Trade Union Bill

Earl of Courtown Excerpts

Thursday 25th February 2016 Lords Chamber

[Lord Monks]

I remind the Minister about workplace pensions. They are a very recent auto-enrolment initiative. They do not go back to the 1990s; they go back about two years. They are based on payroll deductions. They are not old-fashioned; they are efficient. They are the way to do things. They are much cheaper than direct debit and much easier for people to handle. That is why, on a consensus basis, auto-enrolment is based on payroll deductions.

[The Earl of Courtown (Con)]

My Lords, I do not wish to be discourteous to the Committee in any way, but there have been five or six interruptions so far and the Minister has been on her feet for four minutes. If she is allowed to make just a little bit of progress, perhaps during the course of that progress she will be able to respond to some of the questions being put.

[Baroness Neville-Rolfe]

I am grateful to my noble friend. We are debating check-off in relation to Clause 4. The Public and Commercial Services Union on its website quotes a member who said of direct debit:

“It’s the easiest way of paying my union subs. You know then that it’s going to get paid because you’re not dependent on your employer taking it from your wages. I think it’s better”.

I agree with that.

Public sector employers, where they are funded by the taxpayer, have no place in shouldering the administrative burden of collecting trade union subscriptions. Even where the union pays the employer for the service, it remains the employer’s responsibility to manage the payments, and if the employer gets it wrong, it could be taken to an employment tribunal.

Unite, UNISON, GMB and PCS already accept direct debits, and some unions have already modernised their arrangements and accept only direct debit payments. Direct debits are easy to set up, and they offer excellent consumer protection. The majority of adults in the UK use them, and many organisations consider it their preferred method of receiving payments, such as utility providers who offer customers a discount if they pay in this way.

I thank my noble friend Lord Balfe for setting up a meeting with officials from some small trade unions. What struck me was that they felt that direct debit was the way forward and that some of them had already modernised their arrangements and no longer use check-off. The unions I met included the FDA, Accord, Prospect, the Association of Teachers and Lecturers, the National Association of Head Teachers, the British Dental Association and others.

Modern employment practices are seeing more fluidity in the workplace. As Prospect says:

“Many Prospect members change jobs frequently, or have periods of unemployment between contracts. If you’re moving on, you don’t have to resign your Prospect membership. We can stay with you during those times”.

At Second Reading, I said that I was in listening mode, and we have listened to some of the concerns raised about implementing this change and allowing a sufficient transition period. So to reply to the noble Baroness, Lady Donaghy, we announced in the other place that the regulations on check-off would not come into effect until 12 months after the Bill received Royal Assent. This will give unions double the time we originally proposed—a full year—to encourage their membership to move over to paying their subscriptions by direct debit. That is on top of the time unions have already had since the proposal was first announced last August. It is one of the many reasons why we do not accept the assertion that the proposal offends human rights or hinders union activity. It is about a change of subscription method over a full year and, as we see it, does not engage the European Convention on Human Rights. It is right that unions should adopt modern subscription practices to reflect the changing needs of all their members. No new entrant to the job market would expect only ever to have one employer these days. Check-off is not well suited to meeting the needs of a diverse and fluid workforce.

We heard at Second Reading that check-off benefited employees as it made sure that they ceased being a union member when they left employment, but all the large trade unions offer specific memberships for retired members, and trade union membership is not restricted to those who are still working.

Noble Lords have claimed several times that the prohibition on check-off will affect those without bank accounts. I have not seen a great deal of evidence that such public sector workers exist outside the hypotheticals—and we are talking about the public sector—but even if a few members still do not have bank accounts, I am sure that a union would be prepared to accept cash or alternative payment arrangements, although this would be very much a matter for the union. Even basic bank accounts now allow direct debits, and of course if you are online you can cancel a direct debit when you need to, which has represented progress in banking. More householders than ever now have bank accounts, and the check-off impact assessment referred to the wider Bill impact assessment that was published at the same time. The impact on union members will be minimal as they will have, as I have just said, 12 months to switch to direct debit.