Lord Young of Norwood Green
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Lord Young of Norwood Green
Amendment 20M would remove the requirement that a financial penalty be set at 50% of the amount of any compensation awarded. We support the provision to levy an additional fine on employers where they have been found to have breached an employee’s rights and there are so-called aggravating features. We hope that this will act as a further deterrent to rogue employers. However, when considered in the context of the main thrust of the Government’s changes to the employment rights landscape, such as the increase in the unfair dismissal threshold to two years and the extension of new settlement agreements, all of which will make it easier for employers to get rid of workers without following proper process, I am not optimistic about the difference this will make. We have some questions over the practical detail of this provision—for instance, what will be considered an aggravating feature, and the impact that it might have on speed of payment of compensation? However, we will discuss those issues in later amendments.
This is a simple probing amendment to understand further the Government’s thinking behind setting the level of fine at 50% of any compensation awarded. We are not strictly opposed to this being the level set but it seems overly prescriptive in that, earlier in the clause, the Government have already set out the parameters for the amount that an employer may be fined under this proposed new section.
We understand that it is important that employers have certainty about the level of fine that they might face if a claim is upheld. However, we would have thought that setting the minimum and maximum levels of penalty at £100 and £5,000 was a more than sufficient guide to employers about what they might face. What is more, if the Government are still anxious about clarity we would have thought that their first priority would be to produce guidance on what will be considered an aggravating feature. I beg to move.
Lord Marland
My Lords, this is an amendment that my noble friend Lady Brinton was also alluding to. It is a very reasonable probing amendment. What we are building on here is the Labour Government’s legislation, which we supported. I am grateful that the noble Lord, Lord Young, has indicated that he is broadly supportive of the direction of travel. We are trying to have here an award of 50% of value rather than an arbitrary figure of between £100 and £5,000—£100 being the floor and £5,000 being the ceiling. There is therefore a consistency of approach, as you would get an award of 50%.
I would like to move on to the question that I said I would answer from my noble friend Lady Brinton. In the case of multiple cases against the same employer, this clause provides for the tribunal to impose a penalty of varying amounts up to a maximum of 50% for each employee, unlike single claims where the penalty must be 50% of the value of the award. I notice that my noble friend is nodding so it is not as clear as mud but absolutely crystal clear to her, which is of great benefit to me because she has greater experience of this than I. It is perfectly reasonable and fair that we should have a 50% award and that we do not have arbitrary figures. I know that the noble Lord, Lord Young, believes that that is fair. On that basis, having clarified our position, I hope that the noble Lord is able to withdraw his amendment.
Lord Young of Norwood Green
I asked what would be considered an aggravating feature and about the impact it might have on the speed of payment of compensation, but the Minister did not return to the point.
Lord Marland
That is a perfectly reasonable question, and I know that the noble Lord is asking me a question to which he knows the answer—as he often does, because he knows a lot about these things. We cannot be prescriptive about aggravating speeches—sorry, I meant aggravating features. We do not intend to supply that but we have a list of examples which is in the Explanatory Memorandum. I feel sure that things such as deliberate or malicious acts, et cetera, would satisfy the question to which the noble Lord knew the answer before he asked me.
Lord Young of Norwood Green
Such cynicism so early in the day. All I can say is that we will take into account the Minister’s response. I am not saying that we are fully satisfied with it—we may return to the issue on Report—but, for the moment, I beg leave to withdraw.
““aggravating features” includes a failure or failures by an employer to follow its own grievance or disciplinary procedures (or both), or, where an employer does not have its own grievance or disciplinary procedures, the ACAS code of practice on disciplinary and grievance procedures; or a failure by an employer to provide any adequate training to its managers in grievance and disciplinary procedures;”
Lord Young of Norwood Green
My Lords, Amendments 20MA and 20MB are intended to probe the definition of aggravating features—I fear that this will be an aggravating speech in that respect—and to highlight what is perhaps the key to all of this, which is the proper training of managers in grievance and disciplinary procedure, and even in training, I think. I say that genuinely, because it is a subject that I have brought up time and again in these debates. If the Government could only focus more on that than on the firing of employees, they would do industry a much bigger favour.
Amendments 20MA and 20MB would include in the definition of aggravating features consideration of whether an employer has established any grievance or disciplinary procedure and has provided adequate training to its managers in following those procedures. Underlying much of the Government’s changes to employment rights in the Bill and elsewhere is the idea promoted by Adrian Beecroft, among others, that the most urgent problem facing employers is not being able to get rid of underperforming workers and that by stripping away employment rights, we will have a more productive workforce, creating more jobs.
I could not help noticing the reaction of a medium-sized employer in the north, a removals company, to the Chancellor’s Autumn Budget Statement. It welcomed the fact that there would not be an increase in fuel duty because that would enable it to take on more employees, some of whom would be on zero-hours contracts. I did not hear the caveat, “We would have taken them on, but we will not be able to fire them in future, so we won’t”. That shows me what is really focusing employers’ minds in whether they hire more employees. After all, we are told that that is the Government’s driving motive behind the Bill.
We believe that stripping away employment rights is fundamentally misconceived and stems from a real lack of understanding of how the law works in practice. Contrary to what the Government claim, it is not difficult to dismiss an employee, but the employer must follow the proper disciplinary procedure. Time and again you will hear that that has not happened. Employers have inadequate or, in some cases, no disciplinary procedures in place. It is then that they are rightly challenged by the employee.
Including it as a consideration in whether to levy an additional financial penalty would send a strong signal to employers that it is unacceptable not to make adequate provision for a formal disciplinary or grievance procedure and for the training of their managers. As well as incentivising proper training and procedure, which would, we hope, lead to fewer claims being brought in the first place, the listing of possible considerations under the definition of aggravating features in the amendments would also provide greater clarity about what actions by an employer might result in a financial penalty under Clause 14.
The Explanatory Notes state:
“Section 12A does not prescribe the features which employment tribunals should take into consideration when determining whether a breach had aggravating features; this is for the employment tribunal to decide”;
and that, furthermore:
“The concept of aggravating features in section 12A is not the same as the existing regime of aggravated damages in discrimination claims in England and Wales”.
To my knowledge, the Government have not set out anywhere a list of features which might be deemed aggravating by the tribunal. We urge the Government to provide further clarity on that issue. I beg to move.
Baroness Turner of Camden
My Lords, I hope that the Government will see fit to accept the amendment, because I should have thought that it was in their interests. One of the aspects that comes out from discussion of the Bill is that the Government are anxious to stop people going to tribunals. Of course, if you have managers properly trained and a series of agreed procedures, it is far more likely that issues will be settled in-house, so to speak, rather than having to go to a tribunal in the first place. Therefore, it seems very much in the interests of the Government to accept this wording, which talks about the aggravating circumstances but also, I hope, will act as an incentive to employers to make sure that their managers are trained. If you have a trained management, you are much less likely to have an issue that needs to be taken to a tribunal. As we know from our previous discussions, the Government are endeavouring to limit the number of issues that get to a tribunal. I should have thought that acceptance of the amendment was in line with that policy.
Lord Marland
First, I would like to make a couple of points on training, which is of great interest to the noble Lord, Lord Young of Norwood Green. We all agree that training is absolutely fundamental and his knowledge, expertise and commitment to it are very high. This Government have spent a huge amount of money on training, on mentoring and on various other things. We must be getting something right because a million new jobs have been taken on board in the past two years in the private sector. We do not have a load of people running away from employment. It demonstrates clearly that, with unemployment going down and employment in the private sector going up, the policies that we have created to foster employment are working and seem to be working satisfactorily. I do not think that this is a block to training or ongoing employment. The noble Lord would have been right to point it out had this Government not been keen that we should do it.
Let us be fair. All of us are keen that employers should meet their obligations to their employees. That is what we are all here for. None of us is here saying that we want to withdraw this and that. We are arguing around the margins. Throughout this, as I have also argued, ultimately it is up to the tribunal. As we have said, and as the noble Baroness, Lady Turner, has rightly said, a tribunal is the last place where we want things to go to. We want them to have gone to ACAS beforehand, as we have previously agreed, and we want the employer and the employee to have sorted it out by themselves. I am compelled by the point made by the noble Baroness.
Ultimately it is the tribunal that will be making the decision if it gets to that point. We hope that it does not. It will ultimately determine whether there are aggravating features and we cannot be too prescriptive about aggravating features. Paragraphs 86 and 87 on page 18 make it clear how we see this. With that, I rest my case, other than to say that these tribunals have it in their power to take these issues into account. They can uplift the award by 25% should they so wish and we would obviously urge them to do so because we all want to see the right and fair things for employees and employers. With that I hope the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
The Minister has still not addressed our main concern. I do not deny that the Government are spending significant amounts of money on training and we welcome that. Our concern is the worrying statistic produced by the Chartered Institute of Management which says that only one in five managers have any training. That is a worrying statistic. The purpose behind the amendment was to give a clear signal to employers that if they persist in failing to train their managers or having proper procedures they will pay a price. While we beg leave to withdraw the amendment, we will consider returning to this on Report.
“(11) Any money paid by an employer purporting to meet a liability to pay a penalty under this section shall be treated instead as payment of any financial award on a claim against that employer to the extent that any such award has not been paid.”
Lord Young of Norwood Green
My Lords, Amendment 20N follows on from the previous amendment in that it also deals with unpaid compensation. This amendment would allow the tribunal, in making an award on a claim, also to specify a date by which that award should be paid, to be no later than a month following the decision. In addition, it would allow the Secretary of State to bring forward regulations to charge interest on any award that remained outstanding beyond the payment deadline specified by the tribunal.
On Report in another place, the Minister said in relation to unpaid awards that the Government are,
“consulting on two changes that I believe might have some effect on the number of awards paid promptly. They include proposals to put a date on a tribunal’s judgment specifying when payment should be made and to charge interest from the date of judgment where an award is unpaid after 14 days. These charges will apply to all cases, not just to unfair dismissal cases. Importantly, in that scenario the interest will be added to the award and paid to the claimant”.—[Official Report, Commons, 17/10/12; cols. 344-45.]
That consultation closed on 23 November. Therefore, I am very keen to hear from the Minister the Government’s findings in relation to this important issue and whether they will accept the opposition amendment that seeks to bring into effect a new power to ensure that compensation is paid to the individual. I beg to move.
Lord Marland
Of course we are in great harmony, even though I am sure I shall have it thrown back in my face. The consultation ended in November and we are about to publish the information. Incidentally, when we have established our response, I shall be very happy to have a private meeting with the Opposition—of course, there is no reason why it should be with just the Opposition; it should be with any noble Lords in this Room—to discuss the various aspects of this issue, and my officials will be at your Lordships’ disposal. I do not have the information to give the Committee chapter and verse right now but we will give noble Lords chapter and verse before we get to the next stage of the Bill.
I acknowledge that there is a problem with enforcing awards. With that in mind, and in order to recognise to some extent noble Lords’ interpretation of this matter in tabling this amendment and the reference to it at Second Reading by my noble friend Lord Razzall, we are going to commission some research before Christmas. We are about to appoint someone, who will report on the subject in April. We totally acknowledge that this needs to be right. All of us in this Room share the same concerns, and we are committed to going along the same path together. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
My Lords, I welcome the invitation to discuss the issue with the Minister following the consultation. In the light of that assurance, I beg leave to withdraw the amendment.
“(11) Where an employment tribunal makes a financial award against an employer on a claim, that tribunal must also specify a date by which that award must be paid.
(12) A date specified under subsection (11) shall be no later than one month following the date on which the decision was made.
(13) The Secretary of State shall introduce an order providing for the payment of interest by an employer on any award that remains unpaid after the date specified under subsection (11).
(14) Any interest levied under subsection (13) shall be paid to the worker to which the claim has been awarded.”
Lord Young of Norwood Green
My Lords, this amendment follows on from the previous amendment and provides for the tribunal, when making an award on a claim, also to specify a date by which that award should be paid, to be no later than a month following the decision. It also allows the Secretary of State to bring forward regulations providing for the payment of interest on any unpaid awards. I would welcome the Minister’s response. I beg to move.
Lord Marland
Again, I think that I largely responded to this amendment in my comments on the previous amendment. We will be publishing our findings and are assimilating them at the moment. We have committed to publishing them in February, which we will do, and I do not really want to go into too much detail now. I am happy to talk about the whole issue at large with anyone who would like to know about it, and I hope that that answers the question raised by the noble Lord.
Lord Young of Norwood Green
My Lords, I think that that leaves us in the same situation we were in on the previous amendment and, again, I welcome that assurance. In the light of that, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, the amendment is an alternative to the public interest test proposed by the Government. The advantage of the amendment is that it deals with the Parkins v Sodexho Ltd points directly by narrowing the breach of legal obligations category at Section 43B(1)(b) of the Employment Rights Act 1996. This is a better solution than the Government’s proposal, as the public interest test is likely to lead to satellite litigation as courts are left to consider what is and what is not in the public interest.
The amendment was proposed by Ian Murray MP during Committee in the Commons, but was rejected. During the Commons Committee, Norman Lamb MP, serving as the Parliamentary Under-Secretary of State for Employment Relations, Consumer and Postal Affairs, objected to the proposal on three grounds: first, that there can be private contractual rights that it is in the public interest to cover; secondly, that the public interest test is needed because the abuse of the whistleblowing provisions is commonplace; and, thirdly, that the proposal will stop workers from gaining protection for trivial breaches of health and safety.
The first point shows a fallacy in the Government’s argument, as it seems to suggest that there are private employment rights that it is in the public interest to cover, therefore undermining the need to have the Government’s test.
The Government state that the provision is being widely misused. There has not been consultation on the issue, and all evidence is anecdotal. Although the Parkins v Sodexho Ltd point may have led to some individuals misusing the legislation, the Government’s approach is worrying. They overestimate the scale of the problem. Whistleblowing claims lodged with the Employment Tribunal Service account for less than 1% of all claims. During the Scrutiny Committee, Public Concern at Work provided evidence to show that during 2009-10, only 35 judgments involved a Parkins v Sodexho Ltd point out of 464 substantive judgments.
Thirdly, the point about triviality is misguided. The purpose of PIDA is to prevent a disaster and to encourage workers to speak up when they have suspicions. Issues that at one point seemed trivial may in fact be indicative of underlying problems in an organisation and could be the tip of the iceberg. A public interest test may have the unintended consequence of focusing on how big the disaster is or was likely to be and mean less focus on reporting early suspicions. Issues such as missed medication in a care home may seem relatively minor compared to a multi-million pound fraud, such as that in the high-profile Olympus case, but the former could be a matter of life and death.
Moreover, the test builds the perception of barriers in the protection of whistleblowers. When that is added to the fact that PIDA is little known and often misunderstood, we believe that the legislation will be undermined by that approach. It will also add to the idea promulgated in the media that if you are a whistleblower, you will be burned and that the law is too complicated to protect you.
In sectors such as health and care, where whistleblowing can save lives and taxpayers’ money, and where gagging clauses and hierarchical professions and workplaces impose real obstacles for the individual, such an amendment will be seen as another obstacle. The honest and reasonable whistleblower, faced with an increasingly complex piece of legislation to navigate, should they be poorly treated, may not choose to speak up. That is a rather damning and worrying position, nearly two decades on from the Bristol Royal Infirmary inquiry, when the whistleblower, Dr Stephen Bolsin, was forced to leave the UK to find work. That shows the pressures on whistleblowers in difficult and sensitive situations. I beg to move.
Lord Marland
I apologise. Of course, the noble Lord’s wisdom had been honed even further by 1998, which gives the speech more gravitas.
Lord Young of Norwood Green
I thank the Minister for his response. We will read Hansard carefully to see whether we need to return to the issue. I beg leave to withdraw the amendment.
Lord Brooke of Sutton Mandeville
My Lords, I have no idea what the Minister is going to say in response to this but I raise one textual question which I address to him rather than to the mover of the amendment. In Amendment 22, in the fifth line of subsection (1), there is a reference to “a person” in the singular. If my noble friend were minded to accept this amendment, I would be interested to know whether he feels that it would have been strengthened by the inclusion of “or persons” after “person”. It seems possible in terms of the case that the victimisation may be the work of more than one person.
Lord Young of Norwood Green
My Lords, I, too, support the thrust of what my noble friends Lord Touhig and Lord Wills seek to do with these amendments, which is to extend vicarious liability to whistleblowing legislation. This loophole has been graphically explained to us in the context of three nurses from Manchester who raised a concern about a colleague lying about his qualifications. The nurses raised their concerns within the service and the primary care trust and their concern was upheld. However, as we have also heard, the nurses were subject to bullying and harassment from co-workers. One of the nurses received a telephone call threatening her daughter and to burn down her home. As we have already heard, the case proceeded as far as the Court of Appeal, which found that vicarious liability does not exist in the Public Interest Disclosure Act as it specifically does in discrimination law.
We have also heard that shortly after the publication of the judgment the noble Earl, Lord Howe, the Health Minister, agreed that this area needs to be reviewed. Public Concern at Work reports that it routinely hears on its advice line about harassment and bullying of whistleblowers by co-workers. It is bad news for whistleblowers everywhere if those who are bullied by fellow staff members are not protected and represents yet another barrier that may inhibit workers from raising legitimate concerns, which are in the public interest, over wrongdoing by their employer. The amendment by my noble friend Lord Touhig would introduce a new clause that imposes a duty on employers,
“to take reasonable steps to ensure that the worker is not subjected to any detriment by any act, or any deliberate failure to act, by a person other than his employers done on the ground that the worker has made the disclosure”.
My noble friend Lord Wills proposes a further refinement to this approach, which would be to include personal liability against workers who bully co-workers for blowing the whistle. Such an amendment is likely to have a powerful deterrent effect and will mean that those who may otherwise be tempted to victimise a colleague for blowing the whistle may think twice because of their own potential liability for doing so. Again, this is included in the relevant Equality Act, that of 2010.
These amendments have even more relevance if we look at the current circumstances where the lack of whistleblowing in recent high-profile cases—such as the Jimmy Savile scandal, the high mortality rates under Mid Staffordshire NHS Foundation Trust and phone hacking at the News of the World—suggests that much more needs to be done to encourage and, perhaps even more importantly, protect workers blowing the whistle on malpractice and wrongdoing in the workplace. Workers are the eyes and ears of any organisation and often the first to know if things are going wrong or to have suspicions about malpractice in the workplace. Workers can prevent the disaster from happening and alert their own companies and regulatory authorities to prevent health and safety dangers, financial malpractice and environmental risks that may affect members of the public.
It is over 13 years since the Public Interest Disclosure Act 1998 and we believe that it is high time that the whole system should be reviewed—we would welcome the Minister’s views on that—to identify where further protection is needed to encourage employees to speak out when they see wrongdoing taking place.
Lord Marland
Again, we are extremely sympathetic towards and supportive of each other. It is not just the Cross Benches, the Labour Party and the Liberal Democrats who are keen to get this right but the Conservatives as well. I reiterate my thanks to the noble Lord, Lord Touhig, and Public Concern at Work, with which we are working very closely on this issue. I also thank the noble Lord, Lord Wills, for his input, even though we have not had the pleasure of discussing this subject outside this Room—something that I should like to do in future. I am jolly glad that we included the NHS provision in the previous amendment, because some progress seems to have been made there in view of some of the absolutely ghastly stories that have been referred to.
My noble friend Lord Brooke of Sutton Mandeville brought up a very important point. I am told that under the Interpretation Act “single” means “plural” when necessary, so I do not think that we would need to amend that in the amendment.
I have had wide-ranging discussions with the noble Lord, Lord Touhig, and Public Concern at Work across the whole piece, and those discussions have covered Amendments 23 and 23F, which we will be coming to in a few minutes. We are very conciliatory on all this, and on Amendment 23F, in particular, both parties have formed a set of words to deal with the issue of good faith and so on. I think we have found satisfaction with Public Concern at Work and with the noble Lord, Lord Touhig, so perhaps I may look at the issue as a whole.
We need to be careful when going down this route with Amendments 22 and 23. The truth is that the absence of vicarious liability and whistleblowing is not a loophole because there is legislation that provides for it, and it provides for both the employer and the employee. I am struck, as I always am, by the point made by the noble Lord, Lord Borrie, about the employee having protection as well as the employer. That is fundamental. Indeed, they would both be protected under the Protection from Harassment Act 1997; that is the legislation that they would return to in order to claim their rights. Therefore, they have the right protection in this area. It is a strong law that, sadly, has not encapsulated all the whistleblowing issues, but nothing is ever entirely encapsulated. However, whistleblowers have an absolute right and this amendment would put in another level of protection, which is not in the Bill because it already exists.
We should be looking at improving the guidance on this issue. I have instructed my officials to look at the guidance that we are putting on the government website to show where the rights of recourse are and what rights the employer and the employee have under the interpretation of the Protection from Harassment Act. This will be on our gov.uk website. On the basis that we will have an ongoing discussion between now and Report, I hope that the noble Lord will feel confident about withdrawing his amendment for the time being.
Lord Wills
My Lords, I, too, have added my name to the amendment and would like to say just a few words in support of it.
As we have heard, the new test proposed in Clause 15 attempts to remedy a loophole created by the case of Parkins v Sodhexo Ltd. Most people agree that that loophole should be closed but, in doing so, the Government risk creating a new barrier to whistleblowers, adding new complexity to a legal framework which can already be daunting enough for those wishing to expose wrongdoing. The amendment proposed by my noble friend Lord Touhig is an attempt to remedy that by removing the “good faith” test and, as he explained, to rebalance the legislation back towards protection of the whistleblower.
In doing that, as we have just heard from the noble Lord, Lord Low, my noble friend is following the recommendations of Dame Janet Smith in the Shipman inquiry, who said that in her view the words “in good faith” could be omitted from the Public Interest Disclosure Act. She argued:
“The three tiered regime of the PIDA, with its incrementally exacting requirements, should afford sufficient discouragement to those minded maliciously to raise baseless concerns”.
She continued:
“If the words ‘in good faith’ were removed from the PIDA, the test under the PIDA would be brought more closely into line with the test for ‘malice’ in defamation proceedings. It would seem to me to be desirable that the tests should be as close as possible so that a person thinking of making a report can be safely advised about his/her position in respect of both types of proceedings”.
I know that the Government share the view of everyone on the Committee that everything possible should be done to encourage the exposure of wrongdoing, and I hope that even at this relatively late stage, they will feel able to accept what is a modest and sensible proposal to that end. If, for whatever reason, they do not, I would be grateful if the Minister could explain why the Government reject the arguments of Dame Janet Smith. Why do they not accept that the three-tiered regime, with its incrementally exacting requirements, affords sufficient discouragement to those minded maliciously to raise baseless concerns—especially as they are remedying the loophole created by the case of Parkins v Sodhexo Ltd? Secondly, can the Government explain why they think that it is not desirable for the tests in the Act to be brought more closely in line with the test for malice in defamation proceedings?
Having said all that, I understand that the Government are engaged constructively in discussion with Public Concern at Work. I hope that they may feel able to accept the compromise amendment which I have tabled as Amendment 23F. That recognises that, for whatever reason, the Government are not keen to accept Amendment 23 but might be prepared to accept an amendment which removes good faith as an issue in assessing liability but retains it as a consideration in assessing remedies.
As I am sure the Minister will be aware, precedent has been established with the Polkey reductions, which are used in allowing for unfair dismissal damages to be reduced where there has been contributory negligence. Amendment 23F is a compromise which will at least mitigate the problems with the status quo by ensuring that motive will not play a central role in securing protection for whistleblowers. Although the Minister may not be able to give a definite statement on this now, I hope that he can reassure us that he expects that he will be able to reach a form of wording which will be satisfactory to all sides in a compromise amendment.
Lord Young of Norwood Green
My Lords, I shall speak briefly to Amendments 23 and 23F, because people who are far more expert in these areas have already forensically examined them. My noble friends Lord Touhig and Lord Wills, have already explained the reasoning behind them. They raise the important issue of how a broad public interest test would interact with the existing good faith test.
When Parliament passed the Public Interest Disclosure Act, it did not place a public interest test in the legislation, choosing instead to define the categories of wrongdoing under which disclosures in the public interest disclosure action fit. Good faith was seen as the appropriate safeguard.
If the public interest test is to be considered at all, it is crucial that it is considered in conjunction with the test of good faith. With the Government’s new test proposed in Clause 15, whistleblowers would need to show that they had reasonable belief that their disclosure was made in the public interest. Later there is the good faith test that their predominant motive for making a disclosure was in the public interest, creating, in effect, a double whammy of double public interest. Amendment 23F, proposed by my noble friend Lord Wills, would that good faith would become a consideration only at remedy stage. There is already a precedent for this, similar to the Polkey reductions used in allowing for unfair dismissal damages to be reduced where there has been contributory negligence.
The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, I hate to interrupt the noble Lord, Lord Young, but there is a Division in the Chamber and therefore, unless he can draw his remarks to a very speedy conclusion, we will adjourn now for 10 minutes.
Lord Young of Norwood Green
I can. As I was saying, I am grateful to my noble friends Lord Touhig and Lord Wills for tabling both the amendments, which provide the Committee with an opportunity to debate the proper application of the good faith test in the context of a new public interest test, which we are extremely concerned should not present a double barrier to workers who blow the whistle. We look forward to hearing from the Government on this and welcome the Minister’s assurances on further consultation.
“Protected disclosure: blacklisting
(1) Section 2 of the Public Interest Disclosure Act 1998 (right not to suffer detriment) is amended as follows.
(2) After inserted subsection (1), insert—
“(1A) A person has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by an employer on the ground that they have made a protected disclosure.
(1B) Actions under subsection (1A) by a employer relate to—
(a) arrangements made for deciding to whom to offer employment; (b) the terms on which an employment offer is made;(c) failure to offer employment.””
Lord Young of Norwood Green
My Lords, thousands of construction workers have been secretly blacklisted and denied jobs on building projects such as the London Olympics. Individuals branded as troublemakers for being members of a trade union or for raising concerns in the workplace over important issues such as health and safety had their names passed to more than 40 construction firms. In his evidence to the Scottish Affairs Select Committee last month Mr Ian Kerr, who ran the consulting association responsible for gathering the names of thousands of workers, told the committee that he went to radical bookshops and political meetings to gather information, saying:
“I would have had a file on the Socialist Workers Party. I had a file on the National Front. Any organisation that seemed to be jumping up and down about construction, it was my role to keep tabs”.
The committee heard that trade union activity, health and safety concerns or standing up for colleagues was enough to blacklist a worker, leading to work drying up. My colleague, the shadow Business Secretary, Chuka Umunna, has also raised concerns over whether blacklisting is going on for Crossrail, the new £16 billion rail network.
The construction blacklisting scandal exposed in 2009 highlighted a gap in protection for job applicants. At present, if a prospective employer accesses a blacklist or becomes aware of a job applicant’s whistleblowing history and decides not to give them a job on that basis, the applicant would have no course of action. The 2010 blacklisting regulations deal only with lists of individuals who have been involved in trade union activities. The Equality Act provides protection at the point of recruitment and we think it is vital that the right message is sent to employers that discriminating against whistleblowers at this point is unacceptable.
The amendment calls for the Public Interest Disclosure Act to be brought into line with the Equality Act 2010 and to make clear that individuals who blow the whistle will continue to have protection under the law against blacklisting by future employers on grounds that they have raised legitimate concerns over wrongdoing at previous employers. I beg to move.
Baroness Donaghy
My Lords, I was the author of a report on construction fatalities a couple of years ago and I spent a lot of time with both employers and employees on that issue. During the course of my report it became known that a company was keeping records of its former employees—it was in all the papers—and the trade unions concerned asked me to include something about that in my report. Although I was very sympathetic and met a number of the people involved who had been blacklisted and had not worked for years in the construction industry, I did not feel that I could put that in the report because I had to be clear what caused fatalities in the construction industry—that was my brief. You could extrapolate and say that if you prevent people reporting genuine health and safety dangers it will cause risk in the industry and is likely to cause fatalities. However, as I prepared the report in a pragmatic way and had to have absolute proof—we commissioned research on this—I did not feel that I could make any recommendations in that respect.
I met a number of what I regard as good construction employers, some of whom were embarrassed to be on the list of people who paid this company. I asked them about it and they said it was an administrative error and they did not realise that they were still paying. You have to sometimes accept in good faith what people are saying. In the past 15 years they have achieved a much better record on health and safety and it is no coincidence that health and safety was often talked about in the run-up to the Olympics. I pay tribute to the Labour Government and the continuing work of the coalition Government in making sure that there was not a single fatality on the Olympic site. It was a fantastic achievement. The good employers say that it is not only an issue of reputation: if you are hard-nosed about it and you have a fatality on site, the site will be closed for the whole day. So it is not in their interests to have an unsafe building.
I have met employers who do not have quite that view. They claim that they have a right to pay someone to find out about troublemakers and poor workers. When I put it to them that this list had been proved to be completely inaccurate—it had even got the names wrong in some cases—they would shrug their shoulders and say that it was just bad luck.
I spent a whole Saturday with a group of workers who had been blacklisted from the construction industry. To say that the effect on them was traumatic is putting it very mildly. Most of them were now working on a self-employed basis with small companies, some of them for 20 to 25 years. They had never worked for a large company. The ones who were trade union activists were probably realistic about why it had happened; they were fighting for their fellow workers and were regarded as trouble-makers, which was why they had been blacklisted. Others had no idea. They did not know why their names had been put on the list and could not understand it.
This is a very murky world and I accept that it is incredibly difficult to prove whether these lists exist. They are like will-o’-the-wisps; they move around. One company will close but they will make jolly sure that another company opens up somewhere else. It is incredibly difficult to prove. The worker himself finds it very difficult to prove. All I can say is that the impact on individuals and their families is profound. I wish that I could have done something in making recommendations in that report but it would have been dishonest of me. If there is any way that we can make life better for some of these workers who do not know why they are not being employed, I hope very much that we can do so. I support the amendment in that spirit.
Lord Marland
The noble Baroness speaks with great authority on the subject. Of course, it is a difficult grey area. As we know the Employment Relations Act 1999 (Blacklist) Regulations 2010 already protects individuals but I am struck by what the noble Lord, Lord Young, and the noble Baroness, Lady Donaghy, said. If I may I shall take this away and give it some further consideration outside this Committee and perhaps come back on Report. The noble Lord, Lord Young, is looking surprised now—in fact, stunned—but it is Christmas time. I hope on that basis that he will withdraw his amendment.
Lord Young of Norwood Green
That is why I do not play poker. I am taking into account that it is a Christmas gift from the Minister. I accept his intention in good faith, which is a phrase we have been using, and I beg leave to withdraw the amendment.
“Disclosures exempt from confidentiality duties: supplementary provisions
After section 203(3)(f) of the Employment Rights Act 1996 (restrictions on contracting out), insert—“(g) the employee or worker must be advised of their rights under section 43J of the Employment Rights Act 1996”.”
Lord Young of Norwood Green
This amendment would place a positive requirement on lawyers advising in the settlement of claims that they advise claimants about their rights to be freed from any contractual agreement with their employer not to disclose certain information where they legitimately seek to make a protected disclosure. Little attention has been paid to the provision in Section 43J of the Public Interest Disclosure Act which outlaws any contractual clause that prevents workers from raising a public interest concern. The cases of Dr Kim Holt and Great Ormond Street Hospital relating to the baby P case—where the trust offered her £80,000 as compensation if she left quietly—and of the former inspectors at the Care Quality Commission giving evidence to the Mid Staffordshire inquiry highlight the need for greater attention to be drawn to Section 43J of the Public Interest Disclosure Act and for there to be tougher enforcement.
The amendment simply seeks to improve awareness among workers over their rights as whistleblowers by placing a simple requirement on any legal officer advising them over their case to make them aware of those existing rights under the Public Interest Disclosure Act. I therefore hope that the Government will look favourably on this amendment as a simple change that would help improve the application of the existing Act. I beg to move.
Lord Marland
My Lords, I am grateful for this probing amendment. However, I am not convinced that we need to go this way because we already have legislation in place. Section 43J of the Employment Rights Act 1996 provides that any term in an agreement which precludes a worker from making a protected disclosure is void. Furthermore, all lawyers have a duty of care to advise their clients properly on all aspects of the law, whatever the situation. That is their duty of care and, if they do not apply it, they may be struck off.
I understand the motive behind the amendment but I trust that the noble Lord will acknowledge that there is legislation in place and that it would just be putting icing on the Christmas cake, which in this case is a double layer and not entirely necessary. Therefore, I hope that the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
I will take note of what the noble Lord said and give consideration to that view to see whether we need to return to this issue on Report, or whether we can clarify the matter further in our consultations. On those grounds, I beg leave to withdraw the amendment.
“Proceedings in public interest disclosure cases
(1) After section 8 of the Employment Tribunals Act 1996 (procedure in contract cases), insert—
“8A Publication of information
(1) Where proceedings include a claim under the Public Interest Disclosure Act 1998, the president shall, within 28 days of receipt of the claim, publish electronically and without charge the names of the parties and the relevant regional office.
(2) A person who is not a party to those proceedings may obtain from the tribunal a copy of such documents from the proceedings as he may obtain under the Civil Procedure Rules where proceedings are brought in a court.
(3) In this section, “President” has the same meaning as in section 7A(3).”.”
Lord Young of Norwood Green
My Lords, Amendment 23D aims to improve transparency around whistleblowing cases that have been settled privately where it is in the public interest that this information should be in the public domain. I should like to put on the record from the outset that I would not wish to see this introduced without further protections against blacklisting of whistleblowers.
Since the cross-party initiative that brought the Public Interest Disclosure Act into force there has been considerable ongoing debate and discussion around its operation and effect. This has not always been informed by reference to analysis of cases, in part because they have not been readily accessible.
Claims made to the employment tribunal, including those made under the Public Interest Disclosure Act, are not made public, unlike in civil courts. At present, three-quarters of PIDA claims settle in private, with no information in the public domain about the underlying wrongdoing. The lack of openness is exacerbated by the widespread concern that many employers seek to gag employees from making protected disclosures. It is frequently reported in the public sector that independent reports into concerns raised by a whistleblower are kept from the public eye.
In 2008, my noble friend Lord Borrie tabled an amendment on this but the Government’s reasons for rejecting it were twofold: first, a fear of ambulance-chasing lawyers contacting the parties; and, secondly, untested allegations being in the public domain. As a compromise, the Government brought in a system of regulator referral, where claimants can elect to send their claim forms to a person prescribed under PIDA—for example, systems regulators such as the FSA or the CQC. This is inconsistent with the principle of open justice and is not ideal as it puts pressure on whistleblowers to withhold consent, or some individuals will use their consent as a bargaining chip in settlement negotiations. Where consent is withheld, the underlying concern will be hidden from public view.
There is no uniform way for regulators to deal with such concerns and some regulators do not even know of this provision. It is strange that a law which is all about promoting transparency and accountability in the workplace should have its use shrouded in secrecy. Given the proportion of PIDA claims which are settled, it is entirely probable that a public concern may lie unaddressed, buried in a claim and shielded from view.
The amendment should be coupled with the blacklisting provisions, thereby limiting negative consequences for individual workers. It is important that there should be open justice in whistleblowing claims and that it should be brought into line with the Civil Procedure Rules. I beg to move.
Lord Borrie
I hope the Government are positive about this amendment. Secret justice is inherently evil unless there is some very strong argument the other way such as public security. When this is not the case, the Government will have a very difficult job convincing us that things are all right as they are.
Lord Marland
I have a nasty feeling that I am going to disappoint the noble Lord, Lord Borrie, who of course speaks with a wealth of experience. I have observed tribunals over time, and what I have seen is that when names are published and the press get hold of it, they often put an imbalance into the equation. I believe that giving advance warning of the case means prejudice may build up against either side. This can often be seen in press reports on tribunal cases and I think that is unfair. Of the tribunals I have observed—although not been involved in—that have been reported in the press, there have been many times where I would say at the end of the day the press have taken one side or the other and not given a balanced view—and that is what becomes of a public airing.
No one is saying for a moment that this process should not be transparent but people are saying that there should be fairness. This applies to both parties. We accept the transparency issue but I am afraid that, on this basis and from the experience that we have had, and my experience in particular, I do not think it is fair on either party. As such, it is not an amendment that particularly finds favour despite the fact that we seem to have agreed on most things today and will doubtless continue to do so. In the spirit of Yuletide, I hope the noble Lord will agree—I am looking at his face now because he is playing poker—to withdraw his amendment.
Lord Young of Norwood Green
I cannot say we are particularly happy that Christmas has ended early with the Minister’s response. The best I can say is that we will take this one away and reserve the right to return to it on Report. I beg leave to withdraw.
Lord Marland
I am grateful to the noble Earl for giving me advance warning that he was going to raise that issue, and I am happy to deal with it in a moment. First, however, I must deal with the point raised by the noble Baroness, Lady Turner.
I think that there is some misunderstanding here. It is already the case that where a deposit is paid it is always refunded to the paying party unless a cost order is made by a judge. That is the case. Refunds happen whether a case continues to judgment or is withdrawn part way through the proceedings, so there is always the case for recourse. In fact, the Government have accepted Mr Justice Underhill’s recommendations that there should be much more flexibility in the deposit-paying order regime. I hope that the noble Baroness is content that that deals with that issue. I do not know how this misunderstanding happened, but we can certainly talk further about it afterwards.
We recognise that there has been a trend for discrimination claims to obtain large awards. They are trailed as discrimination claims because people think they can get the sympathy of the judge in advance or during the case, because discrimination is not an attractive thing to be accused of—or to suffer from, much more to the point. Therefore, we as a Government are committed, working with the employment tribunals, case-by-case, to see how we can improve that. Obviously, as the noble Earl says, if we follow the procedure of going to ACAS first—and of course ACAS has many more resources and greater teeth, as applies to various earlier amendments—we can deal with this much more vigorously and much more fairly, as the noble Earl rightly seeks. I am happy to discuss the matter with the noble Earl later, as are my officials, but, on the basis of what I have said to the noble Baroness, I hope that she will withdraw her amendment.
Lord Young of Norwood Green
Thinking that I was back in my TUC days, I was almost tempted to make a point of order. The noble Earl was stretching what you can do with an amendment by introducing something that had nothing whatever to do with it. If I look back, I suppose that I have been guilty of that transgression occasionally, but I think that that was taking it a bit too far, as it was for the Minister to respond to it. I say that seriously because, if we are to have a debate about discrimination, let us have a proper debate about it, for which we are prepared. We, too, could evidence all sorts of things.
Lord Marland
The noble Earl gave me notice that at some point he would be raising this issue. We have debated a whole range of issues and I do not think that we need to be unfair and limit any particular issue. I was happy to take the question. I have dealt with it and we will continue to deal with it. I totally agree that it is not in the context of the amendment, but we have had a few things that have not been in the context of amendments. We are a charitable group here. The noble Lord is playing poker again now but he will be in a charitable mood as it is Christmas, and that is why I was happy to deal with the amendment.
Lord Young of Norwood Green
I will not pursue this further but I maintain my point. We roam far and wide in dealing with amendments but, if we want to do something as serious as that, it ought to be on the basis of either an amendment or a debate. I say no more than that. I leave it to my noble friend Lady Turner to deal with her amendment.
Baroness Turner of Camden
I thank everyone who contributed to this small debate. Of course, it is not about discrimination at all. It is quite irrelevant to introduce discrimination in a debate on an amendment which simply says that, if someone pays the deposit and does not proceed with the case because they accept the advice of a judge, they ought to get their money back. It is as simple as that. It has nothing to do with discrimination at all. I see that the noble Earl accepts that.