HANSARD
Trade Union (Levy Payable to the Certification Officer) Regulations 2022
- Motion to Approve
- 8:05 pm
- That the draft Regulations laid before the House on 14 December 2021 be approved.Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee
- My Lords, these regulations enact the reforms made by the Trade Union Act 2016 to the powers of the Certification Officer, the regulator of trade unions and employers’ associations. These regulations have been commented on by the Secondary Legislation Scrutiny Committee in its 25th report on grounds of policy interest.Before I explain the contents of the regulations, it is important to provide the context to these reforms. Trade unions have an important role in effective industrial relations and in wider society. There is a legitimate public interest that trade unions run their affairs according to what is required of them, so it is necessary that they have a responsible and diligent regulator. The reforms in the Trade Union Act are about proportionate and effective regulation. We are bringing the powers of the Certification Officer up to date with those of comparable regulators in other sectors.The Trade Union Act brings three reforms to the role. The first enhances the Certification Officer’s investigatory powers. These reforms were implemented in commencement regulations made in December 2021 and will commence in April. They are not the subject of these regulations, so I will give only a brief overview. Currently, union members may bring complaints to the Certification Officer—for example, on the conduct of elections. The Trade Union Act gives the Certification Officer the same powers to investigate all breaches that she currently has for financial matters and the register of members. This will enable her to act without having to rely on a complaint from a member. This is a wholly reasonable power for a regulator.These regulations bring into effect the second and third reforms introduced under the Trade Union Act: financial penalties and a levy. We consulted separately on these reforms in 2017 and conducted a further engagement exercise on the levy last year. Unsurprisingly, trade unions made up the majority of the responses to these consultations and the further engagement exercise. I will go on to explain the measures that we have put in place to address the concerns raised.
- Moved by
- As an amendment to the above motion, at the end insert “but that this House regrets that the Regulations impose an effective tax on trade unions to cover the costs of the Certification Officer, to whom very few complaints have been recorded, and which is not the case for other civil society institutions.”
- My Lords, these statutory instruments introduce what is, effectively, a tax on trade unions and subject them to criminal-style fines for breaches of complex labour law. This is part of a package of measures that includes allowing anti-union organisations to file time-consuming complaints against them, without a full parliamentary consideration.These changes are the wrong priority for Ministers and come at a tough time for unions. Union members, including doctors, nurses, school staff, transport workers, care staff and shop workers, have been on the front line of the coronavirus pandemic, and unions have worked flat-out to support workers working right across our economy. Adjusting to an array of new rules, and facing time-consuming complaints initiated often by hostile groups and additional financial burdens, will drain union resources from the vital work that they undertake. Unions are accountable to their members and have a strong track record of complying with their legal duties. The Certification Officer’s annual report for 2020-21 reveals that she dealt with just 34 complaints in that year. Not one enforcement order was imposed.The Government have portrayed these changes as tidying up and as unfinished business left over from the Trade Union Act 2016, but it is notable that Ministers have not dealt with other outstanding issues stemming from that legislation—issues that could benefit trade union members by extending and improving the quality of democracy, such as electronic balloting.
- 8:15 pm
- The Trade Union Act 2016 contained measures to overhaul the role of the Certification Officer, who is responsible, as we have heard, for statutory functions relating to trade unions and employers’ associations. That legislation contained a levy to fund the CO’s work, financial penalties on unions for breaches of statute, and to enable the CO to be given greater investigatory powers. For the past five years, these provisions have remained dormant. However, without much notice, in June 2021, the Government announced that they intended to activate the powers. They then ran a further engagement exercise—as the Minister has fairly set out—on the levy element, which closed in July.
- We contend that these plans are bad for working people in our country. The Government intend to recoup the cost of running the Certification Officer from those she oversees from April this year. The vast bulk of this will come from trade unions and their members. Some costs, including external legal advice and external investigators, will be excluded. The Certification Officer has estimated that she is likely to need a budget of £1.15 million. The TUC believes it is inappropriate to treat trade unions like profit-making companies, which are often required to fund their own regulator. Unions are not, as we have argued on many occasions, for-profit organisations; they are set up solely for the benefit of members. Other bodies with social roles, such as political parties or charities, do not pay levies to the Electoral Commission or the Charity Commission, respectively.
- As a result of the levy, unions will have less capacity to negotiate better pay and conditions for working people. There is no significant limit, as far as we can judge, on how much the levy can grow in the future. There is huge scope for a future Certification Officer to further expand their role, confident of course that the expenses for such activity will be met by unions.
- The Government also propose disproportionate penalties of up to £20,000 for statutory breaches; for example, in the running of general-secretary elections. These penalties resemble fines in criminal proceedings. However, they can be imposed on the basis of a civil rather than criminal standard of proof. In our view, there is no need or justification for these new penalties. Unions are accountable to their members through their democratic structures and have a long track record of complying with their legal duties.
- As I said earlier, the Certification Officer’s annual report shows that she dealt with just 34 complaints last year—that is one complaint for every 200,000 union members. Not a single enforcement order was necessary or imposed. This is a disproportionate measure, having disproportionate impact on working people’s organisations.
- The provisions, which require just a commencement order, will give the Certification Officer new, wide-ranging investigatory powers on matters such as elections, political fund management and union mergers. Currently, the Certification Officer can act only on complaints from a union member, but unions could now face often time-consuming complaints stimulated by groups hostile to the work of unions.
- I mentioned earlier that there are other priorities to which the Government could have turned their attention for improving the way in which unions operate. Introducing a levy and increased powers for the Certification Officer is not merely tidying up; it goes much further than that. Other issues, including electronic balloting, remain outstanding. The Act required an independent review of allowing unions the option of using electronic balloting during statutory votes, such as elections of general-secretaries. Unions increasingly use them for non-statutory ballots, such as indicative votes on pay claims. Other organisations, such as the National Trust and even the Conservative Party, use such approaches for their selection procedures, using e-balloting for key votes.
- The review, which was published in December 2017, recommended pilots as a first step. However, more than four years on, Ministers have yet to respond to it. Unions believe that electronic balloting would better meet the expectations of members and encourage greater participation in their democratic structures. Surely that objective is one we can all share. I therefore invite the Minister to give a commitment this evening to bring forward regulations that would enhance democratic participation by union members, rather than adding burden to the work that unions undertake.
- This Government have rarely shown themselves to be a friend of our unions, but they could begin to repair the damage to that relationship by simply parking this vindictive, unnecessary and redundant legislation without losing face. It adds wasteful expense to union activity and will force unions to deal with additional red tape—both things Conservatives traditionally oppose.
- What of the levelling-up agenda? Unions have levelling up in their DNA; it is in the way they think and act. This measure goes against the spirit that the Government are trying to mobilise to improve our communities—our working communities in particular—up and down the country.
- I hope—not with much expectation—that the Minister will adopt a sensible and proportionate course of action this evening, but in the absence of that, I hope the House will support my amendment to the Motion. I beg to move.
- My Lords, like many debates on statutory instruments in this House, the real substance of this debate is not particularly about the topic on the agenda. A moment’s thought will tell us that this is really about party funding. Of course, the noble Lord, Lord Bassam, on behalf of the Labour Party, has to oppose this in the way the Labour Party will oppose most attempts to place any form of restriction on the trade union movement. As we all will realise, historically, the Labour Party started as the political wing of the trade union movement. Of course, in recent years Labour is even more dependent on funding from the trade union movement.I have obviously been a critic for many years of our system of funding, which has led Labour to be in a position where they require this, but the problems Labour has are as nothing compared with the current funding problems of the Tory party, with Russian donations and skirting very close to the line on the sales of honours. I do not think it is for the Tory party to criticise Labour for taking the position of the trade union movement on this.I have every sympathy with the noble Lord, Lord Bassam, on this issue. As he and one of his colleagues in the House of Commons commented, to make trade unions pay for certification is like making charities pay for the Charity Commission. That is a very valid point that the Minister needs to answer.As the noble Lord, Lord Bassam, indicated, the sums taken from the unions, for minimal advantage to the taxpayer, would mostly be spent on the necessary protection of their members. I know people assume that unions are simply political activists, but most of the money they raise is spent on that. This money will be taken directly from their members and will not be used for that purpose.Finally, I thought the noble Lord, Lord Bassam, went slightly light on the Tory party and the Government on this issue. Having watched them over my 25 years in your Lordships’ House, I think that hostility to the trade union movement is deep in the Tory party’s DNA. It goes back to the reforms created by Margaret Thatcher, which they believe sets the standard for all future activity by the Tory party. It is unfortunate. I support the noble Lord, Lord Bassam. These proposals are very unfair.