Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Debate between Lord Lea of Crondall and Lord Razzall

Monday 19th March 2012 Grand Committee

[Lord Lea of Crondall]

My Lords, following the same line of thought as my noble friend Lord Whitty, the section of the document beginning on page 25, which is headed:

“Resolving Workplace Disputes Government Response: Overarching IA Evidence Base”,

kicks off by saying that the “Problem under consideration” is that “Employers are worried”—employers this, employers that and employers the other. That is what you might call the Mandy Rice-Davies approach to evidence—it may be good or it may be bad but it is not what most of us would be looking for when we think about evidence.

On page 28, after it says:

“The Government will therefore commission an independently chaired fundamental review of the relevant procedural rules, and will ask the judiciary and other stakeholders to play a full part in that review process”,

paragraph 18, which is what I would like the Minister to comment on, says:

“There is therefore little to be gained by introducing major rule amendments now that may shortly be undone or altered as a result of the fundamental review. Further, reform at this stage should seek to avoid any risk of introducing more inflexibility and prescription when that is what the fundamental review is designed to strip away”.

Then there is a sentence that I think can be translated slightly differently from what is on the page:

“However, after an assessment of the evidence submitted in response to the consultation, the Government believes that a more limited set of reforms can be implemented without awaiting the review’s recommendations”.

In other words, as I read it, “We have got a political doctrine that is fundamental to the nature of what you might call the evidence”. Whether or not that is what a judge would normally consider to be the sort of evidence on which a jury should take a decision is rather problematical.

The other point I wish to make relates to that. The anecdotal nature of what is being said is not the way in which you would expect the two sides, if I can call them that, to relate to each other. One anecdote is worth as much as another. That is why the system of Explanatory Notes introduced some years ago is vital to getting good legislation and why we should be very careful about the nature of evidence.

Finally, on a slightly different plane, the noble Lord, Lord Jones of Birmingham, and other noble Lords on the other side have made very general remarks about the monstrous flow of legislation that is making life difficult in this country. If one looks at employment and unemployment in Germany, where the mittelstand offers much more in the way of management training and so on than we do, one wonders why the Government’s kneejerk reaction to almost any problem is to listen to employer’s anecdotes and to accept them as the main base of evidence. The Prime Minister now says that it is a good idea to take a look at Germany. If the Germans saw the basis on which we take our decisions about employment and what generates employment, I do not think that they would see other than a caricature about what you might call a “top-end” and the “well mannered dog business”. We have a vast number of mittelstand-type businesses in this country and many of them are undertrained. It is a long process, but this kneejerk recourse to the worst sorts of politicking with the British industrial system is not a creative solution.

[Lord Razzall]

My Lords, it looks as though I have to declare those interests and companies that I have set out in the Register of Members’ Interests, although whether they will benefit from the passing of these orders will depend on whose arguments are correct. I have some sympathy with the points that have been made from both sides of the Committee—although having read particularly the debate in the other place, one would have thought that, from the Labour side, these proposals were going to take the country back to the days of the Tolpuddle Martyrs and, from the government side, that all the problems of unemployment in this country will be solved by passing this order.

I do not share either of those views. This is not part of an agenda designed to take us back to the dark days of poor trade union relations or poor employment relations. I have every confidence in the Secretary of State, who happens to be a member of my party, to ensure that that will not happen. As the noble Lord, Lord Whitty, and one or two other Members on that side have indicated, there is a danger that one can overstate the opportunity for passing this order to extend the period of unfair dismissal from one year to two years. One can overstate the argument. Indeed, as the noble Lord said, most of the evidence in the survey saying that this will have an effect is anecdotal. He put it rather well when he said that if you get three employers having a drink in a pub—I do not know why he picked Hertfordshire—that is what they will complain about.

However, as someone who has been involved for a number of years in the SME sector, I believe that there is a marginal case here for saying that employers are nervous of taking on new employees in small businesses because of the impact of the unfair dismissal rules. There is a case for saying that if they were marginally relieved from one year to two years, people would be taken on.

One point that has not been made is that there is very little evidence that under the current one-year rule many unfair dismissal cases are brought by people who have worked between one and two years. There are very few such cases, which leads me to think that what happens is that people take advantage of the one-year rule to lay people off before they get into the unfair dismissal bracket. If we extend that to two years, action will not be taken until they approach the end of the second year, which will add employment of a further year for people who have been taken on. It will also mean that if somebody knows that they can get rid of somebody who turns out not to be very good before the end of two years rather than one, in some cases they may be more prepared to give that person appropriate training that will keep them in employment for longer.

I will make a point about the context in which the orders were put forward. One does not have to be privy to the inner secrets of government—one just has to read the newspapers or watch television—to realise that a huge battle is going on over how our employment legislation should be framed. Mr Adrian Beecroft has been commissioned to look at the laws. He starts from the proposition that almost all employment regulation and restriction should be swept away. On the other hand, a number of people in both governing parties want to see a significant improvement in family-friendly policies such as paternity leave and maternity leave.

While the battles rage, I very much hope that noble Lords will come out on the right side of the arguments. There is no doubt where I stand on them, and I suspect that there is no doubt where the Secretary of State stands on them. If the proposals come to your Lordships' House, I hope that they will be resisted. In the mean time, this is a modest proposal, and if it is the price we pay for averting something that might be a lot worse, I urge noble Lords to accept it.

Postal Services Bill

Debate between Lord Lea of Crondall and Lord Razzall

Monday 14th March 2011 Lords Chamber

[Lord Razzall]

I cannot say how much I respect the views of the noble Lord, Lord Lea of Crondall, and the noble Lord, Lord Young of Norwood Green, but I have to say that from what they have just said they are living in fantasy land. We are faced with a situation where, unless the Royal Mail gets significant investment from a third party, it will be in serious financial difficulties. The idea that there will be an IPO or a sale with tranches is from a fantasy world. If people want to oppose the Bill, they should say so; they should say, “We don’t agree that it should all be sold off”. But, as those of us who deal with the markets every day know, to suggest that in some way we could have 30 per cent here, 30 per cent there and 19 per cent there is a fantasy world.

[Lord Lea of Crondall]

I—

[Lord Razzall]

May I finish what I am saying? We are in Committee; the noble Lord does not have to interrupt me. The noble Lords are quite right: in the world under the Labour Government, they successfully sold off all sorts of things in tranches. However, we are not talking about the businesses that they sold off; we are talking about a business that is in serous financial difficulties. The idea that we can go to the market on an IPO and sell only 30 per cent, or sell 30 per cent now and trickle out the rest of the sales, simply will not happen. If noble Lords oppose the Bill and do not want Royal Mail to go into the private sector, they should say so, but they cannot pretend that we can do this in the way that they propose.

[Lord Lea of Crondall]

My Lords, the noble Lord has sat down. Did I hear him say that a sale through an IPO per se was unlikely? Clearly there is a difference between a sale through an IPO and a sale to an individual but, as my noble friend Lord Young and I have pointed out, it is perfectly straightforward to say that the public interest would have been served in the 1980s if there had been tranches. Presumably, the noble Lord is saying that the financial position of Royal Mail makes tranches impossible. In that case, it is up to him to prove that he would not be making a catastrophic mistake in an IPO about the initial sale price. Is that not correct?

[Lord Razzall]

It is not for me to respond to this; I am sure that the noble Baroness can do so more eloquently than me. But anybody who thinks, in the Royal Mail’s current circumstances, that there can be an IPO, is living in a total fantasy world. In the world in which we live, and the numbers we have from the Royal Mail—we know what they are—there is no way that suddenly an IPO will be forthcoming. I understand the noble Lord’s point—theoretically there could be an IPO—but we should not clutter the Bill with theoretical amendments. It simply will not happen. There might have been the possibility of an IPO under the noble Lord’s Government if they had got there quickly enough 10 years ago, but it is too late now. The pass has been sold, and this is fantasy.

[Lord Lea of Crondall]

If the noble Lord will allow me, it was the Hooper report that said that the most likely presumption of going forward was an IPO, and that was very recent.

--- Later in debate ---

[Lord Lea of Crondall]

My Lords, it will not surprise the House that I will in due course withdraw the amendment pro tem, but that in no way assumes that our arguments have been overwhelmed by the firepower of the noble Lord, Lord Razzall, or the Minister.

The Liberal Democrats must have been reading too much Machiavelli recently. I am not surprised at that, given the extraordinary arrangements that they have been making with the Conservative Party, and I am sure that they are being kept awake at night wondering who is going to stab them in the front instead of in the back. As to the idea that the amendment is aimed at killing the Bill, we have experience of killing Bills but this would be a peculiar way of going about it. This is about helping the Government and society to avoid a fiasco by feeling our way on how this disposal will be carried out.

Is the noble Baroness prepared to respond on whether it is her view—along the lines of the view of noble Lord, Lord Razzall, for whom he knows I have the greatest respect—that we are living in fantasy land if we think that this sale can be carried out by way of an IPO. The alternative, presumably, is the Sheikh of Kuwait. It may be that Colonel Gaddafi is no longer the likeliest candidate. The alternative is an IPO. We will all avidly read Hansard tomorrow—which means that we will not—but I do not think I said that Hooper advocated an IPO. I said that the most likely presumption to be made after reading Hooper is that an IPO would be a strong candidate as the means of sale. If that is the case, the amendment is the exemplar and states that if the scenario is an IPO, some of the experiences of the IPOs in the 1980s should be borne in mind.

[Lord Razzall]

I must intervene before the noble Lord withdraws the amendment. I am a student of Machiavelli and I have always regarded the noble Lord, Lord Lea of Crondall, as the model of The Prince.