Draft Trade Union (Levy Payable to the Certification Officer) Regulations 2022 Draft Trade Union (Power of the Certification Officer to impose Financial Penalties) Regulations 2022

Imran Hussain Excerpts

Tuesday 25th January 2022 General Committees

[Paul Scully]

I will go through the structure in a little more detail shortly.

To make the levy equitable, the certification officer will be able to broadly apportion the levy between the different types of organisations according to how much time she spends on them.

Secondly, I know that many hon. Members and unions are concerned about the affordability of the levy. That is why the certification officer must exempt lower-income organisations from the levy entirely. No organisation will pay more than 2.5% of its annual income, as set out in its annual return to the certification officer.

Thirdly, it is important that a levy is predictable, so the Government will continue to fund the cost of any internal inspectors that the certification officer hires, as the use and cost of those can vary significantly. That was discussed during consideration of the Trade Union Act 2016. For the same reason, the Government will also fund the cost of any external legal advice that the certification officer may seek. That was not identified during consideration of the Act, but the Government believe that that approach will allow for a fairer levy.

Finally, the Government have taken steps to ensure that the levy is simple and transparent. The certification officer will need to aim to ensure that income from the levy matches expenditure over a three-year period, as well as explain how she calculated the amount of levy each organisation is charged. A number of the certification officer’s existing fees will be abolished and subsumed into the levy. That will be the subject of separate regulations, which will be made under the negative procedure, and we intend them to come into force at the same time as the levy.

[Imran Hussain (Bradford East) (Lab)]

Does the Minister accept that as the instrument stands there will be no cap on the amount of the levy and it could well run into millions of pounds?

[Paul Scully]

The amount of levy paid will be capped to 2.5% of the union’s income, and it is the certification officer’s work that is being paid for—

[Imran Hussain]

Sorry, perhaps the Minister did not understand the point I am making. Does he accept that there is no cap in the instrument on the overall levy that the certification officer can charge and it could well run into millions of pounds? It will be completely at the discretion of the certification officer.

[Paul Scully]

The certification officer’s work will be charged accordingly, and the levy will be distributed at a level that is capped for each union and employers’ association. It will be for the certification officer to demonstrate what she has been doing in that regard and how those costs are broken down.

In response to requests by trade unions during consultation, two fees will be preserved—the fee for listing as an organisation and the fee for a union to be granted a certificate of independence. The costs of dealing with those applications will not be recoverable under the levy.

I recognise that these are significant changes for the organisations involved, albeit that they are the clear and required implementation of the Trade Union Act 2016. That is why we announced the reforms in June 2021, to allow trade unions and employers’ associations time to prepare before they are implemented in April 2022. That also allowed the certification officer time to put the systems in place to determine and charge the levy.

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[Imran Hussain]

I first declare an interest as a proud member of Unite the union, Unison and GMB.

For well over 100 years since the founding of modern organised labour, trade unions have been at the forefront of improving the pay, terms and working conditions of ordinary people across our country. It is because of the struggle of trade unions, even in the face of opposition, obstruction and oppression at the hands of big business and Governments, that working people today have statutory sick pay, which means they are not left completely out of pocket when illness strikes, a minimum wage, which helps to provide a basic floor against poverty, and high safety standards, which ensure that dangerous work places are no longer the death traps they once were.

Yet despite the immense improvements that they have made for working people over the past century, our trade unions are as important today as they have ever been. Working people are still exploited by unscrupulous employers and our trade unions still provide the only real bulwark against even greater exploitation. That has been made all too clear over the last two years of the coronavirus pandemic, with bad bosses, for example, using the dishonest tactics of fire and rehire to take advantage of the workforce.

It seems, however, that the Government do not recognise the value and importance of our trade unions.

[Chris Stephens]

Is the shadow Minister not as curious as I am that, four years since the Government started a consultation and after four years of promises of an employment Bill, there is no employment Bill, but there is now this levy being imposed on trade unions? Does that not say all about how this Government view workers’ rights in this country?

[Imran Hussain]

The hon. Gentleman is absolutely right and adds to the point that I was beginning to make. It is clear that the Government do not recognise or value the importance of our trade unions. Instead, as we see with the measures before us today, they choose to attack rather than support those who are fighting for working people.

[Jonathan Gullis]

Does the hon. Gentleman share my concerns that trade unions such as the National Education Union were found potentially to have broken the Trade Union and Labour Relations (Consolidation) Act 1992 for the £505,000 spent in the 2019 general election on adverts that were overtly party political, attacking the Conservative Government, which would obviously have disenfranchised Conservative members whose hard-earned money had been paid into that trade union?

[Imran Hussain]

It is clear that the hon. Gentleman misses the point. There are regulators today and, while I do not know about that specific example, breaches of any kind should of course be investigated, but that is not the matter before us today. This is not a new body that is being set to investigate breaches, so I think the hon. Gentleman will perhaps understand that his point is not relevant to the debate today.

[John Spellar]

It might be helpful if we heard whether the hon. Member for Stoke-on-Trent North or other members of the union actually made a formal complaint to the certification officer.

[Imran Hussain]

That is a matter for the hon. Member for Stoke-on-Trent North, and I will give way if he wants to respond—or perhaps not.

As I was saying, this is an ideological, deliberate attack by the Government on our trade unions, our workers and their rights. Sadly, however, this attack is not without precedent. While they no longer send armed soldiers in to crush striking workers, this Tory Government are no less—[Interruption.] Conservative Members laugh, but they may want to check history and see that those are real events from the turn of the last century. It is not a laughing matter; it is a very serious matter, and if they choose to laugh at that, so be it. This Tory Government are no less opposed to unions.

On that point, let us remind ourselves of this Government’s record. Over the last decade, they introduced the draconian Trade Union Act 2016, eroding the ability of working people to take collective action, imposed illegal employment tribunal fees that priced people out of obtaining justice, and presided over a disgraceful rate of statutory sick pay, which is one of the worst in Europe. They have also broken a promise made during the passage of the Trade Union Act by backtracking on their commitment on electronic balloting, with the Government-commissioned Knight review, published in December 2017 and still awaiting a response from Ministers—more than four years later. It therefore comes as no surprise that Ministers have introduced these anti-union statutory instruments, as well as a further ministerial direction to once more attack working people.

[Mark Garnier]

The hon. Member is right about the trade unions, and I would echo that: I think they have done an extraordinarily good job. I worked with the Community union in my constituency at jobs fairs.

One of the characteristics of this change is that it makes the unions more independent. By giving the certification officer an independent form of financing, it means that the Government have less leverage over them, thereby ensuring more independence of the whole union movement, not less.

[Imran Hussain]

Certainly, I agree with the hon. Gentleman’s first point—that unions do a fantastic job—but unfortunately I do not agree with the rest. I am sure the hon. Gentleman is not saying this, but one could interpret from what he said that somehow, if the Government were to pay an independent regulator, they could tell that regulator what to do. We know that is not the case—of course it is not.

Again, that is not the issue today. As I said to the hon. Member for Stoke-on-Trent North, at the heart of this—I will come to this at greater length—are two points. The first is suddenly charging a levy—I know the Minister wants to say that there are other organisations where regulators are paid for in the same way, but unions are not profit-making organisations. It is almost as absurd as saying that charities should pay for the Charities Commission. The argument that the Minister made did not answer any of the questions posed from this side of the Committee, and I hope that he will do so when he sums up.

The first statutory instrument deals with the financial levy that the Government intend to impose on trade unions. That levy would impose unnecessary and disproportionate costs on trade unions, and would take money out of the funds used to fight for better pay terms and conditions. That is the crucial point. Any money that is taken from trade unions cannot be spent on defending their members. It is fine saying that it is 2.5% but, by the way, the overall figure is not capped.

That raises another interesting question: who makes up for the shortfall? If, for example, the certification officer says in two to three years that their costs will run into the millions—this instrument does not stop that; if the Minister disagrees, he can intervene—and we are saying that the cap on unions is 2.5%, who will make up for the shortfall?

[Kevin Hollinrake]

I guess the answer in the current situation is the taxpayer. Surely the only question here is: who should pay for the regulator? Should it be the trade unions and their members, or the taxpayer? That is the choice we are making. The Government have no money, so would the hon. Gentleman prefer the taxpayer to fund trade unions, many of whom do not benefit from trade union activity, or should it be the people who benefit from it?

[Imran Hussain]

The current known cost of the certification officer as it stands is about £700,000, which is paid by the taxpayer. There is, however, a principle: trade unions are there. I have just gone through some of the huge achievements of our trade union movement—which I am sure Conservative Members agree with me about—not just in this country but internationally, for workers in some of the poorest and most squalid conditions around the world. Our internationalist trade unions have gone and done that. Now, on the other hand, we are saying that the draft regulations are not for the good of workers. Trade unions help our workforce with their rights and conditions. Therefore, the principle is that of course this should be paid for by the taxpayer.

[Jessica Morden]

I declare an interest as a long-standing member of a trade union. My hon. Friend is making an excellent speech. Is it worth stopping and recognising at this point that those trade unions have been flat out in supporting our nurses, shopworkers and transport workers, who have been on the frontline in the pandemic, during this difficult time?

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[Imran Hussain]

Absolutely. My hon. Friend makes the point perfectly about the great work of our unions at this most difficult time. Over the past two years, we have seen the real values of our trade unions.

[Paula Barker (Liverpool, Wavertree) (Lab)]

I declare an interest as a member of Unison and Unite the union. Does my hon. Friend agree that those on the Government Benches are treating trade union members as if they are not taxpayers in our society? They are taxpayers—

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[Paula Barker]

Nothing has been said about the money that the trade unions save the economy every year.

[Imran Hussain]

Again, a point well made that needs no further explanation by me. The value of our trade unions is a good point—again, Government Members are nodding. They accept the value of the trade unions. I do not think that there is a debate about that.

To go back to my point, in imposing the levy, the Government have deliberately misunderstood the role of trade unions, treating them not as a voice of working people but as profit-making companies. Let me be clear: this Government know full well that trade unions do not exist to make profits for themselves; they exist for the betterment of their members and the workforce as a whole in this country. I have already made this point, but given that we would not think to force charities to pay such a high levy to the Charity Commission, it is frankly outrageous to ask the trade unions to do so.

The Government have also failed to set out a real case for why they need to impose the levy. As democratically accountable organisations in their own right, trade unions have high compliance rates with their legal duties. As my hon. Friend the Member for Newport East pointed out, the certification officer dealt with just 34 complaints against trade unions, not one of which ended up with an enforcement order being pursued.

The reality is that if this draft statutory instrument passes, trade unions will have to meet the costs—my hon. Friend made this point—of politically motivated, malicious, vexatious and unsubstantiated investigations into them. Those investigations will almost certainly be initiated by those who have long-standing opposition to our trade unions. That is why we must vote the instrument down today.

[Craig Mackinlay]

The hon. Gentleman is making an impassioned speech about unions, and I do not think there would be any argument from the Government side about the value of trade unions. However, does he have a view about some of the very well-paid officers that many unions have, who earn in excess of six figures in some cases? Could he not apply some pressure through his good offices to try to suppress some of those excessive salaries and fees?

[Imran Hussain]

The hon. Gentleman is somebody who I have time for and who normally makes some very good points. However, pay structures within organisations are pay structures within organisations—again, that issue is not relevant here. I take the point; he wants to make a political point. Again, I do not see the relevance of that issue in this debate.

The second statutory instrument deals with the financial penalties that the certification officer can impose. As the Minister pointed out, these can range up to £20,000 for a level 1 breach and closely resemble fines imposed in a criminal setting. However, the burden of proof is much lower, which means that the certification officer, in a politically motivated complaint, can impose a huge fine with a much lower evidential threshold. As I have pointed out, trade unions have high levels of compliance, with just one complaint for every 200,000 union members. As my hon. Friend the Member for Newport East pointed out earlier, the question is: what is the need for greater financial penalties when there has been no need for them in years gone by? This is a deliberate attempt by the Government to squeeze every last penny that they can from our trade unions, preventing them from putting funds forward, representing their members and fighting for working people. That is another reason why these statutory instruments must be voted down today.

The Minister also referred to the expansion of the certification officer’s investigatory powers—although that is not included in these SIs, Mr Davies, I do not think we can have this debate without discussing it. This expansion, giving the certification officer new and wide-ranging powers, will allow for the initiation of investigations against a trade union even if there are no complaints from within the union itself, allowing anti-union organisations to submit vexatious and politically motivated complaints against trade unions. Even if no such complaint is upheld, the damage to the trade union will already have been done, with valuable time, money and resources being spent on fighting vexatious complaints rather than unscrupulous employers.

[Chris Stephens]

I am grateful to the hon. Gentleman, because he is emphasising the point that was made repeatedly in the Trade Union Public Bill Committee, namely that this process could include far-right organisations attacking trade unions for their fine anti-racism campaigning work. Does he believe, as I do, that if the Government are consistent, the people who make these sorts of vexatious and malicious complaints should have a levy and a fine imposed on them if they make these sorts of complaints against trade unions?

[Imran Hussain]

I absolutely agree with the hon. Gentleman, and I hope that Government Members also agree. We believe this measure is politically motivated, but even if they do not, surely they would accept that it widens the scope and allows for far-right organisations to make malicious or vexatious claims, which at the very least will have to be investigated, and somebody will have to pay for that.

That is the issue at the heart of this debate. This legislation is not well thought out, as the hon. Member for Glasgow South West has said. We maintain, of course, that it is politically motivated. I ask hon. Members to think about that and I particularly ask those who are members of trade unions to accept that point at least. This ministerial direction, which has huge implications, has also had a concerning lack of scrutiny, as it will never receive a proper debate in Parliament or a vote involving all Members.

That takes me to the lack of scrutiny that these measures as a whole have had. Rather than holding a debate on the Floor of the House, the Government have chosen to tuck these SIs away and try to pass them in Committee, which begs the question: why the avoidance of scrutiny? Why the avoidance of debate? The reality remains that the Government know that this is anti-union, anti-workers and anti-rights legislation. They want it passed in Committee rather than exposed in the full House.

Having looked at the clock, I will bring my remarks to a conclusion. Again, I say in the most respectful manner to the Minister—I do not envy him his job; he often gets rolled out in some of the most difficult to defend places—that I hope he answers some of the questions that have been raised by Opposition Members. Thus far, he has not answered any of them; he has said that he will deal with them in his concluding remarks. I ask him to address the serious concerns that have been raised by Opposition Members; set out why he believes that these regulations, which so clearly impede the ability of trade unions to represent working people, should be introduced, especially at a time of great economic uncertainty when working people are facing one of the greatest assaults on their rights in the workplace; and announce when he will fulfil the promise to give trade unions the power to hold ballots electronically by delivering the pilots that were announced half a decade ago.

When trade unions are empowered, working people are empowered, wages rise, conditions improve and productivity soars, so if the Government have any intention of fulfilling the promises they have made to working people, they will pull these regulations and repeal the Trade Union Act 2016. The Labour party has a proud history of standing up on the side of working people and those across the country who fight to protect them and their rights, and we will never shirk those responsibilities. We will therefore be voting against these regulations today.

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[Chris Stephens]

I do not know what the trade union revenue is in the whole of the United Kingdom, but I can tell the hon. Member that I was the treasurer of the Glasgow City branch of Unison and its revenue certainly was not anywhere near £700,000. If he wants to see the accounts of that organisation, I am sure I can provide him with a copy.

[Imran Hussain]

The hon. Gentleman is making an excellent speech. The issue here is not the revenue that trade unions generate; it is that any money taken away from the trade unions is money taken away from helping working people—helping to improve their terms and conditions and fighting for their rights.

[Chris Stephens]

I agree with the shadow Minister. He will recall, because he referred to it, the attempt to impose fees at employment tribunals, which the Government ended up losing. That was also costing trade unions money, because they were having to pay to defend their members at employment tribunals.

Returning to the legislation at hand, I have a real concern that it curbs the basic work of trade unions in fighting for dignity in the workplace. Over the last two years, during the pandemic, we have seen a real exploitation of workers. That shows why we need an employment Bill, which we have been promised for the last four years. That is why the priorities are all wrong.

In addition, the Government have international obligations here, and they are not following them by taking this route. Thompsons Solicitors is clear that the International Labour Organisation conventions and article 6 are being breached. Extending the certification officer’s investigatory powers and imposing a levy would effectively make the certification officer the complainant, the investigator, the prosecutor and the judge. That is in contravention of article 6 of the European convention on human rights and in breach of International Labour Organisation standards. That is a very real concern. Once again, the Government find themselves outliers when it comes to international labour standards.

The Minister will try to present the regulations as standard practice, but I believe that they are ideological, they are an attack on the trade union movement and they are in breach of international obligations. Once again, the Government find themselves with their priorities all wrong. Will the Minister indicate whether he will accept my Workers (Rights and Definition) Bill, which would go a long way towards ensuring fairness in the workplace, or can he tell us when the Government will finally introduce their employment Bill to deal with so many issues affecting workers in this country?