The Committee deliberated.

[Adjourned till Tuesday 20 January at Ten o'clock.

The Committee deliberated.

[Adjourned till Tuesday 27 January at Ten o'clock.

The Committee deliberated.

[Adjourned till Tuesday 3 February at Ten o'clock.

The Committee deliberated.

[Adjourned till Tuesday 17 February at Ten o'clock.

The Committee deliberated.

[Adjourned till Tuesday 24 February at Ten o'clock.

The Committee deliberated.

[Adjourned till Tuesday 3 March at Ten o'clock.

The Committee deliberated.

Draft Report, proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.- (The Chairman.)

Paragraphs 1 to 8 read and agreed to.

Paragraphs 9 to 16 read.

Motion made, to leave out paragraphs 9 to 16 and insert the following new paragraphs:

"Transitional arrangements

9.  Under the proposed Order, those workers who currently pay their union subscriptions by check off will no longer need to re-authorise continuing deductions on an indefinite basis. Instead, it is proposed that employers issue a prescribed notice[43] to all affected workers to inform them that authorisations for payments will be treated as being for an indefinite period and that increases in the amount payable will be allowed without prior notice. These conditions will be taken to have been accepted unless the notice is signed and returned by the worker within 14 days, in which case (as the prescribed notice specifies) authorisation of payments will continue to be limited to a three year period and the requirement for advance notice of any increase in deductions will be retained.

10.  We asked the Department whether the provision to allow individuals to opt to retain both the existing limit of three years on authorisations and the requirement for advance notification of increases would create a dual system, causing confusion and disproportionately reducing any prospective administrative and financial savings.[44] This point was also made by the TUC.[45] The Department conceded that the transitional arrangements would create two categories of workers operating check off - those who wished to have their current authorisations treated as indefinite and those who did not.[46] However, it reported that very few workers were expected to opt to retain the old requirements and also that the authorisations of those workers who did opt to retain the old requirements would be limited to, at most, a further three years. After that time, the employer would be free to make it a condition of any subsequent authorisation that it be for an indefinite period and that notification of increases in deductions need not be given by the employer. Therefore, in no more than three years, the employer would be in a position to insist that all check off authorisations were indefinite. Any inconvenience caused by a dual system would be extremely limited. We agree with the Department that it is "right and proper" to give workers the option to retain the terms of their existing authorisations,[47] and believe that it is appropriate that the proposal provides for workers to be informed of the change in legislation.

11.  We also expressed concern that the prescribed notice to be sent to workers under the transitional arrangements was excessively complicated.[48] We invited the Department to comment on a simplified draft of the notice[49] which they agreed to adopt with minor modifications.[50] We are grateful to the Department for undertaking to amend the prescribed notice to make it less confusing.

12.  A number of respondents to the consultation document, including Rowley Ashworth Solicitors and the TUC, argued that the proposed transitional arrangements were unnecessary. The TUC argued that no existing authorisation forms referred to a three year limit and authorisations given by workers should be regarded as being intended for an indefinite period.[51] They believed that repealing the existing requirement would simply lead to all existing authorisations becoming indefinitely valid. They provided us with a selection of texts from current authorisation forms used by some of their larger affiliated unions, none of which made reference to any three year limit. Rowley Ashworth Solicitors also noted that they were not aware of any authorisations that had been confined to a limited period.[52] They too argued that if the requirement for re-authorisation every three years were to be removed, then authorisations should be seen to be indefinite.

13.  The Department acknowledges that few, if any, of the authorisations given since the 1992 Act came into force explicitly limit authorisations to three years, but it believes that in many cases employers have not retained copies of the authorisations and the exact text is not known.[53] It also takes the view that at least some of the authorisations given under the requirements of section 68 of the 1992 Act could be argued to be subject to an implied limit of three years because they were given under legislation that specified a three year limit on their duration.[54] Workers who gave their authorisation in the light of that legislation can not be assumed to have authorised more than the law allowed at the time. The Department is concerned to avoid the possibility of a worker seeking to establish, some period after the proposed Order comes into effect, that his or her authorisation should have been limited to a three year period and claiming that all subsequent deductions were therefore unauthorised. The employer would then be liable to pay back all the relevant contributions. The Department believes that the proposed transitional arrangements would avoid this possibility and are therefore justified.

14.  Although they believed the transitional arrangements to be unnecessary, Rowley Ashworth Solicitors recommended an alternative form.[55] They suggested that existing authorisations should expire after three years unless, before that time, the worker concerned received a notice that check off arrangements would continue indefinitely and that prior notice of increases in deductions would not be given. This suggested system would not give workers the option of retaining the three year limit on their authorisation; the authorisation would be indefinite unless the worker concerned instructed the employer to terminate deductions. The Department argued that employees who wished to continue the effect of existing authorisations should be allowed to do so.[56] We accept this argument, and we believe that the proposed transitional arrangements are necessary to remove legal doubt."- (Mrs Jacqui Lait.)

Motion made, and Question put, That the paragraphs be read a second time.

The Committee divided.

Paragraphs 9 to 16 agreed to.

Paragraphs 17 to 30 read and agreed to.

Several papers were ordered to be appended to the Report.

Resolved, That the Report be the Third Report of the Committee to the House.

Ordered, That the Chairman do make the Report to the House.

44  Evidence, page xxi. Back

45  Evidence, page xxxix. Back

46  Evidence, page xxiii. Back

47  Evidence, page xxxix. Back

48  Evidence, page xxi. Back

49  Evidence, page xxxvi. Back

50  The re-draft of the prescribed notice is printed at Evidence, page xl. The Department have agreed to make an additional minor amendment; to leave out "is no longer required to" in line 4, and insert instead "need not". Back

51  Evidence, page xxviii. Back

52  Evidence, page xix. Back

53  Evidence, page xxxvii. Back

54  Evidence, page xxii. Back

55  Evidence, page xix. Back

56  Evidence, page xxxvii. Back