Enterprise and Regulatory Reform Bill

Debate between Lord Monks and Lord Young of Norwood Green

Wednesday 5th December 2012 Grand Committee

[Lord Monks]

I intervene again, although I will not make a habit of doing so. In my earlier remarks I referred to a steeplechase that the applicant needs to negotiate to reach the employment tribunal. The tribunal is not a sort of holy grail by any means. The average compensation payments are pretty low when you get there, although there are some spectacular exceptions, and often do not compensate for the loss of employment.

To all the points already introduced into the debate this afternoon, such as needing to be in a job for two years and having to go through the ACAS procedure, the Bill adds the issuing of a rather formal certificate, which the noble Baroness, Lady Turner, is concentrating on. You may then have to pay a deposit for some, or all, of your case and then you arrive in front of the tribunal, which does not have lay members—people who have direct experience a bit like yours—to give you a bit of reassurance.

It is a daunting prospect and, while I can guess some logic behind the need for an ACAS certificate at the end of the conciliation service, it raises a number of points. First, why is it necessary? It is not necessary now and I am not aware of there ever having been any state of confusion. If the two parties have not agreed, the case continues. Anyway, ACAS has to issue a certificate. How long it will take will depend on its case load and whether it is another bureaucratic stage. I know that the time clock does not start running until after the certificate is issued, but it seems that there is scope for some legal problems.

I would be interested in an explanation, if it is possible to get one today, on the reasoning behind this particular stage being put in. Is there some doubt about whether conciliation has failed? Is there a need to signal that conciliation has failed and that you cannot consider it any further informally in some way? Often, conciliation goes on right up to the tribunal itself, even maybe during the tribunal. However, if you have signed the certificate concluding that process rather formally, the informal scope for conciliation is reduced. I wonder if the Minister could explain a little more about this provision.

[Lord Young of Norwood Green]

My Lords, this is again a legitimate probing amendment. I, too, would be interested in getting some reassurance from the Minister about the process of conciliation. We hope that the conciliation process will work but there are going to be cases—I guess a significant number—where it does not. I suppose that the aim is to ensure that we do not insert any more delay than is necessary. The point about a certificate has already been raised. It would be useful if the Minister could confirm that the clock does not start running again until after the certificate has been issued.

--- Later in debate ---

[Lord Young of Norwood Green]

My Lords, this clause gives us real concerns. The concept of a settlement agreement whereby an employee waives their right to go to a tribunal is something that we find unacceptable. It undermines some basic principles. In the circumstances, Amendment 20G is quite appropriate in that it would ensure that the employee could request union, workplace or legal representation at the settlement negotiations. The whole idea of an employer being able, for any reason whatever, to pick on a particular employee and enter into the kind of negotiations that are recommended in the Bill is totally unacceptable because it could open the door to all kinds of discrimination. For those reasons, we believe that if there is to be any possible settlement, although we are opposed to the concept as it is currently defined in the Bill, the employee ought to be entitled to be accompanied by a union, workplace or legal representative. I beg to move.

[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.