Select Committee on Delegated Powers and Deregulation Thirteenth Report



EMPLOYMENT RELATIONS BILL — MEMORANDUM BY THE DEPARTMENT OF TRADE AND INDUSTRY

This memorandum explains the proposed use of the delegated powers provisions in the Employment Relations Bill.

TRADE UNIONS

CLAUSE 3 - BLACKLISTS

Subsection (1) enables the Secretary of State to make regulations prohibiting the compilation of blacklists which contain details of members of trade unions or persons who have taken part in the activities of trade unions; and are compiled with a view to being used by employers or employment agencies for the purposes of recruitment.

Subsection (2) enables the Secretary of State to make regulations prohibiting the use of lists to which subsection (1) applies.

Purpose: These regulations will help protect union activists against discrimination in employment.

Reasons for proposing delegated powers: This delegated power will allow for extensive consultation on the regulations, which will be drafted so as to permit the legitimate compilation of lists by businesses - e.g. for staff record-keeping - and to take account of the progressive application of the Data Protection Act 1998.

Procedure: Affirmative resolution.

CLAUSE 5 - TRAINING

Subsection (1) inserts a new section 70B and 70C into the trade Union and Labour Relations Act 1992. The new section 70B(9) enables the Secretary of State to amend any of subsections (3) to (6) of that section - meetings between employers & unions on training plans.

Purpose: In workplaces where there is statutory union recognition and which have had a bargaining procedure imposed on them by the Central Arbitration Committee, the Secretary of State will have the power to amend the timing of meetings, the provision of information in advance of a meetings, and how employers deal with union representations made at those meetings.

Reasons for proposing delegated powers: the level of detail was considered more appropriate to secondary legislation; if experience showed the details could be improved in practice, they would be easier to amend

Procedure: Affirmative resolution.

OTHER RIGHTS FOR INDIVIDUALS

CLAUSE 15 - COLLECTIVE AGREEMENTS : DETRIMENT AND DISMISSAL

Subsection (1) enables the Secretary of State to make regulations about cases where a worker is subject to detriment by his employer, or is dismissed on the grounds that he refuses to enter a contract which includes terms which differ from the terms of a collective agreement which applies to him.

Purpose: to make it unfair to dismiss workers or subject them to other detriment because they refuse to accept a contract on terms which differ from those applicable to them under a collective agreement.

Reasons for proposing delegated powers: the level of detail in the provision is considered more appropriate to secondary legislation. The Government is considering, however, whether to deal with these matters by primary instead of secondary legislation.

Procedure: Affirmative resolution.

CLAUSE 17 - PART-TIME WORK: DISCRIMINATION

Subsection (1) enables the Secretary of State to make regulations for the purpose of securing that persons in part-time employment are treated, for such purposes and to such extent as regulations may specify, no less favourably than persons in full-time employment.

Purpose: The powers will be used to introduce regulations prohibiting those in part-time employment from being less favourably treated than those in comparable full time employment. There are also powers in Clause 18, subsection 1 to issue a code or codes of practice giving guidance on part-time work - further details at Annex A.

Reason for proposing delegated powers: The power will be used to implement the European Part-Time Work Directive (Council Directive 97/81/EC). In most cases the regulation making power in section 2(2) of the European Communities Act 1972 would be used to achieve this. However, as the Part-Time Work Directive was brought forward under the Agreement on Social Policy to adopt as community law a Framework Agreement between the European Social Partners, it cannot cover pay. The Government believes that pay should be covered at the same time as other employment conditions. Clause 17 provides power to do this.

Leaving the details to regulations is in line with the normal method of implementing EU Directives, which is a major objective of the powers. It will also allow more time for consultation with interested parties, with the aim of producing better legislation and greater consensus. The UK has until April 2000 to implement the Part-Time Work Directive. If the Government had decided to implement by primary legislation, and had consulted beforehand, then the legislation would have been delayed until the 1999-2000 session. Even if this legislation had been passed before April, there would not have been sufficient time for employers to prepare for the changes. Equally, if the legislation had been introduced in this session, then there would not have been enough time for consultation beforehand. This could have had an adverse effect on the quality of the legislation. By using delegated powers, the Government will be able to make full use of the available time to ensure that consultation is as wide as possible, and that employers are given sufficient warning of the changes.

The powers are widely drawn so that the Secretary of State will be able to take full account of the results of the consultation in drawing up the regulations. Subject to the consultation, the regulations are likely to draw on precedents of current legislation relating to employment rights and non-discrimination.

Procedure: Affirmative resolution.

CLAUSE 20 - POWER TO CONFER RIGHTS ON INDIVIDUALS

Subsection (2) Enables the Secretary of State may by order make provision which has the effect of conferring any such right on individuals who are of a specified description.

Purpose: To enable the Secretary of State to rationalise the currently inconsistent coverage of the employment rights legislation and update it to take account of the diversity of working arrangements in the modern, flexible labour market.

Reason for proposing delegated powers: The required amendments are likely to be detailed and technical. The Government also wishes to have an opportunity to carry out full public consultation on draft regulations before reaching final decisions on the changes to be made.

Procedure: Affirmative resolution.

MISCELLANEOUS

CLAUSE 29 - INDEXATION OF AMOUNTS, &C.

Subsection (2) provides that Secretary of State shall make an order varying the limits on certain payments and awards in line with changes in the September RPI for the year in question compared with the RPI for the previous September.

Purpose: to ensure that the limits on payments and awards vary in line with changes in prices (as measured by the RPI) rather than be subject to annual review as at present.

Reason for proposing delegated powers: the orders will be routine and bound by the tightly defined powers contained in subsections (2) and (3).

Procedure: Orders will be "made and laid".

CLAUSE 30 - GUARANTEE PAYMENTS

Purpose: The clause provides that the guarantee payments time periods may be varied by order rather than subject to annual review as at present.

Reason for proposing delegated powers: To have the flexibility to alter the time periods without the need for amending the primary legislation. The powers will be in line with those contained in section 35 of the Employment Rights Act 1996 (exemption from the guarantee payment provisions).

Procedure: Negative resolution.

SCHEDULES

SCHEDULE 1 - COLLECTIVE BARGAINING : RECOGNITION

Paragraph 6(6) allows the Secretary of State to alter the size of business subject to statutory recognition (currently 21 employees).

Paragraph 6(8) allows the Secretary of State prescribe the form of requests to the CAC.

Paragraphs 21(6)(a) & 90(8)(a) allow the Secretary of State define who is a "qualified independent person" to run a recognition or derecognition ballot.

Paragraphs 25(5) & 94(6) allow the Secretary of State alter the minimum support required in a ballot for recognition or derecognition to be granted (from a majority plus 40% of those affected).

Paragraphs 125 & 126 allow the Secretary of State alter the procedure for 'automatic' recognition if the CAC represents to him that it has an unsatisfactory effect and should be amended, and issue guidance to the CAC on the way in which it should deal with 'automatic' recognition.

Paragraph 127 allows the Secretary of State specify, after consulting with ACAS, a model method for collective bargaining which the CAC must take into account but may vary as appropriate in imposing a collective bargaining procedure after the parties have failed to agree.

Purpose: To allow technical adjustments to certain aspects of the schedule if experiences shows it is not working satisfactorily.

Reasons for proposing delegated powers: the level of detail was considered more appropriate for the Secretary of State to operate legislation to best effect. Also if experience showed that the details could be improved in practice, they would be easier to amend, as primary legislation would prove to be a blunt instrument for altering details or responding to changes.

Procedures: Affirmative resolution for paragraphs: 6(6), 6(8), 25(5) & 94(6), 125 & 126. Negative resolution for all paragraphs 21(6)(a) & 90(8)(a) and 127.

SCHEDULE 4: LEAVE FOR FAMILY AND DOMESTIC REASONS

PART I OF SCHEDULE 4: MATERNITY LEAVE AND PARENTAL LEAVE

Part I of Schedule 4 sets out new Sections 71 - 81 to be incorporated into the Employment Rights Act 1996, including regulation-making powers for:

MATERNITY LEAVE

New Section 71: in relation to ordinary maternity leave:

(1): prescribing qualifying conditions;

(2), (3): determining the length and timing;

(6): specifying matters which are, or are not, 'remuneration'.

New Section 72: in relation to compulsory maternity leave:

(1): prescribing qualifying conditions;

(2), (3): providing the length and timing.

New Section 73: in relation to additional maternity leave:

(1): prescribing qualifying conditions;

(2), (3): setting the length and timing;

(4): prescribing what benefits and obligations, arising from terms and conditions of employment, continue throughout additional maternity leave; and the kind of job to which there is a right to return;

(6): specifying matters which are, or are not, 'remuneration';

(7): dealing with seniority, pension and similar rights, and terms and conditions of employment on return.

New Section 74: in relation to redundancy and dismissal:

(1), (2), (3): concerning ordinary or additional maternity leave, including offers of alternative employment and provision for failure to comply;

(4): providing for no right to return at the end of additional maternity leave in specified cases (this will be used to replicate the existing special provision in Section 96 of the Employment Rights Act for small firms with 5 or fewer employees, who are relieved of the necessity of taking a woman back in limited circumstances).

New Section 75: in relation to ordinary, compulsory and additional maternity leave:

(1): prescribing further details, including about notices, evidence and procedures, making provision where the individual has corresponding contractual rights, modifying a week's pay, and consequential provisions.

PARENTAL LEAVE

Annex B sets out further details of the powers in new Sections 76 - 79, of which some require the Secretary of State to make regulations and others enable him to do so. In brief, there are regulation-making powers for:

New Section 76: entitling an employee to parental leave for the purpose of caring for a child. The powers enable the regulations to specify details such as qualifying conditions, length and timing of leave.

New Section 77:

(1), (2): prescribing what benefits and obligations arising from terms and conditions of employment, continue throughout parental leave; and the kind of job to which there is a right to return;

(3): specifying matters which are, or are not, 'remuneration';

(4): dealing with seniority, pension and similar rights, and terms and conditions of employment on return.

New Section 78:

(1), (2): making provision for redundancy and dismissal during parental leave;

(3), (4): providing for parental leave to be taken part time, by varying normal working hours;

(5): providing for transfer of entitlement to another employee.

New Section 79:

(1): making supplemental provision, for example in relation to notice, records and procedures; and where there is a corresponding contractual right;

(2): providing for modifying a week's pay;

(3): making any other provision which appears to the Secretary of State necessary of expedient in order to implement the Parental Leave Directive, or for related reasons. This ensures that all provisions on parental leave can be made under the powers in the Bill.

Part II of Schedule 4: Time off for Domestic Incidents

Part II of Schedule 4 sets out new Sections 57A - 57C to be incorporated into the 1996 Act, including regulation-making powers for:

New Section 57A(2): specifying further details of the right to time off, including matters to be taken into account in deciding whether time off is reasonable; limits on the amount of time off; notices, evidence and procedures; the effect of corresponding contractual rights, and consequential amendments.

Part III of Schedule 4: Consequential amendments

Paragraph 10 provides (in new Paragraph 47C) for regulations specifying details of the right not to be subjected to detriment for family and domestic reasons. It provides for the Secretary of State to specify that the right relates to reasons relating to pregnancy, childbirth, maternity, maternity leave, parental leave or time off for domestic incidents.

Paragraph 18 makes similar provision in relation to the right not to be unfairly dismissed, including power to apply existing statutory provisions in these circumstances.

Paragraph 48 amends the order-making power in Paragraph 236 of the Employment Rights Act 1996 to provide for any regulations made under Schedule 4 to the Bill to be made under the affirmative resolution procedure.

Purpose: The provisions give the Secretary of State powers to make regulations relating to maternity and parental leave and time off for domestic reasons. It is intended that these powers should be used:

  • to provide a single set of regulations setting out all the main provisions on these matters in one document;
  • to re-enact provisions on maternity rights currently in primary legislation, but with some simplifications;
  • to implement the requirements of the Parental Leave Directive by providing a basic right to three months' parental leave, and to time off for urgent family reasons, and to regulate at least to some extent the way in which the rights may be exercised.

Reason for proposing delegated powers: Regulations rather than primary legislation were considered appropriate because:

  • it would be easier to include the relevant rights in a single discrete document (since there was no prospect of Parliamentary time for a Leave for Family Reasons Bill, particularly since the Parental Leave Directive must be implemented by December 1999);
  • the level of detail which may be included, for example on a default parental leave scheme, was considered more appropriate to secondary legislation; if experience showed the details could be improved in practice, they would be easier to amend;
  • regulations would allow additional time and opportunity for public consultation about the details, which would enable greater consensus and better legislation. It is intended to publish draft regulations for wide consultation in the first half of 1999.

Procedure: Affirmative resolution.

MISCELLANEOUS PROVISIONS

SCHEDULE 7 - EMPLOYMENT AGENCIES

Schedule 7 does not create any new powers. However, paragraph 2 amends and extends the existing power in Paragraph 5(1) of the Employment Agencies Act 1973 ("the Act") under which the Secretary of State may make regulations to secure the proper conduct of employment agencies and employment businesses and to protect the interests of persons availing themselves of the services of such agencies and businesses.

Paragraph 3, by clarifying the extent of the prohibition on fee charging in Paragraph 6(1) of the Act, might be seen also as clarifying the extent of the Secretary of State's power to prescribe exceptions to that prohibition, which is also contained in Paragraph 6(1).

Regulations made under the Act as it stands at present are subject to negative resolution. During the Third Reading of the Bill in the House of Commons, the Secretary of State indicated that the Government would consider whether to seek an amendment requiring regulations under Paragraph 5 to be subject to the affirmative procedure.

Department of Trade and Industry

15 April 1999


 
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