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Viscount Bridgeman: My Lords, perhaps I may refer to my noble friend's main group of amendments. As was said in Committee, the introduction of the companion or minder--whatever one calls him--on the employer's premises or at some place agreed between the employer and the employee, differs from practice elsewhere and is liable to abuse.

With the greatest respect, I suggest that the Minister sees this as an ideal situation and that the provisions as presently drafted do not provide for unreasonable behaviour by either party. There is also the question of confidentiality to consider and we may get into the

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situation that the companion says, "I want to see this and that", telling the employee what is his due to be shown. The Bill needs further safeguards.

Lord Falconer of Thoroton: My Lords, perhaps I may deal first with the amendments of the noble Baroness, Lady Miller, in relation to Clause 10. With great respect to the noble Baroness, she again missed the point in relation to what is the protection for employers in this matter.

Everybody agrees that the national minimum wage will not work unless employees have the right to look at the source material; namely, what the material shows they have been paid. That right must be meaningful and provide adequate protection both to employer and employee. We believe that the provisions of the Bill as presently drafted do just that.

There are three safeguards for the employer. First, the right to look at the material can arise only if there are reasonable grounds for believing that the employee is not receiving the minimum wage. Secondly, there is no question--as the noble Baroness keeps upsetting your Lordships by saying--of the employee simply marching into the employer's premises and demanding to see records. He or she must give notice specifying a period at which he or she wishes to inspect the records.

Thirdly, the employer can determine where the inspection takes place. Subsection (8) says,

    "The place at which the relevant records are produced must be--(a) the worker's place of work; or

    (b) any other place at which it is reasonable, in all the circumstances, for the worker to attend to inspect the relevant records; or

    (c) such other place as may be agreed between the worker and the employer".

Like all great advocates when confronted with the major difficulty in her argument--namely, subsection (8)(b)--the noble Baroness simply read it and said nothing about it. If, as the noble Viscount, Lord Bridgeman, fears, employers are worried about confidentiality and if, as the noble Baroness, Lady Miller, says, employers might be worried about being intimidated by the person who is brought along, then they would be perfectly reasonable in saying, "You cannot inspect at the employer's premises; you have to go somewhere else". They might go to the employee's home, the offices of a citizen's advice bureau if that is sensible, or even a solicitor's office. All of the problems which have been identified can be dealt with under subsection (8).

Clause 10--which in effect would be rewritten as a result of these amendments--is, as I indicated, drafted as it is for very good reasons; that is, reasons to do with fairness and reasonableness. These amendments would either make the clause less equitable or in some cases simply make it less workable.

The Government fully accept that enforcement should not be overburdensome. That is why, in subsections (2) and (3) as I indicated, the Bill makes it clear that the right of access is already limited; for example, the worker must have reasonable grounds for believing that he is or has been paid less than the minimum. In

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addition, the right of access may be exercised only for the purpose of establishing whether the worker is being or has been paid at least the minimum. That goes a considerable way to meeting the problem posed by the noble Viscount, Lord Bridgeman. Again, as I indicated, the worker must produce a written notice.

Clause 10 as it stands also allows a degree of flexibility; for example in agreeing a different period--longer than the specified 14 days--for the production of records, under subsection (9)(b).

Finally, the clause provides for workers actually to inspect records and to be accompanied if they wish. I believe that is an important entitlement which will encourage workers to exercise their rights and discourage some employers who may be tempted to use unfair tactics of dissuasion.

I did not mean that in any intimidatory way when I said it in Committee and was extremely disappointed to hear the noble Baroness suggest that I did. What I meant by that was that there will be certain circumstances where an employer--there will not be many of them, but there will be some unscrupulous employers who wish to make it as difficult as possible--will simply provide a circumstance which is intimidating to an employee, perhaps a homeworker or someone not skilled in looking at records. In those circumstances it is perfectly appropriate that that person should be accompanied by somebody to help him. If the employer is concerned that he will be intimidated, he can deal with it by identifying somewhere where he thinks it reasonable to have the inspection.

More broadly, it is worth emphasising, that the overall purpose of this and other enforcement mechanisms is to encourage self-compliance. It is far preferable, if at all possible, to encourage employers to comply voluntarily than to have to provide for a huge bureaucracy to do so. Furthermore, by allowing workers to inspect records it should be possible to prevent cases of simple confusion or misunderstanding. That in itself should help to keep cases out of the tribunals and the courts.

The amendments would significantly weaken the position of the worker for no particular reason. In addressing them, I shall aim to focus, as in the earlier debate, on three main issues: the removal, by Amendment No. 17 and related amendments, of the worker's right to inspect and examine his records; the removal of the right to be accompanied; and the lengthening of the time in which records must be produced to 28 days.

Taking each of those points in turn, I believe it is essential to the enforcement provisions for a worker to have the right to inspect records. Of course, in many cases that right will be met by the employer providing the worker with a copy of the records as they relate to him. I imagine that that will be the normal way to proceed because in most cases employers and employees will behave well. But in setting out an enforcement procedure one has always to legislate for those cases where the employer or the employee is not behaving well. That is why it is always necessary, as in all civil litigation, for the originals to be inspectable.

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I do not believe that the Bill allows this right to be abused. I doubt whether there will be long lines of employees queuing to inspect their relevant records in person. Subsection (2) already makes clear that the worker must have reasonable grounds to exercise the right. Therefore, the replacement of the right of access with a right to a copy of records would unacceptably weaken the enforcement provisions of the Bill.

This batch of amendments, which hang on Amendment No. 17, would also remove the worker's right to be accompanied when examining the records. As I mentioned, I believe that this right is essential to prevent some employers fobbing off their workers or pulling the wool over their eyes. I do not believe that there will be many such cases, but the option to be accompanied provides a reasonable means of avoiding that.

There is also a pragmatic reason for this provision. Some of the calculations of remuneration for minimum wage purposes may be not at all straightforward and some workers may feel more confident if they can call on a colleague with particular accounting or legal expertise. Again, some workers may not have a complete command of the language to enable them to understand financial or legal terms. The outcome of this provision should assist understanding the position and, to the extent that there may have been an innocent misunderstanding, should encourage early resolution of the problem.

Finally, the amendments would double the amount of time allowed to an employer to produce the records from 14 to 28 days. There seems to be no reason for this proposal. It seems to me that any reasonable employer would be able to produce records relating to how much he pays his staff within a fortnight. Subsection (9) of the clause in any event allows the worker and employer to agree between them an extension of the deadline if that is appropriate. So we have already built in more than sufficient flexibility for employers and employees.

That leads me to Amendment No. 23; for not all the amendments act in the interest of the employer. This amendment deletes subsection (9). It would therefore actually remove the right of the worker and employer to reach agreement on a longer timescale. I am surprised to see this amendment survive, despite apparently working against the interests of the employer, and no argument has been advanced in support of it.

As I indicated, we have designed the clause to be effective in a balanced way, not in order to over-burden or punish employers. It is in everyone's interests, workers and employers, for enforcement to be fair, and in particular for enforcement to be effective.

Perhaps I may come back to what I think is the noble Baroness's underlying fear that the clause allows employees to march into employers' premises and look at records. It does not. That is the misconception that underlay the whole of the noble Baroness's submissions. I would earnestly ask her to think again

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on the amendments and not to continue to upset the House with her constant reference to constitutional outrage.

We talked on the previous occasion about the issues raised by the noble Viscount's amendment. There is not much I can add to what I said before. The Government can sympathise with the thinking behind the amendment as it is intended to ensure that the worker is not caught out by some sharp practice. However, I believe that we should be able to rely on common sense in this area. Subsection (9)(b) already envisages that there may be agreement between the worker and the employer as to the deadline within which the records must be produced. In the same spirit I would hope that employers and workers can reach a sensible agreement about when the records are produced. It seems disproportionate to seek to regulate that timing. Furthermore, as I pointed out in Committee, it is somewhat inflexible to follow the approach proposed by the amendment. On some occasions it may suit both parties to see the records at a time outside the working hours of the individual concerned. Yet the amendment would have the effect of preventing such a sensible arrangement. For those reasons, I hope very much that the noble Viscount will not move his amendment.

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