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Lord Cavendish of Furness: Paragraph 125 states,

Lord McIntosh of Haringey: Paragraph 125 states that the Secretary of State cannot amend the decision. He can amend paragraph 19 of Schedule 1, but not necessarily in a way proposed by the CAC.

Baroness Miller of Hendon: After that little interchange on Amendment No. 226 I hope that the noble Lord, Lord McCarthy, will not take it amiss when I say that when he suggested that my amendment had some merit I wondered whether I had read the wrong amendment as I did not think that we would be in agreement on that. I am well aware that any order will have to be laid before Parliament by means of a Statutory Instrument and that that instrument should constitute a positive resolution of both Houses. That is right and proper. I do not think that we differ greatly in our views on this matter. I hope that on reflection the Government will consider that this measure may be a means of conciliation. It is late, but I am tempted to divide the Committee as I believe I would be accompanied in the Lobby by unusual "friends", as it were. However, I am not serious about that. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wedderburn of Charlton moved Amendment No. 227:

Page 57, line 5, at beginning insert--
("(A1) Where the CAC specifies a method whereby parties are to conduct collective bargaining, such a method imports a duty on the parties to conduct collective bargaining with a view to reaching agreement on matters falling within the meaning of collective bargaining in the relevant part of this Schedule.")

The noble Lord said: In all statutes there are key words. In every discussion that I have been privy to in regard to the Bill there have been a number of them. We have just discussed part of one of them; namely, the declaration of the CAC. The amendment is about the key word, the concept, of "method". It can be approached very simply. Its easily understood use is contained in paragraph 27. I counted about 30 other places where it was also used and where its grammatical construction was not precisely the same. It is also in the general part of the schedule at paragraph 125 and onwards.

In paragraph 127 the method of conducting collective bargaining is set out, but only in respect of the change of methods. The Secretary of State, having consulted ACAS, may then specify the method by which collective bargaining might be conducted. Then follows one of the most remarkable sub-paragraphs in recent legislation: if such an order is made the CAC must take it into account under the relevant paragraphs but,

    "may depart from the method specified by the order to such extent as the CAC thinks it is appropriate to do so in the circumstances".

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    Having been required to consider the method, it may then set it aside. That is a possible construction which might lead the CAC into some difficulty.

That paragraph does not contain a definition or explanation of what a "method" is. There are those who say--this is also in some of the Explanatory Notes to the Bill--that one can equate it to something like a bargaining procedure. The Explanatory Notes tend to do that with regard to diagrams. Those of us who are less numerate than literate do not find it easy to follow precisely from the text what the notion of "method" is.

I raised the matter on Second Reading and, because it was the only place then and I believe it is the only place now, I quoted from where the Government give their secret thinking on the definition through a statement by the Minister for Small Firms, Trade and Industry, Mr. Wills, on 16th March. As far as I am aware, he is the only person who has confronted the question of what is a "method". Before referring to what he said, it may be convenient to look at paragraph 27, one of the first places where the definition appears in the Bill. According to paragraph 27, the CAC is to help the parties reach an agreement. I fully support my noble friend the Minister in some of the remarks he made about the nature of this attempt to put collective bargaining on some kind of statutory footing. It is an attempt to put it on a voluntary basis up to that point; the CAC is to try to get agreement.

But at sub-paragraph (3) it states:

    "If at the end of the agreement period the parties have not made such an agreement the CAC must specify to the parties the method by which they are to conduct collective bargaining". Sub-paragraph (4) states:

    "Any method specified under sub-paragraph (3) is to have effect as if it were contained in a legally enforceable contract made by the parties".

I add as an important footnote that sub-paragraph (4) shows us that in these usages--not everywhere--the method is to have effect as if it were contained in a legally enforceable contract. Whether or not there is significance in that, it plainly gives rise to legal obligations of some kind in respect of what the CAC is declaring.

My honourable friend in another place, Mr. Wills, gave an answer as to what it meant. He said:

    "If the CAC has to impose a bargaining procedure because the parties cannot agree, it will be legally binding". We all agree that that is what it means; it clearly says so. He went on:

    "However, it will be a procedure for holding talks only; the parties will not be required to reach agreement for the simple reason that people cannot be forced to agree".--[Official Report, Commons, Standing Committee E, 16/3/99; col. 348.] I remarked to your Lordships on Second Reading that the last part of his statement was obviously right. Parties cannot be forced to agree. They can only be subject to some penalty if they do not agree.

The important part of the statement seems to me the crunch of the core concept. It will be a procedure for holding talks only. On its face, that is plainly not right. They are not talks only; they are talks about certain

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things or with a certain approach or which in some way are relevant to all the other places where we find the method central to the structure.

I do not wish to advance the argument that the definition of the method, or even the absence of definition, has taken us into the country of duties to bargain. There are many types of duties to bargain. This Bill avoids them. In my submission, it correctly avoids them because, in our circumstances at least, that would not be a very sensible way to further the venture.

On the other hand, if one looks at the other side of the statement, it is not a procedure for holding talks of any old kind. That would be absurd. On Second Reading, I quoted the case of Mr. Boulwar in the United States, who came with his research team, saying, "This is what we will offer and that is an end of it". I have never had an answer to the question whether Mr. Boulwar would have satisfied his duties under this Bill. I suspect he would not. I suspect that, when consulted, the CAC would say, "We do not think it is enough simply to meet with the union." What would it say? I suggest it would say, "You really must, under the definition of the method, come with some kind of view to reaching agreement".

It so happens--and, in my submission, it is pure chance--that the duty to consult with a view to reaching agreement is part of the two EC directives which have some relevance: the directive on collective redundancy of workers and the directive on the transfer of undertakings and the safeguarding of employees' rights in such a situation with our regulations, which are normally known as TUPE. They were re-written in 1998 as directives 50 and 59. However, the phrase which was key in their origins, and still is in our law, is that the parties should consult, that the employer should consult with employee representatives, with a view to reaching agreement in their texts.

I do not think that that goes very far. I do not believe that most employers and unions would regard it as an unreasonable definition of what they are about. They are there to consult with one another on something which might become an agreement and are under no obligation to go further than that.

However, it does line up the ball park and avoids a situation, which I repeat the Bill would do well to avoid, in which the CAC has made its declaration and says, "You must now fulfil the method." The employer has been half-hearted about it, because that will normally be the situation, as they have just agreed, and the employer's lawyers say, "This is not an indication of method at all. We simply do not know what your obligation to execute a method as part of a legally enforceable contract means at all." At that point, with no definition, the scheme is in jeopardy.

I seem to have said that in relation to other matters, but I say it again. If you do not attend to these legal questions in advance, they will blow up in your face. That is what happened once previously. Nobody knew of a man called Mr. Ward at Grunwick Processing and what blew up in the face of a previous scheme. Therefore, this amendment goes only so far as to suggest that method in this schedule imports a duty with a view

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to the parties conducting collective bargaining with a view to reaching agreement on matters falling within the meaning of collective bargaining in the relevant part. The final two words are somewhat circuitous because collective bargaining may mean different things in different parts.

I do not want to go further into the question of what it will mean in Part II. Perhaps the Committee will allow the words to stay there until we see more. In my view, Amendment No. 227 is of the greatest importance because it tries to give a shape and a protection to the CAC in regard to a concept which is central to the execution of its duty. I beg to move.

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