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Lord Falconer of Thoroton: I thought--but I was wrong--that my answer was entirely clear. The answer is this: we believe that this sort of policy is one which does require monitoring and evaluation. Secondly, we consider that the Low Pay Commission is a body to whom particular tasks--I see the noble and learned Lord laughs--can be assigned. I think that is perfectly clear.

Baroness Miller of Hendon: I thank the noble and learned Lord the Minister for his reply. When he started I got very excited and thought that perhaps at long last I was going to have one of my amendments accepted just like that. Therefore he will understand why I was slightly disappointed when we came to the end of his reply. However, I will read very carefully what he has said, and at this stage I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 50 agreed to.

[Amendment No. 125 not moved.]

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Clause 51 [Regulations and orders]:

Lord Clinton-Davis moved Amendment No. 126:


Page 33, line 19, after ("power") insert--
("(a) of the Department of Economic Development to make an order under section 26(6) above, or
(b)")

The noble Lord said: I beg to move Amendment No. 126 formally.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendment No. 127:


Page 33, line 22, after ("such") insert ("order or").

On Question, amendment agreed to.

Clause 51, as amended, agreed to.

Clauses 52 and 53 agreed to.

Clause 54 [Meaning of "worker", "employee" etc.]:

Lord Fraser of Carmyllie moved Amendment No. 127A:


Page 34, line 7, after ("person") insert ("(including a partnership)").

The noble and learned Lord said: I believe that I can move this amendment briefly. The noble and learned Lord will recollect that earlier in this Committee stage we were concerned about whether or not partnerships are to be treated as employers, and, if so, about exactly what liability would be imposed on individual partners. I am very much aware that under the law of Scotland a partnership is regarded as having a separate legal persona. A brief tutorial from the noble and learned Lord might be helpful and enable me to be confident that such a partnership is a "person" in the context of Clause 54, by which I am a little baffled. I trust that the answer will be yes. If the answer is in the affirmative, I wonder whether the definition is necessary. I invite the noble and learned Lord to answer my question in one of two ways. I beg to move.

Lord Dixon-Smith: In rising to support the amendment, perhaps I may say that I am a little intrigued because we are considering definitions at the moment and the clause states that an "employer" is "the person". An employer might be a person, but it might be a company or a charity. It might even be--heaven help us!--the Government because some people who are employed by the Government are occasionally vulnerable, depending on their employment. I wonder whether for the sake of clarity the clause should not refer to "the person or organisation".

While I am on my feet, I should add that I am a little concerned by subsection (5). Perhaps I may impose on the noble and learned Lord for a moment and quote from the subsection which defines "employment" as follows:


    "(a) in relation to an employee, means employment under a contract of employment; and


    (b) in relation to a worker, means employment under his contract".

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Apart from the tautology, is not that a totally indecent form of class distinction?

Lord Falconer of Thoroton: Perhaps I may deal, first, with the amendment which stands in the name of the noble Baroness, Lady Miller of Hendon, and which was moved by the noble and learned Lord, Lord Fraser of Carmyllie. I am glad to have the opportunity to clarify the position and status of a partnership for the purposes of this Bill. My noble friend Lord Clinton-Davis gave an initial reaction when asked about this point on an earlier occasion in Committee. I am now in a position to give a fuller explanation and shall do so.

The amendment affects Clause 54(4) as to the meaning of "employer". It makes explicit that the notion of "person"--and therefore "employer"--incorporates a partnership. I can assure the Committee that the amendment is not necessary. By virtue of the Interpretation Act 1978, the word "person", when used in statutes, includes a body of persons whether corporate or unincorporate. A partnership in England and Wales is an unincorporated body of persons that has no separate legal identity. Scottish partnerships are not corporate bodies, but they have a distinct legal personality separate from their partners. The word "person" in Clause 54(4) therefore includes partnerships in both England and Scotland. I believe that that was the fundamental point raised by the noble and learned Lord.

Partners are jointly and severally liable for the partnership's debts. In England and Wales each partner, some partners or all partners can be sued. In Scotland, only the partnership can be sued although the partners can be sued if the partnership becomes insolvent. None of that means that a worker employed to work for a partnership can recover the minimum wage more than once. There is only one debt and it follows that he can recover it only once. I hope that that fully explains the point raised by the noble and learned Lord when moving the amendment.

I turn now to the point raised by the noble Lord, Lord Dixon-Smith. Clause 54(3) states:


    "'worker' ... means an individual who has entered into or works under ...


    (a) a contract of employment; or


    (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services".
Subsection (5)(a) makes it clear that "employment" (in relation to an employee) relates to a contract of employment whereas, under paragraph (b) (in relation to a worker) it relates to a contract that can be wider than a contract of employment because of the provisions of Clause 54(3). It is not a class-based distinction; it is a perfectly sensible distinction based on the wording of this Bill. I could not expect anyone to pick that up, given the speed with which I gabbled through it, but I believe that that is the answer to the noble Lord's point.

Lord Fraser of Carmyllie: I am delighted that my amendment has given the noble and learned Lord an opportunity to display his learning of the law on both sides of the border. I am grateful to him. He has

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reassured me that partnerships are included in these provisions. I still have a small query about whether subsection (4) is necessary, but perhaps the noble and learned Lord would care to reflect on that and possibly discuss it before the next stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 54 agreed to.

Clause 55 agreed to.

Clause 56 [Short title, commencement and extent]:

Baroness Miller of Hendon had given notice of her intention to move Amendment No. 128:


Page 35, line 12, at end insert ("but not before one year has elapsed from the day on which the Low Pay Commission makes its report and it is laid before both Houses of Parliament, together with a report from the Secretary of State on the results of consultation undertaken by him with representatives of industry and of small business on the content of the Commission's report or, where these events take place on different days, from the latest such day.").

The noble Baroness said: I shall not be moving the amendment in view of the fact that the Low Pay Commission recommended, in paragraph 7 of its report, that the national minimum wage should commence in April 1999--that is, in 10 months, compared with the 12 months that I propose in my amendment. I do not believe that that is a difference worth arguing about. However, perhaps I may mention that I would not have been put to the trouble of having to argue the amendment--neither would the Minister nor his officials--if we had had a copy of the commission's report previously.

[Amendment No. 128 not moved.]

Amendment, by leave, withdrawn.

Clause 56 agreed to.

7 p.m.

Schedule 1 [The Low Pay Commission]:

Baroness Miller of Hendon moved Amendment No. 129:


Page 36, line 6, after ("and") insert ("at least").

The noble Baroness said: In moving Amendment No. 129, I should like to speak also to Amendments Nos. 130 and 131, which are all drafting amendments to the first schedule of the Bill. The first schedule is to be incorporated into the Act under Clause 8(9) to create a permanent Low Pay Commission to replace the so-called non-statutory one which operates at present, the non-legal functions of which--I do not mean "illegal"--will be retrospectively ratified when the Bill is passed. The schedule sets out the constitution of the Low Pay Commission, makes financial provisions and regulates its proceedings. I should like to take each of my amendments in turn and to explain their purpose.

Amendment No. 129 seeks to provide for "at least" eight members of the commission. For all I know, eight members may be more than enough--in the minds of some noble Lords, any number might be too many--but there could conceivably be a need for additional members if the complexity of the commission's operations demanded the membership of more experts. I am the last person to encourage an expanded quango

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such as this but, as the provision is purely permissive, it will give the Secretary of State scope to act, if necessary, without coming back to Parliament with an amending Act.

Schedule 1(2) leaves the Secretary of State with the power to construct the membership in such a way as she may consider "appropriate". What the Secretary of State may consider appropriate may seem far from appropriate to others. Amendment No. 130 requires the Secretary of State to appoint a commission with an equal balance of persons with the necessary qualifications, and not mere token members from one group while packing it with members more amenable to a particular point of view. After all, in employment tribunals consisting of three persons there is a statutory balance between employers and trade unions. Paragraph 1(2)(c), as it currently appears, calls for the inclusion of


    "members with other relevant knowledge or experience",
but what is relevant? Is it service on other quangos or membership of some purely academic think tank with no practical experience of the real world or knowledge of how to juggle a bank account to meet the payroll on a Friday?

Two of the qualifications to which the Government have committed themselves are either trade unions or employer organisations. The third qualification to which the Secretary of State has coyly refrained from committing herself is the most essential one: knowledge and experience of business.

Despite the two earlier paragraphs that require trade union and employer experience, experience of business is the key qualification that the present paragraph omits. That means that it comes in only by interpreting "other relevant knowledge or experience". Why does the Secretary of State not spell it out? Perhaps she wants an escape hatch to avoid the involvement of people from the real world of business. If I am mistaken on the point I am certain that the Minister will explain the reason for this serious omission and perhaps agree to put it right by including representatives of small businesses in any future commission.

It is as if the Secretary of State, while window dressing a balanced organisation, deliberately wishes to ignore or sideline the unrepresented small business community whose interests are not the same as those looked after by the mighty employer associations. What the CBI or the IoD think is of no interest to a business running a factory with 50 employees, much less the owner of a hairdressing salon.

That is the explanation for the point that underlies Amendment No. 130. It provides for the inclusion of at least one person who has practical knowledge and experience of running a small business. I do not in any way disparage the qualifications of any of the present members of the commission, especially Mr. Dewar. I am referring simply to the constituent members of the commission on an ongoing basis if the Secretary of State decides that it has any future. It is the small businesses that will be most affected by the national minimum wage, not the giant supermarkets who can easily cover the cost by adding one penny to a loaf of bread or a

22 Jun 1998 : Column 83

packet of salt; nor will it affect the large industrialists who already pay premium rates for skilled workers. But it will affect the local cake shop or pizza parlour.

No taxation without representation! The national minimum wage is not a tax but it is money that comes out of someone's pocket. It is only right and proper that the voice of small businesses should be heard, even if it is not to be listened to, as I fear it may not.

Clause 8(9) of the Bill gives the Secretary of State yet another permissive power which she may exercise or not as she chooses without further reference to Parliament. The power seeks to make the low pay unit an ongoing body once its initial functions on which it is currently engaged have been performed. The Committee should note that that power may be exercised at any time, not within a reasonable time. It may be exercised in a year, two years, four years, some time, never. The point is that whenever the Secretary of State in her wisdom feels the urge to have a Low Pay Commission she is stuck with it, if for whatever reason she later decides that it is redundant.

Since the Secretary of State is busily giving herself powers to legislate by statutory instrument and all kinds of optional powers while steadily refusing others, she most certainly should have the option, which once again she need never exercise, to close down the Low Pay Commission if it is no longer required without coming back to Parliament with an amending Act.

I am in some technical difficulty over Amendment No. 131. It appears in the Marshalled List as intended for the end of line 30 on page 36. I believe that it should have gone on page 7 at the end of line 5 which is Clause 8(9) to which I have just referred. The Committee has already agreed Clause 8 stand part and I do not believe that I can go back to it. If the Government accept this very reasonable amendment I believe they will be able to agree where it can be inserted at a later stage of the Bill. For the moment, I apologise to the Committee for not noticing the error until I re-read my notes earlier today. I beg to move.


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