Committee (3rd Day)
Clause 39 : Employee support for employee study and training
79: Clause 39, page 17, line 37, at beginning insert “Where an employer does not have acceptable annual arrangements for discussing employees’ training needs in place through annual performance reviews or other arrangements,”
Amendment 79 would quite simply protect those businesses whose good practice in arranging time for their employees to train should give them the right to exemption from too much of the regulatory burden that has been created with recalcitrant businesses in mind. Indeed, much of this part of the Bill seems to make an assumption that businesses need to be bullied or forced into doing the Government’s bidding. The reality is that most employers know well—without the Government or anyone else having to tell them—that it is in their own best interests to ensure that their people are properly trained and equipped. The majority of them not only know this but actively pursue it.
The most recent data from the CBI education and skills survey show that 89 per cent of businesses have training and development plans. The vast majority of employers in this country are strongly committed to investing in skills, a fact that is reflected in the £39 billion per year invested by businesses in skills training. Many of these employers have existing arrangements for discussing employees’ training needs, be they at regular appraisals or, perhaps, at annual performance reviews, as both the IoD and the CBI have told us.
While we certainly are generally happy with the objectives of Clause 39, as my honourable friend Nick Gibb said in another place, the figure from the CBI of £39 billion spent on training, compared with the calculated benefits of this new right, which the impact assessment has put at between £200 and £400 million, shows that what is already being spent is up to 100 times greater than the anticipated benefit of the new right. I suggest that we should avoid creating a greater regulatory burden for those companies that are already more than fulfilling any reasonable expectation of them for training and skills. Where good practice does exist, there is no need for increased regulation. In such cases, training needs should be dealt with through existing programmes, negating the need for legislation. The CBI argues that this approach has worked well for flexible working. Six million people now have a legal right to flexible working; the number increases to 14 million if you count those who do so in practice. Can the Minister explain why this should not work in the case of training and skills? I beg to move.
We have quite a lot of sympathy with this amendment. However, on reading the debate on the same amendment in the other place, we recognise the importance placed by the Minister there on the need for employees to take some responsibility for their own training. He said that we were in a sense trying to change the mindset and behaviour of employees as well as employers. Certainly we are with the Conservative Party in feeling that good employer practices such as proper appraisal systems are important, but we are worried that young people aged between 16 and 18, having had an appraisal and entering into an agreement, may find that things change rapidly and that what they really need is another kind of training course. The wording of the amendment is inflexible in that, once a training programme has been agreed, everyone must stick to it. Employees would have no opportunity to say that they would like time off to do something else. We should look at all the reasons why something is not agreed. Therefore, while we have sympathy with the amendment, we do not go along wholly with it.
I agree totally with the noble Baroness. This amendment deals with a situation where the ideal arrangements are not in place, but I worry because a lot of the work being done to ensure that employers engage with apprenticeships takes place through union learning reps, whom I know the party opposite also favours. They should be part of the ongoing arrangements or audit of the report. In the absence of such arrangements, I suppose that Investors in People or another type of facility in the workplace might be able to help. However, the amendment is restrictive in that it closes things down rather than opens them up.
My issues on proposed new Part 6A go somewhat wider and, while I agree with the noble Baroness, Lady Sharp, that the amendment might not be exactly the right way to loosen up these provisions, they nevertheless need to be loosened and I want to make the argument for why the amendment moved by my noble friend on the Front Bench at least gets us started along the way.
New Part 6A is very detailed and prescriptive. We would all agree that there are difficult employers, if I can put it that way. If an employer is “difficult”, that is usually someone’s opinion of the case. Is the opinion to be that of the unmentioned sector skills councils, where presumably the problem would lie in not enough training being done or in its being done badly? There are many possible reasons for an employer to get into that situation. There may be financial problems; it might not have been a wise decision to take on new employees just starting out on their careers when the bank is saying, “We give you six months and no more”. The company might be in the process of being sold or taken over, the managers could be nearing retirement or there could be a major reorganisation under way. Indeed, I wonder how the Learning and Skills Council is getting on at present in terms of taking on new recruits. In that context, I point out that there have always been problems about who is doing sufficient or insufficient training, as well as who feeds into and who takes out of the pool. Over the time I have been involved in industry, we have always accepted the necessity for a trade-off between those companies that make more than the average contribution and those that, for good reason on occasion, do not.
Another worry that I have about this new part is that the psychology is wrong. While I can see the argument of the noble Baroness, Lady Sharp, that it puts responsibilities on to apprentices, I would be wary of loading too many on to them. That would go against the grain. In the process of putting duties and responsibilities on employers, quite a lot of this part assumes that there will be conflict and sets out the ways in which those conflicts can be solved. A lengthy list is set out in new Section 63F(7), on which we will debate amendments in due course, but do we really expect there to be a balanced and productive discussion between an employer and an apprentice on “planned structural changes” in the company, or indeed under paragraph (j) on,
“any other grounds specified by the Secretary of State in regulations”?
Over what I see as the positive and worthy efforts of both employers and apprentices is the brooding presence of the Secretary of State, who has the power to change the rules at any time, as well as that of the tribunals.
Much of this complex system is arguably unenforceable, at least against apprentices. For my part, I am happy that it would be unenforceable against them because there is no way that a responsible employer would seek to go to law or even look to a tribunal hearing against an apprentice. That is simply not a sensible way of spending time and money and, indeed, the level of emotional involvement might get completely out of hand.
I point out to the noble Viscount that my reading of this part of the Bill is that it applies not just to apprentices but to all employees. The Minister may correct me on this, but I think that this right is going to be introduced for all the employees of a company.
I apologise, because I have always been in the habit of talking about people being trained rather than apprentices, but on this occasion I have fallen into error in confining my remarks to apprentices. I accept fully that this would apply to all employees.
My third issue is that of regulations. These make 12 appearances, which is not bad in eight clauses. How many statutory instruments would they generate? I suggest that there might be eight of them with some consolidation. At around five pages each, they would come to up to some 50 pages. This mass of secondary legislation goes directly contrary to government policy. Where in all this is the Cabinet Office with its policy of less and better regulation, its policy towards reducing burdens and its regulatory reform programme? It takes a long time to see the regulatory reform of one statutory instrument, but here we are to have another eight, or even 12. This proposed new part needs to be thought through again because it is overly detailed and prescriptive and could turn out to be very costly in its regulatory impact. We need to support my noble friend’s amendment and so relieve good employers, and their good apprentices, from this nightmare entitled, “See you at the tribunal”.
We must invest in our nation’s talent to succeed in the highly competitive global economy. There is consensus in this Chamber on that point, which flows from the Leitch report. I was disappointed when the noble Lord, Lord De Mauley, said that we would be bullying employers, because nothing is further from the truth. Indeed, we applaud those employers who, as he rightly drew to our attention, invest significant sums of money in training. They do a very good job, whether it is for apprentices or for a whole range of other workers in their employment. However, they are not the group that we seek to impact on.
Despite the progress that we have made in the past decade, our nation’s skills base has not yet met our aspiration to be the best in the world. Too many adults struggle with low or out-of-date skills. Perhaps the most depressing statistic is that one-third of employers do not train their staff at all, which seems absolutely astonishing. Eight million employees in England go without training every year. We cannot allow that situation to continue. We have to change the culture and the attitude towards training, certainly with those employers and with some employees as well.
Successful employers see investing in the skills of their workforce as one of the most powerful things that they can do to drive their businesses forward. They know that it makes sense for the bottom line. They understand that those businesses that do not invest in training are 2.5 times more likely to fail in a recession. We are seeking to create a culture in which every employer takes that view and in which individuals see improving their skills as one of the most powerful things that they can do to help them to realise their career aspirations. It is not our view that we in any way need to bully, because there are so many employers doing the right thing; it is the ones that are not embarking on any training at all whom we need to influence. We are giving employees a right to a serious conversation with their employer about their skills development. That will help to encourage and support adults and young people to develop their skills and rise as far as their talent will take them.
Time to train goes with the grain of what the best employers are already doing. They are having serious conversations with their employees. It may be in an annual appraisal or in a separate discussion on training. This will help others to follow that example and support their employees to develop the skills that their business needs to prosper in the 21st century.
I want now to address some of the points that have been made. I agree with the noble Baroness, Lady Sharp, about the rights and responsibility approach. We hope that we are giving more rights to employees. This is a fairly cautious, but nevertheless important, step in that direction. Yes, it will require people to exercise those rights responsibly. We are trying to ensure that there is real flexibility. I endorse the point made by my noble friend Lady Wall in relation to union learning reps, who, as I think is universally acknowledged, play a terrific part in encouraging employees to develop their skills and in encouraging employers to focus on the importance of training.
I, too, was somewhat puzzled at the focus given by the noble Viscount, Lord Eccles, to apprenticeships. Apprentices are not the group that we have to worry about, as their training will be laid down. We do not believe that we have made this structurally unenforceable. I do not expect apprentices to have to go through that kind of debate. Neither do we believe that there is a mass of regulations that make this impossible to work. Indeed, we consulted on that matter and we are modelling this on flexible working in order to use a system with which employers and employees are familiar. Our current intention is to have only two or three sets of regulations.
Amendment 79 would prevent those employees whose employers have in place systems for considering training needs from being able to make a request for time to train. It would, as the noble Baroness, Lady Sharp, said, get rid of the flexibility that will exist. I appreciate the aims of this amendment—the need to recognise within the new statutory scheme what good employers are already doing to assess their employees’ skills and training needs and to reduce the burden on business. I assure the noble Lord, Lord De Mauley, that we do not want to increase the burdens on business. We are at one with him on that. We believe that those employers who are doing the sorts of things that he drew to our attention will not be faced with additional burdens.
However, we do not feel that the proposal put forward by the amendment is the right way to go about it. The amendment risks, by introducing an element of qualification, complicating the eligibility provisions and creating a landscape that is perhaps confusing. For example, it is not at all clear from this amendment what exactly “acceptable arrangements” are or how they would be judged. An employee would not know whether they could make a request unless they knew whether or not their employer’s systems were of the required standard. That could put off employees from making requests, including potentially a great many who are in greatest need of training.
Our preference, therefore, is to leave the right open to all employees who satisfy the basic eligibility criteria. They will be able to judge whether or not they need to use the right to gain access to training. As I said, it is our strong expectation that, where an employer has good systems in place, they will be unlikely to receive many, if any, requests under these provisions. They will already have had a serious discussion on training with their employees.
In Committee in another place, an alternative proposal was put forward to provide employers with an additional reason to refuse requests where they have already invested time and effort in considering their staff’s training needs and acted on meeting those needs where necessary. We said at the time that we could introduce such a reason via regulations using the power at new Section 63F(7)(j) if it was supported through consultation with stakeholders. However, our initial discussions have revealed mixed views and it is not clear whether it is actually needed.
None the less, in the light of the views expressed today, principally by the noble Lord, Lord De Mauley, I am happy to commit to the Committee that, after the new provisions have been in force for a year, we will carry out a review, in consultation with stakeholders, to examine whether there is sufficient evidence to support the need for such an additional reason of refusal to be provided. I emphasise that it is not our wish to create any unnecessary or additional burden. On this basis, I would be grateful if the noble Lord would consider withdrawing the amendment.
I thank the Minister for his remarks, which seemed in fact to include a rather better case for my amendment than I made myself. He seemed to say that two-thirds of employers provide very good and proper provision. The amendment would limit the effect of the clause to those employers who do not have acceptable arrangements in place.
I thank my noble friend Lord Eccles for his contribution and I am grateful to the noble Baroness, Lady Sharp, for expressing her sympathy with this amendment. My next amendment, Amendment 79A, will tackle some of the responsibilities of the employee—a matter that she raised. Like my noble friend, I worry about bureaucracy being piled on already compliant employers. I will read the words of my noble friend and of the noble Baronesses, Lady Sharp and Lady Wall, as well as of the Minister, and consider his helpful offer, to see whether I feel the need to return on Report with a better form of wording. In the mean time, I beg leave to withdraw the amendment.
Amendment 79 withdrawn.
79A: Clause 39, page 17, line 37, leave out “may make” and insert “wishing to make a request in relation to study or training must complete”
Our Amendment 79A is designed simply to seek assurances that the burden for filling out the form to make a request for time to train must fall with the employee, not the employer. The Bill states:
“The application must be made for the purpose of enabling the employee to undertake study or training (or both) within subsection (4)”.
This subsection, therefore, does not make it completely clear that the administrative burden of filling out the form must be considered to have fallen on the employee.
Surely if as an employee you are given this great right, the least that can be expected of you is to take responsibility for completing the application. We simply want to hear from the Minister that this would be the case. I beg to move.
Amendment 79A seeks to make it clear in the Bill that a qualifying employee wishing to make a request in relation to study or training under new Section 63D must complete an application. We do not think that it is necessary to make this change. I hope that the noble Lord, Lord De Mauley, will understand why when I make it clear that we have built in the safeguards and precautions that he rightly sought.
New Section 63D(1) establishes the right of qualifying employees to make an application, and subsection (3) requires that the application is made for the purpose of enabling the employee to undertake study or training. We define a key element of the policy, that requests have to be for training that will improve the employee’s effectiveness and improve business performance, at new Section 63D(4). New Section 63E then sets out in more detail what an employee must do to make an application—which lies at the heart of the noble Lord’s concern—including what information must be included in the application at new Section 63E(4).
If the principal concern behind the amendment is around how exactly an employee would make an application, I am happy to confirm that regulations made under the power at new Section 63E(5)(a) will make it clear that employees must make applications in writing. We have sent copies of the draft regulations to opposition spokespersons, Cross-Bench liaison Peers and noble Lords who have spoken in debates prior to today. I shall also place a copy of the regulations in the House Library.
We agree that it is important for employers that an application is made in a clear way, so that the consideration process is as simple as possible. I shall make sure that these concerns also are addressed in the guidance. I hope on this basis that the noble Lord will agree to withdraw the amendment.
I am grateful to the Minister, who is correct in his understanding of the effect of the amendment and for his confirmation that that is what is intended, but I simply do not understand why it cannot be placed at the beginning of the new section, where it will be most effective. For that reason, I should like to test the opinion of the Committee.
80: Clause 39, page 17, line 39, leave out from beginning to end of line 2 on page 18
I shall be brief. I would still like to make an argument for the loosening up of Part 6. On the question of who is doing enough training and who is not, there is an element of chicken and egg. It is easy to say that it is those employers who are not doing enough training who go under in this period of very rapid change, but it could of course be because they are going to go under and do not have a market position that is going to last for much longer that they find themselves in the difficult position of not being able to do enough training.
I should also like to come back to the regulations under Part 6. I am not sure how many there will be, but it is possible that there will be 12—that is the number of times that regulations are mentioned. Either there should be more in the Bill, so that there is less need for regulations, or some of the powers should be reconsidered and dropped. We already have a very rapid increase in the amount of law and much of it is achieved by the weight of secondary legislation. The Government should have another look and see if they really need all these regulations. If they decide they do not, I, for one, will be very pleased. I beg to move.
I give some support to the noble Viscount’s view that the number of references to regulations in this small section of the Bill is quite excessive. It gives the impression that you cannot do anything without reading a lengthy screed of regulations. I read it through with a young person who is working with me as an intern and we were both rather appalled by the degree to which the really very simple notion that an employee has the right to ask his employer if he might have time off for training—he has the right to ask, he does not necessarily have the right to take it—will become very complicated if he actually wants to do it. He will clearly have to have a special 63D form which he will have to fill in in the right way, and then there are all the complications about appeals, if he wants to appeal.
The other day in Committee, we had a very good debate about the report produced by the committee chaired by the noble Lord, Lord Filkin, on the burden of regulations on schools. This is not about schools, but, as was pointed out then, a lot of attention is given to regulatory reform in the private sector, but not enough in the public sector. This is largely a question of regulations on the private sector, but nevertheless, I have quite a lot of sympathy with the noble Viscount, because the number of regulations proposed seems excessive.
We support the right of employees to ask for time to train, but I share my noble friend’s concerns about the bureaucratic burden in this section. I was therefore delighted to hear the words of the noble Baroness, Lady Sharp, who made a similar comment. It is to be hoped that most requests would have a clear benefit for both the employer and the employee. There will, however, doubtless be occasions when this cannot be the case, so I look forward to the Minister’s response as to what should happen in these situations.
Amendment 81 would have the effect of allowing employees to request training other than that which would improve their effectiveness at work and the performance of their employer’s business. We kept this fairly tight, because we did not want to make too much of a burden. Amendments 80 and 82 would remove many of the requirements with which an application must comply in order to qualify under the new Section 63D, including the requirement for a Section 63D application to state that it is being made under that section. While we understand the desire of the noble Lord, Lord De Mauley, to reduce bureaucracy—we are with the noble Viscount, Lord Eccles, on that one—this would have the effect of allowing many general requests concerning training which would no longer be limited to improving their effectiveness at work and the performance of the employer’s business. It would allow these much more general requests to be captured and it would also risk employers being unclear whether the request had to be dealt with in accordance with the statutory procedure.
On Amendments 80 and 81, we want it to be very clear to employees that they can make requests under these provisions only for study or training which will improve their effectiveness or business performance. The close linking of this right with business-relevant skills was set out in our consultation paper and was strongly supported in the responses we received. We do not agree that it is right to remove this link to business-relevant skills and improving the performance of the company, as the amendment would do. I accept that requests could still be refused if they were considered not to increase the employee’s effectiveness at work or improve the performance of the employer’s business, as Section 63F(7)(a) enables refusal on this basis and would remain unaltered. However, the amendments would mean that employers would have the burden of considering a potentially significant number of requests under this process, which would not be likely to benefit their business.
I turn to the concerns expressed by the noble Viscount, Lord Eccles, which the noble Baroness, Lady Sharp, endorsed, about the burden of regulations. I make it clear that we do not need a separate set of regulations for each regulation-making power. It is common for one set of regulations—that is, statutory instruments—to be made using several different powers. That is why we think that only two or three sets for Clause 39 will be needed.
Our primary objective is to persuade or encourage those employers who currently do not engage with any training. They are our primary target. We made it clear in the consultation process that we were talking about business-relevant skills, which would improve the employee’s effectiveness or the performance of the employer’s business. We want it to be clear to employers which requests have to be dealt with under the statutory procedure and which do not. We wish to maintain the position that a Section 63D application must state that it is one. It is important to recognise that these provisions are not intended to, and do not, replace existing systems for considering training needs. When these are available, employees can, and, we strongly suspect, will, continue to use them. When good systems are not available, employees will, through this legislation, have a route to request and discuss their training needs with their employer. A request for training that will improve performance or benefit the performance of the company, if it were refused, would have to be justified.
I trust that, in the light of those comments, the noble Viscount will withdraw his amendment.
I thank the Minister for his reply and thank my noble friend and the noble Baroness, Lady Sharp, for joining in the debate. I should probably have done more to explain what my amendment would do. If it were passed, it would probably lead to a need to rewrite Part 6A, because I doubt that the wording of my amendment would stand up on its own.
The Minister’s last argument seemed to be exactly what we have been saying—that, to the maximum extent possible, employers who already have good systems with which their employees are content, which are positive and productive for both, should in some way be left loose enough not to be subjected to the full rigour of Part 6A. In that connection, I have looked at new Section 63D(8), which comes right in the middle of the clause and says:
“Nothing in this Part prevents an employee and an employer from making any other arrangements in relation to study or training”.
Is it right to interpret that to mean that it is entirely a matter for the employee to decide whether he or she starts the whole process? That is how Part 6A reads. Therefore, it might be helpful if we had the Minister’s assurance that employers and employees are entirely free to agree whatever they want to agree about additional study and training, without reference to this part.
I am grateful to the Minister for that assurance. It might be helpful if that provision was at the beginning of Part 6A, rather than where it is placed at present.
I accept that regulations can be consolidated, but each individual statutory instrument gets longer. I still feel strongly that there is too much power in the hands of the Secretary of State to change the rules of the game. New Section 63E(4)(c) gets down to the detail of saying,
“contain information of any other description specified by the Secretary of State in regulations”.
The thinking behind the powers of the Secretary of State to make regulations has been very loose on this occasion and needs to be tightened up. I may well feel that that is sufficient reason to come back to the subject on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment 80 withdrawn.
Amendments 81 and 82 not moved.
83: Clause 39, page 19, line 41, at end insert “which shall include at least a right to a first decision on the application and thereafter a right to appeal against that decision”
I shall speak also to Amendments 84 to 88. All these six amendments are probing amendments, dealing with different aspects of this issue of time off for study. Amendment 83 is about what happens if a request for time off for study is turned down and whether there is a right of appeal. New Section 63I allows the employee the right to complain to an employment tribunal if he thinks that the employer has not acted in accordance with regulations, but the Bill contains no provision to guarantee a right of appeal. The nearest thing that we get is in new Section 63I(3)(a), which implies that a decision may be referred to an appeal, but the language is obscure. The purpose of the amendment is to ask the Minister to tell us, in relatively plain English, precisely when an employee has the right to appeal an employer’s decision.
Amendments 84 and 85 seek to clarify new Section 63F(5) and (6). Subsection (5) says:
“The employer may refuse a section 63D application only if the employer thinks that one or more of the permissible grounds for refusal applies in relation to the application”.
It is what the employer thinks that is important here; subsections (5) and (6) refer to what the employer thinks. Amendments 84 and 85 seek to insert the word “reasonably” in relation to what the employer thinks.
We put the amendments forward in Committee in the other place, but we were not satisfied with the Minister’s arguments. First, the Minister argued that since the grounds on which employers may refuse a request are already very extensive, asking whether the employer has reasonable grounds to think that he or she meets the permissible grounds for refusal adds an extra dimension of uncertainty. Secondly, the Minister argued that these provisions are modelled on the provisions relating to requests for flexible working hours, which contain similar provisos and grounds for refusal but have no requirement for the employer to have reasonable grounds for thinking one way or another. The flexible working time rules have worked well. If an employer turns down a request he or she has to explain to the employee why they have done so, and, by doing so, inevitably has to set out the grounds for refusal. If those are based on incorrect facts, the employee has the right to challenge them. Nevertheless, that still leaves us with the fact that the right to request time off for training, like the request for flexible working time, remains a limited right. It is a right to request training but not to receive it.
We worry about those employers who do not value training. We know that they need to be nudged to do better and that they will be all too ready to raise problems in relation to meeting consumer demand or reorganising staff duties. As the grounds for refusal are already so wide we need the test of reasonableness. That is why we urge the Government to consider whether it should not be in the Bill.
Amendment 86 again raises the issue of what is reasonable. Here we are looking at the burden of additional costs the employer would have to meet if the employee were allowed time off for training. We propose that the employer should be asked to do a cost-benefit analysis before turning down a request on cost grounds and to show that the burden of additional costs would be greater than the value the firm would derive from the training the employee wants to undertake. Again this was debated in the other place. The Minister argued that it would inhibit the use of the additional costs argument unhelpfully because employers would use it only when they were able to show that additional costs were greater than any value gained from study, and that if that were the case that they could also call in aid new Section 63F(7)(a), that the proposed course of study would not improve the business’s performance, or new Section 63F(7)(g), that it would have a,
“detrimental impact on performance”.
What the Minister seems to have neglected in that reply is that it is precisely because we think the employer should be doing this implicit cost-benefit analysis that we want the term “reasonable” included. We want employers to think seriously about training and the value it gives to them. It is all too easy to claim that it will create an additional costs burden. The amendment forces them to think a little about the other side of the equation.
Amendment 87 relates to new Section 63F(7)(c) about the effect of meeting consumer demand and seeks to insert the word “significant” at the beginning of the provision so that there would need to be a significant detrimental effect on the firm’s ability to meet consumer demand. Again we are into the issues of reasonableness. If the employee is, say, a teacher, and as a result of training would be better able in the long run to do the job, how do you balance the short-term detriment in terms of the cost—for example, the fact that the class has to have an extra supply teacher—against the longer term gain in terms of having a better teacher.
Finally, Amendment 88 seeks to probe precisely what is meant by new Section 63F(7)(h) and the term “insufficiency of work”. In Committee in the other place, the Minister said that the Government did not want there to be any suggestion that an employer would have to provide alternative work for the employee at relevant times such as where the employee suggested a change in their current working arrangements to accommodate training. But nobody has suggested that. What we want to know is what constitutes an “insufficiency of work”. Will the Minister clarify how that can be used as a ground for refusal? I beg to move.
As the Bill stands, the Government are attempting to introduce legislation that would give employees a right to request time to train. The Explanatory Notes are clear that the employer must then consider this application and it must be accepted unless one of the reasons for refusal allowed by the legislation applies. These reasons are then laid out in new Section 64F(7) on page 20 of this draft of the Bill.
We are generally in favour of the principles behind the Government’s intentions in this part of the legislation. We agree that people should be allowed and, indeed, actively encouraged to take advantage of opportunities to gain further training and skills from within their employment.
However, there are situations where, perhaps despite the best intentions of employers, these opportunities may not be forthcoming. In some situations a less enlightened employer might prefer to let a talented and hard-working employee continue in an existing role, rather than allow the individual the room to feed ambition and train to a higher level. Such an employer might be reluctant, for example, to let a good waitress or waiter train to be a restaurant manager because of the risk that the replacement waiting staff may not be quite as efficient or effective as the waitress who is looking to equip herself for promotion. Of course, no one can condone this attitude. Nevertheless, we should not overexaggerate this risk. The consultation response, published by the department last year showed that only 57 per cent of employers in England felt that time to train would help skills development in their organisation and that only 28 per cent said that the introduction of the new right would cause them to alter their behaviour at all. The document published by the department stated:
“These relatively low figures are largely explained by organisations’ existing positive attitude and commitment to training rather than because of any particular reservations about the time to train proposals”.
We are of the opinion that employees should have the right to a serious conversation with their employer about their skills development, as the consultation document stated, and, as I have said, we support the right to train. However, we would be cautious about extending our full support to all these amendments as it is also important to ensure that the administrative burden on employers should be kept to a minimum.
The Institute of Directors—I declare an interest as a member—is increasingly concerned about the regulatory approach the Government are taking to ensure that the UK becomes a world leader in skills. It comments that these proposals add to the pipeline of impending regulations that will add to the administrative burden on employers and that at a time of recession this is spectacularly unhelpful. I would perhaps not go quite that far. We think that the right to request time to train is an important part of increasing skills and of allowing every employee to reach his or her potential. We do however want to ensure that at the same time employers are not disadvantaged by these proposals, especially given the current economic situation.
While it is right that employees should be able to request the time to train, it does not seem right that the permissible grounds for refusal should be so narrowed that it becomes very difficult for an employer to refuse at all.
Amendments 83 to 85 seem very sensible. If an employee has made a request for time to train, it is right that the employer should at least have to make a decision in response. There may also be situations where a right to appeal is appropriate. Perhaps the Minister will inform us as to whether any research has been carried out into the administrative impact of inserting a right to appeal against the decision. Moreover, the injunction on the employer to act reasonably as regards the grounds for refusing an application is difficult to argue with.
However, Amendments 86 to 88 redefine the permissible grounds for refusal by considerably narrowing the ability of employers to find a way to refuse the application, even if they are struggling to meet the demands. I fear that these last amendments assume that all employers will be searching for a way to get out of offering training. I do not accept that that will be the case. Proper training is essential in any business. A business that does not reskill and retrain its staff will not be successful. I very much look forward to the Minister’s response.
I have considerable sympathy with these amendments but, like the noble Lord, Lord De Mauley, I think some are better than others. It takes me back very much not just to “train to gain”, which was clearly a sensible idea, but also to the right the European Union directive gave women with family responsibilities to request flexible working that, as we all know, has been extended more and more and seems to be quite beneficial for employers.
Certainly, the right to be “reasonable” on the basis that you make a decision seems absolutely essential. Maybe the Minister will say that it is not necessary, but “reasonableness” in all these things, where there is a pretty wide degree of discretion, is, surely, something that we should all be in favour of. I am not necessarily convinced by all these amendments. I take into account what the Institute of Directors has to say, and it has a point. Nevertheless, we should be quite sympathetic to these amendments.
I, too, have some sympathy with a number of the amendments raised by the noble Baroness, Lady Sharp. However, I have an issue with Amendments 87 and 88. Most organisations have a very clear understanding of whether their performance is being detrimentally affected. Having “significant” in the amendment raises the dilemma of what this means and how it would be measured. It is usually how the order book is placed and all the rest of it. In my years as a trade union official and working with a sector skills council, I have never experienced that there has been a necessary adjective that needs to be there.
There is something a bit perverse about changing “insufficiency of work” to,
“the inability to provide sufficient work”,
as though the employer was conniving in some way not to have this work. Most businesses, whether small or large, operate in a transparent way, where you know whether there is business coming in or not. I personally have a great deal of difficulty with both of these amendments in particular.
I understand the desire of noble Lords on all sides to get the balance right between employer and employee. That is what we are trying to do. I will see whether I can reassure noble Lords on the balance.
Amendment 83 would place on the face of the Bill a requirement for the regulations to be made under new Section 63F(4) to require a right to a first decision on a request for training and a right to appeal against that decision. I reassure the noble Lord that we intend to use the power at new Section 63F(4) to define a process in regulations based on the one already in place for flexible working that would cover first decisions and appeals.
Again, I have sent indicative regulations to the noble Lords who have spoken in the debates so far. These regulations would require the employer to hold a meeting to discuss an application within 28 days of receiving it and to provide a decision in writing within 14 days of that meeting. The regulations will also include a right for an employee whose application has been refused to appeal to his or her employer—I stress that—in the first instance. These details are better dealt with in regulations where they can be adjusted more readily in the light of practice and experience. This model, in which stakeholders were consulted, again, follows the one used for the flexible working requests.
Amendments 84 and 85 would introduce a concept of reasonableness to the basis on which an employer may refuse an application. As currently drafted, the Bill enables an employer, relying on his or her own judgement and knowledge of his or her business, simply to form a view about whether one of the grounds applies. If these amendments were accepted, an employer could no longer do that. Let us be clear: instead, they would have to consider whether they were acting “reasonably” in forming that view—in other words, to put themselves in the position of an objective outsider and decide the application from that perspective.
Including the term “reasonably thinks” introduces a level of uncertainty about the employer’s decision, and creates a more complex and burdensome test for the employer that we think is unnecessary and that we are genuinely trying to avoid.
I agree with the comment that the noble Baroness, Lady Sharp, made in her contribution, when she talked about this being a “limited right”. It is. In the vast number of circumstance, as the noble Lord, Lord De Mauley, drew to our attention, many employers will not have to worry about this right because they are already training their employees. There are also still a significant number who do not do so. They are the ones who we are trying to address. The example of the teacher that the noble Baroness, Lady Sharp, brought up is the one I would be least worried about in these circumstances. As a school governor, I cannot believe that a request for time to train would be unreasonably refused. I will come to the question about insufficiency and detriment later.
Introducing “reasonably” will create uncertainty and will make it more burdensome for employers, rather than looking simply at the grounds that we have defined. In practice, when considering requests, employers would have to consider which of the permissible grounds for refusal are relevant, and why. They would then need to explain this decision to their employee when they notify them of their decision. If the employer is acting unreasonably, it will be difficult to give the necessary explanation in the decision notice, and it would be open to the employee to challenge the decision on the basis that it is based on incorrect facts. That keeps it as simple as we possibly can make it.
Amendment 86 would narrow the cost ground of refusal so that it applied only where the costs relating to the training outweigh the value of the proposed training and are an unreasonable burden. In our view, cost considerations may be a legitimate factor in an employer’s decision to refuse an application in a wider variety of cases than that proposed by the amendment, where, for example, employers may simply be unable to meet the costs of covering an employee’s absence, however great the potential benefit to the business.
Amendment 87 would mean that an employer could refuse an application only where agreeing it would have a “significant detrimental effect” on the employer’s ability to meet customer demand rather than simply a “detrimental effect” on this ability. While I understand that this amendment is intended to clarify the test, we do not want to try and quantify the level of detriment that would need to apply in order for a request to be refused. It may be that an employee’s absence at that time would put an unreasonable strain on the performance of the business. It may be just a question of timing and something that can be resolved in the future. However, the employer should not have to try to quantify that in the way that is suggested in this amendment by the introduction of the word “significant”.
Provided that there is some detriment, if it is a level of detriment that the employer does not wish to, or cannot, bear, then it is right that they should be able to decline a request on this basis, just as they can under the flexible working arrangements. I stress that again. We tried to model that procedure so that we are not introducing a fresh procedure. There may be genuine instances where a particular request will have a detrimental impact that employers feel make it impossible to accede to a request, and I have instanced a possible example of that.
While we believe that these decisions are best left to employers, there are safeguards in the system—I stress that to the noble Baroness, Lady Sharp—for the employee. As I said, it is a question of balance. The employer will have to explain why the detrimental impact ground applies, and, ultimately, this view could be tested at an employment tribunal. We do not want that to take place; but it could. If an employer was adopting a situation where it thought that it could refuse all requests for time to train and not engage in a proper appeals procedure, some of these may eventually be tested at an employment tribunal. We hope they will not go as far as that, but it will depend on the circumstances.
Amendment 88 would have the effect of redefining one of the permissible grounds for refusal set out in new Section 63F(7). Rather than specifying “insufficiency of work”, it would refer to inability to provide work during the periods that the employee proposes to work. We do not want employers to be obliged to find something for the employee to do at times when the employee proposes to work in order to accommodate training. Instead we want the employer to consider in the light of the current business situation how much work is available during the periods proposed. That is the correct position. No doubt we will find that employers are prepared to be flexible in many cases.
As I said, this new right is modelled closely on the flexible working arrangements which employers are familiar with and which we know work well. That is important. We are not introducing a new procedure here; we are introducing something of which both employers and employees already have experience. This close alignment between the two rights has been welcomed by stakeholders and was supported in the consultation responses as something that would be helpful to employers. We therefore wish to maintain this, and we do not want to create unnecessary differences between the two rights that have the potential to cause confusion.
On the reasonableness test, it was asked whether employers who do not offer training will not simply refuse applications. We think that it may well trigger a discussion about training and that employers may well see the advantages of training. We think that the balance is correctly set where the employee can appeal on grounds of procedure or incorrect facts; we think that is the right way to approach it. In these circumstances it is best for both the employer and the employee to keep it simple and modelled on existing procedures. Therefore, in the light of the explanation and assurances given, I would be grateful if the noble Baroness would consider withdrawing the amendment.
I am grateful to the Minister for his explanations. These are probing amendments seeking clarification and the wording of certainly some of them is not necessarily perfect. The idea was to try to get a clearer picture. On the first amendment, I am grateful to the Minister for making it quite clear that there is a right of appeal and that it will be spelt out in the indicative regulations that he will circulate to us.
I now understand better the Minister's objection to including “reasonably” in relation to what the employer thinks. The question of what the employer thinks is somewhat subjective, and it is being left as a somewhat subjective decision. One accepts that. As the Minister said, the provision is modelled on the flexible working time directive, which has worked well. On narrowing down the cost grounds for refusal, I very much hope that the employer will do a back-of-the-envelope cost-benefit analysis to see whether it is worth doing.
The answer with which I feel least satisfied was that to Amendment 87 and the issue of “significant”. If we say that we do not want to quantify the element of detriment it will leave the issue extraordinarily uncertain. The answer, as the Minister says, is that it will have to be tested at a tribunal. However, the term “significant” would have to be tested at a tribunal in exactly the same way.
I again thank the Minister for his explanation and I beg leave to withdraw the amendment.
Amendment 83 withdrawn.
Amendments 84 to 88 not moved.
89: Clause 39, page 21, line 3, at end insert—
“( ) fails to attend more than two consecutive periods of study or training”
As will be clear from the debate on the previous group of amendments, we support the time-to-train proposals. It is fundamentally important to ensure that those who wish to build on their skills, achieve their ambitions or improve their standing should be allowed to make an application to their employer for time to do it. Nevertheless, we also want to make it very clear that the interests of employers must be taken into account. The IOD, in its response to the Government’s impact assessment of these provisions, stated that,
“no evidence was presented to support the implication that employers are not open to training requests, deny employees the opportunity to discuss training needs or do not treat requests seriously”.
Does the Minister not accept that many employers already do their utmost to ensure that employees are constantly developing their skills training? Does he not support the voluntary measures that many businesses already use in order to make sure that this training can occur? Does he not accept that many businesses do this purely because of good business sense because further training means better staff, which in turn means a more efficient business?
The right to training is very important. Nevertheless, it is vital to find a way of ensuring not only that employees retain their right to training but that employers are not overburdened. It is this thought that is behind these amendments.
Amendment 89 would mean that if an employer has agreed to a request for training, or a part of it, then the employee must inform his employer if he fails to attend more than two consecutive periods of study or training. It seems to me that this is an unobjectionable duty on the employee. As we all know, with rights come responsibility. If the employee has enjoyed the right but also the privilege to request time to train, then it should be incumbent on him also to inform his employer if he is not, for whatever reason, able to reap the benefits of this education and training.
Moreover, we would go further. The Bill as it stands allows the Secretary of State to make regulations regarding the way that the employee will inform the employer of any changes in the training he will carry out. We would like to see a provision in the Bill which states that if an employee fails to start, attend or complete study that has been agreed with the employer, it should constitute grounds for removing the time off.
Does the Minister not accept that while there is clearly an argument for allowing employees to ask for time off, they should not be allowed to abuse this right? Does he not agree that we must also protect employers and businesses from the risks associated with the fact that some people may find themselves unable to attend training, or indeed may have abused the system to the disadvantage of the employer? We want to protect the employer from losing out.
There is an argument, of course, that if the employer is awarded the right to withdraw training that has not been completed to the terms of the agreement, there should be a commensurate right for the employee to appeal against this result. This may result in greater bureaucracy. Nevertheless, I am not sure that this is an entirely satisfactory response. We must not draw away from finding a solution which would protect employers simply because of the complexities involved. It is important that these issues are resolved. I look forward to the Minister’s response, and I beg to move.
Perhaps I may suggest that Amendment 89 probably relates to new subsection (2), at the bottom of page 20, which talks about failing,
“to complete the agreed study or training”.
Amendment 89 seeks to describe what that means whereas Amendment 90 refers to paragraph (c). I think that the Bill is strong enough. If a trainee—it does not matter whether he or she is in an apprenticeship—fails to attend a course, the college will automatically advise the employer that they have not attended. They do this regularly, on a weekly basis. If I am supposed to go every week but do not turn up, my employer will get a phone call saying, “Do you realise that Margaret Wall hasn’t turned up?”. So I think that that is taken care of.
On the other amendment, in reality new Section 63H(2)(c) certainly says that if an individual,
“undertakes, or proposes to undertake, study or training that differs from the agreed study”,
the agreement would be broken. The employee would lose the opportunity to have that training leave continued. They would not be doing what the agreement asked them to.
I found both those amendments perfectly reasonable. However, having heard what the noble Baroness, Lady Wall, has just said, maybe they are covered sufficiently, although we would need a little more emphasis on how the employer will get to know the situation. We must be assured that all colleges behave as described by the noble Baroness, Lady Wall.
We certainly sympathise with the desire of Members opposite to keep burdens on business to a minimum and to get the balance right between employers and employees. I hope that the noble Lord, Lord De Mauley, believes me on that score. I accept his point that many employers do their best to provide good quality training. We also accept that this is a question of rights and responsibilities, and not just about the employer’s responsibility or employee’s rights, but also about the employee’s responsibilities in this matter. There is no difference between us on this.
Amendment 89 would place a requirement on employees to inform their employer if they fail to attend three or more consecutive periods of study or training. As my noble friend Lady Wall said—it is so good to have her wise counsel on these areas—the provisions already cater for this. New Section 63H quite rightly requires employees to inform their employer if they fail to start or fail to complete the agreed study or training, and also if they do, or propose to do, study or training which is different to that which they agreed with their employer. We have covered the three circumstances: they fail to start; they fail to complete; or they embark on something that was not agreed with the employer. So if they do not attend their course as arranged, that would be a change that would be covered.
My noble friend Lady Wall made the point that colleges and training providers have a responsibility that they exercise in saying to employers, “Well, I know that you think that your employee is attending this training course, but I have to advise you that he or she is more often honouring that in the omission rather than the commission”. That is already current business practice.
Amendment 90 proposes that the employer should be permitted to withdraw support on the grounds that the employee had failed to start, attend or complete the agreed study or training. However, as the noble Lord, Lord De Mauley, recognised, providing such statutory provision for employers risks adding an additional level of bureaucracy and further burdens on employers, as we would need to consider giving a similar level of statutory protection to the employee to be able to appeal such decisions.
We do not want to do that, but do want to emphasise the noble Lord’s point about the responsibilities of an employee. In our view, it would be better if, at the time of agreeing a request, the employee and employer also agreed any terms under which support may be withdrawn. This recognises the need for a certain level of flexibility and sensible discussion by both parties that will be necessary for these provisions to work.
In many cases, withdrawal of support will be less of an issue, particularly where it has been agreed that the employee will attend a course of only a short duration. In other cases, it may be appropriate for any breach on the part of the employee to be dealt with through the employer’s disciplinary procedures.
However, I agree that these are important matters and, in the light of today’s debate, I will certainly commit to providing guidance that explains employees’ and employers’ responsibilities under these provisions. I would be grateful if the noble Lord would consider withdrawing the amendment in the light of the explanation and assurances that I have given.
I am grateful to the noble Baroness, Lady Wall, for her comments, which I will consider carefully, and to the noble Baroness, Lady Howe, for her contribution. Before I withdraw the amendment, can the Minister confirm that all colleges are required to report non-attendance to employers? That was suggested by the noble Baroness, Lady Wall, and the noble Baroness, Lady Howe, asked about it.
Amendment 89 withdrawn.
Amendment 90 not moved.
Clause 39 agreed.
Schedule 1 : Employee study and training: minor and consequential amendments
91: Schedule 1, page 161, line 34, at end insert—
“ In section 236(3) (orders and regulations subject to affirmative Parliamentary procedure), after “47C,” insert “63D, 63F(7),”.”
This government amendment takes account of the recommendations of the Delegated Powers and Regulatory Reform Committee, looking at the regulation-making powers in Clause 39. The committee’s recommendation is that they should be subject to the affirmative, rather than the negative, procedure. It is appropriate that we should take these recommendations on board. I know that the party opposite has also tabled an amendment that is similar in effect, and I hope that the noble Lord will agree that the government amendment will take on board the concerns that I expect the party opposite to raise.
I am grateful to the Minister. I think I am right, as she seemed to suggest, that we are both aiming to achieve the same thing. I do not know whether she can help on whether there is any difference in the effect of these amendments, other than the Government’s being perhaps a little more elegant.
Amendment 91 agreed.
Schedule 1, as amended, agreed.
House resumed. Committee to begin again not before 8.29 pm.