I will try not to take too much time. At the outset I have had to give notice that a little local difficulty has arisen as to the intendment of Clause 17. It also relates to Amendment No. 26A. It is not merely technical but fundamental, so I have no option but to take it and bore you all with why, in the shortest possible time, it must be taken out. It will of course be a matter for decision on Report, but this difficulty warrants clarification on any showing before Report. That is the object of this exercise.

This difficulty may well have arisen because, as I have discovered, as yet there is no settled policy on this in my party; I cannot speak for other parties, but I suspect that I may. I think that I have discovered that there is as yet no settled policy in the Labour Party, but I do not know and can only speak subject to correction. This was acknowledged at Hansard col. GC 304 on 13 March by my noble friend Lord Henley, who said that there was as yet no decision as to the correct approach. That speaks for itself. A difficulty also arises in that many noble Lords may have been speaking for themselves at no one’s behest—of which I am, I suppose, a prime example. Of course, I seldom speak at anyone’s behest. This may have led to difficulties with the parties, which must be settled at a different level from where we are today, but it must be met.

In view of the way I put things, and dealing with how people speak for themselves and not merely for their party, I oppose Clause 17. I opposed it at Second Reading for reasons given under option A of the Library Notes, because it was open to abuse. I still oppose it for that reason. In Grand Committee, Amendment No. 27 was moved to amend Clause 17. I opposed it because of distortion of the balance, to put it simply, in favour of the trade union movement and for the reasons given under option B of the Library Notes. It found little favour with the Minister, the TUC, the noble Lord, Lord Wedderburn of Charlton, or—if I remember correctly—the noble Baroness, Lady Turner. However, it attracted the noble Lord, Lord Henley, who said that it would be “very strongly” supported.

Now one gets to the intendment of Clause 17. The Minister rightly said that the concept was to seek compatibility of our domestic law with the decision of the Strasbourg court in ASLEF, and that:

“The European judgment is clear: there are no ifs or buts. We are therefore obliged to make the consequential changes to our law, and that is what Clause 17”,—[Official Report, 13/3/08; col. GC 304.]

is all about. I totally agree. That was said after my noble friend Lord Henley had asserted that the basis on which you left out Clause 17 was that there was no obligation to follow the decision of the ECHR, because, as he said:

“In my submission, the judgment of the European Court of Human Rights is not binding. We do not have to legislate on this”.—[Official Report, 13/3/08; col. GC 313.]

I thought that my party was supporting my opposition to the clause standing part, but for a reason that I could not conceivably accept. It was only when I tried to get down into the issue that I discovered that many Members of the Committee were probably speaking for themselves and not for their party. That matter needs attention before Report.

Observations were made by my noble friend on Amendments Nos. 26A and 27 which related to Clause 17 stand part. Amendment No. 26A, which reflects the essence of the reasoning in ASLEF, will be redrafted to reflect conformity with the Long Title. At the moment, it is outside it and is defective. No one told me that, but I have had another look at it and come to that conclusion. That will be amended to bring it strictly within the Long Title. Amendment No. 27 is apparently to be redrafted to correct error, having eventually succumbed to the Wedderburn creeping barrage, which hit its mark in due course.

It will be for the House to decide whether Amendment No. 26A commends itself and, if so, whether Clause 17 is otiose, and whether Clause 17 stand part, howsoever amended—it looks as though it will be amended again by a revised Amendment No. 27—it being a common purpose of Clause 17 and Amendments Nos. 26A and 27 to amend our domestic law to seek compatibility, Section 174 of the 1992 Act having been found not to be compatible. That is the fundamental matter on which I hope agreement can be reached before we venture forth on Report. It is a fundamental principle and, if this were not acceptable, it has to be said by whom, and argued on the Floor of the House. It is not a matter that can be argued conveniently, subject to what the noble Lord says, today.

The final aspect is that Amendment No. 26A was tabled, together with this opposition to the Question that Clause 17 stand part, before Amendment No. 27. It was not known until the third day of Grand Committee whether my proposal—that Clause 17 do not stand part—would be supported, because there was no need to legislate. This is the antithesis of the situation, which is embarrassing to a degree. It was not known that, if we could not strike out Clause 17, we would very strongly support Amendment No. 27, which I have dealt with before. Again, I find myself in a difficulty. It was not known until the third day of Committee that, because there was no need to legislate, Amendment No. 26A would be opposed without any consideration of the merits. It was not opposed by anyone, unfortunately, except by my noble friend. My opposition to the Question will be retabled on Report with the amendment about expulsion and exclusion only on grounds of membership of a political party and to seek compatibility with ASLEF. I apologise for speaking at length.

My noble friend has, as so often, succeeded in making me realise how very ill informed and un-legally expert I am. My concerns about Clause 17 are very simplistic and straightforward. I ask the indulgence of the Committee so that I can explain why I have very severe concerns about this clause.

During my long career, I have been a member of two trade unions, both of which I found of great benefit. They were totally unconcerned with any political views that I might have had at that time, which were pretty misty, but they provided me with very clear benefits. Trade union membership provides legal protection in times of difficulty and security of employment and tenure, for both of which I was immensely grateful. I exercised my trade union membership appropriately and in one case I was quite a leading member of those who called the further education lecturers out on strike when I was a further education lecturer in my very early days. I have a good, robust trade union background.

I agree with everything that the noble Baroness, Lady Perry, has said. I hope, for a barrister, I shall be extraordinarily brief. First, I do not think that the noble Lord, Lord Campbell of Alloway, is right in saying that Clause 17 is outside the Long Title, which makes clear that the Bill is,

“to make provision about the right of trade unions to expel or exclude members on the grounds of membership of a political party”.

Clause 17 is about that.

Secondly, I do not think that it is right, as was suggested, that we could leave out Clause 17. If we just left it out, the Government would be failing in their obligation to give effect to the judgment of the European Court of Human Rights. Article 46 of the European convention expressly says that states have to abide by a judgment to which they are party. This is a judgment binding in international law and the Government have quite rightly introduced an amendment to give effect to that judgment.

Thirdly, I have already spoken at too much length at Second Reading and previously in Committee to the same effect as the noble Baroness, Lady Perry, on why there need to be adequate safeguards against abuse. The noble Lord, Lord Campbell, was kind enough to say that he would, if we had to bring the amendment back at Report, support something along the lines of the amendment to which we have already spoken—Amendment No. 27—which sought to introduce safeguards.

I have a bit of further news. I have had the great benefit, together with the noble Lord, Lord Morris of Handsworth, of meeting the Minister, Pat McFadden, on a second occasion this week, to discuss this matter with him and his expert advisers. The Government have not yet committed themselves to a particular solution, but he authorised me to say that they do not have a closed mind—in other words, that they are open-minded—and I believe that to be true.

One reason why we in my party are keen to build in safeguards rather than leaving it to the common law and litigation relying on common-law principles, as one used to when there was a closed shop, is that we believe that the BNP specialises in using litigation of a mischievous kind to further its political objectives. Therefore, it is not in the interests of the trade union movement or the wider society to have a situation in which there are no safeguards written into legislation by Parliament. We could argue as to whether those safeguards should have been written into it in the first place, in 1993, but that is beside the point; the point is that those safeguards were then written in by a Conservative Government with Labour support and they would simply be abolished by this Bill.

The real question is of what kind of safeguards there are that would make it harder for the BNP to bring mischievous litigation in tribunals or courts, including the Strasbourg court. I hope that the Government will join the opposition parties in the search. Whatever the noble Lord, Lord Campbell of Alloway, may think, I have no doubt that the Conservative Party, when confronted with the actual problem, would press for safeguards in exactly the way in which we are pressing for them—, I would hope that members of the Labour Party and the trade unions would also be pressing for them—for the reasons stated so powerfully by the noble Lord, Lord Morris of Handsworth. I do not need to remind anyone in Committee that he is a special witness to what is needed, having been an extremely distinguished and powerful general-secretary of the Transport and General Workers Union.

The noble Lord, Lord Morris, and I believe that it is not sensible for the TUC or affiliated unions to be in the position of saying that they do not want safeguards written in but want to leave it to the Queen’s courts to solve any problem. That is not a sensible position. Leaving aside the wording of the amendment, I suggest for the benefit of advisers who are present that what is needed is something along these lines: at the end of subsection (4A) of the 1992 Act, one could say that the measure “does not include membership or former membership of a political party where the values and ideals of the party are incompatible with a rule or objective of the union; the decision to exclude or expel was taken fairly and in accordance with the union’s rules and written procedures; and the consequences of exclusion or expulsion would not result in exceptional hardship”. Those words are my attempt to give effect to what I think is the judgment of the court. If those safeguards were written in and the union were to pursue them in practice—

Can I respectfully ask a question? I do not indulge in this sort of thing; it is a genuine question. The noble Lord has had meetings with the Minister; we have not. All I want to know is whether he is telling us what the Minister told him or what he told the Minister, and where we actually stand here, because he is a government adviser. I do not know whether he is speaking as a government adviser. Can he clear that up for me?

I am certainly not a government adviser on what we are discussing today. I am a government adviser only on some aspects of constitutional reform, of which this does not form part. I went to see the Minister with the noble Lord, Lord Morris, as two Back-Benchers from our respective parties seeking to achieve a friendly and sensible compromise in everyone’s interest. It does not seem sensible to have a great battle, leading perhaps even to ping-pong between the two Houses, on issues that ought to be capable of being resolved in a sensible way. I have not told the Committee, nor should I or would I, what the Minister told us because that is not appropriate. All I can do is to suggest safeguards that Ministers may consider before Report. This is a rather boringly long way of saying that I believe that Clause 17 must stand part because it is essential and that we will have to find safeguards, which will need to be built in either on Report or at Third Reading.

I seek elucidation from the noble Lord, Lord Lester. One of the safeguards to which he referred was that of avoiding hardship. I have not studied the other safeguards because I do not have them in front of me but it seems to me that he is putting this forward to achieve clarity so as to avoid litigation, particularly mischievous litigation. However, “hardship” could amount to anything.

The noble Lord, Lord Borrie, raises an important point, which I shall explain. I used the words “exceptional hardship”, not “hardship”. I do not suggest that we spend a lot of time analysing the ASLEF judgment today because it would not be sensible even for the lawyer Members to do that. However, if one reads it, one finds that the case is very much decided having regard to the fact that the particular individual did not suffer exceptional hardship. However, I am concerned that in a future case a BNP member may come along and say, “I have suffered exceptional hardship but it is not covered by any safeguard in the legislation”. If we leave Clause 17 as it stands, there is nothing to stop a case being brought on those lines. Therefore, it seems to me that we need to spell out the minimum we can in the Bill to try to avoid such litigation and to protect the unions—putting their house firmly in order in line with what Parliament wishes—from it as far as possible.

One could, of course, delete “exceptional hardship” altogether, but the danger of doing that is the one I have just described. That is the reason for putting it in. I originally put in a lot more language but was persuaded that one should put in as little as possible of a subjective and controversial kind. But I fully understand the question that the noble Lord, Lord Borrie, put to me. I hope that I have given my answer, whether he is satisfied with it or not.

I am in great agreement with the noble Lord, Lord Lester, with one exception, which I shall explain briefly. First, some noble Lords seem to omit the central question that it is the obligation of this Parliament to change the legislation to enact the principle in the case of ASLEF in the human rights court. Some noble Lords appear to want to ignore that obligation but I am very glad that most Members are quite clear that we cannot do so.

Secondly, Clause 17—if anyone has not read the ASLEF judgment, I have a copy here—as the government paper explained, is a straightforward attempt to enact the sensible principle of the judgment in the ASLEF case.

Thirdly, what we are about is finding a formula that will understandably satisfy those who think that there might be a case of something—perhaps exceptional hardship or some words of that sort—to mitigate the clause. It is quite ridiculous to try to draft that in Committee. We all know that the Government are thinking about it hard, and we all know that something will come back to us on Report. No doubt, lots of people will meet lots of other people and talk to them on the telephone, and that is what is going to happen. It is quite absurd to try to draft it today. I suggest that this proposal should be withdrawn and outside this Room, on some other occasion, we can all get on with finding a formula that achieves consensus in the House.

My noble friend Lord Campbell of Alloway sought some clarification, particularly from me on the position of the Official Opposition. As my noble friend made clear, I have asserted that it would be possible for us not to do anything. I am now strongly advised by both the noble Lords, Lord Lester of Herne Hill and Lord Wedderburn, that we do have to do something. The noble Lord, Lord Lester, quoted the appropriate article of the convention. If that is the case, and we have to do something, I say to my noble friend that it would obviously not be possible to simply strike out Clause 17 as he suggested. I originally said that we would be sympathetic to that. Failing that, we would then want to go down another route, in effect looking at what the Government offered in option A and option B and possibly heading towards option B which, in my understanding, is something closer to what the noble Lord, Lord Lester of Herne Hill, is pursuing. I make it clear that we seek a tighter reworking of Clause 17. We do not believe that we should go beyond what the judgment asked for.

I offer some further clarification to the Government by saying that it is quite clear that there will be many of us on all sides of the House who will be seeking some further reworking of Clause 17 on Report. Therefore, it probably behoves them to come up with something as well to see whether they can in due course meet us somewhere nearer to where I, my noble friend and the noble Lord, Lord Lester, are.

I do not think I have heard so many warm words about trade unionists and trade unions from Conservative politicians, either in this House or another House, than I have in the past few days. I think that is something of a blue herring rather than a red herring, because I have twice heard references to people having Conservative Party association or views being in danger of some form of expulsion from a trade union, which is something that I have never personally experienced.

I had the privilege of being the chairman of a Labour-affiliated trade union, of which a very distinguished Secretary of State under the noble Baroness, Lady Thatcher, was a member. He came to meetings. No one ever suggested that he should not or that his views were not compatible with membership of what is now part of the GMB. He paid the political levy, but I suspect that was a mistake. The important thing is that I never heard that questioned. There was a distinguished Minister from the Midlands who was a member of the NUM during the miners’ dispute. Again, I never heard anyone suggesting that there should be an expulsion.

In our last debate, I was much persuaded by the view of the noble Lord, Lord Lester, that it is better to have something to protect than leave it to the vagaries of the courts. In that sense I ask whether it is a Conservative Party view not only that there are there warm words to be said about the value of trade unions, but that the party does not believe that Conservative trade unionists are in any danger whatsoever from the trade union movement.

I am sure that with reasonable trade union general secretaries such as the noble Lord—my noble neighbour, if I can put it that way, since he has now come to live in Cumberland—there would be no danger at all. Moreover, I am sure that the noble Lord is right to say that Conservative Ministers have been members of the NUM, and so on. It is really a question of making sure that we get the law right in case something happens in the future.

I am grateful to the noble Lord. Is he aware that the BNP has registered itself as a trade union? While that does not deal with the point that has just been raised, it indicates how trade union registration can lead to some rather strange results at the fringe.

What the BNP does in terms of registering itself either as a political party or a trade union is a matter for the BNP. I cannot speak for it, and its purpose in doing so is a matter on which the noble Lord or anyone else can make their own guess.

I thank all noble Lords for contributing to what in some ways is a repeat discussion on Clause 17, and in other ways is new. Quite understandably, the clause raises points of concern for Members of the Committee on all sides. It was particularly refreshing to hear the contribution of the noble Baroness, Lady Perry. I cannot say that the Government agree with every word she said, but it was a valuable addition to our deliberations today.

If I heard the noble Lord, Lord Henley, right, we seem to have a consensus that the Government are obliged—as the noble Lord, Lord Lester, has pointed out on more than one occasion—because Article 46 of the convention requires the UK to abide by such a judgment. It is an important principle, as it is important that it should be accepted by the Official Opposition. The Liberal Democrats have agreed with us on this for a long time. What is more, it is the policy of this Government to make sure that our law does comply with convention rights. We believe that the judgments of the European Court of Human Rights should not be disregarded.

I shall be as brief as I can, but it is important that I should put the Government’s case for Clause 17 as it stands. The clause makes the changes to trade union law which are necessary to ensure that we adhere to the court’s judgment. Under our current law, it is unlawful for a trade union to expel or exclude a person from membership if the sole or main ground is that person’s membership or former membership of a political party. The relevant provisions of the Trade Union and Labour Relations (Consolidation) Act 1992, which came into force in 1993, refer to such involvement in political parties as “protected conduct”. ASLEF, as the Committee knows well, made a complaint to the European court that this aspect of our law represented a breach of Article 11 of the convention concerning freedom of association.

As in so many of these cases, the ASLEF case involved several competing rights. On the one hand, the expelled individual had the right to associate with others and the right in a free country to hold and express his beliefs. On the other hand, there are the rights of other members of the union to associate with people of their own choosing in conformity with their union’s membership rules. The court acknowledged that our law had tried to strike a balance between these competing rights. In 2004, Parliament considered these issues in some detail. Section 33 of the Employment Relations Act 2004—some Members of the Committee will bear the scars of that particular operation; I use that word because “discussion” does not quite capture it—amended the relevant provisions by giving more freedom to trade unions to expel or exclude political activists. However, the court determined that the UK law still did not strike the right balance. The judgment acknowledged the importance of individual rights but explicitly stated:

“However … Of more weight in the balance is the”,

trade union’s,

“right to choose its members”.

It is important to remember that, in making its decision, the court was mindful that the BNP member involved did not suffer any material loss as a result of losing his union membership. By that I think it meant that there was no closed shop any more; he did not lose his job as a consequence. Of course, the noble Baroness talked about rights in terms of advice and other benefits that come with trade union membership. The court argued that his ability to express his political views was not significantly affected. We have to consider the court’s judgment and it should be foremost in our minds when we consider this clause.

Last summer we held consultation on the appropriate way to respond to this important judgment. We put forward two options on how to amend the relevant legislation. Our proposals implement the simpler option—option A—favoured by the large majority of respondents, not just trade unions but also independent legal organisations such as the Law Society of Scotland and the Employment Lawyers’ Association.

Clause 17 removes all reference to “protected conduct” in those two sections of the 1992 Act. Section 174 sets various limitations on the ability of trade unions to expel or exclude individuals, one of which relates to protected conduct. Clause 17(2), which we are busy debating, repeals the provisions in Section 174 relating to protected conduct. Section 176 of the earlier Act provides the remedies for a breach of Section 174, and it refers to protected conduct in several places. Clause 17(3) repeals those references.

Therefore, Clause 17 increases the freedom of trade unions to set and apply their own membership rules, but we argued that the clause leaves important safeguards in place. Where individuals believe that a union has applied its membership rules wrongly or arbitrarily, then such individuals can take legal action against a trade union for breach of rule. Expelled members can also make a complaint to the certification officer about such alleged breaches of rule. As noble Lords know, the certification officer is a specialist authority in trade union matters and his or her powers to act as a speedier and cheaper alternative to the courts were significantly extended in 1999. I point out that Clause 17 in no way affects those protective arrangements.

Some noble Lords may be concerned that, despite the court's judgment, Clause 17 provides too much freedom to trade unions and that, hypothetically, this freedom would create the potential for abuse. This has to be approached sensibly, as I believe my noble friend Lord Brett did in his remarks a few minutes ago. Let us recall that the origin of the provisions which Clause 17 repeals can be found not in common law or in previous legislation going back decades, but in the Trade Union Reform and Employment Rights Act 1993. We are not talking about some fundamental or long-standing feature of our trade union law.

I agree with my noble friend that there is no evidence at all, either before—in other words, when the position of trade unions was exactly as we intend it to be if Clause 17 comes into law—or after 1993, that trade unions have sought to expel or exclude individuals for belonging to mainstream political parties. The hypothetical threat of union abuse is entirely without precedent. This is hardly surprising. Trade unions are very keen to attract members. They are not in the business of making wholesale expulsions or exclusions. Therefore, we must not legislate against a hypothetical threat; we have to make a rational assessment of the evidence which exists in the industrial relations context of today. In other words, we must apply better regulation principles when considering this issue. By the same token, we must guard against overcomplicating the law. We want to avoid creating scope for uncertainty to arise, and for vexatious, politically motivated, complaints to be made against trade unions.

As my noble friend Lord Jones said the last time the Committee met, on 13 March, we amended the relevant parts of trade union law in 2004 to make it clear that it was lawful for trade unions to expel or exclude political activists. That was an important change, and was probably more significant than the provisions in Clause 17. There is no evidence that the 2004 Act has led to abuse or politically motivated purges by unions. Clause 17 provides further freedom for trade unions in accordance with the ASLEF judgment and would allow unions to use political-party membership as a potential criterion for determining their own membership.

Apart from this clause, this Bill does not deal with trade union law. Its place in the Bill reflects the importance the Government attach to human rights and to the judgments of the European court. It amends the particular part of trade union law which was found to breach the European convention, in a way that is consistent with the judgment and avoids unnecessary complication.

Is the Minister aware that most of the arguments against what he has just said were deployed by the Government themselves in their argument before the European Court of Human Rights? If he reads that judgment he will see why those arguments will not do. He might also wish to reflect on the fact that the court itself said, in paragraph 52 of its judgment that,

“in the absence of any identifiable hardship suffered by Mr Lee or any abusive and unreasonable conduct by the applicant, the Court concludes that the balance has not been properly struck”.

Would the Minister not therefore agree that it is extremely important to deal with what is left out—that is, a case in which there is identifiable hardship or abusive or unreasonable conduct by a union? In the light of that, if we took the Minister literally and the Government followed his speech, that could be exploited by the BNP. Is that not something that should be further thought about rather carefully?

A number of matters need to be thought about carefully between now and Report; that is what I was coming on to say. But it is important for the Committee to hear the Government’s case, robustly put, as to why we opted for option A, and why that appears in Clause 17. That said, I take absolutely the points that the noble Lord makes. We are aware that there are other ways to change the law in response to this judgment and recognise that there are respectable arguments in support of alternatives. Of course, I hardly need to use “respectable” as we have heard them put forward with great persuasiveness at Second Reading and in Committee.

We remain open to others’ views on the clause. As we have already been told, there have been meetings in relation to this matter and the Minister for Employment Relations, my honourable friend Mr Pat McFadden, met the noble Lords, Lord Lester and Lord Morris, to discuss these complex issues. My honourable friend is obviously considering the matter, as one would expect with something as serious and important as this. This matter goes way beyond party—it is about getting it right for the future. So we intend—and I hope that the Committee takes note of this—to continue this dialogue in preparation for Report. But for the mean while, I suggest that the clause does stand part.

Before withdrawing, as is inevitable in these circumstances, I want to say a word of gratitude to the Grand Committee for the manner in which it has dealt with the problems today. The fundamental problem has been dealt with. We cannot just ignore ASLEF. The judgment is binding and we are under an obligation to see that our domestic law is compatible. That is the fundamental reason for my analysis.

It is a matter of relatively minor importance whether my noble friend Lord Henley or my party, when they have heard the merits of my Amendment No. 26A, written in plain English, want to support it or whether the House on Report wishes to support it. It has not considered it yet, and I shall be moving it. But I would not dream of taking your Lordships’ time by speaking to it now. Nor, indeed, can I do other than ask my noble friend if, at some time, he could let me know why he prefers his course, which apparently is to keep Clause 17 and oppose Amendment No. 26A or whether he prefers Amendment No. 27. I am still uncertain about what he is doing because I do not understand his reasoning. But this is a matter of minor consequence which can be sorted out, I hope, before Report stage.

I thank my noble friend Lady Perry of Southwark, who made a very helpful and knowledgeable speech, which was derived from experience. I hope that Members of the Committee will forgive me if I do not entertain any form of argumentative dissertation with the noble Lord, Lord Lester. We can go into that on Report.

Clause 17 agreed to.

moved Amendment No. 27A:

I support the amendment, to which I have put my name, because it seemed to me that my noble friend Lord Wedderburn had identified what you might call a gap in procedures and attempted to fill it. It struck me, when I first heard about it, that this would be a particular help in many instances to migrant workers who are here legally, but who have no idea whether the employment contract that they are employed under is technically legal. They would not know about PAYE deductions or national insurance deductions; they would simply be very glad to have the job and take the payment when they got it. However, if they later face dismissal which they think is unfair, they might find that they are not deemed to have a legal contract and, therefore, would not be entitled to sue for unfair dismissal, even though they might have been dealt with very unfairly.

The amendment makes it clear that if there has been connivance by the employee in illegality, that should count against the case, and it makes it clear that it would not be equitable to grant him any remedy. In other words, if they knew what was going on and decided not to say anything about it and not to pay the insurance contributions or have deductions made, that would be a sort of connivance, and they would not then be entitled to a remedy. There are very many cases when people simply do not know. If they are employed on that sort of basis, it may be that, when they want to sue for unfair dismissal because they feel that they have been unfairly dismissed, they do not have a case because they do not know the situation, whereas perhaps a worker who was born here and lived here does. Therefore, we hope that this wording will commend itself to the Government and that they will be prepared to accept what we have said.

I, too, support the amendment. It appealed to me to a considerable extent, and therefore I wanted to put my name to it. It seems to be a helpful opportunity to clarify the law in a difficult area which, as my noble friend Lady Turner said, may be particularly relevant for practical purposes to immigrant workers who are even more uncertain of the law and of their rights and could be harshly deprived of those rights if the law is not changed.

There are sometimes amendments to a Bill that are just about inside the Long Title and the wording of the Bill. In this case, it seems to me absolutely right that one should try—my noble friend Lord Wedderburn has properly seized the opportunity—to improve the law in the way in which he has described. The law is in a mess at the moment, because different courts and different tribunals at different levels have come to contrasting views on the incidental illegality that the noble Lord described. For example, there are cases where PAYE is not paid and other cases where the illegality of the employment is much more fundamental—there is a distinction between those two. One wants to ensure that when a worker is claiming statutory rights for redundancy, unfair dismissal, national minimum wage or whatever, the same basic rules apply, which he has described as the tort approach, as distinct from the contract approach. The claim should be barred only in the circumstances mentioned in Amendment No. 27A where the employee or worker either had knowledge of or participated in the illegality to such an extent or degree that it would be inequitable to grant him the remedy. In other cases where it would not be inequitable, where the illegality is incidental, the claim should not be disallowed by the relevant employment tribunal or court.

We agree with the amendment in the name of the noble Lord, Lord Wedderburn. To take the point that the noble Lord, Lord Borrie, made, it is clearly appropriate with a Bill whose Long Title begins with making provision,

“about the procedure for the resolution of employment disputes”,

to take an amendment that clearly improves the procedure regarding resolution of employment disputes, even though it goes a bit wider than the substance of the Bill.

I have not had the benefit of looking at all the cases that the noble Lord, Lord Wedderburn, raised. The purport of his amendment is obviously that the law is in a mess—and I shall come on to that when I reach my Amendment No. 28 in the next group. The only answer that the Minister can give to the remarks made by his noble colleagues—indeed, his noble friends, on this occasion—is that the law is not in a mess. Otherwise, the amendment seems simple common sense and we should approve it.

I shall make the shortest of contributions to support what my noble friend said. I have really only addressed this issue on hearing what has been put forward today. The amendment is extremely worthwhile and necessary and is on a matter that we on these Benches, and I personally, feel very strongly about. I do not have the knowledge and background of the noble Lord who proposed the amendment, but there is the potential for very unfair treatment of people who do not have the knowledge and have not had it put in front of them, such as immigrants and foreign people generally. So I give very strong support to what has been proposed.

I, too, support the amendment as I think that the points made on it have been very sound. In my experience of an industrial tribunal, we had to reject such cases. One case involved an underage person who was not entitled to work because they were not old enough to be employed, and we were unable even to consider the matter. I have raised in the Chamber the issue of someone I met who came to this country and went to work for a company, thinking that they were employed and in the country legally—although they were still in the country as an illegal immigrant. They worked for the company and tax was deducted; they were given a national insurance number; then the company went broke, and they had no rights to any wages of any sort and they could not get their tax back because the tax had never been paid in and the national insurance number was fictitious. Apparently, some firms have national insurance numbers that do not belong to any individual but are passed from employee to employee as an illegal ploy.

Would the proposal help that sort of person? The noble Baroness, Lady Turner, spoke about legal immigrants, but what is the position of someone who is not legal but is unaware of just how illegal the whole thing is? I understand that if you know that you are illegal and outside your rights, the amendment would not help you—but what about those poor, gullible people brought into this country, probably illegally, who find themselves in a position without help? What would their position be under this amendment?

I thank my noble friend Lord Wedderburn for raising this important issue. I do not know whether he will be pleased with my response, but that is for him to judge.

We believe that working individuals should be appropriately protected whether they are employees, workers or self-employed. Today’s flexible labour market and changing working patterns mean that there is a wider variety of working arrangements than was the case in the past. There have been cases where it has been necessary for the courts to decide whether an individual is entitled to a particular right, and the body of employment law has been adapted and refined in the light of changing working arrangements. All that is a statement of the obvious, but it is perhaps important to put it on the record. The courts have developed a series of tests to determine an individual’s employment status. In such cases, the courts have regard for all aspects of the employment relationship, including whether the contract is illegal.

Of course, the Government applaud my noble friend’s desire to improve and clarify enforcement of employment law rights. We are not sure that this amendment—it may not just be the wording—does that. First, the amendment requires a judgment which the courts already need to, and do, make in such cases about the level of an employee or worker’s participation in any illegality. Such a test is a fine judgment and in each case will depend on the particular facts. In many ways, that must be for the court to decide. For this reason, it would be difficult to attempt to enshrine in legislation a matter of interpretation which could apply to all types of working arrangement or, in other words, all contracts of employment.

Secondly, since the courts in such cases must already look at the legality of a contract and at a worker’s participation in any illegality, we do not think that the amendment is necessary. We of course support the broad principle that no worker should be penalised where he or she had no knowledge—and ought not to have had any knowledge; that is an important point that the amendment does not address—of the illegality concerned, but this is a question already addressed by the courts every day. Once a court judgment has been made on a particular set of circumstances, and has not been successfully appealed, that interpretation stands. Case law can be good or bad, proving that it is a flexible tool. However, the Government are not convinced that this change would be of great practical benefit. I want to make it quite clear that the Government support the broad principle that, in such cases, the worker or employer should not be deprived of their remedy when any illegality did not involve them and they did not know about it.

Because this is a complex area, I will point out one or two of the complexities that the Government see. One is the position, which may be rare, where an employee perhaps ought to have known. Another is the position around the tax consequences of the amendment if it became part of law. Other parts of government will clearly need to consider the consequences of putting this in primary legislation, which will take some time.

My offer to my noble friend, and I am not sure that he can expect any more from me today, is that my officials and I would be more than happy to meet with him and his supporters on the amendment to discuss the matter further. I want to make it clear that it is my present view that there is no way that we will be ready for anything like this—even if we were to agree to it—by either Report or Third Reading. But we can talk about my noble friend’s ideas and wording and see if we can move things forward on it. I appreciate that that is not the answer that the noble Lord wanted to hear. It may, however, be rather more than he expected to hear.

I am very grateful to everyone who spoke—with one exception—in support of the amendment. On the amendment’s substance, of course it covers a case where the worker ought to have known. The court would interpret participation to cover such a case, and/or take it into account in deciding whether it was equitable to grant a remedy. What else is important in deciding whether it is equitable to give a claimant a remedy other than whether he ought to have known about things that the employer was doing? I do not think that that is a substantial issue as the amendment stands. It could easily be amended if need be, but I am not sure that it needs to be amended.

My noble friend Lady Turner pointed out how important this principle is for immigrant workers. They do not know, and it can hardly be said that they have the obligation to know, what an employer is doing or if he is offending some legal obligation, whatever it may be, from social security to tax law. The Minister said that this would raise all sorts of difficulties in tax law, which would take a very long time to consider. I would have been more impressed if I had been given an example, particularly as this amendment has been on the Marshalled List for quite a long time.

moved Amendment No. 28:

I wish to make two points. First, I express some surprise that no advice was given that this amendment did not fall within the Long Title or the scope of the Bill. If you change or enact a definition of the contract of employment, as this amendment tries to do, you affect the entire, enormous area of employment law: both common law decisions and, rather more importantly, the employment protection legislation, the employment tribunal legislation and even the Gangmasters (Licensing) Act, which is very much affected by a change to the definition of the contract of employment. However, it was my understanding of one conversation—I hope I do not break any confidences—that a fairly relaxed view is being taken about what is admissible as an amendment to this Bill, and Amendment No. 28 shows how right that is.

Secondly, I wish to oppose the amendment on substantive grounds because its drafting is so serious that it would deprive tens, if not hundreds, of thousands of workers of their status as employees under a contract of employment. I say that because of proposed new subsection (1)(b), which is the central principle in regard to the contract of employment. When is a worker an employee? When, the amendment says,

“the employee is subject to a right of direction and control as to the manner in which the services are provided”.

That is the old, crude test. One finds in the leading text book on this matter some 60 pages of discussion about that, beginning with the fact that the control test has become very much more relaxed in cases after 1890, which is the sort of date to which this amendment, with great respect, belongs. There have been other tests, such as: is the worker part of the enterprise in a way that integrates him into it? Another test, which judges use very much now, is whether someone is in business on his own account. That is quite different from the control test, but often merges with it into a very subtle set of decisions which I shall not refer to by name this time.

Let me give some examples. In modern law, employees include a skilled surgeon—I do not know how an employer will give him direction in the manner of his work; a train engine driver; an aeroplane pilot; a proficient crane driver; an experienced master of a vessel—the control test just will not give you the answer there—and many other people. A Law Lord once said that if someone were told that the master was going to control the manner of their work, they would give a sturdy answer and say, “I know how to do my job”.

I enter this debate somewhat late because it is seven weeks since I was buried alive in Crossrail. This is the first opportunity that I have had to address this Committee, for which I apologise.

This is the best point in the proceedings to raise the point I want to make. I am very confused and puzzled as to how some of these provisions apply—and I am worried. I originally introduced two amendments, which have gone but which would have cut across some areas of this issue; an issue which has become heavily dominated by the long shadow of Morecambe Bay. I am worried that, while the proposal may address the case of the Morecambe Bay cockle pickers very thoroughly, it does not allow for the encapsulation of all the other people who could be described as gang workers.

We are not talking about gangmasters under this amendment, unless I have missed something from the noble Lord, Lord Razzall. This is about a considerable change, as I shall argue shortly, in contracts of service.

I am grateful for that but I did say that Morecambe Bay was casting a long shadow—and further long shadows are cast before those. This clause has the shadow of gangmasters upon it; that is my concern.

My concern, on which noble Lords may guide me as they please, is that we could easily come to the point of focusing and crystallising a point of law that relates to gangmasters, allowing significant employers of large numbers of temporary staff to fall through the loop so that they would not be addressed by the Bill. I am concerned that if we are doing this job we are not doing it well or thoroughly enough unless we somehow encapsulate a responsibility on behalf of the underprivileged young workers who form gangs and are used in other forms of short-term employment in which they are very vulnerable.

I am grateful to noble Lords who have spoken in this debate, not least to the noble Lord, Lord Razzall, for proposing the amendment—but also to the noble Lord, Lord James. It is good to see him come out from the outer darkness and back into the light of the Moses Room, to make a contribution which I know he feels very strongly about. We have had some useful discussions about it and I do not think that we have heard the last from him on this matter in this Bill.

I do not think that the noble Lord, Lord Razzall, will be that amazed when he hears that the Government cannot accept the amendment. Let me put it this way. We believe that working individuals must be appropriately protected, and it does not matter whether they are self-employed, employees or workers. As I said in the last debate—there are points of equivalence between the last debate and this one—changing working patterns mean that there are now more and different types of working arrangements than there used to be. It has been necessary on a number of occasions for the courts to decide whether an individual is entitled to a particular employment right. Over many years, the body of employment law has been, and is being, adapted and refined in the light of changing working arrangements.

The noble Lord knows that the Government carried out a four-year review between 2002 and 2006 that examined both the rights of workers and employees and their differing responsibilities. The results of the review were published as part of the Success at Work labour market strategy paper in March 2006. The review concluded that the present legal framework reflected the wide diversity of working arrangements and different levels of responsibility in different employment relationships. Changes to the legal framework would not prevent instances of abuse or lack of awareness of existing rights, which were highlighted as problems in the evidence to the review. I do not apologise for using these phrases; it could reduce overall employment and damage labour market flexibility, which is one of the reasons why our employment rate is so high at present and is higher than it has ever been before.

The courts have developed a number of tests that examine an individual’s circumstances and consider all aspects of the relationship, including the reality of the situation, to establish an individual’s employment status. The amendment is looking to enshrine common law tests for employment status in statute. It would be difficult, and potentially very confusing, to attempt to cover all types of working arrangements in legislation, particularly in such a fast-moving, changing environment. Once a court judgment on a particular type of arrangement has been made, and not successfully appealed, that interpretation stands. Case law is, in effect, proving to be a flexible tool.

The noble Lord raises important issues, and I want to offer him the same courtesy that I offered my noble friend on the last amendment. He and his colleagues can meet my officials to talk through his proposals a bit further. He said that this is a probing amendment; perhaps he would like to probe it further with them outside the Committee.

I am grateful to the Minister for that offer, and I will discuss with my colleagues how best to take it forward. Having listened to the remarks made by the noble Lord, Lord Wedderburn, and by the Minister, I am not persuaded that now is not the time to attempt to enshrine in legislation, rather than relying on common law, the principles in the 60 pages to which the noble Lord, Lord Wedderburn, referred. My knowledge is not as great as his—indeed no one in this Room has as great a knowledge as he does in this area—but it seems to me that if we are at the stage of having 60 pages of definition of the employment relationship, this is perhaps a moment at which the legislature ought to be intervening to put its view. I am delighted with the Minister’s offer. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

had given notice of his intention to move Amendment No. 28ZA, to insert a new clause, Gangmasters: further penalties before Clause 18.

It is a great pleasure to be with the Grand Committee. I am here as a result of paragraph 7.52, “Admissibility of amendments”, of the Companion. As the Committee knows, when noble Lords want to put down an amendment a procedure from the Companion is involved. It says that the Clerks, who serve us extremely well, will advise on the admissibility or otherwise of amendments. In this case, the advice from the Clerks was that the amendments proposed by my noble friends Lord Wedderburn and Lady Turner fell outside the scope of the Bill and, therefore, should not be put forward.

Yesterday, I discussed this with my noble friend Lord Wedderburn and I am very grateful for his time. Quite reasonably, under the rules, my noble friends are allowed to ask, none the less, for these amendments to be printed and tabled, which they are before this Committee. However, the Companion goes on to say that it falls to the Leader of the House to come to the Committee and to invite it to follow our practice; that is, where advice has been clearly given that this is inadmissible in the terms of the Bill, the Committee should say that it does not wish to see the amendments taken forward.

I do this in the spirit of saying to my noble friends that I completely understand the importance of the issues that are being raised. I know that my noble friends Lord Bach and Lord Jones of Birmingham would be very pleased to discuss the issues and I invite my noble friends to discuss with the noble Baroness the Chief Whip the possibility of further debate and discussion on this. So I take nothing away from the importance of the issues. Having taken a large number of Bills through your Lordships’ House, I have always felt that it is very important to make sure that what we have before us is relevant to the legislation being debated. In this case, the clear advice from the Clerks is that it would not be in these circumstances. I hope my noble friends accept that; but, if not, I must invite the Committee to endorse our Clerks and to endorse what I have just said.

With leave, I shall not move any of the three amendments at issue. I have discussed the matter with my noble friend Lady Turner, as well as with my noble friend the Leader of the House. I am most grateful to her for her time, which turned out to be a waste of her time, for which I am deeply sorry. I was out of London on 20 October when my noble friend Lady Turner offered these amendments and was advised that they were outside the scope of the Bill. She, as we discussed, said that we wanted them to be printed and tabled for various reasons, such as giving notice of very serious issues, as my noble friend the Leader of the House has agreed. She was told by a Clerk on that occasion that even if she insisted they could not be printed or tabled. I learnt of this on returning to London and sent an e-mail to the chief Clerk, who took a slightly different view and accepted that they should be tabled. He took the view that the House must decide because paragraph 7.52 of the Companion states that,

“the admissibility of an amendment can ultimately be decided only by the House itself, there being no authority that can in advance rule an amendment out of order”.

As a matter of principle, we therefore asked for these amendments to be printed. I am most grateful to the Leader of the House for doing what the Companion says that she should do. I shall, of course, follow and not waste any more time, except to say that I am very happy not to move these amendments.

The noble Lord is absolutely right on this occasion, first, to have insisted on his right to have the amendments printed and, secondly, to have listened to the advice of his noble friend the Leader of the House. He is right in saying that only the House can decide on this matter, but, by tradition—I speak as someone who has been here as long as the noble Lord and almost as long as the noble Baroness, Lady Turner—we take the advice of the Leader of the House on these matters. The noble Baroness the Leader of the House has given that advice and it is therefore our duty to take it.

This arose because my noble friend Lord Wedderburn was away and I discussed the issue with the Clerks. I was advised that it did not fall within the Long Title of the Bill and so on, and therefore was not acceptable. I was concerned about the insistence that the amendment should not be printed. I said that since I was simply the second noble Lord on the list of supporters, I had no authority over the amendment and did not want to withdraw it in the absence of my noble friend. However, I e-mailed him and told him what the score was. The Clerk suggested an alternative which, when I received it, was one that I was quite certain my noble friend would not accept. I apologised to the Clerk and said that I could not accept it either.

However, I am grateful for the intervention of the Leader of the House and I am sorry to have taken up so much of her time. Of course I am willing to accept whatever she thinks is the right thing to do.

As they would say in the Court of Appeal, I agree entirely with the remarks of the noble Lord, Lord Henley.

[Amendments Nos. 28ZA and 28ZB not moved.]

Clauses 18 and 19 agreed to.

Clause 20 [Commencement]:

moved Amendment No. 28A:

moved Amendment No. 30: