Lawful Industrial Action (Minor Errors) Bill

Andrew Bridgen Excerpts

Friday 22nd October 2010 Commons Chamber

[Mr Nuttall]

I thank my hon. Friend for his intervention, and I agree that this is important. I shall look at the case law shortly.

I shall turn to the detail of the Bill very shortly, Mr Speaker. The early-day motion was signed by 133 Members, including the previous Member for Bury North. The hon. Member for Hayes and Harlington is to be commended for his determination in bringing this Bill before us today.

The House must not take the Bill lightly. It contains just two clauses—one is substantive, the other deals with the short title and details of the commencement provisions—and there is a real danger that, because of its brevity, many Members might think that it is a trivial matter that can be disregarded. We should not take it lightly, however. There is a danger that, because its title contains the word “lawful” and, in parentheses, the words “minor errors”, we could be lulled into a false sense of security. Those words might suggest that it is a trivial piece of legislation that will merely tidy up some long-forgotten legislation that contained one or two technical errors, but nothing could be further from the truth.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my hon. Friend agree that the Bill is in fact a Trojan horse, out of which could spring lots of legislation that could lead to making the UK economy far less competitive, damaging industrial relations and the potential for growth in the economy in the difficult times ahead?

[Mr Nuttall]

My hon. Friend is absolutely right. There is a real danger that the Bill could be a Trojan horse. It could easily take us into new territory. It could also take us back to a previous era that many people outside the House thought they had seen the last of.

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[Mr Nuttall]

My hon. Friend is absolutely right. In most areas of the law, people are quite rightly expected to follow it to the letter. In the particular area of trade union law, the possibility of human error coming into the process is taken care of, I submit, by the provisions of section 232B of the 1992 Act, which specifically allows for minor, small, accidental failures to be completely “disregarded”. That raises the question of why on earth this Bill is being introduced at all, particularly following the decision of the Court of Appeal in the British Airways plc v. Unite case earlier this year. I accept that it was only a majority judgment, but it was nevertheless a judgment of the Court of Appeal, so it should be given time to bed down, as it put forward a fairly clear view of the law.

[Andrew Bridgen]

Can my hon. Friend think of any other aspect of the law where “substantial compliance” is considered sufficient?

[Mr Nuttall]

There are various areas of the law. We have a de minimis rule, for example, which covers cases where there has been a trivial or minor breach. The judges will often overlook such a trivial or minor error if it could be construed as complying with the de minimis exclusion for understandable human error.

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[Mr Nuttall]

I am sure, Madam Deputy Speaker, that Mr Speaker is most upset that he has not been able to stay and listen to the rest of this interesting debate, but he will be able to read it later.

I thank my hon. Friend the Member for Shipley (Philip Davies), who raises an interesting question. The point was made earlier that the provision might be a Trojan horse. If we go down the path of referring to matters as substantially complied with, or saying that, taken together, there has been substantial compliance, there is a danger that it leaves open a gaping hole. What is not substantially compliant? What should we do if someone complies with their health and safety policy for 51 weeks, but not in the other week? Such an approach does not make sense. During detailed examination of clause 1(3), I shall consider whether the Bill takes us any further forward.

[Andrew Bridgen]

Does my hon. Friend agree that the problem is not just with substantial compliance some of the time, but with the fact that some groups will be allowed substantial compliance, whereas other groups will have to adhere to complete compliance all the time?

[Mr Nuttall]

My hon. Friend is right. I can well understand those who comply with the law for all of the time not being too happy about other groups being allowed to comply with the law for only part of the time. The rest of the time they can say, “Well, we have substantially complied with the law.” What should we do with a burglar who said, “Well, I’ve been substantially compliant with the law for 364 days of the year, but today I happen to have fallen foul of the law”? Should we let him off? What absolute nonsense.

Any employee who breaches their contract of employment leaves themselves open to the risk of being found liable, under the law of tort, to their employer, for breach of contract. That applies whether the contract is for unskilled manual labour, skilled manual labour, or what is often termed white collar services. The liability applies equally to those organising industrial action, such as—but not necessarily exclusively—trade unions, because those concerned will seek to procure a breach of contract, which is a tort under English law. Under those circumstances, both individuals and trade unions risk incurring liability to the employer. I add that there is also a potential liability to third parties. In individual terms, the employee is also, of course, liable to be dismissed.

Only through the protection afforded by statute can employees and trade unions escape the consequences of their actions in withdrawing their labour and breaching the terms of their contract of employment. That was first accepted, as the hon. Member for Hayes and Harlington mentioned, as long ago as 1906 when the Trade Disputes Act was passed. Prior to that, the common law provided that trade unions were liable to claims for damages for inducing a breach of contract. The 1906 Act granted them immunities from those liabilities. As I mentioned in response to my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), 100 years earlier the Combination Acts of 1799 and 1800 made it illegal for workers to join together and press employers for shorter hours or increased pay. Those Acts remained on the statute book until 1824 when they were repealed, to be replaced by the Combination Act of 1825.

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[Mr Nuttall]

Thank you, Madam Deputy Speaker. I will indeed.

My hon. Friend the Member for Shipley (Philip Davies) is right about the devastating effect of industrial action such as that to which he referred. In the case in question, it looks as though the action was specifically arranged and organised to hurt people who had waited all year for their holiday. Therefore, it is not surprising that the law drawn up in 1999 should expect the highest standards of compliance. In view of what you have said, Madam Deputy Speaker, I will skip over the next portion of my remarks. Let us jump forward to the late 1970s. I think that this is relevant, because that was the time when trade union powers reached what could be described as their zenith.

[Andrew Bridgen]

Does my hon. Friend agree that the fact that Bill seeks to send industrial relations between employees and employers back to the late 1970s should come as no surprise, given that the new Leader of the Opposition seeks to swing the politics of the Labour party back to that time, and that the great consolation for Conservative Members is that Labour will therefore be out of government for a very long time?

[Ian Lavery (Wansbeck) (Lab)]

Absolute rubbish.

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[Mr Nuttall]

No, I do not. We have not yet had time to see the details of the Court of Appeal’s decision in the case of British Airways plc v. Unite. The court’s judgment, which was quoted by the hon. Member for Hayes and Harlington, was quite clear in regard to the effectiveness of the law.

There has been such a long line of cases of this kind, and it is interesting to note that time and again they have involved the same union: Unite. One would think that by now Unite, and the people whom it employs to conduct the ballots, would have learned how to do it, but apparently not. The Master of the Rolls recognised that. Delivering his dissenting judgment in the Court of Appeal, he said that he agreed with Mr Justice McCombe, who had delivered the earlier judgment in the Queen’s bench division. He said that he did

“not consider that the Union has a good prospect of establishing at trial that it complied with section 231. On the contrary, I would not regard its prospects as promising.”

He reached the conclusion that

“the requirements of section 231 seem…at least as at present advised, to be unnecessarily prescriptive and strict, particularly insofar as they can be relied on by the employer and particularly in a case such as this… Having fallen foul of the technical rules of the 1992 Act in a ballot a few months earlier, the Union might have been expected to take particular care over complying with all those rules in what was effectively a rerun of that ballot.”

So there we have it: the Master of the Rolls saying in terms that the union had had one chance, and had got it wrong. A few months later it did effectively the same thing, and got it wrong again. My hon. Friend the Member for Dover (Charlie Elphicke) is quite right.

Let me now return to the detail of clause 1, which seeks to amend section 232B of the Trade Union and Labour Relations (Consolidation) Act 1992. Subsection (2) would add the words “or notice”. Previously compliance had been required only if a ballot had been held, but sections 226 to 230 require notice to be given to the employer as well. Section 226A requires the notice to be given

“not later than the seventh day before the opening day of the ballot”,

and to be

“received by every person who it is reasonable for the union to believe”

should receive it.

In considering whether this is a sensible provision, I ask myself why notice should not be given to all the other people who would be affected. I would consider it sensible for the Bill to require it to be given not just to the employer, but to others who would be affected by the union’s actions, such as post office and railway users’ groups. Section 226 states that it would help the employer to be able to make plans and bring information to the attention of some of his employees, because other employees might be seriously affected if half their colleagues walked out on strike. It is entirely right that there should be compliance—full compliance—with the requirement for notice to be given.

[Andrew Bridgen]

Compliance with the notice period is essential because, as my hon. Friend has pointed out, there are suppliers downstream and users upstream of the business who need to be informed of potential industrial action.

[Mr Nuttall]

Indeed. The time is needed so that other people—not just other employees—can be notified. Deliveries may need to be stopped, and customers may be waiting for those deliveries.

There is a strong argument for increasing the notice period. Section 226A(1)(a) requires only seven days’ notice, which is not very long. It will include a weekend, so there will be only five working days. That is not a long time in which to make all the necessary preparations, especially when the company involved has never experienced a strike before and does not know what to do. There will be a lot to be done in those seven days. There is a lot of merit in the argument that the period should be extended to 14 or 28 days, so that people know where they stand if a union starts to take industrial action.

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[Mr Nuttall]

I thank my hon. Friend for that intervention. The position is more complex perhaps than I originally intimated. Section 232B(2)(b) says that, in relation to a ballot, if there is a failure or there are failures in respect of a provision mentioned in subsection (2) or other provisions, and the failure or failures are accidental and on a scale that is unlikely to affect the result of the ballot, those can be disregarded. It is worthy of note that the section already makes provision not just for a single failure but for failures, so it already provides for more than one failure. There could be several failures and the law accepts that at the moment. It accepts that there could be multiple failures and the existing legislation would still potentially allow those to be disregarded by the courts, as happened in the case that has been so often referred to this morning—the case of British Airways plc v. Unite. There were a number of errors. The Court of Appeal, by a majority, decided to allow the appeal and discharged the injunction that had been obtained at first instance by the court.

[Andrew Bridgen]

Does my hon. Friend agree that the Bill effectively will give special rights, privileges and concessions to unions that are not given to any other groups in this country?

[Mr Nuttall]

My hon. Friend is right. The concept that is introduced by the proposed amendment to section 232B of “substantial compliance” is a novel concept. I have not heard in the opening remarks in the debate about any other legislation where that is referred to, and therein lies quite a major problem with this legislation.

I turn to the crux of my argument.

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[Mr Nuttall]

My hon. Friend hits the nail on the head. Back in 1999 there was a new Labour Government with a substantial parliamentary majority, and they could very easily have introduced a measure along the lines of the Bill, but they did not do so because it is a bit of a dog’s breakfast. It is not clear what substantial compliance means; there is no definition in the Bill and our attention has not been drawn to any previous case law or to any academic analysis of what would or would not constitute substantial compliance.

[Andrew Bridgen]

Is not the crux of the matter that if substantial compliance had been fully defined in the Bill, that would merely move the legal argument on to the question of whether actions might or might not be likely to affect the ballot?

[Mr Nuttall]

My hon. Friend is right. Whether or not something may or not result in the ballot being affected is a very moot point indeed, and it could exercise the courts for a very long time.

I think there is a danger that the lawyers are sitting out there rubbing their hands with glee, because when they see the Bill they must think, “Marvellous! We’ve almost run our course in respect of the 1992 and 1999 legislation, which has been to the Court of Appeal, but we are now going to move back to square one and start again. We can spend hour after hour in the Queen’s bench division and then the Court of Appeal.” The issues will not be dealt with in, say, Uxbridge county court.

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[Mr Nuttall]

My hon. Friend makes a reasonable point. One difficulty in defining a small or minor error is the size of the electorate. Something that could be regarded as a small error that could be safely disregarded in one trade union would not be appropriate as a matter to be disregarded in another trade union. Even when a conclusion has been reached in proceedings that might at first sight result in apparent settlement of the law, that is not necessarily the case if the union involved is the size of Unite rather than the size of the garment workers’ union, which might have nowhere near the same number of members. This is an important issue that will affect employers and the law will not be clear even after the Bill is passed.

[Andrew Bridgen]

Perhaps I could bring to my hon. Friend’s attention another complication that might not have been considered of the possible implications of this Bill. If we move the burden of proof from the unions to the employers regarding substantial compliance with the provisions and the phrase

“on a scale…unlikely to affect”,

does my hon. Friend agree that there could be a field day for the lawyers when employers, perhaps reasonably, claim that the unions have not complied fully by providing them with the information they need to decide whether there has been substantial compliance with the Bill or whether any errors are on a scale unlikely to affect the Bill’s provisions? Would that not therefore require further legislation to give employers the rights to obtain the information from the unions in a reasonable, timely and full fashion? That is yet another field day for the lawyers and, yet again, will fail to achieve the aims of the Bill.

[Mr Nuttall]

My hon. Friend is quite right. That is a point that I did not consider fully—I apologise for that—when going through clause 1(3). There is a risk that that subsection, taken together with subsection (5), will mean that the employer now has the problem—it will be a problem—of bringing before the courts evidence that there has been substantial compliance or non-compliance. All the evidence might well be in the hands of the trade unions, and it will be very difficult for an employer to be able to satisfy a court and, under this Bill, they would have that responsibility. Employers would have that burden placed on them. How on earth can they be expected to fulfil and meet that requirement when the information is in the hands of the trade unions? As my hon. Friend reasonably and rightly says, it would perhaps be more understandable for there to be a provision in the Bill to require the information that the court needed to be handed over so that there could be no doubt that there was a full requirement for the trade unions to hand over to the employer all the relevant information to enable the employer to submit an action to the court. Without that information, the employer would have no reasonable basis on which to instruct their solicitor, and there would be no way for a solicitor to instruct counsel, because they would not have the facts and figures to enable them to make their case.

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[Charlie Elphicke]

My hon. Friend makes a good point. What does substantial compliance mean? I am not sure. The hon. Member for Hayes and Harlington really should have drafted the Bill properly to include a proper definition of substantial compliance. That might at least have earned Labour party support, if not necessarily Conservative support. If before laying the Bill without any discussion he had worked with the Government, it might have been less controversial. He could have worked with his own party to produce something that could achieve the kind of consensus that there should be for private Members’ Bills.

[Andrew Bridgen]

The salient point is on substantial compliance. Imagine if in canvassing our constituents we were to “substantially comply” with a ballot by delivering papers only to the 80% of people we thought likely to vote in the direction we wanted. Would that be substantial compliance or democracy?

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[Philip Davies]

I tend to agree with my hon. Friend. As it happens, I am a fan of the hon. Member for Hayes and Harlington, who is a great parliamentarian. However, it was rather uncharacteristic of him to make it abundantly clear at the start of his speech that he did not want to take any interventions. My hon. Friend pointed out that he had not provided a definition of substantial compliance in the Bill, which made it all the more unfortunate that the hon. Gentleman started by saying that he did not want to take any interventions, and woe betide anyone who tried to intervene—that was the gist of his starting point—because otherwise we might have been able to ask him what he thought substantial compliance meant. That might have shed some light on the matter.

[Andrew Bridgen]

Is not the reason why the hon. Member for Hayes and Harlington (John McDonnell) did not take any interventions in his opening statement that he did not have any answers to the interventions that were coming? As we have shown today, this Bill has more holes in it than a Swiss cheese.

[Philip Davies]

There may be an element of truth in what my hon. Friend says. The hon. Member for Hayes and Harlington tried to describe the Bill as a simple and non-contentious piece of legislation that, really, nobody could possibly quibble with, and it was helpful to him in presenting that case not to take any interventions, so that none of the flaws in the Bill could be exploited.

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[Philip Davies]

My hon. Friend is right, and we should guard against that. I do not think that the hon. Gentleman wants to exempt minor errors, which are already protected. He wants to exempt major errors from the scrutiny of the courts and we should be very wary of doing that.

In 12 locations, there were no operations staff and workers were clearly ineligible to vote—

[Andrew Bridgen]

I thank my hon. Friend for being so generous in giving way in this most interesting debate. Does he agree that the Bill is not merely a Trojan horse but a wolf in sheep’s clothing, and an attempt to legitimise electoral errors—I am being generous in calling them “errors”—that would disgrace a banana republic?

[Philip Davies]

My hon. Friend is right. That is why I am so disappointed that the hon. Member for Hayes and Harlington made it abundantly clear from the outset that he did not want to take interventions. He has left the impression—rightly or wrongly—that he was trying to portray a small change in the law to clear up a small anomaly, and that no one could argue with that because it was all common sense. However, when one gets to the nitty-gritty—

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[Mr Davey]

My interpretation of the fact that there are some cases before the European Court of Human Rights is that we do not need the legislation at all. Those court cases are dealing with the issues of uncertainty that remain and the case law is helping to develop the situation.

[Andrew Bridgen]

Will the Minister shed some light on whether we need this Bill and whether there is any requirement for it? Is he aware of the proportion of ballots by unions that have been challenged legally?

[Mr Davey]

My hon. Friend anticipates what I was about to say. Although it is true that in recent years there have been more applications for court injunctions, we must put that increase into some perspective. It is still relatively rare for the courts to intervene in industrial disputes. Over the past five years, just seven injunctions have been sought, on average, per year. During the five years from 2005 to 2009, there were on average 132 work stoppages each year. With an average of seven injunctions and 132 work stoppages, it is clearly not the case that employers are always going to court and that it is difficult for trade unions to ballot their members, give notices in the proper way and hold industrial action when their members so vote. I am afraid that the facts are entirely against the hon. Member for Hayes and Harlington.

Moreover, these cases have not always gone the way of the employer, even when there have been injunctions, as my hon. Friends have said. The Bill’s explanatory notes refer to the case of British Airways v. Unite. That case concerned the way that the union notified its members about the outcome of an industrial action ballot. On this occasion, the Court of Appeal upheld the union’s appeal and the injunction was overturned.

There are of course other cases in which the trade union lost. Reference has been made to another case involving British Airways and Unite. I freely acknowledge that most balloting processes across our society will contain some flaws. Existing industrial action law makes some allowance for such small errors, but in the case of British Airways v. Unite that Unite lost, the union had made serious mistakes in the balloting process and a large number of people were mistakenly accorded an entitlement to vote. We are talking about a tightly knit group of workers, all belonging to the same, very well-resourced, branch of the Unite union. The union should have known better. Frankly, the union got it wrong and, quite rightly, it had to rerun the ballot.

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[Mr Davey]

I am grateful for all the interventions, but I want to present my arguments because there are genuine concerns about the Bill that the coalition partners share, and it is important to put them to the House.

We have serious difficulties with the proposal to reverse the burden of proof. To date, in any proceedings, once the employer has established that there has been a breach of the safeguards, the burden shifts to the union wishing to avail itself of the statutory defence to establish whether section 232B applies. That is consistent with the rules on the burden of proof: the burden generally lies on the party making the proposition. However, the Bill contravenes that general rule of evidence. In addition, it ignores another general rule that parties are not required to establish a negative. Under the Bill, the employer has to establish that the breach does not qualify for the disregard under section 232B. On a practical level, it is unrealistic and unfair to imply a level of knowledge on the part of the employer, which enables the employer to show not only that the law has been broken, but that the lack of compliance is substantial and meets certain thresholds.

[Andrew Bridgen]

As the Minister said, it is difficult to prove a negative. Also, the burden of proof will be on the employers, yet the unions will have all the information that the employers require to reach such a conclusion.

[Mr Davey]

I listened to my hon. Friend when he expanded on that point in the debate and he was spot on. It would be a bizarre shift in the law. As one of his colleagues said, it would create a lawyers’ charter.

Let me summarise the Government’s response to the Bill. Broadly speaking, there is a disconnect between the measure and the modern world of industrial relations. It will do nothing to shift employment relations on to the new ground of employee engagement.

At this time, we need all employers and all workers to pull together in a common cause to lift individual businesses and the economy at large out of the doldrums of weak growth. We need to pull everyone together in that effort. I want trade unions, as well, to exert their positive influence. The forward-looking agenda is theirs, too. They should adopt their rightful place and be on the inside of the debates. I greatly hope that they will engage with the Government at all levels.

In contrast, the Bill is about division at the workplace, and its effect would be to deepen those divisions by encouraging more strikes and other forms of industrial action. Contrary to the views of its supporters, the Bill proposes a major shift in the balance of the law. There is no consensus in our society for such a shift. In fact, employers believe that we should move in the opposite direction.

Successive Governments, with the previous Government very much to the fore, did not want to unsettle the balance of the law on industrial relations. The coalition Government share that mainstream view. We therefore have no current plans to change industrial action law either in the direction proposed by the Bill or in that proposed by others.

The case that the Bill’s supporters presented for changing the law is not compelling. The legal framework has been in place for many years, and there is no evidence that it causes problems for trade unions that efficiently go about their lawful business. Parties should know what is needed to comply with the law.

The Bill itself has major defects in its drafting and would encourage undemocratic and coercive behaviour by trade unions. Sadly, it is not a Bill that the Government can support. I therefore ask hon. Members to vote against Second Reading.

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[Jacob Rees-Mogg]

My hon. Friend knows that I have an affinity for thresholds in other circumstances. Obviously, I am not going to talk about that, because it is not germane to the Bill, but I think it right that a sufficient number should express their will for a ballot to be valid, and that while we are debating Second Reading, we ought to think about what else it could have said, had it been a better Bill—a Bill that the House might have liked and approved on Second Reading. It could have contained further reforms to give power back to the members. I actually believe in the slogan used by Baldwin for his election: “Trust the People”. The people are the masters of their politicians, and they know what is best for them, and the greater the democracy in trade unions, the better it is for their members.

I was struck by the Minister’s comments that the Bill would make 15 sections of the Trade Union and Labour Relations (Consolidation) Act 1992 subject to accidental mistakes and a broad interpretation. Does that not make the hairs on the backs of hon. Members’ necks stand up, when they think of what has gone before, and when they think of the possibilities for manipulation and for people to stand over others as they fill out their ballot papers? Perhaps it would be done in the canteen. Perhaps one person would gather everyone together, and if only 20% of the vote went astray, nobody would mind. It would not be substantial; it would be a minor error, a small failing, a little bit on the side.

[Andrew Bridgen]

Does my hon. Friend agree that were the Bill to become law, it could be viewed by a vast number of unions and union officials, who are quite capable of running a ballot in line with the current regulations, as a complete insult to their intelligence?

[Jacob Rees-Mogg]

My hon. Friend is absolutely right. If a union cannot run a ballot properly, that is a disastrous state for that union to be in, but people use the mechanisms to hand. We should always be suspicious—always cautious, always careful—about allowing exemptions, because as soon as we do, people work out how to use them for a purpose other than that which was initially intended. That is why legislation in this place needs to be so properly considered—and considered in due and appropriate detail—because when it is not, people might actually believe the title of the Bill, which I come back to.

As the Minister so rightly said, the title refers to “Minor Errors”. Clause 2 deals with the short title, and although I doubt whether the short title of a Bill should very often be a contentious matter, on this occasion I think that it is. I do not think that the Bill ought to be called the Lawful Industrial Action (Minor Errors) Bill. If passed, it should be called the Lawful Industrial Action (Coach and Horses) Act 2010, because that, as I said in an intervention on the Minister, is what it would do to the law as it stands. The Bill would get rid of so many safeguards, and this House is here to safeguard the British people—our electors—not just from over-mighty government, but from over-mighty private organisations that may wish to use and abuse their power.

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[Jacob Rees-Mogg]

I am so grateful to the hon. Gentleman for making that point, which is one that I made to the Minister myself, when sadly he was not present. Indeed, the Hansard reporters asked me to spell it out, so the hon. Gentleman will notice that it is in Hansard tomorrow. De minimis non curat lex is, of course, a right and just principle, but it is in existing law. The question of what is “substantial” is the important one, and an 80:20 test is deeply unsatisfactory, because it simply allows too much impropriety to take place.

For the benefit of the hon. Gentleman, who is interested in my clubs—I believe that I am allowed to answer this point, Mr Deputy Speaker, as it was raised in an intervention—I should add that I am not a member of the Carlton club, although I think it is in a very fine building and has an excellent membership, and that I think that Fortnum and Mason is a very fine shop, and would be very happy to place that on record.

I would like to return to the Bill.

[Andrew Bridgen]

In the light of the interventions from various Labour Members, does my hon. Friend agree that pretending that only they care about workers’ rights is a fallacy? My great-grandfather was one of the founders of the union movement. My grandfather was a miner, and my other grandfather—