Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill
Debate between Baroness Donaghy and Lord Monks
Lord Monks (Lab)
My Lords, Amendment 154 is designed to provide for ACAS to be able to intervene when there is a dispute about a register. ACAS has a very high reputation for intervening in difficult situations and finding its way through them. We think that there could be some difficult situations if the assurer gets going in a number of circumstances. With the agreement of the parties and the certification officer, it would be useful for ACAS to be deployed before an enforcement order is issued. I beg to move.
Baroness Donaghy (Lab)
I shall speak briefly to the amendment. As the Committee will know, I was chair of ACAS from 2000 to 2007. To that extent, I suppose I have an interest in attracting work to my former organisation. If the Minister is correct in saying that the Government are not looking for confrontation in Part 3 of the Bill—some of us still need convincing of that—they will be looking for ways of avoiding the ultimate sanctions that are contained in Part 3. I think this offers a way out of an impasse. It might help the parties, particularly if there are difficulties in agreeing factual statements, if ACAS were to be invited to intervene. The Minister will know that, if this is not specified, ACAS will not be able to intervene. There needs to be a statutory requirement before it can become involved. It is important that this is written into the Bill. I support my noble friend Lord Monks on this amendment.
Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013
Debate between Baroness Donaghy and Lord Monks
Lord Monks
The Minister will be grateful that I do not propose to go through my opening remarks again. I am sure that he has got that particular point. The Division neatly ended a paragraph of thoughts and so I will move on to another: the purpose of the change.
We are being asked to believe that because people can see a crock of gold in this compensatory award at present, the cap has become an expectation which encourages claims and then deters employers from undertaking recruitment because they are afraid that this gathering mass of people will all think that they are going to get their name up in lights with the top award. It seems far-fetched in the extreme to say that the picture being presented is a real one. I instead come to the conclusion, which I would test on the Minister, that this is simply about reducing the amount of money that some employers have to pay to some employees. It is a step at the expense of the employee in favour of the employer.
This is one of many steps that have been taken in this area in recent times, particularly with the raising of the qualifying period for unfair dismissal from one year to two, which took 3 million workers out of the scope of unfair dismissal legislation. That was perhaps the biggest but there have been a number of other changes. I suggest that this is another salami cut into employment rights at work. It is not the biggest—I do not want to exaggerate my case—but it is one under which some employees will lose, while some employers are going to gain from it. I hope that the Minister will acknowledge that that is really what it is about rather than this romantic story that the Government seem to be advancing: that all this reduced compensation will mean fewer claims, which means more employment, to put it in the reverse way from how I put it before. Is this not simply about reducing the amount that employers have to pay to workers who they have unfairly dismissed? Those workers have been not just dismissed but unfairly dismissed.
Baroness Donaghy
My Lords, I shall make a couple of points. My noble friend Lord Monks has already referred to the Secondary Legislation Scrutiny Committee’s report. I understand that in the absence of clear consensus on views, sometimes the Government have to take a leadership position, which this Government have done. Unfortunately, it is not a consistent position. I question why the Government have decided not to take action on the basis of no consensus on one issue and to take action on the basis of no consensus on the second issue.
Enterprise and Regulatory Reform Bill
Debate between Baroness Donaghy and Lord Monks
Baroness Donaghy
Having sat through the first day of the Committee stage listening to a debate on a subject about which I know nothing, I have found out two things: first, that I was none the wiser at the end of the Committee but, more importantly, that the Minister conducts business at a brisk pace. I shall try to match that spirit.
This amendment is a potentially good new story for ACAS. I was chair of ACAS for seven years, and still feel part of the ACAS family, so my interest is obvious. I hope that the Minister does not think, therefore, that I am looking a gift horse in the mouth, but I do not want this to be a gift that keeps on taking.
The Government are building on something which already exists in voluntary form as a pre-claim conciliation, or PCC, and intend to make it compulsory as early conciliation, or EC. The ACAS voluntary system has been running since 2009; last year, in 2011-12, there were 23,777 cases, an increase of 34% over the previous year. Three out of four cases did not go to tribunal, saving cost and stress for employers and employees. Recent independent research found that if you include staff time and legal costs, employers save on average £3,700 compared with the costs involved once the tribunal claim is made.
If ACAS is given the necessary extra resources—and it cannot be done without them—we need clarity from the Government about how this is to be achieved. In the Government’s response to the consultation Resolving Workplace Disputes, they recognised that,
“there will be an increased burden on Acas that will require sufficient resourcing. This requirement will be met through the savings that will accrue to the Exchequer as a result of fewer cases requiring determination at ET”.
I think that ET means employment tribunal.
I must admit that that statement filled me with terror. ACAS and the Tribunals Service come under two separate departments—an unfortunate move in my view. What will the process be to identify the savings given the different timelines of the two systems—conciliation first and employment tribunals later? What will the framework among departments be? After all, we are talking about the Treasury, BIS and the MoJ. What precise impacts have already been identified? In another place, it was argued that consultation was unnecessary as the Government had already consulted on the appropriate charging points and fee levels for tribunals in December 2011. The Minister in the other House indicated that consultation had also taken place on the possible impact of fees as part of their assessment which accompanied the announcement in November 2011 of the introduction of early conciliation. I do not see very much about the impact of ACAS on either of those two assessments.
As ACAS put into its submission to the Government:
“The proposal to introduce fees into Employment Tribunals will mean a very significant change to the system which is likely to have an impact on how disputes are resolved in future”.
Clearly, we do not know how this will manifest itself until it is introduced. I am not asking the Minister to produce a crystal ball, which is why I will be moving an amendment later about a review after one year of implementation. I will also say something about unintended consequences in that amendment.
I believe that the impact of the changes will not just be on the process of resolving disputes and the resolving or otherwise of them, but that it will spread beyond the issues covered in the success criteria into much broader workplace matters. Will the extra ACAS resources be provided upfront and how will the criteria for success be measured? Will they be confined simply to a drop in tribunal cases? This is particularly important as a number of cases at employment tribunal are usually determined by the state of the economy or by how many multiple cases are under consideration. The statistics quoted are too often cases of double-counting, with the employment tribunal tail wagging the employment relations dog.
If insufficient attention is given to resourcing ACAS, I am concerned about the impact on other services. The helpline takes more than 1 million calls a year and in itself helps to prevent dispute by providing crucial information impartially to both employer and employee. It is a trusted brand and the continuing development of the website, collective conciliation and promoting good employment relations are all vital elements of ACAS’s work.
I do not need to remind the Minister that most people at work are not in a trade union. The introduction of employment tribunal fees will hold no fears for trade union members. No doubt the Minister will raise one cheer for being a recruitment sergeant for the trade union movement, maybe even two. It will not hold too many fears for reasonably well paid employees either, but it is the job of the ACAS council to be mindful of all employers and employees. There have been some extremely distinguished members of that council over the years: John Cridland of the CBI served for 10 years and the noble Lords, Lord Monks and Lord Morris of Handsworth, are also former council members.
By acknowledging the importance of ACAS and by giving it this new role, the Minister has got it right and I pay my compliments to him. Resourcing ACAS is a good thing in itself, not just as a forerunner to employment tribunals—but even as that it has an exemplary record. The ET system would have collapsed years ago if it had not been for the proportion of pre-hearing settlements reached. I hope the Minister can give me the assurances about resourcing that I seek and the information I ask for.
Lord Monks
I support my noble friend’s amendment. As she mentioned, I was a member of the council for a good, long time. In fact, I think I am the record holder at about 15 years. One of the pleasures of being a council member was that mostly when you have been associated with large organisations, you are very aware of complaints and people who are dissatisfied about the way the organisation works. That was extremely rare with ACAS. Its record of people, employers and workers alike, being respectful and grateful for the role that it played in sorting out particular disputes was very pleasing and satisfying. The evidence that has been gathered over the years of ACAS’s life shows that good value has been delivered for the public money that has gone into it. ACAS has been a well regarded body all around the country and in all parts of the community. I am pleased to see it getting some support and recognition, and an expanded role, in this Bill.
However, I have two concerns, which partly overlap with those already expressed. I hope the Minister will be able to allay some of those concerns. As all the changes in this Bill go through in this area, particularly in relation to unfair dismissal, will he agree that employees are going to be in a slightly worse position, at least, than they are at present? Is there not a tilt in the law, particularly on unfair dismissal, towards the employer? I will pick out one thing: the increased risk of an applicant having to put down a deposit to take their case through to a tribunal. Is that not going to make them more reluctant to take that risk? They are probably already in a most uncomfortable position, having been fired and now facing the possible ignominy of taking their case against an employer to a tribunal. I am concerned about that generally, but in particular that this is going to lead to a very long queue at ACAS. Will there not be increased demand for its services, with people more insistent that the conciliation stage delivers a result than perhaps they are at present, so that they then avoid the rather hazardous steeplechase course that leads to a tribunal?
I underline the point that the noble Baroness, Lady Donaghy, made about resources. This is not a cost-free exercise. ACAS is already a pretty busy organisation with a lot of people looking to it for help, very often in fairly desperate personal circumstances. If the Minister believes that the maxim for this part of the Bill is, “Blessed are the peacemakers”, then I hope very much that the peacemakers get some money to make sure they can do their job.
Lord Monks
I want to support this amendment. Clause 12 generally complicates a situation which is reasonably clear at present. It will make life a little more complicated for workers and probably not that uncomplicated for employers. Essentially, it seeks to make it easier for an employer to end the employment relationship by offering an individual money in exchange for a compensation agreement—the title is changed in Clause 18. Let me explain the situation. At present, where there is a dispute, the terms of an offer cannot be reported to a tribunal. It is called a “without prejudice rule”; in other words, what has gone on before is kept away from tribunal cases. Clause 12 will change that and extend the without prejudice rule so that employers can offer an employee money and an agreement where there is no pre-existing dispute and no application has been made. The worker does not even know that there is a dispute, and the employer says, “Here’s some money, get lost”. This is giving the signal that you can fire staff for an arbitrary reason without following any dismissal procedure.
It was not just this side of the House—I remember some wise remarks by the noble Baroness, Lady Brinton, at Second Reading—that welcomed the dismissal by the Secretary of State for Business, Innovation and Skills of the report from Adrian Beecroft, chief executive of Wonga, the payday loans company. He introduced the concept of no-fault dismissal, which was roundly dismissed by the Secretary of State. I very much welcome what he said about it.
However, this provision in Clause 12 is not that far away from that. It is quite similar. It is expressed differently and rather technically, and is not that easy to follow, but essentially the key thing is that there is no unfair dismissal provision. You have not been warned and do not know anything, but the employer can say, “Here is X amount, get lost. Sign here”. You can no doubt go through the tribunal if you wish, but the provisions legalise that signal. I hope that this is not Beecroft through the back door, or “Beecroft-lite” as some people have been calling it, and that we can persuade the Government to take another look at this and recognise that, although it is in different clothing, it is rather similar to what this well known venture capitalist came up with—a measure that he thinks will create jobs and I think will increase unfairness.
Baroness Donaghy
I support this amendment because the improvement of employment relations should be the dog, not the termination of employment the tail. The emphasis throughout this clause is on avoiding proper procedures, not on following and adopting them. An employer can go to the ACAS website and get one side of A4 on decent procedure on discipline and grievance. Such procedure does not have to be long or complicated. I know that in the public sector it is usually 60 pages long, and nobody ever reads it, but you can do it on one side of A4 and it will be a perfectly proper procedure for dealing with employee relations.
All this provision does is encourage employers, with a nod and a wink, to forget about employment procedures such as those on discipline and grievance. Instead, they can just have a nice quiet chat, especially when the employee is feeling a bit low, and say, “Surely you’d be better off out of here. Times are going to get worse and it’s going to be even harder for you. Let’s have an amicable departure”. It is still quite easy to get rid of people from an employment situation in this country if it is dealt with properly. However, employers are very often terrified of dealing with these procedures because they are unfamiliar with them, cannot be bothered or feel, as an employer, that they are doing a good job by employing people and therefore have the right to get rid of them as and when required. A good employer will recognise that to get the best out of an employee, the employee needs to know where they stand, to know what the procedures are in their situation, to have a letter saying how much they are getting paid and what their conditions of service are, to have a little bit of an idea what their future is, and to understand their part in the scheme of things and what their role is. It can be a job description, but what an employee is looking for is to know what their role is.
To me, this just sums up the attitude of a bad employer rather than a good one. I urge the Government to reconsider. If an employer has a decent discipline and grievance procedure, it is perfectly possible to talk to an employee without prejudice about what is expected of them. If that employee fails to meet those expectations within a reasonable time limit, stated in writing if necessary, it is perfectly possible to see that employee out of the building without any danger of going to a tribunal.
The Government are emphasising the wrong end of the stick on employment relations and concentrating too much on reassuring bad employers that they can get rid of employees without any comeback. That is the wrong way round and, long-term, the Government will live to regret it.