Clause 118

Equality Bill – in a Public Bill Committee am 1:00 pm ar 25 Mehefin 2009.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Remedies: General

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

I beg to move amendment 16, in clause 118, page 85, line 28, leave out paragraph (c).

Photo of Ann Winterton Ann Winterton Ceidwadwyr, Congleton

With this it will be convenient to discuss the following: amendment 17, in clause 118, page 85, line 29, leave out subsection (3) and insert—

‘(3) In the event that an employment tribunal finds that an employer has contravened a term modified or included by an equality clause, the employer shall be required to undertake an audit, to be known as an equal pay audit, and to make the results of the audit available in a manner prescribed in regulations made by the Secretary of State.’.

Amendment 18, in clause 118, page 86, line 8, leave out subsection (7).

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

I rise to speak to amendment 16. Before I do so, I should say that I am conscious that the entire Committee wants to make progress this afternoon, and that amendments 17 and 18 are on topics which hon. Members on both sides of the Committee have given a thorough airing under clause 73. Therefore, rather than go over the same ground, I am not planning to speak to those two amendments, and I give notice of my intention not to press them.

On amendment 16, there is more of a substantive issue about which we want to probe the Minister. It is to do with what an appropriate recommendation from a tribunal might involve. There is a definition of an appropriate recommendation in clause 118(3). It is

“a recommendation that within a specified period the respondent takes specified steps for the purpose of obviating or reducing the adverse effect of any matter”.

We want to know the Government’s thinking. Over what period might that take place? What is the scope of the recommendation? What is the force of a recommendation as opposed to an instruction?

I am sure that all members of the Committee would agree that it may be necessary, when a finding has been made that an organisation has been behaving in an illegal fashion, for that organisation to clean up its act and to change what it is doing, potentially substantially. Obviously, how it is asked to do that could have a profound impact on what it actually does. First, therefore, will the provision have binding effect? I presume so, but the word is “recommendation”. Perhaps the Minister could clarify the degree of compulsion that is inherent in the Government’s intentions.

Secondly, the Conservative party is concerned to provide enough leeway that organisations which are instructed to achieve a particular outcome—a desirable outcome that would reduce discrimination—may be able to come up with new and different ways of achieving that outcome which may not entirely be those which were originally envisioned by the tribunal under its recommendation. We wonder whether the Government were envisaging that tribunals will mandate process—steps to be carried out regardless of the outcome—or whether they will say, “You must achieve this or that and you have a degree of flexibility about how.”

The reason that that is important is, first, that organisations will often come up with creative solutions that are not necessarily envisaged by lawyers and their representatives in the tribunals. Secondly, things change over time. It says in the clause that a recommendation must be “within a specified period” but if that specified period lasts a good long time—it could, in theory, be five or ten years—and the world moves on, the organisation merges or splits, or the sector in which it is working alters in a profound way, it might be that, if it were mandated to take process steps to change what it was doing internally, those steps would cease to be effective. I am sure that no one here would want that. Therefore, any recommendations need to be future-proof. We must ensure that, if the world changes, such organisations are still bound to achieve the mandated outcomes and make sure they are not behaving in a discriminatory, or otherwise disadvantaging fashion.

We would like to probe the Government on how they intend to deal with those issues, and what they believe the scope and powers will allow them to do—either  here, in secondary legislation or in guidance—to ensure that they do not fall into any of the various pitfalls that I have described.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

I shall speak briefly. I had not intended to speak at all, but I am afraid that the Solicitor-General provoked me this morning in the Chamber, at women and equality questions, when she implied that we did not think that we should do anything about the gender pay gap. We said at length when we debated an earlier clause that we acknowledged that there was a problem. We simply disagreed about the solutions. Amendment 17, as best we could draft it, would put our policy into the Bill. That is why we tabled it. My hon. Friend the Member for Weston-super-Mare said that we did not want to spend a long time discussing the amendment because the issue had a thorough airing when we debated the earlier clause. I think that all members of the Committee would agree with that. However, given what the Solicitor-General said in the Chamber, I want to remind the Committee that we think that this is a problem that needs solving; we simply disagree with the Government about the nature of the solution. We discussed that issue thoroughly and I am sure that we shall return to it at later stages and in the other place. I think that that is all that needs to be said.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

If I have understood correctly, it is amendment 17 that will not be pressed. Is it also amendment 18? That amendment would remove the power of tribunals to award compensation if a respondent fails to comply with a recommendation. That relates to the question from the hon. Member for Weston-super-Mare about the measure of compulsion. That is the default availability. The tribunal could award or increase compensation if a recommendation is not accepted.

Amendment 16 would remove the current power to make recommendations. I do not suppose that is what the hon. Gentleman intended, either—it is probably just the way it is drafted. He just wants me to say what reach into business these proposals would offer.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

Amendment 18 would leave out subsection (7). I think I am right that the order that the tribunal can make to increase compensation applies only under subsection (2)(b)—only where the order is to pay compensation specifically to the complainant. It is not in relation to the recommendation of a more general nature that the tribunal might make to the business. I think that I am right in saying that.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

That is right, I am told. It is about the reach. The key is that any recommendations made to benefit the broader work force and indeed the business would have to be proportionate to the case that is brought, otherwise it would be unlawful. That is a general principle that has found greater emphasis since we brought the European convention into our law. To answer the specific point about time, it would have to be a reasonable period. There might be more creative ways of doing something that a tribunal recommends. The sensible thing would be for the parties to get together first, discuss it and suggest it to the tribunal, which could then recommend it. If parties thought there were a better way forward, that approach would give the tribunal the opportunity to avoid recommending something that was perhaps less suitable.

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

I thank the Minister for her explanation, which I think she is part way through—it is clear so far. On that last point, in her experience, do tribunals tend to mandate outcomes or process? Is that a matter on which the Government have guidance and which they are able to influence, given that tribunals will want to be independent in many respects?

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

Some typical recommendations that might help include taking steps to implement a harassment policy more effectively; providing equal opportunities training for staff involved in promotion procedures; and introducing more transparent selection criteria in recruitment transfer or promotion processes. Those seem to be fairly process-based. Those are the examples that I have, so I assume that they are typical and that that is the nature of likely recommendations.

The point is that if a problem that goes beyond the individual claimant has been found, it must be in everyone’s interest for the tribunal to recommend that it be put right so that the next complainant does not have to come and, as it were, clog up the works.

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills) 1:15, 25 Mehefin 2009

I take the Minister’s point; I see what she is driving at. My concern is that if, for example, equal opportunities training was mandated, people might go through training and come out the other side having ticked all the right boxes, but not necessarily adhere to it afterwards. I am trying to make a point about the difference between mandating an outcome to be achieved by whatever means, which still leaves a duty and a burden on the organisation to achieve it, and mandating a process whereby, when it is complete, the organisation can say, “We did it, whether or not the outcome was as desired originally by the tribunal.”

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

I suppose it is difficult to be able to say to a business, “Employ 10 more black and minority ethnic staff.” If the problem is in that territory, the limitation is probably to say, “Have better recruitment processes. Train your middle management with the intention of getting rid of that problem.” I do not think that there is anything to be concerned about. It is a pretty simple, logical follow-on to a finding in a tribunal that there is a problem and a recommendation on how best to put it right.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

May I pick up one more point? When we discussed clause 107 on class actions, or representative actions, the Minister said that proportionality would be important. I do not know whether it was in the consultation paper, but if there is to be a representative action, which by definition covers a lot of people, it follows that the appropriate recommendation might be more significant because it affects more people. Is that explicitly in the consultation document? It would be worth bringing that out so that it was clear to people, because it follows logically from what she said.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

The hon. Gentleman is right to say that it follows logically. There is a need for a proportion. If one is bringing an action on behalf of 2,000 people, one can reach a lot further and be more wholesale than if it involves just one individual, although if one is pinpointing the same problem for the 2,000 that the individual pinpointed, there might not be a need for anything bigger. Obviously, we ought to make that point in any consultation document so that people  understand that a possible consequence of representative actions is that recommendations reach further or go wider. I hope the hon. Gentleman is satisfied.

Finally, the problem of recommending an outcome is that it might not be within the business’s power to guarantee achieving it, so that would be unfair. Another point is that by the time an employee gets to a tribunal with an employer, quite often the relationship has broken down and the employee has gone, so a recommendation confined to that employee has no effect at all. That is why it is better to have available the power to make recommendations.

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

That was a clear and straightforward response from the Minister. She fully answered all the questions and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 118 ordered to stand part of the Bill.

Clauses119 to 122 ordered to stand part of the Bill.