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Lord Wedderburn of Charlton: My noble friend knows well that it is not our intention to press any of the amendments that we move today. On the other hand, I was a little unhappy about the nature of his argument--I shall not call it slender. Of course I agree that new Section 238A forms part of Part X of the Employment Rights Act. It is true that the employment tribunals must look for the true reason of the dismissal. There will be conciliation, I agree. There will be a situation where legal dismissal is the last resort. Those points which he made, with respect, do not go to my amendment.

However, when my noble friend says that the employment tribunals will have little difficulty in deciding the matter, that raises the crucial issue. Most people who have been to a tribunal or any other court know that the case is often won or lost, first, according to where the burden of proof lies in fact and in law; and, secondly, how easy it will be to obtain facts for the complainant before the tribunal or court so that it can make its decision on the full argument.

There is no full discovery procedure and even if there were, I would not change my argument. It rests on a simple point which my noble friend, with great respect, did not meet. It is very different when a complainant asks a tribunal for a remedy against a defendant whose reason you have to prove. Let us take my noble friend

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as the complainant who has to prove to the tribunal that my noble friend on his right, who was his employer, had got rid of him by reason of any situation you like. Certainly, where he got rid of him by reason of industrial action my noble friend will not know where to turn, although he will be quite certain that he was pushed. He will talk to his colleagues in the shop who will know that he was pushed out. If he is a militant, it is highly likely that he will be pushed out.

How will the complainant prove that? It is rare for the subjective test to be easily proved in a case where the defendant does not have to go to the burden of proof. I appreciate that it is difficult for my noble friend to take all these matters away and come back on Report when we shall hear many new things, but I ask him to look at this again. It goes to the matter of justice by complainants who are forced to prove someone else's reason.

When it is a serious matter, such as the loss of a job, surely it should be the other way around. The employer can say that he was dismissed because he was slow at the work and he can show that. He may say, "He was no good at this, that and the other.". That is the end of the case under my amendment, as under any other. But where it is a question of the complainant needing to show that he was dismissed by reason of the industrial action, surely we should shift the normal burden. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 5 agreed to.

Clause 15 [Collective agreements: detriment and dismissal]:

Baroness Miller of Hendon moved Amendment No. 276:

Page 8, line 20, at end insert--
("(4) The payment of higher wages or higher rates of pay or overtime or the payment of any signing on or other bonuses or the provision of other benefits having a monetary value to other workers employed by the same employer shall not constitute a detriment to any worker not receiving the same or similar payments or benefits within the meaning of subsection (1)(a) of this section so long as--
(a) there is no inhibition in the contract of employment of the worker receiving the same from being the member of any trade union, and
(b) the said payments of higher wages or rates of pay or overtime or bonuses or the provision of other benefits are in accordance with the terms of a contract of employment and reasonably relate to services provided by the worker under that contract,
and paragraph 4 of Schedule 2 to this Act and sections 146 and 148(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 shall be construed accordingly.")

The noble Baroness said: This amendment is designed to implement statements made by the Government in paragraph 4.20 of their White Paper, Fairness at Work, reinforced by Annex 1, paragraph 8, of the same White Paper, both of which I should like to quote. In paragraph 4.20, the Government state:

    "As under existing law, individual employees will continue to have the right, should they wish, to agree terms with their employer.".

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    That seems plain enough. But just to make it clearer, the Government state in Annex 1:

    "The terms of agreements resulting from collective bargaining are normally incorporated into individual employees' contracts either explicitly or by custom and practice and thus set the minimum terms and conditions for all employees in the bargaining unit". The minimum terms, my Lords.

The annex goes on:

    "Under the existing law an employee and an employer can agree different terms if they wish. Since the current law works well, the Government sees no reason to change it". That is equally plain, but changing the law is precisely what Clause 15 is intended to do, as the Government admit in paragraphs 110 and 111 of the Explanatory Notes.

The issue in this clause arises from the landmark 1995 decision by noble and learned Members of your Lordships' House in the cases of Associated Newspapers Limited v. Wilson and Associated British Ports v. Palmer and Others. A decision of the Court of Appeal was overruled by their Lordships, who held that not paying the same wages to an employee who declined to sign an individual contract was not action against those who did. In other words, not doing something was not action.

Their Lordships ruled that not doing something was an omission which was not prohibited by the Employment Protection (Consolidation) Act 1978, as amended. In paragraphs 4.24 and 4.25 of the White Paper, contradicting what they had said only four paragraphs previously about the rights of employers and employees to agree their own terms, and in contradiction of the statement in Annex 1 which I have quoted, the Government stated:

    "The Government therefore propose to make it unlawful to discriminate by omission on the grounds of trade union membership, non-membership or activities.".

The White Paper, at paragraph 4.25, makes it clear that the intention would be to overrule or reverse the law as determined by this House and the two cases to which I have referred. Paragraphs 110 and 112 of the Explanatory Notes make it equally clear that that is the intention. Clause 15(1) as drafted does not spell out in precise words what the Government are getting at. And the Secretary of State is seeking powers in subsection (2)(a) to make regulations in what the Bill refers to as "specified classes of cases" without openly saying what the Government currently have in mind.

During the Second Reading in your Lordships' House on 10th May, the noble Lord, Lord McIntosh of Haringey, when winding up for the Government, said that,

    "employers and employees will remain free as they are now, and I emphasise the words "free as they are now",

    "to conclude individual contracts if they wish to, even where collective bargaining arrangements exist. We have no intention of changing that and the Bill does not do so.".--[Official Report, 10/5/99; col. 1045.] That is exactly what the Bill does do. As the law currently stands, following the two rulings in the Associated Newspapers and Associated British Ports

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    cases, an employer is permitted to give an inducement to an employee not to sign a collective agreement because that is not a positive detriment against an employee who will not enter into a personal contract.

As the Bill stands, an employee who does not receive the inducement because he does not sign a personal contract could now claim that he has suffered a detriment. That is despite the fact that the employee who does not accept the collective agreement will also be offering something in return, apart from not signing the collective agreement. He might be willing to work more flexible hours, to have more flexible working arrangements, more flexibility in multi-tasking or whatever. The Government are now proposing that the signatories to the collective agreement shall receive the extra benefits in return for nothing.

In Committee in the other place, the Minister for Small Firms, Trade and Industry, admitted talking about an employee who had refused to sign a personal contract, stating:

    "The employee may ... think that it is unreasonable of the employer to ... give the employee a pay rise, but that is the employer's right.". We agree with that. An employer and an employee should always be free to make their own bargain. Where there is a collective agreement affecting the firm, as the Government state in the White Paper, those should be the minimum terms. We believe that an employer should be fully entitled to pay more to employees who do what an employer considers to be more valuable to him.

The Minister in the other place agreed that the Government would look at the clause again. As they have not done so, we have tabled the amendment to clarify the point beyond any possible ambiguity. I invite Members of the Committee to look at my carefully drafted amendment. It relates only to a benefit in the form of extra money--and just money. It makes clear that a different rate of pay between those who sign an individual contract as distinct from a collective one, and those who decline to sign such a personal contract, is not to be treated as a detriment.

There are two important conditions. The first is that the individual contract must not inhibit the worker from nevertheless joining the union, and, secondly, that the additional payments and benefits shall be a contractual right of the employee and not merely something at the discretion of the employer. The noble and learned Lord, Lord Bridge of Harwich, pointed out in the lead judgment in two cases that a union is able to offer its members what he described as,

    "other and important valuable services", apart from the collective negotiating facilities over their terms and conditions of employment. Indeed, they can and do. In return for a small weekly subscription, some unions offer cheaper car, holiday and medical insurance, cheaper mortgages, representations in disputes with their employer and discounts on a whole range of goods and services.

This amendment does not prevent the employee from enjoying those and any other benefits as a member of any union which he chooses. But the point is that in a Bill which the Secretary of State described in the other

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place at col. 130 on 9th February 1999 as containing measures for a partnership based on rights matched by responsibilities, it must be right that if unions are entitled to offer workers all sorts of inducements to join a union, then an employer should be entitled to offer employees an inducement to accept different terms of employment from that negotiated in the collective agreement.

That is especially so when those different terms will be such as to enable the employer to receive greater benefits from the efforts of the worker. As I said, those may be in the form of multi-skilling, flexibility over duties, hours of work and so on. What the amendment does not do, apart from not preventing an employee from being a member of the union, is that it does not permit an employer to refuse to promote the dissenting worker on those grounds; it does not permit an employer to give the dissenting employee all the worst tasks or worst places of work in the premises. It does not permit the employer to harass or wrongly dismiss the dissenting worker. It does not permit the employer to take any other sanctions against the dissenting worker. All those wrongful things, and any others that he can think of, can be legislated against by the Secretary of State under paragraph 2. It does not permit the employer to give and withhold any extra contractual benefits capriciously or arbitrarily. There is to be no discretion. There can be no question of the worker being forced to sign an individual contract, which is what the noble Lord, Lord McIntosh, suggested might happen. He is not forced to take the inducement of extra money in his pocket. The worker who enters into an individual contract is to receive that as part of his contractual rights.

The amendment merely entitled the employer to continue to pay the dissenting worker the wages that the union had already negotiated as being fair and reasonable for the job. The clause as drawn is intended to do the opposite of what the Government paid lip service to in part of the White Paper and in the ministerial speeches to both Houses, which I have quoted; namely, the freedom of employer and employee to negotiate between themselves whatever terms they think fit.

It has another sinister effect. By compelling an employee to accept a collective bargain against his will and in that way increase the power of the union over him, the Government are attempting to reintroduce the closed shop by the back door. I repeat that this would reintroduce the closed shop by the back door. That is something which the Labour Party promised it would not do. This amendment simply ensures that workers enjoy one of the most fundamental of employment rights; namely, to negotiate their own individual pay if they can strike a better bargain with their employer, possibly by being more flexible than an entrenched egalitarian position of a union. I beg to move.

7.30 p.m.

Lord Crickhowell: My name is to the amendment. I do not intend to repeat what I said on Second

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Reading or the interest that I declared then. I thought I had then received an encouraging response from the noble Lord, Lord McIntosh, and I hope that I shall hear an encouraging response to the amendment.

The simple point I want to make is that we are talking about the good industrial relations which have existed in the ports industry over the past eight or nine years, in marked contrast to the shambles which existed before then. Those relations are good and are a transformation from the past. I hope that by their response to the amendment, the Government will ensure that those good industrial relations can continue.

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