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Lord McCarthy: My Lords, we should say, yet again, that this is intended to be a friendly amendment. The amendment, which I support, is designed to extend what would be the new subsection (7) proposed by my noble and learned friend, which applies at the moment to Scotland alone, to the whole of the UK. We see that as a halfway house towards solving the difficult problem of combining relatively autonomous arbitration, which is all one can reasonably ask for, with an exceptional ability for external reference, which is what one has the right to expect.

The words of the amendment are not full enough for us, but we will take them tonight except that, unfortunately, as presently stated, they only apply to 8.6 per cent. of the working people of this country. We know in rough terms what they would mean. We know that alleged breaches of European labour law would be dealt with in one way, whereas serious irregularities would be dealt with in another way. We know that, when we reach the position where the Government produce orders, the precise grounds, and the appropriate courts in each case, will be specified therein. At this point in the game, that seems a reasonable way of

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dealing with the problem. But we can see no reason why that solution should not be extended across the whole of the UK. But not so. The Bill leaves us with what I regard as the irrelevant, unnecessary, inappropriate intervention of the 1996 Act.

Even at this stage one is bound to ask how that came about. It cannot be that the Government--my noble and learned friend Lord Archer may be different--were not aware that they had to do something about the Arbitration Act 1996, because in the Notes on Clauses before we reached the Floor of the House, they stated:

    "The new Section 212A(6) concerns the application of the Arbitration Act 1996 to arbitrations under the ACAS scheme. All arbitrations in England and Wales are covered by the provisions of the Arbitration Act unless explicitly excluded by statute. The clause provides that nothing in the 1996 Act shall apply to the ACAS scheme unless the Secretary of State in making an order approving the scheme applies the provisions of Part I of that Act",

and so on. In other words, one would have had reason to expect, if one read that, that the Government knew that they had to exclude the effect of the Arbitration Act 1996 on the operation of this Bill. Otherwise its presence would undermine the effectiveness of the Act.

The problem was that the Government went on to read back in 80 per cent. of the Act. The Act has 110 sections and four schedules, and covers 35 pages. Of that, 80 per cent., or 33 pages, still applies. Thus, we have been forced, because of the way the Government have conducted the debate, to look at the Arbitration Act 1996.

But I say that, if the provisions of Part I of the Act were applied to the day-to-day application of industrial arbitration, they would ruin the arbitration process. One would have to define the agreement, the procedure and the immunities. One would have to appoint experts. One would have a right to legal representation. One would have provisional awards, and a whole series of other things. Of course the Government will say that they would not apply all that to every arbitration under the arbitration scheme, so why is it there in the first place?

The Government may say that this is all very well, but the amendment about which we are talking does not deal with all of the provisions of Part I of the Act, it only deals directly with Section 68. But I ask noble Lords to look at Section 68, and to think how appropriate that would be in an arbitration scheme run by ACAS. There are three things to say at this point. I have to say the first to my noble friend the Minister, because I do not believe that he has yet taken it on board. The first thing is that Section 68 does not just refer to "serious irregularity". It does not just say that. It is a "serious irregularity" which causes "substantial injustice". That is what it says, and that is what the Minister will have to put in the order: "serious irregularity which causes substantial injustice". It then goes on to give nine different grounds upon which there could be an appeal, as it were, under the system: unfairness, partiality, breach of procedure, exceeding powers, a failure to deal with all issues raised, certain uncertain or ambiguous words, fraud, public policy and any admitted irregularity.

Anyone concerned with industrial relations arbitration will tell you that if these criteria were ever put in a statute or an order, it would ruin most arbitrations. Most

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arbitrations do not deal with all the issues raised. The parties raise very funny issues, many of which they do not want dealt with; they merely want to air them. You have to know which ones they want dealt with. Most arbitrators deliberately, intentionally, use uncertain, ambiguous words. They mean one thing to one side and another thing to the other. That is what arbitration is all about. Moreover, anyone who did not like the result of arbitration could allege that it was unfair and partial.

I am prepared to bet that, if the Government do not get rid of Section 68 and if our friends in ACAS take any notice of Section 68, it will be inoperable.

Of course if one is to have a sensible system of arbitration with some kind of external review we do need a list of sensible grounds. If the arbitration is unreasonable, irrational or arbitrary that might well constitute sensible, reasonable grounds, but they do not exist in Section 68. Therefore it is important for the Government to begin by getting rid of Section 68 and accepting our amendments.

I realise that that will not happen tonight. However, fortunately for the Government and for us, the Bill is only beginning its passage through Parliament. Therefore, before it reaches Second Reading and Committee in another place, there is plenty of time for ACAS and the Government to pull out their fingers and produce a draft of the scheme. If we could see a draft, we could work backwards from what the scheme suggests to what should be on the face of the Bill.

Therefore my first question to the Minister is: when can we see a draft of the scheme? Our argument has always been that something sensible must be on the face of the Bill. The further away that is from the Arbitration Act 1996 the better off we shall be.

However, if the Government persist I wish to ask a second and simpler question. Is there a precedent anywhere in the country for a Bill which produces the same orders on a different statutory base, based on geography? I take it that we shall not have different orders making different provisions, but if we are to, for God's sake tell us now because we shall ask what the difference is.

Thirdly, if the Government continue to go down the road of Section 68, do they really intend that serious irregularities qualified in the way I have specified should cover all nine grounds of that section? Surely not, because, as I say, if it did, it would make arbitration impossible.

Finally, when the Government agree, can the principles of Clause 7 be put on the face of the Bill? That may involve the dissolution of our amendment and that of my noble and learned friend Lord Archer of Sandwell, but that would be well enough. What we have argued for all along, and what this House has argued for over and over again with the previous government, is that the principles of Bills should be put on the face of them and that everything should not be left to secondary legislation. When the Government find out what the principles are, will they put them on the face of the Bill? I support Amendment No. 10.

Lord Meston: My Lords, I briefly interrupt this dialogue, if that is what it is, to say that I followed

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entirely the arguments of the noble Lord, Lord Wedderburn, except in relation to one point. He suggested that the arbitration scheme would be used in test cases. I cannot imagine anybody advising an employer or an employee, in what was known to be a test case, to use the arbitration procedure in the first instance. I imagine that the advice would be to go straight to the tribunal for an authoritative statement of the law and then the normal appeal procedures would apply.

The only other point is that I wish to question the expression used by the noble and learned Lord, Lord Archer of Sandwell, in his opening remarks when he referred to--I hope I noted it correctly--such wider remedies as may be required by European law. I suspect that such further remedies as may be required by European law will not widen significantly the ambit of appeal. They will apply in only very limited circumstances. But if he knows or thinks otherwise, perhaps he will indicate that to the House because it may be a straw at which we could all be clutching at this late hour.

Lord Gladwin of Clee: My Lords, I make a brief intervention as an erstwhile practitioner. As has been said many times before in debating this piece of legislation, on this side of the House we are very anxious that the arbitration scheme should work. From my experience of industrial tribunals, I know that for an employee who has been unfairly dismissed to be reinstated as a result of an industrial tribunal award does not happen any more. Therefore, the only way in which to deal with an unfairly dismissed employee is by internal arbitration. Therefore, this ACAS scheme is welcome. I am only sorry that we have got ourselves into this tangle.

I look forward to the response of my noble friend Lord Haskel to the question posed by my noble friends Lord McCarthy and Lord Wedderburn. But I ask him this evening to give us an assurance that as far as is humanly possible, the arbitration scheme will work in the same way north and south of the Border and that if experience shows that it is not working in that way because of some of the issues raised by my noble friends, the Government will use the powers in the Bill to revise the scheme. It would be disastrous, as my noble friend Lady Turner said, if there were a difference between Scotland and England. It would damage the scheme and trade unionists would not use the internal scheme if it is clear that it is flawed.

Secondly, I seek an assurance from the Minister that there will be the closest possible consultation with the users; that is, the representatives of the employers and trades unions. On a number of occasions I have heard my noble and learned friend Lord Archer refer to consultation with the president. I welcome that, particularly as we have a new president in England and Wales. But the people who know about such matters are the employers' representatives and the trades unions. Therefore, I seek an assurance that there will continue to be the closest possible consultation with the users so that when the scheme is published--I hope sincerely

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that it will be published very soon--we know that it is with the assent of the people who will use the arbitration scheme.

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