Examination of Witnesses (Questions 60-79)
CBI AND EEF
24 JANUARY 2006
Q60 Mr Bone: Acas charges for some
of its training services; are you happy with this type of charge
and does that affect their impartiality?
Q61 Mr Yeandle: If I might just comment
on that, I have already to a large extent covered that. We do
not object in principle to Acas charging for some services like
that, and clearly if this was to be totally free it could be seen
as potentially commercially undermining organisations like EEF,
who are already providing the same type of services to our own
members. Very importantly, we see that charging should not be
for conciliation services, I have made that point already, but
equally as I said before the right balance needs to be struck.
The balance needs to be struck in such a way that the fact that
they are doing more commercial training does not drive Acas to
spend more and more of its resources on this commercial training,
rather than what are seen as the really important services that
they provide for our members and, equally and very importantly,
that it does not undermine their impartiality. It is very difficult
if an employer is paying for services that Acas is providing—and
inevitably it will be the employer who is paying—there is
inevitably going to be a perception that it is not necessarily
going to be as independent as it is now. It is a question of getting
the balance right. I am not opposed in principle, it is getting
the balance right. That is quite a tricky management exercise
and one that the Acas management team will have to look at very,
very carefully over the coming months and years.
Q62 Mr Bone: Would it be fair to
say really that you have something that is very successful in
Acas in its core business which, might I suggest, is empire-building
and going after things that really could have been done successfully
and are being done successfully by private organisations, and
really if there is going to be this training should it not be
outsourced or privatised anyway?
Mr Yeandle: There is a case for
bringing the two together; it is an inter-related service. The
experience that the Acas officials get from doing other parts
of the work will actually prove beneficial for them in the other
parts of their job, so it is a question of bringing the two together.
I would not see it as something that they necessarily should be
seen as separate from, but it must not be seen as driving the
agenda of Acas. The Acas agenda is very clearly the core business,
but we do think there are some valuable things they could equally
do because of their impartiality and because of their independence
that actually can improve employment relations in the UK.
Q63 Mrs Curtis-Thomas: Mr Yeandle,
you mentioned that charging for dispute resolution would affect
the impartiality of Acas, but would that be true if the costs
were apportioned between employer and employee?
Mr Yeandle: First of all, I think
it would be incredibly difficult to apportion the costs in an
appropriate manner and, clearly, as far as the employee is concerned
it is likely that it will be seen, at least if it is the same
amount, as a higher figure. It would effectively undermine that
credibility and that independence and I really do feel that it
is a very fundamental point as far as we are concerned. We actually
think it is really important that conciliation services, whether
they be individual or collective, are free because anything that
moved away from that—even if it was shared out in some way,
which would be very difficult to do, frankly—would inevitably
undermine the credibility of Acas.
Q64 Mrs Curtis-Thomas: I cannot hear
a coherent argument actually to support that. I do not think that
necessarily taking money for a service compromises your impartiality.
Mr Yeandle: It may not in reality
do so, but it will in perception. Inevitably, he who pays the
piper will be seen as calling the tune, so there is a degree of
inevitability about that.
Q65 Mrs Curtis-Thomas: But currently,
you would acknowledge, Acas provide training services and the
funding in fact reverts to the Government, so why would funds
received for conciliation necessarily have to go back to Acas,
why should they not go back to the Government? Is not what we
are doing at the moment giving employers an opportunity to reduce
the costs of problematic employment relations on their bottom
line and fencing that off to the taxpayer?
Mr Yeandle: The fact that these
conciliation services are actually reducing the number of cases
that go to tribunals is a huge benefit that we often do not properly
recognise in terms of the overall benefit that Acas provides as
a service. We do feel very strongly that it should not be something
that is chargeable. We do think it would fundamentally change
the attitude of the general public, employees, the trade unions
and employers towards Acas, it would undermine its very impartiality,
which is so fundamental and so critical to the successful delivery
of a conciliation service.
Q66 Mrs Curtis-Thomas: Mr Yeandle,
I do not think you have made the argument particularly well, I
do not think you have been able to robustly defend my assertion
that what employers are seeking to do is remove the cost of problematic
employment relations from their bottom line, and you have not
said why it would not be appropriate for the Treasury to handle
the charges that are raised from this particular exercise rather
than Acas themselves. That would not be seen to compromise their
impartiality because they are not primary beneficiaries of the
money that would accrue from undertaking these inquiries on behalf
of employer and employee?
Mr Thompson: I would agree with
everything that David has said absolutely, you would be surprised
if we did not, but maybe to put it in a different way to give
a more rounded picture, I think the primary beneficiary from our
point of view—and I think I can speak on behalf of the TUC
which they would not often allow us to—is the economy rather
than the employer or the employee. We have seen that Acas's role
has had a positive impact on productivity in the UK, through good
employment relations, and we would see the economy as being the
primary beneficiary. To assert that employers are using Acas to
deal with problematic employee relation difficulties is to ignore
the amount of money expenditure and management time which is expended
on litigious claims, on difficult claims within the workplace,
on just employee relations, employee communications overall. It
is only when you get into the most difficult cases where you need
a third party with that impartial view, where you need a room
that is unfettered or unpolluted by opinion and you need somebody
in that room who can deliver a service in a way that will bring
the two sides together and help resolve the issues. From our perspective,
to have that role in the most difficult of circumstances is absolutely
crucial and the primary beneficiary of that is the economy.
Q67 Mrs Curtis-Thomas: I still do
not believe that impartiality is going to be compromised by charging;
I do not believe that that is the case.
Chairman: Well, there we are, you have
failed to persuade. Mark Hunter.
Q68 Mark Hunter: Moving back to staffing
issues, Acas as we know is reducing staff numbers through the
early retirement scheme at the moment. The union PCS, which represents
those staff, fears that this is going to lead to greater workloads,
obviously, for the staff who remain, or indeed lower standards.
Would you share the concern that reduction in staff numbers will
affect the effectiveness of Acas?
Mr Thompson: If I could say a
couple of words on efficiencies, and then I know David has some
experience on the staff cuts in particular. From the CBI's perspective,
obviously, we are huge supporters of drives and initiatives at
the moment to improve efficiency across the public sector. We
want to learn from the best of the private sector and the best
of the public sector and drive up efficiency across the whole
economy, so that is where we are coming from. We are not in the
game of saying that we need to have cost cuts and job cuts for
the sake of it and we would like the Government to take a hard
and fast look at Acas and work out whether we are talking about
spending cuts or whether we are talking about efficiency savings.
From our perspective, reducing the numbers of people employed
by Acas by the proportion that is being discussed and talking
about suggestions that we lose 100 posts or so could actually
undermine the very efficiency of Acas rather than just driving
down costs and getting a more efficient product; we do not think
that we would want those significant cuts. Mr Yeandle:
It is probably, frankly, a bit too early to make a clear judgment
as to what the impact of the change in numbers will be, but certainly
it is not just about numbers from our perspective, it is about
the types of people that we, frankly, are going to be losing from
the Acas service over the next six, nine, twelve months, because
all the indications from talking to our regional officials is
that—perhaps understandably—it is the older, more
experienced officials who we are going to lose out of the regions,
and I think there is a genuine worry whether we are going to have
sufficiently well-equipped and experienced officials out there
to deal with the large number of individual and indeed sometimes
collective disputes that they have to deal with. Equally, there
is a concern that, inevitably, they will be providing perhaps
a wider range of services and that may mean that they will not
sometimes necessarily be available, as they may need to be, on
an urgent basis to deal with a conciliation case of one form or
another. It also does raise another issue which I think is an
important one, which is that the world of work is changing very
rapidly out there and it is very important that Acas and its officials
have the expertise and knowledge of a modern way of work. Therefore,
I think it is going to be important, as we move forward in this
new environment that Acas is going to be in, that they look more
widely in terms of who they recruit so that they bring into their
resources people who have a wide range of experiences, of public
and private sector, unionised and non-unionised environments,
different types of work organisation, so that they can genuinely
reflect in their advice and guidance what in reality is happening
out there.
Q69 Mark Hunter: If you support the
efficiency drive and also our concern about the impact on the
quality of advice and service that might be available, how do
you propose that the circle be squared? Where does the extra money
come from to pay for the extra people to keep the service running
at the very efficient levels it appears to be at the moment?
Mr Yeandle: I do not think it
is for me to make a judgment, I am not involved sufficiently in
the administration and budgets of Acas to be able to make comments
as to where, if at all, savings can be made.
Q70 Mark Hunter: Or indeed where
other revenue may come from.
Mr Yeandle: Yes, indeed, there
are a number of different routes.
Q71 Mark Hunter: You did say in a
previous answer that you did support businesses paying.
Mr Yeandle: For certain services,
yes.
Q72 Mark Hunter: Do you have other
ideas as to how it might be funded?
Mr Yeandle: Not any specific ideas,
but at this stage it is too early to make a judgment about what
the impact is on the numbers, but we have genuine concerns that
we are losing an awful lot of expertise and experience which has
been built up over a very long period of time.
Q73 Mr Wright: We have gone through
the question of the possibility of 100 job cuts and some say up
to 160 in actual fact may well disappear, but there is also the
question of whether or not Acas are formulating short term contracts
to bring these people back in with the experience. Whilst I accept
your argument, David, regarding it is a changing world and a changing
environment and Acas needs to change in particular respects and
take on people with those experiences, is it not true that this
may well result in more employment tribunals? I think it was your
figure that Acas was about £450 per case whereas an employment
tribunal was about £2000 per case which really means, when
the equation comes together, if there are more employment tribunals
it is going to be more costly at the end of the day, is that not
true?
Mr Thompson: Yes, it would be,
if we see an increase in employment tribunals then it would be
more costly than achieving a successful result through Acas.
Q74 Mr Wright: Do you not see that
as being one of the effects, that probably if we are having these
staff cuts more cases may well end up in employment tribunals?
Mr Thompson: It is certainly one
of the dangers, that that could happen, but it is very difficult
to quantify of course. It is certainly one of the dangers.
Mr Yeandle: It is certainly a
possibility, but at this stage it is too early to call. It is
an issue that both the CBI and ourselves will be watching very
carefully, as to whether as a result of changes that have taken
place in the Acas service perhaps the level of conciliation that
takes place reduces and, as a result, more cases end up in tribunals
rather than being resolved as they currently are through conciliation
services with the expertise of Acas.
Q75 Mr Wright: It would be fair to
say then, to summarise, that you would oppose these cuts that
are taking place overall within the staff within Acas?
Mr Yeandle: I think you are putting
words into my mouth. I would not say that we oppose the cuts,
we are saying that Acas needs to deliver value for money and live
within its means, and it may well be that changes—as in
any organisation—have got to be made. It is not for me to
make a judgment as to how those changes should be made, that is
something that is the role of the Acas management to determine
as to the best way in which they can meet their objectives—their
statutory objectives, their financial objectives. What we should
be watching very carefully is to ensure that what changes are
made do not have an adverse effect both on employee relations
and the number of tribunal cases. It is too early to make a call,
I think, at this stage.
Q76 Mr Wright: Surely that is one
of the risks. If there is a risk that we are going to go into
more employment tribunals, that will obviously cause a great deal
of concern for employers as it would for trade unions and indeed
employees. Surely that is a risk too far to take?
Mr Yeandle: It is a potential
risk, but I do not think we can quantify at this stage exactly
what the risk is. Life is full of risks.
Mr Thompson: You have to see Acas
within the round of all the other provisions and renewed disciplinary
and grievance procedures to try and resolve disputes in the workplace
much earlier. They are still bedding down and we need to see the
full impact of that. I think what we are saying is that we are
very concerned about the possible impact, but that does not lead
us to say that there are no possibilities for cuts within Acas,
but we have to be fully aware of the ramifications, and that is
a broader, Government-led review rather than anything from the
CBI.
Q77 Roger Berry: Acas provides advice
about promoting equality and diversity in the workplace. Do you
support that, or do you see that as an area for cuts?
Mr Yeandle: I certainly see it
as something that I think Acas is potentially well-equipped to
do. My concern I suppose in this area is that we want to ensure
that the advice and guidance they give in this new area meets
the same high levels of standard that we have in all other areas
of employment-related advice, and I suppose my question really
is have they got a sufficient depth of expertise within Acas to
be able to deliver it? It may well be that this is an area in
which the Acas management have to look at the types of expertise
that they have got within the service to be able to provide it.
It would be unfortunate if that standard of service and expertise
were to decline in this important area.
Q78 Roger Berry: Given your experience
and your members' experience of the work of Acas in this area,
and your experience of the Equality Commission's work in this
area, what conclusion do you draw?
Mr Thompson: From our side we
would say it is a positive step that Acas has moved into this
area for two very clear reasons, which are connected, the first
being that the vast majority of problems in the whole equality
sphere is lack of information and understanding on both sides,
both from an individual's perspective but also an employer's perspective.
It is not that employers are anti equality provision or anti equality
policies, it is that very often they have difficulty in dealing
with the information and when there is a problem they want to
go to a trusted friend, if you like, who they can talk to and
say can we get some impartial advice and information here. I am
afraid to say that with particular equality bodies employers do
not always see the equality bodies as that trusted friend, and
we have seen examples where people have gone and raised issues
about getting more information and the next they hear from the
equality body is that they are being investigated. Acas has a
very clear role to play there in providing information and guidance,
which is absolutely crucial to improving the situation on diversity.
Q79 Roger Berry: You do not see it
as a duplication of effort.
Mr Thompson: We have to be very
careful about not duplicating, but I think there is a clear role
to play from within Acas on both, providing information and also
conciliating. I am sure Acas will have the figures, but I think
41 per cent of race discrimination applications in 2005 were settled
by Acas with just 21 per cent going to tribunal, so there is the
evidence.
Chairman: We will have to bring it to
a conclusion there, Mr Thompson. We are very grateful for your
presence; for someone who claimed not to be an expert on Acas
you have done remarkably well. Thank you very much indeed.
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