Enterprise and Regulatory Reform Bill

Lord Brooke of Sutton Mandeville Excerpts

Wednesday 5th December 2012 Grand Committee

[Baroness Brinton]

It would be very helpful for other Members of the Grand Committee to be able to see the Minister’s letter to the noble Lord, Lord Monks, and any other replies that are circulated.

[Lord Brooke of Sutton Mandeville]

My Lords, before the noble Baroness rises to make her final decision, I intervene to make the point that there is sympathy around the Grand Committee for the case that she has been putting forward. I have only once been involved in legal proceedings. It was an industrial tribunal. I was advised that once the person who was taking us to the industrial tribunal had instituted proceedings, I should not be involved in giving her advice, against the possibility of misunderstanding, but I was very strongly of the view that she was making a mistake. Our barrister was the noble and learned Lord, Lord Irvine of Lairg, before he ascended to that role, and his pupil, who accompanied him, was the future Prime Minister. They were effective in arguing our case, and the tribunal found that there was no proper cause for compensation to be offered. The irony of the whole thing was that the fees of the noble and learned Lord, Lord Irvine of Lairg, and whatever he provided to the former Prime Minister exactly equalled the money that we had been prepared to give her before she instituted the proceedings against us.

[Lord Marland]

My officials have suggested that I clarify as I was not perhaps as clear as the noble Lord wanted. They have passed me a note saying that the clock stops when the claim is received by ACAS and starts again when the certificate is received by the claimant. Is that as clear as mud?

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[Baroness Whitaker]

My Lords, I apologise for not being able to take part in the proceedings on this Bill earlier, but as a former employment tribunal member, I would like to reiterate arguments made earlier that the whole point of employment tribunals and the EAT is experience of the workplace from relevant and, in fact, instrumental perspectives of justice. That refers to points of law as well as to facts because the law is interpreted in a context, as the noble Baroness, Lady Brinton, said earlier. It is not a just process—that is, interpreting and applying the law. As well as not being objective, it is not informed by both these perspectives as of right. The risk with the Bill as it stands is that you could have a representative of the employer or the employee but not necessarily both. That is going to make a travesty of the tribunal concept.

[Lord Brooke of Sutton Mandeville]

My Lords, I have listened with great care to everything that was said by the Official Opposition in this context. I do not understand why the Lord Chancellor should feel in any way moved to make use of this clause if he was not going to add appointed members to the proceedings. It states that it is for a particular kind of case, but why would he do it if he had no intention of making use of the opportunity to provide the extra advice?

[Baroness Brinton]

Might it not be helpful to consider which proceedings ought to have a panel rather than a judge sitting alone? Picking up the point I made earlier about diversity, particularly where there is a claim of discrimination or of inequality of pay, it seems to be an obvious example of where diversity on a panel might provide sage advice as well as reassurance to both parties that diversity is being taken into account.

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[Lord Brooke of Sutton Mandeville]

My Lords, this intervention is not intended to be unhelpful or mischievous, but I cannot help remarking that in earlier amendments there has been heavy concentration on there being equal representation on both sides. I notice that there is the possibility of a legal representative in the procedure recommended by the amendment. However, I am not sure what powers that that gives the employer if the employer wants to have a legal representative there as well.

I realise that there are two answers to this. One is that of course the employer would be entitled to have a legal representative there because he was the employer. Alternatively, to go back to what the noble Lord, Lord Monks, said about the introduction of silks into the case—about which I am in no way sensitive—there seems to be a feeling on the part of those who have propounded the amendment that if there is going to be a legal representative for the employee, they totally understand that the employer will have one too. However, the absence of those words might otherwise be used against the interests of the employer in the discussion that was taking place.

[Lord Deben]

My Lords, I declare an interest as an employer. I make the point that these discussions are much better done on the relevance of the facts and the nature of the argument. I really could not listen to the comments about Mr Beecroft without suggesting that the idea that we should discuss this as if it were “Beecroft-lite”—I think that was the phrase—rather than as a proposition to be properly discussed for its nature is rather a sad thing. If people are talking about “Beecroft-lite”, I must not be moving in the right circles; I have heard no one use such a phrase.

The real issue is: do we have the right balance at the moment? Is it sensible or not to allow employers, in circumstances where this seems to be a better answer, to offer, not impose, an arrangement that includes a payment of this sum? It seems a perfectly reasonable suggestion, and we should not be arguing about it because someone we do not like did not suggest it but suggested something else, and now a Government we do not like are actually bringing forward something different and it might be rather close to that. Frankly, that is not a very good argument. We have to have an argument about the facts; and the facts seem to be that this is a moderate change that would in many circumstances be very convenient for both workers and employers.

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[Lord Young of Norwood Green]

My Lords, I do not want to go over the core arguments about why we are opposed to the direction of travel, to borrow a phrase that the Minister has been using today, but we are. We think it is the wrong direction. We want to undermine the confidentiality. We think it is unfair, unbalanced and inappropriate. Amendment 20H clarifies that settlement negotiations should still be admissible as evidence in a constructive dismissal claim. I shall be interested to hear the Minister’s response. I beg to move.

[Lord Brooke of Sutton Mandeville]

My Lords, on this occasion, I have considerable sympathy with the amendment moved by the Official Opposition. I do not know whether there are particularly reasons why the words “or constructively” are unacceptable to the Government. No doubt they will emerge, but I can understand that there might be circumstances to which this clause would be relevant where unfairness and constructiveness were mutually exclusive. Something might not qualify as being unfair, but could be interpreted as being constructive dismissal, so I have sympathy for why this amendment has been put down.

[Lord Marland]

Of course we all have sympathy with this issue, but we are seeking to ensure that the balance is rebalanced so that the employer has some protection and unfair dismissal is not one-sided, as we and the bulk of employers believe it currently is. We are going over quite a lot of ground that has already been covered.

In response to the noble Baroness, Lady Dean, there is a very clear safeguard for employees. There is a very clear procedure that protects them. She made out that a poor person comes into the room and is told for the first time in his or her life that he or she is going to be put out of work, or that there was potential for that, because you cannot do it the first time. It is three strikes, as the Committee knows. The fact of the matter is that often there is justification. The employee is no longer fulfilling their role, and the employer has come to the conclusion that they cannot carry on fulfilling the task that they were employed to carry out. We have to understand that there has to a balance or the employer is not going to carry on employing.

I have been a significant employer and have seen huge—and correct—changes in the balance in favour of the employee and that there has not been indiscriminate behaviour from the employer. I note that the noble Baroness, Lady Donaghy, was more concerned, not about the big companies to which the noble Baroness, Lady Dean, referred—big companies that can prepare the way and will have had all the legal advice before they call that employee in—but the smaller companies that do not have that advice. They are the ones which do not consult and do not handle the whole programme properly. They are the ones we are all concerned about. Indeed, they themselves should be concerned because they have not prepared in the decent and proper way employers should in handling this very important issue in someone’s livelihood.

As such, we must get the balance right. We must understand that we have to be balanced in our rhetoric and that there are two sides to this, as fundamentally we all do, because all of us in this Room want people to employ more people, do it decently and create livelihoods. All we are trying to do here is establish a slightly better balance. With that understanding I hope the noble Lord will withdraw his amendment.

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[Baroness Brinton]

I am sorry, I am trying to stand up but I am not very fast. I want to add to the comments made by the noble Baroness, Lady Turner of Camden, about matters other than straight salary. The pension pot is one of them, but there are others that need to be taken into account, and I wonder if this has been overlooked or if it is intentional. If it is intentional, I would have real concerns, particularly about some of the pension issues.

[Lord Brooke of Sutton Mandeville]

My Lords, I hope the Minister will regard this as a late contribution to his consultation, but since the academic research on which it is based is 50 years old, and I have no idea whether it has been updated, he does not need to take it very seriously. I recall that when I set out in business 51 years ago, some very detailed academic research had been done in the context of executives—I am not necessarily talking about the shop floor—which found that each employee had a particular gradient for the ascent of their salary. If they went above a figure, whatever the figure was on the line, they were highly likely to fail. If they went below it, they were highly likely to seek another job. The research was sufficiently comprehensive to be an interesting observation and contribution to the process.

[Lord Deben]

My Lords, I will make a simple statement. We have to get an atmosphere in Britain in which employers are less frightened of taking on more staff. I have to say to the Opposition that, if you are an employer, for a long time now there has been a general feeling that you are better off not increasing the number of people you employ. Some of us have fought against that and employed more and more people, but it is not a general trend. I think the Opposition, and particularly the Trades Union Congress have got to come to terms with this psychological fact. It is important for employers to feel that the problems that may open up for them if they make a mistake in employing someone are at least reasonably limited. That is why the Government’s approach in this Bill is absolutely right—it simply, delicately and very slightly seeks to shift the balance so that employers begin to feel that there is a real reason for them no longer to be afraid.

The trouble is that, in this whole discussion, there are 200 years of accumulated dislike of the concept of employers. I find that very hard to understand. The noble Baroness, Lady Turner, speaking from the TUC brief and from a long history as a negotiator, could hardly hide from us the feeling that people ought to employ people and that they will do it automatically. The truth is that we have found, over the past few years, an increasing reluctance to employ, although we ought to have a society in which we restrain our use of material resources and extend our use of human resources. That is what sustainability actually means. However, to do that you must have a format within which people are not so worried that they do not employ.

The very moderate steps being taken here are essential if we are to see an increasing number of people in employment. The unemployment figures are much better than many thought they would be, and I think this Bill will help. If it helps, then it will do more good for the working people of Britain than anything else. I am very unhappy that the Opposition are suggesting that the Bill is in some way anti the workers in factories and businesses; it is not. It is a mechanism to get more people into jobs by removing the feeling that employment is too dangerous an activity to step further into than you really have to. That is the change we have to make and we need to make it now.