Small Business, Enterprise and Employment Bill

Stephen Lloyd Excerpts

Wednesday 16th July 2014 Commons Chamber

[Stephen Lloyd (Eastbourne) (LD)]

I totally applaud clause 136, which will penalise people who do not pay what they are due when they lose a case at an employment tribunal. One of my concerns, though, is that it is not clear that the employer pays the penalty to the employee who won the case before going to the state. I would be grateful if my right hon. Friend clarified that.

[Vince Cable]

Perhaps I can correct a matter of fact. There is a penalty, and that is absolutely right: it is outrageous when somebody who has had a tribunal award made against them simply does not pay it. There will be a penalty, but it will go to the Government, not to the individual.

[Stephen Lloyd]

My concern is that given how the provision is framed, it is possible that the recalcitrant employer could pay the penalty to the Government and not pay the employee what they should have received.

[Vince Cable]

Any employer foolish enough to go down that route would find themselves subject to multiple penalties and, eventually, to contempt of court if they were clearly malicious in their intention. I understand where my hon. Friend is going with this, and he might wish to pursue it in more detail in Committee.

The final employment aspect of the Bill relates to whistleblowing. If something is amiss in a company, those who step forward and blow the whistle take risks by doing so, and they want an assurance that action will be taken. Last year, a report by the university of Greenwich and Public Concern at Work found that 75% of whistleblowers expressed frustration that nothing was being done about the wrongdoing they reported. This is clearly unacceptable. The Bill will require “prescribed persons”—usually regulators—who deal with whistleblowing to report annually on reports received and actions taken, while maintaining confidentiality obligations for the whistleblower. In that way, we want to improve the general standard of best practice around whistleblowing procedures.

Company transparency has been one of the key themes of our work in Government over the past few years, including in relation to reforms of narrative reporting, reporting on executive pay, and, more recently, the directive relating to the declarations on natural resource payments. I now want to introduce measures that strengthen the provisions on corporate transparency. I will start with an area for which we have not previously had an opportunity to prepare the House. We have discussed the Bill with Opposition Front Benchers and with others, but this issue will be new to them, and it is important that we show them that courtesy. The issue relates to takeovers. I have made it clear publicly that we need to take action in this area that may well—not certainly, but very probably—involve legislation for which this Bill would be the vehicle. The approach we are adopting is that we continue to welcome inward investment as being good for the country.

We also continue to welcome merger activity as a normal part of market processes, although I have to say that the evidence on the benefits of mergers is somewhat ambiguous. What emerged as a result of the recent high-profile case of AstraZeneca and Pfizer was a lack of clarity around the enforcement of assurances. The approach we adopted in Government was to talk to the company where issues of wider public interest were involved—it was clearly involved in extensive research and development activity—to seek assurances. That is what should happen, but then the issue arises of how we make sure that any commitments given are clear and, absolutely crucially, binding. In order to ensure that that aim is realised, we are currently talking to the Takeover Panel. Legislation may well also be necessary to underpin cases where a commitment is not honoured. I will bring these proposals back to the House in due course.