Enterprise and Regulatory Reform Bill

Baroness Brinton Excerpts

Wednesday 14th November 2012 Lords Chamber

[Baroness Brinton]

My Lords, as others have already said, this Bill covers a large number of different topics. To mix the metaphor slightly, I shall do a pick-and-mix of some of the areas that my colleagues on these Benches have not covered and a couple that they have. I shall confine my remarks to employment and tribunals, copyright, payments to directors of quoted companies and equal pay audits and a brief comment on the EHRC.

Part 2 proposes changes to employment law and tribunals. We are told that the Bill does not remove any of the existing rights that workers enjoy and that employees remain able to reject proposed compensation offers and to proceed to a tribunal should they so wish. I hope that the Minister can confirm this given some of the comments that we have heard during the debate today.

I also welcome one omission in the Bill: the Beecroft proposals for no-fault dismissals are notable by their absence. I hope that this makes it clear that they have been defeated by the Liberal Democrats in the coalition. In light of various briefings, I hope that the Minister is able to reassure your Lordships’ House that the fears expressed by, among others, the CAB and the TUC regarding employee status are unfounded, and that there will not be any unintended consequences of this legislation.

I welcome the proposal for claims to be lodged with ACAS for early conciliation. ACAS does a very effective job and involving it early will help both parties understand where agreement can be reached early in proceedings. In the past, I have seen cases from both the employer’s and employee’s perspective, and I know of the strain placed on both parties, especially employees and small businesses—which others, including the noble Lord, Lord Mitchell, have spoken eloquently about earlier today.

Anything that can reduce this strain and the number of cases that end at tribunal, but with a fair settlement, will be beneficial to all parties, with the additional benefit of reducing the current cost to the taxpayer. We are told that that was £87 million in the year 2010-11. However, I look for reassurance from the Minister that ACAS will receive extra funding to do this new work, financed—I hope—by some of the savings in the cost of tribunals that the Government talked about. Without those resources, we are setting it up to fail.

I also welcome the proposal of rapid resolution by legal officers, sifting through papers at an early stage, if, and only if, the matters are clear under the law. However, I am concerned that in Clause 11 there appears to be a move to reduce or remove lay members from the tribunal. They have provided a very valuable perspective in the past, so that would be regrettable.

Clause 14 gives the Government the power to fine employers where their actions are negligent or malicious. This will help in cases where employers behave badly. This is a very positive step for employment rights.

Clause 15 changes the rules around whistleblowing to make it plain that protection is given to whistleblowers for issues where there is a genuine public interest in disclosure. When will the Government’s proposals for defining the scope of public interest tests be published? Clarification is fine, but it must not be drawn so tightly as to prevent genuine whistleblowers being given the protection that they need.

Others have referred to the compensation cap. As I read it, the terms in the Bill refer only to the employment decisions of tribunals that are presently capped, not to the current unlimited awards for discrimination. Can the Minister confirm that?

The Equality and Human Rights Commission has had its difficulties in the past, not least in its failure to deliver value for money and have its accounts signed off for three years. I am sure that it is time to review the way that it operates. While Clause 56 reduces its very broad responsibilities to concentrate on its activities in core areas, it is good that no powers and duties under the Equality Act 2006 have been removed. It is vital that we have an EHRC that is fit for purpose, able to deliver its core functions well and can continue with its huge progress in the past few years, including groundbreaking legal cases and inquiries exposing exploitation of migrant workers in the meat-packing industry, harassment of disabled people, discrimination in home care and the finance industry, and equality deficiencies in the Treasury’s 2010 spending review.

Clauses 65 to 69 set out the updating of copyright law to, I hope, bring it into the 21st century a mere decade after it started. While it is vital to protect the rights of and payments to authors and producers of copyrighted material, as my noble friend Lord Clement-Jones outlined, we also need to recognise that users of copyrighted material face difficulties under the present structures, especially universities, museums and libraries. The proposals outlined here will make it easier for them, especially the proposals on orphan works—where it has not been possible to trace the copyright holders—and create a system of extended collective licensing.

I understand that there is a difference of view here. I suspect that much of the time in Committee will be spent trying to balance the two sides in this particular argument, but we need a mechanism to facilitate the use of orphan works. I hope that the Minister can either make it clear that the safety net for authors and creators who cannot be identified has been covered by the creation of the body for orphan works, or will be prepared to consider amendments that would enable genuinely orphan works to be regulated but used and give authors the reassurance that they need that that cannot be abused. We need to ensure that diligent research has been carried out by any proposed user. Payment can be made once an author has been identified, or held by this body until one is.

Clauses 70 to 73 set out changes to payments to directors of quoted companies. The total remuneration packages of company directors, the transparency of that remuneration to the public and the power of shareholders to set effective and realistic pay levels have rightly come under public scrutiny recently and have already been referred to in this debate. I welcome strongly the proposals to give shareholders a binding vote on future directors’ pay at least every three years. I also welcome the support for these proposals from business organisations such as the CBI and the TUC which recognise that change is needed here. This consensus is vital to making it work.

Turning to Clause 74 and equal pay audits, good employers—whether large or small—will already use and have reflected on equal pay, using audits, among other tools, to ensure effective and fair practices with their employees. They are not the problem. All employers should be encouraged to do them. This clause provides significant progress to ensure that companies or organisations which employment tribunals have found in breach of equal pay law must carry out an equal pay audit of the entire company or organisation. It will strengthen the hand of employment tribunals and ensure that companies that favour male over female staff in, say, selectively awarding bonuses, will be brought to task. In the longer term, using the equal pay audit will reduce the number of discrimination cases, because organisations that are serial offenders will have to make it plain in the audit exactly what they are doing, and they will be held to account publicly for that.

This Bill fulfils some of the promises of the coalition, especially introducing the Green Investment Bank—which I welcome—holding companies and directors to account over directors’ pay and equal audit, and the move to the complex issue of copyright in the 21st century. I look forward to the further stages of this Bill.