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Baroness Miller of Hendon: I am glad that the noble Lord, Lord McCarthy, agrees with the principle and that he has nothing against trying to work out the cost of things. It seemed to me that his difficulty lay with the list of items which I said might have to be considered. It may well be that an altogether different list will be produced. I was simply making the point that, if it were possible to obtain some costs from this, that might be worthwhile.

Lord Sainsbury of Turville: Before I begin, I shall assume that the amendment refers to the provisions of Part XII of the Social Security Contributions and Benefits Act 1992. That is the part which deals with statutory paternity pay, rather than Part VII, which deals with income support.

The amendment has two interpretations. It might require an assessment of the impact of regulations made under Section 167(1)—that is, the reimbursement of employers—to be published and revised annually. Alternatively, it might require an assessment of the impact of all the regulations concerning SMP made within Part XII to be published and revised annually. The placing of the amendment within Clause 21 suggests the first interpretation. Therefore, I shall respond directly to that, but the points that I make will apply to both.

The Government's policy is to regulate only when necessary and to ensure that such regulation is both necessary and effective. It is established government policy that new legislation affecting business must be accompanied by a full regulatory impact assessment

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unless the costs or savings are negligible or where statutory fees are increased by a predetermined formula.

The purpose of the assessment is to provide an analysis of the costs and benefits of proposals for regulation and a detailed assessment of any impact that regulatory changes will have on businesses—in particular, small businesses.

The regulatory impact assessment for the SMP measures in the Bill was published at the same time as the Bill. However, a preliminary assessment of the costs was published in December 2000, alongside the Green Paper, Work and Parents: Competitiveness and Choice. It covers in full the effects of the two major proposed changes to SMP; namely, the increase in the rate of payment and the extension of the payment period on both small and large employers. There are no plans to add anything further to that assessment.

While these two significant changes to statutory maternity pay receive detailed attention in the assessment, the same detail is not required for Clause 21. The clause is largely a reworking of existing maternity legislation, but the changes it makes are undoubtedly positive for employers. First, employers will be able to recover their statutory maternity payments from tax and other allowable payments due to the Inland Revenue, not just from contributions payments. Secondly, employers will be able to apply for advance recovery of their statutory maternity payments.

These changes have no negative impact on employers and are comparatively minor in comparison with the increase in the rate and payment period for statutory maternity pay. That is why they do not appear in the accompanying impact assessment.

Since departments already produce regulatory impact assessments, introducing a requirement for additional, annual assessments would be superfluous and time-consuming. However, we are fully committed to monitoring the effects of the new maternity package on employers and employees. For that purpose, we have commissioned a survey of parents and employers to establish a baseline against which the changes in maternity legislation can be properly evaluated. We envisage undertaking a further survey in 2005 to ascertain the effects of the changes made in 2003. Whereas the proposed amendment would limit annual assessment exclusively to the effect of changes to statutory maternity pay, the use of a more general survey will provide a broader picture of the effects of the changes to the pay and leave arrangements available to parents.

Finally, Members of the Committee will be aware that a change to the small employers' relief scheme will take place in April 2002. Regulations were laid before Parliament on 8th February and a full regulatory impact assessment was placed in the Library. That assessment details the effects of the changes to the small employers' scheme. It also gives a full account of the impact of change to the compensation rate from 105 per cent to 104.5 per cent, which was announced

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on 19th December 2001. Thus, the effects of employers' recovery of statutory maternity pay—the subject of Clause 21—are fully covered within this separate regulatory impact assessment.

I hope that that assures Members of the Committee that there is no need to regulate for the Secretary of State to provide further impact assessments. Government departments are already committed to assessing the impact of new legislation on employers, so the amendment would add nothing to what is already established practice. I therefore invite the noble Baroness, Lady Miller of Hendon, to withdraw the amendment.

Baroness Miller of Hendon: I thank the Minister for that lengthy and clear exposition. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 59 and 60 not moved.]

Clause 21 agreed to.

Clause 22 [Employment tribunals]:

Lord Wedderburn of Charlton moved Amendment No. 61:

Page 32, line 10, at end insert "where in the opinion of the tribunal a party has in bringing the proceedings acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by a party has been misconceived"

The noble Lord said: In view of what has been done earlier, it may be convenient if I suggest that, in relation to the amendments, we refer to Part 2—my noble friends and I have tabled amendments to Parts 2 and 3—because it will avoid saying such things when we come to the cases.

Three comments need to be made in light of our debate at Second Reading. The basis of our criticisms did not involve the Government's objective of settling cases at the workplace—who could object to that?—but the way in which the Government set about attempting to decimate applications to tribunals as a necessary part of that. The three comments have become more relevant in view of our proceedings today in Grand Committee.

First, our amendments attempted to take account of what was said by my noble friend, Lord McIntosh of Haringey, who we are all happy to see restored to us here in Committee. He said:

"If we are doing it in the wrong way, I have no doubt my noble friends Lord Wedderburn and Lord McCarthy will seek to show us how to do it better. We shall listen with respect, as we always do, and we shall seek to come to a proper judgment".—[Official Report, 26 February 2002; c.1405.]

We understood that to mean—I hope that this is true—that the Bill is not set in stone. Whatever pacts and deals have been done about the Bill, I hope that the Government will listen and seek to come to a proper judgment in a constructive way.

Secondly, at Second Reading, we showed that the statistics—or alleged statistics—that the Government relied on to form the basis of their case, were in fact not sustained. They were not even sustained by their own

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research, which was finally published just before the debate. I mention the horrendous model of wicked applications to the tribunals, which my noble friend, Lord McIntosh, will remember especially, and whose vital statistics were 64, 62, 37. Huge proportions of workers rushed to the tribunals without any attempt to reach a settlement, and their employers made no attempt to reach a settlement. That was not justified by the research and it is certainly not justified in real life. That led us to introduce, in parts of the Bill to which we shall come, a series of probing amendments, which touch on the unfair way in which the Government are aiming to reach their stated objectives.

Thirdly, we are very conscious in our amendments of the procedure in Grand Committee. I quote from the House's Companion to the Standing Orders. At page 122, it states:

"The proceedings in Grand Committees are identical to those in a Committee of the whole House save that no votes may take place."

It continues:

"The principle followed is that amendments may be agreed to in a Grand Committee only without dissent".

The following section states:

"If there is opposition to an amendment, it should be withdrawn in Grand Committee, to enable the House to decide the matter on report."

We take this objective and statement seriously and we shall of course withdraw amendments where there is a single murmur—let alone voice—of dissent. The objective that we shall keep in mind, as stated in the Companion, is that we shall enable the House to decide any controversial matter on Report.

I hope it will not be thought that I have exceeded the bounds of order by introducing those three thoughts. I now come to Amendment No. 61. This amendment deals with the replacement of the power to make regulations for provision of the award of costs or expenses—"expenses", of course, is the Scottish term—in employment tribunals. That exists at the moment and, in our submission, there is a perfectly good regulation in the Employment Tribunals (Constitution and Rules of Procedure) (Scotland) Regulations 2001, which deals with the matter. Regulation 14 provides that,

"where in the opinion of the tribunal a party has in bringing proceedings, or a party or party's representative has in conducting proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing and conducting of proceedings by a party has been misconceived".

It also provides that the tribunal shall consider making and, if it so decides, may make an order containing an award against that party in respect of the costs incurred by another party. That, of course, is quite different from the principle in the ordinary courts. It is different in a way that is measured and matched in all the labour tribunals and labour courts of Western Europe. It is one of the basic principles of justice in industrial tribunals, as they were called, or employment tribunals, as we now call them; moreover, in research people tend to refer to labour courts. A worker who is faced with the possibility that costs will be awarded against him if he happens to fail, albeit that

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he had a reasonable case—and laymen as well as lawyers know that reasonable cases do not always succeed—will be prevented in real life from bringing cases which it is quite reasonable to bring on the basis of injustice at the place of work.

This principle should not need to be restated. It was stated by the Donovan commission in 1968, and it has been accepted everywhere else, including in the Leggatt report, to which I hope the Minister will refer in his reply. The Leggatt report was on tribunals generally, and it includes extensive passages relating to employment tribunals.

Again and again, in Committee in another place, the Minister, my honourable friend Alan Johnson, said—it is better in his own words—

"To avoid doubt and bearing in mind our curious exchange about the explanatory notes, I should say that we are clear on the fact that the cost awards will not change".—[Official Report, Commons, Standing Cttee F, 11/12/01; col. 58.]

Indeed, he went on to point out:

"We must not get carried away with the idea that a large proportion of applications are vexatious or unreasonable. That is not the case. On anyone's assessment, the percentage is tiny".—[Official Report, Commons, Standing Cttee F, 11/12/01; col. 59.]

The percentage is tiny as shown by the fact that there were only 247 cases last year in which any costs were awarded. That is not to say that some other cases may not have been unreasonable, but in that case they frequently did not survive a pre-hearing session. We come to pre-hearing reviews later in the Bill.

There are few cases where the tribunals have decided that the ability to award costs is inadequate, or even that the existing power should be frequently used. I refer to the figure of 247 out of 130,000 applications last year, which was less than in previous years.

Why do I stress that? First, the Minister said that the Government did not want to change the basis on which costs are awarded in these industrial employment tribunals. If I may quote him again, he said at col. 60 of Hansard that,

"We are dealing with the basis on which costs are now awarded, not extending it".

The Government have been clear that costs awards will be made on the same basis as they are now. The question that arises from that is not whether we can rely on the present Secretary of State. If the Minister says that in another place, that is what we expect our Secretary of State to do, but why take power to give the tribunals the competence to award costs on a wider basis? Why replace Section 13(1) of the Employment Tribunals Act 1996? They are basically the same words, but why put it in without making it clear on the face of the Bill that the Government are secure in their understanding, as was stated again and again in another place, that they do not intend to increase the incidence of costs in these employment tribunals?

Some people may say that that is a very suspicious approach. That ignores the fact that there has been a great deal of pressure to extend the ability to award costs. Indeed, we shall hear from the Conservative Opposition, as was argued in another place, that workers should pay more costs, should pay special

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deposits and make all sorts of payments before they have access to justice which is untrammelled in the ordinary principles of labour tribunals. Secondly, I refer to the pressure to expand the competence to award costs and, indeed, in some cases for tribunals to explain why they do not award costs. That is a quite extraordinary idea for anyone with any experience at all of comparative industrial jurisprudence.

The matter was also extensively examined by the Leggatt committee. The Leggatt report, Tribunals for Users, dealt with employment tribunals. At page 147 it said the following:

"We recommend a joint study by the DTI and the LCD on costs . . . In the absence of detailed research and a systematic review of the policy options in the light of it, we would not recommend the introduction of a general costs regime"—

I pause to say that that is in employment tribunals. The report continues,

"that should be risked only in the light of clear evidence that there is a substantial problem and that change in the costs regime is the only effective answer".

It is widely known among lawyers, laymen and trades union representatives of those who have to enforce their rights in employment tribunals that some people want to impose costs upon applicants beyond the present rules.

The Government have said in another place they do not wish to change the basis of the award of costs. All that this amendment does—and if I may say so it is characteristic of our amendments in that it is a most modest amendment—is say to the Government, "Put your words where your money and your mouth are and let us have it on the face of the Bill. If you will not put it on the face of the Bill, why are you replacing Section 13 of the Employment Tribunals Act 1996? What do you want to do with these regulations for the award of costs or expenses? You cannot mean to have new regulations. Are you just going to print Regulation 14 out again and, if so, let us have a guarantee that that is what you will do"?

It is difficult to understand the necessity of wasting a little tree to print Clause 22(1) of the Bill in that case. The Government have that power already. However, if all they have to do is reprint it, then let us say so. If not, why not clear the fog of doubt away and say to a future Secretary of State—and I am not concerned with the present Secretary of State for the moment—"If you want to exclude the possibility that tribunals cannot award costs other than on a vexatious basis, if I may put it that way, then you must come up with primary legislation"? Why are the Government so afraid of leaving to a future Secretary of State the obligation to come to this House and the other place and explain in primary legislation any extension of competence to award costs? The replacement of Regulation 14 is quite unnecessary; it is undesirable and the Government say they do not wish to do it. I beg to move.

7.15 p.m.

Baroness Gardner of Parkes: I am particularly interested in this section of the Bill as I have sat for 23 years as a member of an industrial tribunal. I support

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the amendment although I wonder whether it is necessary because in my experience we would always have abided by the rules suggested in the amendment.

I wish to ask the Minister a technical question. In the Explanatory Notes and in the Bill itself the Employment Tribunals Act 1996 is referred to in three different places. I spent quite a long time this afternoon trying to obtain that Act from the Printed Paper Office. Finally, I discovered that there was no such thing. It is called the Industrial Tribunals Act 1996. I wonder whether the Minister has already covered that point and replied to it. Perhaps I may ask him by what procedure an Act which has been passed and enacted is suddenly renamed in this Bill on page 32 and again on pages 76 and 80, possibly as well as in other places. Does a procedure exist by which one can rename an Act retrospectively? If so, can the Minister explain to me how and when that procedure was brought about?

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