rise to support the question put by the noble Baroness, Lady Turner, and to follow some powerful speeches that have been made in support of it. I declare an interest. I am a non-executive director of Thompsons, probably the most prominent trade union firm of solicitors.
The Government cannot be accused of inconsistency when it comes to rights at work. I see Clause 61 in a wider context: namely, that the direction of travel which the coalition has adopted is pretty clear. It is to keep chipping away in the name of deregulation at a range of rights, some more fundamental than others. When the opportunity comes along to chip away a bit more, it is taken. The Bill enabled this late amendment to be added. It can be seen in the context of raising qualifying periods and other obstacles to justice, changing the personal injuries area, without touching road traffic accidents, which is the major problem area of a compensation culture, and generally moving to disadvantage the already vulnerable. It is a kind of convoy and Clause 61 is one ship in the convoy.
For those of us who have spent most of our lives working to advance good relationships and security at work, and particularly to make sure that health and safety is of the best possible standard, Clause 61 is disappointing and frustrating. Of course, for the victims it is much worse than that. Clause 61 removes the ability of an employee to enforce a civil claim for workplace injury on the grounds of workplace regulations. I hope that we can take advantage of what my noble friend Lord Browne said, and pause and have a better look at this. If this change is enacted, the employee would have to rely on the common law doctrine of negligence to enforce a civil claim, but it is not always about negligence. The noble Baroness, Lady Brinton, picked an example where negligence did not come into it, certainly on the part of the employer, even if it was not quite in the mainstream of the Health and Safety at Work etc Act. As she said and as others have repeated, health and safety legislation is always looking for a balance between different types of obligation. In my long trade union career I have not met too many employers who are totally blameless, but I will accept the suggestion that there are some.
Before today’s discussion I did some research on this issue. In this House in 1969 Lord Morris of Kenwood introduced some regulations on protecting machinery. I summarise what he said, “If both parties are innocent and neither is to blame, who should bear the loss?”. The reality is that the legislation up until Clause 61 has favoured putting the liability on the employer. He has more resources. As the noble Lord, Lord Browne, powerfully pointed out, he also has insurance. The principle is a mutual one which means that the insurance payment does not go up very much if, because of the mutual process of sharing the burdens, a pay-out has to be made by the insurance company.
However, an employee has no such resources to fall back on and removing strict liability at civil law makes the process that much harder. Removing strict liability does not remove unfairness; it merely shifts it on to the most vulnerable. I worry, too, about the cultural signal that this clause sends out. It is basically saying, “Health and safety is a bit overregulated. You do not have to take it quite so seriously as you did before. We are removing one bit of liability and if you are not negligent you might get away with this in future”. It is the wrong kind of signal. It is a signal that bad practices will be encouraged rather than good practices; that health and safety is not quite such a central feature of business culture as it is in many places, I acknowledge, and should be in all places.
I am proud of the United Kingdom's record on health and safety. If you look at the comparison with similar countries in the European Union, whether on skills, productivity or a range of other issues, we are not at the top of the league. We are at mid-table in most areas. But in health and safety we are at the top of the league. This is an area of excellence and many of the EU directives on health and safety have been the British Government's diplomacy spreading good practice through some countries that have some pretty ropey practices in this area. It is an area of excellence and our regulations, plus the fact that they enjoyed support on a wide basis, have laid the basis of a good record. It is not as good as we would have liked: there are still too many people killed, as has been recited today. There are too many people being injured and whose lives are wrecked, but this is an area of comparative excellence.
I ask the Government to think again and pause. They should have a look at this before Report. I have one question to add to those that have already been asked. In the impact assessment, there was no mention of the applicability of the European framework directive on health and safety. If an injured worker has no redress outside the negligence area, some legal opinion is already beginning to form that says that they can exercise the right under the European directive against the Government. In other words, they cannot take action against the employer so they will take it against someone else. Will the Minister comment on that particular expression and view? Generally speaking, this is a clause that goes in the wrong direction and I hope that while there is still time we can turn back in the right direction.
Baroness Whitaker
My Lords, as a former head of bits of HSE policy, I want to say that this clause undermines the main concept behind the Health and Safety at Work etc. Act to make it clearly enforceable that employers should not with impunity be so recklessly negligent as to imperil life, limb or health if they can help it—that is part of the Act, too. Clause 61, as has been said, does not minimise the potential criminality of this behaviour, but it prevents anyone using a proven breach with any degree of liability as grounds for compensation. Injured employees must fall back, as my noble friends have said, on the common law duty of care, which is very hard to prove.
Recalling the debates over the Health and Safety at Work etc. Act when it was passed—and it received all-party support—Section 47 was put into the Act for this exact reason: so that the workforce could have something effective and tangible if they were severely injured, not just the knowledge of a successful prosecution in which they were a passive witness.
Section 47 was widely consulted on. I would like to ask the Minister the response of the Governments of Scotland, Wales and Northern Ireland to this provision, Clause 61. Can he confirm that they were consulted?
Finally, there is a potential increase in National Health Service costs from this clause because costs are clawed back from the employer if there is compensation and they will not be if there is none. Does the Minister agree? I fear that the Government will be going backwards in their understanding of workplace risks, let alone in recognition of justice for injured work people if the provision goes forward in this form.
Lord Young of Norwood Green
My Lords, we support the question on clause stand part from my noble friend Lady Turner, and I am not going to repeat all the abundance of evidence as to why we should adopt this view, because it has been amply demonstrated by the majority of speakers, apart from the noble Baroness, Lady Brinton, who made an appeal for balance. We would support that, but the balance that the Government propose is certainly, in our view, in the wrong direction.
In excess of 20 specific sets of regulations have been introduced under powers given to the Secretary of State by the Health and Safety at Work etc. Act 1974. They include regulations relating to work equipment, personal protective equipment, manual handling, hazardous substances, construction, offshore installation, railways, young workers, and working at height and in confined spaces. Collectively, these regulations are the basis of workers’ rights to a safe working environment in the UK, as they contain the vast majority of duties that the law imposes on employers to create and maintain safe workplaces.
As a number of my noble friends pointed out, there is no evidence to show that there is overcompliance. There are perceptions, maybe, but is that really how we should frame legislation, based on perception with a lack of evidence? If only there was a culture of overcompliance, we would have less to complain about. There would be no situation with the number of deaths and serious injuries that still take place throughout British industry. Far too often we see examples of employers failing to comply or adopting the wrong attitude towards health and safety. Again, as a number of my noble friends have pointed out, this legislation would give them entirely the wrong signal.
Some of the regulations contain duties that impose a strict liability on employers. I am not sure where my noble friend Lord Browne got the figure of 200; I have a slightly lower figure than that. But it is something that the Government could cope with if they wanted to carry out the recommendations of the Löfstedt report. Others contain duties that are less strict in relation to which an employer shall not be held to be in breach of their duty if it is shown that they could not have foreseen the accident, if the accident could not practically have been avoided or if it is not reasonably practical to avoid the incident. Currently, if an employer breaches any health and safety regulation, there are two possible consequences; the employer can be prosecuted as having committed a criminal offence by the HSE, or the injured worker will be entitled to compensation. The declared intention of Clause 61 is to remove strict liability from the body of health and safety legislation. The genesis of removing that strict liability is found in the Löfstedt report. If only the Government had stuck to that, we might not be in that situation. But Löfstedt did not positively recommend that as the only course of action; it was only one possible option among others, and his firm recommendation was that a further, thorough investigation be undertaken—something that this Government have signally avoided. They have not followed the recommendation to carry out further research and have instead leapt straight into introducing legislation.
With Clause 61 introduced as an amendment, there has been no public consultation. As currently drafted, the clause does not simply remove strict liability; it goes much further than that. There is a fundamental disconnection between the declared intention of Clause 61 and the legislative impact that it will have. On the two consequences that currently exist when an employer breaches a health and safety regulation, the impact of Clause 61 is that one of those consequences shall be removed from the law altogether. Given the very small number of criminal prosecutions brought under the health and safety regulations each year, the consequence being removed by Clause 61 is the most important one in ensuring not only that justice is served but that workplace safety is maintained. The effect of the clause is to withdraw the right of injured workers when claiming compensation to rely on a breach of the statutory duty imposed on the employer in regulations made under the Health and Safety at Work etc. Act 1974. The statutory duty on the employer to comply with the regulations will remain; the clause does not remove a single regulation from the statute book. The employer will remain liable to prosecution for the breach of any regulation in the criminal courts. It is only injured employees who the regulations are designed to protect for whom it will no longer be relevant. As we have heard, according to statistics published by the Health and Safety Executive, only 0.5% of reported workplace injuries result in a criminal prosecution. The prospect of prosecution provides no incentive to employers to comply with their duties. Our concern is that this measure will give the opposite signal.
Employers are obliged by law to maintain insurance to meet claims for damages arising from workplace injuries. Claims against employers are dealt with and paid by insurers. This clause will make no change to this system but, as has been pointed out by a number of my noble friends, the costs are likely to fall on the Government and, in effect, the taxpayer. What on earth is the value of that?
If the clause passes into law, no legislative burden will be removed from any employer. With no saving to the public purse, the Government will remain liable for civil claims deriving from European directives in respect of injuries to their own workers and will also still have to pay benefits to injured workers which they may no longer recover from employers’ insurance.
A number of detailed and valuable points have been made by my noble friends Lady Donaghy, Lord Browne, Lady Turner and Lord McKenzie. A number of questions were posed to the Minister which I look forward to him answering: for example, what is the evidence base for the measure? How many claims will be affected? What is the cost of shifting the burden on to the NHS and government? Will it reduce the cost burden on employers? That is unlikely in our view. As I say, I look forward to hearing the Minister’s response.
Viscount Younger of Leckie
My Lords, I have listened very carefully to the debate this afternoon. I understand the concerns of noble Lords about the importance of protecting people at work from risks to their safety and long-term health so eloquently put forward by the noble Baroness, Lady Turner, and the noble Lord, Lord McKenzie, and, indeed, by the noble Lord, Lord Browne, in an impassioned and extensive speech. If noble Lords will bear with me, there is much to say in response to the many views and concerns expressed.
First, I reassure noble Lords that the purpose of this clause is not to weaken or reduce the existing protections for employees. It is about helping to increase the confidence of responsible employers to continue to do the right things to protect their employees. I stress emphatically that the law, which sets out the standards that employers must meet and the duties which employers must perform, including in relation to self-employed contractors on construction sites, is not affected by this proposal and is not changing. The Health and Safety Executive will continue to investigate serious incidents and complaints about poor practice and will take enforcement action, including, where appropriate, prosecutions, against those employers who fail to meet their responsibilities in line with the executive’s established policies and procedures, so let me explain why it is appropriate to take action.
We all recognise that the world has changed since 1974, when the Health and Safety at Work etc. Act was introduced to replace large numbers of detailed regulations with a proportionate risk-based approach to health and safety. Indeed, the late Lord Robens, on whose recommendations the 1974 Act was based, noted,
“that the sheer mass of this law, far from advancing the cause of health and safety, may well have reached a point where it becomes counterproductive”.
Clearly, every death and serious injury is a tragedy that should not happen. The noble Baroness, Lady Donaghy, referred to this earlier in Committee and has spoken about it again today. However, considerable progress has been made in reducing the incidence of injury and ill health. I listened carefully to the heartbreaking stories of those who have been killed or injured, as outlined in the speech of the noble Baroness, Lady Donaghy. Each one represents a tragic human story for individuals and for their relations.
Progress has been illustrated by the successful delivery of the Olympic Games, where there were no work-related fatalities on the whole of the London 2012 construction programme. This is the first time that any host nation has achieved that. The noble Baroness, Lady Donaghy, specifically raised the issue of construction sites. The substantive law that sets out the duties and responsibilities on employers, and to whom these are owed, including to self-employed subcontractors on construction sites, will not change. Therefore, the ability for such workers to bring a claim for negligence will also remain the same as now. Anyone who directly employs or engages construction workers or controls or manages construction work is a contractor for the purposes of the construction regulations. The duties on contractors apply whether the workers are employees or self-employed or agency workers. There is no distinction.
We are committed to the continued improvement of health and safety standards at work and to building on the progress made to date. The effectiveness of the health and safety regulatory framework has more recently been thoroughly examined by my noble friend Lord Young of Graffham in his report Common Sense, Common Safety.
Baroness Whitaker
Will the noble Lord confirm that the noble Lord, Lord Young, did not touch on the matter of Clause 61 in his report?
Viscount Younger of Leckie
I would need to refer back to the report to give the noble Baroness a full answer. Indeed I shall do so.
The effectiveness of the health and safety regulatory framework has also been highlighted by Professor Löfstedt, as has been mentioned today by several noble Lords, in his independent review, Reclaiming Health and Safety for All. Both my noble friend Lord Young of Graffham, whose report received much support across the House when it was debated, and Professor Löfstedt found that there is no case for fundamental change of the health and safety framework itself and that the existing regulatory requirements are broadly right. In fact, the biggest problem today is the way in which the regulatory requirements are interpreted and applied.
No one can be complacent. If we are to build on the steady progress made, we need to take action to tackle the current myths about health and safety, myths which the Health and Safety Executive see as such a problem that it has set up the Myth Busters Challenge Panel to provide a mechanism so that anyone who receives advice in the name of health and safety which they believe is disproportionate or inaccurate can challenge that advice.
Businesses consistently report that these myths lead to confusion about what the law actually requires and a fear of being sued, which, in turn, drives employers to overimplement the law in an effort to protect themselves and indeed discourages them from expanding their business. This in turn reinforces the perception that the application of health and safety law is unduly burdensome. I shall have more to add to that later.
This situation results in responsible employers taking an overly cautious approach, which has a detrimental effect on their approach to controlling risks properly in the workplace. For example, spending considerable resources on disproportionate paperwork and record-keeping, far in excess of what is necessary to comply with the law, diverts employers from taking a sensible approach to identifying the risks that actually affect their business and their employees, and taking sensible day-to-day precautions to protect their employees from those risks.
In the interests of both employers and employees, the aim is to improve understanding of what the law actually requires and to allay fears about possible litigation to help build employers’ confidence to take on new activities and further develop their businesses and to include recruiting new employees, which is so vital today.
To address these issues, the Government are implementing a package of measures, based on the recommendations of my noble friend Lord Young of Graffham and Professor Löfstedt, to reform both the civil litigation system and to restore a common sense approach to health and safety. This measure forms part of this package and I would reassure noble Lords that its introduction into the Bill at a later stage is purely due to the timing of the publication of Professor Löfstedt’s report and the Government’s desire to address the concerns he raised at the earliest opportunity.
We have already put in place a programme of work to improve understanding by simplifying the supporting guidance that explains what the law requires and to consolidate and clarify the body of health and safety regulation in a number of key industrial sectors. This programme builds on the work carried out as part of the better regulation initiative led by the previous Administration.
The clause does not change the duties placed on employers, but amends Section 47 of the Health and Safety at Work etc. Act so that in future, unless the legislation provides for an exception, it will be possible to bring a claim for compensation in respect of a breach of health and safety legislation only where it can be proved that the employer has been negligent.
Claims for breaches of the general duties of the Health and Safety at Work etc. Act can already be brought only for negligence. The change in this Bill simply extends this position to regulations made under the Act to create a consistent approach to civil litigation for all health and safety legislation. This means that if an employer fails in their duty of care towards their employee they can of course be successfully sued. However, where an accident has taken place and the employer could not have reasonably done anything about it, they should not be liable.
In the knowledge that they will not be liable if an accident happens which is totally outside their control, this change will support responsible employers, who take care to protect their employees, by encouraging them to take sensible steps to manage workplace risks. I am grateful for the speech made by my noble friend Lady Brinton and the example that she gave to support the helplessness that some businesses can experience where there is no defence for them. This will not assist irresponsible employers who fail to comply with the law as they will have no defence to an accusation that they did not take all reasonable steps to protect their employees.
This amendment to the Health and Safety at Work etc. Act has been adopted in preference to amending each strict liability duty, as Professor Löfstedt suggested, because an approach targeting each strict duty would be much more complex, and therefore complicated for businesses and their employees to understand.
The noble Baroness, Lady Turner of Camden, brought up the concern that the law would go backwards, which I think was her expression, and the employer would hold all the cards. I would like to assure her and all noble Lords that the provision will affect only a small number of duties that are unqualified. In any claim for negligence, the existing regulatory requirements on employers will remain relevant, as the courts will look to the statutory duties, approved codes of practice and established guidance to inform them about what risks a reasonable employer should be aware of and the steps they would be expected to take to manage those risks. I stress again that this change will only assist responsible employers who have done what is required of them and can demonstrate this.
This amendment reflects an adjustment to help rebalance the civil litigation system and, as part of the wider reforms of the system, is a proportionate response to the impact that strict duties currently have in the civil litigation system identified by Professor Löfstedt. It also has the benefit of creating a consistent approach to civil litigation for all health and safety legislation.
Currently, most claims are brought for both breach of statutory duty and negligence and, in practice, it is anticipated that the vast majority of claims will still be capable of being brought for negligence. For the small number of cases where this is not possible, as now, individuals will be able to claim for financial and other support through the state benefit system.
This measure is not about reducing the number of claims. It is about establishing the principle that an employer who has done nothing wrong should have the opportunity to defend themselves on the basis of having taken all reasonable precautions. Providing employers with this important reassurance will help them to manage health and safety risks in a sensible and proportionate way.
Lord Browne of Ladyton
At the heart of the noble Viscount’s argument there are general arguments about numbers. The Health and Safety Executive’s impact assessment says that this change will affect 200 sets of health and safety regulations. When it seeks to answer its own question about the number of cases that this will effect, it says that it has not a clue. In the light of that information, which I have here in this assessment before me, could the Minister please tell the Committee on what basis he estimates that this will impact on a small number of regulations and cases? If that is wrong, we are legislating here on a false basis. The HSE has no idea what the statistical base of this is.
Viscount Younger of Leckie
I thank the noble Lord, Lord Browne, for that intervention. I shall answer his questions in a moment.
It now falls on me to answer a number of questions, which I will do in a particular order, if I may. The first substantive question came from the noble Lord, Lord McKenzie, and concerns the basic concept of why there was no review or consultation, as he put it. I assure him that the noble Lord, Lord Young, and Professor Löfstedt consulted widely and found that there was significant and consistent evidence from businesses that the perception of a compensation culture and the fear of being sued have a significant effect in driving overimplementation of the law, and going beyond what the law requires creates unnecessary costs for employers, diverting them from focusing on taking the practical day-to-day steps to protect their employees. Professor Löfstedt, in addition, had concerns that the wider reforms to the civil litigation system and changes to simplify the health and safety system would be less effective if business continued to overimplement the law due to a fear of being sued.
Lord McKenzie of Luton
If the Government’s case is that there was consultation and that Professor Löfstedt undertook that consultation, why did the Government not follow his recommendations?
Viscount Younger of Leckie
As has been mentioned earlier, we are following the vast bulk of his recommendations.
Lord McKenzie of Luton
I shall try not to prolong this, because I know that the Minister has a lot to get through and the clock is ticking. Clearly, the Government did not follow the recommendation related to strict liability. Or is the Government’s case that it did?
Viscount Younger of Leckie
In answer to the noble Lord, I would say that it is not black and white that we followed all the recommendations from Professor Löfstedt, but I shall certainly write to him to explain which recommendations we did follow and which, perhaps, we did not.
The noble Lord, Lord McKenzie, also raised the issue of whether the issue is wider in scope than the Löfstedt recommendation. Amending each strict liability duty individually, as Professor Löfstedt suggested, would be complex, as I mentioned earlier, requiring a large number of changes to many sets of regulations, and confusing for employers. A single amendment to the Health and Safety at Work etc. Act addresses the same policy objective, is simple to understand and provides a consistent approach to civil litigation for all areas of activity covered by health and safety at work legislation.
The noble Lord, Lord McKenzie of Luton, also raised the question of whether the change would mean that cases were more difficult and costly to prove, and that employers would hold all the information. Employees will still have the right to bring claims when fault on the part of their employer can be proved. Currently, most claims are brought for breach of statutory duty and negligence, and in future it is expected that most claims will still be able to be brought for negligence.
Lord McKenzie of Luton
I am sorry, but we are dealing with some very important points here. On this mantra that most claims are brought under negligence and breach of statutory duty—even if it is right, and I am prepared to accept the Minister’s word on that—is it not right that they do not necessarily all proceed to the end of all those processes? The breach of statutory duty process leads to negotiations of settlement way beyond what you get for some of the burdens claimed for negligence.
Viscount Younger of Leckie
It is clear that the vast majority of cases will be covered by negligence and that a small number of cases will fall outside. We should be clear about that.
Many health and safety duties are qualified by “so far as is reasonably practicable”, as was mentioned earlier. In practice, the tests applied for negligence and breach of statutory duty, qualified by “so far as is reasonably practicable”, are likely to be very similar. The record-keeping requirements of health and safety legislation will continue to ensure that information is available to employees where an accident has taken place.
I turn to the question raised by the noble Lord, Lord Monks, concerning the European position. Under European Union law, member states can generally decide what sanctions and remedies to put in place to enforce EU obligations, subject to certain rules. In Great Britain, health and safety obligations are backed by various enforcement powers and criminal sanctions as well as the opportunity to claim for compensation in the civil courts, which will remain through the right to sue for negligence. Taken as a whole, the sanctions available for the enforcement of EU directives are, and will continue to be, effective.
I turn to the various points made by the noble Lord, Lord Browne. One of the questions that he raised concerned how much money is currently returned to the state by the Compensation Recovery Unit, and how much will be lost by this amendment. That is a very straight question. It is not possible to disaggregate the amount because the benefits available are dependent on individual circumstances. He also raised a point about the reform in terms of shifting the burden of supporting employees who are unable to make a claim to the state. Again, that was a very straight point. As I mentioned to the noble Lord, Lord McKenzie, it is recognised that a very small number of employees may not be able to claim in future under the new arrangements. None the less, this change is important as part of the wider package of government reforms in signalling an end to the perception of the compensation culture. Provision for non-contributory no-fault compensation payments—I emphasise that—for disablement caused by an accident at work is already available to individuals through the Industrial Injuries Scheme. All serious incidents will continue to be investigated by the Health and Safety Executive.
The noble Lord, Lord Browne of Ladyton, also brought up the perception of the compensation culture. Businesses have expressed concerns about this fear. It is true and it has long been a driver of overcompliance. That was very clear to the noble Lord, Lord Young of Graffham, and, indeed, to Professor Löfstedt.
One of the crucial questions that the noble Lord, Lord Browne, raised, which was also raised rather more obliquely by the noble Lord, Lord Young of Norwood Green, was that of evidence. I should emphasise that, in conducting his review, Professor Löfstedt consulted most widely, including 30 meetings with individual stakeholders and several business forums. He also received 250 written submissions. The findings of his review build on the work completed by the noble Lord, Lord Young of Graffham, in his report, Common Sense, Common Safety. In preparing his report, the noble Lord consulted 132 wide-ranging organisations representing relevant professionals, including personal injury lawyers, businesses and associated organisations. He also spoke to more than 100 individuals, including health and safety professionals, Members of Parliament, councillors and leading academics in the field of law. I hope that goes a little way to answering the noble Lord’s question.
The noble Lord, Lord Browne, also asked what the Government’s assessment was of the number of claims that this change will affect. It is anticipated that there will be only a small reduction in the number of claims made as most will still be able to be brought for negligence, as mentioned earlier. The only claims that are significantly affected will be those which rely on a breach of the law where there is no, or insufficient, evidence to prove the employer was negligent.
Finally, the noble Lord, Lord McKenzie of Luton, raised the issue of negligence and the fact that the breaches of statutory duties were not equivalent and that the tests for negligence were nebulous. I think that was the term he used. Negligence and breach of statutory duty are different tests but most statutory duties require an employer to take such steps “as are reasonably practicable”. The common law requires an employer to take reasonable care for the safety of their employees. In practice, in the vast majority of cases the issues in dispute will be the same and the standard expected of the employer is likely to be very similar as now. As I mentioned earlier, the statutory framework will continue to inform the courts about the standards expected of the reasonable employer.
For the reasons that I have outlined, I commend the clause to the Committee.
Lord McKenzie of Luton
The noble Viscount referred to my use of “nebulous”. If I remember correctly, that is the Government’s word, and was in the impact assessment. Coming back to the timing of this clause being introduced into the Bill, he referred to the fact that it could not go in earlier because of the Löfstedt report. Professor Löfstedt reported in November 2011, and indeed the Government responded in November 2011. That was time enough to get it in earlier.
Viscount Younger of Leckie
I have certainly noted the point that the noble Lord has made. I was clearly of the understanding that that was the reason but I will certainly revert and check, given the dates that I have just received from him.
Baroness Turner of Camden
In responding to the Minister, I begin by thanking everybody who has participated. We had an excellent debate, drawn from a lot of experience and expertise. It really has been very good indeed, and I am very grateful to everybody who has contributed. However, I am sure that the Minister will not be surprised to learn that I do not accept very much of what he has got to say. I still think that Clause 61 should not become law. I cannot understand why he says that it will help good employers. A good employer is helped by the existing legislation, and if the Government are concerned to improve health and safety at work arrangements, then they should be supporting the Health and Safety Executive instead of diminishing its resources. If they think they need to do more on health and safety, the HSE is highly respected and ought to have more resources, rather than fewer—which is what the Government’s present policy seems to be.
I really do not accept a great deal of what the Minister has said today. I cannot understand why he is going on about compensation culture. I have made some contributions about my experience in that situation when I worked for an insurance company. We have been talking about claims by employees which often take years to settle, particularly if it is a death; frankly, what sort of compensation culture is that? There is a case for looking at aspects of our legislation, but certainly not via this clause, which takes away some of the support that people currently have in the area of health and safety at work.
I am not at all in favour of what the Minister has said. Of course, in Committee we do not have votes. However, I can assure the Minister that this will be back again at Report, because a number of us feel very strongly about it. I certainly do and I am sure that my noble friends do as well. He has not heard the last of this. In the mean time, I do not press this question.
Viscount Younger of Leckie
My Lords, this may be a convenient moment for the Committee to adjourn until Wednesday at 3.45 pm.