Enterprise and Regulatory Reform Bill

Baroness Whitaker Excerpts

Monday 14th January 2013 Grand Committee

[Baroness Whitaker]

My Lords, I support my noble friends and the noble Lord, Lord Lester, in opposing that the clause stand part because of my experience as a member of employment tribunals. Far from being a piece of red tape, the questionnaire speeds up and simplifies tribunal procedure. Briefly, the problem with discrimination is that it is very hard to prove. It is easy to understand why. You are trying to pin down a mental attitude which has resulted in unfair treatment. Employers, naturally enough, give all sorts of plausible reasons for this treatment. No one wants to admit that they have been unfair or racist.

Quite often the person bringing the case does not know how to expose discrimination in cross-examination. Sometimes they do not have a case, just a grievance or perhaps even an obsession. The questionnaire is vital in this process. It is the best way to deter hopeless cases and it elicits, in a very simple way, proper grounds of discrimination when they exist. It is a pity that we cannot know how many cases are deterred, with a great saving of public money. Can the Minister help on this? Do we have any figures?

In short, cases go better, faster and more cheaply with the questionnaire. That is why such a large proportion—83%—of consultees support it, including, as my noble friend Lady Thornton said, judges and tribunal chairs. Parliament would surely be misguided in accepting this clause. The questionnaire has stood the test of time and ordinary, day-to-day justice would be the poorer without it.

--- Later in debate ---

[Baroness Whitaker]

I am sorry to interrupt the noble Baroness. I am grateful for her answer about the statistics, as far as it goes. As regards what the employer stands to gain from retaining the questionnaire, which was the case that I was also trying to argue, would she comment on the British Chambers of Commerce survey which showed that none of the businesses questioned raised concerns about the questionnaire procedure? In the Government’s survey of 2009, when I think they examined 811 businesses, was it not the case that only one organisation said that the questionnaire had been a time-consuming exercise? Could she comment on that?

[Baroness Stowell of Beeston]

If the noble Baroness is referring to 2009, I think I have already answered that point by explaining that that was about the layout of the questionnaire and not the whole process of dealing with a full set of questions from a claimant. However, I am clear that the response to our consultation from the business community was clear. As I said at the beginning, I am very happy to follow up, in writing to the Committee, with further information to support that point. I should add that in some cases the cost to business, including legal advice, often runs to several hundreds of pounds and that is before any costs associated with defending the case at a tribunal.

Having said that, I turn to what is a more constructive alternative way forward. We are agreed that there is value in the aim of encouraging a pre-claim dialogue and exchange of information. There is merit in establishing the facts of a potential discrimination case, and this is certainly what our proposed early conciliation of certain employment claims is intended to achieve. Noble Lords who followed this Bill in debates on earlier clauses will be familiar with the sort of changes that we are proposing. I think those clauses have attracted considerable support.

People thinking of bringing proceedings could still seek information from an employer or service provider about an alleged breach of the Equality Act 2010, either verbally or in writing. As I read that out, I should make it clear that that can be done orally or in writing because I am not aware of anyone writing without using words. That point was stressed by several of those responding to the consultation. This is in a climate where, compared to 40 years ago, businesses are on the whole far more transparent about the information they disclose. I am speaking generally but I think organisations understand the importance of transparency in the way they operate, and that attaches to their reputation. Employers or businesses who refuse to respond to reasonable requests for information will continue to run the risk of this being taken into account by a court or tribunal when deciding whether a basic case of discrimination has been made out. They will be more conscious of that risk than in the past for the reasons that I have just given.

Even if the parties do not in the end agree to conciliation taking place, a conversation with ACAS will give them a better understanding of the issue and of the tribunal process. The Government Equalities Office is in discussion with ACAS with a view to producing approved guidance which would help set out for employers and potential claimants in discrimination cases—

--- Later in debate ---

[Baroness Brinton]

My Lords, there is a balance in these cases. I accept the points that the noble Baroness, Lady Turner of Camden, has made, but an issue has concerned me for some time about there being no defence for breach of duty for organisations that have done their absolute utmost to prevent an accident.

Let me give the Committee an illustration. An organisation with catering facilities for conferences has an extremely good record in public hygiene, effective written policies for staff at all levels and good training in management oversight of practices in its kitchens. A casual chef was employed from an agency. The chef was briefed that he was not to use raw egg in a mousse. He was given a written recipe to follow as well as the policy about why raw egg should not be used in such recipes. He disobeyed the order and, as a result, a conference delegate became seriously ill and had a miscarriage. That is a dreadful outcome from a single thoughtless incident by someone who was not even an employee but an agency worker not following instructions.

The lack of defence for the breach of duty legislation meant that the organisation itself was sued both civilly and criminally, but so were the people who had put in place the policies and monitoring, even though they had explicitly told this particular individual not to follow that course. As a result, individuals further up the organisation were extremely concerned that there was nothing further they could have done. Everything that the managing director, for example, had asked to happen had been carried out by those working beneath him. The organisation was rightly fined and compensation was rightly paid. However, the point is that there has to be some defence for breach of duty.

[Baroness Whitaker]

I apologise for interrupting so early in the noble Baroness’s speech, but it is important to say first of all that almost all provisions in the Health and Safety at Work etc. Act include the little phrase,

“so far as is reasonably practicable”.

Some have strict liability but there are very few. I hope that the noble Baroness will accept that, on the whole, lack of prior knowledge and lack of control does not mean that you will be judged to have committed a criminal act.

[Baroness Brinton]

I am grateful for the intervention by the noble Baroness, Lady Whitaker. Unfortunately, that was not true in this case. Only at the last minute were the managing director and someone else removed from the criminal action, which was helpful, but it was only after months of papers going between the Health and Safety Executive and others.

The point that I am trying to make is the one that I started with: there is a balance. I accept the undertaking that employees need to be protected, but there are occasions when there should be a defence for a breach of duty. I believe that new subsection (2D) in Clause 61 attempts to do that. The concerns that the Baroness has raised should be looked at and I hope that there will be some scope for the Minister to address them. But I would not want the record to show that concern was only one-sided. Certainly, some organisations do their utmost to make sure of something and they appear still to fall foul of legislation.

--- Later in debate ---

[Lord Monks]

My Lords, I rise to support the question put by the noble Baroness, Lady Turner, and to follow some powerful speeches that have been made in support of it. I declare an interest. I am a non-executive director of Thompsons, probably the most prominent trade union firm of solicitors.

The Government cannot be accused of inconsistency when it comes to rights at work. I see Clause 61 in a wider context: namely, that the direction of travel which the coalition has adopted is pretty clear. It is to keep chipping away in the name of deregulation at a range of rights, some more fundamental than others. When the opportunity comes along to chip away a bit more, it is taken. The Bill enabled this late amendment to be added. It can be seen in the context of raising qualifying periods and other obstacles to justice, changing the personal injuries area, without touching road traffic accidents, which is the major problem area of a compensation culture, and generally moving to disadvantage the already vulnerable. It is a kind of convoy and Clause 61 is one ship in the convoy.

For those of us who have spent most of our lives working to advance good relationships and security at work, and particularly to make sure that health and safety is of the best possible standard, Clause 61 is disappointing and frustrating. Of course, for the victims it is much worse than that. Clause 61 removes the ability of an employee to enforce a civil claim for workplace injury on the grounds of workplace regulations. I hope that we can take advantage of what my noble friend Lord Browne said, and pause and have a better look at this. If this change is enacted, the employee would have to rely on the common law doctrine of negligence to enforce a civil claim, but it is not always about negligence. The noble Baroness, Lady Brinton, picked an example where negligence did not come into it, certainly on the part of the employer, even if it was not quite in the mainstream of the Health and Safety at Work etc Act. As she said and as others have repeated, health and safety legislation is always looking for a balance between different types of obligation. In my long trade union career I have not met too many employers who are totally blameless, but I will accept the suggestion that there are some.

Before today’s discussion I did some research on this issue. In this House in 1969 Lord Morris of Kenwood introduced some regulations on protecting machinery. I summarise what he said, “If both parties are innocent and neither is to blame, who should bear the loss?”. The reality is that the legislation up until Clause 61 has favoured putting the liability on the employer. He has more resources. As the noble Lord, Lord Browne, powerfully pointed out, he also has insurance. The principle is a mutual one which means that the insurance payment does not go up very much if, because of the mutual process of sharing the burdens, a pay-out has to be made by the insurance company.

However, an employee has no such resources to fall back on and removing strict liability at civil law makes the process that much harder. Removing strict liability does not remove unfairness; it merely shifts it on to the most vulnerable. I worry, too, about the cultural signal that this clause sends out. It is basically saying, “Health and safety is a bit overregulated. You do not have to take it quite so seriously as you did before. We are removing one bit of liability and if you are not negligent you might get away with this in future”. It is the wrong kind of signal. It is a signal that bad practices will be encouraged rather than good practices; that health and safety is not quite such a central feature of business culture as it is in many places, I acknowledge, and should be in all places.

I am proud of the United Kingdom's record on health and safety. If you look at the comparison with similar countries in the European Union, whether on skills, productivity or a range of other issues, we are not at the top of the league. We are at mid-table in most areas. But in health and safety we are at the top of the league. This is an area of excellence and many of the EU directives on health and safety have been the British Government's diplomacy spreading good practice through some countries that have some pretty ropey practices in this area. It is an area of excellence and our regulations, plus the fact that they enjoyed support on a wide basis, have laid the basis of a good record. It is not as good as we would have liked: there are still too many people killed, as has been recited today. There are too many people being injured and whose lives are wrecked, but this is an area of comparative excellence.

I ask the Government to think again and pause. They should have a look at this before Report. I have one question to add to those that have already been asked. In the impact assessment, there was no mention of the applicability of the European framework directive on health and safety. If an injured worker has no redress outside the negligence area, some legal opinion is already beginning to form that says that they can exercise the right under the European directive against the Government. In other words, they cannot take action against the employer so they will take it against someone else. Will the Minister comment on that particular expression and view? Generally speaking, this is a clause that goes in the wrong direction and I hope that while there is still time we can turn back in the right direction.

[Baroness Whitaker]

My Lords, as a former head of bits of HSE policy, I want to say that this clause undermines the main concept behind the Health and Safety at Work etc. Act to make it clearly enforceable that employers should not with impunity be so recklessly negligent as to imperil life, limb or health if they can help it—that is part of the Act, too. Clause 61, as has been said, does not minimise the potential criminality of this behaviour, but it prevents anyone using a proven breach with any degree of liability as grounds for compensation. Injured employees must fall back, as my noble friends have said, on the common law duty of care, which is very hard to prove.

Recalling the debates over the Health and Safety at Work etc. Act when it was passed—and it received all-party support—Section 47 was put into the Act for this exact reason: so that the workforce could have something effective and tangible if they were severely injured, not just the knowledge of a successful prosecution in which they were a passive witness.

Section 47 was widely consulted on. I would like to ask the Minister the response of the Governments of Scotland, Wales and Northern Ireland to this provision, Clause 61. Can he confirm that they were consulted?

Finally, there is a potential increase in National Health Service costs from this clause because costs are clawed back from the employer if there is compensation and they will not be if there is none. Does the Minister agree? I fear that the Government will be going backwards in their understanding of workplace risks, let alone in recognition of justice for injured work people if the provision goes forward in this form.

[Lord Young of Norwood Green]

My Lords, we support the question on clause stand part from my noble friend Lady Turner, and I am not going to repeat all the abundance of evidence as to why we should adopt this view, because it has been amply demonstrated by the majority of speakers, apart from the noble Baroness, Lady Brinton, who made an appeal for balance. We would support that, but the balance that the Government propose is certainly, in our view, in the wrong direction.

In excess of 20 specific sets of regulations have been introduced under powers given to the Secretary of State by the Health and Safety at Work etc. Act 1974. They include regulations relating to work equipment, personal protective equipment, manual handling, hazardous substances, construction, offshore installation, railways, young workers, and working at height and in confined spaces. Collectively, these regulations are the basis of workers’ rights to a safe working environment in the UK, as they contain the vast majority of duties that the law imposes on employers to create and maintain safe workplaces.

As a number of my noble friends pointed out, there is no evidence to show that there is overcompliance. There are perceptions, maybe, but is that really how we should frame legislation, based on perception with a lack of evidence? If only there was a culture of overcompliance, we would have less to complain about. There would be no situation with the number of deaths and serious injuries that still take place throughout British industry. Far too often we see examples of employers failing to comply or adopting the wrong attitude towards health and safety. Again, as a number of my noble friends have pointed out, this legislation would give them entirely the wrong signal.

Some of the regulations contain duties that impose a strict liability on employers. I am not sure where my noble friend Lord Browne got the figure of 200; I have a slightly lower figure than that. But it is something that the Government could cope with if they wanted to carry out the recommendations of the Löfstedt report. Others contain duties that are less strict in relation to which an employer shall not be held to be in breach of their duty if it is shown that they could not have foreseen the accident, if the accident could not practically have been avoided or if it is not reasonably practical to avoid the incident. Currently, if an employer breaches any health and safety regulation, there are two possible consequences; the employer can be prosecuted as having committed a criminal offence by the HSE, or the injured worker will be entitled to compensation. The declared intention of Clause 61 is to remove strict liability from the body of health and safety legislation. The genesis of removing that strict liability is found in the Löfstedt report. If only the Government had stuck to that, we might not be in that situation. But Löfstedt did not positively recommend that as the only course of action; it was only one possible option among others, and his firm recommendation was that a further, thorough investigation be undertaken—something that this Government have signally avoided. They have not followed the recommendation to carry out further research and have instead leapt straight into introducing legislation.

With Clause 61 introduced as an amendment, there has been no public consultation. As currently drafted, the clause does not simply remove strict liability; it goes much further than that. There is a fundamental disconnection between the declared intention of Clause 61 and the legislative impact that it will have. On the two consequences that currently exist when an employer breaches a health and safety regulation, the impact of Clause 61 is that one of those consequences shall be removed from the law altogether. Given the very small number of criminal prosecutions brought under the health and safety regulations each year, the consequence being removed by Clause 61 is the most important one in ensuring not only that justice is served but that workplace safety is maintained. The effect of the clause is to withdraw the right of injured workers when claiming compensation to rely on a breach of the statutory duty imposed on the employer in regulations made under the Health and Safety at Work etc. Act 1974. The statutory duty on the employer to comply with the regulations will remain; the clause does not remove a single regulation from the statute book. The employer will remain liable to prosecution for the breach of any regulation in the criminal courts. It is only injured employees who the regulations are designed to protect for whom it will no longer be relevant. As we have heard, according to statistics published by the Health and Safety Executive, only 0.5% of reported workplace injuries result in a criminal prosecution. The prospect of prosecution provides no incentive to employers to comply with their duties. Our concern is that this measure will give the opposite signal.

Employers are obliged by law to maintain insurance to meet claims for damages arising from workplace injuries. Claims against employers are dealt with and paid by insurers. This clause will make no change to this system but, as has been pointed out by a number of my noble friends, the costs are likely to fall on the Government and, in effect, the taxpayer. What on earth is the value of that?

If the clause passes into law, no legislative burden will be removed from any employer. With no saving to the public purse, the Government will remain liable for civil claims deriving from European directives in respect of injuries to their own workers and will also still have to pay benefits to injured workers which they may no longer recover from employers’ insurance.

A number of detailed and valuable points have been made by my noble friends Lady Donaghy, Lord Browne, Lady Turner and Lord McKenzie. A number of questions were posed to the Minister which I look forward to him answering: for example, what is the evidence base for the measure? How many claims will be affected? What is the cost of shifting the burden on to the NHS and government? Will it reduce the cost burden on employers? That is unlikely in our view. As I say, I look forward to hearing the Minister’s response.

[Viscount Younger of Leckie]

My Lords, I have listened very carefully to the debate this afternoon. I understand the concerns of noble Lords about the importance of protecting people at work from risks to their safety and long-term health so eloquently put forward by the noble Baroness, Lady Turner, and the noble Lord, Lord McKenzie, and, indeed, by the noble Lord, Lord Browne, in an impassioned and extensive speech. If noble Lords will bear with me, there is much to say in response to the many views and concerns expressed.

First, I reassure noble Lords that the purpose of this clause is not to weaken or reduce the existing protections for employees. It is about helping to increase the confidence of responsible employers to continue to do the right things to protect their employees. I stress emphatically that the law, which sets out the standards that employers must meet and the duties which employers must perform, including in relation to self-employed contractors on construction sites, is not affected by this proposal and is not changing. The Health and Safety Executive will continue to investigate serious incidents and complaints about poor practice and will take enforcement action, including, where appropriate, prosecutions, against those employers who fail to meet their responsibilities in line with the executive’s established policies and procedures, so let me explain why it is appropriate to take action.

We all recognise that the world has changed since 1974, when the Health and Safety at Work etc. Act was introduced to replace large numbers of detailed regulations with a proportionate risk-based approach to health and safety. Indeed, the late Lord Robens, on whose recommendations the 1974 Act was based, noted,

“that the sheer mass of this law, far from advancing the cause of health and safety, may well have reached a point where it becomes counterproductive”.

Clearly, every death and serious injury is a tragedy that should not happen. The noble Baroness, Lady Donaghy, referred to this earlier in Committee and has spoken about it again today. However, considerable progress has been made in reducing the incidence of injury and ill health. I listened carefully to the heartbreaking stories of those who have been killed or injured, as outlined in the speech of the noble Baroness, Lady Donaghy. Each one represents a tragic human story for individuals and for their relations.

Progress has been illustrated by the successful delivery of the Olympic Games, where there were no work-related fatalities on the whole of the London 2012 construction programme. This is the first time that any host nation has achieved that. The noble Baroness, Lady Donaghy, specifically raised the issue of construction sites. The substantive law that sets out the duties and responsibilities on employers, and to whom these are owed, including to self-employed subcontractors on construction sites, will not change. Therefore, the ability for such workers to bring a claim for negligence will also remain the same as now. Anyone who directly employs or engages construction workers or controls or manages construction work is a contractor for the purposes of the construction regulations. The duties on contractors apply whether the workers are employees or self-employed or agency workers. There is no distinction.

We are committed to the continued improvement of health and safety standards at work and to building on the progress made to date. The effectiveness of the health and safety regulatory framework has more recently been thoroughly examined by my noble friend Lord Young of Graffham in his report Common Sense, Common Safety.

[Baroness Whitaker]

Will the noble Lord confirm that the noble Lord, Lord Young, did not touch on the matter of Clause 61 in his report?

[Viscount Younger of Leckie]

I would need to refer back to the report to give the noble Baroness a full answer. Indeed I shall do so.

The effectiveness of the health and safety regulatory framework has also been highlighted by Professor Löfstedt, as has been mentioned today by several noble Lords, in his independent review, Reclaiming Health and Safety for All. Both my noble friend Lord Young of Graffham, whose report received much support across the House when it was debated, and Professor Löfstedt found that there is no case for fundamental change of the health and safety framework itself and that the existing regulatory requirements are broadly right. In fact, the biggest problem today is the way in which the regulatory requirements are interpreted and applied.

No one can be complacent. If we are to build on the steady progress made, we need to take action to tackle the current myths about health and safety, myths which the Health and Safety Executive see as such a problem that it has set up the Myth Busters Challenge Panel to provide a mechanism so that anyone who receives advice in the name of health and safety which they believe is disproportionate or inaccurate can challenge that advice.

Businesses consistently report that these myths lead to confusion about what the law actually requires and a fear of being sued, which, in turn, drives employers to overimplement the law in an effort to protect themselves and indeed discourages them from expanding their business. This in turn reinforces the perception that the application of health and safety law is unduly burdensome. I shall have more to add to that later.

This situation results in responsible employers taking an overly cautious approach, which has a detrimental effect on their approach to controlling risks properly in the workplace. For example, spending considerable resources on disproportionate paperwork and record-keeping, far in excess of what is necessary to comply with the law, diverts employers from taking a sensible approach to identifying the risks that actually affect their business and their employees, and taking sensible day-to-day precautions to protect their employees from those risks.

In the interests of both employers and employees, the aim is to improve understanding of what the law actually requires and to allay fears about possible litigation to help build employers’ confidence to take on new activities and further develop their businesses and to include recruiting new employees, which is so vital today.

To address these issues, the Government are implementing a package of measures, based on the recommendations of my noble friend Lord Young of Graffham and Professor Löfstedt, to reform both the civil litigation system and to restore a common sense approach to health and safety. This measure forms part of this package and I would reassure noble Lords that its introduction into the Bill at a later stage is purely due to the timing of the publication of Professor Löfstedt’s report and the Government’s desire to address the concerns he raised at the earliest opportunity.

We have already put in place a programme of work to improve understanding by simplifying the supporting guidance that explains what the law requires and to consolidate and clarify the body of health and safety regulation in a number of key industrial sectors. This programme builds on the work carried out as part of the better regulation initiative led by the previous Administration.

The clause does not change the duties placed on employers, but amends Section 47 of the Health and Safety at Work etc. Act so that in future, unless the legislation provides for an exception, it will be possible to bring a claim for compensation in respect of a breach of health and safety legislation only where it can be proved that the employer has been negligent.

Claims for breaches of the general duties of the Health and Safety at Work etc. Act can already be brought only for negligence. The change in this Bill simply extends this position to regulations made under the Act to create a consistent approach to civil litigation for all health and safety legislation. This means that if an employer fails in their duty of care towards their employee they can of course be successfully sued. However, where an accident has taken place and the employer could not have reasonably done anything about it, they should not be liable.

In the knowledge that they will not be liable if an accident happens which is totally outside their control, this change will support responsible employers, who take care to protect their employees, by encouraging them to take sensible steps to manage workplace risks. I am grateful for the speech made by my noble friend Lady Brinton and the example that she gave to support the helplessness that some businesses can experience where there is no defence for them. This will not assist irresponsible employers who fail to comply with the law as they will have no defence to an accusation that they did not take all reasonable steps to protect their employees.

This amendment to the Health and Safety at Work etc. Act has been adopted in preference to amending each strict liability duty, as Professor Löfstedt suggested, because an approach targeting each strict duty would be much more complex, and therefore complicated for businesses and their employees to understand.

The noble Baroness, Lady Turner of Camden, brought up the concern that the law would go backwards, which I think was her expression, and the employer would hold all the cards. I would like to assure her and all noble Lords that the provision will affect only a small number of duties that are unqualified. In any claim for negligence, the existing regulatory requirements on employers will remain relevant, as the courts will look to the statutory duties, approved codes of practice and established guidance to inform them about what risks a reasonable employer should be aware of and the steps they would be expected to take to manage those risks. I stress again that this change will only assist responsible employers who have done what is required of them and can demonstrate this.

This amendment reflects an adjustment to help rebalance the civil litigation system and, as part of the wider reforms of the system, is a proportionate response to the impact that strict duties currently have in the civil litigation system identified by Professor Löfstedt. It also has the benefit of creating a consistent approach to civil litigation for all health and safety legislation.

Currently, most claims are brought for both breach of statutory duty and negligence and, in practice, it is anticipated that the vast majority of claims will still be capable of being brought for negligence. For the small number of cases where this is not possible, as now, individuals will be able to claim for financial and other support through the state benefit system.

This measure is not about reducing the number of claims. It is about establishing the principle that an employer who has done nothing wrong should have the opportunity to defend themselves on the basis of having taken all reasonable precautions. Providing employers with this important reassurance will help them to manage health and safety risks in a sensible and proportionate way.