Trade Union Bill

Baroness Neville-Rolfe Excerpts

Tuesday 19th April 2016 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

23A: Schedule 1, page 19, line 45, leave out from “If” to “that” in line 46 and insert “the Certification Officer has reasonable grounds to suspect”

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, there has been a lot of very helpful and constructive discussion with noble Lords opposite and on the government Benches. We have made a lot of progress on the Bill this week, as the noble Baroness, Lady Wheeler, said so truthfully. I thank in particular my noble friend Lord Bridges for his pivotal role and for setting out some of the changes that we propose to make that reflect that dialogue. We will come on to discuss others.

I turn to why the Government are strengthening the Certification Officer. The Government have a manifesto commitment to reform the role of the Certification Officer and there is a public interest in properly regulated trade unions. This group of amendments includes government and other amendments, so I shall start by addressing the government amendments. Once the noble Lord, Lord Collins, has spoken to his amendments and others have added their views to the debate I shall respond on the whole group.

Much was made in Committee about the Bill giving the Certification Officer the same powers to investigate for all breaches that he currently has for financial matters and will shortly have for the register of members. This would enable him to act without having a complaint from a member, including on matters that he might discover in the course of his duties. It would also enable him to respond to matters brought to his attention—I suppose I should say to her attention for the future—by third parties, although he is not bound to consider these. This is a wholly reasonable power for a regulator.

We have heard concerns that the Certification Officer may receive vexatious complaints and that this could increase his workload and costs. I want to provide reassurance here. The Certification Officer, as a public authority, is required to act reasonably. We would not expect him or her to spend much time looking into representations from third parties that are groundless or vexatious. The Certification Officer cannot appoint an inspector to investigate a union on a whim. He can make inquiries, but can appoint an inspector only where there are circumstances suggesting that a union has not complied with its duties.

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[Lord Cormack]

My Lords, I shall not bang on, but I want to make one or two points. The noble Lord, Lord Collins of Highbury, has made a very powerful case. The noble Baroness, Lady Neville-Rolfe, and my noble friend Lord Bridges have shown that they are in listening and receptive mood, for which we are all genuinely grateful. I say to the Minister who is about to reply to this debate that when she is prescribing or proscribing it is very important that we have a flexible structure in which we can have widespread confidence, that is not overcostly and that it cannot have levelled at it the charge of overregulation. From what I have heard and seen, there is a danger that the suggested amendments to the role of the Certification Officer are moving too far in the direction of proscription, prescription and overregulation. I hope that my noble friend will indicate that she would be happy to have detailed conversations between now and Third Reading with the noble Lord, Lord Collins of Highbury, and others who have a lifetime of experience in these fields so that we can get a mechanism that is acceptable and adaptable as circumstances change.

[Baroness Neville-Rolfe]

I thank noble Lords. This has been an important follow-up to a series of debates and meetings outside the Chamber that we have had—to reply to my noble friend Lord Cormack—on the important issue of the Certification Officer and the linked issues, because the Certification Officer runs like a rainbow through the Bill. I also recognise that most trade unions work within the regulatory framework most of the time. We are a deregulatory Government—noble Lords know that, and I am unapologetic about it—but let me be clear: some trade unions break the law. Our reforms provide the Certification Officer with the right tools to ensure effective regulation. Equally, they ensure proportionate regulation, which is an important point given the concerns raised about bureaucracy by the noble Baroness, Lady Donaghy, the noble Lord, Lord Oates, and my noble friend Lord Cormack.

Let me give an example: the case of Mr Dooley v the Union of Construction, Allied Trades and Technicians—UCATT. I am sure the noble Lord, Lord Collins, will know the case. The Certification Officer determined that the union had breached its statutory duty to ballot all its eligible members during the 2009 general secretary election. He also observed other issues relating to the union’s membership register, but he was unable to investigate further as no complaint had been received. This seems to be the wrong situation, and it is that sort of situation we are seeking to change, but we have also listened, as I promised we would when we started Committee stage in this House.

We agree that the Certification Officer, like any other regulator, is and should be independent. However, it is fair to say that noble Lords are seeking a greater assurance. I therefore intend to bring forward at Third Reading an amendment to confirm the Certification Officer’s freedom from ministerial direction. I also confirm that the Certification Officer will follow OCPA appointment procedures.

The noble Baroness, Lady Donaghy, suggested that the Certification Officer might consult on his enforcement strategy. Clearly, he needs to have the ability and space to respond to the information that he receives and to decide the right way forward. He is of course independent, and it is an independent matter whether he investigates and what his approach is to an investigation. That is really a matter for him.

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Moved by

[Baroness Neville-Rolfe]

31B: Clause 18, page 15, leave out line 26 and insert—
“( ) a federated trade union,( ) a trade union that is not a federated trade union,”

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Moved by

[Baroness Neville-Rolfe]

31E: After Clause 18, insert the following new Clause—
“Rights of appeal not limited to questions of law
In each of the following provisions of the 1992 Act, for “on any question of law arising” substitute “on any question arising”—(a) section 45D (appeal from Certification Officer on question arising in proceedings etc under section 24B, 24C, 25, 31, 32ZC or 45C); (b) section 56A (appeal from Certification Officer on question arising in proceedings etc under section 55);(c) section 95 (appeal from Certification Officer on question arising in proceedings etc under Chapter 6 of Part 1);(d) section 104 (appeal from Certification Officer on question arising in proceedings etc under section 103);(e) section 108C (appeals from Certification Officer on question arising in proceedings etc under Chapter 7A of Part 1).”

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[Lord Dykes]

My Lords, I rise very briefly to congratulate the noble Baroness, Lady Prosser, on her proposed new clause. I hope that it will be fully and enthusiastically accepted in this debate today. This is a great opportunity to try to put right some of the deficiencies and weaknesses that we see even now in modern industrial relations in Britain, despite attempts at improvement from time to time.

The tragedy of the “them” and “us” disease—the two nations in industrial relations: the bosses and the employees—is still very strong. Incidentally, although this is not part of the Bill, the very fact that the highly paid executives who run companies are paying themselves far too much in comparison with what people earn on the shop floor is a very dangerous element that contributes to the anger and resentment that is felt in the great divide between the shop floor and the director’s boardroom. It is a great tragedy that, given the modernisation that we expected, with foreign companies coming in and all that the Japanese and Koreans have done to create a new, more modern system, we have not yet made sufficient progress. However, we are beginning to.

I remember vividly that when I was a Member of Parliament for Harrow, more than 30 years ago, I visited within eight weeks the Volkswagen works in Wolfsburg in Germany and British Leyland. British Leyland was going through one of its perpetual crises, mainly because of not the unions but the failure of management to engage their employees and to liaise with them properly. As you can imagine—I am not making this up—the meeting at the Wolfsburg Volkswagen works, one of the biggest motor works in Germany and the world in those days, started at 7.30 am. There was breakfast for an hour and a half, which was black coffee and black bread, and then a tour of the factory for two and a half hours. We then had an early lunch in the canteen, with the employees, directors and bosses eating at the same tables.

Some weeks later, I went to the British Leyland meeting, which, in contrast, started at 11.30 am. It was a half-hour visit to the factory, which was not very long, and we were told that we must make progress but could ask questions later. There was an hour of gin and tonics in the boardroom with the director—a very agreeable English habit that we have—and then a sumptuous lunch in the directors’ dining room, miles away from the workers’ canteen. That was a long time ago and I think that things have improved in many enterprises, so I should not decry that. But it is still not enough. There is still a sinister division between employees and employers in this country, and the pay gap is really menacing for the future of British society and its equilibrium. It has to be tackled one way or another—but that is not, of course, part of this Bill.

I very much agree with the remarks of the noble Lord, Lord Stoneham, and thank him for them. He has experience both of the corporate world and of assisting in trade union activities. He cast a warning about these matters, as did the noble Lord, Lord Mendelsohn. So the Government, having been in listening mode on some specific amendments to earlier aspects of the Bill, have a great opportunity now to re-educate some of their ministerial colleagues about these matters, because the “them” and “us” doctrine is deeply embedded among many Conservative Ministers still. That is a great tragedy for this country and does impede our efforts. We helped the Germans have a much healthier system when we were there as the occupying power after the war. What a great irony that was. So now we have an opportunity for Ministers to respond to these matters. This may be a very general matter and not a specific, technical amendment, but it is a very important new clause. I hope that the Government will respond very positively.

[Baroness Neville-Rolfe]

My Lords, I am very grateful for this opportunity to consider wider aspects of industrial relations in the Trade Union Bill. This conversation builds on the valuable debate initiated by the noble Lord, Lord Foulkes, last November, which I found extremely useful. The knowledge and expertise in this House is, as usual, impressive. I always agree with the noble Lord, Lord Mendelsohn, on the role of good management and the need to engage and inspire employees.

I thank the noble Lord, Lord Dykes, for joining the debate. He is right to mention the importance of appropriate executive remuneration. His tales of Germany reminded me of my time on a German board. But we need to bear in mind that the UK’s growth and dynamism have been greater than Germany’s in recent years. That matters to millions of employees and families right across our country.

I am very grateful to the noble Baroness, Lady Prosser, for bringing her amendment back again and to my noble friend Lord Courtown for the work that he has done with her on this important matter. The Government recognise the value of good employee engagement. We know that it contributes to improved productivity and business growth. Indeed, as a personnel director many years ago in the Civil Service and more recently from my first-hand experience through links with USDAW when I was at Tesco, I have definitely seen the benefits. I am grateful for the work on employee engagement by my department and others and am pleased that businesses are now more aware of its importance. In 2015, the CBI employment trends survey highlighted that a top priority for business in the coming year was better employee engagement to foster productive workplaces.

As the noble Baroness, Lady Prosser, has already told us, there has been a lot of activity. The Prime Minister launched the employee engagement task force in 2011. One of its main achievements has been the development of an employee engagement community, which has promoted the benefits and various approaches to employee engagement. The task force comprised a wide range of businesses, including entrepreneurs and HR professionals. In addition, ACAS has produced an online productivity tool to allow employers to look at which of the seven levers of productivity are most important. There is a range of guidance on each element, one of which is a “strong employee voice”. I am sure that the noble Baroness, Lady Donaghy, would commend ACAS’s work in this area, and support the work of her successor there, Sir Brendan Barber, in this matter. These initiatives and others have shown that employers want flexibility to decide how best to engage with their employees, and while unions play an important role, they are not the only mechanism for effective engagement.

This new clause would require the Secretary of State to issue a code of practice that would require all employers to establish a mechanism of employee engagement via trade unions. From my experience, I believe that a prescriptive approach would be ineffective. For small businesses and sectors that are not heavily unionised, having unions as the only mechanism for employee engagement would also be a practical challenge. While I do not believe that we should limit choice, I do agree that the role of employee engagement in positive industrial relations should be highlighted when we come to explain the changes to the industrial relations landscape brought about by the Trade Union Bill.

To pick up on what the noble Lord, Lord Stoneham, said, it struck me that there have been a lot of moves forward, but those initiatives do not have the salience that they need. I would be happy to commit my department to bring together interested parties to discuss not only existing work on employee engagement but how we can raise awareness of its importance as part of the changes that we bring in with the Bill—and how that can link in to the ongoing issue of productivity, which has been a priority for my department ever since the productivity plan we published last July. I hope that I have shown that the Government value the role of employee engagement and I ask the noble Baroness to withdraw her amendment.

[Baroness Prosser]

I am grateful to the Minister for that response and I am heartened by it. I have just a couple of points. The new amendment does not mention a code of practice. That was removed in the change on the basis that we wanted to ensure that we did not back the Government Front Bench into too much of a corner on this but we could leave open a way for proper discussion.

[Baroness Neville-Rolfe]

I should have said that. The powers are not the problem here; it is about what we do, in intent and communication, which is why I gave the noble Baroness the response that I did.

[Baroness Prosser]

I thank the Minister for that.

Secondly, employee engagement, and the mechanisms to bring it about, must of course take place in workplaces, whether or not they are unionised. That is the whole point. The evidence shows, and I think the Minister agrees, that there is a lot of good will and activity taking place, but there are always employers and organisations that are reluctant to get on the front foot. That is why we are looking for a little bit more of a push from the Government. I am grateful for the Minister’s suggestion that we can continue to discuss this matter to find ways of taking it forward. On that basis, I beg leave to withdraw my amendment.

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I also agree with the noble Lord, Lord Wigley, who mentioned that we have a different way of doing things in Wales. Yes, there is no junior doctors’ strike there; there is a social contract between trade unions, the Government, local authorities and others in Wales that works well. Indeed, my noble friend Lady Prosser referred in the previous group of amendments to a civilised and sensible way we can deal with each other. So far as this matter is concerned, the civilised and sensible way is to drop the legislation and move forward in the spirit of the concessions that the Government have made this afternoon.

[Baroness Neville-Rolfe]

My Lords, we have had a relatively lengthy discussion, both in Committee and this evening, about the territorial reach of the Bill. We have thought about Wales, the home of my grandfather—although I do not think that that is quite a declaration of interest. I hope that we have made it clear today, clause by clause, that we are listening carefully to concerns raised by noble Lords. I heard what the noble Baroness, Lady Morgan, said about the helpfulness of the changes on facility time and check-off relating to the concerns about Wales. I congratulate her on the launch of her manifesto today—a good reason for speaking.

I am sorry to disappoint the noble Baroness as we never comment on leaked letters, but we had a discussion in Committee about the point raised by the noble Lord, Lord Hain, and about the Supreme Court judgment in the Agricultural Sector (Wales) Bill, which considered the competence of the Welsh Government where multiple subjects were at play. Of course, the court held that the Welsh Assembly had competence as the case concerned a situation where the devolved matter of agriculture was specifically in play. By contrast, this Bill is concerned with industrial relations, which is solely a reserved matter.

There are other cases that I will not go into at this moment, but the key point is that we cannot ignore the fundamental and well-established principle that there should be a unified system of law for certain matters. Employment and industrial relations law is one important example that has to apply consistently across Great Britain. Devolution of these matters, which is the effect of this penultimate amendment we are looking at, could lead to the differential treatment of workers and the development of a two-tier system, making it more difficult for workers to move freely within the labour market. That, of course, is why employment law is reserved in Scotland, and not conferred in Wales. The importance of having this single regime has been reconfirmed in the context of the Scotland Act which received Royal Assent recently.

The noble Lord, Lord Hain, sought, in our earlier discussion on the Enterprise Bill to look at the devolution of exit payments and suggested that our treatment of those was inconsistent with our treatment of the Trade Union Bill, to which we have now turned our attention. This is not correct. The Government of Wales Act 2006, which I referred to earlier, gives legislative competence to the Welsh Government for pensions and compensation payments to specific employers and for specific purposes. This is why the Welsh Assembly has regulation-making powers in relation to exit payments in the Enterprise Bill. In contrast, the Trade Union Bill is about employment and industrial relations law, which is not conferred on the Welsh Government—it is a wholly reserved matter, as I have said. The benefits it will bring should apply across the whole of Great Britain.

I appreciate that not all noble Lords share my assessment—hence this amendment—but I cannot accept that the way forward is to exclude certain public bodies outside England from specific provisions of the Bill. That would extend devolution by the back door and undermine discussions in the context of the Scotland Act and the draft Wales Bill. Parliament has put in place provisions for revising the devolution settlements. It would not be appropriate for this Bill, or others unrelated to constitutional devolution matters, to determine the boundaries of devolution in isolation. We are here today not to debate and amend the devolution settlements but to deliver our manifesto commitment for industrial relations and employment law.

In response to the noble Baroness, Lady Randerson, we do treat devolution with respect, as noble Lords can see, in many different ways, but I cannot agree with her or with the noble Lord, Lord Murphy, about the way forward on this amendment. Can we just consider the hugely significant impact of the amendment on the Bill? Under the amendment, none of the Bill’s provisions would apply to any public body in Wales, regardless of whether the public body were devolved. That would mean that neither the 50% turnout threshold nor the 40% support threshold for important public services would apply to industrial action ballots in Welsh schools or Welsh hospitals. The threshold provisions in the Bill ensure that strike action only happens where there is a strong and positive mandate. That is as important, it seems to me, in Cardiff and Wrexham as it is in London or Glasgow.

This amendment would also mean that ballot papers for industrial action in the DVLA or the Border Force in Wales would not be required to contain a summary of the matters in dispute, despite the fact that both bodies are responsible for matters that are solely reserved. Not only would this amendment therefore undermine the devolution settlement with Wales, and the principle that employment matters should be reserved, but there could also be unintended consequences, as I have highlighted. Where bodies have premises in Wales, there would have to be two different sets of rules for different workers by virtue of where they were located.

If the House were to approve the amendment today, it would set a precedent that future employment and industrial relations legislation would not apply to public bodies in Wales. We could anticipate a time when individual rights, such as protections from unfair dismissal, would not affect public bodies in Wales. I am sure that that is not what anybody wants, but we have to look at the implications of making a change in an area which is clearly reserved. Of course, we will continue to talk about the delivery of devolution in the weeks and months ahead, but I hope that I have explained our position clearly this evening.

[Lord Hain]

The Minister has been very generous this afternoon, but I fear that her generosity is now straying into dangerous territory. I am very concerned. May I point out that when Welsh Ministers start to read the text of the Minister’s reply, they will find that she is digging herself into a deeper hole in this matter? Some of what she has said is very contentious on the interpretation of the devolution settlement for which I was largely responsible in the Government of Wales Act 2006, as Secretary of State. I am very concerned, if I may so, in the gentlest way possible, that she is reading from a civil servant’s script that is seeking to get back some of the powers and responsibilities that have already been devolved.

[Baroness Neville-Rolfe]

I thank the noble Lord. I am certainly not seeking to make any changes. I said in response to a point made by a colleague that it was important to respect the devolution settlement. I am trying to explain that this is a reserved area and that if you change that there are implications of the kind that I outlined. That is why we feel strongly that this needs to be a national measure. It fits in well with the unified system that is needed for certain matters and takes account of the fact that employment and industrial relations law is reserved. Of course, as we discussed earlier in relation to the Enterprise Bill, there are particular detailed provisions—apprenticeships are a good example—where I completely understand that the Welsh Government create their own rules. What I am trying to do on this Bill is to make sure that we do not move into constitutional areas which are not appropriate for today’s debate. I have also tried to explain that there is a risk of things being unworkable. I consider that the amendment has far-ranging implications which I cannot accept. I ask the noble Baroness to withdraw her amendment.