Lord Marland
Main Page: Lord Marland (Conservative - Life peer)Enterprise and Regulatory Reform Bill
Lord Marland Excerpts(11 years, 5 months ago)
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Baroness Brinton
My Lords, I welcome Clause 14, which inserts new Section 12A, but would like to assert the importance of Amendment 20L. New Section 12A(1) allows an employment tribunal, having found that an employer has committed an aggravated breach of workers’ rights, to order penalty payments to the Secretary of State regardless of any previously established financial awards. While this is a just measure, we must not neglect the legal rights and needs of those who find themselves unemployed and faced with their former employer’s insolvency while still owed back pay, expenses or other reimbursements. Under subsection (1) as it stands, employees whose rights have been breached by their former employer would not necessarily receive compensation until after the Treasury, which as primary creditor would receive the penalty for the employer’s infringement before the employees got their redundancy pay. Thus the compensation of workers wronged by their former employers would be secondary to and potentially diminished or even eliminated by the amount paid to the Secretary of State when a company is insolvent and funding is finite. This would obviously be unfair to the former employees of an insolvent company who faced jarring transitions in their finances and everyday lives.
Amendment 20L would cancel subsection (1) where an insolvency officeholder had been appointed. This sensible measure would ensure that employees, as creditors, had primacy in receiving financial redress from an insolvent company. This is an important step to protect workers’ rights. When a company becomes insolvent, tens of thousands of people may become unemployed through no fault of their own, and these people are legally owed compensation, which could also provide much needed fiscal support. If we are genuinely to protect workers’ rights, we should support this Bill with Amendment 20L.
I also support the principles of Amendment 20PA, for the reasons that the noble Baroness, Lady Hayter of Kentish Town, has set out.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
Good afternoon, my Lords. I hope that your Lordships all had a good weekend break. I am very grateful to the noble Baroness, Lady Hayter, for putting forward this amendment. As she rightly said, R3 has been working closely with our officials to find a way forward in this important part of the legislation and to try to find a modus operandi—or modus vivendi, whichever one wants to call it—to create the right effect.
I am grateful to my noble friend Lady Brinton for saying that the principle is the right course, and I think we all agree on that. However, as I think most people would agree, the problem lies with the practicality of this. The practicality is that an employee goes to a tribunal suing for wrongful dismissal and the company goes bust. It therefore has no money to pay anybody—in theory, that is why it has gone bust—and there is no right of recourse. I think that my noble friend Lady Brinton was right when she said that we would want to ensure that that wronged employee was very high up the pecking order in attracting revenue from the residual of the company’s assets.
I assure my noble friend that employees have rights equal to those of other creditors. There was some mention that the Exchequer sat ahead of them. The Exchequer does not sit ahead of employees in rights, so it has rights equal of those of the employee. I fear that it is slightly like banging one’s head against a brick wall in that, if nothing is left over in the tin, no one is going to get anything—not the Exchequer, not the suppliers and not the good staff, who have not been paid. That is the problem with this issue. Of course, everything is prefaced by the fact that the tribunal judge knows what is going on and so uses his discretion. It is right that he is empowered to use his discretion in finding out the state of the company to see whether there is going to be money in the tin, quite rightly, to pay this wronged individual.
For the company, £5,000, which we agree is a reasonable figure, is not enough to impact on whether or not it goes into liquidation. It is a small amount in terms of that overall decision and so is not going to be the driver that stops the company trading. Although we are sympathetic to this issue, in our view it is almost impossible to be prescriptive about it, and therefore I do not see how this amendment would work.
Similarly, with Amendment 20PA, there is already a list of four prescriptions for determining the unfitness of directors. If we start adding to that list at this point, where do we stop? Out of a board of 15 directors, is there one director who has failed to behave properly, and should we therefore take action against all directors? Should we expand this prescription, which came into force in October 2009 under the previous Government and which we supported at the time? I just do not think that at this point it can be limited to one director, despite the fact that I see the direction of travel of the noble Baroness.
I also want to say again that the judge at the tribunal will take into account the misbehaviour of a director when making his award. That is his job. He will see the evidence, which will be presented to him openly and fairly, and he will take that into account in his award. I acknowledge the difficulty and problems that we have with this particular aspect, and acknowledge and thank those who have said that it is the right direction of travel, but with this provision we would make it too prescriptive for ourselves. We continue to talk to R3, and we will continue to talk to the noble Baronesses about this as we go into Report. On that basis, I hope that the noble Baroness feels that she can withdraw her amendment.
Baroness Brinton
I ask for some clarification. The Minister said that the tribunal judge will obviously have a discretion, and I absolutely accept that point. However, the amount could be considerably more than £5,000. New Section 12A(1) refers to each worker involved, and I referred in my speech to a large organisation going bust. Even at the minimum of £100, if thousands of people lose their job, the penalty will still be quite a large sum that could take precedence over redundancy pay.
Lord Marland
We will pick that up in another part of the Bill, on the award, where the penalty is 50% of the award per employee. We have tabled amendments on that point. We can debate the point then, if the noble Baroness is satisfied with that.
Baroness Hayter of Kentish Town
I thank the noble Baroness, Lady Brinton, for her support. I find it hard to thank the Minister because I do not think that he has really quite got the point. These companies are already in insolvency, so the question of whether to take into account whether they will continue to trade is not the point; the point there is whether they will be sold on.
What is the purpose of a penalty against the directors who are no longer running the company? I cannot see the point of that, and I do not think that the Minister answered the question. We are talking about penalties, not awards to employees. Although the Minister is correct that they will rate on holiday pay, redundancy and, I think, sick pay—I need help from an expert on that—if money is due into the pension scheme, that would not rate higher than a penalty due to the Secretary of State. There will be other employee interests that could be damaged by this.
I am slightly surprised that the Government feel any need to put a penalty against a company for a transgression when the people concerned are no longer there. We will bring this back in due course, but, for the moment, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
Amendment 20M would remove the requirement that a financial penalty be set at 50% of the amount of any compensation awarded. We support the provision to levy an additional fine on employers where they have been found to have breached an employee’s rights and there are so-called aggravating features. We hope that this will act as a further deterrent to rogue employers. However, when considered in the context of the main thrust of the Government’s changes to the employment rights landscape, such as the increase in the unfair dismissal threshold to two years and the extension of new settlement agreements, all of which will make it easier for employers to get rid of workers without following proper process, I am not optimistic about the difference this will make. We have some questions over the practical detail of this provision—for instance, what will be considered an aggravating feature, and the impact that it might have on speed of payment of compensation? However, we will discuss those issues in later amendments.
This is a simple probing amendment to understand further the Government’s thinking behind setting the level of fine at 50% of any compensation awarded. We are not strictly opposed to this being the level set but it seems overly prescriptive in that, earlier in the clause, the Government have already set out the parameters for the amount that an employer may be fined under this proposed new section.
We understand that it is important that employers have certainty about the level of fine that they might face if a claim is upheld. However, we would have thought that setting the minimum and maximum levels of penalty at £100 and £5,000 was a more than sufficient guide to employers about what they might face. What is more, if the Government are still anxious about clarity we would have thought that their first priority would be to produce guidance on what will be considered an aggravating feature. I beg to move.
Lord Marland
My Lords, this is an amendment that my noble friend Lady Brinton was also alluding to. It is a very reasonable probing amendment. What we are building on here is the Labour Government’s legislation, which we supported. I am grateful that the noble Lord, Lord Young, has indicated that he is broadly supportive of the direction of travel. We are trying to have here an award of 50% of value rather than an arbitrary figure of between £100 and £5,000—£100 being the floor and £5,000 being the ceiling. There is therefore a consistency of approach, as you would get an award of 50%.
I would like to move on to the question that I said I would answer from my noble friend Lady Brinton. In the case of multiple cases against the same employer, this clause provides for the tribunal to impose a penalty of varying amounts up to a maximum of 50% for each employee, unlike single claims where the penalty must be 50% of the value of the award. I notice that my noble friend is nodding so it is not as clear as mud but absolutely crystal clear to her, which is of great benefit to me because she has greater experience of this than I. It is perfectly reasonable and fair that we should have a 50% award and that we do not have arbitrary figures. I know that the noble Lord, Lord Young, believes that that is fair. On that basis, having clarified our position, I hope that the noble Lord is able to withdraw his amendment.
Lord Young of Norwood Green
I asked what would be considered an aggravating feature and about the impact it might have on the speed of payment of compensation, but the Minister did not return to the point.
Lord Marland
That is a perfectly reasonable question, and I know that the noble Lord is asking me a question to which he knows the answer—as he often does, because he knows a lot about these things. We cannot be prescriptive about aggravating speeches—sorry, I meant aggravating features. We do not intend to supply that but we have a list of examples which is in the Explanatory Memorandum. I feel sure that things such as deliberate or malicious acts, et cetera, would satisfy the question to which the noble Lord knew the answer before he asked me.
Lord Young of Norwood Green
Such cynicism so early in the day. All I can say is that we will take into account the Minister’s response. I am not saying that we are fully satisfied with it—we may return to the issue on Report—but, for the moment, I beg leave to withdraw.
Lord Marland
First, I would like to make a couple of points on training, which is of great interest to the noble Lord, Lord Young of Norwood Green. We all agree that training is absolutely fundamental and his knowledge, expertise and commitment to it are very high. This Government have spent a huge amount of money on training, on mentoring and on various other things. We must be getting something right because a million new jobs have been taken on board in the past two years in the private sector. We do not have a load of people running away from employment. It demonstrates clearly that, with unemployment going down and employment in the private sector going up, the policies that we have created to foster employment are working and seem to be working satisfactorily. I do not think that this is a block to training or ongoing employment. The noble Lord would have been right to point it out had this Government not been keen that we should do it.
Let us be fair. All of us are keen that employers should meet their obligations to their employees. That is what we are all here for. None of us is here saying that we want to withdraw this and that. We are arguing around the margins. Throughout this, as I have also argued, ultimately it is up to the tribunal. As we have said, and as the noble Baroness, Lady Turner, has rightly said, a tribunal is the last place where we want things to go to. We want them to have gone to ACAS beforehand, as we have previously agreed, and we want the employer and the employee to have sorted it out by themselves. I am compelled by the point made by the noble Baroness.
Ultimately it is the tribunal that will be making the decision if it gets to that point. We hope that it does not. It will ultimately determine whether there are aggravating features and we cannot be too prescriptive about aggravating features. Paragraphs 86 and 87 on page 18 make it clear how we see this. With that, I rest my case, other than to say that these tribunals have it in their power to take these issues into account. They can uplift the award by 25% should they so wish and we would obviously urge them to do so because we all want to see the right and fair things for employees and employers. With that I hope the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
The Minister has still not addressed our main concern. I do not deny that the Government are spending significant amounts of money on training and we welcome that. Our concern is the worrying statistic produced by the Chartered Institute of Management which says that only one in five managers have any training. That is a worrying statistic. The purpose behind the amendment was to give a clear signal to employers that if they persist in failing to train their managers or having proper procedures they will pay a price. While we beg leave to withdraw the amendment, we will consider returning to this on Report.
Lord Young of Norwood Green
My Lords, Amendment 20N follows on from the previous amendment in that it also deals with unpaid compensation. This amendment would allow the tribunal, in making an award on a claim, also to specify a date by which that award should be paid, to be no later than a month following the decision. In addition, it would allow the Secretary of State to bring forward regulations to charge interest on any award that remained outstanding beyond the payment deadline specified by the tribunal.
On Report in another place, the Minister said in relation to unpaid awards that the Government are,
“consulting on two changes that I believe might have some effect on the number of awards paid promptly. They include proposals to put a date on a tribunal’s judgment specifying when payment should be made and to charge interest from the date of judgment where an award is unpaid after 14 days. These charges will apply to all cases, not just to unfair dismissal cases. Importantly, in that scenario the interest will be added to the award and paid to the claimant”.—[Official Report, Commons, 17/10/12; cols. 344-45.]
That consultation closed on 23 November. Therefore, I am very keen to hear from the Minister the Government’s findings in relation to this important issue and whether they will accept the opposition amendment that seeks to bring into effect a new power to ensure that compensation is paid to the individual. I beg to move.
Lord Marland
Of course we are in great harmony, even though I am sure I shall have it thrown back in my face. The consultation ended in November and we are about to publish the information. Incidentally, when we have established our response, I shall be very happy to have a private meeting with the Opposition—of course, there is no reason why it should be with just the Opposition; it should be with any noble Lords in this Room—to discuss the various aspects of this issue, and my officials will be at your Lordships’ disposal. I do not have the information to give the Committee chapter and verse right now but we will give noble Lords chapter and verse before we get to the next stage of the Bill.
I acknowledge that there is a problem with enforcing awards. With that in mind, and in order to recognise to some extent noble Lords’ interpretation of this matter in tabling this amendment and the reference to it at Second Reading by my noble friend Lord Razzall, we are going to commission some research before Christmas. We are about to appoint someone, who will report on the subject in April. We totally acknowledge that this needs to be right. All of us in this Room share the same concerns, and we are committed to going along the same path together. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
My Lords, I welcome the invitation to discuss the issue with the Minister following the consultation. In the light of that assurance, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, this amendment follows on from the previous amendment and provides for the tribunal, when making an award on a claim, also to specify a date by which that award should be paid, to be no later than a month following the decision. It also allows the Secretary of State to bring forward regulations providing for the payment of interest on any unpaid awards. I would welcome the Minister’s response. I beg to move.
Lord Marland
Again, I think that I largely responded to this amendment in my comments on the previous amendment. We will be publishing our findings and are assimilating them at the moment. We have committed to publishing them in February, which we will do, and I do not really want to go into too much detail now. I am happy to talk about the whole issue at large with anyone who would like to know about it, and I hope that that answers the question raised by the noble Lord.
Lord Young of Norwood Green
My Lords, I think that that leaves us in the same situation we were in on the previous amendment and, again, I welcome that assurance. In the light of that, I beg leave to withdraw the amendment.
Lord Marland
My Lords, I have been very interested in the whole discussion on whistleblowing. I thank the noble Lord, Lord Touhig, and his team for their input to our thinking in the past few weeks. It has shed light on a number of issues that we will deal with later in his amendments, which are well thought out and on which we are coming to a conclusion. I want all Peers to know how important we believe this matter to be and how important it is to get it right. We are all singing off the same hymn sheet and obviously want to protect the whistleblower, and that is very much part of what we want to do.
My concern is that the amendment would narrow the whistleblowing provision. Public interest is critical: that is the primary thing rather than breach of contract. The noble Lord, Lord Young, has thrown up a number of examples of breach of contract and we could counter with examples showing where it does not quite work. I am delighted that the noble Lord, Lord Borrie, has just arrived because he is the one we have looked back to in coming forward with this. I wanted to look this up when we first embarked on this issue: at Second Reading on 11 May 1988—we were only children then—the wisdom of the noble Lord, Lord Borrie, had been honed to absolute perfection in the Public Interest Disclosure Act. I shall not read all of his speech but the following words are spot on. He said:
“As I hope I have made clear, this measure will encourage people to recognise and identify with the wider public interest and not just their own private position”.—[Official Report, 11/5/98; col. 891.]
I consider that in returning to contract people would identify with private position rather than the wider public interest. That is the seriousness of the threat. My view and that of the Government has not changed since then—I have given only an extract from an excellent speech—and I believe that we should carry on on that basis. I hope that will encourage the noble Lord to withdraw his amendment.
Lord Borrie
It is hardly for me to criticise when the Minister has quoted from a speech of mine in the most favourable terms, but the debate was in 1998, not 1988.
Lord Marland
I apologise. Of course, the noble Lord’s wisdom had been honed even further by 1998, which gives the speech more gravitas.
Lord Young of Norwood Green
I thank the Minister for his response. We will read Hansard carefully to see whether we need to return to the issue. I beg leave to withdraw the amendment.
Lord Marland
“(2) Section 43K of that Act (extension of meaning of “worker”) is amended as set out in subsections (3) to (8).
(3) In subsection (1)(ba)—
(a) for “section 84 or 100 of” substitute “section 83(2), 84, 92, 100, 107, 115(4), 117 or 134 of, or Schedule 12 to,”;(b) for “section 42 or 57 of” substitute “section 41(2)(b), 42, 50, 57, 64 or 92 of, or Schedule 7 to,”;(c) omit the words after “the National Health Service (Wales) Act 2006”.(4) In subsection (1)(bb), after “section 17J” insert “or 17Q”.
(5) In subsection (1)(c)—
(a) for the words before “in accordance with arrangements” substitute “works or worked as a person providing services”;(b) in sub-paragraph (ii), after “section” insert “2C, 17AA, 17C,”.(6) Omit subsection (1)(ca) and the preceding “or”.
(7) Omit subsection (2)(ba).
(8) After subsection (3) insert—
“(4) The Secretary of State may by order make amendments to this section as to what individuals count as “workers” for the purposes of this Part (despite not being within the definition in section 230(3)).
(5) An order under subsection (4) may not make an amendment that has the effect of removing a category of individual unless the Secretary of State is satisfied that there are no longer any individuals in that category.”
(9) In section 236(3) of that Act (orders etc subject to affirmative resolution procedure), after “shall be made under section” insert “43K(4),”.
(10) In consequence of the amendments made by subsections (6) and (7), omit paragraph 7(a)(ii) and (b) of the Schedule to the Smoking, Health and Social Care (Scotland) Act 2005 (Consequential Modifications) (England, Wales and Northern Ireland) Order 2006 (S.I.2006/1056).
(11) Until the coming into force of the repeal (made by Schedule 3 to the Smoking, Health and Social Care (Scotland) Act 2005 (asp 13)) of sections 27 to 28 of the National Health Service (Scotland) Act 1978 (“the 1978 Act”), section 43K(1)(c)(ii) of the Employment Rights Act 1996 has effect as if it included a reference to section 27A of the 1978 Act.”
Lord Marland
My Lords, government Amendment 21 aims to ensure that the right people are covered by the whistleblowing protections and amends the definition of “worker” in Section 43K of the Employment Rights Act 1996.
Following National Health Service reforms, certain health professionals have been inadvertently excluded from whistleblowing protections as their contractual agreements are not covered by the existing definition of “worker” in the legislation. We believe that it is important that this situation is rectified, so we are amending the definition of “worker” to cover these individuals. We are also taking a power to ensure that future amendments to the definition of “worker” can be made through secondary legislation. This will provide us with the flexibility to react promptly to ensure that the right individuals are protected.
I trust that noble Lords will support this move which remedies an inadvertent omission and ensures that health workers are properly protected. I beg to move.
Baroness Turner of Camden
My Lords, I understand from the Government’s statement and from what the Minister has said that the intention is to ensure that people who ought to be covered by the Act in future will in fact be covered. What bothers me about it, however, is Clause 4, which gives the Secretary of State the right to make amendments as to what individuals count as workers for the purpose of this part. It seems to me that that leaves the whole thing fairly wide open as far as the Government are concerned: they would be able to introduce secondary legislation to indicate that some people are workers and other people are not workers. That is a bit of a difficulty as far as we are concerned.
As far as the clause itself is concerned, it had been my intention to move that it should be opposed, mainly because the TUC’s view is that the wording as it now exists in the Bill introduces a public interest test into whistleblowing rights and, for such claims to succeed, the employee will have to demonstrate that he believed that disclosure was in the public interest and that this belief was reasonable in the circumstances. The view of the TUC was that this would limit the protection that employees have in raising concerns about health and safety issues at work. The Law Society also has doubts about this clause. For these reasons I intended to oppose the clause. However, my noble friends have further amendments which we are due to discuss and which I think will deal with some of the problems that some of us have with this clause.
Of course, I am sure that the Minister will appreciate that it is very important to ensure that workers, particularly those working in very dangerous environments, do not have any restrictions about whether or not they may raise problems they have about health and safety at work. I can remember my own union being very much involved with this many years ago when there was the awful accident at Piper Alpha in the offshore oil industry, in which a number of workers were killed. We discovered on investigation that a number of individuals working there had short-term contracts and, because they had short-term contracts, they were very reluctant to warn about the kind of issues that were of concern to them about safety and so on because they feared that they would not have their short-term contracts renewed.
There is a case for looking at the way that this clause in the present legislation works to ensure that we do cover everybody who might have the possibility of drawing attention to possible dangers in their working environment. We must be absolutely certain that they are not prevented in any way from raising those particular issues. I will not, this evening, be pressing the opposition to the whole clause, but I certainly think that we need to look at it very thoroughly before the legislation leaves us.
Lord Stevenson of Balmacara
My Lords, in the margins of the debate that we have just had the Minister very kindly passed across the original quote from the 11 May 1998 House of Lords Second Reading debate on the then Public Interest Disclosure Bill. I had to read it very quickly because I was not as well briefed as perhaps I should have been when coming to this debate. I want to make a point that I think influences the way that we might need to respond to the clause-stand-part part of the discussion that we are having today.
The interesting thing about this debate is that we are focusing on the words “the public interest”. I suggest to the Minister that it might be sensible to have a discussion about what the Government are trying to do here. Rather than in the openness of this debate, perhaps we could have a side meeting on it. The reason I am saying that is that, reading the speech of the noble Lord, Lord Borrie, one might think that if he made it up as he went along, it was extremely well written. I imagine that he read it out at the time from a brief that he had. The important thing about it—I am sure that the Minister will have been on to this immediately—is that the Minister was selective in what he quoted to us. The noble Lord, Lord Borrie, said that,
“the tribunal must be satisfied that that disclosure was reasonable, having regard, among other things, to the seriousness of the threat to the public interest, whether the danger is continuing or likely to occur again, whether the disclosure was in breach of an obligation of confidentiality owed to a third party and, where appropriate, whether use was made of any whistle-blowing procedure which the organisation had in place”.—[Official Report, 11/5/98; col. 891.]
The noble Lord then went on to make the quote to which the Minister referred.
The point that I want to underline is that the tribunal has to be satisfied that disclosure was reasonable: that is the founding principle of this part of the legislation. “Having regard to” is a secondary feature of that in relation to the seriousness of the threat to the public interest. It seems to me that this amendment substitutes the present arrangements for the reasonableness —having regard to other things—of the seriousness of the threat to the public interest, to a direct concern for “the public interest”, however we define that. It seems to me that in making that rather elegant elision we are in danger of opening a much wider range of issues that need more thought than we can possibly give it in this Committee, which is why I suggest that we have a meeting.
The Minister says that this is ongoing work—we welcome that. He says that it is important—we certainly echo that. He is also asserting, and we would agree with this, that we are singing off the same hymn sheet. So we are surely trying to get to the same place here. I do not think that there is a difference of approach: I just worry that the wording is not as you would do it.
The complexity of this issue is that, as the noble Baroness said very clearly, we all want those who should be covered to be covered by this part of the legislation, but we do not want to have the risk that those who could be covered are not covered by it. I think that that is a really important point. It is in that sense that we would ask the Minister to respond to this and, perhaps, to take up our suggestion of a side meeting.
Lord Marland
I am always available for side meetings to discuss this. I think that the noble Lord, Lord Stevenson, is clutching at straws a little in his interpretation, but then, we each have our own interpretation. I do not see that, at the end of it all, we are going to move this back to breach of contract, to which the previous amendment—which is now withdrawn—related. I am grateful for the noble Lord’s words that we are all trying to move along the same path together. That is why we should continue to discuss this, which would be most welcome.
The noble Baroness, Lady Turner, reminded me of Piper Alpha. I used to be in the insurance industry and that was a seismic event for that industry. How well I remember the loss of life. It was a shocking moment for everybody who was involved in insurance. Luckily those who were worried ended up in jobs because, obviously, the oil industry was able to recover very quickly from that horrendous accident and its expertise was needed.
Both the noble Baroness and the noble Lord, Lord Stevenson, mentioned the list. It is all about definition of “a worker”. We can only remove “a worker” from the definition if that category of worker no longer exists. What we have sought to do in the first part, which I think everyone is very happy about, is to recognise that we have failed to add some workers in. We have put a provision in the Bill to add others in if a worker group does start to exist, and of course we will remove one if they do not exist. It is an ongoing thing, which is why we have provided for that definition.
I am not quite sure where we have got to. Lord Chairman, perhaps with your great wisdom you can guide us. I moved an amendment and I think that the noble Baroness was speaking to her amendment as well as to mine. I ask for guidance, Lord Chairman. I hope that one amendment will be supported and the other will not be pressed.
Lord Geddes
As is normal on these occasions, we take it strictly by the order of the Marshalled List. The question therefore is that Amendment 21 be agreed to.
Lord Young of Norwood Green
My Lords, I, too, support the thrust of what my noble friends Lord Touhig and Lord Wills seek to do with these amendments, which is to extend vicarious liability to whistleblowing legislation. This loophole has been graphically explained to us in the context of three nurses from Manchester who raised a concern about a colleague lying about his qualifications. The nurses raised their concerns within the service and the primary care trust and their concern was upheld. However, as we have also heard, the nurses were subject to bullying and harassment from co-workers. One of the nurses received a telephone call threatening her daughter and to burn down her home. As we have already heard, the case proceeded as far as the Court of Appeal, which found that vicarious liability does not exist in the Public Interest Disclosure Act as it specifically does in discrimination law.
We have also heard that shortly after the publication of the judgment the noble Earl, Lord Howe, the Health Minister, agreed that this area needs to be reviewed. Public Concern at Work reports that it routinely hears on its advice line about harassment and bullying of whistleblowers by co-workers. It is bad news for whistleblowers everywhere if those who are bullied by fellow staff members are not protected and represents yet another barrier that may inhibit workers from raising legitimate concerns, which are in the public interest, over wrongdoing by their employer. The amendment by my noble friend Lord Touhig would introduce a new clause that imposes a duty on employers,
“to take reasonable steps to ensure that the worker is not subjected to any detriment by any act, or any deliberate failure to act, by a person other than his employers done on the ground that the worker has made the disclosure”.
My noble friend Lord Wills proposes a further refinement to this approach, which would be to include personal liability against workers who bully co-workers for blowing the whistle. Such an amendment is likely to have a powerful deterrent effect and will mean that those who may otherwise be tempted to victimise a colleague for blowing the whistle may think twice because of their own potential liability for doing so. Again, this is included in the relevant Equality Act, that of 2010.
These amendments have even more relevance if we look at the current circumstances where the lack of whistleblowing in recent high-profile cases—such as the Jimmy Savile scandal, the high mortality rates under Mid Staffordshire NHS Foundation Trust and phone hacking at the News of the World—suggests that much more needs to be done to encourage and, perhaps even more importantly, protect workers blowing the whistle on malpractice and wrongdoing in the workplace. Workers are the eyes and ears of any organisation and often the first to know if things are going wrong or to have suspicions about malpractice in the workplace. Workers can prevent the disaster from happening and alert their own companies and regulatory authorities to prevent health and safety dangers, financial malpractice and environmental risks that may affect members of the public.
It is over 13 years since the Public Interest Disclosure Act 1998 and we believe that it is high time that the whole system should be reviewed—we would welcome the Minister’s views on that—to identify where further protection is needed to encourage employees to speak out when they see wrongdoing taking place.
Lord Marland
Again, we are extremely sympathetic towards and supportive of each other. It is not just the Cross Benches, the Labour Party and the Liberal Democrats who are keen to get this right but the Conservatives as well. I reiterate my thanks to the noble Lord, Lord Touhig, and Public Concern at Work, with which we are working very closely on this issue. I also thank the noble Lord, Lord Wills, for his input, even though we have not had the pleasure of discussing this subject outside this Room—something that I should like to do in future. I am jolly glad that we included the NHS provision in the previous amendment, because some progress seems to have been made there in view of some of the absolutely ghastly stories that have been referred to.
My noble friend Lord Brooke of Sutton Mandeville brought up a very important point. I am told that under the Interpretation Act “single” means “plural” when necessary, so I do not think that we would need to amend that in the amendment.
I have had wide-ranging discussions with the noble Lord, Lord Touhig, and Public Concern at Work across the whole piece, and those discussions have covered Amendments 23 and 23F, which we will be coming to in a few minutes. We are very conciliatory on all this, and on Amendment 23F, in particular, both parties have formed a set of words to deal with the issue of good faith and so on. I think we have found satisfaction with Public Concern at Work and with the noble Lord, Lord Touhig, so perhaps I may look at the issue as a whole.
We need to be careful when going down this route with Amendments 22 and 23. The truth is that the absence of vicarious liability and whistleblowing is not a loophole because there is legislation that provides for it, and it provides for both the employer and the employee. I am struck, as I always am, by the point made by the noble Lord, Lord Borrie, about the employee having protection as well as the employer. That is fundamental. Indeed, they would both be protected under the Protection from Harassment Act 1997; that is the legislation that they would return to in order to claim their rights. Therefore, they have the right protection in this area. It is a strong law that, sadly, has not encapsulated all the whistleblowing issues, but nothing is ever entirely encapsulated. However, whistleblowers have an absolute right and this amendment would put in another level of protection, which is not in the Bill because it already exists.
We should be looking at improving the guidance on this issue. I have instructed my officials to look at the guidance that we are putting on the government website to show where the rights of recourse are and what rights the employer and the employee have under the interpretation of the Protection from Harassment Act. This will be on our gov.uk website. On the basis that we will have an ongoing discussion between now and Report, I hope that the noble Lord will feel confident about withdrawing his amendment for the time being.
Lord Wills
Can the Minister clarify something for me? I am very grateful for his openness and willingness to carry on a discussion about this but I should be grateful to know the Government’s position on what Lord Justice Elias said in the Manchester case, which we have heard about. I accept that it is a qualified statement but he said he accepted that the claims lawyers,
“may be right to say that if the Tribunal decision is allowed to stand, it means that on one view of the matter whistleblowers are inadequately protected. If so, any remedy must lie with Parliament”.
On the facts of that case, is it the Minister’s view that whistleblowers are or are not inadequately protected?
Lord Marland
I do not have a view because I do not have enough knowledge of the subject. As the noble Lord rightly said, he is quoting a small piece that I am unable to form an opinion on because I do not have enough evidence to support one view or another. However, I shall be happy to respond to the noble Lord on that issue. It is a perfectly reasonable question but it is too specific for me at the moment, I am afraid. I would need to take legal advice on it because I am not qualified in that area. I know that that is not a satisfactory answer but I hope that the noble Lord, Lord Touhig, will withdraw his amendment.
Lord Touhig
My Lords, I thank all noble Lords for their contributions. I echo the point made by the Minister; this issue is supported across the House. We are all in the debt of Richard Shepherd MP, who pushed hard to secure this legislation. When I was dealing with it a year or so before, I was not successful, but I should like to put on record the huge support I had from one Iain Duncan Smith, who worked very hard with us to try to ensure that this legislation became law.
I understand some of the Government’s worries and concerns. We have had a useful meeting with the Minister—I have already thanked him for that—and his officials but, at the end of the day, the real prize would be a complete review of the Public Interest Disclosure Act. Aneurin Bevan once said that our principles remained constant but our policies, like tools, have to be reworked with each generation because they get worn out with use. We need to review and revise the Public Interest Disclosure Act.
I hope the Minister and his officials will feel able to continue the dialogue, not only with me but with other noble Lords and Public Concern at Work, because we can improve this legislation by the time we get to Report and Third Reading. With that hope and aspiration, I beg leave to withdraw the amendment.
Lord Marland
My Lords, a lot of what has been said was said in relation to the previous amendments. I am struck by the remark of the noble Lord, Lord Touhig, about the Public Interest Disclosure Act being looked at again. I had probably better be careful what I say but if I blink it is in sympathy. That is not for this Bill or for this moment, but it is a valid point. I am grateful for everything that the noble Lord, Lord Low of Dalston, said as well.
As I said earlier, we are in a number of discussions with the noble Lord, Lord Touhig, and Public Concern at Work, within which we would be happy to embrace the noble Lord, Lord Wills. We are coming up with a form of words that is going through the ministerial process for approval at the moment. The form of words that we desire has been agreed, in principle, between the two groups but it needs ministerial sign-off. We will be going through that process before I can be clearer on that issue. On the subject of Dame Janet Smith’s report, we do not reject her findings at all. We believe that motive is a relevant issue and we are also working with Public Concern at Work on that.
Both these amendments are worthy of consideration and we are considering them, as we are the previous amendments. If I can slightly keep my powder dry for the moment, I am not able to give the Committee a concrete answer except that it is going through the appropriate channels to try and resolve the issue. In the next few weeks—before Christmas, I hope—I may be able to discuss with noble Lords the outcome and agree a way forward, which will help us by the time we get to Report. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Touhig
My Lords, again, I am grateful to colleagues who took part in the debate and in particular to the Minister for his response. It is the season of good will; I am sure that we may have some further good will before we reach Christmas itself but I have no doubts that there is a willingness on all sides to work together here to try to make better legislation. When I had a Private Member’s Bill, I certainly found that the more pre-legislative scrutiny we had the better Bills we made. The way that we are debating this, at the end of the day, better legislation will be coming out of it where whistleblowers are concerned. With those few remarks, I beg leave to withdraw my amendment.
Lord Marland
The noble Baroness speaks with great authority on the subject. Of course, it is a difficult grey area. As we know the Employment Relations Act 1999 (Blacklist) Regulations 2010 already protects individuals but I am struck by what the noble Lord, Lord Young, and the noble Baroness, Lady Donaghy, said. If I may I shall take this away and give it some further consideration outside this Committee and perhaps come back on Report. The noble Lord, Lord Young, is looking surprised now—in fact, stunned—but it is Christmas time. I hope on that basis that he will withdraw his amendment.
Lord Young of Norwood Green
That is why I do not play poker. I am taking into account that it is a Christmas gift from the Minister. I accept his intention in good faith, which is a phrase we have been using, and I beg leave to withdraw the amendment.
Lord Young of Norwood Green
This amendment would place a positive requirement on lawyers advising in the settlement of claims that they advise claimants about their rights to be freed from any contractual agreement with their employer not to disclose certain information where they legitimately seek to make a protected disclosure. Little attention has been paid to the provision in Section 43J of the Public Interest Disclosure Act which outlaws any contractual clause that prevents workers from raising a public interest concern. The cases of Dr Kim Holt and Great Ormond Street Hospital relating to the baby P case—where the trust offered her £80,000 as compensation if she left quietly—and of the former inspectors at the Care Quality Commission giving evidence to the Mid Staffordshire inquiry highlight the need for greater attention to be drawn to Section 43J of the Public Interest Disclosure Act and for there to be tougher enforcement.
The amendment simply seeks to improve awareness among workers over their rights as whistleblowers by placing a simple requirement on any legal officer advising them over their case to make them aware of those existing rights under the Public Interest Disclosure Act. I therefore hope that the Government will look favourably on this amendment as a simple change that would help improve the application of the existing Act. I beg to move.
Lord Marland
My Lords, I am grateful for this probing amendment. However, I am not convinced that we need to go this way because we already have legislation in place. Section 43J of the Employment Rights Act 1996 provides that any term in an agreement which precludes a worker from making a protected disclosure is void. Furthermore, all lawyers have a duty of care to advise their clients properly on all aspects of the law, whatever the situation. That is their duty of care and, if they do not apply it, they may be struck off.
I understand the motive behind the amendment but I trust that the noble Lord will acknowledge that there is legislation in place and that it would just be putting icing on the Christmas cake, which in this case is a double layer and not entirely necessary. Therefore, I hope that the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
I will take note of what the noble Lord said and give consideration to that view to see whether we need to return to this issue on Report, or whether we can clarify the matter further in our consultations. On those grounds, I beg leave to withdraw the amendment.
Lord Borrie
I hope the Government are positive about this amendment. Secret justice is inherently evil unless there is some very strong argument the other way such as public security. When this is not the case, the Government will have a very difficult job convincing us that things are all right as they are.
Lord Marland
I have a nasty feeling that I am going to disappoint the noble Lord, Lord Borrie, who of course speaks with a wealth of experience. I have observed tribunals over time, and what I have seen is that when names are published and the press get hold of it, they often put an imbalance into the equation. I believe that giving advance warning of the case means prejudice may build up against either side. This can often be seen in press reports on tribunal cases and I think that is unfair. Of the tribunals I have observed—although not been involved in—that have been reported in the press, there have been many times where I would say at the end of the day the press have taken one side or the other and not given a balanced view—and that is what becomes of a public airing.
No one is saying for a moment that this process should not be transparent but people are saying that there should be fairness. This applies to both parties. We accept the transparency issue but I am afraid that, on this basis and from the experience that we have had, and my experience in particular, I do not think it is fair on either party. As such, it is not an amendment that particularly finds favour despite the fact that we seem to have agreed on most things today and will doubtless continue to do so. In the spirit of Yuletide, I hope the noble Lord will agree—I am looking at his face now because he is playing poker—to withdraw his amendment.
Lord Young of Norwood Green
I cannot say we are particularly happy that Christmas has ended early with the Minister’s response. The best I can say is that we will take this one away and reserve the right to return to it on Report. I beg leave to withdraw.
The Earl of Glasgow
I apologise for interjecting at this stage. My issue is a little bit different but, after a lot of consideration, I did not know where I was going to put it. I consider it a very serious omission regarding the tribunal situation.
Two years ago I knew relatively little about employment law. As a small employer, however, I have recently—and for the first time in 35 years—been taken to a tribunal by one of my employees. This particular issue has been going on now for more than two years. I believe passionately—and this is one of the reasons for this Bill—that we should try to make these tribunals as unnecessary as we possibly can. In my case it is completely or very nearly unnecessary and I think that it is also a very great waste of money.
The Government’s intention is to try to make tribunals as unnecessary as possible. I am very much in favour of having ACAS involved and giving it the extra strength—which is part of the Bill already—to try to make them unnecessary. However, there is an elephant in the room which no one has addressed and which has purposely not been put into the Bill, and that is the question of discrimination.
One of the main reasons why claimants go to a tribunal when they could easily have settled at an earlier stage is that if they can prove discrimination, they can get something like 10 times as much compensation as they would have got if they had settled in the first place. To give an example again from my own case, the lady who I employed was laid off at four months. She thought that it was unfair that she was laid off and thought that someone else should have been laid off instead of her. She came with her union representative and talked to me about it. I made a deal with the union representative that I was going to pay her £1,500 and that was going to be the end of it.
About two or three days later she came back again and said that she was not satisfied with what her union representative had recommended and that she was going to go to a tribunal. It became clear to me that the reason why she was going to a tribunal was that she thought that she could prove discrimination. Discrimination in this case was that she thought that someone other than her should have been laid off and also that, as she had a disabled son, we were not taking enough consideration of her disabled son. This case is still carrying on. It has been over two years and we still have not resolved it. It strikes me as unbelievably wasteful that this thing should not have been settled a long time ago. It is because of this discrimination issue.
I think that the Government and the Minister have decided that they do not want to involve discrimination in this because discrimination is governed by European law. I do not think that we are ever going to be able to cut down drastically the number of people going to a tribunal unless we address this issue of discrimination. A lot of lawyers, or the representatives of some of these claimants, are deciding to go to a tribunal because they think that they are going to get a lot more money because of discrimination. I ask the Minister to consider including at a later stage at least some reference to address this problem of discrimination.
Lord Marland
I am grateful to the noble Earl for giving me advance warning that he was going to raise that issue, and I am happy to deal with it in a moment. First, however, I must deal with the point raised by the noble Baroness, Lady Turner.
I think that there is some misunderstanding here. It is already the case that where a deposit is paid it is always refunded to the paying party unless a cost order is made by a judge. That is the case. Refunds happen whether a case continues to judgment or is withdrawn part way through the proceedings, so there is always the case for recourse. In fact, the Government have accepted Mr Justice Underhill’s recommendations that there should be much more flexibility in the deposit-paying order regime. I hope that the noble Baroness is content that that deals with that issue. I do not know how this misunderstanding happened, but we can certainly talk further about it afterwards.
We recognise that there has been a trend for discrimination claims to obtain large awards. They are trailed as discrimination claims because people think they can get the sympathy of the judge in advance or during the case, because discrimination is not an attractive thing to be accused of—or to suffer from, much more to the point. Therefore, we as a Government are committed, working with the employment tribunals, case-by-case, to see how we can improve that. Obviously, as the noble Earl says, if we follow the procedure of going to ACAS first—and of course ACAS has many more resources and greater teeth, as applies to various earlier amendments—we can deal with this much more vigorously and much more fairly, as the noble Earl rightly seeks. I am happy to discuss the matter with the noble Earl later, as are my officials, but, on the basis of what I have said to the noble Baroness, I hope that she will withdraw her amendment.
Lord Young of Norwood Green
Thinking that I was back in my TUC days, I was almost tempted to make a point of order. The noble Earl was stretching what you can do with an amendment by introducing something that had nothing whatever to do with it. If I look back, I suppose that I have been guilty of that transgression occasionally, but I think that that was taking it a bit too far, as it was for the Minister to respond to it. I say that seriously because, if we are to have a debate about discrimination, let us have a proper debate about it, for which we are prepared. We, too, could evidence all sorts of things.
Lord Marland
The noble Earl gave me notice that at some point he would be raising this issue. We have debated a whole range of issues and I do not think that we need to be unfair and limit any particular issue. I was happy to take the question. I have dealt with it and we will continue to deal with it. I totally agree that it is not in the context of the amendment, but we have had a few things that have not been in the context of amendments. We are a charitable group here. The noble Lord is playing poker again now but he will be in a charitable mood as it is Christmas, and that is why I was happy to deal with the amendment.
Lord Young of Norwood Green
I will not pursue this further but I maintain my point. We roam far and wide in dealing with amendments but, if we want to do something as serious as that, it ought to be on the basis of either an amendment or a debate. I say no more than that. I leave it to my noble friend Lady Turner to deal with her amendment.