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Industrial Relations Legislation

Volume 13: debated on Monday 23 November 1981

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4.9 pm

With permission, Mr. Speaker, I should like to make a statement on the Government's proposals for further industrial relations legislation.

These proposals have been prepared in the light of the extensive consultations on the basis of the Green Paper on "Trade Union Immunities" published in January this year. These consultations have shown that there is a wide measure of agreement on the issues which need to be tackled and widespread support for a further legislative step in this Session of Parliament.

Our proposals are therefore a direct response to those consultations. I have today placed in the Library and in the Vote Office copies of a document explaining the proposals in detail. They cover the closed shop, the definition of a trade dispute and the immunity for trade unions themselves.

In formulating these proposals our aim has been twofold: first, to safeguard the liberty of the individual from the abuse of industrial power; and, secondly, to improve the operation of the labour market by providing a balanced framework of industrial relations law. These aims are fundamental to any civilised and prosperous society. The need for further legislation to help to achieve them is clear, and we believe the time is right.

On the closed shop we propose: first, that the compensation for someone who is unfairly dismissed because he is not a member of a trade union should be increased substantially; secondly, that existing, established closed shops should be subject to a periodic ballot; and, thirdly, that anyone who is unfairly dismissed in a closed shop because of trade union pressure should be able to seek compensation directly from that trade union.

We also propose that the practice of requiring contractors to employ only trade union members as a condition of seeking or obtaining a contract should be made unlawful.

We propose to tighten up the definition of a trade dispute which is now unacceptably wide. Our proposals are designed to ensure that disputes which are predominantly political or personal, and disputes which do not directly involve an employer and his own employees, are excluded from the statutory definition and therefore do not attract immunity.

Finally, we propose that the immunity of trade unions themselves should be brought into line with the immunity for individual trade union officials and their members. We do not believe that it is right or necessary for trade unions to continue to enjoy an immunity which, as the Donovan Commission pointed out, is wider than that of any other organisation or person, even the Crown.

The Government's intention is to bring forward a Bill as soon as possible after the Christmas Recess. In the meantime, the document being published today invites comments on our proposals.

May we now take it that the Secretary of State is very keen to make statements to the House and that he will come here tomorrow and make a statement about the unemployment figures? His statement today has been shown to be what it is—an ill-thought-out, tawdry little gimmick to help to influence the electorate at the Crosby by-election.

Is the right hon. Gentleman aware that the legislation that he has foreshadowed today is nothing more than an irresponsible, irrelevant diversion to hide the catastrophic failure of the Government's economic policies? How will it help the hundreds of thousands of firms which have gone into liquidation over the past two-and-a-half years, all of which had excellent industrial relations?

Is the right hon. Gentleman further aware that the proposals in the document to which Parliament will be asked to devote so much time will create not one extra job or solve one industrial dispute? On the contrary, as with the Industrial Relations Act 1971, they are likely to provoke conflict and cause strikes. If the Secretary of State is so concerned about the rights of the individual, will he now restore the protection from unfair dismissal which the Government removed from 1 million workers two years ago?

Does the right hon. Gentleman realise that if we are to overcome the serious economic problems that face our nation the Government must work in co-operation with the trade unions and will have to do so before this Parliament is over? We shall fight the proposals that the right hon. Gentleman has announced. They are a recipe for conflict and are just a kick in the teeth for trade unions.

It is regrettable that the right hon. Gentleman has not dealt with a single aspect of the statement that I made. If there were a precedent for Secretaries of State to come to the House to make statements on unemployment, I would not be too fussed about coming to the Chamber tomorrow to make a statement. The right hon. Gentleman spoke about those who lost their jobs, but it is only fair to give the right hon. Gentleman an opportunity some time to say whether he has a scrap of concern for those who have lost their jobs as a direct result of the closed shop——

let alone those whose jobs have been lost as a result of the inefficiencies in British industry that have been fostered by restrictive practices, buttressed by trade union immunities.

May I congratulate my right hon. Friend on the proposals, which respond to the needs of our people in restoring rights to individual workers? Does my right hon. Friend agree that the statement made from the Opposition Front Bench reveals that, as always, the Opposition learn nothing and refuse to understand the role that restrictive practices have played in the economy in destroying jobs?

My hon. Friend is absolutely right, and I thank him for his support. Unless we rid our industry of restrictive practices, gain a freer labour market and protect people from the abuse of power, the House will fail.

Order. I propose to allow a full half hour of questions on the statement before moving to the next business.

The Secretary of State referred to widespread consultations, but has he entered into consultations with the TUC and with individual trade unions, as they will be much affected by his announcement? What contribution will the announcement and proposed legislation make to increasing productivity and improving harmonious relations with the trade union movement in general?

I have made it plain that I welcome discussions with individual trade unions and with the TUC. Today I have written to Mr. Murray and sent him a copy of the consultaative paper, inviting his comments and those of the trade union movement. Equally, when my right hon. Friend the former Secretary of State for Employment published his Green Paper in January, he made it plain that he welcomed the contributions that the TUC and trade unions might make. Several such contributions have been received and I have taken them into consideration.

Is my right hon. Friend aware that his statement will be greatly welcomed by many small firms which do not operate closed shops and which have been excluded from tendering for contracts—particularly local government contracts—because of "trade union labour only" rules?

I am particularly concerned about the manner in which some local authorities have sought to extend the closed shop against the will of employees—particularly those in small firms—by the use of "union labour only" contracts. I am determined that that should end.

Is the Secretary of State aware that some of us would find the package more supportable if it had combined such proposals with an extension of profit sharing and industrial partnership? Do the Government or the Secretary of State realise that a two-handed approach is required? Union bashing may be popular, but it will not necessarily improve industrial relations.

I do not know whether union bashing would be popular, because I do not intend to indulge in it. Any such measures as the hon. Gentleman proposes would probably be better set in a Bill that was separate from industrial relations legislation. The matters we are dealing with here are designed to restore a balance between the rights of the citizen under the common law and those that have been taken away from him—I emphasise this—by successive industrial relations and employment Acts over the years.

In his concern for the rights of the individual and about the abuse of power, will the right hon. Gentleman give thought to the other end of the scale, where an employer forbids trade unionism and where it is impossible for employees to join a trade union because of the power exercised by the employer? Does he recall the Grunwick case in my constituency, and is he aware that hundreds of Asian ladies are still not permitted to join a trade union?

Of course, I recall the Grunwick case. I recollect a certain distinguished lady standing on the picket line and acting in a manner that would be unlawful today under the 1980 Act. I hope that, sooner or later, she and her friends in her party will say whether they want the 1980 Act kept on the statute book or whether she wants the freedom to go back on the picket line. My concern for these matters is such that the increased compensation for those who are dismissed for not being members of a trade union will be extended to those who are dismissed for being members of a trade union.

Will my right hon. Friend confirm that, whatever the merits and popularity of the measures he has announced, the basic job in industrial relations remains discussion about straightforward trade disputes, and that trade unions and managers alike have a responsibility to bring out a common purpose, both for those in the enterprise and for the country as a whole?

My hon. Friend is absolutely right. The prime responsibility for ensuring good industrial relations is laid upon those concerned in the factories and workplaces. That is perhaps more important than anything we can do in this House.

I can assure the right hon. Gentleman that Mrs. Shirley Williams will be in the House next week and will no doubt take an opportunity personally to answer his point about Grunwick. Following his consideration of industrial relations and trade union reform, why did he decide not to take this opportunity to introduce legislation to ensure that all senior national trade union officers should be elected by secret ballot? Does he not agree that that is fundamental to the credibility of union policies?

I take note of what the hon. Gentleman said. It would have been nicer had Mrs. Williams answered the question before polling day rather than afterwards. I am not sure whether the hon. Gentleman voted with his former Labour Party colleagues to strike down the protections that have been afforded in earlier legislation for those who are damaged by the closed shop. I am not sure whether the hon. Gentleman voted for or against the 1980 Act, which gave some protection. But I think that he was in the same Lobby as the Leader of the Opposition and the right hon. Member for Bristol, South-East (Mr. Benn) on those occasions.—[Interruption.] The hon. Gentleman shakes his head. I hope that I am wrong. However, I hope that in January or later next year the hon. Gentleman will be able to support the Bill that I shall bring forward.

I have not taken the step he proposes because I have the natural reluctance of any good trade unionist to impose the law on the internal arrangements of the trade unions. That would be a major step upon which I am not yet ready to embark. I hope that the trade unions will see the need for reforming their procedures, because that is the proper and democratic way in which it should be done.

We accept that the Secretary of State has no time for trade unions or their members, but why is he also ignoring the views of the large number of employers who have said that there should be no further legislation in this area during the present Parliament, and that, instead of embittering industrial relations still further, the Government should be concentrating on getting industry and people back to work?

The hon. Gentleman is entirely wrong in the attitude that he attributes to me. He is also wrong in the attitude that he attributes to employers. Certainly some have said that in some areas there is no need for further legislation, but the overwhelming response from employers was that further legislation was needed. Indeed, I am acting in most, although not all, of the CBI's priority areas. I have taken up some of the other points that the CBI supported, although it did not think that they necessarily merited immediate action.

Is not the crux of the matter to find the right and fair position in modern law for trade unions that have grown immeasurably in both power and responsibilities since the 1906 Act? I look forward to reading the Government's proposals in detail, and I welcome the further period for consultation. Under what specific circumstances does my right hon. Friend see trade union funds now being subject to claims for damages in the civil courts?

In general, exactly under the circumstances where an individual taking part in industrial action would be personally at risk. For example, one might refer to a dispute that was overwhelmingly political in its nature—[Interruption.] The right hon. Member for Salford, West (Mr. Orme) must understand the existing legislation. He surely understands the immunities that are extended by section 13 of the Trade Union and Labour Relations Act 1974. I am telling him that in future that immunity will be extended to the trade unions. It will be exactly the same as that extended to their members. Therefore, if a trade union organised a dispute in circumstances aimed wholly at a political objective, and not concerned with a trade dispute, the union would be at risk.

What exactly does the right hon. Gentleman mean by the word "personal"? Does he imply that the new legislation will mean that a trade dispute over the dismissal of a shop steward would not attract the immunities under existing legislation? What will be the definition of a "political strike" under the new legislation? That is the crux of the matter. For example, would a dispute involving trade union actions against Government pay policy be regarded as a political dispute?

The definition of a political dispute will be the same as at present. The hon. Gentleman's example, which he feared might be taken out of protection, would not, in general terms, be taken out of it. Rather the question relates to disputes between workers and workers.

I thank my right hon. Friend for this important advance in the protection of the rights of individuals. Will his proposals afford any comfort or relief to those of my constituents who have recently been faced with the sack if they do not return to work, and the withdrawal of their union cards if they do?

In essence, my hon. Friend is asking for action to deal with the closed shop at its root. I do not think that the time is appropriate for that, nor do I think that public opinion is ready for it. I can only move in that direction so far as to give much greater protection to individuals who are unfairly dismissed as a result of trade union pressure or a closed-shop agreement.

Is the Secretary of State aware that in a heavily concentrated industrial area such as Attercliffe I know of not one employer who has yet had recourse to the Employment Act 1980, far less of any desire among employers, as he implied, for more restrictive legislation? Is he further aware that those employers and trade union representatives are rallying and co-operating admirably in the face of problems largely of the Government's making, and that the last thing that employers want now is for the Secretary of State himself—and this is what alarms them about his appointment—to poison that emergent climate?

That is not the case put by the employers' representatives and many individual companies during the consultation process. If, as the hon. Gentleman says, people have not rushed to bring actions under the law, in many ways I would say that that is so much the better. I believe that the law is much better when it influences people to behave in a more responsible manner than when it is actually used to take people to court for not behaving responsibly.

With regard to the closed shop, is my right hon. Friend aware that there is a valuable precedent in the European Court of Human Rights which has indicated strongly that compulsion in such circumstances in a free society cannot be tolerated?

My hon. Friend is right. The court ruling was significant and gave a great deal of encouragement to those of us who believe that trade union membership is better on a voluntary basis, and that it is a poor trade union which has to rely on conscription. In the particular case with which it dealt, however, the 1980 Act has already repaired the damage, and would have provided a remedy for the British Rail employees had it been on the statute book at the time of their dismissal.

How does the Secretary of State see his own job? Is the most important part of it his obsession with attacking the trade union movement, or is it to get people back to work? Does he realise that the main obstacle in the way of people's deciding whether to join a trade union is the simple fact that he and the Government have put a great many of them out of a job? Why does not he simply tear up this ragbag of irrelevant rubbish and get on with the job for which he was appointed and get people back to work?

If the hon. Gentleman regards it as so irrelevant, no doubt the legislation will have an easy passage. It sounds as though he is not particularly worried about it one way or the other, and I welcome that. I repeat, however, that the one matter that is always raised by foreign companies considering investment in Great Britain is the state of industrial relations and their inability to achieve satisfactory negotiating agreements. In particular, they find it extraordinary that in some cases they are faced with 10 or a dozen unions all anxious for and involved in bargaining.

My right hon. Friend said in his statement that this was another step forward in union reform. Will it be the last step forward in this Parliament? If so, does one infer from that that he has no further reforms in mind as being necessary to complete the reform of the trade unions?

My hon. Friend should certainly not believe that I can envisage any institution so perfect as to require no further reform at any time. I believe, however, certainly in this Session of Parliament, that this is as much as we can take on at present. I should not like to bind myself as to what may happen in the future one way or the other. That may well depend upon the reaction of those concerned to this legislation and how successful it proves to be.

Is the right hon. Gentleman aware that most people, certainly in the trade union movement, will regard today's announcement as merely another step in the denigration of the trade union movement and further evidence of the Government's view that the trade unions are to blame for all our economic ills? Why are there no accompanying proposals to deal with bad employers? Secondly, will the review procedure for the closed shop include the very anti-democratic system of an 80 per cent. majority?

I have proposed 80 per cent. or 85 per cent. for the review of an existing closed shop. I have no doubt that that figure will be discussed during the consultation period and perhaps in Committee.

If that were the system here, the right hon. Gentleman would not be here.

I do not think that any of us would be here if we needed an 80 per cent. majority to be elected. But we are not talking about the election of Members of Parliament—we are talking about giving one group of people the right to put others out of work.

Will my right hon. Friend set in its appropriate context the Pavlovian reaction of Labour Members who depend for reselection upon the support of trade union officials whose interests the closed shop embraces? Does he further agree that if there is a fault in his statement it is that he did not go further and that his proposals do not envisage giving an enforceable right to an individual to join or not to join or remain in a union as he sees fit? Finally, does he agree that the sanctions should be in terms of damages rather than compensation?

I understand my hon. and learned Friend's concern on this point. As I have indicated, however, I am a moderate and modest man, and I believe that this is the kind of moderate and modest step that we should take at this time. No doubt there will be those who urge strongly the need to go further. Indeed, I recommend that the House reread an article by Peter Jenkins in The Guardian on 23 September concerning the way in which trade unionists' votes were cast in electing the deputy leader of the Labour Party. The article contained expressions such as

"blatant malpractices … propensity to administrative muddle … in many unions the members were not consulted at all … the whole business has been a travesty of democracy."
I believe that we should be very cautious to what extent we extend immunities to people found guilty of such practices by so independent a person as Mr. Jenkins.

Has not the Secretary of State just admitted to the hon. Member for Bromsgrove and Redditch (Mr. Miller) that the new legislation will do nothing to solve the current dispute at British Leyland? What use will it be for solving disputes of that kind in which employers take an action out of procedure and refuse to reconsider that action?

Is the hon. Gentleman advocating that I should take powers to enforce procedural agreements? That is something that I am not prepared to do at this stage. The hon. Gentleman must not expect that industrial relations law can solve all industrial relations problems.

I welcome my right hon. Friend's proposals very much. Will he ensure that they are seen to be fair and just by ordinary rank and file trade unionists who are looking forward to the reforms, even though they may displease some trade union leaders and perhaps the TUC?

My hon. Friend is right. That is why, as I said earlier, I have ensured that the proposals for higher compensation for those dismissed as a result of a closed shop will apply also to those dismissed as a result of their trade union activities alone.

Will the Secretary of State return to the question put by my hon. Friend the Member for Wood Green (Mr. Race) and define what is a political dispute and what is a personal dispute?

The courts define the law, and in this respect the law will remain precisely as it has been for several years.

With regard to the definition of a trade dispute, is my right hon. Friend aware of the number of jobs and the amount of work lost as a result of the unreasonable blacking of foreign vessels seeking to come to these shores for repair and other work? Will he confirm that, under the new definition, cases such as that of the "Nawala", which was driven away and the work therefore lost, will be dealt with so that disputes of that nature will not be allowed to prevent the creation of jobs and the gaining of money by this country?

The "Nawala" dispute was possibly a particularly extreme example, where industrial action was taken although there was no dispute between the employers and the employees concerned with the "Nawala". That type of dispute would no longer be protected under the proposals that I shall put before the House.

Will the Secretary of State point out to the House the various ways in which he thinks that the trade unions have too much power? Does he believe that they can stop 3 million people being put on the dole, or that they can stop factory closure after factory closure? Is it not the truth that the trade unions do not have too much power, and that the Secretary of State is obsessed with an antiunion hatred, resulting in this legislation? If he is concerned about days lost from work, why does he not introduce legislation on health and safety at work? At least four to 10 times more days are lost each year because of industrial injury than through strike action. Why does he not do something about that?

There is a good deal of legislation in that area. The answer to the hon. Gentleman's question is perhaps best put in these words:

"That vast and powerful institutions should be permanently licensed to apply the funds they possess to do wrong to others and by that wrong inflict upon them damage, perhaps to the amount of many thousands of pounds, and yet not be liable to make redress out of those funds would be a state of things opposed to the very idea of law and order and justice."
That was an extract from the report of the Royal Commission in 1906.

Is my right hon. Friend aware that I am grateful to him for responding to the views expressed both to him and his predecessor by so many Conservative Members, and also for arriving at a balanced view between those who recommended that there should be no further change in the law and those who suggested that there should be wider changes, which would have been equal to some of the accusations from the Opposition? While I welcome his suggestion that there should be further consultations, will he ensure that they do not cause his proposals to have to be dealt with in the next Session of Parliament rather than in this Session?

Yes, indeed. I am determined that the Bill should be intoduced early in the New Year. Therefore, as we have had about eight months of consultations following the Green Paper, to ask—as I am doing—those concerned to let me have their observations by the close of the year is not unreasonable.

Is the Secretary of State aware that his whole approach to these matters is based on a compound of crass ineptitude and vindictiveness? Surely, in the present state of our country's fortunes, the last thing we want is a further bout of conflict and bitterness with the trade unions? Is he aware that his idea that the Bill will get an easy passage through the House is completely wrong and that the opposition to this Bill will make the opposition to the 1980 Bill—both inside the House and, I suspect outside—look like a Sunday school picnic?

I hope that the hon. Gentleman, when he talks about opposition outside the House, will not slide into the same sort of error as certain others outside the House who have spoken about making places "ungovernable" because they do not agree with political decisions taken in the House.

I welcome my right hon. Friend's statement, but may I press him a little on the question put by my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller)? Is my right hon. Friend aware that no amount of money can ever compensate a person for wanting to stay in a job but being unable to do so, and not wanting to belong to a union, but being made to do so?

I agree, but I regret that at present I do not think that it would provide a practical remedy merely to legislate to make the closed shop illegal in this country. I do not believe that we could enforce such a law at present.

Is the Secretary of State aware that his vindictive and poisonous proposals will meet the same opposition as the 1971 Act? Is he further aware that it is now perfectly clear why he replaced his predecessor in his present position?

The hon. Gentleman can come to his own conclusions about that. The 1971 Act was a far more radical recasting of the law. It included the requirement for a new court and the requirement for unions to register in order to attract immunities. I am not requiring that. I am merely bringing the immunities of the trade unions in line with those that have stood on the statute book for some time for their officials and other individuals.

Is my right hon. Friend aware that many union members will be delighted with this chance to review the closed shop agreements that they had to accept in the first place with no say in the matter? Is he further aware that many union members voted Conservative for the first time in 1979 just to secure that right?

Yes, indeed, and I hope that they will make good use of the right that will be conferred.

Is it fair to presume that, before the Secretary of State made proposals to increase the compensation payable to people forced out of trade unions or out of their jobs because of pressure or because of the closed shop, he would have found out how many people had received compensation at the present rate, which has existed since October 1980? How many such people are there? None?

I confess that I have not asked for those figures, but I know that many people deserve compensation at a higher scale——

If the hon. and learned Gentleman will wait to hear what I have to say, it may help. It is easier to keep the ears open when the mouth is closed.

In particular, those on very low pay receive grossly inadequate compensation, and I propose to put that right.

Does the Secretary of State realise that in the 30 minutes during which he has answered questions he has demonstrated over and over again his hostility towards and hatred of the British trade union movement? Does he agree with what Lord Justice Scarman said gout political strikes, that putting the courts in the driving seat is more likely to bring chaos to many of our major firms?

Is he aware that the difference between the two sides of the House is that we on this side believe that trade unionism is a right to be enjoyed and exercised responsibly, while he believes that trade unionism is a crime that must be punished? Is he further aware that, if the legislation that he has foreshadowed today reaches the statute book, we shall wipe it off, just as we did the Industrial Relations Act 1971?

The attitude of the right hon. Gentleman shows clearly why the Labour Party has become a spent force in British politics. Does the right hon. Gentleman want to use the trade unions to support political strikes? Is he so afraid that he cannot make a case on the hustings that he has to resort to industrial muscle to make it? Does he conceivably believe, in all honesty, that what I have said today is an attack on the trade unions, or is it an attack on the irresponsible use of trade union power?