Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)(13 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on coming first in the ballot for private Members’ Bills. The Bill gives us a chance to debate an important and topical subject—industrial action law. That issue is receiving wide attention in the media. As hon. Members know, some organisations, including the CBI and the Policy Exchange think-tank, are calling for that body of law to be strengthened, and we heard those voices loud and clear in the debate today. Of course, that is the exact opposite of the effect that the hon. Gentleman wants to achieve through the Bill.
It is not the first time in recent years that the hon. Gentleman has presented a private Member’s Bill. A couple of years ago, he tabled the Trade Union Rights and Freedoms Bill, which also centred on industrial action law. I commend him for his determination and consistency of purpose. He has a justified reputation in the House as a doughty defender of trade unions. His knowledgeable and often impassioned contributions to our debates show his deep commitment to that cause. That commitment does him credit, even though many in the House, including some of his hon. Friends, do not always share his views.
If my memory is correct, the last Bill the hon. Gentleman introduced included proposals for root-and-branch reform of strike law. For instance, it contained provisions to restore the lawfulness of secondary industrial action and to repeal the requirement on trade unions to provide notice to employers in advance of industrial action. He presents his current Bill as a modest measure in comparison—it is undoubtedly more modest than his previous Bill, which I suspect was rather closer to his heart and true beliefs than this one—yet modesty is often in the eye of the beholder. Saying that this Bill is more modest than his last does not make it so, despite its seductive title.
The Bill is admirably short—just two clauses. It works by changing section 232B of the Trade Union and Labour Relations (Consolidation) Act 1992. However, as I shall demonstrate in my speech, the Bill is not so modest as it appears at first sight. In fact, it would have the effect of altering the applications of about 15 other sections of the 1992 Act. In some cases, it would significantly relax the procedures that trade unions must follow when organising industrial action—something which the previous Government considered and rejected.
In the hon. Gentleman’s opening remarks, he made one or two points that the House ought to consider more carefully. He argued that his Bill tries to achieve the original intention of section 232B by applying it to all 15 sections of the 1992 Act, but that is wrong. Section 232B is clearly drafted so that it applies to just four sections of the 1992 Act. Parliament did not therefore intend that it should apply as widely as he suggests, and it is important that hon. Members hear that argument.
The hon. Gentleman referred to a number of court cases, but it is worth reminding the House that in recent times, the trade unions have been the ones scoring wins in the courts—many of my hon. Friends referred to such cases. For example, the Court of Appeal ruling in BA plc v. Unite this year, to which my hon. Friend the Member for Dover (Charlie Elphicke) referred in some detail, found very strongly for Unite and rejected the employer’s argument. In Milford Haven Port Authority v. Unite, the Court of Appeal again found for the trade union. In a third case this year—Metrobus v. Unite—although the Court gave an injunction against the trade union, it dismissed many of the employer’s arguments with respect to notices, saying that the errors were small and should therefore not be considered.
The case law that has amassed this very year suggests that the concerns of the hon. Member for Hayes and Harlington are not based on what is true. I strongly urge Labour Members to think carefully about the fact that real case law developments are helping trade unions. The hon. Gentleman tried to argue that the Bill would reduce uncertainty and therefore that it would give greater clarity and assist the process. As many of my hon. Friends clearly demonstrated—particularly my hon. Friend the Member for Shipley (Philip Davies)—changing the “accidental” test in the current law and replacing it with a “substantial compliance” test would create uncertainty, because case law has clarified the law, which is in the unions’ interests. Therefore, some of the core arguments behind the Bill are flawed.
I congratulate my hon. Friend the Member for Bury North (Mr Nuttall) on his speech. Using his legal background, he forensically showed that the test of substantial compliance had extreme shortcomings, and said that it would result in some bizarre outcomes if applied more generally in law.
I welcome the hon. Member for Llanelli (Nia Griffith) to her new position as Opposition spokesperson and look forward to our debates, not only on this Bill but on the Postal Services Bill, on which no doubt we will spend some weeks in Committee. She rightly praised the actions of many unions, especially how, during the recession, they have engaged and worked with management in many firms—large and small—up and down the country to preserve and create jobs. I, too, would like to put on the record my praise for those unions and employers who have been prepared to work flexibly—in respect of family-friendly flexibility, pay cuts and reduced work hours—with management to prevent redundancies.
That sort of progressive trade unionism needs to be highlighted and pinpointed. I often think that it removes some of the passion from this debate by showing that many trade unions are committed to ensuring that our economy is vibrant and prosperous, and do not want to undermine firms’ ability to move on. I was pleased that the hon. Lady committed the Opposition Front-Bench team at least to the framework of industrial relations law, as Labour did time and time again when in government. I was also pleased that she made it clear that her Front-Bench team will not be supporting the Bill today. She made one argument against it: she clearly opposes the part of the Bill that reverses the onus of responsibility and puts it on employers. That is one argument against it, but, as I will seek to show in due course, there are others on which the House should reflect carefully.
On the wider industrial relations context in which we should view the Bill, I want to comment on an intervention made by the hon. Member for North East Somerset (Jacob Rees-Mogg) that went to the heart of the matters before us. He reminded the House that trade unions have immunity from prosecution for breach of contract going back to the Trade Disputes Act 1906, which was brought in by a Liberal Government. That immunity is an important special privilege for trade unions, so it is right that Parliament imposes conditions on how they are used. Over the years, all three main parties have supported the role of Parliament in ensuring that there are conditions on the uses of those privileges.
When one looks at the rationale for the Bill, one must bear in mind the industrial relations context in which it is set. It is important to establish that up front, because there are significant differences in our respective understandings of how industrial relations in the UK are evolving. It is because we start from such different points that I fear our attitudes towards the merits of the Bill will not fully coincide. I suspect that the hon. Member for Hayes and Harlington and his supporters view industrial relations in rather more divided terms than I do. Sometimes from listening to him—I have done so for many years—his seems to be a world in which bosses are always seeking to gain an advantage over the work force. In other words, without the countervailing power of the trade unions, individual workers are always chronically disadvantaged in the work place. His Bill therefore seeks to reinforce and strengthen the countervailing power of trade unions and tilt the balance of the current law and our industrial relations practices in favour of trade unions.
Conflict and confrontation are, of course, a feature of workplace life in some workplaces, but it is much less common than it once was. One only has to think back to the 1970s, when on average 12.9 million days were lost each year through strikes. I am delighted to say that modern-day industrial relations are very different. Of course, the 1970s were also a time of high unionisation in both the public and private sectors, but total union membership has declined significantly since then. In fact, it has almost halved. As a supporter of progressive trade unionism, I take no pleasure in pointing that out. However, those trends are particularly apparent in the private sector. Just 15% of private sector employees are now union members and there are large areas of the private sector where unions are completely absent. They are simply not a part of the landscape.
As I have said, I and the Government more generally are supporters of progressive trade unionism. We feel that unions have much to offer this country. Even now, trade unions represent the largest voluntary organisations in this country—one could perhaps say that they are an expression of the big society.
That is why this Government and my Department want to engage with trade unions. We want to hear their considered views, and to develop a common understanding and an approach to the severe problems that this country faces, which include not just our economy, but the critical state of the public finances. That is why my right hon. Friend the Secretary of State meets the TUC’s general secretary, Brendan Barber, each month. I and other BIS Ministers have also had meetings with the TUC and other trade unions. From those discussions we have explored issues of particular concern to trade unions. For example, decisions that I have taken on the national minimum wage, working with the Low Pay Commission, speak to those concerns. We and other Departments operate an open-door policy for trade unions, and in most cases we have retained the joint bodies, such as the public services forum, and partnership arrangements that the previous Government established.
We want to hold a constructive dialogue with trade unions, but of course it takes two to talk. That places an onus on us to listen and to understand the union position on the matters before us and others, but just as importantly, it places a duty on trade unions to engage realistically with the issues that the country and the Government face. Most trade unions are committed to a mature and positive dialogue of this kind. Sadly, there are a few exceptions to that, but I should pay credit to the many unions that do engage. The Government also understand that trade unions have a positive role to play in the workplace when they engage with the employer. I want to pay tribute to the role of union learning representatives, who help tens of thousands of their fellow workers with their learning and development needs. The Government have therefore committed themselves to continuing to provide support to their work through unionlearn, the training arm of the TUC.
That said, it remains the case that the protective umbrella that the trade unions once provided for this country’s work force has disappeared across large swathes of the economy. However, employees in the private sector are not subject to widespread exploitation, nor are they generally dissatisfied with their employment. Indeed, most surveys show that union members tend to be more dissatisfied with their working environment than their non-union counterparts. There are many reasons why surveys show that and why the decline of trade unionism has not led to widespread dissatisfaction or the spread of bad working practices. One reason is that the law provides many more rights to workers—many were introduced by those on the Labour Benches—than it once did. These days, it is the law, rather than the presence of active trade unions necessarily, that provides the guarantee of decent working conditions and fair treatment to millions of men and women up and down our country.
Another key reason, which I want to stress, is that working life and the approach of employers have moved forward. I am glad to say that it has become the consensus among a vast majority of employers that they should develop a new style of employment relations based on engaging and involving employees. Employers are not taking that approach simply because it is fair and progressive in itself, though it is; they have other, hard-headed commercial reasons for adopting such enlightened policies. Employers realise that obtaining the active co-operation of the work force is vital if they want to increase productivity and raise competitiveness in today’s tough market conditions. The quality and creativity of workplace performance are increasingly important for business success. More and more employers are developing innovative ways to engage their employees.
I do not know whether Labour will take this position in opposition, but the previous Labour Government certainly grasped that point. Indeed, they were enthusiastic enough to promote the message of employee engagement, which in many ways is the zeitgeist of employment relations, and they commissioned a special and very informative study into the subject, by David MacLeod and Nita Clarke, a former adviser to Mr Blair when he was Prime Minister. I have met them both, and I have encouraged them in that work and given support to it from the Department. This forward-looking agenda for employment relations is about securing greater co-operation and engagement in the workplace. It is about identifying common interests between employers and employees, and achieving the shared business goals. It is also about encouraging more employee participation and new forms of ownership. That is not a zero sum game, and this is certainly not about reliving the battles of the 1970s or 1980s.
Looking at the context of the industrial relations behind the debate today, I fear that the Bill does not engage with the new agenda. In many ways, it seems to be a throwback to a previous age, and both the hon. Member for Hayes and Harlington and we need to draw a line under our industrial relations history and turn the page. His Bill does not do those things. So, at a very basic level, I have serious reservations about his proposal.
The Advisory, Conciliation and Arbitration Service is promoting the new style of industrial relations, and I believe that it has much to offer to our debates in this area. I recently visited the ACAS head office and spent some valuable time with its chairman, Ed Sweeney, and his colleagues. I was deeply impressed with the expertise available to ACAS, and with the commitment of its work force. It is best known for its work on conciliating the settlement of industrial disputes, and its record on that is impressive. Less well known is its work on advising employers and trade unions on good employment practices and the management of change. That work helps to raise productivity and performance, and nips potential workplace problems in the bud. Importantly, it creates a culture of collaboration and mutual support at work. I believe that this approach to industrial relations improves—
John McDonnell
On a point of order, Mr Deputy Speaker. I thank the Minister for giving us the opportunity to hear the Government’s response to the Bill, which we have now done. There is other important Back-Bench business today, and I would like formally to move that the Question be now put.
Mr Davey
May I say to the hon. Member for Hayes and Harlington, for whom I have the utmost respect, that he did not take interventions during his opening remarks? As many of my hon. Friends made clear, that would have assisted the progress of the Bill. I think that new politics is about engagement in debate, and I hope that he will engage in that way in future.
We need to consider the details and the rationale behind the Bill. The hon. Member for Hayes and Harlington tried to make a case for changing industrial action law. He considers the current legal framework to be intrinsically unfair and thinks that because it is complicated, it gives rise to great uncertainty and unnecessary legal challenges against trade unions. Industrial action law has been a bone of contention for most of the last century or more, and hon. Members have referred to past discussions. When we look at the history, we see many key moments. We need only think of Barbara Castle’s “In Place of Strife” to remind ourselves how divisive and politically damaging to certain Governments this issue can be. Then there was the bruising period of the 1980s and early 1990s, when the Conservative Governments of those days introduced a succession of laws to establish a new legal framework to regulate and democratise the taking of industrial action. I believe that those reforms were long overdue, but it is worth reminding the House that they were resisted every inch of the way by the Labour party when it was in opposition.
Jeremy Corbyn (Islington North) (Lab)
On a point of order, Mr Deputy Speaker. I have been trying to follow what the Minister is saying, and it appears to me—I do not know whether you have the same impression—that he is deviating a long way from the terms of the Bill. He is giving his view of the history of industrial relations in the 1980s and early 1990s, when he should be addressing whatever concerns the Government have about my hon. Friend’s Bill.
Mr Deputy Speaker
I am listening to what the Minister has to say, and if I consider that he is out of order, I will certainly call him to order. However, I know that he will want to relate his comments more directly to the Bill.
Mr Davey
I certainly intend to do that, Mr Deputy Speaker, but I hoped it would help the House if I set out some of the context of the debate. I think that people sometimes have amnesia when it comes to what actually happened in the past.
It is worth reminding Opposition Members that the laws we have today relate not only to the laws passed in the 1980s and 1990s, but to the changes in those laws made by the last Government. My hon. Friends made it very clear that the last Government reviewed and made changes to this very part of our law, and did not adopt changes such as those that the hon. Member for Hayes and Harlington is trying to persuade the House to support today. They did not want to make any significant changes to the law on ballots and notices. Indeed, the last change of any substance that they made was in 2004. That is probably why the hon. Member for Llanelli was unable to support the Bill. She and the hon. Member for Bradford South (Mr Sutcliffe)—when he was doing the job that I am doing now—examined the law extremely closely, and found no case for changing it.
It has hardly been a secret that trade unions wanted to extend the disregard in section 232B, but I presume that when the last Government examined the law, they decided not to listen to those trade union voices. I am pleased to observe the consistency in the position adopted by the hon. Member for Llanelli. Successive Governments have taken the view that the legal framework of our industrial relations law is basically sound, and this coalition Government certainly share that view.
Mr Nuttall
I realise that we need to stick to the point, but I think that the historical context is very relevant. The certainty of the law is of great benefit not just to employers but to trade unions. The danger posed by the Bill is that it will reintroduce a great element of uncertainty.
Mr Davey
My hon. Friend is absolutely right. I urge Opposition Members, when they debate this issue—not just today but during the weeks, months and years to come—to think about where the trade union interest actually is. The fact that a body of case law has been developed, much of which, as I said earlier, has found in favour of trade unions, is creating certainty. It is clarifying what was previously uncertain. If we changed the law now in the radical way proposed—it is certainly not modest—we should have to go through that whole process again, which would increase uncertainty, and do precisely what the hon. Member for Hayes and Harlington says he is trying not to do.
Outside the trade union movement, which understandably has its own interests to pursue, I hear no clamour for the law to be changed in the way proposed. It seems that the average worker and even the typical union member do not see the law as unjust; still less is it seen as unfair by the general public. They do not want to see public services disrupted because striking has been made easier—quite the reverse. They want trade unions to help us to manage the painful adjustment that is needed to put this country's finances in order.
The supporters of the Bill argue that the law is too complex. According to them, it places too many procedural obligations on trade unions and as a result it is difficult for unions to comply with the last dot and comma of the law's many provisions. It follows, they say, that trade unions must be given more wriggle room to ensure that they can operate within the law. According to the Bill’s sponsors, the existing disregard, which provides some wriggle room, needs to be extended.
Again, I have to ask what has changed to make life so intolerable for trade unions. This legal framework has maintained its shape, give or take some refinements and amendments, for 20 years or more. Surely both trade unions and employers should be accustomed to it by now. They should know its requirements and they should know what needs to happen at every stage of the process to achieve compliance.
Let us remember that we are not talking about matters that are devolved to ordinary members or to local representatives of trade unions to organise unaided on their own. If that were the case, those local representatives perhaps could not be expected to know every provision of the law, but that is not the position that we face, or it should not be the position that we face. Rather, the taking of industrial action is a very serious matter and no sensible union would permit strikes to proceed without the specific authorisation of the union’s leadership and the involvement of its professional cadre of workers at every stage of the process. By and large, that is what happens.
Nick de Bois
The Minister touches on a point on which I would welcome some clarity: the consequences of industrial action go far wider than has been mentioned so far, as my hon. Friend the Member for Shipley (Philip Davies) highlighted. There is no call for redress for those who are affected beyond the immediate action. Therefore, surely it is responsible for the law as it stands to require the maximum process to ensure that strike decisions are not taken lightly. In that way, those who will suffer as a consequence of that action can at least draw some grim satisfaction from that maximum process. They have no other form of redress.
Mr Davey
My hon. Friend puts his finger on it. We need to weigh in the balance not just the rights of ordinary trade union members, but the rights of the business, the shareholders, the public, customers and other businesses that are affected by strike action. That is why the law has evolved as it has. It is a balancing act. Sometimes people say that the democratic result of a ballot was clearly in favour of strike action but ignore the fact that the procedural way in which the ballot was conducted was against the current law. They fail to understand why the procedures are there. They are there for good reason.
Jacob Rees-Mogg
I thank the Minister for giving way with characteristic graciousness. Does he agree that not requiring the trade unions to stick to a rigorous programme risks their going back to the 1970s? All of us have memories of mass meetings, Red Robbo and the will of the membership being entirely overlooked by terrible abuse of procedure, using the law as it then existed to its utmost to stop members having their say. The law as it stands prevents us from going that way again.
Mr Davey
I agree. I put it in another way, which complements the argument that my hon. Friend is making. I think that progressive trade unions welcome the law as it is. It ensures that their reputation, the way they work and their relationship with members is protected because they can show that they have gone through the right procedures. That improves their reputations with not just their members but the public, so I ask Labour Members who support the proposed change to reflect on the long-term implications for trade unions if we went down that route.
Every union must ensure that it has a good grip of the procedures when it enters disputes and that those procedures are professionally run. I do not think it is unreasonable to ask them to ensure that their information systems and membership records are as accurate as possible, using the vast power of information technology currently at our disposal. I suspect Opposition Members would be as intolerant and unforgiving as I am if organisations in other walks of life failed to keep accurate records or provided mistaken advice or a second-rate service. We should expect high professional standards from trade unions, just as we expect the same high standards from others.
The truth is that the previous Government understood that. From their extensive political contacts with unions, they knew there were problems with how some of them were managed. I suspect that they believed union leaders were a mixed bag in terms of their professional competence. That is why they argued for, and introduced, the union modernisation fund. They wanted to inject public funds into unions to bring them up to scratch. Millions of pounds were spent on projects to update membership databases, adopt new technologies and inject modern managerial methods into the running of trade unions.
Mr Nuttall
On the question of new technologies, the Bill would have been better if it had addressed the problems raised by the judges in the Court of Appeal, and if, instead of changing the rules on substantial compliance, it had provided specifically for the internet, e-mail, Twitter and text to be valid means of electronic communication for the purposes of the legislation. That would have provided a specific clarification that Members on both sides of the House might have been able to support.
Mr Davey
My hon. Friend makes a good point. The Court of Appeal thought about that carefully in coming to its judgment, but I would not want to go any further and say the law has to be tightened up in that way, because the judge’s statements are already quite helpful. I see the thrust and power of my hon. Friend’s argument, however.
If the UMF had worked as intended, it should have rectified the deficit in this area. I suspect, however, that problems remain and inefficiencies persist. While we all need to make sure that unions can try to reform in that area, I do not think the law should be relaxed to preserve poor methods of working within unions. Rather, it should be designed—as, by and large, it is—in the expectation that trade unions will run themselves efficiently and spend the money they collect well; their total annual income is more than £1 billion.
The current law not as rigid as the Bill’s supporters suggest. At virtually every point, the provisions are designed to take account of the fact that trade unions, just like any other organisation, do not have perfect knowledge and complete information at their disposal. Many provisions in the law are flexible enough to take account of what is “reasonable” or “reasonably practicable” for the unions to achieve.
Let us take the example of the law on ballot notices, which is a major part of the Bill. I know trade unions criticise these provisions a lot. Obviously, notices need to convey information, but according to the law—section 226A of the 1992 Act—that information needs to be
“as accurate as is reasonably practicable in the light of the information in the possession of the union at the time”.
That is not an onerous condition, and it is because of those sorts of conditions in the current law that the unions have won a number of cases in this year alone.
Jacob Rees-Mogg
The Minister is being enormously helpful to the House by taking so many interventions.
Is this not the absolutely right and just application of the legal maxim that the law is not concerned with trifles?
Jacob Rees-Mogg
It was quoted from the other side of the House in Latin: de minimis non curat lex.
Mr Davey
I am afraid I only did Latin O-level, and I have forgotten a lot of it.
Turning to the notices informing the voters and the employer of the outcome of the ballot, sections 231 and 231A respectively require only that the union take, as
“soon as is reasonably practicable after”
the ballot,
“such steps as are reasonably necessary”
to inform all persons entitled to vote and every relevant employer of the outcome.
The Bill’s supporters also believe that the law loads the dice in favour of the employer. According to their analysis, the law makes it difficult, and even impossible in some cases, for trade unions to defend the interests of their members—but, again, where is the evidence that the strike weapon has lost its potency, if used responsibly? The level of industrial action varies from year to year, but in the past 12 months for which data are available about 620,000 days were lost through industrial action. I would like that figure to fall, but such levels of industrial action in the UK are about the average for the EU overall, when allowance is made for the size of each country’s work force. In 2007, the latest year for which EU data are available, EU countries lost, on average, 34 days through industrial action per 1,000 workers. The UK figure was similar, although a little higher, at 38 days per 1,000 workers. That does not suggest that the UK laws on industrial action are out of step or are more difficult for British trade unions to navigate than laws elsewhere in the European Union.
Mr Nuttall
Just as a matter of interest, is the Minister aware of whether any other European Union country has a provision similar to the one proposed in this Bill?
Mr Davey
I am not, although I think it is highly unlikely that any EU country does, for the following reason. The way in which industrial relations laws have developed in different countries reflects different traditions, and that is how it should be; I do not think that there is a standard approach in the EU. The British view obviously draws on a very different tradition from elsewhere, but the effect is not dissimilar in terms of the average number of days lost. So the hon. Member for Hayes and Harlington, the promoter of this Bill, has not made his case; he has not provided evidence to show that our trade unions face particular problems.
The hon. Gentleman’s opening remarks contained references to various observations made by advisory bodies to the International Labour Organisation, but the data simply do not support the argument that unions in the UK are uniquely disadvantaged when it comes to organising strike action. The previous Government made it clear that Britain upholds its commitment to the ILO conventions; indeed, there has never been a challenge at the supreme authority of the ILO that we have transgressed our international commitments to those conventions. Some people make rather too much of this by saying that we are somehow breaching ILO standards and other human rights obligations on freedom of association.
It is also worth noting that employers normally choose to settle disputes before industrial action takes place—only a minority of industrial action ballots actually lead to industrial action. According to our estimates, in about 80% of cases where employees have voted for industrial action, no industrial action is subsequently taken. Both sides treat the outcome of the ballot as a stimulus to further negotiation. Once again, such behaviour is difficult to square with the conclusion that employers invariably have the upper hand under our law and could easily obtain an injunction to stop a strike in its tracks or impose their will unilaterally.
The hon. Member for Hayes and Harlington and others have discussed recent court cases. He said that they have made matters much worse for trade unions, but we have heard that argument rebutted.
Mr Nuttall
On court cases, does the Minister agree that it would have been sensible for the hon. Member for Hayes and Harlington to wait before introducing this Bill until the case that the RMT is taking to the European Court of Human Rights had been dealt with, as that may shed some light on the matters that we have been considering this morning?
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.
Nick de Bois
I am grateful to the Minister, who has been very generous with his time. Given the small number of applications for injunctions, would the Minister like to speculate on the motives behind this Bill? It strikes me that it is simply a device to allow and encourage more industrial disharmony at a time when we clearly cannot do such a thing, as well as to cover up the failure of unions to get their act together when they wish to follow this process.
Nick de Bois
I would not wish to suggest otherwise; I was merely asking about the situations that might arise at a time we can ill afford them.
Mr Davey
I certainly agree with my hon. Friend that were we to pass this Bill, it would not help the economy, in its current fragile state, to recover. There would be a danger of more strike action and that is not something that we want.
The courts are helping to develop everyone’s understanding of the practical applications of the law. Let us take the case of Metrobus v. Unite, which is something of a cause célèbre in union circles, and which centred on the time taken by the union to inform the employer of the outcome of a ballot. The employer, of course, has an intense interest in knowing the ballot result. The law therefore specifies that the union should notify the employer as soon as reasonably practicable. In this case, the court considered that the union should have informed the employer sooner. I can understand that the ruling may have inconvenienced Unite, but the ruling sets a clear standard for all unions to follow in future. There should therefore be less uncertainty and fewer legal complaints on that issue, as my hon. Friends have argued.
Let me turn to the detail of the Bill. As I said at the beginning of my response, the Bill amends section 232B of the Trade Union and Labour Relations (Consolidation) Act 1992. That section was inserted in the 1992 Act by section 4 and schedule 3 of the Employment Relations Act 1999. Several years later, in 2002 and 2003, the previous Government reviewed the practical operation of the 1999 Act. As a result, section 232B of the 1992 Act was slightly amended. Those amendments were introduced by the Employment Relations Act 2004.
So what does section 232B do? Its provisions enable the courts to disregard small failures by a trade union to comply fully with certain legal provisions concerning the organisation of an industrial action ballot. Those failures concern the requirements set out in four places in the 1992 Act. The first of those is section 227(1), which defines those who should be accorded an entitlement to vote by the trade union. The second is section 230(2), which places an obligation on the trade union to ensure that those entitled to vote are provided with a voting paper by post and are given a convenient opportunity to vote. The third is section 230(2B), which deals with the corresponding obligation on trade unions to ballot those persons entitled to vote who are merchant seamen. The fourth provision relevant to the disregard is 232A(c), which deals with the obligation on trade unions not to induce a person to take industrial action if that person was not accorded an entitlement to vote in a ballot.
The disregard applies to a small failure or failures to comply with those particular provisions. “Small” is defined as
“on a scale which is unlikely to affect…the result of the ballot”,
and the measures also apply if “the failures taken together” are on a scale that is unlikely to affect the result of the ballot. That test has a strong quantitative component, and it can therefore be used as an objective measure, so the test is relatively easy to apply in practice. Importantly, section 232B applies the law only to “accidental” failures by the trade unions. We have heard quite a lot of comments on that point.
As I have said, the original provision of the disregard was reviewed by the previous Government in 2002 and 2003, and after a detailed and thorough review, they were basically content with the operation of the disregard. They also concluded that other changes they had made to industrial action law had operated broadly as intended, so let hon. Members be in no doubt: the last Government saw no need for provisions such as those in the Bill. Having considered the case for them, and having reviewed them extensively on more than one occasion, they rejected the case for the amendments before the House.
So what are the proposed changes to section 232B? There are four major amendments proposed. I say “major”; the title of the Bill refers to “Minor Errors”, but we are talking about major ones. First, the Bill would apply the disregard to many more provisions in the 1992 Act. I counted that the disregard would apply to every aspect of 15 separate sections of the 1992 Act. In combination, those sections specify virtually all the procedures that trade unions must follow when organising industrial action. The disregard would apply to the running of ballots and to the notices that trade unions must provide to the employer or employers concerned before an industrial action ballot and before any subsequent industrial action. That, by any standards, is a substantial change to section 232B.
Secondly, the changes would remove the requirement for the failure by the trade union to be “accidental”. It would be replaced by the notion that the disregard applied where there had been “substantial compliance” with the provision or provisions in question. That therefore leaves open the possibility that the disregard will apply to situations in which the trade union knowingly makes a mistake or deliberately decides to flout the safeguards in the Act. We could not accept that change.
Thirdly, as the disregard would be extended well beyond the balloting provisions, we would be introducing a new way of defining the size of the failure to which the disregard applies, where the failure concerns a notice. In such cases, the disregard applies if the failure
“is unlikely to affect a reasonable person’s understanding of the effect of the notice”.
That alone raises many questions that are totally unanswered by the Bill.
Fourthly, the Bill places the burden of proof on the employer or other complainant to demonstrate that the failure does not qualify for the disregard. In other words, it is assumed that any failure by the trade union will be small scale and therefore covered by the disregard, unless the complainant demonstrates otherwise—a significant shift in the law, with a new presumption in favour of the trade union.
Earlier in my speech, I identified concerns that the Government have about the overall case for introducing this Bill. But, even if we were to assume that there is a compelling case for some changes to be made to section 232B, the Government would have serious misgivings about the way the Bill would amend the section. We cannot accept that the disregard should apply to every one of those 15 sections. That would be a major extension of the disregard and cannot be considered a modest measure. Just by way of example, the disregard would extend to section 230(1)(a), which provides that union members should be allowed to vote without interference from, or constraint imposed by, the union or any of its members. Where is the interest in allowing errors with respect to this safeguard?
Jacob Rees-Mogg
As I said earlier, this would be a slippery slope. It is an attempt to take trade union law back to where it was in the 1970s. It would run a coach and horses through the attempts since then to ensure democracy, control, proper procedures and orderly ballots. It is a frightening little Bill that attempts to undermine all that in just two clauses.
Mr Davey
As I looked in detail at the Bill, I became increasingly concerned. I thought initially that it might be something with which we could engage seriously and examine the possible need for reform. But if one forgets the title and looks at what is actually proposed, one realises that it is a significant attempt to shift the law in a direction we do not want it to go.
Philip Davies
The Minister glossed over his last comment too quickly for my liking. Am I right in thinking he said that, as the Bill stands, the union could interfere in the free vote of a few of its members in a ballot but could still argue that it had been substantially compliant?
Mr Davey
That is indeed my interpretation. I may have glossed over it because the hon. Gentleman and his hon. Friends made a clear analysis of that point in their contributions. I therefore felt that he had already grasped it, as he does so readily.
We strongly oppose removing the requirement for an error to be accidental. The suggested new disregard would apply to situations in which a union had deliberately denied members the entitlement to vote. It could also apply to a situation in which the union pressurised or coerced some individuals to vote in particular ways. Such behaviours are inexcusable, even if they were to occur on a small scale. They would undermine the democratic principles on which the current law is based. The Government cannot support a provision that could allow such democratic abuse to be excused. We have serious difficulties with the proposal to reverse the burden of proof—[Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
Order. Mr. Skinner, your sedentary remarks can easily be heard from the Chair, and that should not be the case.
Mr Nuttall
I am sure that hon. Members who have been present throughout the debate know that my hon. Friend the Member for Shipley (Philip Davies) had many more comments to make and has not had the opportunity to do so. The idea that opposition is being artificially engineered is far from the truth, because my hon. Friend had much more to say, and could well still have been speaking at this moment.
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.