Trade Union Bill (Ninth sitting)

Jo Stevens Excerpts

Tuesday 27th October 2015 Public Bill Committees

[The Minister for Skills (Nick Boles)]

It is a pleasure to be starting what I hope will be the final day under your chairmanship, Sir Alan. Sometimes during this debate it strikes me that the two sides of the Committee are discussing completely different pieces of legislation. Both Opposition parties portray the Bill as one of the most egregious attacks on fundamental human rights since King John, whereas I would describe it as, to borrow a phrase from the previous speaker, a NALGO Bill, in that there is not a lot going on.

What the Government are proposing here is nothing more than a set of provisions that seek to change behaviour within the public sector. After all, the public sector is funded by taxpayers: they go out to work to earn money and they pay taxes, so they have a right to see that money spent responsibly. We hope that, in the light of public scrutiny of the information relating to facility time that public sector employers will be required to publish under clause 12, public sector employers will voluntarily renegotiate their existing facility time arrangements with trade unions and bring their spending on taxpayer-funded facility time under control.

We could, of course, have legislated now for a cap, so the idea that the clause, to cite another famous monarch, is a Henry VIII measure, an egregious attack, is false. We have heard a lot about the constitution in recent hours. We could have legislated for a cap now and no doubt the Opposition would have attacked that. We have taken the more modest route of suggesting reserve powers, which—the clue is in the name—will be kept in reserve and used only as the last resort. Only if transparency shows unacceptable inefficiencies in relevant employer spending on facility time and poor value for money for taxpayers from existing facility time arrangements with trade unions will Ministers set a cap on the time and money spent on facility time.

Amendment 101 would prevent the reserve powers being exercised so as to effect changes to a contract of employment or collective agreement, or limit the relevant employer’s discretion as to the contents of the contract or agreement concerned. The amendment would, in effect, neuter any consequential provision that regulations could make amending or otherwise modifying contracts of employment or collective agreements. As I have said, it is by no means certain that the reserve powers will ever be exercised and, should they be exercised, it is also by no means certain that this would interfere with, or override, existing contractual rights and rights under collective agreements. Most union representatives do not have contractual rights to facility time over and above their statutory rights, which we are not seeking to change.

[Jo Stevens (Cardiff Central) (Lab)]

What legal advice has the Minister received as to whether this proposal for a cap conflicts with EU law, with TUPE law or with the Information and Consultation of Employees Regulations?

[Nick Boles]

We keep going around this merry-go-round. The Government receive a great deal of legal advice from their own officers and sometimes they seek other advice. We do not publish that advice; we are satisfied with the compatibility of all our proposals with all the laws and treaties to which we are signed up. Any cap on facility time will only apply prospectively. It is, on the other hand, possible in theory—though, as I have said, unlikely in practice—that a cap may apply to ongoing, legally-binding relationships; either legally enforceable terms in a collective agreement, or in the contractual rights of individual employees. This is what is flagged in the European convention on human rights memorandum to the Bill. The Government acknowledge, however, that even the potential impacts upon pre-existing contractual arrangements should be fully debated. That is why we considered the affirmative procedure to be necessary to provide the correct level of parliamentary scrutiny.

Before asking hon. Members to withdraw their amendment I want to respond to a question, which is not specific to this amendment, about the devolution settlement. The devolution settlement does not define which individual Ministers in the Government can do things. It defines which areas of policy are devolved and which are not. We have established, and there is general consent—although it might well be wished otherwise—that employment law is not a devolved policy but a reserved policy, and therefore Ministers in the UK Government are entitled to exercise those reserved powers in relation to their responsibilities. That does not imply that, say, the Secretary of State for Health, would be breaching the devolution of health to the Scottish and Welsh Governments by exercising the reserve powers under employment law in the way that we have outlined.

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[Stephen Doughty]

After a lively start to the Committee, we now come to the provisions of the Bill that deal with the certification officer. Although the position of certification officer is familiar to many members of the Committee, it does not normally get a lot of attention, although it will in this debate because of the huge extension and change to its remit proposed by the Government.

When we debated clause 6, we discussed how the certification officer will be given powers to gather information on industrial action taken by trade union members, and how trade unions will be required to publish details of all industrial action and ballots in their annual return to the certification officer. When read in isolation, clause 6 poses a risk to the neutrality of the certification officer in the regulation of trade unions. When read alongside other clauses in the Bill, however, and particularly clause 14, it amounts to a vast extension to the role, remit and powers of that position. The clause will insert into the 1992 Act new schedule A3, which is schedule 1 to this Bill, and give effect to schedule 2, which also amends the 1992 Act. As a result of those changes, trade unions will face significant new obligations and further blue tape, as we have discussed, because they will have to report to the certification officer annually on when industrial action takes place and on political fund expenditure.

The provisions will give the certification officer new, wide-ranging investigatory powers on matters such as the register of members, elections, the political fund and union mergers. For example, if the certification officer thinks that there is good reason to do so, they will have the power to demand the production of any documents relevant to their investigation. Furthermore, if they believe that a union has failed to comply with its duty, they may appoint inspectors who can require the production of documents, as well as the attendance and assistance of any persons believed to have information relevant to the investigation. Failure to comply may lead to the certification officer imposing an enforcement order, which carries punitive sanctions.

The TUC believes that those new powers represent a major new intrusion by the state into union affairs and union members’ rights to privacy. The certification officer will—I find this quite extraordinary—be able to initiate an investigation against a trade union even though they have not received a complaint from a member of that union. That power applies to rules governing elections, political funds and union mergers. The TUC is concerned that the certification officer will be expected to act on complaints and intelligence provided by third parties, including employers. We need to discuss that in detail because it provides wide grounds for fishing expeditions, sabotage actions and engagement by people who are not involved in a dispute, but simply want to cause problems, and to provoke legal proceedings and investigation or action by the certification officer.

We have heard from many people who are concerned about the provisions, and such concerns were reaffirmed in oral evidence by legal experts including Thompsons Solicitors. The United Kingdom’s judicial system is lauded by many around the world, and the Minister should note how its founding principles stand in complete contrast to how the certification officer will be able to act. It is important for the Committee to understand that the certification officer will have the power to bring a complaint against a trade union, to investigate the issue, to decide which witnesses will be called, to cross-examine them, to make a decision on the matter, and then to impose a fine on the union that they have investigated and on which they have adjudicated. I cannot overemphasise the point, which was also made by many of our witnesses, that this is simply not consistent with the principles of natural justice or the founding principles of our legal system, which include many checks and balances, not least the separation of powers.

It is quite extraordinary that this is taking place in an era when we have finally done away with some of the anachronisms of our constitutional arrangements. As the Minister mentioned, we have been having many discussions about this—I am sure that we could have a lengthy one about the other House if we wished to—and the fact is that in recent years we have moved forward. We have separated out the roles, and we no longer have the head of the judiciary sitting as the Chair of proceedings in the other place, as a member of the Executive and of the Cabinet, while that Chamber also acted as the highest court of appeal in this land. That was separated out, and we now have the Supreme Court, the independent Judicial Appointments Commission, a Lord Chancellor who is a member of the Cabinet but not of the other place, and so on and so forth. We have taken that step, and rightfully so, to separate the Executive from the judiciary and to remove the blurring of powers, yet the Government are now effectively merging all those powers together in the role of someone who, I am pretty sure, would not want those powers in the first place, and has had a very limited role until this point.

This seems to be an attempt to politicise a position so that it can be used in a very wide-ranging way, and to interfere fundamentally with the rights of trade union members up and down this country. When the provisions are considered alongside other clauses in the Bill, they do look very sinister. I am sure that the Minister will say, “Oh don’t worry, it will be fine. The certification officer will only engage once in a while if something really terrible happens,” and so on and so forth, yet he is proposing to grant huge, wide-ranging powers which, given the previous clauses we have debated, are deeply sinister. We believe that this clause and the relevant schedules are excessive, so we shall oppose them.

I turn briefly to our amendments. Amendment 53 would prevent the insertion into the 1992 Act of schedule 1, which provides for the certification officer’s new investigatory powers. Amendment 69 would provide that any person investigating a breach of an obligation by a union must allow that union to make representations before any decision is taken, which would be absolutely consistent with the principles of natural justice. I find it extraordinary that it is the certification officer who will decide which witnesses to call and to whom they will speak before making a decision. If we are talking about powers that affect the rights of trade unions, it is crucial that, at the very least, those involved should be allowed to make representations that are relevant to the matter at hand.

Amendment 70 would require any person carrying out an investigation to send the union a copy of the interim report at the same time that it is sent to the certification officer. Again, that is only fair. If such decisions are being made, at the very least the parties to the dispute should receive a copy of the report. Amendment 71 would require that the final report relating to an investigation would also be sent to a relevant union.

I hope that the Minister can explain both the intent behind these wide-ranging changes—we will come on to other parts of the role shortly—and how the process sits with the principles of natural justice in this country. I hope that he will also set out whether there will be any safeguards to prevent the officer from interfering unwillingly, or from being forced to interfere in the affairs of unions without just cause.

[Jo Stevens]

It is a pleasure to serve under your chairmanship, Sir Alan.

The Bill would, if enacted, fundamentally change the role of the certification officer from a neutral arbiter of disputes to a state snooper and enforcer. We have heard the concerns of legal experts, Liberty and others about the implications of these changes for civil liberties, and about the likelihood that they infringe article 6 of the European convention on human rights, on the right to a free trial, and well-established principles in common law on natural justice. No one should sit as a judge in their own cause.

I repeat those concerns today, for the record, in the light of the Government’s changes to the ministerial code, which were quietly sneaked out last Thursday via a ministerial statement in the other place. Until the code was changed last week, it used to refer in its opening paragraphs to an

“overarching duty on ministers to comply with the law including international law and treaty obligations and to uphold the administration of justice and to protect the integrity of public life”.

That duty to comply with international law and treaty obligations, and to uphold the administration of justice, has just been deleted from the ministerial code. It may be a complete coincidence that, at the very point when this Bill is coming under a barrage of expert criticism for its breaches of international law and treaty obligations, the Government have decided to do away with the requirement for Ministers to uphold those laws. Will the Minister explain what possible justification there is for such a change to the standards against which Ministers are held accountable? Why was not Parliament consulted on the change?

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[Ian Mearns]

I was interested to see a TV interview this morning in which the former editor of Conservative Home suggested that the provisions with which the Government are having problems in the House of Lords were in their manifesto, but that as they did not expect to win the election, they did not expect to have to enact many things that were in that manifesto. That theory is very interesting, as it is possible that the Government did not expect to have to enact the Bill.

[Jo Stevens]

My hon. Friend makes a valid point. I think that we will see more of that during this Parliament.

What was the inspiration for the changes? The Government propose to give the certification officer a whole armoury of weapons. They will be able to investigate, demand documents, demand explanations and start proceedings, which they themselves will hear, acting as prosecutor and judge, before giving a verdict and delivering a sentence. They will be able to impose a fine and, as we heard in evidence, a quasi-criminal sanction. This is an extraordinary attack on the rule of law.

Certification officers’ powers will be extended into areas that have historically been way outside the remit of the role. The CO’s role is to regulate the internal workings of unions and their relationship with their members. That is clear from the existing jurisdictions and procedures involving complaints by union members. The certification officer’s website states that his role is to

“maintain a list of trade unions…ensure compliance with statutory requirements for annual returns…determine complaints concerning trade union elections…rules”

and trade union mergers,

“oversee the political funds”

and

“certify the independence of trade unions”.

That work involves seven staff, and the net cost of the certification officer’s office, according to his most recent annual report of July this year, was £560,232. That represents a 3.7% decrease. Hon. Members might think that that is good value for money, yet the Government want to increase massively bureaucracy, cost and intrusion.

I also note from the annual report that in March 2015, the certification officer’s premises were found to be structurally unsafe. I fear that the proposals in the Bill are equally structurally unsafe. No longer will the CO’s role be confined to legitimate complaints that are not ruled out as scandalous, vexatious, hopeless or misconceived. The real purpose of the proposals was revealed in the questions from the hon. Member for Banbury to Professor Ewing in Committee on the afternoon of 15 October. The hon. Lady envisaged the certification officer being required to take action at the behest of

“someone with a legitimate cause for complaint—someone who is affected by strike action…The certification officer himself might be able to take a view that it was appropriate to investigate non-compliance.”––[Official Report, Trade Union Public Bill Committee, 15 October 2015; c. 131, Q352-354.]

Professor Ewing was understandably perplexed by that question, as even the certification officer’s expanded role would not encompass non-compliance with industrial action requirements, yet it is clear that Government Members believe that it should, and that the certification officer should act as a state enforcer who steps in at the behest of any individual to interfere in the workings of trade unions. One can imagine that the Conservative party’s friends in the TaxPayers Alliance will be keen to waste more public money and resources by pestering the certification officer on all manner of issues and seeking enforcement orders on unions, especially in the light of the oppressive reporting requirements on industrial action and political funds.

The situation shows that the Government and Conservative Members are proceeding on the basis of a fundamental misunderstanding of the law and of the role of a certification officer. They are creating a bloated and distorted role that undermines the independence of the office and offends universally accepted legal principles. As a final insult, they will require trade unions to pay for the privilege. Under the Conservatives, we are used to attacks on trade unions, but now we will have an open-ended tax on trade unions—a blank cheque—on which unions will have no say and no control. It is taxation without representation at its most extreme, enabling ideologically motivated complaints to target union resources. It is another direct, politically driven attack on the finances of unions and their capacity to represent their members.

[Chris Stephens]

The hon. Lady is making an excellent speech. Is it not ironic that trade unions are being asked to contribute to the costs of a certification officer, but will be prohibited from contributing to employers administering check-off?

[Jo Stevens]

The hon. Gentleman makes a valid point that shows the inconsistencies throughout the Bill.

I hope that the Government will rethink their proposals on the certification officer. I believe that they should be withdrawn, as they are pernicious, and that the current role of the certification officer, which is widely respected, should be retained. To do otherwise betrays a disdain for independence, impartiality, fairness and, most importantly, the rule of law.

[Ian Mearns]

I rise to support the amendments. The clause will increase substantially the investigation powers of the certification officer, giving him or her powers to investigate the activities of a union even when a complaint has not been received from a member of that union, or from any trade union member at all. Surely the provision completely misses the point of a trade union certification officer’s role. Trade unions are independent organisations whose function is to represent the interests of their members. Whether or not this Government approve of trade unions, the fact remains that they perform a legitimate—some would say essential—role within a free society.

The certification officer performs a vital role, but that role does not and should not involve attacking the rights of trade unions and their members who, after all—apologies to my colleagues from north of the border—are citizens of the United Kingdom. The role of the certification officer is to protect the rights of trade union members by ensuring that unions operate openly, democratically and at all times in the interests of their members. The guidance on the Bill describes the provision as giving the certification officer new enforcement powers so that action can be taken without the need for an application or complaint from a member to be received first. The certification officer will therefore be able to investigate and take enforcement action in a number of areas where that is currently not possible or appropriate. In particular, the guidance states:

“For example the Certification Officer could act upon information or concerns he had received from a third party or on his own initiative.”

That provision is totally unacceptable in a free society.

There are more than 6 million trade union members in the UK. They are all intelligent and fully capable of raising a complaint or concern with the certification officer if they have a problem with their trade union. Why does the certification officer need powers to act when not one single trade union member raises a concern? On whose complaint or on whose authority will the certification officer act? We all know on exactly whose authority that will be. Every scare story and sensationalist headline in the “Daily Wail” or the “Daily Hexpress” will be followed up. Six million members may be completely content and satisfied, but the editor of the “Daily Wail” screaming about Len McCluskey, Sir Paul Kenny or Dave Prentis having the bare-faced audacity to stand up for their members will in future be the subject of a full investigation. That is a total waste of time, and the costs of such investigations will be passed on to the trade unions, which will have no alternative but to pay.

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[Nick Boles]

I am certainly trying my best to ensure that the regulation of trade unions is more effective than the regulation of the financial services industry preceding the 2008 crash. I do not think that the risks are as great, and I have been the first to point out that it is unlikely that the trade unions, which mostly do an excellent job, will crash the economy in the way that the under-regulated financial services industry did under the previous Labour Government. Sir Alan, I think you are going to say that I am moving away from the point, so I will return to it.

The clause enables regulations to be made so that the certification officer can charge a levy on trade unions and employer associations.

[Jo Stevens]

Will the Minister give way?

[Nick Boles]

I am going to make some progress.

It is important to understand that employer associations are also subject to the levy. The Bill does not prescribe the amount of the levy because the certification officer is independent. It is for the certification officer to decide each year how much they need to charge to cover the costs of performing their functions. We have taken the approach of providing a regulation-making power, rather than setting out in the Bill exactly how the certification officer is to determine the amount of the levy, because the Bill expands the certification officer’s role. It is only once this new expanded role is established that it will be possible to determine precisely how the regime should work. Having said that, we also recognise that Parliament and those directly affected rightly expect to see how the regime will work when Parliament is being asked to agree the detail of the legislation. That is why the Bill sets out specific parameters for the content of the regulations. It is also why the regulations will be subject to the affirmative procedure. The clause also requires consultation before any regulations are made.

To meet our objective of cost recovery, the levy must be enough to cover the cost of the certification officer’s functions, but it cannot be any more than the certification officer needs. The certification officer cannot make a profit from their activities, nor undertake spurious activities to generate funds. That is only right as the certification officer is an independent public appointment and not a commercial enterprise.

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[Nick Boles]

The hon. Gentleman is entitled to speculate on any figure he likes, but we are going to leave it to the independent certification officer to assess the additional requirement and to set an appropriate levy.

We recognise that trade unions can vary greatly in size and that employers associations are often small, meaning that the size of the regulatory functions provided by the certification officer to such organisations may vary greatly. Smaller unions and employer associations may require less of the certification officer’s time and resources.

[Jo Stevens]

I am pleased to hear that clarification about employers organisations. Will the Minister tell us whether federated employers organisations, such as the CBI, will be covered by the measure?

[Nick Boles]

My understanding is that federated employers associations will not be covered, but all other employers associations will be.

We want to be able to consider whether organisations that use more of the certification officer’s time should bear more of the cost. We will need to consult before determining whether that is the right way to proceed and will only take that approach if we find during consultation that it costs more for the certification officer to regulate larger organisations that it does for smaller ones.

Let me conclude by summarising the safeguards in the Bill on the way the levy is to operate: the amount of the levy will be limited to covering the cost of the certification officer functions; ACAS, unions and employer associations will be consulted before regulations are made; the regulations will be subject to the affirmative procedure, allowing a full debate in Parliament before they are brought into force; and the certification officer will be required to report annually on the amount levied and how that was determined, which will be published and laid before both Houses, ensuring transparency.

Question put, That the amendment be made.