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Lord McCarthy: My Lords, it is very difficult for us to know how to react to these amendments because they are, as the Minister himself said, extremely complicated and they come at very short notice. It is extremely difficult to trace through and see precisely what is left of the old Part II. One cannot say that it is subject to subsequent correction and change because this is the last moment. If we get this amendment wrong now and we do not complain about it now, we shall not have another opportunity to do so because here we are in the upper House at Report stage.

Nevertheless, as I understand it--indeed, as the Minister explained it--this is far better than the pseudo-monster of Part II, which is on the face of the Bill. I was always against Part II. I could never gain an honest admission from people that they had invented it or that it was their idea. No one would say who asked for it; it just appeared. It was supposed to be there because unions had complained about the non-enforcement of their collective agreements by employers.

The first objection to that view is that, when you investigate what unions are complaining about, it invariably turns out that they are not complaining about the non-observance or non-enforcement of a written, formal agreement; they are talking about employers taking back customs and practices which were never put in writing and which we never really agreed at all. They are complaining about sudden, immediate acts of management authority. They have not got it written down and do not have protection, but they think they have. Therefore, I was always extremely sceptical that they would get much out of this.

Secondly, if the unions did challenge, what they were being asked to do under the Part II now in the Bill was to turn their existing agreement, or some other construction of it, into a legally enforceable document. But no one would have wanted that. We do not have

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any legally-enforceable collective agreements in this country. That is not the tradition; it is not the method. That is part of the problem about the way that this Bill seeks to enforce recognition. However, I shall leave that point aside for the moment. So, if this were taken seriously by employers, unions would suddenly find that they were being asked to accept all kinds of legally enforceable restrictions on, for example, their relations with their shop stewards or their members or, indeed, on the use of industrial action. They would not want that anyway on the second ground.

Thirdly, if it ever came to the point of the CAC wanting an existing agreement to be legally enforceable and beefed up in some way and the employer did not like it, the obvious reaction for the sensible employer would be to derecognise the union. We would have a rash of derecognitions if ever the unions sought to put the pseudo-barmy Part II into effect. Therefore, the fact that that has gone cannot be a bad thing; indeed, it is an entirely good thing. I regard it as the second great concession which has been made this afternoon and am grateful for it.

However, why do we not just abolish it? Why have we thought up another pseudo-Part II to put in its place? It is possible that I do not understand it because it has been put forward at the last minute. Therefore, I have a few questions for my noble friend the Minister. I understand--I am sure I have this bit right--that it is confined to applicants for recognition; in other words, it cannot affect anyone who does not apply.

Secondly, it applies where you have gone for recognition because the employer will not grant you this, but you have not got the ballot and you have not had a CAC declaration which will turn itself into a "method", whatever this is, and be enforced. Indeed, if you had got that far, this part of the system would not apply. It also applies if one party signs what I believe my noble friend called a "semi-voluntary" or "partly- voluntary" agreement but the other party doubts whether there is in fact an agreement. So you can go to the CAC and it will determine whether the agreement which was signed is really an agreement. I cannot imagine the circumstances in which this would arise; but never mind.

The other occasion when it arises is where one party says, "We have got an agreement but the other party is not carrying it out". If I have got it right, those are the circumstances. I have several points to make. First, I find it impossible to envisage such a situation ever arising in the real world. Employers who refuse to recognise, and who take themselves to the stage where they appear before the CAC which makes an award against them, will not suddenly recognise half-way through, sign what actually turns out not to be a proper agreement and then fail to observe it. This is a world about which I know nothing at all. As I said, I cannot envisage such a situation arising. But, never mind, if it does not arise, you might say that it does not matter.

However, it is not clear to me what happens if it should arise. What answers are given by the CAC? Let us suppose that such a situation did arise and one party, perhaps a union, goes to the CAC and says, "This

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agreement is not an agreement". What does the CAC do? It may give a declaration, but are there any sanctions behind this? Do you then move on to a legally enforceable method? Does the CAC then write the agreement because the agreement in question turns out not to be an agreement? That is not very clear to me. On the other hand, let us suppose that it is an agreement and the problem is that it is not being carried out. What is the sanction? If the CAC decides that the agreement exists, that it is a good one but that it is not being carried out, what is the sanction? Is it the same old sanction that appears in other parts of the Bill; that is to say, "specific performance"? Do we go back to a situation in which the CAC puts in what is in effect a legally enforceable agreement and then, if the employer does not take notice, the union can, so to speak, go to court and seek to impose it on him because he is breaking a contract and it can get "specific performance"?

If that is the case, what have we added? What have we done? What would be different if we took this provision away? If there were another sanction at this stage--for example, one that the Government had rejected, like compulsory arbitration--that would be saying something different. But I do not think that that is here and I do not see it in the Bill. Frankly, having got rid of the old Part II, I am not convinced that we need the new Part II at all.

Lord McIntosh of Haringey: My Lords, perhaps I may reassure my noble friend on one point immediately. When a totally new amendment is introduced on Report, it is perfectly proper under the conventions of the House for any noble Lord to table an amendment to that amended part of the Bill on Third Reading. It will inevitably be new material and there would be no difficulty in that respect. However, my noble friend's argument is much more detailed than that. Perhaps I may try to reassure him, although I do not know whether I can cover all the possibilities that he envisaged in his speech.

My noble friend is quite right in his first assumption. These amendments and Part II are about applicants for recognition; in other words, those who have made an application for recognition under paragraph 3 of Part I and started off the statutory procedure. My noble friend then went on to ask whether these are cases where there has been no ballot or where the procedure has not been completed. The easiest way to describe it is to say that it will apply where the procedure for statutory recognition has been started but has been aborted by the employer agreeing recognition, perhaps after a union's application had been accepted by the CAC and a bargaining unit determined, although it could be aborted at quite a number of different stages. Then, under the provisions of the Bill, without these amendments and with the statutory procedure having been aborted, the employer could derecognise the union. In that way, the employer could avoid recognition even if all his workers were union members. That is why we have brought in the semi-voluntary procedure.

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My noble friend also asked about sanctions and suggested a number of alternatives. The sanction here is that a semi-voluntary recognition is binding for three years, just as is the case with statutory recognition. We believe that to be an effective and appropriate sanction.

Part II will apply only where there has been a formal application under Part I and the parties reach agreement for recognition without a ballot or membership count; for example, the employer and the union may disagree only about the bargaining unit. But once that has been settled by the CAC, they may be able to agree recognition.

The point of these amendments is to ensure that the employer can be held to that recognition for three years and the agreement enforced, if necessary, through the imposed procedure, as recognition under Part I can. My noble friend has far more experience than I of whether this is likely to happen on the ground, but I hope he will agree that this was a loophole--at least in theory--and that what we have done to Part II closes that loophole and--as I think he acknowledges--is an improvement to the Bill. I beg to move.

On Question, amendment agreed to.

5.30 p.m.

Lord McIntosh of Haringey moved Amendment No. 6:


Page 23, line 15, leave out from beginning to end of line 24 and insert--
("(2) Within the decision period the CAC must decide whether the application is invalid within the terms of paragraphs 38A to 38H.
(3) In deciding whether the application is invalid, the CAC must consider any evidence which it has been given by the employer or the union (or unions).
(4) If the CAC decides that the application is invalid--
(a) the CAC must give notice of its decision to the parties,
(b) the CAC must not proceed with the application, and
(c) no further steps are to be taken under this Part of this Schedule.
(5) If the CAC decides that the application is not invalid it must--
(a) proceed with the application, and
(b) give notice to the parties that it is so proceeding.
(6) The decision period is--
(a) the period of 10 working days starting with the day after that on which the parties agree an appropriate bargaining unit or the CAC decides an appropriate bargaining unit, or
(b) such longer period (so starting) as the CAC may specify to the parties by notice containing reasons for the extension.")

The noble Lord said: My Lords, in moving Amendment No. 6 I wish to speak also to Amendments Nos. 12 to 23, 49, 51, 60 to 69 and 80. All of these amendments deal with how the CAC handles applications. There are three main subjects covered by them, all of which are interlinked: the reapplication of preliminary tests, three-year bars on repeat applications and clarification of the derecognition procedures.

At present, preliminary tests are applied by the CAC when it receives an application for recognition. The tests are set out in paragraphs 30 to 38 and are applied by

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paragraph 14. Some of them are intended to rule out applications which would disrupt other bargaining arrangements by imposing statutory recognition on top of them. However, if the bargaining unit changes during the process, under paragraph 16 or 17, the tests need to be reapplied to ensure that no existing collective bargaining arrangements are affected.

Amendment No. 6 provides for the preliminary tests relating to a particular bargaining unit to be reapplied if the bargaining unit changes, and Amendment No. 20 gives the tests themselves. Amendments Nos. 12, 14, 21, 22 and 23 are consequential to Amendments Nos. 6 and 20.

Turning to the issue of three-year bars on repeat applications, I should like to draw attention to what the Government set out in the White Paper, Fairness at Work:


    "New applications for recognition or de-recognition will not be considered by the CAC until three years after the date on which a previous application was determined". That is set out in paragraph 4.18 on page 25.

A three-year bar on reapplications for recognition after a failed request and on applications for derecognition after a successful application for recognition has been in the schedule since it was first introduced in another place. Amendment No. 18 will mean that successful applications for derecognition bar recognition of the same union in respect of that bargaining unit for three years; Amendments Nos. 15 and 19 are consequential to it. Amendments Nos. 60, 61, 63 and 67 bar reapplications for derecognition for three years after an unsuccessful application; Amendments Nos. 62, 64 and 69 are consequential.

Amendment No. 80 concerns the three routes by which an employer may seek derecognition: having fewer than 21 workers, a "standard" procedure and a procedure for use if the union was recognised via the "automatic" recognition procedure in paragraph 20. The schedule does not currently make any provision for dealing with multiple applications. The amendment would give the Secretary of State power to direct the CAC as to the order in which competing applications for derecognition should be treated by the CAC. The Government intend that an employer should have to choose a single ground on which to apply for derecognition, rather than being able to run several applications simultaneously or consecutively. The other amendment of substance in this group is Amendment No. 51 which makes explicit provision for the withdrawal of applications under Part III. This is equivalent to the provision in Part I, paragraph 15. I beg to move.

On Question, amendment agreed to.


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