Standing Committee E
Tuesday 9 March 1999
(Morning)
[Mr. Peter Atkinson in the Chair]
10.30 am
The Chairman: Before we begin with clause 15, with which we may take Government new clause 5, Government new schedule 1 and the amendments tabled to that new schedule, it may be of assistance to the Committee if I outline the procedure to be followed this morning.
I shall first call the Minister of State to explain why he is inviting the Committee to leave out clause 15 and replace it with new clause 5 and new schedule 1. It is for the Minister to decide whether to address the amendments tabled to the new schedule at the same time or whether to wait until the hon. Member for Daventry (Mr. Boswell) has had the chance to introduce them.
When the debate is concluded, I shall put the question that clause 15 stand part of the Bill, to which I assume Labour Members will vote no. No further proceedings will arise at that point, and we shall move directly to clause 1 and schedule 1. Government new clause 5 will be called formally, as the first new clause, when we reach the end of the Bill. Government new schedule 1 will be called formally after all the new clauses have been disposed of.
Once the new schedule has been read a Second time, and without further debate, I shall invite the hon. Member for Daventry, if he so wishes, to move formally one or mor of his amendments to the new schedule for a Division. I shall then put the question that the schedule be added to the Bill, again without further debate. I hope that that makes the position clear.
Clause 15
Unfair dismissal of striking workers
Question proposed, That the clause stand part of the Bill.
The Chairman: With this it will be convenient to discuss the following: Government new clause 5 Unfair dismissal of striking workers.
Government new schedule 1
{**epUnfair Dismissal of Striking Workers
1. The Trade Union and Labour Relations (Consolidation) Act 1992 shall be amended as follows.
2. In section 238 (dismissals in connection with industrial action) after subsection (2A) there shall be inserted
"(2B) Subsection (2) does not apply in relation to an employee who is regarded as unfairly dismissed by virtue of section 238A below."
3. The following shall be inserted after section 238
Participation in official industrial action.
238A. (1) For the purposes of this section an employee takes protected industrial action if he commits an act which, or a series of acts each of which, he is induced to commit by an act which by virtue of section 219 is not actionable in tort.
(2) An employee who is dismissed shall be regarded for the purposes of Part X of the Employment Rights Act 1996 (unfair dismissal) as unfairly dismissed if
(a) the reason (or, if more than one, the principal reason) for the dismissal is that the employee took protected industrial action, and
(b) subsection (3), (4) or (5) applies to the dismissal.
(3) This subsection applies to a dismissal if it takes place within the period of eight weeks beginning with the day on which the employee started to take protected industrial action.
(4) This subsection applies to a dismissal if
(a) it takes place after the end of that period, and
(b) the employee had stopped taking protected industrial action before the end of that period.
(5) This subsection applies to a dismissal if
(a) it takes place after the end of that period,
(b) the employee had not stopped taking protected industrial action before the end of that period, and
(c) the employer had not taken such procedural steps as would have been reasonable for the purposes of resolving the dispute to which the protected industrial action relates.
(6) In determining whether an employer has taken those steps regard shall be had, in particular, to
(a) whether the employer or a union had complied with procedures established by any applicable collective or other agreement;
(b) whether the employer or a union offered or agreed to commence or resume negotiations after the start of the protected industrial action;
(c) whether the employer or a union unreasonably refused, after the start of the protected industrial action, a request that conciliation services be used;
(d) whether the employer or a union unreasonably refused, after the start of the protected industrial action, a request that mediation services be used in relation to procedures to be adopted for the purposes of resolving the dispute.
(7) In determining whether an employer has taken those steps no regard shall be had to the merits of the dispute.
(8) For the purposes of this section no account shall be taken of the repudiation of any act by a trade union as mentioned in section 21 in relation to anything which occurs before the end of the next working day (within the meaning of section 237) after the day on which the repudiation takes place."
4. (1) Section 239 (supplementary provisions relating to unfair dismissal) shall be amended as follows.
(2) In subsection (1) for "Sections 237 and 238" there shall be substituted "Sections 237 to 238A" .
(3) At the end of subsection (1) there shall be added "; but sections 108 and 109 of that Act (qualifying period and age limit) shall not apply in relation to section 238A of this Act."
(4) In subsection (2) after "section 238" there shall be inserted "or 238A" .
(5) At the end there shall be added
"(4) In relation to a complaint under section 111 of the 1996 Act (unfair dismissal: complaint to employment tribunal) that a dismissal was unfair by virtue of section 238A of this Act
(a) no order shall be made under section 113 of the 1996 Act (reinstatement or re-engagement) until after the conclusion of protected industrial action by any employee in relation to the relevant dispute,
(b) regulations under section 7 of the Employment Tribunals Act 1996 may make provision about the adjournment and renewal of applications (including provision requiring adjournment in specified circumstances), and
(c) regulations under section 9 of that Act may require a pre-hearing review to be carried out in specified circumstances."
Employment Rights Act 1996
5. (1) Section 105 of the Employment Rights Act 1996 (redundancy) shall be amended as follows.
(2) In subsection (1)(c) for "subsections (2) to (7)" there shall be substituted "subsections (2) to (7A)" .
(3) After subsection (7) there shall be inserted
"(7A) This subsection applies if
(a) the reason (or, if more than one, the principal reason) for which the employee was selected for dismissal was the reason mentioned in section 238A(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 (participation in official industrial action), and
(b) subsection (3), (4) or (5) of that section applies to the dismissal.'" .
And the following amendments thereto: (a), leave out paragraph 2.
(b), at the end of paragraph 2, after "below" , insert
`or who is dismissed under common law in connection with an official industrial dispute.'.
(c), in paragraph 3, in proposed new subsection 238A(3), leave out `eight' and insert `four'.
(d), in paragraph 3, at the end of proposed new subsection 238A(3), after "action" , insert
`or, in the case of intermittent industrial action in connection with the same dispute, four weeks from the first day on which industrial action was taken in connection with that dispute.'.
(e), in paragraph 3, in proposed new subsection 238A(5)(c), after "employer" , insert
`, or employee or employees, or a union representing that employee or employees,'.
(f), in paragraph 3, in proposed new subsection 238A(6), after the first "employer" , insert
`, or an employee or employees, or a union representing that employee or employees,'.
(h), in paragraph 3, in proposed new subsection 238A(7), after "employer" , insert
`, or an employee or employees, or a union representing that employee or employees,'.
(k), in paragraph 3, in proposed new subsection 238A(6)(a), after "applicable" , insert
(g), in paragraph 3, in proposed new subsection 238A(6)(b), after "offered" , insert
(i), in paragraph 3, in proposed new subsection 238A(8), leave out `the next working day' and insert `three working days'.
(j), in paragraph 4(5), in proposed new subsection 239(4)(a), after "until" , insert `at least one week'.
The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): Good morning, Mr. Atkinson. That was the best speech that I have heard in this Committee. I have been up all night wondering how we might deal with the matter, knowing that the hon. Member for Buckingham (Mr. Bercow) and others would be at my heels.
I shall speak to clause 15 stand part, and, then to Government new clause 5 and Government new schedule 1. I shall not respond to the amendments to Government new schedule 1 tabled by the hon. Member for Daventry until the end of the debate, and I shall incorporate in my response any additional points raised on the amendments. Those amendments are considerable, however, and they deserve a substantive reply. I hope today to have exhausted our arguments on the questions before us.
Clause 15 extends the right of protection for employees taking lawfully organised official industrial action. That is in line with our pre-election commitments, and it is in response to the International Labour Organisation criticism that United Kingdom law provides insufficient protection for workers.
Our law on strikes and strikers is peculiar to this country. The law gives no explicit right to strike. Instead, it provides immunities from civil action for unions when they lawfully organise strikes and induce others to break their contracts of employment. However, individual strikers can be sued for damages by their employers for breaking their contracts. They can also be dismissed. In practice, it is virtually unknown for individual strikers to be sued, but the threat of dismissal is real enough, given the number of disputes and the possibility of people being dismissed immediately following industrial action.
During the past 20 years, the scope of union immunities has narrowed, as the law on industrial action has become more prescriptive. By and large, those changes have become an accepted feature of our industrial relations system. However, the position of individual workers has remained much the same as it ever was. That is unfair.
The existing law provides inadequate protections for those individuals who exercise their fundamental freedom to withdraw their labour. Our proposals aim to modernise the law in that area, and redress a glaring imbalance. They will provide a fair balance between the interests and freedoms of individuals and employers.
Under the law at present, an employee can complain to a tribunal of unfair dismissal if an employer dismisses or re-engages selectively; however such an employee cannot complain if all the strikers are dismissed. That is illogical, and it provides inadequate protection.
The new right means that it will be automatically unfair to dismiss workers for the first eight weeks of the action. That will deter employers from making precipitate dismissals soon after the action has begun.
In the United Kingdom, there are few occasions on which industrial action leads to dismissal. As part of the process of conciliation, it is normal that employees return to work with no sanctions against them. The clause addresses the cases in which sanctions occur.
Precipitate dismissals are bad in themselves. Moreover, they complicate disputes and usually make them more difficult to resolve. It is no accident that disputes involving dismissals are among the most bitter and intractable to resolve.
Why choose eight weeks? I think that the hon. Member for Eastleigh (Mr. Chidgey) and some Conservative Members asked that question on Second Reading. We want to set a period that allows reasonable time for parties to resolve their dispute and so avoid dismissals. In our judgment, eight weeks gives enough time for detailed and serious discussions to occur, possibly involving third parties such as the Advisory, Conciliation and Arbitration Service.
Some employers might not use the eight-week period to try to find a settlement. They might sit on their hands and do nothing. Workers must have redress in those circumstances, so clause 15 also gives employees a right to claim unfair dismissal if they have been dismissed after the eight-week period and employers have not engaged in procedures to resolve the dispute.
Those new protections will apply only to industrial action that is official and lawfully organised. We will therefore create a dual set of obligations on the parties. Unions must organise the action in accordance with the law, including the detailed provisions concerning notice and ballots. If they do not, the rights will not apply, which means that employer scan, without the fear of tribunals against them, dismiss those taking unofficial action. Employers are obliged to begin serious negotiations with the union before they can fairly dismiss.
This is an important clause, which we have looked at again closely. On reflection, we feel that it can be improved to give fuller guidance to tribunals, employers, unions and employees on what the new right entails.
First, the clause should do more to give guidance to tribunals in assessing whether employers have taken sufficient action to resolve disputes when judging applications for unfair dismissal that have occurred outside the eight-week period. Therefore, we have defined in subsection (6) of new section 238A of the Trade Union and Labour Relations (Consolidation) Act 1992 the factors that tribunals should take into account. They are: respect for dispute procedures; whether reasonable steps have been followed to re-open negotiations after the beginning of action; and whether reasonable steps have been taken to involve ACAS or other third parties to help resolve a dispute through conciliation or mediation.
In that context, "mediation" means the involvement of a third party that makes non-binding recommendations to identify the further procedural steps that should be taken to resolve disputes. The focus of mediation on procedural matters is typical of ACAS mediations, so we are not inventing a new concept of dispute resolution. "Mediation" is distinct from "arbitration" , and I urge hon. Members not to confuse the two. "Arbitration" means the involvement of a third party to decide the substantive issues of dispute. The amendments would not require employers to accept such arbitration. However, if the parties wish to proceed by agreement, they can always take steps that amount to arbitration.
Secondly, the clause should place greater onus on unions to begin negotiations to resolve disputes. If dismissals are to be avoided, both sides must be encouraged to find a settlement. In drafting subsection (6) of new section 238A, we have stated that tribunals must equally take into account whether unions have made or accepted overtures to resolve disputes.
Thirdly, we do not want a tribunal to decide whether a union or an employer has the better case in a trade dispute. We do not want it to decide whether an employer's offer was appropriate or whether a union's claim was excessive. Its sole focus must be procedural matters it should examine whether all reasonable procedural steps have been taken to resolve a dispute. The clause has therefore been redrafted to achieve that, to include wording stating explicitly that tribunals should not become involved in judging the merits of a trade dispute.
Fourthly, the clause states that normal tribunal procedures should apply in such cases. On reflection, however, we now feel that those procedures should be adapted to take into account the peculiar circumstances of such cases. For example, it would be wrong for tribunals to issue reinstatement orders while action is still being taken. That might lead to absurd situations where by tribunals issued orders to employers to reinstate people who did not want to work. Employers might be required to pay additional compensation to each worker up to a maximum of over £11,000 if they failed to abide by such orders, even though the workers involved were still on strike. We have made provision to allow tribunals to consider applications for unfair dismissal while industrial action is still proceeding, but not to consider applications for reinstatement or re-engagement until the end of the dispute.
Special provision for tribunal procedure is also needed. Paragraph 4(5) of the new schedule ensures that it will be possible to deal with that through regulations made under the Employment Tribunals Act 1996. First, at the moment, tribunals can reject requests to hold pre-hearing reviews of unfair dismissal cases. We want tribunals to conduct pre-hearing reviews in all cases when requested. If the tribunal gives an early opinion on the merits of unfair dismissal cases, it should help to stimulate negotiations to settle the dispute. For example, if an employer had an early indication that the case for unfair dismissal was strong, it might change his or her willingness to negotiate a settlement with the union on the underlying trade dispute.
Secondly, we must adapt tribunal procedures to allow for circumstances in which the courts are considering actions brought by the employer or others challenging the legitimacy of the union's organisation of industrial action. Tribunals must have the scope to adjourn cases of unfair dismissal while such related court actions are under way.
Finally, as currently drafted, new section 238A, inserted by clause 15, contains a technical error. It fails to define "protected industrial action" accurately. It wrongly states that an action is protected when the individual worker was not committing a tort. That applies in a few cases. Individuals may induce someone else to break his contract and thereby commit a tort. However, such cases are rare. In cases when the individual's only action is to break his own contract of employment as is normal in such cases he is not committing a tort. He would be unprotected if we were to let the clause stand, and the effect of the right would be minimal. Instead, in line with the policy described in the White Paper, "Fairness at work" , the clause should read that an action is protected when the union that organises the action in which the individual takes part enjoys immunity form tort because it has done so lawfully. The amendment at subsection (1) of new section 238A makes the necessary correction.
The changes that we propose are significant. We have therefore tabled amendments that delete clause 15 and replace it with a new clause and a new schedule. The changes greatly clarify the right; they encourage the voluntary settlement of disputes, and give important guidance to tribunals considering such cases. I therefore hope that hon. Members will support the changes in respect of Government new clause 5 and Government new schedule 1.
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