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Equality Bill

Volume 716: debated on Tuesday 19 January 2010

Committee (3rd Day) (Continued)

Clause 77: Discussions with colleagues

Amendment 81 not moved.

Amendment 81A

Moved by

81A: Clause 77, page 49, line 33, at end insert—

“( ) A term of a person’s work that purports to prevent or restrict the person (P) from seeking disclosure of information from a colleague about the terms of the colleague’s work is unenforceable against P in so far as P seeks a relevant pay disclosure from the colleague; and “colleague” includes a former colleague in relation to the work in question.”

Amendment 81A agreed.

Moved by

81B: Clause 77, page 49, line 34, leave out from “A” to “whether” in line 36 and insert “disclosure is a relevant pay disclosure if made for the purpose of enabling the person who makes it, or the person to whom it is made, to find out”

Amendment 81B agreed.

Amendment 82 not moved.

Moved by

82A: Clause 77, page 49, line 39, leave out subsections (3) and (4) and insert—

“( ) The following are to be treated as protected acts for the purposes of the relevant victimisation provision—

(a) seeking a disclosure that would be a relevant pay disclosure;(b) making or seeking to make a relevant pay disclosure;(c) receiving information disclosed in a relevant pay disclosure.”

Amendment 82A agreed.

Amendments 83 to 85 not moved.

Amendment 86

Moved by

86: Clause 77, page 50, line 14, leave out subsection (6)

Amendment 86 agreed.

Clause 77, as amended, agreed.

Amendment 87

Moved by

87: After Clause 77, insert the following new Clause—

“Equal pay audit following contravention by employer

(1) In the event that a court or employment tribunal finds that an employer has contravened the provisions of this Act relating to equal pay, the employer shall be required to undertake an audit, to be known as an equal pay audit, and to make the results of the audit available in the prescribed manner.

(2) In this section “prescribed” means prescribed in regulations made by the Secretary of State.”

My Lords, I speak to Amendment 87 and the other amendments in my name and the name of my noble friend Lady Warsi. Our amendments would have the effect of easing an unnecessary bureaucratic burden on companies without, we believe, weakening the effect of the Bill on equal pay.

We regard equal pay as a matter of social justice and believe that the plight of women working in firms of all sizes should not be ignored. I introduced a Private Member’s Bill on this subject a year ago this week and remain firmly committed to the issue and its importance. I said then that pay inequality is not acceptable whatever the economic times. We must ensure a culture of equality and fairness in the workplace to motivate women, who will play a crucial part as the economy recovers. I reiterate that in the knowledge that noble Lords around the Chamber will share my dismay that in the 21st century women are still paid on average almost 13 per cent less than men, with the figure rising substantially for part-time work. I remind your Lordships that 45 per cent of women who work in the UK do so on a part-time basis.

These women deserve to be treated fairly and protected by the law, yet we have seen the pay gap widen in some areas. That is why I brought legislation before your Lordships' House. I did not pursue it last January because I genuinely believed, as so many of us did, that we would have seen the Equality Bill in your Lordships' House long before now. However, as I and my noble friend Lady Warsi explained at Second Reading, we are not convinced that the Bill’s intention to impose compulsory pay audits is the right way in which to proceed. We believe that requiring all companies to carry out this exercise would be costly and time-consuming and would not necessarily be effective.

Surely the emphasis and resources should be directed at problem employers and how we deter unfair practices. The more sensible solution would be to require an audit in all companies in which an employee has brought a successful case on these grounds. That would greatly strengthen the current position by providing meaningful sanctions against unfair employers while not burdening the majority of fair employers with a new administrative burden. I recognise that business organisations are not too keen on the Government’s amendments but have concerns with our proposals as well, mainly because they have worries over the tribunal service. We understand those worries and would like to carry out a review of the service if possible.

As noble Lords will see from our proposal that Clause 78 should not stand part, we have serious concerns with the means of achieving a shared desire. Just before Second Reading, there were hints in what appeared to be well informed media that the Government might be looking to row back on company pay audits. The Minister denied that when we raised it at Second Reading, but there is still time for her to reconsider.

The exemptions from this clause are very interesting. Why would they not apply to government departments? Perhaps we are to believe that Her Majesty's Government have an unimpeachable record on equal pay. Sadly, that case does not look too convincing, given that two past Ministers for Women in another place have been appointed to do the job but not been given a salary to do it. If any part of the explanation is that this is superfluous or impractical in the cases to which the exemption applies, that should tell us all we need to know about this clause.

Together with our belief that this clause is over-bureaucratic and puts an undue burden on good employers, we object to it because it will apply only to women in companies of a certain size. The amendment proposed by the noble Lord, Lord Lester of Herne Hill, seeks to address this, but we remain of the firm belief that any equal pay legislation should be there for all women. However, if this clause remains, the metrics for gender pay gap reporting will be crucial.

A number of business organisations have been in touch with us regarding serious concerns about the EHRC report, which will supposedly contain the metrics for gender pay gap reporting. Harriet Harman charged the EHRC with delivering a voluntary reporting framework that would allow greater pay transparency to be measured. The publication was expected to coincide with the Second Reading of the Equality Bill in your Lordships' House on 11 December, but the deadline came and went. According to business groups, the menu of indicators was agreed on and the final text nearly agreed, but suddenly the deadline was postponed until the new year. In January, an amended draft was then sent out that did not contain the previously agreed menu and text. There were also changes to the language, which reflected expectation rather than encouragement. This was not agreed to by certain business groups, but the late date made it very difficult to have any time for changes. The last-minute changes meant that all employer organisations on the working group found them unacceptable and forced them to reject the report. So the business groups were engaged in the process, which was then undermined. There were discussions yesterday, but the EHRC did not finish these with business organisations who were left waiting, not knowing what was happening or whether the report was going to be published without their agreement.

The way this has been organised means that we do not have the report today. Has it been published yet? It certainly had not been earlier. Have the Government found agreement? What were the parameters of the near agreement before Christmas, and why have the Government rowed back on this? Late amendments, late reports, late metrics—it makes you almost feel like saying, “We can’t go on like this”. I beg to move.

My Lords, at this late hour I cannot muster sufficient disappointment and indignation, as I feel, about this part of the Bill, and I have already said some of what I feel at Second Reading. Using moderate language, it is in my view a complete betrayal of what I expected would be in the Bill on the principle of equal pay for men and women.

I can deal swiftly with the amendment that the noble Baroness, Lady Morris of Bolton, has just moved. I hope she will forgive me for saying this, but I find the position of Her Majesty’s Opposition incoherent— Amendment 87, Amendment 89 and Clause 78 stand part attempt to water down the gender pay gap information clause. They seek to remove Clause 78 in its entirety and replace it with a clause that would only require an employer to publish a pay audit if a court or employment tribunal found that they had contravened the provisions of the Act relating to equal pay. In other words, the position of the Official Opposition as I understand it is that they do not like what the Government have put in, pathetic and weak though it is, and instead they want to treat an equal pay audit as a punishment—so that only if you were found, in an individual case, to have broken the law would you suddenly have an equal pay audit inflicted upon you. That is not sensible. For one thing, it is entirely arbitrary. We are dealing with a systemic problem that requires a systemic solution.

What is the systemic problem? The systemic problem is that the Equal Pay Act 1970—Barbara Castle’s Act—has proved to be unworkable. I am afraid this is because its procedures, which were amended in Margaret Thatcher’s time to comply with the European Court of Justice judgment, were deliberately intended to be unworkable. It is tortuous, and the judges have said so. Again and again, senior judges and independent experts have called for a radical overhaul of equal pay legislation.

The matter we were discussing before was technical: it was simply an attempt to state the equal pay law, as it is, in an accurate way in the Bill. Now we are talking about what can be done, more than a generation after the Equal Pay Act was first enacted, to close the pay gap in a really effective way.

When I introduced my own Private Member’s Bill, based on Professor Sir Robert Hepple’s report, we set up a working party which consisted of all the main government departments, the CBI and the TUC. Month after month we sat and negotiated the equal pay audit that was in my Bill. I remember the CBI representative Mr Cridland, for example, was entirely in favour of it. What has happened now is that I am afraid since their inception the present Government have always asked themselves, and answered, one question: what would the employers think about this? It is the wrong question. The right question is how can you achieve equal pay for women, given the history of non-compliance?

The reason an equal pay audit is required is not as a punishment. It is because employers in the private and public sectors need to review their pay systems to see whether there is any direct or indirect discrimination, and they need to do so voluntarily, not by way of punishment. Any good employer, I hope, already tends to do that. The question is: what encouragement can the law give?

The noble Baroness, Lady Gould, who I am delighted to see is in her place, knows this at least as well as I do, as does the noble Baroness, Lady Turner. At the moment, the law works by encouraging employers to carry out job evaluation schemes. If they carry out a job evaluation scheme measuring the work that men and women do throughout the labour force, and then apply it properly to pay, they can eliminate direct and indirect sex discrimination. The real question is: how can the law best assist in encouraging large and medium-sized employers to do what is needed, which is to eliminate sex discrimination in pay after all these years? I do not suggest that the reason for the pay gap is only sex discrimination—of course that is not the case. Part of the reason has to do with other social factors, which we all know about. There is undoubtedly still persistent and continuing sex discrimination.

It seems to have got into the head, not necessarily of the CBI but some of its members, that it is clever to leave the system as it is now. As I read its submissions, the CBI opposes the timid proposals in the Bill. Employers seem to be under the impression that the best thing they can do is leave the present antiquated, tortuous and unworkable system as it is, so that it can simply be soldered up year after year, leaving it to individual litigation.

In the old days, before the Government of the noble Baroness, Lady Thatcher, came in, there was at least the Central Arbitration Committee, which was there as a collective mechanism to eliminate sex discrimination from pay agreements. That was abolished. There is now no effective collective mechanism. What the Government are doing is, in heaven’s name, about as modest as one could conceivably think of. I know the reason. It is not because the right honourable Harriet Harman believes this; it is because she has been outmanoeuvred by the business Ministers who, in turn, march with the employers on this issue. We are dealing with the majority of the population, but a highly vulnerable group of women are being exploited as a source of cheap labour. The Government, in Part 1 of the Bill, talk about eliminating socioeconomic disadvantage. If they are serious about that, one of the best ways of eliminating it is to give equal pay to women and men.

Clause 78, as it stands, requires the Minister to make regulations about mandatory pay audits. That will only be exercised, as I read it, if there has been insufficient voluntary publication by employers by 2013. That completely unnecessarily delays making the changes that are needed now to address the gender pay gap. Also, the Bill fails to indicate how much detail employers are expected to be required to publish. Instead, that is apparently to be decided after publication of recommendations of the ECHR. The Bill provides no certainty that employers will be required to publish information in sufficient detail to address the gender pay gap.

My amendments, which I am speaking to as part of the group, require a Minister to make regulations requiring private sector employers with at least 100 employees in Great Britain to publish information about differences in pay between their male and female employees. The purpose of that is to identify discriminatory differences in pay so as to encourage employers, as I say, to eliminate sex discrimination in pay by knowing—as they should already know—what their pay systems are, whether they have an adverse impact on women and what can be done, through negotiation or otherwise, to address the situation.

Many years ago when we had the pay freeze—some who are a bit old like me may remember—there was always an exception made to secure equal pay. Now we are in economically straitened times. I think that we would all agree—I hope we would all agree—that because the country is at the moment in such difficulty, it is no excuse to go on exploiting women as a source of cheap labour. I had wished that the EC Commission would have found the energy some years ago to bring further infringement proceedings against this country for failure to comply properly with the principle. I still hope that it will do so, because I can see no other way—with this Government, or whoever wins the next election—of ending this scandal. I am sorry to use such moderate language. I wish I could find stronger language, but I have to say to the Government that, in my view and that of my party and that of women in general, this does not do.

My Lords, I do not want to add anything to what the noble Lord has just said. I would like, however, to mention his Amendment 91, which suggests that “250” be left out and be replaced by “100”. Quite recently, I was approached by a number of employees who work in private companies working for the NHS. They told me that they suffer very much from inequality, but that they would not be able to utilise the provisions of this Bill, because the companies they work for are quite small, relatively, and they would not have the 250 employees which make it possible for them to utilise the provisions in the Bill. I wonder whether we could look again at the number 250—whether you have 100 or more or a lesser number—because quite clearly a number of people are working in smaller companies who will not benefit at all from the provisions of this Bill.

I agree with a lot of what the noble Lord, Lord Lester, has said about the provisions in relation to equal pay generally, but I would like to say a few words about that when we come to discuss Amendment 93.

My Lords, as it stands, this clause is only about the gender gap, and subsection (1) only places a duty on employers to report on gender. I believe that this is not sufficient, as this does not expose pay gaps among employees of different ethnic groups, employees of different ages, and employees with or without disability.

It is extremely important that this information is made available, and my Amendment 89A places a duty on the employer to do that. My second amendment, Amendment 91A, places a duty on the employer that information published under subsection (1) shall be made available to the whole workforce and other interested stakeholders.

As the clause stands, there seems to be no such duty and, more often than not, such information stays hidden away in committee meeting minutes. This information needs to be publicly available, so that it can be used to provide equality for all, which, after all, is the aim of this Bill.

My Lords, with permission, I will speak to Amendments 87 and 89, proposed by the noble Baronesses, Lady Warsi and Lady Morris, before turning to Amendments 88, 90 and 91 from the noble Lord, Lord Lester, and Amendments 89A and 91A from my noble friend Lord King.

The noble Baroness, Lady Morris, has a fine record in relation to the gender pay gap. We all, throughout this Chamber, agree on the iniquity of the gender pay gap. What we do not agree on is the means by which to narrow the gap, which is something that we absolutely must do.

Amendment 87 would introduce a new clause similar to a provision in the Equal Pay and Flexible Working Bill, introduced in this House by the noble Baroness last year. It would require only those employers found to have breached the equal pay provisions of the Bill to conduct a pay audit and publish the results. As the noble Lord, Lord Lester, said, it is rather like a punishment clause. We believe that in practice this amendment would make very little difference in closing the gender pay gap because very few equal pay claims succeed at tribunal. More are lost and many more are settled or withdrawn before reaching a tribunal. The latest figures from the Tribunals Service show that, out of the 20,148 equal pay claims disposed of by employment tribunals in the year to 31 March 2009, only 36 were successful at tribunal.

Furthermore, Amendment 87 would not affect in any meaningful way obligations on the private sector, in which the vast majority of people in work are employed. Most equal pay claims that reach a tribunal involve public sector bodies, which already conduct pay audits. Often the results of these pay audits are the very reason that a case has been brought in the first place. Amendment 87 would also remove any discretion from tribunals. It would lead to them ordering pay audits where they might be inappropriate—for example, where the employer had recently conducted a pay audit or where there would be no benefit to other employees.

Finally, the requirement imposed by Amendment 87 is indiscriminate. It would apply equally to small employers which may not have the resources to conduct a pay audit and to larger ones that do. As the noble Baroness said herself, there is no great enthusiasm in the business world for the proposals in the amendment, and I certainly urge her to withdraw it.

I now come to Amendment 89—again, tabled by the noble Baronesses, Lady Morris and Lady Warsi. This amendment would make Clause 78 unworkable. I note the intention of the noble Baronesses to oppose the Question that Clause 78 stand part of the Bill, and I shall therefore explain briefly why the clause should stand part. The Government are committed to doing more to close the gender pay gap, but we can only effectively do so, particularly in the private sector, when regular publishing of pay gap information by individual employers produces greater transparency. To address the issue, we must first shine a light on it, and that is how the clause may come into play. I say “may” because the Government hope that we can get greater transparency through voluntary publishing arrangements.

The Equality and Human Rights Commission has, at our request, been working with representatives from the business community, trade unions, the voluntary sector and other stakeholders to help to develop workable arrangements for gender pay publishing by non-public sector organisations, to be promoted on a voluntary basis. Its consultation seeking input from employers, unions and others about their preferred approach began in August and closed on 28 October last year. We expect publication imminently. I deeply regret that the commission has been unable to follow its press release of today with a report, and I shall certainly be seeking clarification on the reason for the delay. It is fair to say that the Government asked the EHRC to undertake the project, but the commission, with its stakeholders, has owned the project from its inception. I respectfully point out that the commission is an executive non-departmental public body and therefore it is an arm’s-length body. Of course, the Government were given an opportunity to comment on the draft report, along with all key participants, but decisions about the contents of the metrics report ultimately rest with the EHRC.

The commission’s proposals include a range of measures in relation to the gender pay gap from which employers will be encouraged to select in the way that best suits their circumstances, while enabling reasonable comparability for the future. Employers will be able to choose from three quantitative measurement options: an overall single figure; the starting salaries of male and female staff; or the differences between male and female pay grades by grade and job type. There will be no one-size-fits-all approach. The commission will also offer the option of a narrative, which will enable employers to explain the context. The narrative would not be a stand-alone element but would have to be combined with at least one of the quantitative measures. The commission would expect employers employing 500-plus employees to use two or more options from this menu—in most cases, the narrative plus one or more of the quantitative measures. The commission’s expectation in respect of employers employing 250 to 500 employees is that they would opt out of one of the quantitative indicators.

I hear the concerns expressed by my noble friend Lady Turner of Camden, who has a fantastic record on these issues. We have taken those concerns into consideration, but it is not something that we can meet at the moment. However, as employers get to grips with the information requirements and begin to publish their data, the Government will carefully monitor the extent to which employers are publishing in accordance with the commission’s guidelines. If employers start to embrace greater transparency on pay, progress on recognising and challenging patterns of pay inequality should follow naturally, step by step.

The Government do not intend to use the reserve power in Clause 78 before 2013, to give voluntary arrangements time to work. It would then be used only in the event that insufficient progress on voluntary reporting had been made by that time. The power enables a Minister to make publishing arrangements mandatory through regulations, which would identify which employers were required to publish what information relating to the pay of which employees, and in what form and manner the information should be published. Regulations would also detail the time of publication, which could not be more frequently than annually. Any regulations would have to be consulted on and then debated by Parliament.

We expect that employers will meet their publishing obligations. They should know whom they employ, whether their employees are men or women and what they pay them. However, clearly there need to be proportionate sanctions that may be brought to bear in cases of non-compliance. Any criminal sanction would be pursued only in the most serious cases, and would entail a fine no higher than £5,000.

The noble Baroness, Lady Morris, asked what we were doing in the public sector. The Government propose to use the power in Clause 152 to require all public sector employers with more than 150 employees to publish annually details of the gender pay gap in their organisation. This is one of the proposals for a set of specific duties to support better performance of the new equality duty in the Bill. The proposals are set out in the consultation document published on 16 June last year. The closing date for responses was 30 September. We are considering what people said and we will respond very shortly. When the noble Baroness criticised the Government for not paying former Ministers for Women, I would say we are bang to rights.

I now turn to Amendments 88, 90 and 91, tabled by the noble Lord, Lord Lester. Amendment 88 would mean that voluntary arrangements were not given any time to work. It would reserve the power to make regulations in Clause 78 into a requirement to make regulations immediately the clause has technically commenced. The Government share people’s impatience at the slow progress being made in closing the gender pay gap, but we want to try to bring employers with us on this and convince the doubters that it is in their business interests. That means first giving larger employers the chance to demonstrate their commitment to change on a voluntary basis. The noble Lord asked why the clause does not give details of the information that may have to be published. We want the flexibility to allow us to learn from the voluntary arrangements, which will help to inform any future consultation on these details.

Amendment 90 would implicitly require employers to have analysed the data they had collected to establish the causes of any pay gaps identified before publishing information only about those caused by sex discrimination. Such an analysis is a key element of a formal pay audit. The reserve power in Clause 78 could be exercised in a way that required employers to determine where men and women were doing equal work, or work of equal value, and to collect pay data to identify gender pay gaps. These are also elements of a formal pay audit. However, the power could not require employers to analyse the data to establish the causes of any gaps identified. Not every gap will be because of sex discrimination. We know, for example, that many men and women enter the labour market with different skills and qualifications. However, once the data had been published—which is what transparency is all about —employers could be more exposed to claims if the data disclosed a significant pay gap. It would therefore usually be in the employer’s own interests to analyse the data in order to ascertain the reasons for the gap.

Amendment 91 would apply the clause to employers with 100 or more employees, instead of those with 250 or more. This would increase the number of employers in the scope of the clause by over 146 per cent, but it would increase the number of employees by only 16 per cent. We chose the 250-employee threshold as employers with fewer employees are classified as small and medium-sized enterprises. In addition, employers generally invest in the kind of sophisticated IT, payroll and HR systems that would enable easy collation and presentation of gender pay gap information only when their headcount reaches around 250 employees. Smaller employers will of course be free to publish information about their gender pay gaps, and we would strongly encourage them to do so if they wish. I add that a threshold of 100 employers would be lower than that which the Government propose to apply in the public sector. We propose to use the power in Clause 152 to require all public sector employees with 150 or more employees to publish annually details of the gender pay gaps.

I turn finally to Amendments 89A and 91A, tabled by my noble friend Lord King—

I hope that it is convenient for me to speak now. I have two main points. First, the Government’s position shows no understanding at all of the history. The Equal Pay Act was enacted in 1970 and employers were given five years before it came into force to move their pay so that there was equal pay for women. After those five years, in 1975, the obligation to give equal pay became legally binding. In the early cases, such as the Julie Hayward case, the House of Lords repeatedly warned employers that the results of those cases should lead employers to carry out what the Government would now call mandatory pay awards. That did not happen.

I have listened carefully to the Minister but, with respect, the second reason why what she says is not convincing is because of the CBI’s own brief. If the CBI had written a brief saying that it welcomed the Government’s proposals and that it would ask its members to give them effect, it might be a different matter. We are trying to change the culture of discrimination, which is more than 40 or probably more than 100 years old.

It beggars belief, but the CBI in its briefing says that,

“forcing companies to report on their gender pay gaps would not help to tackle the root causes of inequality”.

It opposes Clause 78, saying that it is too simplistic, it could tar employers, it is short-termist and that there should only be voluntary initiatives and so on. If the CBI, which as I have said in the past was not like this, is now taking this as its official position, what hope is there in a plea to voluntarism all these years after the Equal Pay Act and the European equivalent came into force? It will not happen. It will not happen even if this Government win the next election, and it will certainly not happen if they do not. That is why when we come to Report I intend to push for some beef. My wife, who is a vegetarian, will forgive me for using that phrase.

As a fellow vegetarian, I say that of course we are disappointed with the attitude displayed by the CBI in its briefing, but that does not mean that individual employers should not nevertheless take up the proposals and do whatever they should be doing. We are giving them three years and if after that time they do not comply with the voluntary system, enforcement will come. At this stage in our history, notwithstanding the fact that the noble Lord thinks we are ignoring history, we are in different times and we want to close the gender pay gap. We have reflected on these things for many hours and we believe that this is the best way forward and the best way to see progress. I note what the noble Lord says about Report and the beef, and I look forward to discussing this with him at a later stage.

I now turn to the amendments tabled by my noble friend Lord King, which would mean that employers could also be required to publish and make available to their workforce and unspecified others information about their race, age or disability pay gaps, as well as their gender pay gaps. The Government have seen no evidence of a significant race or age pay gap. The gender pay gap is also much bigger than the disability pay gap, which now stands at 6.4 per cent, and we think that the way to reduce it is to get more disabled people into work.

Publishing gender pay gap information means making it generally known, and the form and manner in which this should be done will be a matter for any regulations made under Clause 78 following public consultation. I do, however, hear what my noble friend says, and I trust that this will not be a problem that grows in future. If it is something that needs to be looked at in future, then look at it we must, but at the moment we do not think that the problem is sufficient to include it in legislation. I therefore ask the noble Baroness to withdraw the amendment.

I am most grateful to the Minister for her careful consideration of these amendments. The noble Baroness says that our amendments are a punishment, but the Government’s own proposals would seek to impose an unnecessary duty on good employers. The Minister also said that our amendments were discriminate because they would impact on small firms, but that then leaves women who work for small firms with less protection than those who work for large organisations.

The noble Lord, Lord Lester, said that he thought our amendments were incoherent. I think we have a fundamental disagreement; we do not think that they are at all incoherent. We feel that our amendments are good because they do not penalise or put extra administrative burdens on good employers, but send out a strong signal to employers who discriminate against women in pay that, if they do not comply, they will have to have a compulsory audit. I agree with the noble Lord, Lord Lester, that encouragement is better than punishment, and our amendments are indeed intended to encourage good practice. I also agree with him about women not being paid badly, as fodder for low pay, as cheap labour, in bad economic times. I said that, whatever the economic times, the issue of equal pay is one that we should always address.

I am terribly sorry that I did not address the amendments tabled by my noble friend, Lord King when I spoke initially. I thought that they were coming in the next group. There is an interesting case to be raised here. The Government say that they do not expect equal pay audits to be a seriously onerous burden on business in terms of cost or administration and, if that is the case, why should the Government not wish to expand the provisions to disability, age or ethnicity? I hear what the noble Baroness said—that, should that be a problem in the future, the Government will look at it. I am not saying that it is what should happen, but if you are doing it for one, it seems strange not to do it for another.

However, I feel that we are miles apart on this, which is sad, given that we want the same outcome, and it seems a pity that we cannot will the same means. Given the hour, I beg leave to withdraw the amendment.

Amendment 87 withdrawn.

Clause 78 : Gender pay gap information

Amendments 88 to 91A not moved.

Clause 78 agreed.

Amendment 92

Moved by

92: After Clause 78, insert the following new Clause—

“Representative actions in equal pay claims

(1) The Secretary of State must make regulations to permit the Equality and Human Rights Commission or a registered trade union to apply to a court or tribunal as appropriate for a representative action order in relation to a defined class of persons (“the class”) who would benefit from the litigation of rights, or common issues in relation to rights, that members of the class may have as a result of the provisions of this Act.

(2) The regulations shall make rules in relation to the making and termination of a representative action order and its conduct.

(3) Such rules shall provide for hearings to be conducted in private when it is necessary for the issues between the members of the class and the Equality and Human Rights Commission or a registered trade union to be resolved and those issues are subject to legal professional privilege shared by members of the class.

(4) Such rules shall make provision for the hearing of any issue as defined in subsection (3) to be undertaken and managed by a different judge or tribunal from the judge and tribunal that have the responsibility for determining the rights or common issue in relation to rights of the member class.”

I say straight away that Amendment 92 is defective and will therefore need to be reconsidered. It is defective because it deals with representative actions only in equal pay claims, whereas it ought to deal with representative actions in all discrimination claims, and certainly those involving sex discrimination as well as equal pay.

The amendment is also unnecessary in the sense that the tribunal legislation already gives the Government the power to bring in representative proceedings. The Government so far, no doubt because the business Ministers representing employers have decided to oppose this, will not exercise that power. I shall try to think of some ways before Report to make them do so, and I hope that the Official Opposition will join in that.

I want to try to explain why this is such an important issue and, in doing so, I hope that the noble Baroness, Lady Turner, will allow me to go down memory lane to give just one example. About 25 years ago, I had the privilege of representing MSF in the speech therapists or Enderby case. The noble Baroness, Lady Turner, will remember it very well because she was there from the beginning and it was her trade union. That case took 11 years—I say it again, 11 years—from start to finish. We had to go to the divisional court, the Court of Appeal and Luxembourg, come back from Luxembourg and then there were further proceedings. The case involved comparing the work and pay of speech therapists, hospital pharmacists and clinical psychologists within the National Health Service. The Government, in the public sector, used every trick in the book and fought tooth and nail to avoid giving those speech therapists, 99 per cent of whom were women, equal pay with their counterparts.

Each of those women had to fill in a separate originating application, a separate claim form, because there was no procedure in the employment tribunals to allow them to join together—not in an American-style class action but simply in English-style representative proceedings so that several hundred claimants could be joined together. Because there were hundreds of separate pieces of paper, as is now required, the consequence was that, by the end, women had moved or died and their male comparators had died or moved. The union had probably lost many of the papers. There was a great law firm, and the whole thing was chaos. Who is helped by chaos? Bad employers are helped by chaos. If the CBI, a body which I have respected very much throughout my years when dealing with discrimination, and major employers, went to the noble Lord, Lord Mandelson, and his colleagues and said that they now accept that there should be orderly, coherent procedures in the employment tribunals for dealing with equal pay, sex discrimination and other discrimination cases, and therefore liberated the Government from any pressures and enabled them to use their existing power, it would be a modest change in procedure that would mean that the collective implications of systemic wrongdoing could be addressed in a single process in an orderly way by a single employment tribunal and upwards.

My amendment is unnecessary and too narrow. It is very modest, because it states:

“The Secretary of State must make regulations to allow the Equality and Human Rights Commission or a registered trade union”—

nobody else—

“to apply to a court or tribunal … for a representative action order in relation to a defined class of persons … who would benefit”.

It goes on to explain how that might be done.

One bad argument I heard from within the Administration—I think it came from the Ministry of Justice—was that all this is very sensible, but we have to wait for the civil justice review to change the system for all proceedings. That is one of the arguments that FM Cornford dealt with in his classic book Microcosmographia Academica: Being a Guide for the Young Academic Politician as a recipe for doing nothing at all. We do not need to wait to reform the entire civil justice system when we are dealing with discrimination law and a specific jurisdiction. All I therefore beg for is that the Government will exercise their power now—there is no need for consultation, as this is not controversial—to allow the commission and registered trades unions to apply in this way so that we can have orderly proceedings. It is not radical. It is not even liberal. It is just sensible. I beg to move.

I support the ideas behind this amendment—we heard what the noble Lord, Lord Lester, had to say about it—because I recall that when I was a trade union official, when the union wanted to secure equal pay for sections of women workers and wanted to use the legislation, it was necessary to find an individual member in whose name the case could be taken to a tribunal. If the case was won, it was then possible to get the decision carried through to the remainder of the workforce involved. But there was of course a problem. Someone had to be prepared to stand up herself, on behalf of everyone. Of course, it was done. The case to which the noble Lord, Lord Lester, has drawn attention was the case of speech therapists, who were members of my union, and we were fortunate in finding one member, a test-case member, who was willing to go the whole length—the whole 11 years—that it took before we eventually won that case. She was a remarkable woman, but you cannot always rely on exceptional individuals. She is now a professor at Leeds University, in charge of research. She was in every way an exceptional person, but you cannot rely on finding one of those in every case that you wish to take before a tribunal.

It would be so much simpler, as has been indicated, if we were able to take representative cases for the whole group of members; and there is also a case, of course, arguing that it should not just be for equal pay cases but across the whole spectrum of equality governed by the Bill, in which case we would need very different wording. I was in fact approached by a group that wanted a set of wording rather different from that of the noble Lord, Lord Lester, which would enable any equality case to be dealt with on a representative basis, if the union sought to do so. We will maybe consider that at Report. This is certainly an issue which ought to be dealt with by the Government either in the way suggested by the noble Lord, Lord Lester, or perhaps with the aim of a different amendment at Report, when we can take it across the whole spectrum of equalities in order to ensure that representative action can be taken instead of relying on exceptional individuals. They are few and far between, and you cannot always find people who are willing to go the full distance, as did this particular member in this particular case.

My Lords, I strongly support the thrust of the amendments of the noble Lord, Lord Lester, even though, as he points out, they are ineffective today. I also very much hope that he will induce the Government to think again about whether their existing powers could be put to good effect, because if in fact they are not going to be put to good effect by, I assume, another government department, then they ought to be restated in this Bill. I also share the noble Lord’s view that the requirement that further work should be done on the various procedures within the civil courts is quite unnecessary. As a member of the Merits Committee, we dealt with three Crown Court or civil jurisdiction regulations today, without the slightest difficulty, and I do not see the slightest difficulty in having regulations in relation to discrimination quite separate from anything else that comes. It is a perfectly simple thing to do. The wording of the regulations would have to go through the civil courts procedure committee, and no doubt there is another committee, the name of which escapes me, which would also have to look at it. Those are purely and simply procedural matters, to get to the point that the noble Lord is making, and it is well overdue.

One very simple point, which has already been pointed out by the noble Lord and by the noble Baroness, Lady Turner, is that it is inefficient to use a single person when that single person is representing a lot of other people. It would be much more efficiently done, and actually better for the employers, if they knew the extent of those who were involved in this, and everybody knew where they stood. It would be more efficient from the point of view of everybody. It therefore seems to be well overdue.

My Lords, I, too, should like to add a word of support. At a meeting with the Solicitor-General before the Bill went before the Commons I brought up this issue, but I was told that it would not be possible to bring it into the Bill. For that reason alone, I am pleased to see this amendment. It would be a great leap forward. The United States has seen a huge change since class actions were introduced. As my noble and learned friend Lady Butler-Sloss said, this would be the right way forward. It is time to bring in this provision and not make scapegoats of individuals who suffer so much over the years as they go through the process. It is unfair to them.

My Lords, I support the intention behind this amendment. The more I think about the years we have waited to get anything near equal pay for work of equal value, the more perhaps I have become cynical about how long it will take to achieve. Not least are the excuses, such as, “We are in a bad economic situation”. So what do we do? We make certain that we do not give anything at all that we think might cost us, which fails to take account of the fact that one of the good aspects of a recession is that it should be, and is in some cases, encouraging firms to half lay off people—for example, using flexible working—which applies to men as well as women.

However, on a more general point, there are many sides to this issue. I feel almost as if I am arguing the same case for prison reform. Let us do more to prevent it happening in the first place. What is happening in schools? How often are girls being taught about jobs where there is need and where the pay is better, and always has been? Mentoring of that sort would help. There are all sorts of things like that. For example, girls can be given the chance of apprenticeships in areas that they have never thought of or had suggested to them. Preventive work is part of it.

Clearly, we have more people in the public service than we have ever had before. If the public sector is to set an example, as it should, this will have some effect if it can be shown that it is setting the example for others to follow, not least if it starts with employers of 150 people. I should like to encourage everyone not to be too depressed by all of this but to think of a range of ways in which we can move ahead.

I am afraid that I am even more cynical than I have indicated so far. When we had equal numbers of trade unions and CBI reps on the Equal Opportunities Commission, I am afraid that my reaction was, “Okay, those six will get together and make certain things do not move as fast as they should”. There was too much common interest in not moving ahead. There is a lot still to do, but I am certain that we can move much faster than we are. The idea put forward by the noble Lord, Lord Lester, even if his proposal is not well drafted, is a good beginning.

My Lords, it is my great pleasure to follow the noble Baroness, Lady Howe of Idlicote, because she was my inspiration when she chaired the Equal Opportunities Commission. I have to say that she never let me get away with anything. Indeed, I have been committed to the cause we are discussing as a result of her initiative. This is a welcome opportunity to pay tribute to her.

I listened with interest to the noble Lord, Lord Lester, and I understand completely his concerns. But I just say to a number of those who have participated that it is a question of how we get there now. I strongly agree with the noble Baroness, Lady Howe of Idlicote, that we have to do it in a variety of ways. It is no use going down just one road. I have to say to the noble Baronesses, Lady Turner of Camden and Lady Flather, and the noble and learned Baroness, Lady Butler-Sloss, that in many ways I am worried about opening the door to huge class actions. In the United States, we have seen what damage that can do.

I am worried about provisions such as meetings in private and various other things in the amendment, but I do not think that it is necessary to go into great detail because the noble Lord has already put it in context. I believe that our proposals for compulsory pay audits limited to employers who have lost equal pay cases would mean that class actions were no longer necessary. So let us get on with it.

All noble Lords this evening have made a persuasive case in favour of representative actions. We certainly welcome the intention behind the new clause, but we cannot accept it. It would be premature to legislate for representative actions in equal pay cases now because there are a number of difficult issues still to work through in order to understand whether the introduction of representative actions really would promote the better enforcement of individual rights. As the noble Lord, Lord Lester, himself said, including a power in this Bill is really unnecessary. Section 7 of the Employment Tribunals Act 1996 already contains a power to make regulations on procedural rules which could be used to permit representative actions in equal pay claims in employment tribunals. We should think further about the use of this power. I note what the noble Lord said in his speech. I will reflect on that further.

Our recent research into how representative actions would work for equal pay cases has shown that this is a complex issue which generates polarised views, although not in this Chamber. Some of the issues we need to work through include: what happens when discrimination cases are brought together with other cases, such as unfair dismissal; the extent to which costs should be borne by the losing party in tribunal cases; how such cases should be funded; whether claimants should have to opt in or opt out of a representative action; how disputes between a claimant and the representative party should be resolved; and how damages should be awarded and distributed to a successful class of claimants.

There are also more issues to work through with regard to employment tribunals and the civil courts. This is because representative actions are to a limited extent permitted in the civil courts so that when introducing representative actions for things such as consumer and financial services cases, we will be building on an existing legal framework. There is no similar mechanism for grouping cases in the employment tribunals, so introducing representative actions for discrimination and equal pay cases in this jurisdiction would be a completely new departure.

More time is therefore needed to consider the potential impact on the tribunal service. In order to help us work through these issues, the Ministry of Justice will be doing some further work with the Civil Procedure Rule Committee to develop a tool kit for departments to use and to develop flexible generic procedural rules within which any representative action scheme can operate.

In conclusion, we recognise that there are problems with systemic pay discrimination. We accept that representative actions may bring great benefits both for individuals bringing claims under the Bill and potentially for defendants faced with multiple claims, and we will continue to look at this issue and may consult in due course. Concern has rightly been expressed around the Chamber about the backlog of equal pay cases and we are looking at whether there is more that the Government can do to speed up the handling of equal pay cases. Indeed, we have already introduced a number of measures to improve their handling. For example, the Employment Act 2008 contains provisions to enable ACAS to target conciliation resources on equal pay cases, with most likelihood of early resolution, and removes time restrictions on ACAS conciliation after an employment tribunal claim is made.

We have also taken other actions in this field. But for the reasons I outlined earlier, I ask the noble Lord to withdraw his amendment.

I am grateful to the Minister and to everyone who has spoken in this short debate. The Women’s National Commission said in its briefing that it supports the concept of representative actions as a means of speeding up equal pay claims and taking the pressure off individual women who often do not have the confidence to pursue claims against their employers, even if they are represented by unions. It continues:

“Unequal pay is often systemic rather than individual, requiring an overhaul of an entire pay system, not just compensation to a few brave individuals”.

That was the point the noble Baroness, Lady Turner, made in her important speech.

The citizens advice bureaux network, which is a grass roots body throughout the country, deals helpfully with representative proceedings. I shall not go through what it says now but it makes extremely intelligent suggestions about how the procedure already existing in the civil courts under civil procedure rule 19.6 might be invoked. I should say to the noble Lord, Lord Hunt of Wirral, that I am not in favour of class actions American style; and I am not in favour of lawyers getting a big cut out of damages claims on behalf of women. I welcome the fact that the conditional fee agreement scheme is to be cut back so that greedy lawyers cannot do that. I am not in favour of any of that. All I am seeking is limited procedural reforms on the lines of what we already have.

On Friday morning I am going to address the Trades Union Congress annual meeting on equality, at which about 400 or 500 people will attend. I have had the privilege of doing so for the past 10 years and I always give a report on the progress, or lack of it, that we have made. I promise the Government that on Friday I shall tell the people there what has happened in this debate and I shall ask each and every one of them and their organisations to write to the Minister because I cannot think of any other way to do this. We will have to use muscle if necessary—but muscle should not be necessary for a simple procedural reform. On that basis, I beg leave to withdraw the amendment.

Amendment 92 withdrawn.

Clause 79 : Colleagues

Amendments 93 to 96

Moved by

93: Clause 79, page 51, line 6, leave out “colleague of A’s only” and insert “comparator”

94: Clause 79, page 51, line 15, leave out “colleague of A’s only” and insert “comparator”

95: Clause 79, page 51, line 18, leave out “colleague of A’s only” and insert “comparator”

96: Clause 79, page 51, line 24, leave out “colleague of A’s only” and insert “comparator”

Amendments 93 to 96 agreed.

Clause 79, as amended, agreed.

Clauses 80 and 81 agreed.

Schedule 7 agreed.

Amendment 97

Moved by

97: After Clause 81, insert the following new Clause—

“Time off for trade union equality representatives

(1) The Trade Union and Labour Relations Consolidation Act 1992 is amended as follows.

(2) After section 168A insert—

“168B Time off for trade union equality representatives

(1) Subject to subsection (4), an employer shall permit an employee of his who is—

(a) a member of an independent trade union recognised by the employer, and(b) an equality representative of the trade union,to take time off during his working hours for any of the purposes listed in subsection (2).(2) The purposes are—

(a) carrying on any of the following activities in relation to members of the trade union employed by the relevant employer—(i) analysing equality monitoring data and reviewing the impact of policies and practices on different groups;(ii) providing information and advice on equality issues;(iii) promoting the value of equality and diversity in the workplace;(iv) investigating complaints relating to equality at work;(v) supporting and advising trade union officials in the carrying out of any duties that concern equality issues;(vi) attending equality committees or forums related to equality established by the employer;(b) preparing for any of the activities listed in paragraph (a). (3) The employer is required to provide information to the representative to enable him to carry out the activities listed in subsection (2)(a)(i) and (iv).

(4) Subsection (1) only applies if—

(a) the trade union has given the employer notice that the employee is an equality representative of the trade union, and(b) the training condition is met in relation to him.(5) The training condition is met if—

(a) the employee has undergone sufficient training to enable him to carry on the activities mentioned in subsection (2), and the trade union has given the employer notice in writing of that fact.(b) the trade union has given the employer notice in writing that the employee will be undergoing such training, or(c) within six months of the trade union giving the employer notice in writing that the employee will be undergoing such training, the employee has done so, and the trade union has given the employer notice of that fact.(6) If an employer is required to permit an employee to take time off under subsection (1), he shall also permit the employee to take time off during his working hours for the following purposes—

(a) undergoing training and development activities which are relevant to his functions as an equality representative,(b) where the trade union has in the last six months given the employer notice under subsection (5)(b) in relation to the employee, undergoing such training as mentioned in subsection (5)(a).(7) The amount of time off which an employee is to be permitted to take under this section and the purposes for which, the occasions on which and any conditions subject to which time off may be so taken, are those that are reasonable in all the circumstances having regard to any relevant provision of a Code of Practice issued by the Advisory Conciliation and Arbitration Service or the Secretary of State.

(8) An employee may present a complaint to an employment tribunal that his employer has failed to permit him to take time off as required by this section.

(9) For the purposes of this section, a person is an equality representative of a trade union if he is appointed or elected as such in accordance with its rules.””

My Lords, in speaking to the amendment I return to the theme of equality representatives in the workplace which I raised in my Second Reading speech. I have cut this speech to a bare minimum in the interests of time.

It has been repeatedly demonstrated in studies from a range of countries that worker activity, with union support behind it, is a major factor in increasing the opportunity for equality at work. Statistics show that better standards of equality of opportunity are achieved in unionised workplaces than in similar non-unionised ones. As a former equal opportunities commissioner, I obviously welcome this. I would say to the noble Baroness, Lady Howe, that I hope I was a progressive commissioner.

Equality representatives are at the core of the amendment. There are hundreds of thousands of equality representatives appointed and supported by trade unions and their members in the United Kingdom. They are important people in industrial relations. It has been estimated that they save society between approximately £200 million and £600 million each year. This results from a reduction in lost time. It involves race, gender and disability equality issues, as well as age and sexual orientation matters.

The amount of time equality representatives spend on their activities varies considerably. In a 2009 survey by the TUC, 88 per cent of equality representatives had spent time on providing information on equality issues to members, 77 per cent on promoting good equality practice and 61 per cent on assisting employees with investigations for discrimination and harassment complaints. Sixty per cent had been involved with flexible-working requests, 59 per cent with discriminatory practices and 41 per cent with requests for parental leave. That is just a flavour of what equality representatives do.

This all sounds very good, so why this amendment? A recent TUC survey found that only 36 per cent of equality representatives had an employer who automatically consulted with them frequently, only 26 per cent actually negotiated with union representatives and 22 per cent of employers never involved their union reps. A failure to consult with the workforce, or even to respond to points raised, can have devastating consequences. On the other hand, equality representatives working with the employer can intervene very positively towards the well-being of employees. This amendment shows the kind of legislation which would be of great help to both sides of industry.

The TUC, which I thank for this briefing, believes that equality representation should not be an add-on to the overall well-being of employees. Consultation with the workforce should be an automatic action for any good employer and any Government claiming to care for the well-being of the country’s workforce should provide legislation to assist it. I know that the Government are unlikely to accept this amendment and I have no intention of pushing it to a vote, but it is an important issue, especially to individual trade unions and their members and to the TUC, so I hope that a way forward can be found for a constructive debate on the question of legislation to support equality representatives. I beg to move.

I share the concerns expressed by the noble Baroness, Lady Gibson of Market Rasen. I should declare an interest, having once been a solicitor for the Transport and General Workers’ Union. An awful lot of people do not realise the extent of advice and support that goes on within a trade union. So much focus is put on the political side—particularly by the militants—that people forget the enormous amount of work involved. Mr Blyton of the Transport and General Workers’ Union, who I used to work for, was an example to everyone of how to ensure that people got the best advice.

Have the Government done any assessment of the additional amount of work that is going to be necessary? The noble Baroness made the point in her Second Reading speech that she felt that the work would dramatically increase. I am worried about that. Do the Government envisage that the impact of this Bill would be so great as to put an enormous amount of additional work on the shoulders of trade union equality representatives, and have they done any work in this respect? What discussions have taken place with businesses and what consultation has occurred on how best to deal with this? How much time do they envisage should be permissible or allowable, for instance, under the terms of the amendment? And would the amount of time off envisaged allow a business to remain properly functional under those terms? We just need a little bit more information before we can decide how best to proceed.

I agree with the speech we have just heard from the noble Lord, Lord Hunt of Wirral. In the old days trade unions were very often on the wrong side in discrimination cases and then it began to change. The Transport and General Workers’ Union under Jack Jones was conspicuous, as were the white collar unions, eventually overcoming prejudice in the craft unions, for example, on the basis of race.

We are dealing with highly vulnerable groups. Trade unions are indispensable in standing up for the underdog and trying to redress some of the balance. Part 1 of the Bill refers to socioeconomic disadvantage; the trade union movement stands for removing it. Time off to allow trade union representatives to tackle inequality is extremely important. Although I agree that specific questions need to be dealt with, I totally support the objective of the amendment.

My Lords, I am pleased to speak on Amendment 97, tabled by my noble friend Lady Gibson. We had a flurry of anxiety earlier because we were not quite sure that she was here, but she was of course in her office watching us on the television. I am very pleased that she is here to speak to this amendment. The noble Lord, Lord Lester, reminded me that one trade union fiercely resisted the introduction of women into one of our major emergency services in the early 1980s. I remember that quite clearly; I was cutting my teeth in the London Labour Party at the time.

The intention of the amendment is to give trade union equality representatives a statutory right to reasonable paid time off to perform their functions and for training. It is commonly referred to as “facility time”. Currently, only trade union officials, union learning representatives and safety representatives have a statutory right to facility time. There is agreement across the Chamber that equality representatives do a brilliant job, and the Government very much support their work.

Following a recommendation by the Women and Work Commission, the Government have spent just over £1.5 million from the union modernisation fund and the Government Equalities Office on building capacity and supporting the evaluation of the effectiveness of this relatively new type of trade union representative.

This funding came to an end in December, and we have now received and are carefully considering a report of the evaluation, which will be published shortly by the TUC. I am pleased to say this report is very positive about the impact that equality reps are having in the workplace.

The report acknowledges that statutory time off would enable equality reps to increase the amount of time they spend on the role and help attract new equality reps. This does not, however, represent a compelling case in itself. My noble friend would surely acknowledge that to make real progress in this area of employment relations there has to be greater consensus between trade unions and business, although I think that there is great hope for the future.

In September and October last year, the Government Equalities Office conducted a round of discussions with employers and other key stakeholders on the right to facility time for equality representatives. Opinions received were fairly equally divided along predictable lines.

There is not yet sufficient empirical evidence that time off should come through the law. However, in addition to statutory time off, the evaluation report points to other, non-statutory ways of developing the role through guidance. We are committed to working with the TUC and business to consider what else we can do to foster a consensus on the way forward. We will not forget the legislative option, but we do not believe that the time is right now.

Given what I have said, I hope that my noble friend knows that we are committed to and will continue to support the development of equality reps as part of our wider equality agenda. I ask her to withdraw her amendment.

My Lords, I thank the noble Lords, Lord Hunt and Lord Lester, for their positive contributions to this debate, which I very much appreciated. I also thank my noble friend the Minister for her positive response regarding future working with the TUC. That is all that I was trying to achieve with the amendment. On that positive note, I beg leave to withdraw it.

Amendment 97 withdrawn.

Clause 82 agreed.

House resumed.

House adjourned at 9.55 pm.