Trade Union (Levy Payable to the Certification Officer) Regulations 2022

Lord Balfe Excerpts

Monday 7th March 2022 Lords Chamber

[Lord Monks (Lab)]

My Lords, to follow on from those last points, it almost seemed to be the case from the Minister’s presentation that unions had somehow agreed with quite a lot of the proposals being put, which is very far from the case.

I do not want to go over the 2016 Act, but, at the time, many of us thought it was the product of a certain mindset in parts of Conservative Central Office, which was still bent on fighting the battles of the 1970s and 1980s. If you were that kind of Tory, why not ladle extra dollops of red tape, as the noble Baroness, Lady Neville-Rolfe, just said, on the old enemy? After all, it polishes your credentials in the eyes of some of the Conservative associations, it does not cost very much and it kicks your opponents hard, which with a workable majority you can do.

Unions are now to face a Certification Officer with new and extended powers to impose these fines—very steep fines in terms of union finances—and to make unions pay the bills of the Certification Officer. These are the motives of a suspicious, hostile Government, who regard unions as conspiracies, plotting mayhem and confusion—much as some of us regard the present regime in Downing Street. Yet unlike our views on Downing Street, the Government’s view is certainly not borne out by the facts. British unions are already heavily regulated by any standard applying in western democracies, yet the Certification Officer is rarely troubled by complaints of maladministration and injustice, as has been pointed out already in this debate. There is a handful of complaints each year, and the vast majority are dismissed or withdrawn, and there were no enforcement orders last year.

So what is the problem? There is not really one at all. The motive for this legislation is ignoring the fact that unions are a hallmark of a free and democratic society, and a force for greater equality in an increasingly unequal society.

The new Certification Officer could well be like a police officer looking for work to justify his or her existence, no doubt having actively to encourage people to come forward with complaints. The Certification Officer can take them themselves, as we heard the Minister spell out. Perhaps there will be advertising for complainants, to boost the workload if it is meagre. The aim is to tie up unions in expensive litigation and force them to pay the costs of that litigation, as well as for the administration of the Certification Officer’s office.

Can the Minister tell us precisely whether there are any other regulators of voluntary, not-for-profit, democratic organisations which have to pay for their regulator? Political parties do not, as we have heard, and charities do not, so who else does? It is not the same as the City or the banks, which are profit-making, private sector bodies, yet unions collectively are likely to face a seven-figure bill for the privilege of being complained against. After all, this is fertile territory for opponents of the national executives of unions. Unions are lively, democratic organisations, with all the cut and thrust that goes with that, and sometimes it is fair to say that the losers do not always lose gracefully.

These regulations and the Act which spawns them are unworthy of a great democracy. I take this opportunity before the regulations pass into law to register my disgust and contempt for them and their promoters.

[Lord Balfe (Con)]

My Lords, first, I should declare an interest as the president of BALPA, the TUC-affiliated union for pilots.

This is just unnecessary, is it not? The Act was passed in 2016. I remember that my noble friend who just spoke was the Minister then and we had one or two set-tos, but in the end, to my mind, her knowledge of the trade union movement helped ameliorate that Bill and get it on to the statute book. I had liked to think that the non-activity over the past two or three years meant that the Government had had another thought and decided that these regulations did not need to be brought into being—and of course they do not. They are not going to add anything. We have heard about the 34 complaints with no enforcement orders and about the fact that no other voluntary organisation pays for its regulator, and we know that the whole of this office is really not needed for the purpose for which it is being put forward.

What I would say though, particularly to the noble Lord, Lord Razzall, is that we should not make this a battle between the Labour Party and the Conservative Party over funding. It is not. It is about unnecessary control of the trade union movement. The majority of my union members voted for this Government. I am absolutely convinced of that, having talked to them. Some 30% of paying trade unionists vote Conservative. We have got to get over this idea that somehow the trade union movement is comprised of hard-working, left-wing socialists.

My wife was a district councillor for some years; she dealt with unions in rural England, and said that most of them were well to the right of her in their political beliefs. Most of them were voting for the Conservative Members of Parliament to be found in the depths of East Anglia. So let us get over this idea that union members are all Labour and not Conservative. It is important to get over it because I think the Minister needs to get over it and the Government need to get over it.

I have said over many years that we will have reached an achievement in this country when, just as the leader of the Opposition goes to the CBI on a regular basis, so the leader of the Conservative Party appears at the TUC and makes a speech and answers questions. Breaking down this divide is really quite essential if we are going to have industrial relations peace in this country.

We have not got a lot of time, so I am going to leave the Minister with just two questions, one of which has already been asked in one form. First, what, if anything, are the Government prepared to do about vexatious litigants? There will be people who will go to the regulator purely to cause trouble—every union has them; even BALPA has the odd member who gets great pleasure out of trying to run rings around its national executive. To what protection are the Government prepared to look to protect vexatious claims against unions? Secondly, the Government have pussyfooted around on electronic balloting the entire time I have been in this House. There are no questions about having a secure electronic ballot. Is it not time that the Government made a generalist gesture to the trade union movement and let it have what is a totally secure system, at its own choice, for running internal elections?

Those are two things the Government can give us. It will cost them nothing but it will show the Conservative-voting trade unionists of this country that the Government are a Government of the country and not just one part of it.

[Lord Hendy (Lab)]

My Lords, the Minister’s justification for the levy is that it is entirely normal for a regulator to be paid for by those whose businesses are subjected to regulation. That argument is untenable for at least five reasons.

First, the CO is not a regulator in the same way that others are. She has an administrative role to list trade unions and employers’ associations but her principal function is judicial, regulated exclusively by the Trade Union and Labour Relations (Consolidation) Act 1992. It is confined to the following matters: elections; disciplinary proceedings; balloting, other than for industrial action; the constitution and proceedings of the executive; elections for president, general-secretary and executive committee; political funds; amalgamations; transfers and engagements; accounting records; and annual returns. All these are purely matters of internal trade union affairs. The Secretary of State has the power to specify other matters by order but has not done so.

In relation to these issues, the CO acts judicially. If she receives an application from a member against the union which manifests a prima facie case, the CO conducts a formal hearing. Both parties take their turns—often through counsel—to present their evidence, cross-examine witnesses and make legal submissions. The CO then hands down a decision and may make a declaration if she finds a breach.

Appeals lie from the CO to the Employment Appeal Tribunal, which is of course a division of the High Court presided over by a High Court judge. There are few regulators with such judicial functions and where the governing legislation has specified a direct route of appeal to the High Court. However, one such is the employment tribunal, from which there is the identical route of appeal to the EAT. Noble Lords will recall that the Government legislated to impose fees on employment tribunal claimants but the Supreme Court, in the Unison case, held that that was unlawful; the Government consequently withdrew the fees regime. However, what is significant in this debate is that the Government have never suggested a levy on employers to pay for employment tribunals. It is not surprising therefore that trade unions point to the fundamental injustice of them paying a levy to meet judicial costs under the legislation which applies to them when the costs of adjudication under the legislation which applies to employers is met by taxpayers.

The second point is that the justification for the imposition of virtually every regulator is the need to protect the public. That does not apply to the CO. The primary purpose of bodies such as the CO and the employment tribunal is not to protect the public but to adjudicate in disputes between specified classes of claimants and respondents. In the case of tribunals, this is between workers and employers, and in the case of the CO between unions and members. The jurisdiction of each is limited to the statutorily specified subject matters. That is why members of the public cannot complain to the employment tribunal or to the CO that a friend of theirs has been unfairly dismissed by an employer or unfairly disciplined by a union.

Therefore, the CO is not there to protect the public from breaches of the relevant rules but to give trade union members, and only trade union members, an avenue of judicial complaint. It is true that the Government have now extended the remit of the CO to investigate matters on her own initiative, even where no member has complained, but the scope of her jurisdiction is still confined to the specific items I have listed. An infraction by a trade union in any of those matters will not impinge on members of the public and neither will any member of the public have the right to bring proceedings before the CO about it. So the public interest argument is simply without merit.

This is important, for although unions are complaining that newspapers and political parties hostile to them will rush to make complaints to the CO, such complainants cannot make a formal application and, if she thinks there is any merit in an informal complaint, the CO will be called upon herself to act as investigator, prosecutor and judge. That is not a position she is likely to enjoy, I imagine. Indeed, I doubt that she will welcome the extra workload of investigating allegations from unaffected outsiders about the internal workings of a union where no member feels sufficiently aggrieved to make a formal application to her.

My third point, which has already been dealt with by my noble friends Lord Bassam and Lord Monks, is that where regulators are funded by a levy, they are invariably conducting a business for profit, or at least earning a living from the regulated activity. That does not apply to trade unions, which make no money from the regulated activities.

That leads to the fourth point, which is that where a regulator is funded by a levy, those who must pay it are able to deduct the cost of their levy from the tax they pay on their profits. Trade unions cannot do that. Their income is derived, as has been said, almost exclusively from members’ subscriptions and goes to offset their running costs. They have no profits to tax. They do not have a tax bill against which to claim their levy.