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Lords Chamber

Volume 477: debated on Tuesday 24 June 1986

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House Of Lords

Tuesday, 24th June, 1986.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Severn Estuary Barrage Study

My Lords I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows: To ask Her Majesty's Government what is the latest position on the River Severn barrage project, and when their response to the report on the project is due to be announced.

My Lords, Her Majesty's Government have recently received the report of the Severn Tidal Power Group which has been engaged for the last two to three years in a study, partly funded by Government, to assess the viability of a private sector barrage across the Severn estuary. The report is comprehensive and detailed. Consultations are taking place with the Severn Tidal Group and other interested parties before a response can be made.

My Lords, while I thank my noble friend for that interesting Answer, can he assure the House that it is still the Government's view that the potential of the Severn's tidal power is as great as any in the world and indeed greater than the project brought to a successful conclusion at La Rance in France?

My Lords, yes, indeed. This is potentially the second largest tidal barrage in the world and is certainly larger than that in France. There is one in Nova Scotia which is presently the largest, but this would be the second largest in the world.

My Lords, can the noble Lord tell me whether the report which the Government have received refers to the shorter barrage or the longer one from Weston-super-Mare?

My Lords, this would be the near-Weston-super-Mare to near-Cardiff barrage.

My Lords, is the noble Lord aware that it is generally agreed that this is a very important project? Does he recall that in another place on 18th April his honourable friend in answer to a question from Mr. David Mudd, said that the report would be published shortly? It is now 24th June, nine weeks later. Can the noble Lord say when we are likely to see the publication of the report, and will a copy be placed in the Library?

My Lords, I am afraid that my answer is still "shortly", but I hope that the period will be shorter than the one mentioned the last time such a question was asked. I shall indeed ensure that a copy of the report is placed in the Library.

My Lords, perhaps I may follow up my noble friend's question and the noble Lord's reference to "shortly". Does the noble Lord recall that four-and-a-half years ago, in February. 1982, we had a debate in this House on the Bondi Report and his noble predecessor, on winding-up that debate, said, if I recall, that the Government would shortly be reporting after they had considered the issues? How long does it take for this Government to make up their mind—four-and-a-half years? In view of the great concern and interest in Wales in this project and the high unemployment in the Principality, and bearing in mind that it is thought that if this project were put in hand, it would provide several thousand jobs, will the noble Lord be a little more specific and be good enough to accelerate the response to the report?

My Lords, in fact I do not think that the noble Lord will have long to wait. Following the publication of the Bondi Report, the Government promoted the Severn Tidal Power Group's report, which was half-funded by the Government. Originally the group was expected to report within two years. In fact, the report was published in May, 1983; so it has taken slightly over three years. However, one must remember that it is an extremely large project and, as the noble Lord, Lord Cledwyn, said, very substantial job opportunities are linked to it.

My Lords, does my noble friend agree that hydrologists and engineers have been working on this since the first design in 1849?

My Lords, I am sure that my noble friend is right, but I am afraid that my memory does not take me back quite that far.

My Lords, does the noble Lord appreciate that this matter has many facets? Therefore perhaps he will forgive a third member of the Opposition Front Bench asking a question. My question has transport connections. As a review concerning a second Severn crossing is under consideration, have the two groups been liaising?

My Lords, the report produced by the Severn Tidal Power Group will concentrate on the energy-producing aspects. However, in their response the Government will have to take into account not only that but the environ-mental impact on the area, plus of course the possibility of a road crossing, which is what I think the noble Lord, Lord Underhill, was referring to, and also of course the possible effects upon recreation and tourism.

My Lords, will the Government satisfy themselves that, if this barrage is built, migratory fish going up or down the Rivers Severn and Wye will be able to pass through the barrage without excessive loss, and that consequently there will not be severe losses to the stocks in those and other rivers?

My Lords, I am sure that that is one of the matters which will be taken into consideration.

Ilea Teaching Pack

2.43 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows: To ask Her Majesty's Government what response they have received from the Inner London Education Authority to the letter from the Department of Education and Science concerning the teaching pack Auschwitz: Yesterday's Racism.

My Lords, as my noble friend Lady Hooper said in a Written Reply to the noble Lord on 3rd June 1986, the authority accepts that parts of the teachers' guide to the pack are inappropriate and has undertaken to revise them.

My Lords, I thank the noble Earl for that reply. Given the deplorable nature of this particular piece of propaganda, relating, as it did, to the death of many millions of Jew in concentration camps, to the Prevention of Terrorism Act, and the dispute over GCHQ, may I ask him whether the Inner London Eucation Authority has now agreed to withdraw this teaching pack from schools pending the revisions which I understand are now being made to it?

My Lords, I understand that ILEA has said that it will not issue any more copies of the pack until the text has been revised. The department has written to the authority suggesting that the pack be withdrawn meanwhile if the necessary amendments cannot be made quickly, and the reply to that has yet to be received.

My Lords, can my noble friend go a little further and say that this pack is so monstrous that it should be withdrawn? It is not a question of not issuing any more. If you have sinned and been found out, you should be redeemed by withdrawing all the copies which now exists in our schools.

Yes, my Lords; I agree entirely with my noble friend that this pack is monstrous, and that is why the department has written to the authority suggesting that the pack be withdrawn.

My Lords, if the noble Earl or the department do not receive a reply very soon indeed from the Inner London Education Authority, can we take it that the Secretary of State will make it clear that he expects this guide to be withdrawn forthwith, and that if it is not he will consider what other steps to take?

My Lords, I think that the noble Lord would have me answer a hypothetical question. It would not be right to do so because matters are not helped by conjecture, and the Government in fact decide their actions on the basis of the circumstances of an actual case. They would need to know, for example, if matters fell out as the noble Lord's question implies, why it was that ILEA has decided to act in that way. What I can say, though, is that in such an event we would scrutinise very carefully indeed the circumstances of the case and the authority's reasons. I can also add that if we do not receive a reply in the very near future we shall be taking up the matter again with ILEA.

My Lords, is the Minister aware that this is not the same authority to which the letter originally went? Since the original letter was sent there has been an election and a new authority has been elected. Will the noble Earl give it time to settle in first?

My Lords, the letter went on 29th May. As I understand it, even if elections take place it is still the same authority, though the personalities may have changed. We have given it a lot of time. By the same expression, we do not expect it to take very much longer to answer.

My Lords, my noble friend has answered the question I was going to ask, which was the date at which the department had written to the Inner London Education Authority. In view of the fact that no reply has been received, how much longer is my noble friend going to wait before taking further action? Would he not agree that his last but one answer was worthy of the very best of Sir Humphrey Appleby?

My Lords, I should be delighted to be compared with Sir Humphrey. The answer to my noble friend's question is: not very much longer.

My Lords, would it be possible for a copy to be put in the Library of the House? The word "Auschwitz" has terrible memories for so many of us.

My Lords, I am not quite sure what the noble and learned Lord is asking for a copy of.

My Lords, a copy of the document which has now been the subject of question-ing for the past 10 minutes.

My Lords, I shall undertake to the noble and learned Lord and other noble Lords to have that placed in the Library forthwith, but I think it may horrify some of your Lordships.

My Lords, I did not mean to be discourteous to the noble Earl. We are old friends.

My Lords, without intervening on the merits of this case may I ask the noble Earl the Minister to at least bear in mind the limited powers that the Secretary of State has in all these matters? When I was involved in a dispute with a local authority which six weeks after an election had not met to elect its chairman, I was turned down by the House of Lords for wrongfully interfering with that local authority.

My Lords, the noble Lord is not the first person to have had trouble with this noble House.

My Lords, would the noble Earl agree that as well as putting the original document in the Library he will also put the revised text into the Library at the same time?

My Lords, I undertake that when it is produced, that will be done.

School Expeditions: Safety Procedures

2.48 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows: To ask Her Majesty's Government whether, in the light of the Land's End tragedy in 1985, advice is being given by the Department of Education and Science to schools to help improve safety procedures during school visits and expeditions.

My Lords, in March of this year the Department of Education and Science issued a bulletin (Safety in Education Bulletin No. 4) to local education authorities and to schools, containing general guidance to all involved with the organisation of outdoor pursuits and school expeditions. The bulletin supplemented previous departmental guidance on the subject and in particular drew on lessons arising from the Land's End tragedy.

My Lords, I thank my noble friend for that reply, and I congratulate his department on this extremely good bulletin. Will my noble friend please assure the House that expeditions and visits have not been restricted since this disaster last year? Will he also tell us whether all schools have received this bulletin?

My Lords, I am glad to say that I think that schools continue to produce a number of educational and outdoor expeditions. I understand that the numbers are not in fact falling off. Copies of the bulletin have been distributed widely through LEAs and other education bodies who are free to reprint the guidance to schools and colleges without copyright restriction. I cannot answer my noble friend as to whether every school in England and Wales has received a copy of it.

My Lords, does my noble kinsman agree that it would be most useful if the teachers and children in all schools had first aid classes, especially before undertaking expeditions?

My Lords, I think that that would be a good thing. In fact Her Majesty's inspectors and the department concentrate on getting the right advice out to schools to see that these awful accidents do not take place so that first aid is not necessary.

Test Ban Treaty: Soviet Offer


My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows: To ask Her Majesty's Government why they have not accepted Mr. Gorbachev's offer to agree to verification by seismic monitoring stations inside the Soviet Union as part of a comprehensive test ban treaty.

My Lords, the qualified nature of such offers would not provide adequate levels of verification for a comprehensive test ban treaty.

My Lords, while I thank the noble Baroness for that Answer may I ask her why the Government have not pursued the matter further? Why did they block all measures and all proposals to move towards negotiations in Geneva? Why did they even block an Australian compromise proposal that a draft should be drawn up to outline the objective negotiation? Why do the Government apparently not want to discuss this subject? Is the position really that they do not want a comprehensive test ban?

No, my Lords, that is not the position. I have made clear on this occasion and on many others in your Lordships' House that the crucial question is one of verification.

My Lords, will the Minister be good enough to reaffirm that last July the Government put forward proposals for verification? I should like to know what the Soviet reaction was to that? What have the Soviets done about our proposals?

My Lords, I am grateful to the noble Lord, Lord Mellish, for raising that point because last July the United States proposed an exchange of test site observers and invited Soviet observers to visit a United States test site. This goes to the heart of the issue, which is verification, and it is a matter of much regret that the Soviet response so far has been dismissive.

My Lords, does the noble Baroness recall her reply to a recent parliamentary Question—that if negotiations were to be resumed, questions other than concerns over verification would need to be addressed? Will she say what these other questions are and whether they include the need of the American or British Governments to make further tests?

My Lords, I recall the Question that the noble Lord asked a little while ago. The other matters which would have to be dealt with are scope, duration and compliance; but the key issue is verification.

My Lords, will the noble Baroness agree that international scientific advice is that verification techniques are now extremely accurate? Secondly, will she confirm what I thought she said before—that a comprehensive test ban treaty is one of the Government's clear objectives?

My Lords, we should like to see a comprehensive test ban treaty. With regard to the question of verification and recent scientific advances, to which the noble Lord referred, and indeed the claims that verification is not a problem, particularly in the light of advances in seismology, the Government do not agree, and we do not believe that the recent arguments advanced invalidate the conclusions of a United Kingdom paper presented to the Conference on Disarmament in July 1985. For example, these arguments concentrate largely on detection, ignoring problems of discriminating between explosion and earthquake.

My Lords, will the noble Baroness say whether the Soviet Union gave any reasons why they did not take any action or refused to consider our proposals of last July?

My Lords, may I ask the noble Baroness to clarify her reply to me just now? Was she saying that questions other than verification, which would need to be addressed if negotiations were resumed, would not include the need of the United States or British Governments to make further tests?

My Lords, what I said to the noble Lord on the question that he asked me about other issues that have to be raised besides verification on a test ban treaty related to difficult questions such as the scope of the treaty, its duration and its compliance. But the key issue is verification.

On the other point that the noble Lord asked about concerning testing—he has asked about it several times—we are committed to making progress. We are committed to maintaining the effectiveness of our nuclear capabilities; but it is a hypothetical question at the present time to ask what would happen under a test ban treaty.

My Lords, but the question remains: why are the Government even refusing to examine the Soviet proposals for on-site seismic verification?

My Lords, among the most recent developments is an agreement only in principle, though it is not yet confirmed, of the Soviet acceptance of United States monitors. But the Russians apparently are prepared to accept non-official American scientists to start stations in the Soviet Union but are not prepared to talk to the United States Government scientists about verification. The Soviet proposal suggests that non-official US scientists should be admitted to the Soviet Union. The Americans are prepared to agree that Soviet Government scientists should be admitted to the United States. Clearly this is a difference of view, but we hope that there might be a resolution of it.


2.56 p.m.

My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Davidson will, with the leave of the House, repeat a Statement that is to be made in another place on restriction on the movement of sheep.

It may be for the convenience of the House if I announce that the Committee stage of the Wages Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjourn-ment three Representation of the People Regulations and the Committee stage of the Consumer Safety (Amendment) Bill will be taken.

Bournemouth-Swanage Motor Road And Ferry Bill Hl

Read a third time, and passed, and sent to the Commons.

Plymouth City Council Bill Hl

Read a third time, and passed, and sent to the Commons.

Private Bill Procedure

rose to move, That this House do concur in the resolution communicated by the Commons in their Message of Wednesday last.

The noble Viscount said: My Lords, in moving this Motion standing in my name on the Order Paper I should briefly explain its purpose. The House of Commons agreed last week that it would be desirable to appoint a Joint Committee of both Houses to consider the whole question of Private Bill procedure and in particular whether there were any ways in which certain matters now requiring the promotion of a Private Bill—for example, those concerned with the construction of works—might be dealt with other than by private legislation. Concern has been expressed recently, particularly in the House of Commons, but also in your Lordships' House, about certain aspects of what I will broadly call private legislation procedure. These arose, for example, in the Joint Committee considering the question of the Okehampton bypass and in the Joint Committee considering the Edinburgh western relief road.

It is now some 30 years since Private Bill procedure was last considered, and the noble Lord the Chairman of Committees, following discussion with the Chairman of Ways and Means, agrees that it would now be appropriate for both Houses to set up a Joint Committee to examine these issues and to consider whether any changes might be made. I hope therefore that your Lordships will agree to this Motion, which will lead to the formation of a Joint Committee. In due course the Committee of Selection will be asked to choose those Peers who will be appointed to the committee and who will face what I know will be a formidable inquiry. My Lords, I beg to move.

Moved, That this House do concur in the resolution communicated by the Commons in their Message of Wednesday last—( Viscount Whitelaw.)

On Question, Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Gas Bill

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the amendments for the Report stage be marshalled and considered in the following order—

  • Clause 1,
  • Schedule 1,
  • Clause 2,
  • Schedule 2,
  • Clauses 3 to 9,
  • Schedules 3 and 4,
  • Clauses 10 to 15,
  • Schedule 5,
  • Clauses 16 to 60,
  • Schedule 6,
  • Clauses 61 to 67,
  • Schedules 7 to 9,
  • Clause 68.—(Lord Belstead.)

On Question, Motion agreed to.

Safety At Sea Bill

Read a third time.

My Lords, I beg to move that this Bill do now pass. Before we leave this matter, it would be churlish not to congratulate the promoter of this Bill in another place, the Member for Banff and Buchan, Mr. Albert McQuarrie, for his ingenuity and resourcefulness in bringing it forward. His was the first work in drafting; he pursued it through, and one would hope that such a useful Bill, which after all carries the mantle, as he himself does, of the noble Lord, Lord Boothby, will be remembered as the McQuarrie Bill. I beg to move.

Moved, That the Bill do now pass—( The Earl of Lauderdale.)

On Question, Bill passed.

Health Service Joint Consultative Committees (Access To Information) Bill

Read a third time and passed.

Children And Young Persons (Amendment) Bill

Report received.

Wages Bill

3.2 p.m.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—( Lord Trefgarne.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES (Lord Aberdare) in the Chair.]

Clause 1 [ General restrictions on deductions made, or payments received, by employers]:

Page 1, line 9, at end insert ("is reasonable in amount having regard to all the circumstances of the case and").

The noble Lord said: Amendment No. 1. in my name and those of my noble friends, comes to a central issue in a Bill which will take away a protection for a very large number of working people. With the leave of the Committee, I shall move this amendment and speak also to Amendment No. 56. It is my understanding that the noble Lord, Lord Rochester, will speak to his Amendment No. 2, in the course of the same debate.

This central issue is that just 90 years ago the Truck Act 1896 protected most deductions from wages on broadly a two-pronged basis. First, no deduction could be made unless there were a clear contractual base for it in a written contract or a notice in writing at the workplace. Secondly, the 1896 Act required that the deductions from wages should be fair and reasonable. Of course, it is true that those provisions applied only to manual workers and it has long been a non-controversial point of policy in many quarters that the division between manual and non-manual workers should cause this aspect of the law to be changed; although, as we shall see, the Government set up in this Bill a new dichotomy between two different types of worker.

The question is how to amend the law. Should it be amended to apply to all workers no protection or a protection based only on a contract of employment; or should it retain the second element which has been there—and indeed has been there as a crime— since 1896: that it is wrong and illegal to deduct unfair and unreasonable amounts from the wages of a worker? When the noble Lord the Secretary of State spoke to the House on Second Reading on 6th June he gave this explanation of this part of the Bill at col. 1205 of Hansard. He said:

"The Truck Acts also include statutory controls on deductions from wages. The Government have decided to bring those up to date. That is necessary for several reasons. The controls are uncertain in their effect; they apply only to manual workers and, in part, to shop assistants; they establish criminal offences to deal with what are essentially contractual disputes between workers and employers; and they are designed to deal with problems that existed in 1896 not 1986.".

We agree that the manual worker division should be revised; we can see the case is there to treat the matter in the civil law as against criminal offences, although it depends upon how you do it. We dispute that there has been great uncertainty in this part of the law. No evidence has ever been brought forward to suggest it. We certainly dispute the suggestion that the problem, is for 1896 not 1986. All the evidence is the other way. The Secretary of State appeared not to know that there is a mass of evidence that deductions from workers' wages play a major and an increasing part in the lives especially of the low paid, the ill-organised, the isolated and the weak groups of workers in our society.

Employers in many areas—certainly not in all but in many areas such as garages—have extended these deduction practices beyond anything that could remotely be called reasonable. The evidence of the Citizens' Advice Bureaux in regard to that Government's consultative document gave many examples. The Government, I am sure, would not write off the evidence from such a responsible body. They told them about long-distance lorry drivers who had large deductions made from the month's wages for expenses without reasons being explained. The other cases included a young man of 17, a forecourt attendant, on duty when a group of children stole sweets from the shop. He could not leave the shop unattended as that risked even worse fault on his part. That whole loss was deducted from his wages, leaving him £5 living expenses for the week.

The trade union movement knows of these practices. The Union of Shop, Distributive and Allied Workers has spoken of employers increasingly introducing the power to deduct for shortages into the contracts of workers if it cannot be resisted. The idea that this is a problem for 1896 and not 1986 is defeated even by the law reports. In the case of Sealand Petroleum Company and Barratt, in this year's All England Reports, in the second volume, at page 360, noble Lords will find that an 18 year-old lad was taken on after an afternoon's trial at a self-service petrol station, with a statement in writing which said that he was to be liable for any loss of cash, stock or other equipment as a result of his breach of contract or other duty or any negligence; and that that amount could go immediately from his pay. That was interpreted as meaning, for example, that if he did not take the vehicle number of any customer who did not pay for the petrol at the self-service station, that amount would be deducted.

This came to the court under the 1896 Act. He had to look after the shop and the self-service station and he had to look after the car-wash bay, which was difficult to see from where he primarily worked. The Divisional Court of the Queen's Bench Division had no doubt whatever that this could not be supported under the 1896 Act. Mr. Justice Nolan said that the,

"contract afforded no adequate means by which the respondent could check or supervise the calculations of deficiencies for which he was to be held responsible".

He could not get near the till when it was checked.

"Thus his prospects of being able to mount a successful challenge… by complaint would be negligible."

He was not trained.

"He was, it must be remembered, 18 at the time… and was taken on after only one afternoon's trial."

The judge concludes that this contract,

"gave a wholly arbitrary power to the employer within the limits of the total loss ascertained by the employer as to the amount of the fine."

Lord Justice Watkins said that it,

"contains a very one-sided obligation. It is an obligation on the employee to accept the consequences of whatever it is the employer determines shall be the effect of his finding a deficiency in the takings at the end of a working day".

As I say, the evidence is there that this is very common in garages. It is quite common in other parts of retail employment, but it is also increasingly found in employment which is not retail and not in garages, although the worst practices appear to be in many garage chains. The essence of the problem is that these deductions fall hardest on employees who are the most vulnerable. They are the least unionised and the least protected in any other way. As the citizens' advice bureaux evidence put it,

"You find workers who will take almost any terms in the labour market of today."

Having got a weak labour market, as we like to call it in rather abstract terms—a market in which workers like these are open to exploitation—how should we amend the law? Should it be by making sure that every deduction is provided for in the contract? Yes, but it has to be said and it has to be understood that in regard to the worker in a labour market in the kind of situation Anthony Barratt was in on that garage forecourt, consent by contract is to a large extent a fiction. Consent by contract is in fact submission in order to get a job at all.

The Truck Act of 1896 was based upon debates, including debates in your Lordships' House, almost 90 years ago which were about precisely this problem although no doubt the social context was different. I do not know whether the problem was more or less widespread: perhaps it was more. But it was not about the issue that we are debating today; namely, whether to take away (as this Bill would) the protection of reasonableness as a residual way of stopping these arbitrary practices. The debate was whether or not deductions from wages should be prohibited altogether or whether there should be a limit assessed by the standards of reasonableness. So the whole axis of the debate today is one step backwards on the Bill which is before us and which this amendment would only bring back to the debate of 1896 and go for the same solution. That solution has not proved wholly unsuccessful. It has not been wholly successful, partly because, founding itself on a criminal basis, it was necessary to have a wages inspectorate which enforced it beyond the resources which the wages inspectorate has usually had, especially during the past few years.

But the idea that there should be at least these two parts of possible protection for workers of this kind seems to us the most elementary protection for which one can ask. Nor is it true that our law of contract does not know of this concept. Indeed, not only in the Unfair Contract Terms Act of 1977 but in many other statutes—and in particular in the Act of 1977—the idea that certain contractual terms should not be permitted to operate according to their tenor on the face of the contract but should be moderated by the court by some concept of what is reasonable is now established part, certainly of consumer transactions and of many other areas of the law contract.

What we are asking for in this amendment is that workpeople in this position should not be made responsible for possible losses from thefts by customers or thefts by other employees; or as a result of defects in stock control mechanisms which we shall come to later today; or by failure to train workers like Anthony Barratt (who had only an afternoon's training) or certainly by failure of management supervision. No doubt there are failures all round them; but there are these deductions of amounts for which they are not, in anyone's moral perspective, themselves responsible, other than on the paper which they have had to take to get the job.

The matter goes further because some of the practices are really scandalous. There are garage chains—and Heron Garages appears to be one—which set a ratio of oil sales to petrol sales on past experience, and if the petrol sales then come to so much on a check they assume that the oil sales should have come to the same ratio; and if there is some discrepancy to the disadvantage of the attendant, they deduct amounts from wages on that basis. That will be in the contract or the document of at least most of those workers.

However, is it right that there should be nothing else in the law to protect them in that situation? We say that for the employee and indeed the manager—because this matter can go to the managers of such retail outlets—there should be some protection. This is for all workers in respect of the amount that can be taken from the wage upon which not merely the worker but the family at home depend. The family expects a weekly wage; and if the worker is responsible for some specific misconduct, that is another matter. But the broad test should surely be what we have had for 90 years: that the family expectation of the wage should be limited by what is in the contract and by what is reasonable. Take away the second protection, leaving various avenues of exploitation for those who wish to exploit—the bad employers who may well be in the minority but who exist in terms of the practices going on now—and the workers are at a double disadvantage. They are the most vulnerable and the weakest. That is what this Bill would do.

It is our great hope that the Government will at least say they will think again about putting into this Bill a protection and not mark themselves as a government in favour of unreasonable deductions. This amendment asks only for that which is reasonable, and I beg to move.

It may be for the convenience of the Committee if I speak now, with leave, to Amendments Nos. 2, 13, 70 and 112.

Would the noble Lord forgive my interrupting him? I am very grateful to him. There is an objection because they are totally disparate considerations that arise under this Amendment No. 1 and on Amendments Nos. 2, 13 and 70. It would import, with the greatest respect to the noble Lord, an intolerable degree of confusion if he were to try to deal with two wholly separate and distinct concepts at one and the same time. If the Committee is with me on this, I would respectfully suggest that we deal with the amendment of the noble Lord, Lord Wedderburn, and then in due course deal with the other set of amendments.

I am in the hands of the Committee. I had understood that there was a measure of agreement that this was the procedure which should take place. Perhaps the noble Lord, Lord Trefgarne, would help us on behalf of the Government.

I hope my noble friend will feel able to agree that we should proceed in the way proposed by the noble Lord, Lord Rochester. As my noble friend will appreciate, considerable discussions go on through the usual channels as to how we should handle these matters; and if they fall apart as soon as we get to the Floor of the Chamber very often we find ourselves considerably detained. So I hope my noble friend, at least on this occasion, will feel able to agree that we should discuss the amendment of the noble Lord, Lord Rochester, with the one proposed by the noble Lord, Lord Wedderburn.

I am obliged to my noble friend the Minister. Quite clearly, the usual channels have messed this one up, but if they have done it, they have done it and we had better get on with it.

I think it was our intention that, although the noble Lord, Lord Rochester, could speak to both amendments, there would be a separate vote on our amendment. We intend to press our amendment to a separate vote. Therefore, if the noble Lord were in a position in which he wanted to support one rather than the other, he would in the end be able to do so.

It was worked out and that is why I said at the outset that it was my intention to speak to these amendments, rather than at this stage to move any. Like the amendment which has just been moved by the noble Lord, Lord Wedderburn, the amendments to which I referred—perhaps for the convenience of the Committee I should just repeat that they are Nos. 2, 13, 70 and 112—are aimed at ensuring that deductions from wages are reasonable, but they set about the task in a way different from that proposed by the noble Lord, Lord Wedderburn.

At the Second Reading of the Bill I expressed the view that there was a strong case for a code of practice to be drawn up by the Advisory, Conciliation and Arbitration Service after consultation with other interested parties to facilitate the implementation of Part I of the Bill. In response the noble Lord, Lord Trefgarne, assured me that guidance material would be produced before Part I commenced and added that ACAS was also aware of the suggestion that it should produce advice on aspects of the Bill.

Since then I have come to feel that the area which could most usefully be covered by such a code is that of deductions from wages, particularly in relation to the form which the relevant term in the contract of employment should take. Indeed, it was a discussion in another place of the need to build on good practice in this matter which led the Under-Secretary of State to say, first, that he should perhaps be responsible for recommending that ACAS should produce guidance on it and then, more specifically, that it would be a good idea if ACAS was to propose a draft form of contract.

Between them, the amendments to which I am now speaking seek to take the matter a little further, first, by providing in Amendment No. 2 that deductions from wages should accord with a code of practice; secondly, by requiring the Secretary of State—that is, under Amendment No. 13—to issue such a code prior to the date on which Part I of the Bill comes into force; and, thirdly, by stipulating in the new schedule referred to in Amendment No. 70 that the objective of the code should be to ensure that deductions from wages are fair and reasonable. The terms of the proposed code of practice are set out in the schedule and they follow closely Section 3 of the Employment Act 1980, except that in this case the issuing of the code by the Secretary of State would be mandatory rather than, as in 1980, permissive.

Initially, as under the 1980 Act, the Minister would have to consult ACAS, publish a draft code, consider representations made to him about the draft, and have the draft approved by both Houses of Parliament. Once it was introduced, failure to observe the code would not render an offender liable to proceedings, but in any proceedings before a court or industrial tribunal the provisions of the code would be admissible in evidence and could be taken into account in determining any relevant question. Amendment No. 112 is consequential in simply enabling the process of introducing the code to begin at the time the Bill is passed, rather than waiting until the rest of Part I of the Bill comes into force.

If I may turn to the amendment which has been moved by the noble Lord, Lord Wedderburn, it follows from what I have so far said that I am in sympathy with its objective. As he said, the Bill as it stands does not even uphold the existing statutory safeguards, particularly those which were a feature of the Truck Act provisions of 1896. In general, the contract of employment should, in my view, be regarded as inviolate—that is, as between the employer and the employee—but the principle that deductions from wages should continue to be reasonable in amount seems to me to be of such basic importance that it should be treated as an exception to the general rule. My only doubt is whether a requirement that the deduction should be,
"reasonable in amount having regard to all the circumstances of the case",
to quote the terms of the amendment just moved by the noble Lord, Lord Wedderburn, would of itself prove effective.

In two recent well publicised cases concerning petrol station attendants—the noble Lord referred to one of them—the courts have done their best to interpret the law as it now stands, but in doing so they seem only to have succeeded in adding to current doubts about its application. It appears questionable, therefore, to me whether the insertion in this subsection of a test very similar to the one now in operation would serve its intended purpose.

The aim of my amendment is to see that it has a better chance of doing so by providing additionally for a code of practice containing practical guidance on this subject. In my view this would both diminish present uncertainties and produce a welcome measure of consensus in what would otherwise remain a contentious area. Indeed, I have enough faith in ACAS to feel that if the task of drawing up such a code were entrusted to it, the outcome would prove generally acceptable. I hope, therefore, that the Committee will support the introduction of a code of practice of the kind proposed in this amendment to facilitate implementation of this part of the Bill. I shall not move this amendment, but will leave the matter there for the time being.

3.30 p.m.

May I first speak to Amendment No. 1 and then, with the Committee's leave, to Amendments Nos. 2, 13, 70 and 112. I speak in opposition to both amendments in the names of the noble Lord, Lord McCarthy, and the noble Lord, Lord Rochester. On Amendment No. 1, I have listened with that degree of attentive awe which any practitioner owes to a law don, but I fear that I am unable to follow the logic of the argument of the noble Lord, Lord Wedderburn, other than on the basis that, as he said, consent by contract has become a fiction—a proposition with which I hope your Lordships' Committee will not agree.

Amendment No. 1 is open to serious objection because it has to be seen in context with Amendment No. 4, which seeks to excise paragraph (b) of Clause 1(1) from the Bill, and unlike the amendments in the name of the noble Lord, Lord Rochester (Amendments Nos. 2, 13, 70 and 112), it does not impose an unacceptable qualification on Clause 1(1) (b); it simply seeks to excise it.

There are three grounds of objection to Amendment No. 1 moved by the noble Lord. First, there is the imposition of a wholly unacceptable qualification on subsection (1) (a).

When we come to the amendment concerning Clause 1(1)(b) I shall be happy to explain to the Committee and to the noble Lord its purport, but at the moment he should not assume that its relationship is either alternative or otherwise to the amendment we are discussing.

I am assuming that it is both, because it is either one or the other. If noble Lords will be good enough to look at Amendment No. 4 they will see that it excises Clause 1(1) (b). If it excises Clause 1(1) (b), in those circumstances the objection is to excision, because who better than the worker to judge in this day and age whether he should signify his consent? Therefore it is objectionable on that ground. If it does not excise Clause 1(1) (b) it is objectionable because if Clause 1(1) (b) is left in it imports a wholly impracticable qualification affecting the operation of Clause 1(1)(b). I know the noble Lord intervened to assist, but, with respect to him, I had worked this one out, and whichever way you put it there is a problem. I am seeking, not unkindly I hope, to expose the problems that lie within the proposed amendments. That is the first objection.

The second objection as I see it is the one to which I have referred—the excision of subsection (l)(b), taking the point that it is an alternative objection. The third is that Amendment No. 1 read in context with all the amendments to Part I of the Bill in the name of the noble Lord—

I wonder whether the noble Lord with his usual courtesy will allow an intervention, because this is upsetting the whole rules that govern us in discussion at Committee stage. We are either discussing amendments that have been moved or by arrangement are to be spoken to or we really find ourselves in complete disarray. Amendment No. 4 has in no way been moved. My noble friend may decide when he comes to Amendment No. 4 either to move it or not to move it, but if we start discussing amendments which by arrangement are not to be discussed and assume that they are going to be moved, we really end up in chaos. Since the noble Lord was anxious to avoid chaos before, in his submission to the Committee, I am sure that he will now wish to avoid it in his own case.

The noble Lord, Lord Mishcon, for once and wholly exceptionally fails to do me justice. The whole problem arises because one has to look at Amendment No. 1 objectively. If you look at it without Amendment No. 4 it raises the objection which I have made. If you look at it—and I take only a moment to say it—with Amendment No. 4 it raises the objection to which I have also spoken. I am not speaking to Amendment No. 4. This is one of the reasons I was hoping that these two sets might be dealt with separately. I hope that I have satisfied the noble Lord on that.

I come to the third and last objection to Amendment No. 1. If you look at Part I of the Bill as the Government propose it should be—there are no government amendments to Part I—and if you look at Part I of the Bill wth Amendment No. 1 and the set—I say no more than that—of Opposition amendments in the name of the noble Lord, the whole structure of Part I which is broadly intelligible and satisfactory is drastically altered. The hope must be that my noble friend the Minister will not accept Amendment No. 1 for the reasons that have been given, because any qualification by this Bill which qualifies as distinct from repealing or amending (and one goes to Clause 1(l)(a)) what,
"is required or authorised"
by statute or alters what has been agreed under a contract of employment makes a vast general superimposition on existing statute law which is wholly unacceptable and also indeed on the freedom of contract.

Those are the basic objections to the first amendment. The set of amendments moved by the noble Lord, Lord Rochester, raises quite different objections. I have listened with due deference to the noble Lord, who speaks with authority on all matters relating to good working relations between management and staff, but the objections to this set of amendments go not only to form but to substance. First, the provisions of Part I of the Bill operate to ensure that the deduction should be fair and reasonable in all the circumstances, broadly; secondly, the proposed injection by paragraph 1 of the Schedule—and the Committee will find that in Amendment No. 70—of standards of what is fair and reasonable could operate to qualify retrospectively existing statute law or obligations under the employment contract under Clause l(l)(a); or to negative matters of consent in writing, no doubt given on the basis of independent advice under Clause 1(1)(b).

The third objection is that because the obligation is upon the Secretary of State to issue a code of practice under paragraph 1 of the Schedule—that is in Amendment No. 70—and is upon Parliament under paragraph 4 to approve the code, and upon courts, tribunals and the Central Arbitration Committee to take the code into account under paragraph 7, that is neither appropriate nor requisite; nor indeed is it acceptable. There is an internal conflict in the proposals of the noble Lord, Lord Rochester, which, with respect to him, makes no sense because in (2A) in Amendment No. 13 you have the type of code that has no legal effect at all. It is a mere practical code of guidance that is not taken into account. If you look at paragraph 7 of Amendment No. 70 you see the type of putative effect of the code. The two lie in irreconcilable conflict and the source of confusion is all but unimaginable.

The set of triple amendments is objectionable on that ground. The further objection is basic. What the noble Lord, Lord Rochester, has done is to make a fundamental departure from settled practice under which the trigger clause which introduces the code, and which determines the legal efficacy, is found in the body of the Bill and not, as he has put it, in the schedule. Paragraph 1 of the schedule, which mistakenly he has put in the schedule instead of in the body of the Bill (hence the conflict) is borrowed from Section 3 of the Employment Act 1980. A similar section is found in Section 6 of the Employment Act 1976.

I shall not detain the Committee but there is, in any event a very serious objection, recorded in the debate on 15th January in which the noble Lord was good enough to take part, as to resort to this type of code—and it is all on record in Hansard. It has given rise to concern. It is the type proposed in paragraph 7 of Amendment No. 70. To borrow a phrase in another context from Churchill, it is neither one thing nor the other. Although it is admissible under paragraph 7(a) in Amendment No. 70, there is no sanction whatever if it is not taken into account under paragraph 7(b). There is no appeal and there is no judicial review. It is mere putative efficacy dressed up as a sort of legal doll. If a code is needed—which is much to be questioned because ACAS has certain responsibilities which it could discharge—then either it should be the code of practical guidance which is the very type proposed in subsection (2 A) of Amendment No. 13, or it should be a code having full legal effect such as is taken into account at first instance and then can be taken into account on appeal or judicial review; analogous, as the Committee will remember, to the Commons amendment to the Animals (Scientific Procedures) Act 1986. There is another example which will be moved on Report in respect of the Bills dealing with the disabled and gas next week.

Therefore, this set of amendments of the noble Lord, Lord Rochester, proposes a type of code which follows an evil precedent. The form of the set of amendments is open to objection on the ground of irreconcilable conflict. It departs from settled practice and it imports wholly unacceptable qualifications into Clause 1 of the Bill. For those reasons, which are quite distinct from the reasons on Amendment No. 1,I hope that my noble friend the Minister will not accept that set of amendments.

3.45 p.m.

As between these two amendments, I should like one or other of them to be accepted, but of the two I prefer that proposed by the noble Lord, Lord Rochester. Let us think for a moment of the problem under the 1896 Act. That applied only to manual workers. It did not apply to people working in shops, and the like. Under that Act it was permissible for an employer to make deductions from his men's wages so long as he put up a proper notice warning them about it. In addition, he could deduct from their wages subject to this: the men had only one form of complaint—they could not go to the civil courts or to a tribunal but had to prosecute the employer before the petty sessions magistrate and had to prove that the deduction was not fair or reasonable.

No wonder that in those days nobody went through that archaic procedure. No man did. I remember no case brought before my court under those Acts in all the years I sat. In the last year or two some petrol garage people have become alive to the situation and as the noble Lord, Lord Wedderburn, said, some petrol attendants, and so on, have been faced with contracts or notices enabling the employer to deduct everything—all the deductions and so on—from the workers' wages. That was taken before the magistrates and then before the Divisional Court and it was held to be not fair or reasonable. It was a very proper decision, if I may say so, but it is time that we had another attempt to put the law on this matter on a proper footing.

As I read this Bill and these clauses they go a long way towards putting everything in proper order. There has to be a proper contract for the employee. He must have signified his agreement to it in writing. The employer must then deduct in accordance with that contract and there is provision that he cannot deduct more than 10 per cent. That is a very good way of dealing with the matter. Moreover, if the man is dissatisfied and states that it is not good enough, he can go before the tribunal. That is all right and proper.

However, there is one omission from this Bill which was in the 1896 Act—it must be fair and reasonable. That is why I suggest—and the noble Lord, Lord Wedderburn, was quite right—that many of these so-called contracts are a pro forma. A form is set before the man and he signs it without reading it. Members of the Committee will have done that dozens of times in contracts that they have signed. These printed forms are hopeless and time after time I have said in the Court of Appeal that they ought to be fair and reasonable. Under the Unfair Contract Terms Act 1977 the legislature has said that many commercial contracts, with all these exemption conditions, are enforceable only if they are fair and reasonable.

Therefore, we should have in this Bill a provision to ensure that deductions can be made only in accordance with a contract that is fair and reasonable. In the circumstances of the case, whatever the man has done, the deductions must be fair and reasonable. That is the way in which I hope the Bill will be amended in due course.

What is to be the form of the amendment? With respect to the noble Lord, Lord Wedderburn, the first amendment goes only a little way. It says nothing about fair and reasonable. It only has to be,
"reasonable in amount having regard to all the circumstances of the case".
That is only looking at the amount—whether £10 or £5 should be deducted. That is not looking at the terms of the contract, or the arrangements, and what has happened to the man—whether or not he has been careless. There is nothing in that amendment as to whether it is fair or reasonable. But the condition of fair and reasonable comes into the proposals of the noble Lord, Lord Rochester. The first paragraph of Amendment No. 70 states:
"The Code of Practice issued by the Secretary of State … shall have as its objective to ensure that any deductions from wages is fair and reasonable having regard to all the circumstances of the case".
That is just to my liking. As my noble friend Lord Rochester has said, there is an advantage with a code of practice that all these matters are not necessarily allowed to be dragged up in the courts. They may be small matters, so let them go if your please. They should not come under the strict and rigid rules of law. These matters should go before a tribunal which will consider the terms of the contract and whether they are fair and reasonable. It is for this reason that I favour a code of practice. Codes of practice are now widely recognised in law. They are very useful in dealing with cases where there is a mass of detail to be considered which, if I may say so, it would be quite inappropriate to consider in your Lordships' House. Let us consider the Highway Code. A person in charge of a vehicle has to exercise due care and attention but details such as when he is to keep to the right side of the road and when it is considered safe to overtake, and so on, are left to the code of practice. These matters should be dealt with by a tribunal and the code should be there for guidance. We have an industrial relations code which is concerned with whether a person has been properly or reasonably dismissed. It is recognised that decisions of this kind depend very much on the individual situation.

We should not put such details in a statute but in a code of practice. For example, in the Police and Criminal Evidence Act which was passed a year or so ago, the words of the statute are very difficult for people to understand. Even I fail to understand a lot of the statutes that we have now. The value of a code of practice is that it puts everything into simple words, so that the people who have to act according to the code of practice can read and understand it. At the moment I am afraid that in Clause 1 of the Bill as it now stands there is a great deal of detail. For example, subsection (5):
"Nothing in this section applies—
  • (a) to any deduction from a worker's wages made by his employer …
  • (b) to any deduction … or any payment received from a worker by his employer".
  • There is a great deal of detail already in the Bill.

    When we come to the amendments of the noble Lords, Lord Wedderburn and Lord McCarthy, there are all sorts of other details, such as the proposal that a copy of the provisions should be presented by the employer when he makes any deduction, and so on. Many of these matters are very appropriate for a code of practice, but are much too detailed for your Lordships to have to consider time after time in Parliament.

    On the whole, if there has to be a choice between Amendment No. 1 and Amendment No. 2., I should be against Amendment No. 1 and in favour of Amendment No. 2. However, if I may say so I am not sure but that the better course is for the Minister to take this point away and for him to bring back something which will give effect to the underlying principle, which is that in all the circumstances, whether under the contract or not, the deductions should be fair and reasonable—just as was provided for in the 1896 Act. I am against Amendment No. 1 and in favour of Amendment No. 2 on the whole.

    We should perhaps remind ourselves that a major aim, perhaps even the main purpose, of this part of the Bill is to extend cashless pay. This was the basis of discussions between the TUC and a former Secretary of State for Employment. It is a purpose that I think should commend itself to the Committee and indeed to most people. It is right and proper to the extent that the Truck Acts are an impediment—and various inquiries have shown that they are only a minor impediment—to the extension of cashless pay in an orderly way.

    This particular provision smuggles in behind or underneath the purpose of extending cashless pay a serious and indeed improper weakening of what was the original, definitive purpose of the Truck Acts, which was, in short, to stop unscrupulous employers from cheating their employees. It would indeed be a happy state of affairs had unscrupulous employers disappeared from the face of the earth, but I fear that it is not so. No doubt they are only a minority of employers but evidence has been put before Parliament that they are most certainly there. It would also be a happy state of affairs if alternatively the workpeople concerned had had the prescience, foresight and ability to organise themselves collectively in order to resist victimisation, oppression or cheating. But, as has already been said, the extent of trade union organisation, partly because of the nature of the trades and occupations, is very limited indeed.

    It is therefore still incumbent upon this Committee to ensure that the conditions of working people are not made worse by their inability to resist an impost by their employer by incorporating within the legislation the degree of protection that is suggested in the amendment that is now before us. I find it odd that employers have a unilateral right in any event to impose fines upon their employees. If the employee is guilty of dishonesty, let him be sacked or prosecuted; if the employee is cheated by a third party—such as a motorist who drives away with a full tank of petrol—let the employer look to his management systems and supervision and not impose a penalty upon the employee, who may not have caused the original distress or damage.

    Be that as it may, this Bill gives employers a great power which they can exercise against individuals who are weak, who are anxious for a job and who. as the noble and learned Lord, Lord Denning, has said, will sign almost anything in order to get work.

    It is right that the tribunal, if it is to be a tribunal, should have at its disposal not only the powers that are expressed in the Bill but also the further power to ask whether what the employer has done is fair and reasonable. It should have the further power to search behind the narrow words—words of which perhaps the employee has repented, regretting that he had not had sufficient foresight—and to ask that question. The Government themselves have acknowledged the need for common sense to be operative in this context in that they have suggested that a figure of 10 per cent. should be applied in certain circumstances. We are not arguing about the level of the figure. The idea of the figure indicates that there must be some common sense and some application of shrewdness of judgment, in order to prevent the worst excesses. That is why I think we should incorporate some further protection within the legislation or, perhaps I should say more accurately, why we should preserve a protection which has historically been found to be necessary and for which, regrettably, time has not removed the need.

    I am quite prepared to accept either the amendment of the noble Lord, Lord McCarthy, or the amendment of the noble Lord, Lord Rochester. I have listened to the different arguments and 1 am prepared to support either of the amendments, because I think it is thoroughly disgraceful that, as has been suggested, young people who do not have the means, the power or the strength to insist on fair play, can be taken advantage of. That is why I am prepared to support either of the amendments. I do not think it can be too strongly emphasised how thoroughly disgraceful it is if young people are being taken advantage of and how essential it is that it should be stopped.

    4 p.m.

    I shall speak only to Amendment No. 1 which was moved by the noble Lord, Lord Wedderburn. Because I find myself basically in sympathy with it, I should like to say in answer to what I think was the only point of substance made in relation to the amendment by my noble friend Lord Campbell of Alloway that I cannot for a moment agree that consent by contract is a fiction in these filling-station cases. The amendment is designed to underpin the protection offered by the Bill to low-paid workers in what are in times of high unemployment very vulnerable jobs indeed. Whether the amendment goes far enough is one question, and I am mainly going to direct what I have to say to the question of whether there is a need here which the Bill does not rectify.

    This is not a party political question. The Truck Act 1896 was introduced under a Conservative Administration, with general support, to meet the needs of its time. Now it limps. It is interesting to note that about a third of this Bill, and almost all of Part I of it, is devoted to re-legislating the 1896 Act in respect of deductions from wages. I see that as a clear indication that the problem of deductions, though it may have a different shape now, is just as much with us as it was at the turn of the century.

    There is in my view a relatively widespread problem which this Bill does not tackle adequately. Once a provision allowing deductions from wages is in a contract of employment, no matter how unreasonable it may be, provided that the employer is alert to see that the modest requirements of the Bill have been complied with, there will be nothing that the county court, the magistrates' court or the industrial tribunal can do to protect the employee. There will be just the same abuses as were seen in 1896.

    I should like to draw briefly on two examples of what actually happens, each taken from a recent decision of the Divisional Court. The judgment in the first—and that is the case of Mr. Barratt, to which the noble Lord, Lord Wedderburn, referred—was only four months ago. Perhaps I may mention that Mr. Barratt went to the stipendary magistrate and complained that his employers had unlawfully fined him. The stipendary found the case proved, fined the employers £250 and ordered them to pay costs and to repay to Mr. Barratt the deduction which had been made, amounting to £75.90.

    Under the Bill the making of wrongful deductions is to be decriminalised. It is only necessary to pause to consider for a moment the size of the fine in this case compared with the amount of the deductions to see that one strong deterrent to the making of wrongful deductions is to go with the repeal of the 1896 Act.

    I would also point out to the Committee that on the facts of the case Mr. Barratt worked for only three weeks at the filling station. His net wages were to have been £55·90 a week. In one week he lost £20; in another he lost the lot. Mr. Barratt was lucky. What the court found in his case was that his employers had wrongly imposed a fine on him and so they put themselves outside the Act. They had not taken his money by way of compensation for their loss, which might have been legitimate as between an employer and an arguably negligent employee. The Divisional Court decided that as a fine it was not a fair and reasonable one.

    The second case, also a filling-station case in the Divisional Court, was decided a year ago. A Mr. Bristow was a cashier. He, like Mr. Barratt, was 18 years old. In what seems to have been a written contract of employment there was this provision:
    "Every site employee, together with other site staff working with him, if any, is responsible for all cash shortages that may occur in the cash till that he is using. He will, therefore, undertake to make good to the company either all or his share of the total shortages on every shift that he works, either immediately or by deduction from any wages outstanding".
    That made the employee liable for cash deficiencies, and he signed a separate acceptance of responsibility in respect of stock deficiencies.

    In that case the intention of the employers was that Mr. Bristow should be legally liable, irrespective of whether he or indeed any other employee was culpable, for a share of all loss of cash and stock. In the five weeks of his employment in 1983 there was deducted from his pay packet an average of 17 per cent. of what should have been his weekly net wage.

    Mr. Bristow failed both before the magistrates at Brentford and in the Divisional Court because he could not show in his case that the deductions were fines and so covered by the Act. He could only proceed under Section 1 of the Truck Act 1896, which deals with fines, because he was not under that Act a workman; he was a shop assistant and shop assistants are protected only by Section 1 of the Act. That is one of the fine but outdated distinctions in the Act which are to be eliminated with this Bill's passage into law.

    What seems to me to be common to both cases is that the deductions were unreasonable, but if the Bill is passed unamended it would be possible for unscrupulous employers to continue to make those unreasonable deductions. Both Barratt and Bristow were 18 years old. What sort of introduction to employment was that, and what sort of first-job experience was it?

    The amendment proposed by the noble Lord is a modest one. I wonder whether it could not be widened to provide, in effect, that all contractual provisions for deductions must be fair and reasonable and not just that the deductions made under the provisions must be fair and reasonable. Might it not be better to influence employers to write fair contracts in the first instance, rather than to leave it to employees to find out that unfair contracts are unenforceable?

    I hope that my noble friend will think again about this clause in the Bill and perhaps come back at a later stage with something to meet what seem to be the general feelings of the Committee today.

    It may help if I briefly explain the philosophy of the controls on deductions from wages in Part I of the Bill. The Government conducted a consultation exercise in 1984 on controls on deductions from wages that should be established if the Truck Acts were to be repealed. The results suggested that there is no major problem that workers are currently experiencing in the field of deductions from wages other than in the limited area of deductions concerning cash shortages and stock deficiencies. The Bill provides for general controls on deductions from wages that, broadly, allow the parties to agree their own terms, but then ensures the employer sticks to the terms. It provides for special controls in Clauses 2 and 3 on deductions to cover shortages.

    It is quite reasonable that employers will make in some circumstances disciplinary deductions from wages as a sanction for breaches of discipline that do not merit dismissal. If such deductions were entirely prohibited employers might more readily resort to dismissal. The philosophy of the Bill is to let employers and workers sort out rules governing such deductions in the contract. But Clause 1(3) ensures that the worker knows what the rules are; Clause 1(4) ensures that the rules cannot be changed retrospectively by the employer to allow a deduction in respect of events that are past; and Clause 5 ensures that the workers can enforce the rules before an industrial tribunal. I believe that these are fair and reasonable provisions.

    I recognise that the amendments moved by the noble Lord, Lord McCarthy, and his noble friend are inspired by a desire to reinstate certain words in the Truck Act 1896 concerning reasonableness. It is proposed that deductions from wages or payments by workers to employers should be reasonable in amount, having regard to all the circumstances of the case. But the fundamental difficulty with a requirement that deductions be "reasonable" is that what is reasonable is a matter of opinion. Employers and workers would just not know where they stand if these amendments were accepted.

    If we say in the statute that deductions must be "reasonable" the employer will never know if a deduction is lawful until he has had its lawfulness tested before an industrial tribunal. In practice, employers may simply not take the risk of having to waste a morning arguing the case before an industrial tribunal and simply punish breaches of discipline by dismissal. Surely it is enough simply to say that the terms of the basis on which the parties are prepared to go on offering and accepting employment are reasonable terms.

    One must also recognise that the more we tie up people with statutory requirements which they must follow in deciding whether to offer and accept employment, the more likely it is that we shall deter would-be employers from offering employment at all.

    With regret, I think that the practical effect of the amendments, however well-intentioned, would be to increase the number of dismissals, leave employers in an impossibly uncertain position and reduce the number of jobs on offer. I noticed considerable derision when I made that observation a moment ago. I wonder how many noble Lords opposite have been in the position, as I have, of being a small employer and being genuinely concerned about the bureaucracy that is attached to taking on new employees. It is a deterrent. Noble Lords opposite should not lose sight of that.

    May I turn to the proposal for a code of practice? My noble friend the Secretary of State has considered closely whether it would be appropriate for him to issue guidance on good practice in drawing up contractual terms concerning deductions. On balance, he thinks that it would not. However, I can assure the Committee that the Department of Employment will issue guidance on the law before Part I comes into operation.

    It is possible that a number of independent organisations such as the Institute of Personal Management or ACAS may wish to produce some guidance on good practice in framing contractual terms of deductions. ACAS is aware of the point which was raised during earlier stages of the Bill, but ACAS is an independent body governed by a council that includes TUC and CBI representatives. It is not an instrument of the Department of Employment. It would not be appropriate for Ministers to seek to direct ACAS in any way, but the ACAS council will doubtless consider the call for a code.

    The noble Lord, Lord Wedderburn, and my noble friend Lord Coleraine referred to the case of Sealand Petroleum Company Ltd. v. Barratt. That case demonstrates, if I may say so, that a High Court case was required to determine whether the 1896 Act protected the employee. I believe that supports the proposition that the 1896 Act, after 90 years, is uncertain and therefore largely ineffective.

    A number of questions have been asked about the concept of "reasonableness". I shall perhaps help the Committee with an example. Suppose that an employer is faced with a worker who has breached a safety regulation, perhaps putting other workers at risk. The employer does not wish to dismiss him and the contract says that workers can be fined for such breaches. Suppose that the employer fines the worker £10. Is that lawful? With the amendments, the employer does not know until he comes before an industrial tribunal. He spends a day arguing his case and is told that £5 was perhaps reasonable but not £10, or perhaps £10 but not £15. The employer just does not know where he stands. I have said that the Truck Acts have caused considerable confusion on that issue. At an earlier stage the noble and learned Lord, Lord Denning, was right to describe them as ineffective. They are a poor model.

    I hope that those difficulties will have persuaded the Committee that we should not proceed in the way suggested in the amendments. I hope that the amendment will not be pressed.

    4.15 p.m.

    It is a novel experience for me to hear, albeit from the noble and learned Lord, Lord Denning, that I am not going far enough, but I take his point. After consultation, my noble friends and I have come to certain conclusions. I shall say just two or three things about the arguments against our amendment. The noble Lord, Lord Trefgarne, speaking for the Government produced some astonishment. Every time there appears in this Chamber any Bill that has anything to do with the protection of workers, we are told that it must be bad because it will stop recruitment into jobs. There is no evidence of that in relation to matters which have come before us recently, any more than there is that jobs will be promoted by the Government's plan to charge workers £25 for going to an industrial tribunal which is contained in their latest policy document.

    The noble Lord fell into another error which must be faced. He said that the amendment rests upon "reasonableness"; that what is reasonable is a matter of opinion; that no one would know where they stood and therefore we should not have such a law. Many laws stand on "reasonableness". On the noble Lord's reasoning we should never have had a law on unfair dismissal. I am not sure that the Government want an unfair dismissal law. No doubt if they come to repeal it, that is the argument that they will use. It is a poor argument, because many parts of our law depend on what is reasonable. The Factory Acts, which the noble Lord cited frequently, depend upon the employer doing what is reasonable or what is different but perhaps more difficult, that which is reasonably practicable. No one suggests that we should repeal the Factory Acts because they include such formulae.

    I do not hold such a low opinion of British employers, be they small or large, that I believe that they would not know in the vast majority of cases when a fine on a worker was reasonable and when it was unreasonable. I do not believe that. I do not believe that the noble Lord, Lord Trefgarne, when he was a small employer, would not have known in the vast majority of cases when he went home at night whether he had treated someone unfairly.

    The noble Lord, Lord Coleraine, rightly took us to two cases. I did not cite the Bristow case because it seemed to me more concerned with the definition and interpretation of what is a fine, which does not appear in our formulation. We have had cases in the courts because petrol companies have gone in for scandalous practices. In 1896 the Home Secretary, replying to a debate on the Bill, said on 4th May at col. 523 of Hansard that he did not apprehend any vexatious litigation over the expression "fair and reasonable". He felt sure that one or two decisions by the courts of law would settle the meaning of that expression. In this context he was right. It is only when employers in this area have gone for such outrageous practices that cases have gone to the courts.

    There has been a wages inspectorate. Although we all criticise it, over the years it has also maintained standards on the basis of a test of reasonableness. The noble Lord, Lord Campbell, spoke to other amendments. I shall reserve my comments until we come to those amendments. I must put one matter right in case it was my slip of the tongue rather than his mishearing. I hope that I did not say that all consent for workers by way of contract was a fiction. I hope I said that the groups of workers with whom we are dealing, the formal contract is more in the nature of a submission than of real consent. The noble and learned Lord, Lord Denning, gave other illustrations of when that is so.

    If the noble Lord, Lord Campbell, will look at the report of bodies such as the Citizens Advice Bureaux he will find hundreds of cases described. They are not all by any means in retail shops or petrol stations. There are hundreds of cases with questionable deduction clauses in workers' contracts. As the North Warwickshire Citizens Advice Bureau put it, they are individuals who are desperate for employment, only too eager to sign the contract and only later when the deductions affect their living standards and their families do they fully realise the consequences. That is the reality of today. Those are the workers for whom we are worried.

    My noble friends and I are not concerned about the precise order of the amendments on the Marshalled List, but we are interested in workers in stock rooms, store rooms, petrol stations, shops and driving jobs who suffer those practices and whose families suffer them. If there be a sense in the Committee that the first amendment is in some ways too mild and insufficiently full, or not quite right, we shall not press the matter as there may be a better solution.

    I understand that Amendment No. 2 will be pressed. As I read it, it demands that deductions must be in accordance with the standards of the code of practice. That is to say, the code of practice will not be merely a document suspended in some judicial levitation above employment practices but will be there, right in the middle. Its standards must be observed. It is possible that this is something that some Members of the Committee prefer. Because my noble friends and myself regard it as so important to establish the broad principle and because the two amendments, it seems to me, are very much at one, I beg leave, on the understanding that we can go into the Lobby on Amendment No. 2, to withdraw this amendment.

    Amendment, by leave, withdrawn.

    Page 1, line 9, at end insert ("is in accordance with the code of practice referred to in subsection (2A) below, and")

    The noble Lord said: I have already spoken to this amendment, and I sense that the Committee wishes to reach a conclusion on the matter in general. I should like, briefly, to thank all noble Lords who were good enough to contribute to the discussion on the amendment to which I spoke earlier. I respect very much the opinion of the noble Lord, Lord Campbell of Alloway, who criticised my amendment on grounds both of form and substance. I felt, if I may respectfully say so, that, on substance, the noble and learned Lord, Lord Denning, demolished that argument pretty effectively. If it was only a matter of form, and if there was some imperfection in the code that could be improved upon, that is one thing. It could readily be done, I am sure, at another stage. But it is the principle, clearly, with which the Committee is concerned. It is that, I suggest, to which we now have regard.

    I was particularly grateful to the two noble Lords on the other side of the Committee, who spoke in favour of the general proposition. I admired very much the manner in which the noble Lord, Lord Coleraine, spoke. Clearly, the noble Lord has considerable knowledge of the subject. I was greatly disappointed by the response of the noble Lord, Lord Trefgarne, who seemed to be saying, in effect, that what the employer and the employee agreed between them on the contract to be followed was sacrosanct. I do not regard that as nearly good enough. What is required is that employees, often, as stated at an earlier stage, among the most lowly paid, should be adequately protected in terms of deductions from wages being fair and reasonable. The noble Lord the Minister said that it was the intention that ACAS should offer some guidance on this subject. I do not believe that this is good enough. What we want to see is something inserted in the Bill to that effect.

    I am grateful to the noble Lord, Lord Wedderburn, for agreeing in the circumstances and in the light of the discussion that has taken place, to withdraw his amendment in favour of mine. I wish therefore to move the amendment.

    Before the noble Lord decides what to do with his amendment, he has, I believe, slightly misunderstood what I said during my remarks. I was not in the least intending to be unreceptive to the proposal that he made. I said that the Department of Employment would be issuing guidance before Part I of the Bill became law. I pointed to at least two bodies that might wish to prepare a code of practice that would further assist employers and employees operating the provisions of this measure. I am not sure how much further the noble Lord wants me to go. If it helps him, I would be happy to agree to look again at the possibility of my noble friend preparing a code of practice of his own which I believe would go some way to meeting the noble Lord's concern.

    I thank the noble Lord for what he said. I thought that I had made plain at an earlier stage that we are anxious—I believe that I speak for most, perhaps all, noble Lords on this side of the Committee and for a number on the other side—that something should be written into the Bill upholding the principle that has been enunciated this afternoon. I wish both to move and to press the amendment.

    4.26 p.m.

    On Question, Whether the said amendment (No. 2) shall be agreed to?

    Their Lordships divided: Contents, 101; Not-Contents, 125.



    Airedale, L.Harris of Greenwich, L.
    Amherst, E.Hatch of Lusby, L.
    Aylestone, L.Heycock, L.
    Bacon, B.Hirshfield, L.
    Banks, L.Hooson, L.
    Birk, B.Houghton of Sowerby, L.
    Blease, L.Hughes, L.
    Blyton, L.Hunt, L.
    Boston of Faversham, L.Irving of Dartford, L.
    Brockway, L.Jenkins of Putney, L.
    Brooks of Tremorfa, L.Jessel, L.
    Bruce of Donington, L.John-Mackie, L.
    Burton of Coventry, B.Kaldor, L.
    Carmichael of Kelvingrove, L.Kilbracken, L.
    Chitnis, L.Kilmarnock, L.
    Cledwyn of Penrhos, L.Kinloss, Ly.
    Coleraine, L.Kirkhill, L.
    Crawshaw of Aintree, L.Lawrence, L.
    David, B. [Teller.]Leatherland, L.
    Davies of Penrhys, L.Listowel, E.
    Dean of Beswick, L.Lloyd of Kilgerran, L.
    Denington, B.Lockwood, B.
    Denning, L.Lovell-Davis, L.
    Diamond, L.McCarthy, L.
    Donaldson of Kingsbridge, L.McNair, L.
    Elwyn-Jones, L.Mar, C.
    Ennals, L.Mayhew, L.
    Ewart-Biggs, B.Milverton, L.
    Ezra, L.Mishcon, L.
    Falkender, B.Morton of Shuna, L.
    Fisher of Rednal, B.Mulley, L.
    Gallacher, L.Murray of Epping Forest, L.
    Glenamara, L.Nicol, B.
    Graham of Edmonton, L.Northfield, L.
    Grey, E.Oram, L.
    Hampton, L.Parry, L.
    Hanworth, V.Ponsonby of Shulbrede, L.

    Rhodes, L.Taylor of Mansfield, L.
    Ritchie of Dundee, L.Tordoff, L.
    Rochester, L. [Teller.]Turner of Camden, L.
    Ross of Marnock, L.Underhill, L.
    Sainsbury, L.Walston, L.
    Seear, B.Wedderburn of Charlton, L.
    Shackleton, L.Wells-Pestell, L.
    Shepherd, L.Whaddon, L.
    Silkin of Dulwich, L.White, B.
    Simon, V.Williams of Elvel, L.
    Stallard, L.Wilson of Langside, L.
    Stoddart of Swindon, L.Wilson of Rievaulx, L.
    Strabolgi, L.Winstanley, L.
    Taylor of Blackburn, L.


    Allerton, L.Lothian, M.
    Ampthill, L.Lucas of Chilworth, L.
    Arran, E.Luke, L.
    Auckland, L.Lurgan, L.
    Belhaven and Stenton, L.McAlpine of West Green, L.
    Belstead, L.MacLehose of Beoch, L.
    Bessborough, E.Macleod of Borve, B.
    Boyd-Carpenter, L.Mancroft, L.
    Brabazon of Tara, L.Marley, L.
    Brookes, L.Marsh, L.
    Brougham and Vaux, L.Masham of Ilton, B.
    Broxbourne, L.Maude of Stratford-upon-
    Caccia, L.Avon, L.
    Cameron of Lochbroom, L.Merrivale, L.
    Campbell of Alloway, L.Middleton, L.
    Carnegy of Lour, B.Molson, L.
    Cathcart, E.Monk Bretton, L.
    Constantine of Stanmore, L.Montgomery of Alamein, V.
    Cottesloe, L.Morris, L.
    Cowley, E.Mottistone, L.
    Cox, B.Murton of Lindisfarne, L.
    Cross, V.Napier and Ettrick, L.
    Cullen of Ashbourne, L.Nugent of Guildford, L.
    Dacre of Glanton, L.Onslow, E.
    Davidson, V.Pender, L.
    De Freyne, L.Perth, E.
    Denham, L. [Teller.]Porritt, L.
    Dilhorne, V.Portland, D.
    Dormer L.Reay, L.
    Dundee, E.Rochdale, V.
    Eccles, V.Rodney, L.
    Elles, B.St. Aldwyn, E.
    Elliott of Morpeth, L.St. Davids, V.
    Elton, L.Sanderson of Bowden, L.
    Fanshawe of Richmond, L.Sandford, L.
    Forester, L.Sandys, L.
    Fraser of Kilmorack, L.Savile, L.
    Gainford, L.Selborne, E.
    Gardner of Parkes, B.Sempill, Ly.
    Glanusk, L.Shannon, E.
    Glenarthur, L.Sharples, B.
    Gridley, L.Shaughnessy, L.
    Halsbury, E.Skelmersdale, L.
    Harmar-Nicholls, L.Strathcarron, L.
    Hives, L.Strathcona and Mount Royal,
    Holderness, L.L.
    Home of the Hirsel, L.Swinton, E. [Teller.]
    Hood, V.Thomas of Swynnerton, L.
    Hooper, B.Thomeycroft, L.
    Hunter of Newington, L.Tranmire, L.
    Hylton-Foster, B.Trefgarne, L.
    Inglewood, L.Trenchard, V.
    Kaberry of Adel, L.Trumpington, B.
    Killearn, L.Vaux of Harrowden, L.
    Kimball, L.Vickers, B.
    Kinnaird, L.Vinson, L.
    Kintore, E.Vivian, L.
    Knollys, V.Westbury, L.
    Lane-Fox, B.Whitelaw, V.
    Lauderdale, E.Wise, L.
    Layton, L.Young, B.
    Lindsey and Abingdon, E.Young of Graffham, L.
    Lloyd of Hampstead, L.Zouche of Haryngworth, L.
    Long. V.

    Resolved in the negative, and amendment disagreed to accordingly.

    My Lords, I think that it would be appropriate at this moment to take the Statement. Therefore, I beg to move that this House do now resume.

    Moved accordingly, and, on Question, Motion agreed to.

    House resumed.

    Chernobyl Accident: Movement Of Sheep, Scotland

    4.35 p.m.

    My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable and learned friend the Secretary of State for Scotland. The Statement is as follows:

    "With permission, Mr. Speaker, I should like to make a Statement on the control on the movement and slaughter of sheep in Scotland.

    The results of tests on sheep in slaughterhouses in Scotland, the latest findings from which were published yesterday, give no cause for concern. We now have results of tests on young lambs in Scotland. These results are being published today.

    "Generally they are satisfactory. No readings have been obtained comparable to the highest in North Wales and Cumbria, but there are five readings over 1,000 Bq/kg for caesium 134 and caesium 137 together, which is the limit at which by international recommendation action should be considered. One of these readings, the lowest of the five, comes from Easter Ross and, at 1,017 Bq/kg, is within the margin of sampling error. Three of the other readings were found in Dumfries and Galloway, including the highest at 1,272 Bq/kg, and the remaining reading is from Arran.

    "The animals tested were only two to three months old and will not be ready for market for some weeks yet, by which time the level of radioactivity may be expected to have declined well below the 1,000 Bq/kg level. I can say categorically therefore that there is no danger to public health and no reason for consumers to refrain from purchasing and eating lamb.

    "It is Government policy to insist on the highest levels of safety, and, in order to keep under supervision lambs in those areas of Scotland where relatively high levels of radioactivity have been identified, I have made an order which will be laid before Parliament to come into effect today to prohibit for the next 21 days the movement and slaughter of sheep within Dumfries and Galloway, Arran and Easter Ross.

    "Monitoring in these and other areas will continue and the restrictions will be reduced or removed as soon as testing confirms the expected fall in levels.

    "I recognise that these measures may cause some interference with the marketing plans of some farmers in the areas concerned. I am sure they will understand why this action is being taken and in this connection I must pay tribute to the responsible and co-operative attitude shown by the National Farmers' Union of Scotland. If it should prove necessary, the Government will be prepared to discuss cases of compensation for severe loss in particular circumstances to specific farmers."

    My Lords, that concludes the Statement.

    My Lords, there is not much that one can say which was not said on Friday when the Statement on Wales and Cumbria was made. However, I think that the importance of letting the public know what is happening should be re-emphasised, and the noble Viscount has done so, because there were some considerable scare stories in the press last Saturday morning. However, this is a difficult task to carry out, and I understand that there has already been a drop in the price of lamb. My own wife's reaction is that she will not buy lamb unless it is New Zealand lamb. This has a rolling effect which is seen in the fact that lamb prices have come down, in spite of the fact that many of these lambs are not yet of marketable size, although in 21 days they can come a long way.

    I should like to ask the Minister why, only three days after the Statement on Friday, we have this Statement. I hope that the Government have not been sitting on these reports because it is rather important that farmers should know all along the line what is going on. I hope that that is not the case here.

    The matter of compensation will be very important because all the areas which have been mentioned, apart from Easter Ross, almost entirely rely on at least the next two months for the sale of store and fat lambs for their total income for the year. Therefore, it is very important indeed that this matter should be looked into very carefully and that we be ready to give help when it is required.

    On several previous occasions when compensation has been paid, the matter has dragged on for a long time and farmers have had to wait for their money. I re-emphasise that these are areas where the farmers' income comes solely from sheep and if we have another Statement from the Government, it will be very serious for them. I hope that the Minister can assure us that there will not be another Statement in the near future because that would give rise to a very serious situation as it would begin to cover all the lamb-producing areas in the country.

    My Lords, it is obvious that in circumstances of this kind the Government, in the public interest, must err on the side of caution, and this the Government have done. Would the noble Viscount confirm that there is strict monitoring going on, and that in fact the lambs in this and the surrounding areas will be tested again to reassure the public, and that the results will be published as soon as it is done?

    With regard to the question of compensation, these are innocent farmers, very often with one cash crop in the year, and that is lamb. The words used in this Statement in respect of compensation might cause considerable alarm. It is clear that this interference with the normal marketing process will cause loss to farmers. For example, if lambs are kept back for three weeks they put on excessive fat and will not grade properly.

    The words used in the Statement are:
    "If it should prove necessary the Government will be prepared to discuss cases of compensation for severe loss".
    Should not the Government compensate for any loss? Why should it be confined to particular circumstances with specific farmers? If fanners as a result of these actions are going to suffer loss, surely the Government should compensate, and look to the Soviet Union for compensation nationally? Would the noble Viscount not agree with that?

    My Lords, I am grateful to both the noble Lord, Lord John-Mackie, and the noble Lord, Lord Hooson, for their reception of this Statement. In general, I would agree with the noble Lord, Lord John-Mackie, that this problem was discussed at length on Friday when my noble friend Lord Belstead repeated a Statement made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food.

    I do not think that I can add much to what my noble friend then said. But on certain specific points, the noble Lord, Lord John-Mackie, asked why was the order not laid last Friday. We said then that we would act on the basis of monitoring data, and that is what we have done. Following on the monitoring topic, I would assure the noble Lord, Lord Hooson, that we are keeping monitoring on a continuous basis and will publish the results.

    The noble Lord, Lord John-Mackie, raised the subject of consumption. If it is any help, perhaps I may just give him a scientific answer from my brief and not from my brain. At 1,000 Becquerels per kilogram of total caesium, which is caesium 137 plus caesium 134, the total does in a year to the average consumer, assuming he eats meat at the average consumption rate throughout the year of five kilograms, would be 0·15 millisieverts. This compares with an annual does from natural sources of 2 millisieverts, to which we are all subjected. Therefore, there is no danger whatsoever.

    On the question of compensation, which both the noble Lord, Lord John-Mackie, and the noble Lord, Lord Hooson, raised, I take note of what they said. This is always a difficult problem in these matters. Our intention is that any distruption will be minimal disruption, and the position on compensation was spelt out by my right honourable friend the Minister of Agricuture. If it should prove necessary, the Government will be prepared to discuss cases of compensation for severe loss in particular circumstances to specific farmers, and more than that I cannot say at the moment.

    My Lords, could my noble friend say why sheep only? Are we monitoring the position as regards fat cattle? Certainly in Easter Ross some fat cattle will be coming forward for slaughter in the near future. Can my noble friend say a word on the position of monitoring of cattle?

    My Lords, the monitoring results so far—and there has been monitoring for cattle as well—show that there is no cause for concern withother food products at the moment. The point is that he young lambs have been feeding on the contaminated pastures and have been ingesting a great amount of food, and that is why they have been particularly susceptible to risk.

    My Lords, am I right in thinking that the Government took action as soon as they received the information in respect of the recent analysis? But it is rather obscure to say that there is no cause for concern. There may be no cause for concern to the consumer; but there is considerable cause for concern to the farmer, especially when the noble Viscount suggests that there may be some disruption of the market.

    You cannot have a policy of restricting movement and no slaughter without seriously restricting the market for those hill sheep farmers affected. What percentage of the stock of sheep in Scotland is held in Arran? It is not very high, I would fancy. But when you think of Dumfries and Galloway particularly, and Easter Ross, it must be getting well on to 15 per cent. of the whole stock. That is a considerable disruption.

    Can the noble Viscount tell me one other thing? When he talked about a restriction on movement and slaughter, is this absolute? Is there to be no movement at all even within an area? Can he give us any indication of what is going to be the basis of compensation when that is dealt with? Compensation will be needed, and needed speedily when we are dealing with what is an acceptable—and readily acceptable—cash crop for farmers who are going to be denied it, having had a fairly rough winter already.

    My Lords, in reply to the noble Lord, Lord Ross of Marnock, I do not have the figures of the number of sheep affected. On the effect of the order, in Dumfries and Galloway it forbids for a period of 21 days, beginning on 24th June, the movement of sheep off farms and the slaughter of sheep except with the consent of the department. Slaughter will be permitted for welfare reasons, and this is already provided for in the order, on condition that the meat does not …. There is no end to that sentence. I apologise for the fact that my noble friend the Minister of State is in Inverness today. I am afraid I forget the noble Lord's other question. Perhaps he would remind me.

    My Lords, I asked about the stock, and whether there was an absolute bar on the movement and slaughter of stock, and I gather that there is not provided something or other that we do not know about, and that the Minister has not been adequately briefed about. I asked about the effect of compensation. There has already been a loss and a drop in price. It may not affect just these areas. It may be general through all the lamb and store lamb markets at the present time. The other question was about the basis of compensation, and whether it will be paid quickly.

    My Lords, I understand. What I meant to say earlier when I was talking about no cause for concern was that I was talking about the consumer. There is of course considerable cause for concern for the farmers affected here. I am certain that my right honourable friend will bear that in mind and do his best to assess and pay the compensation to those who have really suffered from this tragedy.

    My Lords, if the Government find it necessary to pay compensation in respect of Scotland, Cumbria, or of Wales, will they seek reimbursement of the cost of that from the Government of the USSR in view of the fact that the whole problem has been created by a failure in the industrial system of that country?

    My Lords, I think all I can say to my noble friend is that I shall pass on his question to my right honourable friend.

    My Lords, may I ask the noble Viscount to tell me whether the monitoring of cattle, to which he referred, includes the monitoring of milk, and if so, with what results?

    My Lords, while I agree with what my noble friend Lord Ross of Marnock has said about the producer, may I ask whether the noble Viscount is aware that it will ease public concern considerably if he makes it clear that within the 21 days referred to in the Statement the amount of caesium in the lambs will have reduced sufficiently to make it safe to slaughter and to eat the lamb? That is the point in the public mind that has not been made clear. If he can say that today, it will be of considerable benefit.

    My Lords, I can state categori-cally that that is what we are expecting to happen; that the amount of caesium will be reduced over the next 21 days.

    My Lords, may I ask the noble Viscount about another point which might worry farmers? If the price comes down I hope the Government will not rely on the variable premium to make it up. There is a limit to the variable premium and it would not make up a loss of 25 per cent., which is the figure stated. I do not know how accurate that figure is, but it has been quoted in some of the reliable press. That is something that must be carefully watched: the Government, who are pretty good at this kind of thing, relying on the variable premium, which I do not think they can do in this case.

    My Lords, I am grateful to the noble Lord, Lord John-Mackie. I shall certainly draw his remarks to the attention of my right honourable friend.

    Wages Bill

    4.50 p.m.

    House again in Committee on Clause 1.

    Page 1, line 10, leave out ("one of)

    The noble Lord said: In moving this amendment I wish to speak also to Amendment No. 4. Now that we have settled the broad issue that no test overall of reasonableness is to be imported into the control of deductions, it is perhaps more important than ever to look with great care at just what the Government have put into their Bill and at their main plank of contractual arrangements being clear.

    These amendments go to a puzzle as we see it. It can be put shortly in this way: deductions are to be allowed under the Bill if they are authorised either by statutory provision or by provisions in the worker's contract. That one would understand, but then there is a further wheel to the coach, an alternative to the provisions allowed by contract, those matters to which the worker has previously signified in writing his agreement. If he signifies his agreement in writing in any formal way, as one would expect it to be, would that not become a variation of the contract? If it is a variation of the contract it falls within paragraph ( a) and paragraph ( b) is not needed. Paragraph ( b) is clearly needed where the writing is not imported into the contract; a writing standing alone which would not be legally binding unless it were a sealed deed. What kind of documents do the Government have in mind that would not be a part of a contract? Is this a document where there is perhaps a homeworker who does not have a contract? That is a difficult example to take because the whole of Part 1 of the Bill is based on a worker who does have a contract and the home worker without a contract is not brought in. All we are left with is this very uncertain area of signification in writing of consent or agreement that is not contractual because then it would be within paragraph (a).

    At this stage so that we can consider the matter—because our efforts have not been availing in trying to find a clear explanation in another place in its debates on this matter—we ask the Government to clarify what is meant so that the matter can be considered further. I beg to move.

    Before I put the Question, I should explain, as the noble Lord was speaking to Amendment No. 4, that if Amendment No. 4 were agreed to it would pre-empt Amendments Nos. 5 and 6 so that I should not be able to call them as well.

    As the noble Lord has explained, the amendments restructure Clause 1(1), which provides that the basic protection for workers that deductions from wages (or payments by a worker to his employer) are unlawful unless provided for in a statutory provision—for example income tax—in the contract or by the written consent of the worker.

    Incidentally, I believe that Amendments Nos. 10 and 11 come within this group as well. I notice that the noble Lord, Lord McCarthy, nodding in assent.

    The effect of these amendments would be to remove written agreement as a method of authorising a deduction or payment. But it would create great difficulties both for employers and workers if the route of authorising a deduction by the written agreement of the worker was closed. For example, a set of deductions to recover a loan to purchase a season ticket could then only be authorised by varying the contract, which would be a needlessly cumbersome method of achieving a result desired by both parties. But in so far as the method of varying the contract was by the agreement of the worker the steps involved would amount to much the same thing except that agreement would not necessarily be in writing—so the standard of protection of the worker would, I think, be reduced.

    I hope that in the light of these two difficulties the noble Lord will not wish to press his amendment.

    I am grateful to the Minister for that explanation. It is one that I followed in one respect, namely that if the effect of the amendments was to reduce the protection of the worker we certainly should not wish to move it. But, in a phrase, the objective and effect of the amendments—I apologise to the Committee and to the Minister because Amendments Nos. 10 and 11 on the new numbering are those we agreed should be considered as they involve the same thing—would not be to remove written agreement from the Bill. Written agreement is presumably contractual. It is intending that the parties should be bound. If I have a contract of employment and a document is put before me saying "Here is £100 as a loan to buy your season ticket. Will you agree to that being deducted from your wages?" and I accept, whether by signature or otherwise—that is a point we are coming to—then it is difficult to understand how that does not vary the relationship: my consideration being my going on working on those terms and the employer's being employing me on those varied terms. That is a variation of the contract of employment. I could imagine very bizarre documents that would not be, but the noble Lord the Minister did not put any of those to us. I am still mystified.

    This is an important matter and not just a technical one. It is not a technical matter because if the Bill stays in this state it will suggest to employers and their advisers that there is an important category of writing which can be the foundation of lawful deductions which, because it is in paragraph (b) is not necessarily contractual and not a variation of the contract, not within the contractual sphere. The example that the Minister gave, a loan to purchase a season ticket with a written agreement to repay by deduction, is plainly a variation of the contract of employment. So the only possibility it would seem to me, with respect, would be agreements which are collateral to the contract of employment. That is what I expected the Minister to say. If this is aimed at contracts which are collateral to the contract of employment then Clause 1(1)(b) assumes quite a serious area of danger and problem because then it can go outside the employment relationship in new ways. For the moment, hoping that the Government will be able to say something a little clearer on what are the writings which are not contractual and come within paragraph (b) and do not come within paragraph (a) when we come to the point once again on Report, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 4 not moved.]

    5 p.m.

    Page 1, line 14, after ("signified") insert ("to the employer").

    The noble Lord said: In moving Amendment No. 5, with the leave of the Committee I shall also speak to Amendment No. 6. There are two very short points here. They both relate to paragraph ( b) and they may be put in this way. We are now on the writing that is not contractual, which is within paragraph (b), and not within paragraph (a), by which the worker signifies his assent.

    First, in signifying assent, will he not sign the document? If it is not signed, will there not be uncertainty about his assent, his "agreement or consent", as the paragraph has it? So would it not be better to have it signed, to require signature? The Government are concerned about uncertainty. We heard that in relation to Amendment No. 1. Surely signature should be required.

    With regard to the first and main amendment that I am moving, since the worker is so signifying his consent, to whom is he signifying it? Everyone will assume that he is signifying his assent to the employer. But that is not what the paragraph says. That is a much more serious problem because one can well imagine a document which is proffered by the worker to someone else or perhaps a document proffered by someone else, perhaps a customer or perhaps someone in a commercial relationship, to the worker and that later being relied upon by the employer and the worker saying, "I didn't signify my assent to you in that document".

    Many such situations can be imagined. They would always be unusual ones, but the law is concerned with the unusual situation; the law is concerned with the pathological rather then the normal. Therefore, in order to avoid uncertainty, will the Government consider perhaps asking that in paragraph ( b) the writing, the written document, should be something which signifies consent to the employer specifically and clearly. I beg to move.

    Both these amendments seek to change the provision in Clause 1(1) that a deduction is authorised if the worker,

    "has previously signified in writing his agreement or consent to the making of it".
    Amendment No. 5 requires that the worker has signified his agreement "to the employer". But the employer could not make a deduction authorised by this provision unless he knew that the worker has signified his consent. So the worker must in practice signify consent to the employer or to a third party, but at the same time informing the employer of this consent, which surely amounts to the same thing. If the worker gave consent to a third party but neglected to inform the employer, the employer obviously could not make a deduction authorised by such a consent. I assure the Committee that the additional words in Amendment No. 5 add nothing in that context of practical value.

    Amendment No. 6 requires the worker to sign the agreement or consent he has given in writing. But the clause already requires the worker to give his consent in writing, which means that the worker must write a consent or sign a consent written by someone else. I see no reason to say that a consent written out by the worker but not signed is not a valid consent, and the more complicated we make these provisions, the more Likely it is that an employer will trip up on a small technicality and find himself having to repay to the worker a perfectly justifiable deduction from wages. I believe that these amendments add nothing and, arguably, create a rather confused Subsection. I hope that the noble Lord will not press them.

    Sometimes I think it difficult to make these subsections rather more confused than they are, but no doubt if we have achieved that, it has not been a very good step to take. The noble Lord the Minister's objection to the amendments seems to be that they change the provisions of the Bill. That, of course, is the objective of amendments to a Bill. Let us take the two examples that he gave, because they are important. He said —and I follow him a long way—that the agreement must be signified in such a way that the employer knows about it. So it can either be signified to the employer or to a third party and, so long as the employer knows about it, then that is good enough. Well, if the employee does not inform the employer, that he says, would create a problem.

    But let us suppose that the third party then informed the employer. The Minister's example has to have added to it the rider that if a third party informed the employer then, on his hypothesis, that would satisfy paragraph (b). How uncertain! The noble Lord the Minister ended up by saying that in practice therefore it would be all right. Every time you hear the draftsman of a clause say, "Oh, in practice, it will be all right", you can be sure that there is something wrong with the clause. No one should ever have to defend a clause with the words, "If it is not right on paper, it will be all right in practice". A clause should be clear, a clause should cut out all possible—it cannot ever cut out all—predictable uncertainties. And there are two here.

    The first the noble Lord did not meet—except merely to say that it would be all right in practice. As for the second, the noble Lord the Minister says that the worker must sign a document drawn up by someone else—I accept that—or draw up his own document which he need not sign. Why not? Why not say that it should be signed? Then everyone would know where they stand. For example, we have a document drawn up by, say, a noble Lord. I say, "This is your document". He says, "But I haven't signed it. It's not my handwriting". An element of uncertainty immediately appears.

    I understand the point that the noble Lord is trying to make. I think it will generally be a matter of fact whether or not the employee actually wrote out the document concerned, if he did not sign it. It would be presumed generally in such circumstances—and I guess that they will be pretty unusual ones—that he had written it out in the presence of his employer who therefore knew that it was his document and that he was thereby assenting to the actions to which this provision applied. I understand the anxiety in the noble Lord's mind on this matter. If the noble Lord will allow me, perhaps I may look into this a little further, particularly in the context of a document which the employee has written out himself, to see whether there is any way in which I can meet the noble Lord's anxiety.

    I am glad to have that qualified assurance, as perhaps I should call it, from the noble Lord the Minister and on that basis I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendments Nos. 6 and 7 not moved.]

    Page 1, line 15, at end insert—

    ("and unless the deduction is made by reason of dishonesty, default or other conduct on the part of the worker.").

    The noble Lord said: I beg to move Amendment No. 8, which stands in my name and in the names of my noble friends Lord Wedderburn of Charlton and Lord McCarthy. I think it would be convenient to take with this amendment Amendments Nos. 29 and 30. As I read the Bill, Clause 1 as it stands gives the employer carte blanche to make deductions from an employee's wages provided that the employee has previously signified his consent or agreement in writing. Those deductions can arise not from any action on the part of the worker or employee himself but from action on the part of others. That is the reason for this amendment.

    Once the employee has made his agreement he cannot retract from that; and we must bear in mind that the employee probably made that agreement at the commencement of his employment and, once having made it, it is unlikely that he will be able to alter it unless there is a provision for review within the agreement or if the employer would himself agree or perhaps if the employer gave the employee the right to renegotiate the agreement without fear of victimisation or dismissal.

    Clearly, as the noble and learned Lord, Lord Denning, pointed out in our first debate, the employee is put in an impossibly weak position when he is applying for a job or when he is starting his job. The employer consequently is put in an unacceptably strong position. For a youngster or a person who has been unemployed for a long period to be asked to sign such an agreement before he knows the implications and what his job entails is a shameful strengthening of the employer's position and a weakening of that of the employee. But once he has signed the agreement the employee is trapped. He has not realised, and probably will not realise until he begins work, that his employer can fine him not only for his own dishonesty or default or indeed for any conduct on his own part but also for such behaviour of others over whose actions he has no control.

    We have heard, for example, of the case of the attendant at a petrol station. My noble friend Lord Wedderburn of Charlton and the noble Lord, Lord Coleraine, referred to cases of forecourt attendants. We heard of the case of a petrol station attendant controlling perhaps six pumps. It is no easy task during a busy period to control six pumps. Yet if a dishonest motorist fills his tank and roars off without paying and the attendant fails to note his number—which in any case may be obscured by dirt or, at night, may not be properly illuminated — the poor attendant, under Clause 1 of this Bill, if the employer so decides and the employee has agreed at the beginning of this employment, has to pay up for a dishonest motorist clearing off without paying for his petrol. He is being punished not for his own dishonesty but for the dishonesty of someone else. Such a situation is unfair and unjust. After all, it is not really the responsibility of the employee to insure his employer against the thefts of others but, as the clause stands, that is precisely what employees can be required to do.

    That is not all. It will be possible, particularly in respect of stock discrepancies, for an employer to fine his employees for the dishonesty, misdemeanours and inefficiencies of others, perhaps even of himself. Certainly it will be all too easy for an employer to be lax in the matter of proper control mechanisms if any losses are to be made up by his employees. Why in such circumstances should the employer put himself to the trouble and expense of imposing proper control disciplines if in fact he can draw money at will from his employees?

    This clause and this Bill are heavily weighted in favour of the employers and against the employees. They penalise financially the poorest section of the workforce and those whose very status and occupation indicate that they need most protection. Our amendment seeks to somewhat redress the balance between employer and employee and to protect the weakest, in bargaining terms, among the country's workforce. I commend the amendment to the Committee and I beg to move.

    The effect of this Amendment, No. 8, will be to add a further restriction on contractual or agreed deductions or payments. It would ban deductions that are not made by reason of dishonesty, default or other misconduct on the part of the worker. This would ban a great many perfectly reasonable deductions: for example, to recover loans or to pay subscriptions to a company's social club.

    Under the Bill as it stands, the worker can be made to compensate the employer for a loss or shortage only if the worker has a contractual responsibility for the loss or shortage; that is, if his contract makes clear that he can be asked to compensate the employer for the loss or shortage. This is clear law and it is reasonable that the parties should agree their own rules in the contract, and stick to them. It is quite reasonable that where a worker has accepted a contractual responsibility for losses or for the cash that is the lifeline of the business, he should meet such loses or shortages.

    The Government have considered these amendments carefully but we have concluded that they would lead to uncertainty and complexity and would possibly cost jobs. The amendments would require the employer to seek to determine responsibility in fact for losses and shortages, rather than simply agreeing with the worker to make a deduction and drawing a line under the matter. This might make the employer, faced with continuing unexplained shortages that he had to meet as he could not prove dishonesty, more likely simply to dismiss the worker concerned.

    The amendments would lead to complex and lengthy tribunal cases, investigating who was in fact responsible for particular losses or shortages. The more we complicate the Bill with statutory constraints on the ability of employers to offer and workers to accept jobs on terms they can agree, the more likely it is that the number of jobs on offer will be reduced. I ask the Committee to accept that, however well-intentioned, the amendments could lead to complex-ity in law and to the loss of jobs.

    5.15 p.m.

    I have some sympathy with this amendment. There is a widely-held view that any deductions for cash or stock deficiencies are outmoded and should be replaced by better management and better methods of control. I think that was one of the points that the noble Lord, Lord Stoddart of Swindon, was making. My fear is that incompetent management may seek to hide that incompetence at the expense of the employees. Under the Bill it is possible for poor management to make deductions from wages rather than carrying out sound practices such as, for example, moving employees thought to be responsible for deficiencies in cash or stock from one shift to another. Our aim in the long term should surely be to get employers to accept that it is their responsibility to establish procedures under which their employees are protected from what may be the misdeeds of others, rather than taking refuge in penalising people who may not themselves be at fault.

    I am in a difficulty here because, as I have already indicated in the general discussion on the first two amendments, I am not happy, any more than is the Minister, about doing something (except in the most exceptional circumstances) which violates, as it were, the contract between the employer and the employee. I rather hope that in those circumstances this particular amendment will not be pressed but that the thought which underlies it may perhaps be introduced at some later stage when I may find it easier to support it.

    I am afraid that I do not support the amendment. It is not wise to put rigid rules such as this into the statute itself. As I indicated earlier, it is really much better for there to be a code of practice or code of guidance so that the matter may be considered as to what is fair and reasonable in all the circumstances. I hope the tribunal will be sufficiently interested and have wide enough powers to decide what is fair and reasonable. I would not hamper it by having through-out this Bill rigid rules laid down for it, or for the employer, to operate on.

    Very briefly, may I say that I would not wish it to be assumed that silence on these Benches implies, in any sense, acceptance of the statements or unsupported assertions made by the Minister; for example, the reiteration of the assertion that this measure is designed to produce jobs. There is not a shred of evidence that measures of this kind defend jobs. If his argument is that this measure is necessary to defend the job of a defaulter who other-wise might be taken to a tribunal, the answer is that if there is dishonesty his job should be at stake. If there is alleged dishonesty, he should have the right to go to a tribunal and defend himself there. I make the point merely because, if the Minister repeats something many times, that does not mean that we are accepting the basis of his argument.

    What the Minister said is borne out every day with people who have to run businesses, particularly small businesses. When one is thinking of opening a department in another town, particularly when people have to handle money and one has to pay for the stock which is to be put into the shop, one must be satisfied with the people who will be handling money without day-to-day supervision, because one cannot always transfer top, responsible management to a new department in another town. The employer must feel that he has some sanction which will ensure that the business is being properly run, as regards the cash that comes over the counter.

    The arrangement that you come to, perfectly properly, is that if the money taken does not conform with the normal percentages of the other branches, and if there are no circumstances which make that new branch different from the others, the employee knows that he will be responsible for any discrepancies that cannot be accounted for. That makes him that much more efficient. If you do not have that sanction, you think twice about risking your capital in the stock, in the rent and in all the other things that go with opening up new premises. That is common form.

    I am interested, too, in a group of hotels where people are in charge of various departments and cash is coming in. If the money taken at the door for a dance, where there is no real check other than the tickets that have been handed in, is short somebody is responsible for the discrepancy. The people who take on that responsibility know that and they are that much more keen to see that the takings at the door conform with the tickets. If there are special circumstances, such as rowdyism, an employer takes that into account.

    However, I do not think there is any need for the state to come in on this. There is no need for a statute, which means all kinds of pettifogging forms having to be filled in and procedures having to be followed. The Minister is absolutely right. I have great respect for the noble Lord who has just spoken as a trade union leader. He knows his men and it is right that he should want to defend them from any kind of interference by anybody. But I am on the other side of the counter and I know that, before you take a risk and put in investments, you want certain protections. This is a very sensible one which you enter into with the employee concerned. If it is not there, it will interfere with your decision as to whether you open a department, and therefore it will interfere with the employment of certain people.

    It has been an interesting short debate. I think I can understand the reservations of the noble and learned Lord, Lord Denning, and the noble Lord, Lord Rochester. I understand their preference for the insertion of what is fair and reasonable and a code of practice. We had the opportunity to vote for just those things, but unfortunately the Committee in its wisdom or otherwise decided that it could not agree to that. Had it done so, this amendment would have been completely unnecessary and we should have certainly withdrawn it. But I understand those reservations and, in any event, I shall probably not press the amendment.

    The noble Lord, Lord Harmar-Nicholls, seems to think that employers in the retail trade, and in other such trades, should have this sanction of fining their workers, because that is what it amounts to—

    Yes, indeed. Just listen for a minute. He is proposing that there should be a sanction in those trades of a fine to be placed on the workers quite indiscriminately in respect of defalcations, shortages in the till or shortages of stock. That is what he said. I was listening to him very closely.

    The noble Lord's interpretation of what I said bears no relation at all to the words that I used. What I said—and I repeat it—was that I believe that a contract made between the employer and the employee is all that is necessary. They both agree that, in order to get the efficiency that they both need, they are prepared to pay for discrepancies which common sense shows are there. There is no question of fining anybody. The kind of interpretation which the noble Lord put on it shows the bias with which he approaches this question: that the employee can never be wrong but that there are dirty employers who always want to be wrong. That is the wrong attitude here and the noble Lord reflects it far too often. But he must not reflect it by misinterpreting my words.

    On the question of bias, I think that it is a case of the pot calling the kettle black. The noble Lord is very well known for his bias in many respects, and for his forthright speaking in the House of Lords, which is particularly what we want. I understood perfectly what he said about the contract of employment, but I thought I explained earlier the difficulties that a worker may very well be in when he signs that contract of employment. He is at that moment perhaps starting a job without knowing what it entails, or he may be applying for a job but before he can get it he will have to sign the contract. Therefore he is in a weak position, at that point in time, in relation to his employer. That is what I was getting at, and in those circumstances it is wrong. It militates against the interests of the employee, and in favour of the employer, if he is under that contract subject to being fined for defalcations and shortages which may not be his own fault.

    The noble Lord asks: who is going to start a small business or department in those circumstances? Marks and Spencer did and they employed workers under the protection of the Truck Acts. Today, Marks and Spencer see no reason to fine their employees for shortages and what have you. The reason they do not is that they manage their business properly and ensure that there is proper control, both of cash and of stock. It is made clear to their workers that any of them who are found to be dishonest will no longer be welcome to be employed by Marks and Spencer.

    Although the noble Lord the Minister said that condoning dishonesty by punishing collectively is better than the sack, from the point of view of the business and from the point of view of his fellow workers it is much better that a dishonest worker should be sacked. It is a protection for the employer and it is a protection for the other people who are employed. That is the way to run a business. I therefore think that the noble Lord, in suggesting and bringing up this question of dismissal, is guilty of perhaps misleading himself and by misleading himself is misleading the Committee. As I said, I do not intend to press this amendment at this stage, but I hope that the noble Lord, Lord Trefgarne, will ensure that the debate which has been a short but interesting one is well read in the department. It may well be that we shall come back to this matter on Report. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendments Nos. 9 to 11 not moved.]

    5.30 p.m.

    Page 2, line 3, at end insert—

    "(2A) Where an employer makes a deduction from any wages of any worker employed by him and one ground for such deduction relates to any loss or any event causing, or likely to cause, loss, to the employer, which has been, or which it is reasonable to believe has been, occasioned by the dishonest conduct of some other person without default on the worker's part, the deduction shall not exceed one-twentieth of the net amount of the wages payable to the worker on that day.

    (2B) Where an employer receives a payment from a worker employed by him and one ground for the payment relates to any loss or any event causing or likely to cause loss, to the employer which has been or which it is reasonable to believe has been, occasioned by the dishonest conduct of some other person, without default on the workers part, the payment shall not exceed one-twentieth of the net amount of the wages payable to the worker on that day.").

    The noble Lord said: This amendment is one more attempt to civilise the operation of Clause 1. As has been said by my noble friends on this side of the Committee, if our Amendment No. 1, or if Amendment No. 2 which was moved by the noble Lord, Lord Rochester, on the reintroduction of the reasonability test, had been passed by the Committee, all these amendments would not need to be moved. It is precisely because the Government now take power or now wish to give employers power to dismiss unreasonably and unfairly in any circumstances that we find it necessary to move these amendments. In answer to the noble Lord, Lord Harmar-Nicholls, I have to say that we are not asking for any category of new and extended rights.

    It is our central submission today that the workers so far as they were covered were better off and would be better off with the 1896 Act than they will be under this Bill. We are not asking for anything that has not existed since 1896. In effect, we are not asking for the same degree of protection. We are trying to mitigate the consequences of what the Government are doing, particularly because they will not accept the retention of the fair and reasonable test. There is nothing new in what we are trying to seek.

    So far we have not had any success not simply on the reasonability test but also on the small and minor points which my noble friends have sought to introduce to the Committee. What we are trying to do in this similarly minor amendment is to limit the rate of repayment to one-twentieth of the wages due on that day in circumstances in,

    "which it is reasonable to believe",

    that the deduction,

    "has been occasioned by the dishonest conduct of some other person without default on the worker's part".

    In other words, this amendment bites only where the deduction arises as a result of somebody else's conduct and not the conduct of the worker concerned, where the employer cannot show that the worker has been dishonest or in some other way in default. In those circumstances, because noble Lords opposite would not accept any of our previous amendments where we wished to restrict the employer's rights to do these things by reference to dishonesty and so on, we are asking them to accept some small reduction on the rate of return.

    There are many reasons one could give why this is a modest thing to ask. But I would suggest that the Government themselves accept the principle behind this amendment because the Government propose in Clause 2 in particular that where workers sell directly to the public or to fellow workers or to other individuals in their personal capacities, there shall be a limit of one-tenth—that is what Clause 2(1) says—and that the rate of repayment,

    "shall not exceed one-tenth of the gross amount of the wages payable to the worker on that day",

    whether it is his fault or not. We say that if in those circumstances the Government are prepared to accept a limit of one-tenth, surely in the rather more general circumstances of this clause they would be prepared to accept the limit of one-twentieth. I beg to move.

    Under the Bill as it stands a worker can be made to compensate the employer for a loss or shortage only if the worker has a contractual responsibility for the loss or shortage (for example, his contract makes clear that he can be asked to compensate the employer for that loss or shortage). This is clear law and it is reasonable that the parties should agree their own rules in the contract and stick to them. It is quite reasonable that where a worker has accepted a contractual responsibility for losses, or for the cash that is the lifeline of the business, he should meet such losses or shortages.

    We have considered this amendment very carefully but have concluded that it would lead to uncertainty and complexity. The amendment would require the employer to seek to determine responsibility in fact for losses and shortages rather than simply agreeing with the worker to make a deduction and drawing a line under the matter. This might make the employer, faced with continuing unexplained shortages that he had to meet as he could not prove dishonesty, more likely simply to dismiss the worker concerned. The amendment would lead to complex and lengthy tribunal cases investigating who was in fact responsible for particular losses or shortages.

    The 10 per cent. limit on deductions on account of cash shortages or stock deficiencies is a response to what emerged as a particular problem area in the consultation exercises conducted in 1983 and 1984. We consulted on the 10 per cent. figure, which proved acceptable. There is no evidence of any more general problem and no reason for the 5 per cent. limit proposed in this amendment. Even if the principle that workers could not be asked to accept a contractual responsibility unconstrained by various statutory controls on the behaviour of the employer were accepted, these particular controls seem to have no great merit. Why a 5 per cent. limit on wages when someone else is responsible for the loss? I think it would be wisest just to leave matters to the parties as is proposed in the Bill.

    The noble Lord really is amazing. If he wants to say that he should like our amendment to propose one-fifth rather than one-twentieth, of course we will do that; but otherwise what he says is quite irrelevant. We say one-twentieth because we are trying to be reasonable. It is not an argument against our reasonability for the noble Lord to say that we should have been unreasonable or less reasonable.

    Then he says that he thinks there are circumstances in which when stoppages occur as a result of cash loss or stock loss one-tenth is a reasonable figure; but where deductions arise not from cash or stock but from some other cause no figure at all is reasonable. What possible argument can there be for that? I expect the noble Lord to make the arguments about uncertainty. I expect him to tell me that otherwise employers will not be able to employ people. I think it is time he set that to music.

    Amendment, by leave, withdrawn.

    [ Amendments Nos. 13 and 14 not moved.]

    Page 2, line 14, after ("more") insert ("express").

    The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendment No. 16 as both amendments refer to the same point.

    We are now, as my noble friends and I see it, faced with a Bill where every part of the dice is loaded against the worker, at any rate against the worker who does not have strong union organisation. The point has not yet been made, but what spin-off effects this Bill will have in those areas where the union is organised among workers involved has yet to be investigated. No doubt at some point the Government will tell us what they expect there.

    These are the circumstances of the vulnerable and isolated worker. He is now to be bound by contract or by a written document signifying his assent, with a certain number of uncertainties. We hope the Government will say there is at least a document that he has signed. We then come to what is meant by his contract—the "relevant provision" in subsection (3). The terms which are within the relevant provisions are either express or implied. If the Government are concerned about certainty and uncertainty, such a phrase in a statute of this kind is a recipe for disaster. The Government must take the responsibility that it is not just a disaster in the abstract but a disaster for the worker because it will always operate against him on the structure that we now have.

    Lawyers know very well, and laymen know even better if they have been involved in litigation (and many laymen know as well as lawyers) that terms implied into contracts by tribunals or the courts, and especially appellate courts, are often very difficult to predict. There are terms implied in fact; there are terms implied in law; there are terms implied because of that well-known test, "An officious bystander would think that the parties intended to include them although they did not include them". There are terms implied to give what the court thinks is, in the old phrase, "business efficacy" to the contract; there are terms implied by some judges because, especially today, they think it is reasonable for them to be implied.

    The Government, who eschewed "reasonableness" on our Amendment No. 1, specifically include implied terms and bring in reasonableness in litigation by another door. There are terms implied because of a custom or usage of the trade; and there are terms implied by other judges because they see them as part of the relationship between the parties and not coming under any of the other heads. Those broad categories only begin to elucidate the complexities of the implied terms.

    Implied terms are nearly always the cause of controversy. For example, in 1931 the Court of Appeal implied a term allowing an employer in Lancashire to deduct for bad workmanship because, the court said, that was a normal part of Lancashire cotton weaving. One of the Lord Justices came from the area. He believed that, even if the workers had never heard of it, that had to be implied into the contract.

    Many Members of the Committee will have seen, a little outside the area, the decision on 30th May this year about what is implied in the contract of a teacher. That was a matter of great dispute between the parties. The learned judge in the High Court held that the contract of employment in a professional capacity would not normally be expected to detail all the obligations but that it must include whatever could be seen as a professional obligation, though not referred to. He thought that meant the standards set both by the profession and by public expectation. I appreciate that is not about deductions but it gives some illustration of the kind of controversy and complexity which always surrounds implied terms if an argument breaks out between the parties. Whether those decisions are right or wrong does not matter, but they illustrate the uncertainty.

    Why let lawyers litigate when—and the Government say this is what they want—there should be clarity in the contractual arrangement? Why have the matter brought to implied terms? Indeed, the matter is to be put into writing in one way or another; In subsection (3)( a) and ( b) one would expect something in writing if only because (and this was an amendment that we did not move but which referred to the issue that most employees have written particulars of their employment) one would hope to find a reference there. So why the insistence that we must have implied terms to deal only with the situation of an oral agreement? That would seem very undesirable.

    Consent under Clause 1(1)( b) must be in writing. Why should we not have similar clarity in the Bill, even on the basis of the Government's logic and not on the basis of any of the arguments we have hitherto advanced? Surely the Government will consider again whether implied terms should be kept out and that clarity between the parties must at least make the deduction clause an express term of the contract—that refers to the first amendment—and leave out reference to implied terms because that will only increase uncertainty and establish an area for new controversy which would not otherwise be there. I beg to move.

    5.45 p.m.

    I should like a little more clarification from the noble Lord, Lord Wedderburn, because I do not altogether understand the significance which is attached in this amendment to the distinction between an express and an implied term of contract; and I must admit to being something of a layman in these matters. If, for example, there is a collective agreement which sets out, say, a disciplinary procedure, that could lead to pay being withheld and that would surely be recognised (would it not?) by any court or tribunal as a valid implied term of the employee's contract.

    Moreover, as I understand the Bill, it protects employees against arbitrary wage deductions based on implied terms because the employer has to tell the employee that such a term exists and give him a written explanation of what it means before making any deduction. The employee also has the fallback remedy to which I suppose we shall come later. If he believes there is no implied term in his contract he can complain to an industrial tribunal, which will decide whether there is such a term.

    It may be that I have misunderstood what the noble Lord has in mind or that there is much more to it than what I have seen, but I felt that I should give expression to that doubt.

    I am afraid I do not support the amendment. When speaking about terms of a contract we in the law know perfectly well that they can be express or implied, or they can be oral or in writing; and we always manage to deal with them quite well. In the old days we had requirements for the terms to be in writing, but we have lost all that and we can have them quite generally, as the words are in the Bill. Therefore I do not support the amendment.

    Having listened to the noble and learned Lord, I am not sure there is any more I need say; but perhaps I should explain that under the Bill as drafted the employer will have to give the worker a copy or a written explanation of any terms authorising a deduction from wages prior to the making of a deduction authorised by them. The important objective is to ensure that the worker knows of the terms before any deduction is made on account of them.

    Taken with Clause 1(4), which deals with retrospective amendments of the contract, these are strong controls. Proposals to strengthen these controls must be balanced against the added complexity for the employer, and the danger of creating a situation where he can easily trip over a technicality. The amendment would rule out implied terms of contracts from being terms which could authorise a deduction.

    The amendment seeks to bar the implied terms of contracts from being terms which, as I say, could authorise a deduction. I understand that it is common for terms of contracts to be implied from collective agreements with trade unions, custom and practice in the industry, or company rule books. A relevant example would be a term implied from a company disciplinary procedure which might itself be part of a collective agreement. There seems to be the thought behind the amendment that there is something undesirable about implied terms. That is not the case; but in any event, since the Bill makes it clear that the worker must be given a written explanation of the implied term, he will not remain in ignorance of the term simply because it is implied. I hope that in the light of this explanation the noble Lord will not wish to press the amendment.

    If I do not press the amendment, I shall certainly press the argument, and it is a matter to which we may come back on Report because, with great respect, a number of fallacious concepts seem to be floating about in the Committee. It is perhaps the hour of the day. For example, there is a distinction made between terms which are implied in a contract and terms which are incorporated into a contract by reference.

    So far as concerns collective agreements, the normal position is that the statement of written particulars of the employee will refer to the collective agreement, and that is not an implied term. I know of no authority to say that that is an implied term. It is a term incorporated by reference. If the two categories alone are permitted, it is more in the camp of "express" than anything like that of "implied". A company disciplinary procedure incorporated by written particulars or other document or express reference by the contract of employment is of course incorporated.

    It is true that on occasion when an employer does not get his written particulars right, or when he is slovenly about the document which he is obliged under Section 1 of the Employment Protection (Consolidation) Act to give to each employee, the courts sometimes have to bend their minds to implying other documents—be they collective agreements or works rules—when it comes to the contract of employment, and they have frequently done so to the disadvantage of employees in the last decade.

    It is exactly that fact to which my noble friends and I object. We object to the fact that the worker will not have the certainty of finding it in his written particulars or other document, be it under this Bill or under the Employment Protection (Consolidation) Act, and there will plainly be a great deal of overlapping of pieces of paper in that respect to which no attention appears to have been given. He is entitled to the certainty of something written down which will attract his attention. But if one is saying that we can use the implied term where the employer has been slovenly in his practice, and where he cannot even be bothered to give to the employee the proper written particulars to refer him to the documents where the deduction clause may be found and that that is where the implied term will be used, of course it will. That is precisely the matter to which we object in this amendment.

    I say with great respect to the noble and learned Lord that the idea that just because most statutes and most judgments use the phrase,
    "terms of a contract express or implied, oral or in writing",
    then we have to use it here seems to me not to follow at all. Indeed, the implied term has expanded its scope in the contract of employment in the last 10 years—it is common knowledge—to the disadvantage of workers. In cases such as the notorious Hollister decision the courts have expanded the implied term "to co-operate" on the workers' side in such a way that, despite one or two judgments putting obligations on employers, managerial prerogative has been expanded in business reorganisation in the common law to a very large extent.

    If the noble Lord, Lord Trefgarne, says that it will be all right because the worker will have something written down and he must know of it under this Bill, what is the point of the implied term?—because then presumably this will be covered by the Bill without the implied term and a written explanation will be enough.

    I confidently expect that when we look at Hansard it will be found that there is something in the point that implied terms will operate exactly as I have outlined, when this Bill even on its own premises, should not encourage the practice of bad management. That is a situation where management has not given to workers in advance the documentary evidence of their obligations to which they are entitled. It is precisely there that the implied term will be used and, on the structure of the Bill, must be used. We ought to look again at the matter when we see the nature of our debate today. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 16 not moved.]

    Page 2, line 19, after ("contract") insert ("or any such provisions").

    The noble Lord said: I wonder whether I may put this amendment very briefly to the noble Lord the Minister because I think that perhaps there is no difference of principle, especially in the light of a phrase that he used when speaking on the last amendment. I am moving Amendment No. 18 and for convenience I shall speak also to Amendments Nos. 19 and 20.

    The point can be put simply. The noble Lord the Minister, as I understood him, remarked that the Bill prevented certain types of retrospective deduction. It is fairly obvious that on anybody's premises retrospective deduction is not really a very good idea. However, as I understand it, subsection (4) allows for the prohibition of variations of the contract under Clause l(l)( a) and all types of written consent under Clause 1(1)( b), but that does not cover the case of a contract which itself permitted retrospection.

    I should like to give an example. Let us suppose that a young man helps out on Saturdays in a computer shop; and any Members of the Committee who have had any contacts with computer shops will know that the best time to go to these places is on a Saturday when the teenagers are there, because they know all about computers. So the young man helps out from time to time and then he is taken on as a part-time employee. Let us suppose that there is a contract in that clause which allows for deductions for any losses which occur in any period during which he has worked there. That would not be a variation. It is an original contract, and as I understand it it will not be covered by Clause 1(4). It is a contract which provides for the possibility of retrospective deduction without variation and of course does not come under the heading of the written consent.

    I have other examples, but I shall leave it at that. In the hope that the Minister will say that he will take this amendment away and look again at Clause 1 (4) I beg to move.

    Clause 1(4) prevents employers from varying the contract or obtaining the consent of the worker to the making of a deduction in respect of a particular event and then deducting in respect of an earlier event. For example, it would be unlawful for an employer to vary the contract or obtain consent to his making deductions for lateness, and then to institute deductions for incidents of lateness that had occurred some months previously.

    I must assure the Committee that Amendments Nos. 18 and 20 are of no effect, but that Amendment No. 18 amends the reference to relevant provisions in Clause 1(4) to cover all provisions of a contract, and since deductions can be authorised only by relevant provisions as defined in Clause 1(3), this is of no effect. Amendment No. 20 simply says that deductions or receipts covered by the subsection are unlawful, which is already the case. Amendment No. 19 would have the effect that an employer could not enter into a contract with the worker and then make a deduction from his wages on account of a matter that occurred before the contract was entered into.

    I wonder how real is the problem that the amendment seeks to deal with. If an employer agrees to take on a worker for the first time, what event might there be that happened before the contract was forged in respect of which the employer might want to make deductions? It cannot be anything to do with the employment relationship, as there was no employment relationship.

    The amendment might have some unfortunate side-effects. It would debar an employer from reaching an agreement to take on a worker, subject to the worker agreeing to have deductions from his wages in respect of something that had already happened before the employment commenced; for example, the individual had borrowed money from the employer before he worked for him or had run up a debt with him as a customer of his business.

    The problem that the clause deals with is where the employer agrees terms, seeks to vary them and then makes a retrospective deduction in respect of an event related to the employment relationship that occurred before the variation. This is rather different from employer and worker agreeing terms at the outset of employment that incude provisions for deductions in respect of past events when the worker was not employed but was perhaps a customer. I think that the amendment adds little by way of extra protection, at a possible cost of some unintended side-effects, and I hope that the noble Lord will not wish to press it.

    6 p.m.

    One of the problems with these amendments and with the noble Lord's response is that many of them relate to apparently small points, but they are real ones. Each one, it is argued, will either be all right in practice or will have no effect.

    If I may illustrate, the Minister by advancing up the flanks, as it were, has forsaken his mid-field. He says that there must be the possibility in a contract to allow for the recovery of money borrowed from the employer or debts incurred previously by way of business; so the principle of retrospection is not to be absolute. I can see some force in that. One might wish to take account of that, but the Minister will not allow variations for that. Why not? The provision does not allow variations for money borrowed, debts run up in business, and so on, previously. On the Minister's logic he ought to allow variations for that.

    I merely take two points. Secondly, the Minister asks how real all this is. It is very real. The example that I gave was a simple one of a youngster working in a shop, just helping out and then being taken on. But we are dealing especially with the part-time employee, the short-term contract, the casual contract and all the other forms of a typical and marginal employment which are now being analysed by the academics but which are not doing a great deal of good for some of the workers, compared to their need for full-time and secure employment. We rarely get the numbers broken down into the jobs that are part time and insecure.

    The point about short-term or casual contracts is that there may well be a short-term contract for a few days and then for a week or two. Those would be broken up and they would be separate contracts. They would not fall under the ban of variation. They are not variations one of another; they are short-term and separate contracts, except that in some such cases the courts—and this is an area of complete confusion in case law—imply what they call a global contract to cover the relationship. But in the majority of such cases there are fragmented, short-term relationships for such workers; fishermen, for example. There have been cases recently where people have been held to have only short-term contracts, interspersed with periods away.

    I take the Minister's point that different types of debt may well be considered separately. But no kind of retrospection is to be forbidden there. It is not within the Government's logic to permit restrospection there, for all types of debt anyway, and to ban it for variation. I ask the Minister whether he will say that he will look at that again. In practical terms that could be an important point. We all know that deductions are often made in respect of stock losses—perhaps a little less so for cash shortages—which take some time to come to light. Periods of time matter in the relationship between the parties. In asking leave to withdraw the amendment, I hope that the noble Lord will consider carefully what result subsection (4) as it stands will have.

    Before the noble Lord seeks permission to withdraw the amendment, he has asked me specifically whether we will look at the matter again. I am bound to say that I cannot see much scope for that. However, I wish to be as constructive as 1 can be. I think that he is asking us to look at the possibility of distinguishing among different kinds of debt, where some would be deducted retrospectively and others would not. I believe that that presents considerable difficulties of definition. Nonetheless I shall ask for the matter to be looked at, but, to be frank, not with much expectation of success.

    Amendment, by leave, withdrawn.

    [ Amendments Nos. 19 to 21 not moved.]

    Page 3, line 12, after ("person") insert ("(not being a person employed by, or directly or indirectly under the control of. the employer)").

    The noble Lord said: This amendment is concerned with Clause 1(5)( d), which is already known by those who know the Bill—and they are few so far but there will be more—as the check-off clause. It takes out of all the controls of this part of the Bill certain deductions made in accordance with its terms, with the agreement of the worker, which are to be deducted and paid over to a third person.

    Many people concerned with employment matters will immediately think of the check-off; that is to say, the arrangement whereby the employer deducts a portion of wages due to the worker who is a union member and pays it over to the trade union. It is an arrangement which in terms of stability and good industrial relations has an important place in a number of industries and indeed now in a number of services and in the public sector.

    Clause 1(5), however, goes rather further. It relieves the employer of the prohibition on deductions in subsection (1) so that he is relatively free, although it then reimposes the requirement for consent. As it stands, this provision in the clause relieves the employer of the requirement to gain consent, whatever the relationship of the third party to him. It does not seem to us that that can be right.

    Some aspects of the Truck Acts originated in the "tommy shop" system. I am not suggesting that that would necessarily be re-created; that is, shops under the control of the employer. But would it not be desirable, as a condition of exempting the employer from the normal controls of subsection (1) and imposing merely the requirements of consent in subsection (5)( d), to insist that the third person should be independent of the employer; or should there not be some other formulation which prevented any kind of abuse in that respect? I put the point shortly, and I beg to move.

    I understand that it is common for workers to agree that the employer can deduct sums and pay them to third parties—for example, to a trade union, a charity or a social club—with the third party telling the employer how much to deduct; for example, what subscription is due. The most common example is the check-off of trade union subscriptions, the worker signing an agreement that the employer pays directly to the union subscriptions of an amount notified by the union. Such arrangements are perfectly proper, but it would be wrong, I think, if the employer was guilty of an unlawful deduction if the union got its calculations wrong.

    The amendment is clearly designed to protect the worker where the third party is employed by or controlled by the employer. The thought is, I think, that the employer could possibly instruct the third party to advise him to deduct a larger sum than was properly due, part of which was then paid back to the employer.

    I believe that the worker is already well protected. Deductions on account of those arrangements are still covered by Clause 1, if the worker has not signed his agreement to the arrangement. The protection of the worker against the abuse of that provision is that he can always withdraw his agreement. I recognise the concern that lies behind this amendment, but I think that it is unnecessary because the worker is well protected even without it.

    I hear what the noble Lord the Minister says. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    I must point out that if Amendment No. 23 is agreed to I shall be unable to call Amendments Nos. 24 and 25.

    Page 3, line 16, leave out from beginning to ("or") in line 22.

    The noble Lord said: I think that it will be convenient if I refer also to Amendments Nos. 24 and 25. They are all related to clause l(5)( e)—deductions made from workers' wages where the employee has taken part in a strike or other industrial action.

    There are three major points which support the amendments to which I am speaking and moving. First, the paragraph relieves the employer of the prohibition upon deduction in Clause 1. The first thought that comes to mind is, why? Should there be no control just because there is a strike or industrial action? One might suggest that the employer should say in advance what he will do if he intends to deduct sums for industrial action, at any rate in general terms. That might lead to a document as to his policy on the matter. However, that is not required. He is left at large.

    Secondly, as has been said in another place, it appears to be one of the Government's reasons for having the clause, that in effect it gives the employer the right in law without constraint to fine anyone who dares to take industrial action. What he can do will depend upon the state of industrial relations, trade union strength and the labour market. The Government may then say that one of the reasons for the provision is to keep strikes and industrial action away from industrial tribunals. If the deductions and fines for industrial action were covered by this Part of the Bill, complaints could be made to industrial tribunals. It has long been a policy of employment protection legislation that the controversial issue of what is a just or defensible industrial action, lock-out or strike should be kept out of industrial tribunals.

    Of course, this is the Government which invented the procedure of joinder—that the trade union can be joined in an unfair dismissal action in an industrial tribunal if it threatened to take industrial action which induced the dismissal. With those provisions, the Government pushed the justice and equity of strike action into the tribunals.

    It has been said in another place that the Government are relying upon the traditional argument—keep strikes out of the industrial tribunals. If that is so, the jurisdiction under the present law of unfair dismissal with regard to industrial action and strikes (the jurisdiction of the industrial tribunal) is destroyed under Section 62 of the 1978 Act in effect only where the employer treats all employees alike—that is to say, where he does not victimise one or some by dismissing them or refusing to re-engage them as against the others who were involved in the same industrial action or, under the amendments, the same industrial action at that establishment.

    As it stands, the Bill allows for discriminatory fines and deductions and so it is not in line with traditional policy. Amendment No. 25 is a probing amendment to ask why that should not be included. If one is to impose the traditional policy of keeping industrial tribunals out of strike issues, why do the Government not do it in the way that is traditional—by saying that can be the case where the employer treats all his workers alike?

    In other words, the clause takes a bit of the old policy and adds a bit of its own. To keep out the industrial tribunals, it excludes fines for strike action from the controls and any obligation to say in advance what the employer's policy will be with regard to that matter. I should have thought that was an arguable point on any basis. Having done that, and used the traditional policy for that, the provision does not go on to tell the employer that he will be at risk if he victimises some people as against others.

    Our amendments ask the question: why not? If the logic of the parallel with Section 62 of the 1978 Act is to be followed, surely some equity must be imposed as a price for the lifting of all the controls. There is nothing here about workers' consent. I know what the Government will say about that. They will plainly say that where a strike and industrial action are concerned the workers' consent is irrelevant.

    I should have thought that two other points would have caused the Government to look with care at the clause—first, the requirement that the employer should in some circumstances say something about his policy in writing and, secondly, the determination that if the matter is to be taken from industrial tribunals by removing it from the clause, the price should surely be that there is no unfair discrimination and victimisation merely because people have taken industrial action, which, in some countries and sometimes in this country, people like to refer to as the right to withdraw their labour.

    At present far more than anything we have so far met in the Bill, the clause not only permits but positively encourages management victimisation by way of fines and deductions of those who take part in industrial action. I know that it will be said that such people may be lucky to have their jobs back. That is the stage we have reached. We cannot accept that that is a proper piece of legislation to pass now. I do not think that it is a piece of legislation that will be found in that form in any other Western European country. In the light of these amendments, we ask the Government to look at the matter again. I beg to move.

    6.15 p.m.

    Perhaps I may just swiftly explain the objective of Clause 1(5)(e). If a worker is involved in industrial action—for example, in a go-slow or other similar action in which the worker stays at work but deliberately hampers production—the employer is often entitled to deduct something from his wages. There may be an express term in the contract that allows for that, but more often there will be an implied term in the contract that the worker does not behave in that way and that, if he does, the employer is not obliged to pay him his wages in full.

    The worker can of course go to the civil court and argue that the employer is in breach of the contract in making such a deduction. There are a number of cases where a worker has taken an employer to court and, in some instances, the courts have disagreed with the employer's interpretation of the implied term of the contract and have made an award to the worker.

    Clause 1(5)(e) leaves the existing legal situation in respect of deductions on account of the worker having taken part in industrial action broadly unchanged, Clause 1 will not apply to such deductions, so the worker's redress if he believes that the deduction is not contractually authorised is to the civil court for breach of contract rather than to an industrial tribunal. In the Government's view, it is best that contentious and difficult problems concerning deductions in disputes, where emotions may run high, remain matters for courts and not for industrial tribunals. The courts—not tribunals—are best placed to deal with such matters. Each of these amendments changes that situation. Amendment No. 23 reverses it entirely. Amendment No. 24 effectively does the same thing as a tribunal could be asked to decide if a deduction was authorised by the worker's contract. Amendment No. 25 has the effect that a tribunal could be asked to consider whether the employer had treated all workers on strike equally. It is arguable, I believe, either way, whether the employer should be prevented from being selective and from deciding to forgo his right to make deductions from some workers, although our fundamental objection to the amendment remains that these issues are best not put to tribunals at all. I believe that Clause l(5)(e) is essential and that each of these amendments destroys it or erodes it significantly.

    The noble Lord, Lord Wedderburn, was concerned to know why we should exclude deductions for strikes and industrial action. The answer is that it is partly because, as the noble Lord himself said, the scope of implied terms is often uncertain, and particularly so, I fear, in this field. The employer would have real difficulty knowing what the implied term was and would therefore be debarred from making any deduction by the technical requirement of Clause 1 (3)(b) to explain the effect of the term in writing to the worker. I hope that these difficulties will have persuaded the noble Lord that he should not press the amendment.

    I am nearly encouraged to press it, especially when the Minister, to whom I am grateful, says that deductions can be made in the case of a go-slow because it will be a term, and often an implied term, of the contract that employers are allowed to do so. As seen in the recent teachers' case, this may be difficult to interpret. But the noble Lord goes on to say that implied terms arc very difficult and that this explains why the Government have excluded the area of strikes and industrial action from the scope of Clause 1. To exclude the problems of implied terms from Clause 1 and to leave the matter to common law where one finds implied terms that are very difficult to interpret seems a curious policy to follow. The Government wish of course the employer to be in the clear, so far as this is possible, in respect of fines for industrial action. That is what they wanted; that is what they have done. It is that approach that these amendments were meant to challenge. 1 beg leave to withdraw the amendment.

    Amendment, by leave withdrawn.

    [ Amendments Nos. 24 to 26 not moved.]

    On Question, Whether Clause 1 shall stand part of the Bill?

    The Committee will not be surprised to find that we wish to oppose the Motion that the clause stand part of the Bill. I wish to say a few words about what the clause does, what the Government have said and done this afternoon and what the consequences, we believe, will be. This clause is to replace the provisions of the 20 or so Acts dealing with deductions and payments by workers with two broad tests: what is allowed and provided by the statute, and what is contained or implied in the contract. We have sought in various ways to argue that this is insufficient. We have sought to argue that it is an imperfect form of protection, in particular in relation to Section 1 of the Truck Act 1896 and most especially in relation to that part of the 1896 Act that has been represented this afternoon as the reasonability test.

    As a result, we have tried to put down 10 effective—nine of them very minor—gateways, into reasonability. We tried to get the Committee to reintroduce the reasonability test. The noble Lord, Lord Rochester, tried to get the Committee, if not to introduce it by statute, to put it in the code of practice. We tried to get the Committee to limit the authorisation of deductions to those that were contractual only. We tried in Amendment No. 5 to say that consent must be by the employer. We tried in Amendment No.8 to confine a deduction to dishonesty and default of conduct on the part of the worker. We tried in Amendment No. 10 to limit the rates of reduction. We tried in Amendment No. 15 to insist on express intent. We tried in Amendment No. 18 to limit retrospection and, in Amendment No. 22, to have a limit on what can count as a lawful third party. Finally, my noble friend Lord Wedderburn tried to limit deductions in cases of strikes in Amendment No. 23.

    What have been the Government's answers? I must be fair. Apart from the one, or perhaps one and a bit, that the noble Lord undertook to take away, to our 10 reasonable but minor ways into reasonability we have had five defences. The noble Lord has said that the amendments, or parts of the amendments, were declaratory of the Bill and therefore not necessary anyway. The noble Lord has said that even if they were not declaratory of the Bill, they would have no effect and were not required. Thirdly, he has said that they might have some effect but that they would also, unfortunately have side effects and that such side-effects could not possibly be tolerated.

    The noble Lord has said repeatedly that the amendment would foster uncertainty. Here, we have had some advance on previous statements by the Government. I congratulate the Minister. Previously, and particularly in respect of the reasons for the Government taking out the reasonability test, we had no explanation at all. The Secretary of State on Second Reading—I had intended to read out his remarks but I shall not now do so—did not really refer to the reasonability test specifically at all. He talked about the chaos and the archaic nature of the present Truck Acts, as indeed did the Minister in another place. What they are really talking about is the difficulty of doing something about restrictions on deductions by check. That may be chaotic. We are talking about stoppages. We are talking about deductions.

    For the first time, we have had some kind of defence in terms of uncertainty. We have been told about the position of the employer who would be uncertain if any of our amendments were accepted. And finally of course we have had our old friend, the employment effect. Employers would not like it. If these things were done, employers might not employ people, might employ fewer people or might dismiss people. Here, the Government ease into an area where there are a few facts. That is something that the Government do not like to do. Several surveys have been done including those by the Institute of Policy Studies and the Government's own study, Burdens on Business. These suggest overwhelmingly that when businessmen, even small businessmen are asked what it is that limits employment, their reasons—in so far as they give reasons—have nothing whatever to do with the Truck Acts. They are to do with VAT, with taxation and with all kinds of complex forms that come from the Department of Trade. Very few, if any, talk about Section 1 of the Truck Act 1896.

    Nevertheless, the Minister says that there will be an employment effect. It is not only we, on this side, who say that there is no justification for this clause or indeed for Part 1 of the Bill. Evidence has been submitted, following upon the consultative document, by the National Association of Citizens Advice Bureaux, by the law centres, by the CBI and by the Institute of Personnel Management. The general thrust of this evidence is that there is no justification for this part of the Bill. There may be some justification for the chaos of check restrictions. But there has been no substantial evidence against Section 1 of the Truck Act 1896. We have therefore to ask the Committee to oppose this clause. We do not say that, in destroying the unfair and unreasonable provisions of the 1896 Act, that the Government want to be unfair and unreasonable. We do not say that the Government believe that the result will be that employers will be unfair and unreasonable. We say that, in the interests of their ideology and their friends, they do not care whether or not they are unfair or unreasonable.

    6.30 p.m.

    I rise to support my noble friend who is moving that this clause shall not stand part of the Bill.

    As with the Shops Bill, we are discussing a situation which applies to employees who are in a particularly vulnerable situation. The Victorians believed that such people had to be protected. I remind Members of the Committee opposite that Disraeli played some part in that, because a long time ago, when I was at school, I remember reading his book, Sybil—the Story of Two Nations. I can still remember the description of the "tommy shops" and the operation of the "tommy shops" which eventually led to the Truck Acts legislation.

    There was an acceptance then, and there should be now, that there was a parliamentary obligation to protect those who are most vulnerable. I believe that it is partly because the Government have not recently been seen to discharge that duty that the Shops Bill ultimately failed to pass, and that the Government were defeated in Committee in your Lordships' House last night on some key sections of the Social Security Bill.

    I believe it was claimed by the Minister in another place that the new provisions on deductions represent a step forward for vulnerable employees. It does not appear to us on these Benches to be so. It is true that it abolishes the distinctions between workers. The Truck Acts were limited in their cover to manual workers and I know from my own experience as an official for a white-collar union that they did not apply to white-collar employees. Nevertheless, the mere fact that the Truck Acts were there inhibited employers when it came to making deductions, even as far as white-collar employees were concerned. There is no requirement now because we failed to get the amendment that any deductions had to be fair and reasonable past your Lordships' Committee. That of course was a key element in the older legislation.

    There have been a number of cases recently which have been referred to in the Committee, and I do not want to go over that. However, I want to remind noble Lords that many of the people who operate as cashiers at petrol stations—and their cases have been referred to—are often from ethnic minorities with, in many cases, a very inadequate grasp of English. To suggest that these employees, who no doubt are often happy to have any sort of job at all, are capable of negotiating a contract about deductions and understanding what it means, is quite frankly absurd. Moreover, because of the transitory nature of much of this work, which has already been referred to in the debate, and the relative isolation of the people who do it, they are not particularly easy to organise into unions.

    In such circumstances, if they cannot protect themselves, it is up to Parliament to do so. Just how necessary this protection is can be gleaned from some of the reports produced by some law centres. Fortunately, some employees who felt themselves to be victimised have been able to have recourse to such centres and law centres have been able to assist them in a number of cases. I should like to quote from a recent report by the Hounslow Law Centre, which has been doing a great deal of work in this area. It says:
    "Till shortages can occur in many ways: customers can be dishonest; cheques bounce; meters are faulty or are misread; tired cashiers made to work without the breaks to which they are entitled may give too much change. In our experience management is rarely concerned to trace the error or give advice about preventing recurrences. It is much easier to make a cashier pay. The result is that cashiers' already low wages are regularly reduced below the poverty line as a result of events which are not their fault".
    The Hounslow Law Centre says that in the past year it has dealt with 35 inquiries about deductions, 26 of which were from petrol station cashiers. It says that it has been successful in a number of cases.

    Of course, with the absence of Truck Acts protection and with the absence of the fair and reasonable amendment which we tried to insert in the Bill before the Committee, these people will not have that protection in the future. If it is claimed that the law is difficult to enforce, all I can say is that we ought to do something about the inspectorate. We ought to have more inspectors in order to ensure that that law can be enforced for the benefit of a very vulnerable workforce. I support my noble friend's Motion that the clause shall not stand part of the Bill.

    I thank the noble Lord for giving way. I feel obliged to say that, in the light of the discussion which took place over the first amendment relating to the need, as I saw it, for deductions from wages to be fair and reasonable, and in order to be consistent I must oppose the question that this clause shall stand part of the Bill even though, as the Committee will have seen, I have reservations about a number of amendments tabled thereafter.

    Members of the Committee will not be surprised to hear that I very much hope this clause will remain part of the Bill. The clause of course provides a new and uniform protection for all workers, manual and non-manual, against arbitrary deductions from their wages. Deductions from wages will be lawful where they are provided for in the contract of employment, where the worker agrees to them in writing or where they are authorised by statute. This leaves it to the parties themselves to decide the circumstances in which deductions should be allowed, enabling the parties themselves to sort out provisions that are clear, easy to understand and mutually acceptable.

    I believe that this is a fair and workable system. For manual workers the new protection replaces out-dated protections which were uncertain in their application, confusing to understand and which applied to circumstances which might have prevailed in Victorian times but which are no longer relevant to modern conditions. For non-manual workers they introduce for the first time statutory safeguards against unfair deductions where previously workers have had to rely on common law remedies.

    The provisions are designed to be straightforward and clear so that employees and employers know exactly where they stand. I hope that Members of the Committee will agree that this clause should remain part of the Bill.

    6.37 p.m.

    On Question, Whether Clause 1 shall stand part of the Bill?

    Their Lordships divided: Contents, 105; Not-Contents, 83.



    Airey of Abingdon, B.Inglewood, L.
    Allerton, L.Kaberry of Adel, L.
    Ashbourne, L.Kimball, L.
    Belhaven and Stenton, L.Kinloss, Ly.
    Belstead, L.Knollys, V.
    Birdwood, L.Lane-Fox, B.
    Boyd-Carpenter, L.Lauderdale, E.
    Brabazon of Tara, L.Layton, L.
    Bridgeman, V.Long. V.
    Brookes, L.Lucas of Chilworth, L.
    Brougham and Vaux, L.Lurgan, L.
    Broxbourne, L.Macleod of Borve, B.
    Caithness, E.Mancroft, L.
    Cameron of Lochbroom, L.Marley, L.
    Campbell of Alloway, L.Marshall of Leeds, L.
    Carnegy of Lour, B.Massereene and Ferrard, V.
    Cathcart, E.Maude of Stratford-upon-
    Coleraine, L.Avon, L.
    Colwyn, L.Merrivale, L.
    Constantine of Stanmore, L.Molson, L.
    Cox, B.Monk Bretton, L.
    Davidson, V.Monson, L.
    De La Warr, E.Montgomery of Alamein, V.
    Denham, L. [Teller.]Mottistone, L.
    Denning, L.Mowbray and Stourton, L.
    Eccles, V.Munster, E.
    Elliot of Harwood, B.Murton of Lindisfarne, L.
    Elton, L.Nelson of Stafford, L.
    Faithfull, B.Onslow, E.
    Ferrers, E.Orkney, E.
    Ferrier, L.Orr-Ewing, L.
    Fortescue, E.Pender, L.
    Fraser of Kilmorack, L.Perth, E.
    Gardner of Parkes, B.Plummer of St Marylebone,
    Glanusk, L.L.
    Glenarthur, L.Polwarth, L.
    Gridley, L.Portland, D.
    Hailsham of SaintReay, L.
    Marylebone, L.Renwick, L.
    Halsbury, E.Rochdale, V.
    Harmar-Nicholls, L.Rodney, L.
    Hives, L.Russell of Liverpool, L.
    Holderness, L.St. Davids, V.
    Hood, V.Sandys, L.
    Hooper, B.Savile, L.
    Hunter of Newington, L.Sharples, B.
    Hylton-Foster, B.Skelmersdale, L.

    Strathcona and Mount Royal,Vaux of Harrowden, L.
    L.Vickers, B.
    Swinfen, L.Vinson, L.
    Swinton, E. [Teller.]Vivian, L.
    Teviot, L.Wise, L.
    Thomas of Swynnerton, L.Young, B.
    Tranmire, L.Zouche of Haryngworth, L.
    Trefgarne, L.


    Airedale, L.Lockwood, B.
    Amherst, E.Longford, E.
    Aylestone, L.Lovell-Davis, L.
    Bacon, B.McCarthy, L.
    Birk, B.McIntosh of Haringey, L.
    Blease, L.Mackie of Benshie, L.
    Blyton, L.McNair, L.
    Brockway, L.Mar, C.
    Brooks of Tremorfa, L.Mayhew, L.
    Bruce of Donington, L.Meston, L.
    Burton of Coventry, B.Milner of Leeds, L.
    Carmichael of Kelvingrove, L.Morton of Shuna, L.
    Chitnis, L.Murray of Epping Forest, L.
    Cledwyn of Penrhos, L.Nicol, B.
    Crawshaw of Aintree, L.Northfield, L.
    David, B. [Teller.]Oram, L.
    Davies of Penrhys, L.Parry, L.
    Dean of Beswick, L.Ponsonby of Shulbrede, L.
    Denington, B.[Teller.]
    Diamond, L.Prys-Davies, L.
    Ennals, L.Rea, L.
    Ewart-Biggs, B.Rhodes, L.
    Fisher of Rednal, B.Ritchie of Dundee, L.
    Foot, L.Rochester, L.
    Gallacher, L.Ross of Marnock, L.
    Glenamara, L.Sainsbury, L.
    Graham of Edmonton, L.Seear, B.
    Grey, E.Shepherd, L.
    Hampton, L.Simon, V.
    Harris of Greenwich, L.Stoddart of Swindon, L.
    Hatch of Lusby, L.Taylor of Blackburn, L.
    Heycock, L.Taylor of Gryfe, L.
    Houghton of Sowerby, L.Taylor of Mansfield, L.
    Jeger, B.Tordoff, L.
    Jenkins of Putney, L.Turner of Camden, B.
    John-Mackie, L.Underbill, L.
    Kagan, L.Wedderburn of Charlton, L.
    Kaldor, L.White, B.
    Kilmarnock, L.Wilson of Langside, L.
    Kirkhill, L.Wilson of Rievaulx, L.
    Lawrence, L.Winstanley, L.
    Lloyd of Hampstead, L.Young of Dartington, L.

    Resolved in the affirmative, and Clause 1 agreed to accordingly.

    6.46 p.m.

    Clause 2 [ Deductions from wages of workers in retail employment on account of cash shortages etc.]:

    Page 3, line 35, at beginning insert—

    ("( ) It shall not be lawful for the employer to make any deduction from any wages of any worker employed by him to whom this section applies on account of one or more cash shortages or stock deficiencies unless the shortage or deficiency was caused by the dishonesty, negligence default of that worker or of a worker for whom he is responsible by virtue of the express terms of his employment.").

    The noble Lord said: I rise to move Amendment No. 27, and I understand that it is for the convenience of those involved if I speak also to Amendment 37. In moving to Clause 2 it might be helpful if I read from the face of the Bill. Clause 2 provides that where a worker's employment involves selling directly to the

    public, to fellow workers, or to other individuals in their personal capacities, any deduction from his wages on account of a cash shortage or stock deficiency,

    "shall not exceed one-tenth of the gross amount of the wages payable",

    to him.

    As background before I indicate the main thrust of my argument I wish to draw the Committee's attention to the fact that when one looks at the amendment it is clearly seen what we are not quibbling about; namely deductions in respect of dishonesty, negligence, or default of the worker, for which he is responsible by virtue of the express terms of his employment. That is in Amendment 27. What we say is why should an employee who is responsible, who is honest, who is not negligent and who is not at fault be penalised?

    In another place we had some interesting observations. The Minister who introduced the Bill on 11th February said at col. 800:

    "The Bill introduces an important new and modern set of rights for workers … a comprehensive, easily understood, easily enforeceable and fairer set of statutory rights concerning deductions".

    Anyone who knows particularly the retail trade would object strenuously to that description.

    As a matter of fact a Conservative Member, Mr. Richard Holt, had this to say at the Report stage at col. 739 of the Official Report on 14th May about the Bill and this clause:

    "suggesting that [the Truck Acts] are being replaced by something superior, fairer and nicer simply does not hold water. It does not bear examination. The Government's case is wafer-thin, and water is seeping through … The Government have produced bad law on this aspect, and it will not be long before it will bring the whole Bill into disrepute".

    Those are words with which I sympathise and which I accept. He happens to be a member of another party, a member of the Minister's party. The difference is that that person speaks with some experience of the retail trade. I profess at this stage to indicate a modest credential in that respect too. I am a director of a co-operative society. I have close connections with the co-operative movement, and declare an interest in the Union of Shop, Distributive and Allied Workers.

    The main burden that the Minister has to satisfy is that it is right and proper that individuals not well paid, perhaps adequately paid, should bear the consequences of someone else's actions, because in the real world that is what will happen. Someone else can be careless; someone else can be dishonest; someone else can take a chance and someone else can be the victim of someone else's fraud, but the individual who is nominally in charge of the till or the cashpoint will have to carry the can. We cannot accept that that is right.

    I do not believe the Minister will accept that is right either, because we are talking about business systems and the manner in which a business sets out to control its stock efficiently. Some stock control systems are good and some are bad. Some are able to control the amount of stock, to control the value of the stock, and are able to apportion and identify the responsibility so precisely that there is very little of what is known in the trade as leakage. Leakage is that amount of the stock, or that amount when the cash and the stock are taken together, which is unaccountable for. In a normal well-run business an allowance is made.

    Sometimes, dependent upon the nature of the business, there will be a variation. There certainly is a variation between departments, between the food department and the non-food department, even between the butchery, the milk department and the grocery department. There are understood norms. The attempt in the retailing business in 1986 is always to keep the expenses down as much as possible. That is fair. One of the expenses of a business is wastage, leakage, and one of the responsibilities of management is to make sure that that is kept down as low as possible.

    In retailing in 1986 there are far more part-time employees than full-time employees. People will come on duty for two hours, or four hours or part of the day, and then go. We are talking about, as the Minister in another place said, what a nonsense it would be if every employee had his own cashpoint or till. Somebody has to be responsible but he is not responsible for the management, control and security of the cashpoint every minute of the day. The till may be left out of the control of the responsible person during lunch time, during tea break, coffee break or while that person goes to the toilet. There are a great many ways in which temporarily the person who will have to pay the shortage is not in charge of that point.

    To leave this matter as it is is a charter for bad management because the bad manager says, "Although I know I should be responsible for providing training, education and making my employee far more efficient, I do not need to bother." If the employee is not diligent, honest and reliable but is careless, and there is a shortage, the Bill provides the bad manager a legal opportunity of taking 10 per cent., not once and for all but time and time again until the total amount is received. I cannot believe that that is the intention of a fair-minded government or of a fair Bill.

    I believe that the stock deficiency aspect in this clause and in my amendment is part and parcel of the business risk. By and large that risk ought to be carried by the employer and not by the employee. I am talking about the honest and diligent person doing his job within the confines of the tools of the trade; that is, computerisation. In computerisation mistakes can be made. There are two kinds of losses: a real loss and a notional loss. There is a loss whereby goods are not there and a loss whereby on a piece of paper we are told that the goods are not there. When there is a reconciliation later, that is found not to be correct.

    There is the transfer and the movement of the stock about a building, because each member of the staff has his own duties and the stock passes through many hands. Goods are received; they are stored on the premises; they are transferred to selling areas and placed on display. They are selected with and without the assistance of the sales staff. They are sold and they are packed. At each stage not only can those goods go missing but they can also be damaged; they can also deteriorate. Writing off losses, whether goods are sold cheaper or whether they are simply written off, are all aspects of the control of stock. In retailing in 1986 the name of the game is to get the biggest volume of trade with the minimum number of employees. That means that the business wants the maximum amount of trade to be done by each employee. As I have already said, there is a great deal of coming and going.

    Then there is the management. There will be shops open from 9 o'clock in the morning and increasingly to 8 o'clock or 9 o'clock at night—forgetting the Sunday nexus. Shops are open six days a week. I am tempted to deal with the Sunday trading issue, but time does not permit it. What about the manager who cannot work all those hours that the shop is open; that is, 56 or 60 hours a week? He needs his time off and somebody else is in charge of the shop. Businesses have their own ways of chastising a manager who is notdoing his job. If there is a leakage and it is shown that the manager is not as efficient as he ought to be, there are ways in which his promotion does not come along. There are ways in which, without fining him or making him responsible for the loss of stock, that manager is made to pay.

    I hope that what we shall hear from the Minister is something that is helpful and fair. So far as we are concerned, a stock loss is a commercial risk which should not be passed to the employee. The employee has no means of exercising real control over stock. A true stock depends on the adequacy of management recording and monitoring systems. Stock checking systems have been proved in the past on many occasions to be inaccurate. I move the amendment and look forward to the faint possibility that the Minister may be able to say something kind about it. I beg to move.

    I have some sympathy with this amendment. It seems on the face of it to offend against natural justice if the course advocated by the noble Lord, Lord Graham of Edmonton, is not followed. At an earlier stage I indicated that I think we want to reach a situation as soon as possible where there is no need for deductions from wages but we rely instead on better management practices and methods of control, as the noble Lord, Lord Graham, said.

    I have a question to ask and a doubt to express, if the noble Lord, Lord Graham, would be kind enough to help me. Is there a danger that if some unscrupulous employer were denied the opportunity to effect a deduction by virtue of this suggested new subsection, he might approach the matter in an altogether different way by making use of disciplinary procedures which, more particularly in the case of employees having less than two years' service, might result in a pretty speedy dismissal? In that case, what sets out to protect the employee might, I suppose, in practice have the reverse effect.

    At Second Reading, I made it plain that for my part there were a number of points in Part I of the Bill where I would wish to judge the matter on the merits of the particular case. This is one such case. I have an open mind about it. I look to the Minister for guidance and I seek reassurance from the noble Lord. Lord Graham, as to the doubt to which I have given expression.

    These amendments would ban deductions relating to shortages except where these were due to dishonesty, negligence or default of the worker himself or another worker for whom he was responsible. Under the Bill as it stands, a worker can be made to compensate the employer for a loss or shortage only if the worker has a contractual responsibility for that loss or shortage; that is, his contract makes clear that he can be asked to compensate the employer for that loss or shortage. It is reasonable that the parties should agree their own rules in the contract and stick to them.

    It is also reasonable that, where a worker has accepted a contractual responsibility for losses, he should meet such losses or shortages. The amendments would require the employer to seek to determine responsibility in fact for losses and shortages rather than simply agreeing with the worker to make a deduction and drawing a line under the matter. The amendments would lead to complex and lengthy tribunal cases investigating who was, in fact, responsible for particular losses or shortages.

    It should also be noted that a failure to pay a bonus due to a cash shortage or stock deficiency is treated as a deduction under Clause 2 by virtue of subsections (4) and (5). The effect of Amendment No. 27 would be to render unlawful bonus systems run by many reputable employers whereby managers get a bonus if stock shortages are kept below a certain level because such bonuses have nothing to do with dishonesty, negligence or default. Many large and reputable employers would be alarmed by that. Even if the principle that workers could not be asked to accept a contractural responsibility unconstrained by various statutory controls on the behaviour of the employee were accepted, these particular controls seem to me to have no great merit.

    Why have a provision that allows deductions if the worker in question is contracturally responsible for another worker, even if the other worker has not been dishonest, but prevents them even if the worker in question has not been dishonest himself? It would be wisest simply to leave these matters to the parties. I hope that in the light of these difficulties, and, particularly, the penultimate difficulty to which I referred the noble Lord will not wish to pursue this proposition.

    It is the understatement of the night if I say that I am disappointed with the response of the Minister. He fails completely to see, in the context, very often, of very lowly paid employees, the situation of their having to be responsible for the acts of others when they are not dishonest, when they are not negligent or when they have not been at fault. I tried to explain to the Minister that in the nature of retailing there are many episodes and practices which will cause a stock loss for which a person who has been honest, careful and without fault can be held to be responsible. I simply ask this. Why should we not write on the face of the Bill a protection of that kind?

    In the retail food and allied trades there are more than half a million workers. Their wage is £80 per week. Yet the Minister is saying to them that if there is stock deficiency, they should have some of their £62 or £64 a week deducted even though they have been honest and have not been negligent. There are, in unlicensed places of refreshment, 116,000 workers. Their wage in 1986 is £73·26.

    The Minister really reveals that he is not part of the real world. He reads his brief, he understands the Bill, he is able to argue it. But in the real world outside there are real people who will be faced—and never mind the question of equity and never mind the question of unfairness—sometimes by virtue of bad management decisions with having to pick up the tab and with being fined a few pounds through no fault of their own. I think this is a very unfair clause. I think this amendment is very reasonable and I intend to press it.

    7.5 p.m.

    On Question, Whether the said amendment (No. 27) shall be agreed to?

    Their Lordships divided: Contents, 52; Not-Contents, 92.



    Bacon, B.Lovell-Davis, L.
    Birk, B.McCarthy, L.
    Blease, L.McIntosh of Haringey, L.
    Broadbridge, L.Mar, C.
    Brockway, L.Milner of Leeds, L.
    Brooks of Tremorfa, L.Murray of Epping Forest, L.
    Carmichael of Kelvingrove, L.Nicol, B.
    Cledwyn of Penrhos, L.Northfield, L.
    David, B. [Teller.]O'Neill of the Maine, L.
    Dean of Beswick, L.Oram, L.
    Denington, B.Parry, L.
    Ennals, L.Ponsonby of Shulbrede, L.
    Ewart-Biggs, B.[Teller.]
    Fisher of Rednal, B.Prys-Davies, L.
    Gallacher, L.Rea, L.
    Glenamara, L.Ross of Marnock, L.
    Graham of Edmonton, L.Shepherd, L.
    Heycock, L.Stoddart of Swindon, L.
    Houghton of Sowerby, L.Taylor of Blackburn, L.
    Jeger, B.Taylor of Mansfield, L.
    John-Mackie, L.Turner of Camden, B.
    Kagan, L.Underhill, L.
    Kaldor, L.Wedderburn of Charlton, L.
    Kinloss, Ly.White. B.
    Kirkhill, L.Wilson of Rievaulx, L.
    Lawrence, L.Ypres, E.
    Lockwood, B.


    Airey of Abingdon, B.Eccles, V.
    Alexander of Tunis, E.Elliot of Harwood, B.
    Ashbourne, L.Faithfull, B.
    Belstead, L.Ferrers, E.
    Birdwood, L.Ferrier, L.
    Boyd-Carpenter, L.Fortescue, E.
    Brabazon of Tara, L.Gardner of Parkes, B.
    Bridgeman, V.Glanusk, L.
    Brookes, L.Glenarthur, L.
    Brougham and Vaux, L.Gridley, L.
    Broxbourne, L.Hailsham of Saint
    Bruce-Gardyne, L.Marylebone, L.
    Caithness, E.Halsbury, E.
    Cameron of Lochbroom, L.Hives, L.
    Campbell of Alloway, L.Holderness, L.
    Carnegy of Lour, B.Hooper, B.
    Colwyn, L.Hylton-Foster, B.
    Constantine of Stanmore, L.Inglewood, L.
    Cox, B.Kaberry of Adel, L.
    Craigavon, V.Kimball, L.
    Davidson, V.Knollys, V.
    De La Warr, E.Lane-Fox, B.
    Denham, L. [Teller.]Lauderdale, E.
    Denning, L.Layton, L.

    Lindsey and Abingdon, E.Rochdale, V.
    Long. V.Rodney, L.
    Lucas of Chilworth, L.Sanderson of Bowden, L.
    Macleod of Borve, B.Sandys, L.
    Mancroft, L.Savile, L.
    Marley, L.Shannon, E.
    Marshall of Leeds, L.Sharples, B.
    Massereene and Ferrard, V.Skelmersdale, L.
    Merrivale, L.Strathcona and Mount Royal,
    Molson, L.L.
    Monk Bretton, L.Swinfen, L.
    Montgomery of Alamein, V.Swinton, E. [Teller.]
    Mottistone, L.Teviot, L.
    Mowbray and Stourton, L.Thomas of Swynnerton, L.
    Munster, E.Tranmire, L.
    Murton of Lindisfarne, L.Trefgarne, L.
    Nelson of Stafford, L.Vaux of Harrowden, L.
    Onslow, E.Vickers, B.
    Orkney, E.Vinson, L.
    Pender, L.Vivian, L.
    Plummer of St. Marylebone,Wise, L.
    L.Young, B.
    Polwarth, L.Zouche of Haryngworth, L.
    Portland, D.

    Resolved in the negative, and amendment disagreed to accordingly.

    7.14 p.m.

    Page 3, line 36, leave out ("in retail employment").

    The noble Lord said: In moving Amendment No. 28, it may be convenient if I speak to Amendments No. 31 and 38. The point can be made briefly that now we have reached this stage the Government's new dichotomy in the workforce is beginning to take shape in the Bill. That dichotomy is between those in retail employment and those who are not. There are two questions to be answered. Is it fair to have such a dichotomy? Does it work?

    In one sense, the first depends on the second because obviously it is unfair to have some workers limited to a 10 per cent. deduction (to put it as a label) when others are at risk of having whatever is in the documents which count as consent under this Bill. Quite plainly, anomalies can arise between those in retail employment and those not. That is to say, the shop assistant may be in the retail sector but a stockroom assistant in the same shop might not be. One wonders whether even on the best of definitions that would be a fair situation. Why should the one not be limited to 10 per cent. deductions and the other be so limited?

    The history of the definition of who is in retail employment of course began with the Bill in a very different state from what it is now. Leaving aside the minor points, in broad terms it began by a definition that said that those who carry out retail transactions directly with members of the public are to be retail employment sector employees. Of course the definition of "the public" is a well-known problem in many areas of our law. The company law prospectus issued to the public has caused a great many problems and there have to be special provisions as to what it meant by "the public".

    However, the difficulties for the Government increased when they realised that here that was, in any case, an inadequate definition, however difficult, because transactions might not be with members of

    the public but with fellow workers by those in retail employment or by other individuals—as they now put it,

    "other individuals in their personal capacities".

    But of course the retail transaction is not necessarily a sale: it is a supply of goods or services, including financial services.

    What does this mean? Does the clerk in accounts who provides a supply of financial services to other workers in the firm, some of which are for their personal purposes, become someone in the retail sector? Is the stockroom or warehouse worker who supplies goods to other persons, who may be fellow workers within the area or without, a worker in the retail sector? Does it depend on whether the goods supplied are for their personal use? Does he have to ask? Does he have to say, "I am now supplying you with goods: are you going to use them in your personal and individual capacity or are you taking them as an agent or employee of your employer?"

    I refer to garden centres as an example. I am sure many of your Lordships will have visited those. Take the garden centre which normally supplies goods or services wholesale. As I read the definition, if workers are taking goods on behalf of their employers, that would not be a retail transaction. However, suppose some members of the public come in and take goods. These definitions seem to lead to the type of uncertainty which we have seen earlier today and which the Government are beyond compare in their anxiety to avoid. Perhaps they could do better in their definition of what is retail employment and what is not if they want to avoid the core case of these amendments.

    That core case—if I may repeat it briefly—is this. If some workers are to be guarded by the 10 per cent. protection and others are not, there must be a definition of the line between the two which works and is fair. Despite the changes in another place, that line neither works nor is fair, I beg to move.

    We on these Benches support this amendment. I do not see why protection against excessive, unfair or unjustified deductions should be confined to the retail trade. I shall be very brief, because the noble Lord, Lord Wedderburn, has explained the situation so clearly. There are other examples, such as a wholesale cash and carry warehouse or a trade counter, which can also be subject to cash shortages and stock deficiencies. Therefore, as I said, we on these Benches will support the amendment if it is put to a vote.

    As the noble Lord has explained, these amendments would have the effect of extending the protection provided by Clauses 2 and 3 to all workers and not only to those involved in retail employment. Let me clarify what we are trying to do with Clauses 2 and 3. Clause 1 provides certain basic protections against arbitrary deductions. All deductions must be authorised by statute, agreed in the contract of employment, or be with the prior written consent of the worker concerned, and the worker must have knowledge of any contractual term authorising a deduction before a deduction based on such a term is made.

    What we are trying to achieve with the additional protection of Clauses 2 and 3 is a situation where workers do not suffer such large deductions or require-ments to make payments, on account of cash shortages or stock deficiencies, that they are left with very little or nothing in their wage packets; and it is because it is in the area of retail employment, and really only in that area, where there is evidence of abuse and public concern that we have restricted the special protection to that area. We are therefore covering sales staff, petrol station cashiers, milk roundsmen etc., but not people who are not actually engaged in sales, such as warehouse staff.

    I think we would all be in agreement that practices which leave workers with almost nothing in their wage packets because they are asked to cover till shortages are undesirable. I hope we are all agreed that something needs to be done about such practices. We believe that we have struck the right balance in the protection provided here. We have included in the group to which additional protection is provided all those workers engaged in the sale or supply of both goods and services. Following amendments passed in another place, we have ensured that Clause 2 makes clear that the protections apply to all workers engaged in the sale or supply of goods to members of the public, fellow workers or other individuals in their personal activities; for example, members of a club.

    We have also ensured that the person who sells not only to the public but also to companies is fully covered in respect of all his sales. The protection is also provided to those who are not involved in selling or supplying goods or services on a regular basis. This means that a worker who does not normally sell goods to the public but who, for example, covers for a colleague during a lunch break, will have the same protection as those workers who normally sell to the public. But we see no reason why protection should be extended to those engaged in activities other than selling to the public, where stock shortages might occur but where these are likely to be as a result of negligence or theft. I believe that the protection provided covers the areas of need and I hope that the Committee will resist these amendments.

    I thank the noble Lord the Minister for his reply. In case he said something that we would want to take into account, or there is a new point that we have missed, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendments Nos. 29 to 33 not moved.]

    Page 4, line 27, leave out from ("of) to end of line 30 and insert ("three months commencing with the date on which it was reasonably practicable for the employer to establish the existence of the shortage or deficiency".).

    The noble Lord said: I beg to move Amendment No. 34 and, if it is for the convenience of the Committee, I think we should take with it Amendments Nos. 35 and 44. The amendment seeks to limit the period of time during which the employer may seek to make deductions from an employee's wage packet in respect of a stock or cash deficiency. As the clause stands, an employer is given 12 months from the time when he established the shortage or deficiency to take action to deduct from an employee's wages, and that seems to be a quite inordinate length of time. Again, the Government seem hell-bent on favouring the employer at the expense of the employee.

    A year is a long time to allow an employer to act and I am puzzled as to why this lengthy period of time was decided upon. Perhaps the noble Lord will explain the reasons. Perhaps it has something to do with annual accounting. I certainly do not know, but if it does it is quite nonsensical. Any businessman who has the slightest modicum of business and accountancy sense will check his cash and stock at frequent intervals, and in a well-run business any cash discrepancies or stock deficiencies would be spotted fairly quickly. Investigations into such discrepancies and deficiencies ought to be carried out immediately and completed in days or weeks rather than months, and our amendment limiting the period to three months is eminently reasonable in all the circumstances. It would be far more considerate of the employee's interest, too.

    Why should an employee, 12 months after the event, be faced with deductions in respect of a deficiency of which he may have no knowledge? We must remember that we are dealing here not with people who are earning £20,000 or £30,000 a year, or even with people earning the national average wage of around £185 per week. We are talking about people earning around £55 to £70 per week, to whom a delayed deduction will come as a bombshell and will disrupt their already strained finances.

    I do not know how many noble Lords present have experienced living a hand-to-mouth existence; some, perhaps, have. Certainly, having spent part of my childhood in the Rhondda Valley during the years of depression, I am aware of the strains and the stresses such an existence imposes on men and women and their families. It is no good the noble Lord sneering. This is exactly what happens in families on low incomes. They suffer from actions such as these, and I detest seeing the noble Lord sneering when we are talking about low-paid people such as those I have mentioned. Therefore I sincerely hope that noble Lords will have some understanding and compassion for these low-paid people and will help them in a small way by supporting this amendment. I beg to move.

    Perhaps I should point out that if Amendment No. 34 is agreed to, it will not be possible to call No. 35.

    I should like very briefly to support this amendment. An employer should surely not need a period as long as 12 months from the time when he should have established a deficiency until he makes a deduction from wages. Three months is quite long enough and I look forward to hearing from the Minister that he agrees, or, if he does not, why.

    Before the noble Lord, Lord Stoddart, was so objectionable, if he will forgive me for saying so, I was thinking of offering some comfort to the noble Lord on this amendment. The fact of the matter is that my family comes from South Wales as well and I am quite aware of the matters to which he refers. I do not think it lies very well in the mouth of the noble Lord to accuse me of sneering as he said I was. The fact of the matter is that the sort of sentiments we hear from noble Lords opposite from time to time seem to me to represent attitudes about a century out of date, but be that as it may.

    The Government introduced amendments during Committee stage in another place to ensure that deductions relating to cash shortages or stock deficiencies would be entirely prohibited if there was an unreasonable delay between the date the cash shortage or stock deficiency occurred and the date the employer made a deduction from wages in respect of that shortage or deficiency. It was said during that debate that there is nothing magical about the period of time one chooses, but 12 months was mentioned as a reasonable period. The amendments seek to reduce this period to three months. I really believe that in certain cases that is too short a period to enable an employer to discover the shortage and consider whether, taking everything into account, he really wants to make a deduction on account of a shortage.

    I am supported in this view by the existence in the Bill of the requirement that if an employer could reasonably be expected to have found out about a shortage earlier than the date on which he did the deduction will be lawful only if it is made within 12 months of the date on which he ought to have found out about its existence. This I am certain provides the necessary safeguards and will prevent employers, who I am sure would be few in number, who decide to victimise a worker for whatever reason from dredging up a lot of old events on which they took no action at the time and starting to make deductions. I hope that those considerations will persuade the noble Lord not to press his amendment.

    Let me first of all apologise to the noble Lord. If he was not sneering, I must confess it appeared that he was. But of course I welcome him as a compatriot. I accept that he was not in fact sneering at the difficulties that poor people have.

    I listened to the noble Lord very closely. I understand from the Bill that an employer may not deduct from his employee amounts that the employer ought to have located within 12 months. I do not quite know how that is to be discovered. Therefore, I think that the assurance the noble Lord has given is not satisfactory. I still believe that the three-month period is the more satisfactory one. I believe it is adequate for the protection of the employer and I believe it is much more satisfactory from the point of view of the employee. Therefore I fear I must press this amendment to a division.

    7.33 p.m.

    On Question, Whether the said amendment (No. 34) shall be agreed to?

    Their Lordships divided: Contents, 57; Not-Contents, 72.



    Airedale, L.McCarthy, L.
    Amherst, E.McIntosh of Haringey, L.
    Bacon, B.Mackie of Benshie, L.
    Barnett, L.Mar, C.
    Blease, L.Morton of Shuna, L.
    Brockway, L.Murray of Epping Forest, L.
    Carmichael of Kelvingrove, L.Nicol, B.
    Cledwyn of Penrhos, L.Parry, L.
    Crawshaw of Aintree, L.Perry of Walton, L.
    David, B. [Teller.]Ponsonby of Shulbrede. L.
    Diamond, L.[Teller.]
    Ennals, L.Prys-Davies, L.
    Ewart-Biggs, B.Ritchie of Dundee, L.
    Fisher of Rednal, B.Rochester, L.
    Gallacher, L.Ross of Marnock, L.
    Glenamara, L.Sainsbury, L.
    Graham of Edmonton, L.Shepherd, L.
    Grey, E.Stoddart of Swindon, L.
    Hampton, L.Strabolgi, L.
    Hatch of Lusby, L.Taylor of Blackburn, L.
    Houghton of Sowerby, L.Taylor of Gryfe, L.
    Jeger, B.Turner of Camden, B.
    John-Mackie, L.Underhill, L.
    Kagan, L.Wedderburn of Charlton, L.
    Kaldor, L.White, B.
    Kennet, L.Wilson of Langside, L.
    Kilmarnock, L.Wilson of Rievaulx, L.
    Lockwood, B.Winstanley, L.
    Lovell-Davis, L.Ypres, E.


    Alexander of Tunis, E.Marshall of Leeds, L.
    Belstead, L.Massereene and Ferrard. V.
    Birdwood, L.Maude of Stratford-upon-
    Boyd-Carpenter, L.Avon, L.
    Brabazon of Tara, L.Merrivale, L.
    Brookes, L.Molson, L.
    Brougham and Vaux, L.Monk Bretton, L.
    Cameron of Lochbroom, L.Monson, L.
    Campbell of Alloway, L.Montgomery of Alamein, V.
    Carnegy of Lour, B.Mottistone, L.
    Constantine of Stanmore, L.Mowbray and Stourton, L.
    Cox, B.Munster, E.
    Craigavon, V.Murton of Lindisfarne, L.
    Davidson, V.Onslow, E.
    De La Warr, E.Orkney, E.
    Denham, L. [Teller.]Pender, L.
    Faithfull, B.Plummer of St Marylebone.
    Ferrers, E.L.
    Ferrier, L.Polwarth, L.
    Gardner of Parkes, B.Renton, L.
    Glenarthur, L.Rochdale, V.
    Gridley, L.Rodney, L.
    Halsbury, E.Sanderson of Bowden, L.
    Hives, L.Savile, L.
    Holderness, L.Shannon, E.
    Hooper, B.Skelmersdale, L.
    Hylton-Foster, B.Strathcona and Mount Royal,
    Inglewood, L.L.
    Kaberry of Adel, L.Swinton, E. [Teller.]
    Kimball, L.Teviot, L.
    Lane-Fox, B.Tranmire, L.
    Layton, L.Trefgarne, L.
    Lindsey and Abingdon, E.Trumpington, B.
    Long, V.Vaux of Harrowden, L.
    Lucas of Chilworth, L.Vickers, B.
    Lurgan, L.Vinson, L.
    Macleod of Borve, B.Wise, L.
    Marley, L.

    Resolved in the negative, and amendment disagreed to accordingly.

    7.41 p.m.

    In moving that the House do now resume I suggest that we do not return to consideration in Committee on this Bill until twenty minutes to nine o'clock. I beg to move that the House do now resume.

    Moved accordingly, and, on Question, Motion agreed to.

    House resumed.

    Representation Of The People Regulations 1986

    rose to move, That the draft regulations laid before the House on 13th May be approved. [23rd Report from the Joint Committee.]

    The noble Viscount said: My Lords, I beg to move that the Representation of the People Regulations 1986 be approved. Similar sets of regulations for Scotland and Northern Ireland are on the Order Paper and, if your Lordships agree, it might be for the convenience of the House if I spoke to the three sets of regulations together. The Joint Committee on Statutory Instruments has considered all three sets of regulations and has made no comment.

    These regulations replace the Representation of the People Regulations 1983. They are needed to lay down procedures for British citizens abroad to register as overseas electors and for holidaymakers and others to apply for an absent vote under the new provisions of the Representation of the People Act 1985. The regulations have been the subject of full consultations with representatives of the political parties and the local authorities and reflect the many helpful comments we received.

    Regulations 23 to 28 deal with the new procedures for overseas electors to make declarations with a view to their being included in the electoral register. The same procedures will apply to Members of your Lordships' House resident abroad who, subject to the requirements in the Act, may register as electors at elections to the European Assembly. This is covered by Regulation 14.

    Part III introduces changes in registration procedures including, for England and Wales, the identification of new names on the register and, for England and Wales and Northern Ireland, a regulation allowing the draft register to take effect as the final register. Part IV introduces new provisions on absent voting. Applicants for an absent vote at a particular election will need to say why they cannot reasonably be expected to vote in person. Applicants for an indefinite absent vote for an indefinite period will have to meet the countersignature and other requirements in Regulations 64 and 65. Part V allows the proceedings on the issue and receipt of postal ballot papers to be taken together when the polls at elections are combined, and Part VI deals with the combination of polls.

    The regulations for Scotland and Northern Ireland contain similar provisions except in the few cases I have mentioned, and with the exception also of Regulation 13 of the Northern Ireland regulations relating to documentary evidence of identity.

    We plan to make a commencement order as soon as possible following the approval of these regulations bringing the remainder of the 1985 Act into force. Our intention is that overseas electors should be able to start making their declarations straight away. The changes relating to applications for absent votes will be brought into force from 1st January next year and other changes relating to the conduct of elections will apply to elections held on or after 16th February 1987. Post Office regulations will be made before then dealing with the free delivery of unaddressed electoral material.

    We shall be making new local elections rules later this year in order to apply to local elections the changes which have been made by the 1985 Act and these regulations to the parliamentary elections rules. New European Assembly regulations will also be made so that the new absent voting provisions and provision on the lines of these regulations can apply at European Parliament elections held on or after 16th February.

    I hope that your Lordships will be content to approve the regulations. I beg to move.

    Moved, That the draft regulations laid before the House on 13th May be approved. [ 23rd Report from the Joint Committee]—( Viscount Davidson.)

    My Lords, I welcome the explanation of these regulations given by the noble Viscount, which I am sure will be appreciated by all concerned with running elections, both on the official side and on that of the election agents. We now have up-to-date regulations.

    I am pleased to have the assurance from the noble Viscount that these regulations have been the subject of consultations with local authorities and the political parties and that no items are included which were not covered by primary legislation, particularly the 1985 Act. I am particularly pleased to note the extension under the Northern Ireland regulations—No. 13, I think—to which the noble Viscount referred, which extends the documents which must be presented by electors to polling stations to include a driving licence issued in Northern Ireland and a merchant seaman's card. Those regulations will be appreciated by all in Northern Ireland.

    With those few remarks, I support the three regulations.

    On Question, Motion agreed to.

    Representation Of The People (Scotland) Regulations 1986

    rose to move, That the draft regulations laid before the House on 15th May be approved. [23rd Report from the Joint Committee.]

    The noble Viscount said: My Lords, I beg to move.

    Moved accordingly, and, on Question, Motion agreed to.

    Representation Of The People (Northern Ireland) Regulations 1986

    rose to move, That the draft regulations laid before the House on 19th May be approved.

    The noble Viscount said: My Lords, I beg to move.

    Moved accordingly, and, on Question, Motion agreed to.

    Consumer Safety (Amendment) Bill

    7.48 p.m.

    My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

    Moved, That the House do now resolve itself into Committee.—( Baroness Gardner of Parkes.)

    On Question, Motion agreed to.

    House in Committee accordingly.

    [The LORD MURTON OF LINDISFARNE in the Chair.]

    Before Clause 1, insert the following new clause:

    ( "Offence of supplying unsafe goods.

  • .—(1) A person shall be guilty of an offence if he supplies or offers or agrees to supply goods or exposes or possesses for supply goods which do not provide the standard of reasonable safety which a purchaser is entitled to expect taking into account all the circumstances including—
  • (a) the presentation of the goods;
  • (b) the use to which it could reasonably be expected that the goods would be put;
  • (c) the cost of the goods; and
  • (d) the state of scientific and technical knowledge.
  • (2) The Secretary of State may make regulations containing such provisions as he considers appropriate to specify standards of safety in relation to prescribed classes of goods and it shall be a defence to a charge of committing an offence under this section to prove that the goods complied with such standards in relation to the hazard in question.
  • (3) It shall be a defence to a charge of committing an offence under this section to prove that the goods complied with safety requirements in relation to the hazard in question.").
  • The noble Lord said: In moving this amendment I speak also to Amendment No. 2 relating to Clause 2 and Schedule 1. The two amendments hang together.

    By way of explanation I should state that the noble Baroness, Lady Stedman, who spoke on behalf of the Association of County Councils at Second Reading and who should have been here tonight to speak to these amendments on behalf of the association, unfortunately is not able to be present. As I happen to be vice-president of the ACC, I have been asked to speak briefly on these matters today.

    I do not intend to press any of these amendments to a Division because I am quite aware of parliamentary protocol and procedure in respect of the Bill making progress in another place, but I shall be grateful to have the Minister's observations. The ACC has asked me to say that if the Bill is not amended it could set unfortunate precedents for the expected government safety legislation which it hopes will include a duty to trade safely and will relate to product liability. The aim of the Bill to enable dangerous goods to be kept off the market can be achieved, the association believes, by workable compensation provisions and a 72-hour detention period.

    The amendments are moved, as the House was reminded at Second Reading, against the sombre background of some 3 million people requiring hospital treatment for injuries sustained in accidents in the home, of whom about 7,000 die. Many of these accidents are avoidable, like the death in Leeds last Christmas of a five-year old child who died from playing with an imported toy pony. I am very grateful for the opportunity to speak on this matter in company with the promoter of the Bill, the noble Baroness, Lady Gardner of Parkes, and I am delighted to share her interest.

    I know that MK Electric, which is the largest employer of labour in Edmonton, and a firm which must be known to the noble Baroness, Lady Gardner, will have as much interest as anyone, and I notice from the report of the Second Reading that there is a wide range of consumer bodies which are interested. Equally I am certain that many trade and commercial bodies have their own reputations to protect. I know that only last year MK Electric celebrated having made 1 million safety plugs, and Alec Fletcher, who was then a Minister, went along and congratulated the company on its standards. I look forward to what the Minister has to say and I beg to move the amendment.

    The Parliamentary Under-Secretary of State, Department of Trade and Industry
    (Lord Lucas of Chilworth)

    Since the noble Lord, Lord Graham of Edmonton, has invited me to make some comment on the new clause which is Amendment No. 1, it may be for the convenience of the Committee and indeed my noble friend if I do so at this stage.

    This clause seeks to introduce a version of the general safety duty that is proposed in the Government's White Paper on the safety of goods. Perhaps I may say at this juncture that I am glad to note that the noble Lord opposite is taking this opportunity to probe the Government's intentions in this matter. Let me make it absolutely clear that we are committed to introducing a general safety duty. We shall do this in conjunction with legislation to implement the European Community directive on product liability at the earlest possible opportunity.

    While I can only applaud the intention of the noble Lord in putting forward this new clause at this stage, in an attempt to introduce the general safety duty now, I must say that in our view it is not appropriate to extend the current Bill, and I think that the noble Lord accepts that. This Bill is about the enforcement of existing consumer safety legislation. I think that to include this new and wider offence would be very difficult. The inter-relationship between the general safety duty and the product liability directive is very complex and I assure the Committee that they can only be dealt with sensibly together.

    It may be helpful if at this stage this evening I say a few words as to why these complexities will arise, because I think it may help us when we come, perhaps a little later, to discuss the wider implications which are in the back of our minds. As the clause is drafted—and I have no quarrel with that—it leaves a number of points unclear, quite apart from the unanswered questions about its relationship with the product liability directive.

    For example, what is to be the scope of the new offence? Is it intended to cover all goods, including goods intended for the workplace—these are already covered by the general duty in Section 6 of the Health and Safety at Work Act—or is it really intended just to cover consumer goods, as is our proposal for a new general safety duty? Why is there a reference to a purchaser of the goods in line 4, when the offence is geared to the supply of goods which may not involve a sale as such and which may be of concern to many users of the goods other than the purchaser? At what time is the state of scientific and technical knowledge to be relevant? Is it at the time that the product was first put into circulation? What measures for enforcement will apply, given that the definition of relevant provisions does not include this? Would commission of the offence also attract civil liability? Those are just a very few of a great number of questions that will have to be answered, and those answers will not be very easy to arrive at, if we are to introduce a sensible, workable and enforceable provision as complex and far-reaching as the general safety duty.

    So with all respect to the good intentions behind the clause, I say to the noble Lord that I am happy that he does not intend to press this amendment. I hope that he and those with whom he discusses these matters, and indeed my noble friend Lady Gardner of Parkes also, will perhaps do a little more work on the wider range of questions which will have to be answered and to which we shall provide answers, as I say, when we bring forward our legislation. As I said at the opening of my remarks, this will be just as soon as parliamentary time allows.

    I thank the noble Lord, Lord Graham, for moving the amendment, which is an interesting one, and I also thank the Minister for his reply. I am not happy with the amendment as it stands because it seems to me that although very naturally it would be put forward by the Association of County Councils, it is placing the onus on the trader and removing the onus from the inspectorate. This of course would suit the county councils, particularly in view of the less favourable points about the number of hours and whether the authority would be liable if the goods proved to be satisfactory. So I can see that they have cause for concern.

    This amendment seems to me to aim at moving responsibility soundly away from the county councils and on to the trader. I think that the trader does have a responsibility, and I see the point in the amendment of the words:
    "taking into account all the circumstances."
    So there are ways out. However, it seems to me that as the amendment is drafted it will be better considered (as I hope and believe it will be) when we look at this matter in a much wider context at a later stage. I think that at the present time this Bill aims simply at taking a first step of introducing the means of slowing down the presentation of goods and having the opportunity to inspect them. I am grateful that the noble Lord does not intend to press his amendment.

    I am grateful to the Minister for what I think is a sympathetic response to the intention of the amendment and I also thank the noble Baroness for her reception of it. The noble Baroness is absolutely right, and her final words were very pertinent. What we have in the Bill is a first step; and there is the promise of even more to come. I hope that, as the Minister said, between now and then even more work can be done upon it, so that what we shall have in future will be even better than that which we have now in draft. I am very grateful to the noble Lord. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 1 agreed to.

    Clause 2 [ Power of Commissioners to detain goods]:

    [ Amendment No. 2 not moved.]

    Clause 2 agreed to. Remaining clauses agreed to.

    Schedule 1 [ Schedule to be substituted for Schedule 2 to the 1978 Act]:

    [ Amendment No. 3 not moved.]

    Schedule 1 agreed to.

    Remaining schedule agreed to.

    House resumed: Bill reported without amendment: Report received.

    My Lords, I beg to move that the House do now adjourn during pleasure until 20 minutes to nine o'clock.

    Moved accordingly, and, on Question, Motion agreed to.

    [ The Sitting was suspended from 8 until 8.40 p.m. ]

    Wages Bill

    House again in Committee on Clause 2.

    [ Amendment No. 35 not moved.]

    Page 4, line 43, leave out from beginning to end of line 10 on page 5, and insert ("it shall not be lawful for the employer to make any further deduction in respect of that pay day").

    The noble Lord said: This amendment attaches to Clause 1(4) which deals with an old problem. There is a sense in which it may be said to deal with reductions as against deductions; that is to say, the problem where the calculation of wages is determined by what the worker would certainly see as a deduction for a cash shortage or stock deficiency. There are a number of old cases on the question which relate to the Truck Act 1896 and to certain other statutes. If one says that there shall not be certain deductions from wages, one has to ask what wages are. Although the Bill at later clauses does something in that regard, here it faces the problem of what one says if the wages are calculated by reference to the events or other circumstances such as bad workmanship, which might be drafted in a different way as deductions.

    Although there are old cases, I hope that I am not a century out of date, as we are constantly told things are in this Bill in our debates. There were more recent cases in 1945 which held that the calculation of wages by reference to the events which reduce the amount payable were reductions and not deductions.

    Where that is the case, there would be an easy evasion here of perhaps the whole Bill. Perhaps we should look again at some of the matters we have discussed already on these clauses in that light. But, as I understand subsection (4), where wages are determined by reference to cash shortages or stock deficiencies and the gross amount is less than the gross amount that normally would have been payable, what is then to happen? Subsection (5) goes on to say that the employer is to be allowed to make further deductions, treating the net sum of wages, as it were, as the starting point. That at least is how I read it. We say that that is not the right approach. Once the reductions have been made on account of cash shortages or stock deficiencies in calculating the wages, in those circumstances the employer should have no more.

    This has been said a number of times this afternoon but perhaps in the more placid climate of a post-prandial session I may say it again calmly but clearly. We are talking about workers who earn low wages and who are taking gross in many cases £50, £60 or at any rate no more than £70 a week. After the statutory deductions—after tax and the rest of it—they are not taking home vast sums. If a worker in that category is having his wages calculated by reference to cash shortage or stock deficiency, we are talking about someone whose family is taking from that wage-earner no princely amount. Wherever we come from, we should all recognise that that is what the Bill is about.

    Our amendment would replace the approach of subsection (5) to the situation described by subsection (4). We would say that where cash shortages or stock deficiencies have already been taken into account, there ought to be no more. It seems to me that the Government face a difficulty if they do not accept that solution or at any rate something along those lines. As the Bill is drafted, the Government place great store by the fact that those in retail employment will be protected by the 10 per cent. limit.

    In subsections (4) and (5) is there not an easy method of evading the 10 per cent, limit? If the petrol company puts a clause into the forecourt worker's contract, "Your wage is calculated by the following formula", and then builds in an element for, let us say, stock deficiencies or a cash shortage, without a clear limit being stated—it could be up to 50 per cent. of the wage in practice—that would be a contract formulated by reference to reductions. After the wage is calculated by reference to the reductions for cash shortages or stock deficiencies, the employer is now, it seems, to have another chance to deduct up to 10 per cent. more from the wages if subsection (5) remains unamended.

    Our amendment does not deal wholly with the first of those two problems, but I suggest that the Bill does not either. I hope that the Minister will say something about the problem of reductions; that is to say, the lack of a limit on reductions in calculating retail employees' wages. That might save us having to raise that issue on clause stand part. I raise it now to help progress, although progress is not exactly how we would describe what is happening with the Bill.

    The amendment, however, goes to the other problem. By however much the wage is decreased with the reduction formula, can it be right that further deductions should be allowed? To allow such a procedure makes nonsense of the 10 per cent. limit. Any well-advised employer, and certainly any well-advised rogue employer, would be able to put it aside with great ease. It is on those grounds that I beg to move the amendment.

    Subsections (4) and (5), to which the amendment is addressed, deal with the situation where all or a part of the wages of a worker depend on the absence or extent of any cash shortage or stock deficiency. The aim of the subsections is to remove a possible loophole by saying that if an employer pays a bonus related to the absence or size of a cash shortage or stock deficiency, any failure to pay the bonus is to be treated as a deduction from wages related to cash shortages or stock deficiencies and is covered by the protection of Clause 2, which in effect means that the unpaid bonus must not exceed 10 per cent. of gross wages; that is, basic wages plus bonus.

    Amendment No. 36, in amending subsection (5), appears to have the effect of removing any require-ment that any shortfall in gross wages paid due to a shortage or deficiency should be treated as a deduction and be subject to the 10 per cent. limit. It only prevents a further deduction being made in respect of the pay day in question. That would allow deductions from gross wages to be calculated without limit. That removes the protection which the provision seeks to achieve in respect of workers who are employed under certain bonus arrangemen