rose to move, That the draft order laid before the House on 18th December 1997 be approved [13th Report from the Deregulation Committee].
The noble Lord said: My Lords, this order is concerned with removing some of the burdens currently imposed by the law upon employers when they deduct the trade union subscriptions of their employees direct from pay—the system known as "check off". The law in question is contained in Sections 68 and 68A of the Trade Union and Labour Relations (Consolidation) Act 1992 inserted by the Trade Union Reform and Employment Rights Act 1993.
The provisions of Section 68 and 68A of the 1992 Act have been unpopular with both employers and unions. This is because they impose a costly and pointless administrative burden. This was confirmed in the large consultation exercise we conducted last year. The overwhelming majority of the 106 responses indicated dissatisfaction with the existing law and support for the changes we propose.
The order eases the burdens in two ways. First, it removes the requirement on employers to obtain repeat authorisations from individual workers at least every three years, confirming their wish to continue paying their trade union subscriptions by check off. Secondly, it removes the requirement on employers to notify workers at least one month in advance if the amount to be deducted by check off is to increase. As a result of this order, individuals can pay their subscriptions by check off in much the same way as they pay other regular payments; for instance, by direct debit.
The Government are satisfied that the legislative changes contained in the order retain those aspects of the legislation on check off which provide necessary protections for workers. This includes the transitional arrangements. Employers are still obliged to obtain a written authorisation from workers before they can begin making check off deductions from their pay. Likewise, workers will remain free to withdraw from the check off at any time; and employers are still required under Section 8 of the Employment Rights Act 1996 to give every employee a regular itemised pay statement, showing the amount of any deduction. In this way employees can easily tell each week or each month what deductions have been made. This is similar to the way direct debits are recorded in bank statements. The Government consider that these requirements provide a sufficient safeguard to keep employees informed about, and in control of, any check off payments.
The removal of the legal requirement that the employee is notified in advance of any increase in the subscription rate will not remove any necessary protection. Employees are in most cases notified of increases in advance by their union. Repeal should also produce significant cost savings to business and unions. Several million workers pay their subscriptions by check off. According to some estimates, it costs around one pound to obtain and then process a written re-authorisation.
The proposal has completed the preliminary scrutiny procedures for deregulation orders under the Deregulation and Contracting Out Act 1994. The Delegated Powers and Deregulation Committee of your Lordships' House and the Deregulation Committee of the other place have separately assessed and reported on the proposal. Both committees have indicated that they are content with the draft order as it stands. Therefore I commend the order to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 18th December 1997 be approved [ 13th Report from the Deregulation Committee].—( Lord Haskel.)
My Lords, it is true that the Delegated Powers and Deregulation Committee has declared itself content with the order. I am grateful to the noble Lord for setting out in some detail what the order is about and what it will mean in terms of the arrangements for employees to pay their union subscriptions. Nevertheless, the scrutiny committee had some concerns on the way and sought some assurances.I wish to support the noble Lord and the Government in looking at the ways of reducing costly administrative burdens, particularly on business. Some costings have been done. Although they are not precise, the view has been that the cost is considerable. However, there is a principle at stake here. If I have a standing order—and I do have some—whenever there is a change to that standing order, particularly when it is an increase—but whether it is an increase or a decrease—there is a basic principle that I should be notified of that. The scrutiny committee pointed to the fact that employees ought to know what is going on and put the obligation on the unions to inform their members that subscriptions would go up. The subscriptions on most employees are standard subscriptions. Therefore, it cannot be beyond the wit of the unions to devise ways and means of informing their members without reverting to the bureaucracy with which the order seeks to deal. I have in mind the trade union newsletter. All trade unions produce newsletters. Those newsletters go to their members. When they go to their members they should have in them information that from a certain date subscriptions for ordinary members of the union will increase and that that will be shown on their pay slips. The other point in defence of these changes was that when employees look at their payslips they will see that the deduction has changed, particularly if there is an increase. It is always open to them to cease payment, in which case the most they would lose would be one month. I would like a much stronger assurance that the trade unions have taken that on board and that they will look to every practical step that they can take which is not administratively burdensome. I have given one practical way in which that can be achieved through newsletters to members. This measure is breaking with a very important principle that when money is deducted from pay or bank accounts, it is done on the basis that if there is any variation of the amount of money which it is expected to be paid, there is a notification to that effect to the payee. I was impressed by the comments made about putting this measure on the Internet. I support the recommendation that the consultation that precedes orders of this kind should be put out on the Internet. With this kind of order the voices and opinions of individuals are as important as those of the institutions because it affects individuals and not institutions. Of course, it is lessening the burden on the employer. I looked at the 106 responses, which involved 33 individuals. The figures are impressive. Out of 106 respondents, 95 supported the proposals. Some of the concerns expressed during the consultation were addressed, and that is stated in the report. But were there any outstanding concerns that were not addressed concerning individuals rather than employers, trade unions and big organisations? I have made it clear that I shall not be opposing the order. Reducing the burden is a good idea, but we ought to seek reassurance that the anomalies that are left with individuals and what takes their place will be equally protective of the rights of the individual.
My Lords, I thank the noble Baroness for her very helpful comments and support for this order. I can give no assurances on behalf of trade unions, but most inform their members of increases in subscriptions in their journals or by mail. We would encourage them to do so as best practice. We try to encourage these things to be done by that method rather than by legislation. Of course, as the noble Baroness said, when workers receive their payslips they can see if there has been any change. I agree that it would be good practice for the unions to inform workers of increases before any deductions are made.However, we could not find any evidence of abuse. We do not want to impose any further regulation on the unions, so the matter is best left to best practice. We have received no response from individuals expressing concern about the proposals. The noble Baroness mentioned that this matter was on the Internet. One of the problems with that is that one may have a large number of "hits" but one does not know how people will respond. In the event, we did not receive any responses from individuals.
On Question, Motion agreed to.