Fifth Standing Committee on Statutory Instruments, &c.


Tuesday 14 May 1991


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The Committee consisted of the following Members:


Banks, Mr. Tony (Newham, North-West)

Benn, Mr. Tony (Chesterfield)

Bowden, Mr. Andrew (Brighton, Kemptown)

Budgen, Mr. Nicholas (Wolverhampton, South-West)

Callaghan, Mr. Jim (Heywood and Middleton)

Carlisle, Mr. John (Luton, North)

Chapman, Mr. Sydney (Chipping Barnet)

Colvin, Mr. Michael (Romsey and Waterside)

Cousins, Mr. Jim (Newcastle upon Tyne, Central)

Evans, Mr. John (St. Helens, North)

Finsberg, Sir Geoffrey (Hampstead and Highgate)

Forth, Mr. Eric (Parliamentary Under-Secretary of State for Employment)

Franks, Mr. Cecil (Barrow and Furness)

French, Mr. Douglas (Gloucester)

Gardiner, Sir George (Reigate)

Lloyd, Mr. Tony (Stretford)

McCartney, Mr. Ian (Makerfield)

Thurnham, Mr. Peter (Bolton, North-East)

Wallace, Mr. James (Orkney and Shetland)

Mr. R. J. Rogers, Committee Clerk

3 Fifth Standing Committee on Statutory Instruments, &c. Tuesday 14 May 1991

[SIR JOHN HUNT in the Chair]

Draft Employment Codes of Practice (Revocation) Order 1991

10.30 am

The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): I beg to move, That the Committee has considered the draft Employment Codes of Practice (Revocation) Order 1991. One of the Government's first measures in their step-by-step reform of legislation on the closed shop was to issue a statutory code of practice on the subject in 1980. That code gave guidance on how union membership agreements and arrangements should be operated to obviate the worst excesses of the closed shop. However, a succession of Acts of Parliament, culminating with the Employment Act 1990, have made all forms of closed shop effectively unlawful. It is therefore, clear that the closed shop code of practice no longer serves any useful purpose. Parliament gave the Secretary of State the power, contained in the 1990 Act, to revoke obsolete codes and I am sure that the Committee will agree that revocation is the appropriate course of action for the closed shop code of practice. The other code of practice covered by the draft order is generally known—in so far as it is known at all—as the industrial relations code of practice. It was published in 1972 to "give practical guidance for promoting good industrial relations" in accordance with the principles of the Industrial Relations Act 1971. The industrial scene has changed enormously in the 20 years since that Act was passed, and the code cannot help but be an anachronism today. Fortunately, much of the subject matter which is of lasting value is available in a more up-to-date form, either in the Advisory, Conciliation and Arbitration Service codes of practice or in the popular series of ACAS guidance booklets. That being so, I hope that members of the Committee will agree that the time has come for the industrial relations code of practice, and the closed shop code of practice, to be revoked.

10.31 am

Mr. Tony Lloyd (Stretford): We accept that the code of practice on the closed shop has been superseded by the change made in the Employment Act 1990. It is almost enough for me to say that I concur with the Minister's view that it is time to rescind that code, but I wish to make a few comments about the second code of practice with which the Committee is dealing. The Minister said that that code was anachronistic but the oddity of its genesis is that it was introduced by a Conservative Government in 1972. It was stoutly defended by the Conservative Opposition after the general election of February 1974 resulted in a minority Labour Government taking office. They were kept in office by the then Liberal party which, I suppose, is as anachronistic as the code of practice. 4 It is odd that a code that was fought for long and hard by members of the Government should be tossed on to the scrap-heap, because there is little doubt in my mind that there is room in industrial relations for codes of practice that are authorised and authenticated by the Government. That is also the view of the Government because they introduced codes of practice on ballots for trade unions and other matters. The Government believe that they have a right and, indeed, an obligation to interfere in the running of those ballots because they regard them as matters of public and private policy. Yesterday, we heard the announcement of the tearing up of the employment contracts of 34,000 workers at Rolls-Royce. It is for the courts to determine whether Rolls-Royce acted legally, but the issue should concern the Government and the Minister as it applies to the furtherance of good industrial relations. The Opposition understand that a 20-year-old code of practice needs revision, but we believe that the Government should express their view on industrial relations in a code of practice. The Minister referred specifically to the code of practice of the Advisory, Conciliation and Arbitration Service as though it will act as a substitute for a Government code of practice, but ACAS does not deal with all employment matters. For example, it would not deal with what has happended at Rolls-Royce. I invite the Minister to comment specifically not on the legality of the Rolls-Royce case, as that is outside his brief—rightly, Ministers cannot act in place of the courts—but on whether he regards the pre-emptive tearing up of employment contracts by Rolls-Royce's management as acceptable. I also invite the Minister to comment on whether there is a role for a code of practice that would ensure that such actions are brought clearly into the ambit of debate by the Government, the Opposition, trade unions and employers. As codes of practice have semi-legal status and are used by the courts, if the Minister were to introduce a code of practice that dealt with the Rolls-Royce case, he would guide industrial relations generally.

The Chairman: Order. Passing reference to the Rolls-Royce case is in order, but we cannot have a full-scale debate on it.

Mr. Lloyd: As always, I accept your ruling, Sir John. I have tried to remain in order, as I have argued that a code of practice should replace the present code. We can talk theoretically about the relationship between employers and trade unions, but codes of practice relate to the real world. One of the problems of Committee debates is that they are theoretical. However, Rolls-Royce is a real case. I should be happy to refer to other cases—such as that of Pergamon Press pic, which sacked its employees some time ago—that have unsatisfactory features and where doubts have been expressed about the validity of employment contracts. A large gap is now appearing in employment relationships, because what was deemed to be a contract of employment no longer seems valid, whether it be in the printing industry or in Rolls-Royce. I hope that the Minister will deal with such issues and give the Committee the Government's opinion on employment contracts. The Government must take action; lack of action will reinforce the status quo. 5 I could continue at greater length on a different occasion, but I should be grateful this morning if the Minister answered the fairly narrow questions that I have asked.

10.38 am

Mr. Forth: I am grateful to the hon. Member for Stretford (Mr. Lloyd) for his acceptance of my comments on the closed shop. I shall consider the more substantive points that he made about the industrial relations code. Although Conservative Members might be attached and devoted to the industrial relations record of the Conservative Government of the early 1970s, for the hon. Gentleman to appeal to that, of all things, was straining our loyalty, if not our memory, a little too far. I claim, with modesty, that the Government's achievements through successive measures in the 1980s on the role of individual trade union members, and the country's record on industrial disputes—indeed, on industrial relations generally—shows that we have been much more successful and progressive than the previous Conservative Government. The hon. Member for Stretford appealed to Conservative Members to recall the alleged glories of the industrial relations legislation of the early 1970s, but I am prepared to let history speak for itself. The hon. Member for Stretford rather underplayed and undervalued the role of ACAS. The Department of Employment has a high regard for the work of ACAS, which represents all sides of industry. I took the trouble to bring with me several of its excellent publications, which show the extent to which we have looked to it for guidance on industrial relations, on handling redundancies, on recruitment and selection or on workplace communications. We look to it to take up the points that were made by the hon. Gentleman. I do not want to be drawn into a debate on Rolls-Royce—you, Sir John, have given guidance on that subject—but as far as I am aware, the dismissal letters that it sent its employees gave the due period of notice required by existing law and practice. I understand that Rolls-Royce took extensive legal advice before doing so; therefore, as far as I am aware, it was within the law. That is the advice that I have received and I cannot comment further. However, as the circumstances are rather unusual and somewhat new we shall want to see whether they have wider implications. Although there is no question of Government action on individual cases, whenever such cases arise the Department would want to consider them to see it is necessary to change the law or to introduce a code of practice. Whether any resulting code would be a matter for ACAS or for the Department would be a different question, even though it is germane to our debate today.

Mr. Lloyd: That was a suitably bland response. The Minister is not in a position to advise us on the legality or otherwise of Rolls-Royce's action. It is not acceptable for 6 the House or for Ministers to take the place of the courts. The Minister assured the Committee that he will look into that matter in general terms, but do the Government have a view on whether it is acceptable for an employer, arbitrarily and without notice, to tear up contracts of employment? That is a fundamental change in what most people deem to be the nature of a contract of employment. I urge the Minister to consider whether we need a code of practice or legislation to guarantee that contracts of employment have some validity for employees as well as for employers.

Mr. Forth: I well understand the hon. Gentleman's point. It may be valid but we do not know enough at this stage. For example, ACAS code of practice No. 1, "Disciplinary practice and procedures in employment", covers some elements of dismissal. As far as I am aware, the dismissal letters issued by Rolls-Royce gave employees their due period of notice. How far one has to take account of such things, and how far the rather black picture painted by the hon. Member for Stretford is true requires further investigation. Neither I nor anyone else in the Government will rush to judgment on the matter or say that we need new codes of practice or new legislation. It is not in my nature, not in that of the Government, to do so. The hon. Member for Stretford made a constructive suggestion, but I hope that he does not suggest that we rush to make such commitments so soon after the event and knowing so little about it. I repeat my undertaking to examine the circumstances of the case to assess its implications and to make a mature judgment of what should be done. That case, however, has no bearing on the order before the Committee. Events and legislation have long overtaken the codes that have been in effect, and the time is right to lay them to rest. The hon. Member for Stretford happily conceded one part of my case and asked other questions that I have undertaken to consider. I hope that the Committee will agree that nothing has been said this morning that should persuade it to do other than support my proposition.

Question put and agreed to.

Resolved, That the Committee has considered the draft Employment Codes of Practice (Revocation) Order 1991.

Committee rose at fourteen minutes to Eleven o'clock.



Hunt, Sir John (Chairman)

Bowden, Mr. Andrew

Budgen, Mr.

Chapman, Mr.

Colvin, Mr.

Forth, Mr.

French, Mr.

Gardiner, Sir George

Lloyd, Mr. Tony

Thurnham, Mr.

Wallace, Mr.