Financial penalty for contravention of section 21

I beg to move amendment No. 172, in clause 22, page 11, line 30, after ‘has’ insert ‘knowingly’.

Borrowing from the style of the hon. Member for South Holland and The Deepings, I start by reminding everybody, from the explanatory notes, that clause 22

“provides for a local education authority to serve a penalty notice on the employer and sets out the circumstances in which the notice can be given. It provides for the amount of the financial penalty to be determined by regulations, and sets out the requirements for what is included in the notice.”

Our amendment No. 172, which is modest but succinct, in case the Minister chuckles too much, would insert “knowingly” at line 30, and require that the imposition of a financial penalty against the employer depend on them knowingly having contravened section 21—in other words, knowingly having taken on a young person aged 16 or 17 without them being in education or training.

Let me refer back to my comments on clause 21. As the Minister has acknowledged, the employer is asking for relatively modest confirmation from an employee of their education and training status. Arguably, in exceptional cases, a young person might forge a letter from an education or training provider to demonstrate that they are compliant with the legislation, and the employer might be completely unaware of that fact, or might not be able to check. The implication of the Minister’s statement is that they will not be required to do so and it will all be terribly easy, with a nod and wink over a cup of coffee and a letter passed across a desk, or some other easily given assurance.

My concern is whether, if a young person forges a letter, gives incorrect information, or is on an education or training course when they first take up their employment, but ends up not being on that—perhaps because it collapses or for some other reason—the employer will be penalised even though they cannot have reasonably or knowingly been aware of that young person’s circumstances. That is the issue on which we seek clarification from the Minister.

Let me give a word of support for the hon. Gentleman’s amendment. It is important that we explore how high the bar is to be set for local authorities to interpret an employer’s culpability in these terms. The hon. Gentleman was right to table the amendment because it allows us to probe the matter.

It will be quite possible for an employer to take on a young person who has deceived them into thinking that he or she is involved in training. It is important that we probe the Minister further because this is a matter of concern for employers. We spoke a few moments ago about the other concerns that employers have, and similarly it is particularly important that we reassure small and medium-sized enterprises in this regard.

I am delighted to be probed on this particular clause. I am absolutely clear that an employer would not receive a financial penalty if they had checked that the young person had made appropriate arrangements for training or education and were satisfied with the evidence before allowing employment to begin.

Clause 21(1) states that employers should take

“all such steps as are reasonable to ascertain, that the employee has made appropriate arrangements”.

We will make it clear in guidance what those reasonable steps should be. I am clear that there will be no requirement on the employer to verify the evidence. If it is a forgery, the local authority should act on the young person, not the employer, and we will seek to make that clear. I hope that that helps the Committee.

Accepting the amendment, however, could have undesirable consequences. It would create a loophole by enabling an employer to avoid the duty because they  would know that if they were caught, they could simply claim ignorance. Ignorance should be no defence in law. Ignorance would then be sufficient justification for not fulfilling the duty at all. Not even checking the young person’s evidence that they had made appropriate arrangements for education or training would clearly be unacceptable. I hope that, in the light of that, the hon. Member for Yeovil will withdraw the amendment.

I am grateful to the Minister for clarifying the Government’s intent. He reassured me that if the documents supplied by a young person were falsified in some way, the young person, not the employer, would be held to account. I did not manage to leap in in time to ask the Minister to clarify the other circumstance to which I referred. A young person might have legitimately got into education and training at the beginning of their employment with an employer and then dropped out of the training course three days after, or the training course might have collapsed. That individual might then have decided that there was nothing else on offer that they wanted to take up. Perhaps two or three months later, someone might discover that that young person was not in education or training. Under those circumstances, would there be an employer responsibility?

There is no employer responsibility in those circumstances.

I express my gratitude to the Minister for that reassurance. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 54, in clause 22, page 12, line 1, after ‘education’, insert ‘authority’.

We omitted the word “authority” due to typographical error.

It would be quite wrong to skate over this with the speed that the Minister wants. As you know, Mr. Bercow, the amendment was tabled in my name—

May I record my gratitude to the hon. Gentleman and his colleagues for tabling the amendment because it reminded us of the housekeeping that we needed to do?

I am delighted that the Minster has acknowledged the first of many amendments that he will accept during the passage of the Bill. He has been slow to accept the first of them, but given the spirit in which he has accepted this suggestion, we hope that he will accept many more of our honourable attempts to improve the Bill.

Amendment agreed to.

I beg to move amendment No. 55, in clause 22, page 12, line 4, leave out from ‘area’ to end of line 6.

Clause 22 provides for a local education authority to serve a penalty notice——this is precisely what we discussed a few moments ago in relation to employers——and sets  up the circumstances under which the notice can be published. The problem with the clause is that it is clumsy. There is no clear line of accountability in respect of a person who lives in one local education authority area and works in a different one. The amendment is probing. It aims to allow the delegation of the task from one authority to another. I hope that the Minister will deal with it in a way that will satisfy a reasonable complaint about the Bill.

The amendment would limit the circumstances in which a local authority could take action against an employer in its area to those concerning a failure to check that new employees resident within the local authority’s area were in appropriate training. Any failure by the employer to check in respect of new employees resident outside the local authority’s area would not be covered.

If a local authority discovered that an employer had not been making checks, it would not be able to issue a penalty notice unless the employees were resident in the same area as the employer, but it could contact the employees’ local authority and ask it to take action. If there were a large number of employees to whom the failure to check applied, that could be a very bureaucratic and time-consuming task for both the local authority, which might need to contact a number of other authorities, and the employer, who would then have to respond to penalty notices issued by more than one authority.

The amendment would unnecessarily complicate the system, which is designed to ensure that employers play their part in enabling and encouraging young people to participate in education or training. On that basis, I hope that the very reasonable hon. Member for South Holland and The Deepings will withdraw his reasonable amendment.

I am a reasonable man. The intention behind the amendment is not to limit the power of the local authority, but to extend it in the sense that it would be able to work with other local authorities to do the job that the Minister describes. However, I accept that that might involve additional administrative cost and burden. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22, as amended, ordered to stand part of the Bill.

Clause 23 ordered to stand part of the Bill.