Alan Johnson: I hope that I can reassure my hon. Friend the Member for Manchester, Central. The correct interpretation of the assurance that I gave to the hon. Member for Runnymede and Weybridge (Mr. Hammond) came from the hon. Gentleman himself. We seek to introduce a system of mitigation of between 10 and 50 per cent. for employers and employees who do not follow the system. That is not meant to deal with cases of bullying, violence and sexual harassment. The regulations themselves will make exceptions in those cases. To take the point that the hon. Member for Tatton (Mr. Osborne) made, those cases will be where, to follow the procedures, the employer or the employee-depending on the circumstances-would have to come into face-to-face contact with the person who had assaulted or bullied them.
We seek to deal with those cases in regulations, not through the ''exceptional circumstances'' subsection. That subsection provides for a tribunal to vary the mitigation below 10 per cent. if there are exceptional circumstances, and it will be a matter for the tribunal to decide on. The subsection covers all jurisdictions, but let us take unfair dismissal as an example. When we come to later clauses, we will find that if an employer fails in any way to implement the statutory minimum procedure, dismissal is automatically unfair and there will be a minimum of four weeks' pay in compensation to the individual concerned. The 10 per cent. mitigation comes on top of that.
However, in some, very rare, circumstances, the tribunal may decide that that amount is disproportionate. It might want to go below 10 per cent. because to apply 10 per cent. would be disproportionate for a small employer who had breached a minor part of the procedure. We think that that will be rare. The tribunal will not have discretion in this regard over bullying and harassment cases because procedures for those will be set out in a separate regulation.
My hon. Friend the Member for Manchester, Central raised an important point about the review, and he has raised that point before. I repeat the assurance that my right hon. Friend the Secretary of State gave on Second Reading that that review will commence early next year. With those comments, I hope that the Committee can agree that clause 31 stand part of the Bill.
Rob Marris (Wolverhampton, South-West): I may have missed this technical point earlier, in which case I hope that the Committee will forgive me. Are the boosted awards-if I may use that shorthand phrase-intended to apply to the employment appeal tribunal as well as to the employment tribunal? I cannot see that the Bill says that. For example, could they apply if an appeal tribunal reversed a decision of an employment tribunal and brought in an award?
Alan Johnson: Perhaps I will dwell on that for a while and give my hon. Friend the answer later. His point about the employment appeal tribunal is a point of law. We are trying to deal with the statutory procedure for the majority of cases, but he raises a point about which I shall remain clueless for the moment, until I have another Nurofen. I will respond later.
Rob Marris: That is why I referred to, for example, an employment appeal tribunal overturning a decision of an employment tribunal. I am aware that employment appeal tribunals usually examine questions of law rather than questions of fact. Does that assist him at all?
Alan Johnson: It gives me no assistance whatsoever, but assistance will come from somewhere. I hope that my hon. Friend will agree that the clause stand part of the Bill; I will respond to his question later this morning.
Question put and agreed to.
Clause 31 ordered to stand part of the Bill.
Schedule 3 agreed to.
Consequential adjustment of time limits
Mr. Hammond: I beg to move amendment No. 58, in page 37, line 16, leave out paragraph (c).
This is a probing amendment. It seeks to leave out clause 31(2)(c), which allows regulations to
''make provision treating proceedings begun out of time as begun within time.''
I have pondered on that for a while but I cannot see what the Minister is driving at. When will it be right and proper to treat proceedings begun out of time as being timely?
It may be fine to adjust time limits to reflect statutory procedures. That does not seem the same, however, as taking the power to decree that proceedings that are out of time are within time. Can the Minister clarify the exact circumstances in which that power will be appropriately deployed? I hope that it is precisely definable, because otherwise it is a rather sweeping power that could have serious consequences. If it is definable, why can it not be defined in the Bill, rather than being reserved as a regulation-making power?
Alan Johnson: The short answer is best given in an example, such as a case in which an employee is seriously ill and would have to have started the procedure within the three-month limit. We are making provision through regulation for treating proceedings begun out of time as begun within time. I am sorry: we are talking about beginning proceedings out of time. That would apply when the employee concerned-in, say, a dismissal case-is seriously ill and unable to attend the hearings or respond to the employer's inquiries.
Mr. Hammond: Can the Minister be precise about what he means by ''begun''? It seems to me that proceedings would have been begun, even were the employee subsequently, for a prolonged period, unable to attend meetings or respond to the employer's inquiries. My understanding is that the Minister proposes to take a power to allow a proceeding to be begun after a long period, when no steps have previously been taken.
Alan Johnson: In exceptional circumstances, that will be the case. Most jurisdictions have a three-month time limit. Let us remember that we are looking to get disputes resolved in the workplace and to end the culture in which the IT1 and IT3 forms are flying about the system and there has not even been an attempt fully to resolve the issue in the workplace.
Mr. George Osborne: Is there not a paradox here? Schedule 2, which we debated previously, involved no time limits and the Government did not accept the amendments that my hon. Friend tabled to it. Here, however, we are talking about extending time limits for employment tribunal actions. What is to stop an employer or an employee spinning out the procedures to delay going to an employment tribunal?
Alan Johnson: The hon. Gentleman makes a good point, but there is a difference between this debate and those that we had on the basic three-step procedure, when we talked about ''reasonable'' time. If I remember rightly, that debate was about setting a period of a month. It is for the employer and employee to decide that matter.
The precise point that the hon. Gentleman made about the possibility of an employer spinning out the procedures will be discussed when we reach clause 33 on admissibility.
At the moment, most jurisdictions in schedule 3 have a three-month time limit for presenting a claim and the tribunal has the power to extend that time limit, generally where it believes that it was not reasonably practicable to have presented the claim within the time limit. We propose that complaints should not be regarded as out of time if a statutory procedure was begun within the normal period for complaining, but the application is made later, during an extended period of a further three months. Those extra three months would run from the expiry of the original three-month period. In some cases, a statutory procedure may not be commenced until after the expiry of the time limit, which would normally be when the claim itself was also out of time. We want to consider whether there should be any provision for extending the time limit if it was not reasonably practicable to have started the procedure within the time limit-for example, if the employee concerned was seriously ill.
In most jurisdictions, there will be three months to submit the claim, an extension of three months to allow internal procedures to be completed in exceptional circumstances, and a further two months if both parties agree that they have made sufficient progress to be able to resolve the case internally. That moves away from a procedure in which people focus on the employment tribunal almost as soon as the award has been made.
We are trying to deal with exceptional cases, of which the example of serious illness comes to mind and was raised during consultation. Given those assurances, I hope that the hon. Gentleman will be willing to withdraw the amendment.
Mr. Hammond: Not entirely. I understand and agree with much of what the Minister said, but I still have reservations. Subsection (2)(b) gives him the power to
''make provision about the exercise of a discretion to extend the time for beginning proceedings''.
So in the case of a potential applicant who was seriously ill, the tribunal could extend the time for beginning proceedings. Unless I have misunderstood, subsection (2)(c) will be a retrospective power. Consequently, an employer who believed that he had no outstanding claims, and no potential for outstanding claims because the period for bringing claims had passed, could suddenly find himself subject to claims that were, on the face of it, way out of time. Subsection (2)(c) refers to making provision for
''treating proceedings begun out of time as begun within time''.
The Minister will respond that he would not make such regulations without imposing some backstop time limit-at least, I hope that he will. Nevertheless, if that backstop time limit was, say, five years, is it reasonable that somebody who is expecting a claim to be brought within the normal period of six months could suddenly find, two or three years later, that a claim is popping up from nowhere? I am sure that the Minister would not want to encourage that.
The legitimate situation that he describes, in which a person is seriously ill, would be better dealt with under subsection (2)(b). Subsection (2)(c), which is a retrospective power, appears to be unnecessary. Moreover, it could create a highly unsatisfactory situation for an employer who has had to dismiss several members of staff. He will know, when he does so, that it is possible that a claim will be brought. He will metaphorically hold his breath until the period for the making of a claim has passed, then regard himself as being free of potentially having to answer an application in the employment tribunal.
Can the Minister be more explicit about why he needs the power in subsection (2)(c) and confirm that it would operate retrospectively, unlike subsection (2)(b), whereby a discretion would be exercised before the deadline for extending the time limit? I assume that, under subsection (2)(c), discretion would operate retrospectively, so that an application that was brought after a year would be deemed to have been brought within six months. That would not be a good way to proceed, and I should be grateful for the Minister's clarification.