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Baroness O'Cathain: On the point of costs, the Minister mentioned the Electoral Reform Society. The

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activities of that organisation would involve more than merely the cost of postage stamps. After all, it has its administrative costs, its overheads and all the rest of it. I ask for clarification whether there is a market as regards bodies which organise ballots or are we just talking about the Electoral Reform Society? Is there a competitive element here?

7.15 p.m.

Lord McIntosh of Haringey: I should not have named that organisation as I am no doubt giving it a competitive advantage. There is a market in this area. There are other organisations which provide these services.

Baroness Miller of Hendon: As we do not know the costs involved, I sought to make the point that if a ballot did not succeed because the workers did not wish to have recognition of collective bargaining it seems extraordinarily unfair that the employer--who may be a small employer--may have to bear the costs of something that he did not wish to occur in the first place. I listened with interest to the comments of the noble Lord, Lord Brookman. He said that he thought the relevant costs were so small they should not inconvenience an employer in any way. If the costs are so small I do not see why unions should not bear these small burdens if they wish to adopt the measure in the first place. The noble Lord, Lord Brookman, mentioned the cost of postage stamps in this regard.

Lord Brookman: I agree with the noble Baroness. Let us do a deal; we shall swap the 40 per cent for 10 per cent and we shall pay all the postage.

Baroness Miller of Hendon: It is nice of the noble Lord to start to do deals with me but I am sure that the Members of his Front Bench would not agree with that. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 44 and 45 not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 46 to 50:

Page 25, line 9, leave out ("written")
Page 25, line 13, leave out ("21 days starting with the day") and insert ("15 working days starting with the day after that on which")
Page 25, line 44, after ("declaration") insert ("under this Part of this Schedule")
Page 26, line 4, leave out ("42") and insert ("30 working")
Page 26, line 6, after second ("day") insert ("after that")

The noble Lord said: These amendments have already been spoken to with Amendments Nos. 12 and 9. I beg to move Amendments Nos. 46 to 50 en bloc.

On Question, amendments agreed to.

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Baroness Turner of Camden moved Amendment No. 51:

Page 26, line 14, after ("effect") insert (", subject to the following provisions of this paragraph,")

The noble Baroness said: This is by way of being a probing amendment to what I repeatedly said at Second Reading is a good Bill. The amendment derives from my own experience as a union official during the period when previous governments have sought to introduce legislation governing the conduct of employment relations. There have of course been numerous attempts in the past 30-odd years. Many of them were concerned with legislating for trade union recognition. Others, of course, were designed to constrain the ability of unions to act on behalf of members.

I believe that most people involved with industrial relations would agree that in the UK both employers and unions have been somewhat chary of involving the law too much. I say this with great respect to my noble friend Lord Wedderburn who sometimes agrees with me on that point. Of course it is accepted that as regards individual rights the employment tribunals and the EAT were welcome innovations. However, the enforcement of collective rights is a different matter. Previous attempts by governments--noticeably Conservative ones--have sought to make collective agreements legally enforceable. That has by tradition been resisted by unions. In fact I can remember when it used to be union policy to negotiate agreements which stated quite specifically that they were enforceable in honour only, and not legally enforceable.

Many employers were prepared to co-operate in that regard as both sides wanted to keep the lawyers out. The experience of the United States was not felt to be particularly encouraging in that regard. I remember that when I went to the States during that period I was surprised to discover that it was quite usual for a union's labour lawyer to accompany officials to negotiations with employers. One result of that was enormously thick agreements and, incidentally, no lessening in the number of industrial disputes. In the present Bill when the CAC makes an adjudication about recognition it can make the resulting agreement legally binding. The objective of the amendment is to allow both parties if they wish-- I emphasise the expression "if they wish"--to opt that this should not be so. In other words, there could be an agreement that is binding in honour only. I shall be interested to hear the Minister's views on this point. As I said earlier, this is a probing amendment. I beg to move.

Lord McIntosh of Haringey: I am grateful to my noble friend for that explanation. If I have understood correctly, I believe that the amendments are intended to enable an employer and a union who have had a procedure imposed on them by the CAC because of their inability to agree to modify or end that procedure. However, that is exactly what sub-paragraph (5) of paragraph 27 does. It provides that if the parties agree in writing that all or part of the procedure is not to be legally binding, or if they agree to vary or to replace the procedure, they may do so. They are therefore free to replace the legally binding procedure with some other arrangement which is not legally binding if they so wish.

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I think that part of the confusion is our fault in the sense that we could be misled by the end part of sub-paragraph (5) which states that,

    "the written agreement shall have effect as a legally enforceable contract made by the parties". What we intend to be legally enforceable and what the sub-paragraph states is legally enforceable is not the original agreement which had been imposed but the agreement to end or vary the procedure imposed by the CAC. It is necessary to give the new agreement legally binding force to override the previous procedure. It does not have to impose any new legal obligations on the parties unless they wish it to do so and provide for that in the agreement. My noble friend's amendments are unnecessary because the wording achieves that. Similar arguments apply to Amendments Nos. 81 to 83, which are in the same group.

Baroness Turner of Camden: I thank my noble friend for his reply. In the light of his explanation, I shall withdraw the amendment. I shall look very carefully at what he said to see whether it would be a good idea to clarify sub-paragraph (5) on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 52 not moved.]

Lord Wedderburn of Charlton moved Amendment No. 53:

Page 26, line 23, at end insert--
("( ) In determining a complaint where the only remedy available is specific performance under sub-paragraph (6), the court shall not imply any term in the relevant contract, method or agreement falling within this paragraph which affects--
(a) the rights of employers, workers or an independent trade union to take action in contemplation or furtherance of a trade dispute, or
(b) the operation of subsections (2) and (3) of section 180.")

The noble Lord said: Amendment No. 53 reverts to the question raised earlier in the Committee's discussions. It attempts to point towards the new machinery, which will either form itself or be formed, in a situation where a collective agreement specified--as to method at least--by the CAC is legally binding. Speaking not only as a lawyer, I am unhappy at the way in which there has been very little debate, both in the other place and here, about the question of what follows from the new world of legally enforceable agreements, which, to a remarkable degree, my noble friend Lady Turner has just touched upon.

Amendment No. 53 takes us into a situation where an agreement or contract has been specified by the CAC, or under a CAC declaration, and one side or the other raises not a new question but a very old question--which I am sure that the noble Lord, Lord McIntosh, will appreciate--namely, that of one side saying to the other "You have broken the procedure". That is the oldest sentence in arguments about industrial relations and collective agreements. The problem is not new. One side says to the other, "You should have taken this course in the procedure before"--in some cases--"you called industrial action".

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The new feature then provides for the innocent party to take action in a court for the only remedy which is permitted; namely, a specific performance, a matter we touched on earlier. In doing that, the innocent party will have a claim to that remedy--and that remedy alone--but of course within the procedures of that court. I suspect that I am right in saying that the Government have not yet vouchsafed just which court it will be. There were a number of types of actions under Schedule 1 which could be brought in the county court. Two of those have now been knocked out and the county court does not seem to be the favourite vehicle for that sort of action. Indeed, in such commentaries on the Bill that I have seen, most people assume that the action will take place in the High Court. When the schedule gives no guidance and the parties have a contract in front of them in respect of which they say there has been a breach, they would have a right within, at least, the new rules of the noble and learned Lord, Lord Woolf, to go to the High Court.

The first question is whether that is right or whether the plaintiff is to have a total claim as to the court. If that is right, then we must ask what is likely to happen in a High Court action against the background of this new type of enforceable collective agreement. I am aware that collective agreements could be enforceable under the old regime but, as the noble Baroness opposite knows very well, this is a new type of collective agreement which is enforceable by reason of a CAC declaration. If one got that far, it would mean that appeals would rely then on a question of law to the Court of Appeal or to your Lordships' Judicial Committee.

More importantly, in 1988 the Court of Appeal established that the interpretation of a collective agreement--not its legally binding character--should be drawn from the normal principles of employment law contracts, which are normally individual contracts. In one case it interpreted a minute of the Railway Staff Joint Council--a body well known to my noble friend Lord McCarthy--on the basis of implied terms and expressed terms; that is to say, "Is this the whole contract which I have before me?" "No. There are some implied terms". What kind of implications could we envisage in a contract which is in front of the High Court and it decides that such evidence as it has is not the full contract between the parties? That is highly likely because the CAC is not obliged to establish all the terms between the parties.

In many other systems of labour law, the court implies that there are "peace obligations", as they are called. Let me say that I cite foreign cases not because of a need to travel to conferences in delightful places but because we can learn from different jurisdictions. In Germany and Sweden, the peace obligation is the basis of the whole labour law system, either as a relative peace obligation, which covers points within the expressed agreement, or as an absolute peace obligation prohibiting all industrial action during the life of the agreement.

If nothing were done we would need a hot precedent--by which I mean an unusual case which established people's reactions to the whole system. That

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is how it would work. As we saw earlier this afternoon, it would not need an employer who is typical of employers in any way; it would need a case which would bring out the hostility or otherwise of other parties. If the High Court implied peace obligations into one example of the new collective agreement which is legally binding, my prediction would be that the whole system would crash to the ground. There would be an enormous argument about whether there should be an implied obligation and whether the court was right to give that impression.

If one looks at the individual employment contracts, which the Court of Appeal tells us to do in Mr. Cresswell's case in 1994 involving the Board of the Inland Revenue--about which one of your Lordships' should know something--the duty of co-operation was firmly established at the centre of employment laws. In the case of Mrs. Ticehurst in 1992, the Court of Appeal went much further. It established that a worker who returned to her work with her group--in her case a junior management group--with the wrong attitude and not being prepared to say she would not take action again, that by itself was a breach of the employment contract.

I am well aware that it is only those lawyers who look at employment law who come across these bizarre cases. I am happy to make plain the assertion that these are typical cases, slightly pressing at the edges. If the High Court applied the same concept to the interpretation of collective industrial relations, then a co-operative trade union might be caught more frequently than one would think by reason of implied obligations of peace; it might be caught perhaps rather more frequently than a union which was less co-operative since the intentions of a co-operative union might be held to a higher standard.

These are uncharted waters. The amendment says that there should be no such implication and, secondly, that nothing should be implied concerning Section 180 of the 1992 Act, as this Bill refers to it.

If the Government would be prepared to say that they will look at this, I think it would be of enormous help. I am well aware that the legal establishment outside employment law will tell the Government that it is quite impossible to cope with injections of orders to the court. It is not at all impossible. We do it every day. We tell the courts what they can and cannot do and let them get on with it. Sometimes they get on with it so well that we have to come back and tell them that they must not do something else.

However, something must be said about this. It is not in the Government's documents, and it is not in the Bill. It is nowhere to be found. We should be told, first, which court it is to be; secondly, what is to be the approach of the court to implied terms in regard to co-operation and whether or not it is to be the same as in individual contracts of employment; and, thirdly, whether the Government are prepared to say something on the face of the Bill, and not just in

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a code, which will prevent the case that will knock its Schedule 1, as Lord Montgomery used to say, out of the ground and out of earshot. I beg to move.

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