Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Monks Excerpts

Monday 13th January 2014 Lords Chamber

Moved by

[Lord Monks]

28A: Clause 37, page 40, line 9, at end insert—
“(c) to have a duty of confidentiality to the trade union and its members, and(d) to abide at all times by the trade union’s obligations under the Data Protection Act 1998 to protect the information of members.”

[Lord Monks (Lab)]

My Lords, I shall speak also to Amendments 28B, 28C, 28D and 31A, standing in my name and that of my noble friend Lord Stevenson.

To give some brief context to those who are new to this subject, we have moved from Part 1 of the Bill to Part 3, which is concerned with trade union administration. It seeks to strengthen the public supervision of union membership records, with a duty on unions to produce a membership audit certificate annually. Unions with more than 10,000 members would have additionally to appoint an assurer—a new term to me in public life—whose job would be to check the veracity of union records. Perhaps this is a precedent, and perhaps we could do with assurers to be appointed to check some companies’ tax affairs from time to time.

Why is union membership being singled out? Are there are a lot of complaints? Is there widespread public concern? Is there a lobby around to say that there are some scandals in this area? Let us have a look at the facts: between 2000 and 2004, the last time that any records were taken, six complaints had been received by the certification officer, and there has been only one since, which is current. Is there public pressure for this intrusion into internal union affairs? No one knows who has been asking for it because the Government have never been able to provide any information about that.

This provision seems to be the product of a fevered imagination, convinced that it is quite legitimate to pile a load of red tape on to unions when generally the policy is against red tape and overregulation. In today’s Conservative Party it does not actually seem necessary to have a reason to make union lives more expensive and complex; it is almost a reflex action that they wish to perform from time to time.

It is not just about the expense and trouble that this part of the Bill is likely to cause. The measures have only one parallel in the EU: in Malta, in connection with a specific circumstance of rivalry between unions, a public official got involved in checking membership records. Every other country keeps the state and employers out of union membership records.

This is not a theoretical discussion about what might happen. There are 2,000 cases currently in procedure over allegations of blacklisting, and the people being accused—some of them have admitted it—are eight of the major blue-chip construction companies in this country. This involves sites as huge as the Olympic site, which of course is being regenerated for other purposes, and the Crossrail site, which we are all aware of if we travel around central London. There is a risk of information falling into the wrong hands and becoming available to people who should not see it. We know that the more people get hold of records and information of this kind, the more likely it is to fall into the wrong hands and be used to people’s detriment.

That is what this series of amendments is about. They would strengthen protection for the individuals. The Data Protection Act 1998 classed trade union membership as “sensitive personal data”, and was quite correct to do so. A specifically protected category under the EU data directive is a derogation for unions. Unions should be affected only where there is a substantial public interest. Where is the substantial public interest in this measure? There have been hardly any complaints, and very few people have spoken on this subject.

Amendment 28A would make clear that the assurer, this new creature, would have a duty of confidentiality to the union and its members, and a duty at all times to abide by the trade union’s own obligations under the Data Protection Act to protect the personal information and data of members. It is important that we recognise that this information is very sensitive and the assurer should have a duty of care and proper responsibility. I hope that the Minister will be able to accept these rather simple points. After all, if you reverse the situation, will he be saying that there is no duty of confidentiality to the union and its members and no duty to help a union maintain its obligations under the Data Protection Act?

Amendment 28B would strengthen the hand of the union to get rid of an assurer who breaches confidentiality or some other statutory duty, or for some other justifiable reason. In the Bill, the only way in which an assurer can be sacked is by a resolution at a general meeting of members or delegates—an annual conference, if you like. That is limited scope indeed for termination of this position. Surely, a union, which will be paying the assurer, should be able to discharge a person who is unsuitable, just as it can an accountant, an auditor or its solicitor. The Bill’s assumption here is somehow that the assurer will be in conflict—an investigating officer looking into the affairs of a miscreant union and an adversary who must be protected. The Bill gives the game away on the Government’s rather hostile approach to what unions are doing and how they are administering their affairs.

Amendment 28C reinforces the point about the assurer complying with the Data Protection Act, and reminds us that information can easily be obtained nowadays by people who should not have it, particularly if it becomes too widely available.

Amendment 28D would narrow the circumstances under which the names and addresses of members can be disclosed. It would specifically remove requests from the certification officer, the government registrar, who already has significant powers over trade unions in this area but not normally to get personal data. We are trying to stop him from being able to ask for personal, individual data. There is an inspector in addition to the assurer in this cast list of new people who will be rolling around union administration. We also want to stop an inspector, appointed by the certification officer, getting this individual, personal information. In effect, we are seeking to establish the principle that the disclosure of an individual’s name and address is done only with the individual’s consent, and not with some blanket power given to the assurer, the assurer’s officials and the certification officer. In this way, we are trying to help to protect against breaches of the Data Protection Act.

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The noble Lord, Lord Morris of Handsworth, stated that unions were more harshly regulated than other organisations. Noble Lords are sometimes fond of drawing analogies between trade unions and other membership organisations, but trade unions are unique in both purpose and design. They are explicitly defined by legislation, and in practice regulation is tailored to each type of organisation, to fit its role and function. Again, we believe that these measures are appropriate to the function of trade unions. I therefore ask noble Lords not to press their amendments.

[Lord Monks]

My Lords, I thank the Minister for that reply. I admired his straight bat, which could have been used down under, against the Australians, in the last few weeks.

I hope that noble Lords have noticed the complex web of officials who are going to be busying themselves around the union world. There is quite a cast list of people for unions to deal with. First there is the certification officer, whom they are used to dealing with, but now he has extra powers. Then there is the new assurer, who is unique in British public life. Nobody else has an assurer. No political party has an assurer. Do we have assurers to check the electoral roles in some inner city areas? Of course we do not. People do their best, and we get 80% accuracy, on average, in this area.

Why are we appointing this network of officials, who will no doubt be passing the buck if problems really do arise? I know that at the end of the day it will be the trade union that ends up in breach of the data protection legislation in the event of any complaints, despite the fact that it will all have passed through the hands of the certification officer, the assurer and an inspector. And of course, there have been no complaints—I remind people of that.

One of the problems with this debate is that the Committee stage was truncated. These measures were brought forward quickly. Because Part 2 of the Bill was paused, Part 3 was rushed forward to fill the timetable gap. So we have not had a chance to get many people interested in this particular issue. This is perhaps the best attended debate that we have had. I hope that people who are listening with an open mind—I know that that is the position of many in this House—will reflect on this complex, bureaucratic, red-tape way of spinning some kind of web around unions, causing expense, difficulty and possible problems where no problems exist.

Union members want to be confident that their information is not misused. Contrary to what the Minister said about confidence, they will be less confident with this measure than they would be on the ground that the union accountants are doing their job properly. They are reasonably confident about that now—as confident as they can be. I am not saying that union membership administration is perfect; of course it is not. But it is in the unions’ interest to make it perfect, and the certification officer keeps an eye on what is going on.

I appreciate the Minister’s straight bat, but I would like to test the opinion of the House.

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Current statute does not provide—

[Lord Monks]

I am grateful to the Minister for giving way. I just wonder how the assurer can help a union in a situation where there is very rapid labour turnover, lots of short-term contracts and great difficulty in keeping membership rolls up to date. What possible value can the assurer add to that situation, except to confuse it?

[Viscount Younger of Leckie]

It is certainly not to confuse, my Lords. As I explained, the role of the assurer is to provide that element of credibility which is not there at present. The assurer will also be working closely with the union and a contract will be drawn up with the union, notwithstanding the core powers that the assurer must have. That is why we believe this is necessary, in particular for the larger unions with 10,000 members and above.

The current statute does not provide an assurance of the union’s compliance as there is no sufficient enforcement mechanism. The Bill addresses this shortcoming by allowing the certification officer to investigate instances of possible non-compliance where there is good reason to do so. The certification officer will require access to the register and other relevant documents in order to determine whether a union is diligent in maintaining a register that is up to date so far as is reasonably practicable. The current system relies on individual members making formal complaints to the certification officer before he can investigate. As members can have no way of knowing the state of the register as a whole, the route for the certification officer to determine whether a union is compliant with its statutory obligations is not that effective to ensure that the existing duties are complied with. There may be a good reason for the certification officer to investigate a union’s compliance with the overarching duties even in the absence of a complaint including, for example, where a membership audit certificate has not been provided by the union or it is unsatisfactory.

We want to give members and the wider public an assurance that all unions are complying with their existing statutory duties. If the measure is applied only when the certification officer receives a complaint, we will not achieve this objective. Just because there are few formal complaints that we are aware of, it does not mean that there is no problem and this is an important point to make bearing in mind the comments that were made earlier by the noble Lords, Lord Whitty and Lord Monks. The access to and handling of union data is a concern that has occupied a great deal of time and debate. The Government understand the sensitivity of union membership data and agree with the importance of protecting them. However, for the reasons discussed at length previously, I reassure noble Lords that this amendment is unnecessary. Membership data will be well protected by both the existing and new legal safeguards. The assurer will owe a contractual duty of confidentiality to the union as set out in the Bill. The assurer, the certification officer and the inspector will be subject to the obligations of the Data Protection Act whenever they handle union membership data. Furthermore, the certification officer is obliged to act in accordance with the European Convention on Human Rights, which includes the individual’s right to privacy.

These two amendments between them would undermine the Government’s policy objective in Part 3 of the Bill. Amendment 29 would remove the independent scrutiny that is fundamental to the credibility of large unions’ annual reporting on duties. Amendment 30 would remove the provision for the certification officer to proactively investigate and assess a union’s compliance with Section 24 of TULRCA where there is good reason to believe that there may be an issue. For these reasons I cannot accept the amendments.

Just before I ask the noble Lord, Lord Whitty, to withdraw his amendment, I want to respond to a question he put to me. He raised the important issue of who would be appointed to be an assurer. We have already said that we will consult on who will be eligible to be an assurer, and further to this consultation the Secretary of State will make an order setting out who is eligible. They are likely to be qualified professionals such as solicitors and lawyers, which was alluded to by the noble Lord, Lord Whitty, auditors or independent scrutineers. This is similar to the system in place for independent scrutineers, and furthermore the unions will have discretion over whom to appoint from the list of eligible assurers and to remove them from the role on agreement with their members. Unions will be able to define the detailed terms of contract and their relationship with the assurer. I ask the noble Lord to withdraw his amendment.

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Moved by

[Lord Monks]

33A: After Clause 39, insert the following new Clause—
“Part 3: Commencement
The provisions in this Part shall not come into force until the Secretary of State has received notification from the Certification Officer that all registered unions with more than 10,000 members have completed such rule changes as are required to satisfy this part of the Act.”

[Lord Monks]

My Lords, Amendment 33A concerns the commencement of Part 3. We have already debated the purposes of the Bill and I must say that I am still in a state of some mystery about exactly what it is supposed to do, other than give trade unions a provocative prod, and it is certainly doing that. For the Government to act in this way without any clear justification for doing so other than through some sense of confidence and assurance—for whom, I am not sure—is a dangerous road to go down. We will be watching other developments in this area, if there are any, very carefully.

I am not going to go through the speeches and points that have been made already. This amendment seeks to ease the regulatory burden by extending the period before the Act is brought into force. The Minister has learnt about union administrative procedures. To change the rules, which would have to be done to allow the assurer access to this kind of information, is a time-consuming, complicated and expensive prospect. The kind of costs we are talking about are those for a union with, say, 1 million members that holds a rules revision conference every two or three years of 1,000 delegates. If, because of the timing, a union has to hold a special conference, that will cost another £500,000. The Government’s estimate that the cost to unions collectively will be around £460,000 pales into insignificance against the costs of union conferences and administration. We debated earlier that the assurer can be got rid of only by the decision of a delegate conference, and again you can see the kind of costs that are beginning to stack up; they go way beyond where the impact assessment took us. In Committee, the Minister indicated some scope for flexibility about this aspect and I know that there have been talks about it. The TUC has been involved and some noble Lords have had contact with the Minister as well.

Let me emphasise that there does not seem to be any great urgency about the need to bring this in. It is not a matter of widespread public concern. There are no current, or indeed historical, problems screaming for attention and for the early implementation of this legislation. It would very much help unions, which would obviously have to comply with the law, if they had adequate time to prepare the necessary changes to their rules without the need to have special conferences and rules revision processes that are exceptional rather than in their mainstream work. It would be cost effective, economical and practical, and would minimise some—not enough but at least some—of the red tape that has been dolloped on the administrations of trade unions. Therefore, I ask the Minister if there can be an adequate period of digestion that avoids unnecessary costs and administrative complexities.

This is a probing amendment, so I wonder whether the Minister can say something about what talks he has had on this issue and whether he has been able to give any more thought to it that he could disclose today in addition to what was said in Committee. I hope that if there is a chance for further dialogue, he will agree to come back to the House on Third Reading to give a report about where we are. However, this is a plea for a road map of where the unions go in relation to full implementation, for some additional time and maybe even for a scintilla of sympathy for the union position as we are forced into this particular corset, which is unwelcome in so many aspects.

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[Viscount Younger of Leckie]

My Lords, Amendment 33A could delay commencement of the provisions in Part 3, as they would not come into effect until the certification officer knows that all trade unions with more than 10,000 members have changed their rules to provide for the appointment and removal of an assurer. I know that noble Lords have been concerned that unions should have sufficient time to prepare for these new arrangements. In particular, we have been told that many unions do not routinely have an opportunity to make rule changes—I think the noble Lord, Lord Monks, alluded to that earlier. I am happy to offer reassurance to the noble Lord, Lord Stevenson, and other noble Lords that unions will have the time that they need. They will have at least 17 months to comply from the point at which the legislation takes effect, because the provisions will not apply retrospectively.

Unions will be required to submit a membership audit certificate alongside their annual return for the first full reporting year after the changes become law. The 17 months is the combination of the 12-month reporting period plus the five months that is allowed after that period to submit the annual return. The earliest that the provisions will take effect is October this year, which would depend on Parliament granting Royal Assent next month. That being the case, unions would have a minimum of 25 months from Royal Assent. In practice, many unions will have much longer.

Unions have different reporting years: many work on either a calendar or a financial year, which the noble Lord, Lord Stevenson, mentioned. Were the legislation to take effect in October 2014, a union with a calendar reporting year would first provide the membership audit certificate by the end of May 2016; for a union with a financial reporting year, it would be the end of August 2016. The noble Lord, Lord Monks, raised the issue of allowing unions sufficient time to meet the new requirement. I entirely sympathise with that and have said something about it just now. I have to confess that this is not the most straightforward of timetables to set out and I would be very happy to meet the noble Lords, Lord Stevenson and Lord Monks, and any other noble Lords to clarify the timings and state why we think this would be sufficient for trade unions to make the transition. That reflects the discussions that we have had with the TUC and others.

I take this opportunity to warmly welcome the noble Lord, Lord Balfe, and the experience that he brings on union matters, something I mentioned earlier in respect of the noble Lord, Lord Monks; it is only fair to acknowledge the experience that the noble Lord, Lord Balfe, has as well. I have had some discussions with him, at his request, on the question of whether the £10,000 threshold is set at the right level. Our primary objective is to supply assurance to union members, and to the wider public, about the existing statutory requirement to maintain an up-to-date register of members. The requirement to maintain a register applies to all unions, no matter what size. However, at the same time, the Government do not want to unnecessarily prohibit the creation of trade unions or undermine their ability to operate. We believe that it is possible for a union to be confident in the accuracy of all its records where its membership is small. We also believe that the wider public will think it reasonable that special provision is made for the smaller union and accept that where numbers are smaller it is reasonable to rely on the union’s own assessment.

Self-certification means a union officer assuring that every individual record is up to date, so far as is reasonably practicable. We think that this is achievable for unions with 10,000 members or fewer, but it becomes much more challenging where there are more members than that, which was part of the debate that we had earlier. The union official would have to be confident of the position and union members and the wider public would have to have trust that this was reasonable—a point, again, that I made earlier. By contrast, independent assurance focuses on whether the system in place for monitoring records is satisfactory, as opposed to making a statement about the accuracy of individual records. I therefore believe that this amendment is unnecessary and I ask the noble Lord to withdraw it.

[Lord Monks]

My Lords, it was a pleasure to hear the noble Lord, Lord Balfe. I welcome him to this House. It was a pleasure to hear him praising TASS, which, as its chosen acronym suggests, was not exactly aligned with the Conservative Party—nor, from time to time, with the Labour Party either. However, we all change and I am interested in what his views were when he was an active member of that union.

We appreciate the way in which the Minister responded on the timetable point. It will be useful to just see if we can tie this matter down in the next couple of weeks and see where the different positions that we hold meet, so that unions comply in a way which is sympathetic to the necessary costs and timetables. On that basis, I beg leave to withdraw the amendment.

Amendment 33A withdrawn.