Trade Union Bill

Debate between Lord Oates and Baroness Donaghy

Tuesday 19th April 2016 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I believe that the Government have got it wrong on the proposals for a new role for the Certification Officer. The Government are creating legislation affecting our legal rights in inverse proportion to the need for it. Thousands of people are deprived of access to justice because of the Government’s cuts to legal aid and slamming costs on to employment tribunal applications, yet here we have no complaints, no build-up of steam, no demand whatever and the Government decide that something is up. They create a complex and expensive role for the new-look Certification Officer when there is no evidence that it is necessary.

This is supposed to be a deregulating Government; however, they are setting up this bureaucratic role for the Certification Officer and making the trade unions pay for it. This will politicise the role, and there is still much confusion of roles. Will the CO be judge, jury or executioner? How will the Government clarify this to avoid judicial review? The sheer amount of information that trade unions will be asked to give is disproportionate and will tie up resources which should be used to protect members.

The cost to the trade unions is unreasonable. If, as the Government say, there is a need to ratchet up the role, then it should be paid for from the public purse. I believe firmly that the Certification Officer should be able to initiate investigations only when a union member has made a complaint. Failing this, there must be additional safeguards to protect members’ right to privacy and the right of trade unions to organise their internal democratic affairs without unjustified interference.

The Government are putting out mixed signals to justify the proposed ban on check-off, which we thought we were facing today, on the basis that employers should not be involved in what should be a direct relationship between unions and their members. In contrast, in the same Bill employers are invited to play a direct and active role in influencing enforcement action taken by the CO on key democratic decisions within unions.

The new role could damage employment relations—for instance, if an employer attempts to interfere in the election of a general secretary, or in challenging proposed strike action, and union members will be less likely to trust the Certification Officer to handle complaints fairly. It is important that the new Certification Officer should be required to consult interested parties, including the TUC and unions, on future enforcement strategies. That would be consistent with good practice and transparency. It might even be advisable to require the CO to establish consultative committees for trade unions and employers’ associations. Their views would be sought before issuing guidance or setting enforcement strategies. Where the CO disagrees with the views of the consultative committee or committees, he should be required to provide a written response explaining and justifying the difference of opinion. This might seem to be too much detail but this is a quasi-judicial post and proposed changes should have been much more carefully thought through than this.

We have seen a succession of these Bills which, as the noble Lord, Lord Tyler, said, have a skeletal element. I argue they are so naked that even the Windmill Theatre would have been embarrassed. I understand that the Select Committee, under the excellent chairmanship of the noble Lord, Lord Burns, was very impressed by the current Certification Officer, David Cockburn. He embodies all that is good about public service. The fact that there was no headline news does not mean that a problem was buried; it means that the role was performed in an exemplary manner. We should thank him for all he has done, not impose this Eton mess of a package.

[Lord Oates (LD)]

My Lords, I welcome the Government’s recognition that, as drafted, the Bill could give rise to vexatious complaints which the Certification Officer would be required to investigate. Government Amendment 23A will give greater discretion to the Certification Officer so that he or she needs to investigate only where they have reasonable grounds to suspect a breach. I hope this will not be the only concession today with regard to the Certification Officer because, notwithstanding the concessions the Minister has set out, the Bill’s clauses and schedules relating to the Certification Officer remain obnoxious. They represent an unwarranted interference in the activities of free trade unions and make trade unions pay for the privilege of having this unnecessary regulation.

It is surprising, to say the least, that a Government who purport to champion deregulation are so ready to reverse their position when it comes to trade unions. What happened to the Government’s one-in, one-out rule on regulations, which I think later became the one-in, two-out rule? I hope the Minister will tell us which regulations are being removed from trade unions to meet that commitment. However, I doubt that will happen because we have asked the Minister repeatedly for an answer to that question throughout the passage of this Bill. I hope I am wrong, but I suspect that I will get no answer again today, not through any fault of the Minister but for the simple reason that there is none.

Not content with imposing yet more regulation on trade unions, the Government have also determined that the trade unions must pay for it. The imposition of the levy is just one regrettable clause in a highly regrettable and unnecessary Bill. However, it is a particularly symbolic one as it demonstrates the Government’s lack of awareness of the role of trade unions. As the noble Lord, Lord Balfe, rightly pointed out, trade unions are not composed of people who go to work every day plotting revolution, but rather of people who come together to protect their rights in the workforce and ensure proper representation. However, the Government do not seem to see it that way.

We have repeatedly asked the Minister to explain which comparable organisations are subject to a levy to pay for this sort of regulation by the state. The examples which we were given at earlier stages in the progress of the Bill, such as the Financial Conduct Authority, are just not comparable. The FCA regulates profit-making organisations, many of which pose systemic risks to our economy, many of which have routinely flouted the spirit—and sometimes the letter—of the law, and some of which have been bailed out by taxpayers to the tune of billions of pounds. By contrast, trade unions are representative, democratic organisations, already tightly regulated by law, which play a critical role in our democracy.

However, the Government do not seem to see trade unions in that light. They do not see them as contributors to our democracy or as defenders of the rights of people with less power than themselves; they see them simply as opponents of their party’s interest and as organisations to be regulated, levied and constrained. There is no other explanation for the decision to impose a levy in this way. No such levy exists for the only really comparable organisation, which is the Electoral Commission. The Conservative Party does not fund investigations by the Electoral Commission into the manner in which it operates, but the trade unions must pay for the partisan regulation that the Conservatives impose on them. It is unjustifiable.

Amendment 31A, which the noble Lord, Lord Collins, will speak to, would at least help ameliorate the impact of the levy. It would prevent a partisan direction being given by the Secretary of State to the Certification Officer and ensure that the officer would only have to investigate complaints made by non-trade unionists if they could demonstrate that they had suffered detriment. That seems to be a very sensible change to Schedule 2. Together, those changes would help ensure that the Certification Officer, who has operated effectively as a regulator to date, is not turned into an overbearing regulator subject to political direction. I very much hope that, in her response, the Minister will be able to address the points made in that amendment and give some more concessions on the Bill.

Trade Union Bill

Debate between Lord Oates and Baroness Donaghy

Thursday 25th February 2016 Lords Chamber

[Baroness Donaghy]

My Lords, I want to make some general points about the Government’s proposal on the Certification Officer in addition to the amendments, but first I thank my noble friend Lord Mendelsohn for such a comprehensive coverage of this subject. In my view the TUC summed it up: this is a disproportionate response to an unidentified problem, and I fully agree. The Minister will be pleased to know that although I am going to take slightly longer on this amendment, I will be as brief as possible on my technical and probing amendments later, which may give her an opportunity to think about the exit door and her throat; certainly before 7 pm and I hope a lot sooner.

My first point is one that I am sure everyone understands, but it needs to be put on the record. The Certification Officer is a public servant who carries out his work with diligence and integrity, and I am sure that all future postholders will do the same. We are not and should not be discussing the role of the individual CO. The officeholder will carry out whatever function the Government of the day give them, and I have no doubt that they will do that to the best of their ability. Secondly, I do not question the right of any Government to promote policies that change the nature of a post or a role, no matter how unnecessary and churlish those policies might be. Thirdly, I do not challenge the right of a Government to increase expenditure without providing the direct means to fund it. One could challenge the wisdom, but not the right.

However, I do challenge on the following matters: unfairness, lack of evidence, the one-sided nature of the proposals, the politicisation of the role of the Certification Officer, the necessity for any substantial change and, finally, the Kafkaesque proposal to make trade unions pay for unnecessary government-imposed red tape. On the issue of unfairness, I am grateful to the Equality and Human Rights Commission for supporting these amendments. Others will no doubt deal in more detail with the EHRC’s evidence, and indeed have already done so, but I shall just repeat the quotation given by my noble friend Lord Mendelsohn because it bears repeating. It states that,

“the new proactive character of the CO’s functions (i.e. the power to instigate, investigate and then adjudicate the same complaint) compromises the impartiality of the CO”.

The commission has dealt comprehensively with the problems caused by Clause 15 and I thank it for doing so.

The clause is one-sided because it will have very little impact on employers’ associations. According to the impact assessment, the familiarisation costs will be £2,400 to be met by 93 employer organisations. That represents 26p per employer organisation, although no doubt that will vary depending on the size of the employers’ association. So we are talking of an average of 26p per employer organisation. The estimated cost of familiarisation to the trade unions is £525,000. The actual levy of £1.9 million per year will be covered in secondary legislation, and there may be variations depending on the size of the trade union, any exemptions or other issues about which we have absolutely no knowledge. We will not be able to change it, and yet it will be of considerable importance to at least 7 million people. But if we look at the division of the cost of the levy between the trade unions and the employers’ associations based on the same division as the familiarisation costs, it comes out as 0.5% of the £1.9 million levy for employers’ associations and 99.5% of it to be met by the trade unions. That is why it is one-sided. I accept that the impact assessment may be completely wrong in its calculations, and I know that there is to be some consultation with employers and trade unions about the levy in the future. I ask that Cabinet guidelines be adhered to and that this will not be yet just another appearance at the August-fest.

The trade unions will have less money because of the ban on deduction from salaries and will be now levied for the bulk of expenditure that, up to now, has been paid from public funds. That is unfair. It will politicise the role of the CO because any third party will be able to ask for an investigation. The purpose of my amendments, and the probing amendments in the following groups, is to ensure that it is trade union members who can complain, not a daily newspaper or Conservative Central Office.

While I am on the subject, I ask the Minister whether there is a typing error on page 77 paragraph 280 of the impact assessment. Under “Rationale for Intervention”—it is “rationale” used in its loosest sense—it says:

“The main market failure arguments which underpin the existence of a regulator are externalities which occur because of union behaviour and imperfect information between employers and trade unions”.

That has to be a typo. If it is not, it reveals a worrying ignorance of the role of the CO. Surely it should read “employees and trade unions”. I hope that I can be reassured on this.

The impact assessment also comes out with the admirable understatement:

“It is likely that the Certification Officer may receive more representations from 3rd parties”.

There is an attempt to reassure us that the representations would need to meet the two tests that,

“the Certification Officer can only require documents if there is good cause to do so and can only investigate where there are circumstances to suggest that a union could be in breach of a duty”.

The impact assessment calculates that the increase in investigations as a result of these changes is likely to be limited. That may well be true of formal investigations, but that does not take into account the actual work involved processing any representations short of a formal investigation. This creates an unnecessary industry. There is no evidence whatever that anybody wants it, and, to add insult to injury, the trade unions will be picking up the tab for something that nobody wants.

[Lord Oates (LD)]

My Lords, I shall speak to the amendments in this group, in particular Amendments 98 and 99, and to the question that the clause stand part of the Bill. If I ever wondered why I joined a liberal party, almost every day that we have discussed the Bill I have been given a clear and stark reminder. Today is no different. Clause 15 goes to the heart of the role of free trade unions in a free and liberal society. State interference in the organisation of freely associated people should be contemplated only where there is compelling and overwhelming evidence that it is required.

The comparison between what is proposed here and the financial services industry, which the noble Lord, Lord Flight, made, is entirely specious. The banks beggared our economy and it was millions of trade unionists and other workers who paid the price. What was the first action of the Tory party in government freed from coalition? It was to let the bankers off the hook by reversing the change we had made in the coalition of reversing the burden of proof, and it was to go after the trade unions with this Bill. It says everything we need to know about the Tory party.

Returning to the amendments, a regulator exists in the form of the Certification Officer with a modest and proportional role. The powers and obligations on the regulator will be massively increased if the Government have their way and the grubby and grasping hand of state interference and control will have been further extended. A sensible, modest and proportionate regulator will have been turned into a monster capable—if not intent on—suffocating democratic trade unions in red tape. There will be a vast expansion of the powers and obligations of the Certification Officer. As noble Lords have said, he or she will now be investigator, prosecutor and adjudicator, compelled to investigate the complaints not of trade union members but of any third-party complainant. An array of right-wing organisations and individuals are doubtless preparing their vexatious complaints, led—I have no doubt—by the TaxPayers’ Alliance. Why is this happening? What evidence has been brought forward to justify this unwarranted new interference in the operation of free trade unions? The Government proffer none. The current Certification Officer says that there is none.

In the Select Committee, my noble friend Lord Wrigglesworth asked the Certification Officer where he thought the pressure had come from. He replied that he had no evidence of pressure for change—although, to be fair to the Government, they would have had no way of knowing that prior to the Bill being published. Why would they not have known? Because, as the noble Lord, Lord Mendelsohn, noted, at the same Select Committee hearing the noble Lord, Lord Richard, asked the Certification Officer whether he had been consulted, and he replied that he had not been consulted. The transcript shows that the noble Lord, Lord Richard, then asked him again—one assumes incredulously—“You were not consulted at all?”. The answer was no. The Certification Officer—the person you assume would have been the first port of call to whom any Government actually interested in the evidence before them would have gone before even considering legislation—had not been consulted at all. That is astonishing—or at least it would be if we had the slightest thought that the Government’s intentions in this Bill were to address a genuine problem. Those are not their intentions. Every clause after those relating to the thresholds—the merits of which you could argue one way or the other; personally, I think they are unnecessary—is a nakedly partisan attack on free trade unions and the main opposition party. Although those trade unions and the main opposition party have often done no favours to the Liberal Democrats, there is something more important at stake here—the nature of our democracy.

Clause 15 will significantly increase the burdens on the regulator and on trade unions. The Certification Officer made clear in the evidence he gave that, in his opinion, as far as he could judge, the costs of the regulator would rise at least fourfold. Can the Minister explain to us how that can be justified? And can she explain on what basis she thinks it right that such a stark increase in the costs should be passed on to the trade unions instead of the Exchequer? For example, does she think that the Conservative Party should pay the costs of the Electoral Commission, or MPs pay the costs of IPSA? These are the relevant comparators. It might be reasonable to charge a levy on trade unions when the regulator was simply looking at members’ complaints, but it is most certainly not in the circumstances we are discussing.

The impact assessment is very weak on justification. It can claim only this justification:

“The actions of unions can have wider impacts beyond their membership and their operations may not always be transparent to the wider public”.

I could as easily replace the word “unions” with the words “Conservative Party”. Given the number of times we have heard the Government justify their position on this Bill by the claim that they have a mandate provided by the Conservative manifesto, might the public not have a legitimate interest in knowing how the content of that manifesto is decided? Should it, for example, be determined by an all-postal ballot of its members? Should there be a 50% threshold, and perhaps an additional threshold requirement that at least 40% of eligible members vote on any section determined to be nakedly partisan?

Given that less than 25% of eligible voters supported the Conservative manifesto at the last election, should the public not at least know that it was properly considered and voted on by Conservative members? Perhaps we should introduce amendments to that effect. But no, of course not. The state should not interfere in the operations of a voluntary association of citizens, unless there is a compelling and overwhelming need to do so. The Conservative Party used to believe that. Indeed, many on the Conservative Benches still do, as evidenced by their contributions in our previous discussion, but Ministers seem to have forgotten it. I appeal to my friends in the Government—if I still have any left after the Bill—to recall that traditional Conservative belief and to drop this obnoxious clause.

--- Later in debate ---

[Baroness Donaghy]

I shall speak also to Amendments 102, 103 and 105. Amendment 101 goes over some of the ground that we have already covered. It would restrict the power to require the production of documents to the Certification Officer and his or her staff. Amendment 102 would require a complaint to be made by a union member and for the Certification Officer reasonably to believe there was evidence of a breach of an obligation before he or she initiated an investigation. Amendment 103 would require a person investigating a breach of an obligation by a union to be a member of the staff of the Certification Officer and not “other persons” as vaguely written in the Bill. Amendment 105 would require the interim report of the person investigating a breach of an obligation by a union to be sent to the union concerned, which is a new point and, if anything, represents the one improvement in the whole area of the schedule.

The concern is that the Certification Officer and inspectors will have wide-ranging powers to demand the production of union documents and access to membership records, members’ names and addresses and correspondence between a member and their union, even though no union member has raised a complaint about the union’s practices. I am also seriously concerned that the evidence threshold that needs to be met before these wide-ranging powers are triggered is very low. The CO will be able to demand access to documents if he or she thinks there is good reason to do so. The CO would not need to have substantial evidence demonstrating that the union has breached any statutory obligations. Requests for union documentation would not be limited to union head offices, and the CO and any appointed inspectors would also be able to approach branch offices and regional offices to request documents.

These powers represent a serious violation of union members’ rights to privacy, as protected by Article 6 of the European Convention on Human Rights, as has already been said. Many individuals do not want their employer or, indeed, the state to know that they are a member of a union for fear of victimisation or blacklisting which, as my noble friend Lord Mendelsohn said, unfortunately still exists today. The Bill may therefore deter individuals joining unions and benefiting from effective representation at work. This will undermine the right to freedom of association. I know that the Minister has said that this information will be confidential to the Certification Officer, but that is not necessarily the perception that will be held by individual union members, who will fear that the information may get out to the public, particularly if they find out that the complaint or investigation has been initiated by a national newspaper or a political party. Perceptions are extremely important on that. It is not surprising that, as the noble Lord, Lord Ouseley, has already referred to, the ILO committee of experts has called on the Government to account for their proposal to increase the powers of the Certification Officer.

I hope the Minister will understand that it is quite important from the point of view of the standing of the Certification Officer that any complaints are confined to union members. I do not think there is a case for any external inquiries. If anyone in the public thinks that there is some illegality going on in the unions, there are different ways of investigating that which have nothing to do with employment relations. I beg to move.

[Lord Oates]

My Lords, I shall speak particularly to Amendment 104 in the names of my noble friends Lord Stoneham of Droxford and Lady Burt of Solihull. We have discussed the serious concerns about the nature of the changed powers of the regulator. A particular concern has been expressed about the power to appoint a person or persons who are not members of the Certification Officer’s staff, and about the severe financial burdens that could be placed on trade unions as a result if organisations such as big accountants’ firms, lawyers or others were to be used.

The amendment tabled by my noble friends simply sets out a sensible way—which the Government could accept if they insist on going forward with this clause and these schedules—of ensuring that proper consideration is given to the proportionality of making the appointment, the cost of appointing the person or persons, and their impartiality. This would be very important in reassuring trade unionists. I hope the Minister will feel able to consider the amendment very seriously and adopt it.