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Mr. Kevin Hughes (Doncaster, North): On the issue of paternity and adoption leave, my hon. Friend will recall that in Committee I tabled probing amendments in respect of those who would not be eligible because their earnings were below the lower limit. He informed the Committee that the Department for Work and Pensions was thinking of redressing that problem to coincide with other provisions, and in correspondence the Secretary of State for Work and Pensions has informed me that the Department intends to make regulations to deal with that.

None the less, I should like to ask my hon. Friend to ensure, with his colleagues at the Department for Work and Pensions, that when those regulations are introduced there is no gap. Normally, benefits are paid after the event, because one has to claim them when one is in the given situation. We need to be sure that people are able to get the top-up income support at the time that they need it, not a couple of weeks after.

Alan Johnson: My hon. Friend raised that issue in Committee. There was general consensus on the need to do something about it, and I have been considering it in some detail with colleagues at the Department for Work and Pensions. I am delighted to say that we have now agreed that the income support regulations will be amended to enable fathers who are entitled to paternity leave but who do not receive statutory paternity pay to claim income support. In addition, parents who receive paternity pay but who are normally low paid will also be able to top up their income with income support.

Those changes will ensure that household income does not fall below a certain guaranteed minimum, currently about £130 a week for a couple with one child where the father takes paternity leave. That will provide a degree of financial security sufficient to ensure that all low-paid employees have the opportunity to take up their statutory right to paternity leave. Regulations will be made later in the year, to coincide with the introduction of the new paternity rights. I thought it would be helpful, in response to the intervention by my hon. Friend the Member for Doncaster, North (Mr. Hughes), to confirm that to the House today.

Mr. Hammond: As we did not reach amendment No. 6, will the Minister confirm also that self-employed people on low pay would be included within the arrangements that he has outlined to the House?

Alan Johnson: I cannot confirm that. That is a completely different problem. As I explained in Committee, that point applies to a group of people whom we would have to place in an expensive and bureaucratic new system. That would be necessary to meet the same provisions. However, we undertook to consider that as part of the employee-worker review, which I confirmed earlier will be taking place in late spring.

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The Government are extending maternity leave and simplifying the rules governing maternity leave and pay. Following extensive consultation with a wide range of interest groups, we have designed the new paternity and adoption rights to mirror the simplified maternity provisions. Business representatives asked for that in their responses to our consultation, and we listened to them. These are changes that benefit society as a whole. The new and improved rights will make it easier for parents to make choices about how they balance their work and family lives.

Removing pressures will encourage employee commitment, motivation and productivity. Many companies already recognise this and use such benefits to employees as an essential part of running a successful and productive business. These measures have been welcomed by business and employees' representatives alike.

Equally, the involvement of partners of people receiving working-age benefits in work-focused interviews will increase participation in the work force and bring other benefits to society and, therefore, ultimately to the economy.

The second substantial area covered by the Bill is dispute resolution. A wide range of provisions will introduce new ways of handling disputes in the workplace, and will help deliver modern, competitive workplaces in Britain through better awareness of rights and more and better communication within organisations.

Ms Walley: Given that we did not reach the amendments that relate to the statutory modified disciplinary procedure, will my hon. Friend give an assurance that he will give further consideration to the amendments which were tabled but not called before they go to another place? There are now only two steps in dismissal cases, and there has not been the opportunity for anyone to conduct a proper investigation. Will my hon. Friend give further consideration to those matters?

Alan Johnson: As always, we shall keep those issues under review, especially as the Bill goes to the other place. We think that there are clear reasons why the modified two-step procedure is necessary, not least to ensure that those who have been involved in violence and serious cases where there has been discrimination and harassment do not have to discuss the issue. There is the right of appeal. That is why the modified procedure is in place for gross misconduct.

As I have said, the second substantial area is dispute resolution. The Bill represents a real opportunity to change the way in which workplace disputes are managed by putting communication before litigation. It will ensure a modern user-focused tribunal system that will provide swift and efficient justice. The idea that grievance and discipline procedures should be used in the workplace is neither new nor innovative. The introduction of statutory minimum standards will mean that about 3 million employees who do not currently have any procedures available to them in their workplace, and a further 3 million who have substandard procedures, will in future have a right to a basic but crucial first course of action should a problem arise.

There are many other provisions in the Bill. The introduction of an equal pay questionnaire will enable the facts of a case to be established early. It will encourage

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the collection of evidence and the settlement of cases before they proceed to tribunal. The absence of transparency on pay information contributes to and perpetuates the gender pay gap. The Government are determined to eliminate pay discrimination, and the questionnaire provision is one step towards that goal.

Another long-standing problem in the workplace is the provision of training at all levels. The Bill introduces the right to time off for union learning representatives. This will ensure that vulnerable groups of workers, such as older men, people from ethnic minorities and part-timers, who currently all too often miss out on training and development opportunities, will be given support and encouragement from their representatives, who are adept at reaching precisely those groups.

The provisions on fixed-term employees are equally important. We are ensuring that people on fixed-term contracts cannot be treated less favourably than their colleagues on permanent contracts. We are outlawing the abusive use of consecutive fixed-term contracts. All those measures contribute to the new framework of basic minimum employment rights in a flexible labour market, which the Government are committed to establishing.

Let us not lose sight of the bigger picture. The Bill is well rounded and balanced, and has been introduced after extensive, in-depth consultation with all the stakeholders. It will allow employees some control over their working lives when they have small children, and will lead to better dialogue in the workplace over working patterns when disputes arise. Such dialogue and an increased use of an open partnership-based approach at work will make employees more motivated and businesses more productive. An increase in productivity is the way to make this country more competitive, which is why the Bill is important and why I commend it to the House.

9.25 pm

Mr. Hammond: I, too, congratulate all hon. Members who spoke on Second Reading and subsequently served on what was a constructive Committee.

This is a Bill of parts, which do not always hang together. It is therefore convenient to deal with them separately in the order in which the Committee considered them. Parts 2 and 3 deal with procedures for grievances and discipline. We generally welcome the Government's attempt to reduce the burden on tribunals caused by cases that should be dealt with in the workplace. We welcome measures aimed at encouraging and increasing the use of workplace dispute resolution measures. We regret the fact that some of the Government's earlier ideas have been watered down along the way, and it remains to be seen whether the Bill will deliver effectively the Government's stated objective of resolving a significantly greater proportion of disputes in the workplace and imposing a significantly reduced work load on tribunals.

Two issues remain unresolved: the resourcing of the tribunal system, which we touched on earlier, and the rather difficult relationship between the Government and the president of employment tribunals. Members of the Committee have seen the robust correspondence between the president and the Minister, which hardly bodes well for the future of employment tribunals. Generally, however, we welcome the Government's approach, although we regret the fact that they have backed down on a number of issues. We shall watch carefully to see whether their intended results are delivered.

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Part 1 introduces a raft of new rights, to which the Minister referred. The Minister described them as new individual rights given to workers. However, throughout proceedings on the Bill, I have thought of them not so much as individual rights granted for the benefit of individual workers but as rights granted for the better functioning of society, which will support families and ensure that children are brought up properly. In that context, I can certainly relate to the Bill, which will have tangible benefits for society. However, it is important to realise—the Minister will agree that this has been the theme throughout proceedings on the Bill—that we are not giving people time off for their own benefit; we are doing so for the benefit of their families. We are not giving adopters time off for their benefit; we are doing so in order that they can bond with the children they are adopting.

That is a sensible approach, and deserves great support. However, we are concerned, both about the burden of costs and the incidence of costs in connection with the benefits resulting from provisions in part 1. The simple fact is that business, particularly manufacturing, is groaning under the weight of regulations, taxes, new legislation, an overvalued exchange rate and foreign competition. This is not the right time to impose further burdens on business; they will damage competitiveness, reduce flexibility and ultimately affect the ability to invest and deliver jobs.

Our plea throughout, and the purpose of our new clauses on the subject today, was to ensure that there was a mature debate about the costs and the benefits that will arise from part 1—there are certainly benefits, as well as costs—the incidence of those benefits and costs, and who, in fairness, should meet those costs. Unfortunately, we have not persuaded the Government to move very far. Although there will undoubtedly be benefits for society and probably for some individual employees, there will be disbenefits for others, and the cost will, by and large, be borne by business. We very much regret that during consideration of the Bill we have not persuaded the Government to move much on that issue.

I was disappointed by the Minister's response to my earlier intervention. I had hoped that he would find a way to include low paid self-employed people in the arrangements for statutory paternity pay, so that they too could benefit from the good that we are delivering, in the same way as low-paid mothers benefit from statutory maternity allowance.

Part 4 is the ragbag that collects all the other bits and pieces. In this part of the Bill especially, we see the agenda of the trade unions. Clause 43 introduces on a statutory basis union learning representatives, with a right to paid time off for union activities. We are the first to recognise that union learning reps have played and do play a significant and constructive role in some workplaces, though apparently not in the Department for Education and Skills, where there is none.

Ministers have been at great pains to tell us throughout the Bill that the introduction of learning reps on a statutory basis will be to the benefit of employers, but the statistics suggest that the largest employer in the country—the Government—has not taken heed of its own

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advice to any significant extent. One cannot take best practice where it is working well and impose it across the board by legislation.

In a workplace where industrial relations are not harmonious and functioning properly, one cannot introduce by legislation the role of trade union learning reps in the way that that works in the best workplaces, where unions and employers are both committed. It is a matter for education, not for legislation. We believe that by introducing union learning reps as a statutory right, the Government have gone down the wrong route in seeking to impose across the board a practice that will not work in many cases, and in other cases will damage the good work that is going on between employers and their workers.

Clause 45, which deals with fixed-term working, gold-plates the EU directive, as unions have urged the Government to do and Conservative Members have urged them not to do. We are concerned that there is still a residual hostility to non-conventional work patterns. I emphasise our support for measures that eliminate abusive practice. The Minister mentioned artificial sequential fixed-term contracts. We entirely support the Government's intention to remove that abusive practice.

Our new clause, which unfortunately we did not reach in the timetabled debate, would have exempted from the provisions of clause 45 cases where the employer had offered the worker a permanent employment contract on the same terms as other people in that workplace doing similar work, but the employee had rejected the offer. The purpose of the new clause was to draw the Government's attention to the fact that, although there may be abuses at the bottom end of the employment curve, at the top end there are many people working on fixed-term contracts whose employers would love to get them on permanent long-term contracts, but are unable to do so. It is their choice to work on fixed-term contracts. The Bill does not recognise that.

Clause 47 on flexible working was a late addition to the Bill. When it was introduced, I said that it was appallingly drafted, and I still believe that it is. A great chunk of it was lifted from the Bain report. The Minister has ignored the criticisms and questions that we raised about the wording in clause 47. It introduces terminology such as "staff", which is unknown to the Employment Rights Act 1996 into which it is inserted. Our noble Friends in the other place will want to give those matters further close attention.

The flexible working provisions will impose a new and further burden on business that is not justified by any benefit that will be delivered. I emphasise that we support flexible working, but it cannot be effectively imposed by statute. The issues that we raised have not been dealt with.

There are many other rather more minor matters that we have not had time to discuss tonight. Our noble Friends will want to take those up when the Bill reaches another place.

We are considering the Bill in an environment of increased union militancy in which trade unions are asserting a veto over public policy—even public policy that the Government were clearly mandated to implement in the general election of 2001. Business has suffered a barrage of legislation, regulations, directives and taxes, some of which are specifically designed to hit the manufacturing sector, which is the worst affected.

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Business faces one of the toughest environments for a decade. Britain is slipping down the competitiveness league. The productivity gap between the United States and the United Kingdom is widening. The Government respond by piling more cost burdens on business, which will damage our competitiveness still further.

There are many good ideas in the Bill. There are also some very bad ones, and I am sorry that during its passage we have not persuaded the Government to modify or drop the worst of them. Even for many of the good ideas that we support and endorse, the time is simply not right. Business, especially small business, is reeling under a torrent of Government legislation, regulation and taxation burdens. It needs a breather and space to recoup, to recover and to regain its profitability. This is not the right time for the Bill and I must urge my hon. Friends to vote against Third Reading.

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