rose to move, That the draft order laid before the House on 23 November be approved [Second Report from the Statutory Instruments Committee].

The noble Lord said: My Lords, noble Lords will recall that the Government introduced, in the Employment Act 2002, a framework designed to improve the way in which disputes between individual employees and their employers are resolved. The intention of the framework is to encourage disputes to be resolved through a better dialogue between employers and employees.

The Act provides that, in most cases, the parties should follow a three-step statutory procedure. First, the employer must set out the circumstances of the dismissal or disciplinary action, or the employee must set out the grievance, in writing. Secondly, both parties must meet to discuss the dismissal/disciplinary action or grievance. Thirdly, the employee may appeal against the employer’s decision if he or she is not content. If there is an appeal, certain steps must be followed.

A failure to follow the three-step procedure may have consequences for the party at fault, should the employer’s action or employee’s grievance then be the subject of a formal complaint to an employment tribunal. Where employers fail to follow the statutory procedures, a tribunal may increase the amount of any award to the employee. Any award may also be increased where it becomes evident, during the course of such proceedings, that employers have either failed to provide a written statement of particulars of employment or where it is incomplete or inaccurate. Failure by an employee to observe the procedures could result in the tribunal not hearing the complaint. In addition, in cases where the complaint is heard and the employee is successful, the resultant award may be decreased.

It is also important to note that the statutory procedures do not apply to all jurisdictions automatically. The statutory procedures and the requirement for the tribunal to consider the claimant’s written statement will apply only to any complaint under the jurisdictions listed in Schedules 3 to 5 to the Act. The order seeks to add three recently created jurisdictions to Schedules 3 to 5. Each jurisdiction is similar in nature and I therefore propose to highlight their broad similarities rather than discuss them separately. Under each jurisdiction, there is a requirement for the employer to consult, or in some circumstances to negotiate, with employees or their representatives. Each jurisdiction contains provisions protecting employees or representatives from detrimental treatment by their employer when exercising their bargaining or consultation rights. At present, the jurisdictions listed in the draft order are not subject to the statutory grievance procedures or the written statement penalty provisions because they are not included within Schedules 3 to 5 to the Act.

Article 2 of the order will rectify that by listing those parts of the regulations that provide protection against detriment within Schedules 3 to 5 to the Act. This approach is consistent with the treatment of similar jurisdictions; for example, they already provide that employee representatives of a European co-operative society, who have suffered detriment, should follow the statutory grievance procedure.

We propose that this order will come into force on 6 April 2007. The Government are making the amendment now—more than four months in advance of that date—to ensure that businesses and employees have plenty of notice of the change. The DTI carried out a three-month consultation about the draft regulations between May and August this year. There were 12 responses, including representations from the CBI and TUC. A clear majority of respondents agreed with our proposals. They noted that this was a minor change that would not be burdensome. The order will ensure that the three jurisdictions will be treated in a consistent manner with similar jurisdictions. The amendment will therefore make things simpler for employers and employees alike. I beg to move.

Moved, That the draft order laid before the House on 23 November be approved [Second Report from the Statutory Instruments Committee].—(Lord Truscott.)

My Lords, noble Lords will be relieved to hear, due to the lateness of the hour, that we welcome the order, which is intended to ensure that the dispute resolution framework set out in the Employment Act 2002 will apply to the three stated new areas. We welcome any measures that will encourage more employers to engage in information and consultation activity. We believe that voluntary measures like this one allow the flexibility which is so helpful in dispute resolution.

However, concerns with the overall cost of the statutory dispute resolution procedure have been raised with us by various business leaders. So we welcome the Government's decision to review the framework for settling dispute resolution, as set out in the Written Ministerial Statement last week. The Government admitted in that statement that,

“changes to the various components of the current system could produce real benefits for businesses and individuals, by reducing the time, cost and stress involved in settling disputes”.—[Official Report, 7/12/06; col. WS 139.]

To do that, they are reviewing the dispute resolution procedures 2004. That is welcome news, although the Institute of Directors and indeed the GMB, both of which had good reasons for saying so, suggested waiting to implement these regulations until after that review has been completed. Perhaps the Minister could expand on the Government’s reasons for going ahead.

The North Western Local Authorities' Employers' Organisation claims that it will take two hours for managers to understand the effects of this order, but the Government have dismissed that claim. Can the Minister assure us that the Government will provide information about the implementation of this order to businesses in language that is easy to understand? As I said at the outset, we welcome the order. I look forward to the Minister's responses to these few points.

My Lords, this must be a wonderful day for the Government, when the three parties of this Parliament all agree. On behalf of the Liberal Democrat Benches, I welcome the order.

My Lords, I am exceedingly grateful for the support and constructive comments of noble Lords this afternoon. I thank the noble Lord, Lord Roberts, and the noble Lord, Lord De Mauley. I shall deal with the couple of points raised by the noble Lord, Lord De Mauley, about the burden that some employers, particularly small businesses, may face. There will be initial costs associated with putting procedures in place for some firms. In the longer term, business stands to gain from the better management of disputes, timely settlement and a more efficient tribunal service.

Why should the Government not wait for the outcome of the review before making this amendment? It is necessary for the Government to make the amendment at this stage for two reasons. First, while the Government would not wish to prejudge the outcome of the review, it is highly likely that any replacement procedure or modified procedure would have to refer to the jurisdictions listed in the current schedules in one way or another. Secondly, any potential amendments to the statutory dispute resolution procedures resulting from the review are unlikely to be made for some time, which would create considerable delay. It therefore makes sense to make this amendment now.

On Question, Motion agreed to.

House adjourned at 6.11 pm.