Enterprise and Regulatory Reform Bill

Baroness Turner of Camden Excerpts

Tuesday 26th February 2013 Lords Chamber

Moved by

[Baroness Turner of Camden]

13: Clause 7, page 4, line 33, at end insert—
“( ) In the case of alleged unfair dismissal, should the conciliation officer fail to secure a settlement, the claimant may proceed forthwith to an employment tribunal.”

[Baroness Turner of Camden]

My Lords, at Second Reading I expressed concern about the provisions of Clause 7 and subsequent clauses. They seemed to me to be designed to make it as difficult as possible for employees to access employment rights. Indeed, the Government made it clear that they wished to decrease the number of tribunal cases. I accept that many issues arising in the course of employment could be better dealt with through conciliation, such as alleged failure to pay a bonus or holiday pay, but alleged unfair dismissal is not one of those cases.

Loss of a job can be completely destructive to the individual concerned and to the employee’s family as well. It is already necessary for an employee to have at least two years in the employment concerned before being able to claim unfair dismissal. In many cases, the length of time in the employment can be much longer. Dismissal can result in illness, mental breakdown and marriage problems, particularly if alternative employment is hard to find, as it is at present. Many people who lose their jobs at the age of 50 or over are still unemployed a year later. I have known of cases where an individual who loses his job does not immediately tell his family but pretends to go to work at the usual time, spending time in the local library, if there is one, and then returning home at the normal time, pretending that the job still exists.

The loss of a job is life-destroying. For these reasons, the drawn-out procedures recommended in the Bill are quite inappropriate. The individual concerned should have easy access to a tribunal. Even if it does not result in a return to the job, if the individual wins the case there will at least be some compensation. Even if the case is not won, the individual will have had the opportunity to put his or her case to an independent body—a tribunal including lay people with knowledge of working procedures.

This is a human rights issue as well as an employment issue. Therefore I hope that the Government will consider my amendment and agree to adopt it, or something very similar. I beg to move.

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[Baroness Turner of Camden]

I thank the Minister for that response. The issue is very complicated and one will need to look at the record in some detail. In particular, I noted that in response to my amendment he stated specifically that after certification by the conciliation officer it will be possible for a dismissed employee to make a direct appeal to a tribunal. That is a very thoughtful response to what I said and I am very pleased to have it on the record.

The Minister also seemed to be prepared to make certain other concessions to make it easier for an employee in a dismissal situation—which he seemed to appreciate is a pretty desperate one for many people— to have access to conciliation and to a way of sorting out their problems without necessarily having to sit and wait for a very long time for their case to come before a tribunal. That is all very useful and in those circumstances I am very willing to withdraw the amendment. I will look very carefully at what the Minister said today as I think there are some concessions that I very much welcome. I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

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[Viscount Younger of Leckie]

My Lords, Clause 11 attracted a great deal of debate in Grand Committee. Much of it was concerned with the proposal that judges should sit alone in the Employment Appeal Tribunal as a matter of course, where there is a divergence of opinion between the Government and noble Lords opposite. The concerns expressed by noble Lords then were similar to those raised when the Government brought forward measures last year to allow judges to sit alone to hear unfair dismissal cases in the employment tribunal. Those concerns centred on the loss of the contribution that lay members would make to determining what was fair and reasonable conduct by parties, based on their knowledge of social relationships in the workplace.

This clause relates not to employment tribunals but to the Employment Appeal Tribunal. As noble Lords will know, the EAT differs from the employment tribunal in that, unlike the tribunal, where cases will often involve matters of fact and require an assessment of reasonableness, appeals before the EAT are taken solely on points of law. The current practice is for the EAT panel that is hearing proceedings to be constituted such that it mirrors the composition of the tribunal from which the appeal arises—so, if the matter is heard by a judge sitting with two lay members in the employment tribunal, the EAT will sit with a judge and two members.

It is the narrower focus of the EAT on points of law that persuades us that lay members have a much less valuable role to play here than in the employment tribunal itself. As the noble Lord, Lord Young of Norwood Green, said in the debate on changing the composition of the employment tribunals for unfair dismissal, lay members,

“bring real knowledge and understanding of industrial situations … real experience in a wide range of industries and occupations”.—[Official Report, 28/3/12; cols. 1449-50.]

However, this is not a function or a requirement of the EAT.

I am sure that noble Lords will agree that it is incumbent on government to ensure that we use our resources—both judicial and lay member—wisely. The Government are committed to creating a tribunal system that not only is efficient for users but offers value for money for the taxpayer. Indeed, I remind noble Lords that the Equality Act covers a range of sectors, including service provision, property rights and education, and only one of these—work—is dealt with in the employment tribunal system. The remaining equality sectors are dealt with in the civil courts, where judges sit, and have always sat, alone.

There is, however, an issue on which we can agree, and that is in relation to the exercise of the Lord Chancellor’s order-making power. That will allow the Lord Chancellor to order that specified proceedings should be heard by a panel, rather than by a judge alone. However, as the noble Lord, Lord Young of Norwood Green, rightly observed in Grand Committee, the drafting of the Lord Chancellor’s power could allow an order to be made specifying the number zero. For example, the Lord Chancellor could by order provide that appeals in discrimination cases should be heard by a judge and zero employer-representative and zero worker-representative members. Such an order would therefore remove the judicial discretion that exists in the clause to direct that a panel should hear an appeal. While the Government currently have no plans to use the order-making power, we had never intended that any Lord Chancellor should be able to use the power in this way. Amendment 19 inserts into the clause a requirement for the Lord Chancellor to specify in any order whether the panel should consist of two or four appointed members.

The noble Lord, Lord Young of Norwood Green, also raised the further concern that the power as drafted does not specify that the panel should comprise an equal number of employer and worker representatives. Again, the Government have never intended that any Lord Chancellor should be able to constitute uneven panels. My noble friend Lord Marland recognised the genuine concerns raised by noble Lords and agreed to look again at the wording. Amendment 20 honours this commitment and amends Clause 11 to restrict the power so that any order made by the Lord Chancellor must provide for an equal number of employer-representative and worker-representative members. The provision in Amendment 20 would also apply where a judge gives a direction for a panel; the judge will need to direct an equal number of employer-representative and worker-representative members. As a result, lines 35 to 38 on page 7 of the Bill are no longer needed and Amendment 18 deletes that duplication. I beg to move.

[Baroness Turner of Camden]

My Lords, I listened with interest to the Minister; I was very much opposed to Clause 11 at Second Reading and I am still not at all happy about it. I have always believed that the involvement in procedures of lay members is a matter of much interest to us all. The workers who appear before tribunals have always been concerned that they should include lay members with some knowledge of working practices, particularly at appeal stage. The value of the involvement of lay members with knowledge of workplace procedures and conditions is widely respected. The individual claimant knows that the appeals tribunal contains people with a knowledge of employment relations and this gives the claimant confidence in the proceedings.

I do not know why the Government are proceeding along these lines, except that there is apparently an estimated saving. However, the saving is only between £120,000 and £130,000 a year, which is not all that much if it results in a loss of confidence in the proceedings. The value of lay members has been specifically recognised by the Court of Appeal. I have been approached by lay members who are very concerned that their services may be dispensed with. They referred me to the case of Balfour Beatty and Wilcox, where the contribution made by lay people has been directly acknowledged and congratulated.

As it stands, Clause 11 should not be part of the Bill; there is no real good reason to depart from present practice. I accept that the Minister has already offered some modification, but I still believe it is necessary to involve lay people. They make a contribution to the procedures and are widely respected, by employees appearing before them and by employer organisations. I can see no reason for dispensing with them in the present procedures. I do not think that the savings involved are worth what may result in a total abandonment of the existing procedures which have served us well and which have the respect of the people who appear before them. We need more concessions from the Minister about what Clause 11 actually means and how it will operate.

[Baroness Brinton]

My Lords, I support many of the points made by the noble Baroness, Lady Turner. Indeed, I made some of them in Committee. One of my particular concerns was the issue of diversity and ensuring that lay members were able to inform a judge of their experience of employment practice and diversity than may be apparent to a judge sitting on his or her own.

I welcome the government amendments. In particular, it is extremely helpful to have spelt out the equality of employer and employee representatives, whether it is two or four. I am grateful for that.

I have a question based partly on the noble Viscount’s comments and on the concern of the noble Baroness, Lady Turner, about what the government guidelines will be for when a judge may not sit on their own. I reiterate my support for the government amendments—they go some way—but we still need some clarification.

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[Baroness Turner of Camden]

My Lords, I support what the noble Baroness has just said. It is very important that we should know what area of diversity, if we can call it that, or what issues would mean that it would be appropriate for a judge not to sit on his own but to have the support of lay people. I can think of a whole range of issues that it would be appropriate in such circumstances for lay people sitting on the appeal tribunal to deal with. Perhaps the Minister could indicate what those issues would be.

[Viscount Younger of Leckie]

It may be helpful, in answering the question for my noble friend Lady Brinton, to say that the guidance for employment judges to consider when deciding to sit alone, which I agree is important, is set out in the Employment Tribunals Act 1996. That is unchanged. It requires them to consider the likelihood of a dispute arising on the facts that suggests lay member involvement could be beneficial. It is for them to decide. Indeed, the likelihood of issues of law arising that would suggest that a judge sitting alone is sensible is another factor. He would need to take account of the views of the parties and what other proceedings might be heard concurrently. However, to answer the noble Baroness’s question in depth, I think it is best that I write to her and other noble Lords concerned over this particular issue on guidance.

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[Lord Young of Norwood Green]

My Lords, in Committee a number of noble Lords expressed our concern about confidentiality in settlement agreements and the inability of these agreements to be raised at an employment tribunal in the future. We felt that this was a totally wrong direction for the Government to proceed in. The worst aspect of this would amount to what we consider to be a charter for bullies. As the legislation currently stands, despite the attempts to introduce a number of amendments, which were rejected by the Government, there is no protection. We believe that this is a thoroughly unsatisfactory approach that will be detrimental to basic employment rights in relation to potentially unfair dismissal. It is on those grounds that we seek to test the opinion of the House.

[Baroness Turner of Camden]

My Lords, I support my noble friend’s amendment to Clause 12. It would make it easier for employers to end employment by offering the individual a sum of money in return for a compromise agreement. The clause extends the “without prejudice” rule, which exists where a compromise agreement is offered as a means of ending an existing dispute. Any negotiations cannot then be considered by an employment tribunal. Clause 12 enables an employer to offer a sum of money and a compromise agreement in return for leaving employment when there is no pre-existing dispute. These negotiations will remain confidential and cannot be admitted as evidence before an industrial tribunal.

The TUC opposes these provisions as it believes that they will send a clear signal to employers that it is acceptable to sack employees without following a fair dismissal procedure. The provisions are also complex and can lead to legal wrangles, particularly where an employer has not acted properly in the negotiations and could be accused of discrimination. For these reasons, I support my noble friend.

[Viscount Younger of Leckie]

My Lords, this clause has been the subject of substantial debate in both Houses, and the noble Lord, Lord Young, has given notice of his intention to oppose it. I hope that I will be able to answer the concerns that have been raised. The clause forms part of a package of measures to facilitate the appropriate use of settlement agreements, encouraging the resolution of workplace disputes outside tribunals. Settlement agreements, or compromise agreements as they are currently known, offer a consensual and mutually beneficial outcome for both parties as distinct from the “no fault dismissal” idea, which we have been clear the Government are not taking forward. The clause does not affect an individual’s right to bring an unfair dismissal claim using other evidence or to bring other types of claim.

This legislative change builds on an existing system that has been successfully used for many years by many employers. It aims to provide additional certainty to enable a wider range of employers, particularly smaller businesses without in-house HR functions, to use settlement agreements with more confidence and in an appropriate way. We are clear about the importance of guidance for employers and individuals, an issue that has been the subject of substantive debate in both Houses. We have recently published our response to the Ending the Employment Relationship consultation on the principles to underpin the use of settlement agreements, and this will inform the development of substantive guidance that we will publish in support of the clause.

In response to concerns raised by all groups, we will include in a new statutory code an explanation of “improper behaviour” to ensure that employees understand the protection and employers are confident that they are acting appropriately when negotiating settlement. A draft statutory code is currently out for public consultation and the Government are working closely with businesses, ACAS and other stakeholders to ensure that the system is understood and can be easily and successfully used by employers and employees. This clause is part of a package of measures to better enable employers and employees to understand and use the existing system of settlement agreements as a mutually beneficial way of resolving workplace issues without resorting to a costly and distressing tribunal process. I therefore commend this clause to the House.

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[Viscount Younger of Leckie]

I thank the noble Lord, Lord Low, for suggesting that I intervene at this early stage in the debate and set out the effect of government Amendment 34. It would introduce the principle of vicarious liability into the whistleblowing protections. It has exactly the same purpose and effect as the noble Lord’s amendment. However, we feel that the drafting of the government amendment better achieves our shared objective and mirrors the provisions in the Equality Act on vicarious liability for discrimination. I look forward to further comments that the noble Lord, Lord Low, may make. I have noted some questions that he has raised, which I will attempt to address later in this debate.

[Baroness Turner of Camden]

My Lords, briefly, I have tabled Amendment 30 in this group because the TUC wrote to me and pointed out, among other things, that if you left the Bill as it stood, with the protected disclosure being limited to something in the public interest, that could well be construed to mean that a worker would not be protected if he or she made a disclosure affecting the provisions on health and safety at work. The TUC wanted to make sure that a worker would be protected if he made a disclosure in regard to the health and safety and general interests of the workforce; that is the intention of my amendment. However, when I looked at the amendment moved by the noble Lord, Lord Low, it seemed to me that it covered practically everything, including that which I was intending to cover in my amendment. Therefore, it had been my intention not to move my amendment and to say that, instead, I supported Amendment 29 absolutely and completely. That is still my position.

[Lord Touhig]

My Lords, I warmly welcome the Government’s approach on the prevention of detriment from co-workers as set out in Amendment 34. This seems to well support the amendment tabled in the names of the noble Lords, Lord Low of Dalston and Lord Young of Norwood Green, and myself. It is good that there has been some agreement that there should be protection from bullying and harassment by co-workers, and that our concerns have been listened to. Right at the beginning, I thank the Minister, the noble Viscount, Lord Younger of Leckie, his predecessor, the noble Lord, Lord Marland, and their officials, who have actually engaged in discussions with a number of people. We have made good progress as a result.

In Grand Committee, I referred to the evidence of staff nurse Helene Donnelly at the Mid Staffordshire NHS inquiry. She was a whistleblowing nurse who told the Francis inquiry of how she was physically threatened by colleagues after raising concerns about the standards in the accident and emergency department. Robert Francis, in his report, drew upon her case and said that Mrs Donnelly was offered no adequate support. She had to endure harassment from colleagues and eventually left for other employment. Clearly, such treatment was likely to deter others from following her example; she was aware of colleagues on whom her experience had this effect.

I do not intend to detain the House, but this lady suffered all sorts of threats; she was told by colleagues, “We know where you live”, and she became so nervous that her parents or husband had to meet her in the car park when she left the hospital at night so that she would not have to walk across the car park alone in the dark. On one occasion, another nurse followed her into the toilet in their locker room, locked the door, demanded to know if she had any problems with her and began threatening her if she did. I fear that this is an example that could be repeated in many parts of the country. It is important that we make sure that people are protected when they act in the public interest and blow the whistle.

This has come up again recently. Despite the progress that we have made over the years in supporting and protecting whistleblowers, the recent case of Gary Walker, a former National Health Service chief executive, highlights another area of the law that needs to be examined, and that is gagging clauses. Mr Walker was a former chief executive of the United Lincolnshire Hospitals NHS Trust who raised a concern about patient safety, namely the pursuit of targets for non-urgent cases within the hospital to the detriment of urgent cases. The facts were similar to those of Mid Staffordshire, and following the publication of the Francis report, an inquiry was ordered into the United Lincolnshire Hospitals NHS Trust.

I am concerned about the use of public money, because I understand that Stephen Barclay MP, a member of the Public Accounts Committee in the other place, has received confirmation that £15 million of public money has been used to gag whistleblowers. I urge the Government to do more on this issue. An amendment on gagging clauses was laid in Committee, and I invite the Minister to look at it because, in my view—and I am sure that many in the House would agree—gagging people who work in the public service and have issues they need to bring to public attention, and using public funding to stop them from doing that, is quite improper. We should do everything we can to put a stop to it. This is not just a waste of public money: it is an abuse and a threat to our liberties.