I was referring to what I consider to be the breadth of the proposed section 187B. I think, with respect, that it creates considerable scope for any employee who is faced with an instance of fire and rehire to challenge it through the employment tribunal. It creates, I think, an obvious and unsustainable tension with common law principles—the common law principles that underpin the entire law of redundancy.
I will just finish this point.
There could be circumstances in which an employer had made the decision to change the terms of employment, to reduce wages, and the employment tribunal, applying every single correct common law principle, would find the decision to have been fair, but if the employer had breached one element of the consultation requirements—had not put one document or one meeting note before the trade union representative—the dismissal would be found to be unfair.
I have listened carefully to the hon. Lady, and I am very respectful of her knowledge of this particular issue, but nothing she has said today suggests to me that her arguments could not be better deployed in Committee. My hon. Friend the Member for Brent North (Barry Gardiner) asked Conservative Members to work with him to improve the Bill in Committee. I wonder why the hon. Lady is not taking that approach.
I hope that what I am going to say will answer the hon. Gentleman’s criticism.
There is another point that I cannot ignore. I invite every Member to turn to proposed section 187F, which deals with the proposed “Award of compensation” to be made by any employer who fails to comply with the proposed new consultation requirements. It states:
“ The amount of compensation awarded shall, subject to the following provisions, be such as the employment tribunal considers just and equitable in all the circumstances”.
That is exactly the same compensation measure that is used in whistleblowing and in discrimination law. It opens the door to uncapped compensation in the area of unfair dismissal, which has a cap, It therefore drives a coach and horses through the entire principle of compensation in unfair dismissal hearings. It would make fire and rehire the only form of unfair dismissal in which the employee could receive an uncapped compensatory award. If the employee had been dismissed for gross misconduct or for being bad at his or her job, the award would have been capped at 80 grand. That cannot be right.
What will all this do to the employer who is thinking about renegotiating terms of employment? The employer will be too nervous to do it, and will lay people off. Let us take the employer in the case of Garside & Laycock v. Booth 2011, who had proposed a 5% reduction in wages which every single balloted member of staff except one had accepted. Employers would not do that; they would lay off the whole workforce. Is it better or worse for people to take a less attractive variation in their terms of employment or to lose their jobs altogether?
I am grateful to the hon. Lady for engaging so closely with the Bill. I think she knows she is over-egging it, because any tribunal would look at the situation in the round. The Bill is drafted as it is because it chimes with the legislation on redundancy. Again, to be technically proficient, the Bill has to merge with the other Acts.
I am afraid the hon. Gentleman is incorrect. This concern was raised by my head of chambers and it is shared across the employment Bar. We cannot have a just and equitable jurisdiction in the law of unfair dismissal as it does not work.
The hon. Member for Feltham and Heston (Seema Malhotra) raised a point about the aviation sector. The conduct of British Airways was poor, but there is an important issue at stake. If in primary legislation the risks of fire and rehire are so great that employers are more inclined to lay people off, think what that would mean for airline pilots, for example. Airline pilots must fly within a two-year period to retain their flying licence. If they are sacked by British Airways at a time when the entire travel sector is struggling badly, they would be very unlikely to get a job and it could easily be two years. It is not just the loss of a job; it is the loss of an entire career. We need to tread very carefully when we consider primary legislation in the area of fire and rehire.
My hon. Friend is making an excellent speech and some important points. She talks about the risk of moving to layoffs or redundancies, is there not also a danger that businesses will not recruit people in the first place or will not scale up because of the fear that employment legislation is so complex and is increasingly one-sided on behalf of workers? That would deter employment, which is the exact opposite of the situation we all want to see.
We all know there is always a risk that we make employment relations so onerous that there is a temptation to engage consultants. What we are primarily looking at is employers that have larger, unionised workforces. I am not sure how many employers it would engage, but the short point is that Conservative Members want a solution that does not make an existing problem worse, drive redundancies or lead to more business failures. Fire and rehire must be a genuine option of last resort when a negotiated settlement cannot be reached, when the business is on the brink of insolvency and when the alternative is layoffs.
I am grateful to the hon. Lady for the conversations we had when I proposed legislation on this issue last year. She says that, had fire and rehire been banned, British Airways might have just made people redundant, and she cites the example of pilots. This has happened already, and Ryanair negotiated temporary changes. Why would British Airways not have done the same, had it not been allowed to fire and rehire?
I will return to that point when I address British Airways in a bit more detail.
As I have said to the Minister, we need more than ACAS guidance. I want to see the rules on dismissal and re-engagement set out in an ACAS code of practice, with financial sanctions to back them up. Parliament specifically envisaged the possibility of doing this when it passed the Trade Union and Labour Relations (Consolidation) Act 1992. Section 207 gives the Secretary of State the power to introduce a code of practice in respect of anything in that Act. Parliament also considered and welcomed the possibility that the Secretary of State would have the power to impose legal teeth. Section 207A addresses the possibility that any compensation can be increased by up to 25% if the employer does not comply with an ACAS code of practice.
We know that ACAS codes of practice can be effective. The hon. Member for Middlesbrough (Andy McDonald) is an employment lawyer and will know that when we think about, for example, the ACAS codes of practice on disciplinaries or grievance procedures, it is vanishingly rare to get into an employment tribunal nowadays and find that the employer was oblivious to those codes of practice. Why do employers know about them? Because there is risk—financial risk. If they go down in the employment tribunal, there could be an uplift on compensation, and they want to avoid that, so we know that it is has the right effect.
What should the code of practice say? We have some of the answers already. The BEIS call for evidence, which was published through ACAS, gives us some clues. I think practitioners made such suggestions very well, including, in relation to paragraph 56 of that report, that employers should provide an analysis of whether changes are anticipated to last for more or less than five years with evidence to substantiate that answer, and, in relation to paragraph 76, that they should provide evidence of reasonable alternatives they have explored and evidence of their financial position.
Another point comes out of the excellent work of the Transport Committee, and I want to pay tribute to the very impressive session it had with Willie Walsh on 11 May 2020. Anyone who has read the transcript will recall that he was asked repeatedly by the Chair, my hon. Friend the Member for Bexhill and Battle (Huw Merriman), whether, if British Airways returned to full profitability, he would restore workers’ wages to their previous levels, and he declined to confirm that he would do so. That created huge exposure for British Airways, and I do not think it is any surprise that, when Alex Cruz appeared before the Select Committee six months later, he gave a rather different explanation.
BEIS would then have the opportunity to require employers to set the criteria that they would exercise in deciding when to restore workers’ pay. I think it would enable the Government to give guidance on this distinct category of dismissals, how they should be treated and what the employment tribunal should be looking for. My final point on this is that it would give the Government real teeth, and it would incentivise employers to do the right thing and give employees more power to enforce their existing rights.
The point has been made, but most of the employers we have cited in this House are considering fire and rehire in relation to large proportions of their workforce. With British Airways, 12,000 people were at risk. If every single one of those people could get an uplift in a compensatory award of 10% to 25%, then—let us be realistic—that might be £10,000 or £20,000 times 12,000. That creates a huge incentive for the employer to do the right thing, because there will be a very significant financial penalty if they fail. That will mean that consultations are entered into with legal advice, which is a good thing, as well as with an open mind and an open spirit.
By the way, consultation is not a meaningless word, as all hon. Members will know. When it is approached in the right spirit, it can often lead to alternatives to the thing that is most feared by the employee. That is the suggestion that I have made to Ministers.
I was one of the members of that Select Committee, and I remember there was very much cross-party agreement that it was such a disgrace for that to happen that the company should not carry the British flag. The point is that the parent company, IAG, had profits in the region of £3.5 billion-plus, there in stages, that it could have used. IAG’s agenda—and this is why I am concerned that what the hon. Member is suggesting may not go very far in discouraging companies—was about driving profits, not about saving the jobs and livelihoods of people, particularly women in their 50s and those towards the end of their careers. It was a restructuring brought in under the guise of fire and rehire.
The hon. Member makes an excellent point, and I just want to pick up on what he said. He points to the fact that the parent company had substantive profits, and that point was made by the Unite representatives who contacted me. I do not think that that case would have survived the employment tribunal in its early stages, as I do not think that it would have crossed the threshold of a sound, genuine business reason. I think the reason why Alex Cruz appeared before your Committee five or six months later and spoke very differently about his plans for pilots, cabin crew and everybody else was because the company was on thin ice, and I think some damaging concessions were made in that session. I think you are right, but I do not think that my solution fails to capture it.
I do not think that my proposal is at odds with what the hon. Member suggests.
Just briefly, because I am coming to the end—[Hon. Members: “No.”] I would like to focus the remainder of my remarks on the detailed work that has gone into clause 1 and the extended duty to consult, which is proposed to go into the Trade Union and Labour Relations (Consolidation) Act as new section 187A. One of the things I think is most surprising about this, despite the fact that it is obviously very persuasive at first blush, is that it immediately takes the trade union, the employee and the employer into their very first meeting talking about fire and rehire. When I spoke to my constituents and the Unite representatives who were looking after them, the thing that had been the most stressful was that they had gone into these meetings and found that from the very start, dismissal was already being mentioned as an option. It was, “You will take this pay cut, otherwise we will sack you and get you back.” That seems to exacerbate the problem, rather than improve it.
The law in this area is not working. When I speak to employers about why they have been raising fire and rehire so early, they always cite section 188 consultation obligations, the “in good time” requirement under that, and the genuine fear that they will be hit with a punitive protective award if they have not put all their cards on the table at the start. A much more sensible route would be to take the heat out of these negotiations and make fire and rehire a last resort that only comes in when all other options have been explored.
That is why we should have specific language in a code of practice. It could say something like, “An employer who begins a section 188 consultation only after it has attempted to negotiate a change in terms and conditions consensually will be regarded as beginning that consultation in good time.” Alternatively, it could say, “Where an employer is attempting to negotiate new terms and conditions before any fire and rehire process, that amounts to special circumstances that rendered it reasonably practicable not to comply with section 188.”
The hon. Member is making some very interesting points. Given that she agrees with the spirit of the Bill, does she agree that fire and rehire should be a last resort? She is looking at this matter in detail. Does she agree that it would be better looked at in Committee? We appreciate that this area is complicated and she is a great expert in it, but would it not be better for her to be forensically evaluating this Bill with good time with my hon. Friend the Member for Brent North (Barry Gardiner) and others in Committee?
The hon. Lady is making some excellent points and, like the hon. Member for Swansea West (Geraint Davies), I feel they might be better made in Committee. Does the hon. Lady agree that part of the motivation for the Bill is not to do away with the practice completely? It says that fire and rehire or change of contracts in exceptional circumstances can be done with negotiation, consultations and so on. The motivation was that several major companies appeared to be using the current crisis as something to hide behind and institute unfair fire and rehire practices at a time of already mounting stress and emotional trauma for a lot of people.
Thank you, Madam Deputy Speaker. I will take those first two points in succession. The first was about whether these issues are not better raised in Committee. The answer, respectfully, is no, because I do not think an area as technically difficult as this belongs in primary legislation, and I have explained why the Bill is at odds with the Trade Union and Labour Relations (Consolidation) Act 1992, the intentions of Parliament when that Act was passed and the existing web of laws at section 98 of the Employment Rights Act 1996 dealing with unfair dismissal. The issues covered in the Bill belong in a code of practice backed up with financial penalties, rather than in primary legislation.
To take the point made by the hon. Member for Edinburgh West (Christine Jardine), I of course accept the stress that people were subjected to, and all the work that Members on the Government side of the House are doing is directed at minimising that, but the solution we are considering and discussing must not give employers leeway to abuse employment rights. We have been thinking about that just as much.
It is precisely because I do not think employees should have a gun to their head at the start of consultations that I cannot support clause 1 of the Bill, which requires employers to lay all their cards on the table on the issue of fire and rehire from the start. Rather than demanding full disclosure from day one, we should be much more sensitive to the legitimate desires of businesses to remedy defects before they have to reveal they are on the verge of failure, given what that might mean for their business at a stage before they would wish to disclose it.
I agree that it really important to take the heat out of the situation at the very beginning. The hon. Lady is absolutely right—I mentioned it myself—about the importance of not having section 188 on the table immediately. That is why, starting at line 20, the Bill says:
“The employer shall consult with a view to reaching an agreement to avoid decisions being taken to terminate contracts of employment, or to introduce changes in work organisation or in contractual relations.”
The precise point that the hon. Lady has made is there on the face of the Bill.
The hon. Gentleman knows that proposed new section 187B(2) says:
“The information to be disclosed is all information relating to the employer's undertaking”.
It would be almost impossible for an employer to comply with that without its having to put on the table the fact that it is considering dismissal in the first instance.
I hope that, if my speech has strayed into technical issues of industrial relations law, that reveals how difficult this question is and how any attempt to impose primary legislation runs significant risks of unintended consequences that would be much worse for workers’ rights and job losses. We on the Conservative Benches depart from the Opposition in that we think there is strength and flexibility in existing employment law, but we also think that it could do with being robustly reinforced through potential financial penalties. I hope the hon. Member for Brent North is reassured that we take this issue as seriously as he does. We are also thinking hard about it, and I am confident that we will deliver for workers’ rights.
I welcome the Bill and thank my hon. Friend the Member for Brent North (Barry Gardiner) for the incredible campaign he has fought up and down the country over recent months to stop fire and rehire. I also put on record the thanks of the whole House to my hon. Friend—
I wonder whether the hon. Gentleman can clarify something. The campaign is to end fire and rehire, which is what Unite says, but the hon. Member for Brent North (Barry Gardiner) has clarified several times that the legislation would not end fire and rehire, so I am a bit confused as to what he is seeking to achieve.
If Members intervene before someone has really started their speech, it does lead to confusion, so they may want to wait a little longer on occasion. There is probably a lesson there for the hon. Gentleman. My hon. Friend the Member for Brent North has made it absolutely clear that although he does not seek to ban fire and rehire, it should end. There is a difference, and I will come to that later.
First, let me thank my hon. Friend, who cited real examples of working people who are being impacted by this abhorrent practice. Sometimes in the Chamber, we move away from real examples and towards theses or even the law, which is important, but we must always keep in touch with the real impact on real people.
As I made clear in the Westminster Hall debate in April, fire and rehire is a deplorable tactic used by unscrupulous employers. Using the threat of permanent dismissal, employers bully their staff and force them to reapply for a job that they already had. They force them to sign away their pay, rights and conditions and rip up their original contracts. These bad bosses—these unscrupulous employers—do so knowing full well that staff cannot refuse without being cast out into an uncertain job market. Let me be clear: these are not negotiating tactics, they are nothing more than a form of legalised blackmail, with all the power in the hands of bad bosses. They are tactics that leave working people worse off to the tune of several thousand pounds a year while working longer hours on exhausting shift patterns. They leave working people with fewer days of annual leave, with no paid lunch breaks and with no protections when they fall ill. They leave working people without the dignity in work that they deserve, all while CEOs pay themselves inflated salaries and bumper bonuses worth millions of pounds.
So let there be no doubt. Fire and rehire is abhorrent, morally bankrupt and a stain on our economy. Put simply, these employers are employing bully-boy tactics—surprisingly, those are not my words but the words of the Minister.
The shadow Minister has used the words “abhorrent” and “deplorable” when it comes to the use of fire and rehire. Could I suggest that he has a word with his boss, the Leader of the Opposition, so that the Labour party stops using these practices itself? Perhaps he should look closer to home at his own party.
This is a serious debate, where working people are looking towards this House for guidance on an important issue. The hon. Gentleman, I have to say, may on occasion make a decent point, but today is not that day for him. He needs to look again at the point he made.
I want to follow up on that point. The hon. Gentleman says we are fabricating news. Would he like to explain why a senior Labour MP is reported as criticising Labour’s employment practices? They have said:
“To learn that our party are now using what can only be described as fire and rehire appals me. It is everything we as a party should be aggressively opposing.”
That is after the Labour party made a whole load of redundancies and then appointed people in exactly the same departments. It is not fake news.
That point has already been clarified. Let me echo the point that my hon. Friend the Member for Brent North made earlier. Fire and rehire is an abhorrent practice, regardless of who is involved. I do not understand why Conservative Members seems to think this is an opportunity for them to stand up one after the other and make a point that has already been addressed.
Thank you very much, Madam Deputy Speaker.
For those who seek to minimise the scale of fire and rehire, let us remember—the point was made earlier—that one in 10 workers, around 3 million people across the country, of whom a worrying proportion are young or from an ethnic minority background, face having their pay cut or their rights stripped away, or losing their job. What is most alarming is that fire and rehire is being used not by smaller companies but by big national names such as British Airways, British Gas, Tesco, Clarks, Argos and Weetabix, to name a few. All of them are established companies. Many saw bumper sales during lockdown. Workers at these companies, whether in the warehouse, in the factory, on the shop floor or in HGV cabs are also the workers who kept us moving during the pandemic.
Some companies threatening their staff with fire and rehire, such as Tesco and British Airways, even received Government handouts during the pandemic, only to take the money and then show their staff the door. That is scandalous. Rather than helping working people, the Government have subsidised their dismissal during the worst health and economic crisis in a generation. This is a national disgrace.
Is not it the reality that it is not that big employers are unscrupulous or evil, as opposed to small employers? The truth is that it is only larger employers who are bound by the obligations under the Trade Union and Labour Relations (Consolidation) Act 1992 and it is only they who are consulting with larger numbers, so, inevitably, the focus will be on large employers.
I agree in part with the hon. Lady’s point. The issue here is this. She made her points earlier. I accept that there are good employers and there are those who perhaps are not behaving in the manner that they should. Referring to one of her previous points, the issue is this: those employers that are acting in a just, proper and proportionate manner are actually worse off because they are being undercut by unscrupulous employers that are not acting in the manner that they should. The size is perhaps for illustration purposes, but I do take some of her points.
Faced with such scandalous and disgraceful behaviour by employers, the Government should have stepped in as fire and rehire spread through our economy like wildfire, but they did not. Instead, it has only been the Labour movement, trade unions and staff coming together to organise in the workplace that stopped the use of fire and rehire at places such as British Airways, Go North West and Heathrow. It was not Ministers and it was not the Government.
Let me make this point clear. The campaigns and victories of our proud trade unions fighting against fire and rehire, fighting against bad bosses, and fighting for their members and working people right across the country—whether it be Unite, GMB, Unison, the Union of Shop, Distributive and Allied Workers, Community or others—shows that, despite this Government’s every effort to diminish and grind them down, there is still power in the union.
The hon. Member’s point does not even have a passing acquaintance with fiction, never mind fact, and does not deserve a response.
Trade unions and working people have been deliberately hindered in their efforts to fight fire and rehire as the Government put barriers in their way and bog them down in red tape.
Despite the hoots of derision from the Government Benches, does my hon. Friend accept the survey evidence that shows that three quarters of the British public back the Bill from my hon. Friend the Member for Brent North (Barry Gardiner)? Countries such as France, Spain and Ireland have already acted to make this appalling practice illegal.
My hon. Friend, as ever, makes a very valuable point. The most pertinent point that he makes is that many countries in Europe are already ahead of us and have already acted in this area. Let me say this to him: the reason that Government Members are loud and make points that go towards accepting in part that there is this need is that they understand that, when they go back to their constituencies, there is a different argument that they have to face there. I urge them today to seriously consider this very sensible Bill.
The Bill introduced by my hon. Friend the Member for Brent North, with the support of trade unions, working people and the Labour party, would rebalance employment protection so that it is no longer overwhelmingly weighted in favour of the employer, and put workers and trade unions back on an equal footing. It would place power back into the hands of the workers who create the wealth, rather than the chief executives and shareholders who hoard it.
The Bill would also reward those countless employers who are doing the right thing by their staff in ensuring that they are well paid, well protected and well looked after, but who are being undercut by unscrupulous competitors. Yet even as Ministers claim to oppose fire and rehire, they are clearly telling their MPs to vote against the Bill, as is evident today. The reality is that the Government have nothing to offer working people.
In some ways, I am a bit disappointed, because the hon. Member for Brent North (Barry Gardiner) made a bipartisan speech, but unfortunately the hon. Member for Bradford East (Imran Hussain) is not. Fire and rehire is a cross-party issue that Conservatives in our constituencies are dealing with on the ground as well. In Rother Valley, Adam Tinsley, the councillor for Maltby East, fought against Sheffield University, which was going to use fire and rehire, as a Unite the union representative. I commend him for that. Let us take some of the partisanship out of the debate and work together to solve the problem.
The hon. Gentleman says that he supports a councillor who stands up against fire and rehire in his constituency. I say to him that he should stand up in the House and support fire and rehire [Interruption.]—support ending fire and rehire. Then he can take that message back.
Of course, neither I nor anybody on these Benches intend to make this a partisan issue. [Interruption.] Let me finish. Our issue is that the Government have instructed Conservative Members to vote against the Bill. [Interruption.] Well, in that case, I look forward to welcoming Conservative Members in our Lobby today.
Let us look at the Government’s shameful record. I am not surprised that they are voting against stopping fire and rehire, because over the last decade, they have done nothing but openly attack and undermine workers’ rights. They introduced the Trade Union Act 2016 that stripped away the power of trade unions and made it harder for working people to organise in defence of their rights. They preside over an employment tribunal backlog that means it is almost impossible to receive justice for mistreatment in the workplace. They leave the post of director of labour market enforcement vacant at a time when we are seeing more workers exploited in the workplace. They promised us an employment Bill that we are still waiting for almost two years later. Is it any wonder that we have a labour shortage when the Government could not care less about the rights of working people?
We all know that the Prime Minister likes to talk about levelling up and building back better, but the Government cannot have it both ways. They cannot talk about levelling up without levelling up employment protections. They cannot talk about building back better without building a better employment rights settlement. They cannot talk about fire and rehire being a “bully boy tactic” without voting for this Bill today.
I have been very generous with my time.
I urge the Minister to back giving rights to working people, back an end to the disgraceful use of fire and rehire, and back the Bill today. If this Government will not, then the next Labour Government, as part of our employment rights Green Paper, will.
It is a pleasure to speak after the hon. Member for Bradford East (Imran Hussain). [Laughter.] At least we have a Yorkshire heritage in common, which is always a pleasure.
It is quite daunting to speak after the eloquent speeches by the promoter of the Bill, the hon. Member for Brent North (Barry Gardiner), and by my hon. Friend the Member for Newbury (Laura Farris). They both made fantastic and constructive speeches. Prior to my being in this Chamber, my life was in business, and I feel like I am in some kind of mediation. We have heard the workers’ perspective, we have heard the lawyers’ perspective, and now, perhaps, we will listen to the business perspective, which is a very important part of the conversation.
It was great to hear the hon. Member for Brent North talk about the engagement that he has had with business, and about seeing the issue from their perspective. I can see why he has made sure that the Bill does not ban fire and rehire outright. I am not sure that all his colleagues would support that position, so he has taken a brave line on that. He said right at the start of his speech that he wants to make the UK the best place to work. I absolutely agree. We also want to make it the best place to start a business, because the relationship is symbiotic. The shadow Minister, the hon. Member for Bradford East, said that workers create the wealth and the chief executives and shareholders hoard it. I do not see it like that. It is a much more interdependent relationship than that.
Let me talk about a personal experience of mine. I have been in business for 30 years. I know that the situation would not have been quite the same, because my business would not have come under the legislation contained in chapter 1, but there are other elements that would have been the same. We entered the crisis of 2008 with a workforce of 200 people, so we would have come under this legislation in scale, although the legislation that covered our business would probably have been slightly different.
We were in the property sector, and we were faced with a 70% reduction in turnover that year. The first thing that happened was that all the directors of the company—all the people who ran the company—took a 50% pay cut. That was the first thing we did, before we made any redundancies whatsoever. Then, of course, we sat down and talked to our workforce about how we were going to get through this period. That was a very difficult period, because we had been in business for 26 years and a lot of those people had worked for us for over 20 years. We had to reduce our workforce from 200 people to 65. It was a desperate time. We were not trying, as was described, to coerce them into a certain situation; we were simply trying to get our business through a very difficult situation. We were under pressure from all directions.
The key thing for us at that point was pace. The bank was putting us under huge pressure. We did go through consultations. As part of the section 188 requirements—the 30-day requirement—we went through consultation with our workforce. The workforce were very supportive of what we did, and I think in many cases they felt more sorry for us than we did for them, although, as I say, the conversations were very difficult. However, if we had had to go through endless consultations and reviews, challenges through the committee and challenges through the employment tribunal, our business would have gone under. That is the reality behind that delay.
The hon. Member is making some excellent points. I do not think that anybody in the House is suggesting that the sort of practices that he engaged in, as a good and responsible employer, are the issues at play here. The issue that concerns us is employers that are making very significant profits using the cover of covid to deploy these dreadful tactics, not the sort of good practices that he is describing. He is making reasonable points about periods of consultation. If he finds that those are too onerous, we can address and debate those issues in Committee. We need to hear evidence directly from people, including his considerable experience.
The hon. Gentleman makes a good point, and I should have clarified this. I am not a lawyer, but I can read, and subsection (1) of proposed new section 187A covers not just fire and rehire but, as set out in clause 1,
“reasons other than conduct or capability”,
which could cover a situation where someone was making redundancies simply to cut their coat according to their cloth. Is it possible to amend in Committee a Bill that is potentially so flawed? I defer to my hon. Friend the Member for Newbury, who said that guidelines and sanctions would be the better approach. It is only fair that we look at that. As legislators, it is important that we tread carefully when we legislate at all. Bill Shankly, a great Liverpool manager, said to his players before he sent them out on to the pitch that, “The score is 0-0, don’t let it get any worse.” Before we move down a path of legislation, we legislators have to think about whether there are unintended consequences—we must not make things worse, particularly for business, which is looking for stability, frameworks and certainty. I will also come to the retrospective nature of the Bill, which I am uncomfortable with.
I am of course totally opposed to fire and rehire where a profitable business that does not need to restructure is taking advantage of a particular situation. Opposition Members are trying to cover those situations, and who would not want to do that? Such conduct is absolutely wrong and a stain on business, and every Minister I have heard at the Dispatch Box has criticised it.
There is only one thing worse than fire and rehire, and that is fire and not rehire. That would be a concern if the Bill went through, instead of companies taking the opportunity to restructure in a way that keeps their business going and gets it through a difficult time. If the provisions were not in the Bill, companies would just make redundancies or dismiss staff in other ways.
The hon. Gentleman says that there is only one thing worse than fire and rehire, and that is just fire. But if this is about the option of an offer of redundancy with a redundancy payment, as opposed to someone having a gun over their head and being told, “Take these worse terms or you won’t be able to pay for your housing. You can have no job at all, with no redundancy pay-off”, I am not sure he is right. And the situation may even be worse than that. He needs to remember the stress that our constituents were facing when they were faced with fire and rehire.
To pick up on the point about redundancy payments and that being a suitable alternative, does my hon. Friend agree that of course a business in financial trouble could dismiss in any case for “some other substantial reason”, which would not lead to a redundancy payment? It is all there in section 98(1)(b) of the Employment Rights Act 1996, and it would leave an employee as badly off as somebody who is subject to fire and rehire.
I defer to my hon. Friend, who knows far more about this issue than I ever would. The principle behind our discussion is making sure that, where the question is a business’s survival, it can get through a very difficult time. There is no doubt that last year many businesses and many sectors were in a situation where there were question marks about their very existence, so in those times they must have the opportunity to sit down with their workforce and restructure, where that is the only way forward.
The hon. Gentleman professes to speak for business. My background is in business. I mentioned earlier that the productivity rate in Germany had been twice that of here because employers are required not to fire and rehire people easily, so they train people. Does he also know that the Government-commissioned research by the Department for Business, Energy and Industrial Strategy shows that, in terms of productivity, the return to training in Britain is about 24% compared with only 6% in Germany? In other words, they have done much more training but our returns are much higher. Does he not agree that this sort of Bill, which puts pressure on employers to train and tool up their workers instead of just firing them when times are tough, is very important for the economy? Will he not join hands with us and take this forward to Committee?
I think that there are two separate things entirely. Who would not agree with skilling up our workforce? Of course we need to skill up our workforce and good employers will do that to enhance productivity, particularly if we move to a higher-wage, higher-skilled economy. It is absolutely right that we should do that. However, the key question on whether the Bill should go forward to Committee is: is the Bill in any shape or form amendable so that it can do what the hon. Gentleman wants? [Interruption.] I accept that Opposition Members may feel that it is, but there are cogent arguments from Government Members that it is not and that there are better ways to do this.
I look to my hon. Friend for guidance, as a wise head. There are certain turns of phrase that I perhaps do not understand. The shadow Minister, the hon. Member for Bradford East (Imran Hussain), said that this about not banning the practice, but ending the practice. Does my more experienced colleague, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), understand what he means by that?
I was not legally trained, so I am struggling. The key point is this: if we can find a way to meet the objectives of the hon. Member for Brent North (Barry Gardiner) without legislation, I would prefer to see that, and I think we all would because life is tricky enough when someone is trying to run a business, so if there are better, non-legislative ways to do it, we should absolutely look at them. The danger is that this becomes hugely bureaucratic.
My hon. Friend the Member for Newbury (Laura Farris) is a lot more learned on this matter than we are, but as a general point, does my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) not agree that the way in which we make good laws in this place is by ensuring that they are operational? Does he not share my concern that the Bill is very much open to legal challenge in its current form and that, if we want to make sure that it works, it has to be operational on the ground?
My principal concern is the amount of bureaucracy in and the interpretation of the Bill. I have many good lawyer friends—this usually has a “but” attached to it, doesn’t it?—but there are bound to be different interpretations of this kind of legislation. My hon. Friend the Member for Newbury (Laura Farris) set that out very clearly. Let us take just the phrase “all information”—that can mean virtually anything. A process can be subject to challenge all the way down the line and there can then be a claim for wrongful dismissal on the basis of a simple document that was not provided. Who would decide whether all the information has been provided? The appointed representative, at any point, could challenge the fact that all the information was not provided. It could be a very small piece of information that the employer never considered relevant to the discussion. Again, there is a huge opportunity for interpretation and bureaucracy. That cannot be positive for a good business environment.
There is also the issue of capacity. We already have issues about capacity for employment tribunals. This also brings in a whole new set of responsibilities for the Central Arbitration Committee and there is no understanding of whether that capacity can be filled.
There is much in what the hon. Gentleman has said that I agree with. I just point out that the Bill does not actually ask for the disclosure of “all information”. It asks for the disclosure of
“all information…without which the appropriate representatives would be to a material extent impeded in carrying on consultation with the employer, and… which it would be in accordance with good industrial relations practice that the employer should disclose”.
That is not a catch-all. It is specifically about the information necessary to conduct proper consultations about the future of the business. He is being very fair in the remarks that he has made, but he must not misrepresent the Bill in that way.
I certainly do not seek to do that. Proposed new section 187B(2) of the 1992 Act says:
“The information to be disclosed is all information relating to the employer’s undertaking (including information relating to use of agency workers in that undertaking) which is in the employer’s possession, or that of an associated employer”.
There is a double requirement, so “all information” does seem to apply.
At what point does a debate on Second Reading, when we should be debating the general principles of a Bill, turn into a Committee debate in which we parse one or two words in individual clauses? I believe that is a reasonable point given how the debate is currently developing.
I thank the hon. Gentleman for that point of order. Basically, a Second reading debate is very wide-ranging and hon. and right hon. Members are entitled to raise issues that they feel might be problematic if the Bill were enacted. This is a very wide-ranging debate that on another occasion I am sure the hon. Gentleman would appreciate enormously.
The hon. Member for Cardiff West (Kevin Brennan) makes a very good point, and I have a lot of time for him generally. My point is a general point, but there are specifics underpinning it that we have to consider. The definition of “all information” is relevant, as is the definition of “less favourable” when considering whether an employment contract is now less favourable. That interpretation will be left for the courts and lawyers to decide. I am looking at this from a business perspective. How would it affect the likelihood of businesses wanting to employ people? That is a big commitment for any business.
If we refused to send legislation into Committee because of how lawyers might or might not interpret it in future, we would not pass a single Bill. The hon. Gentleman is going into minute detail on the wording of clauses, and that debate belongs in Committee. It demonstrates that Government Members have lost the argument. This Bill should go into Committee.
The hon. Gentleman makes a fair point, but in my view it is better to have no legislation than poor legislation. It is important that we look at the Bill and decide whether it should go into Committee.
As I was trying to say in response to the intervention by the hon. Member for Brent North, it is about capacity. We would be giving the Central Arbitration Committee huge responsibility, not only for taking on lots more cases but for making lots more determinations about information.
Yes, but it would require a huge scaling up of the role and there are no money resolutions attached to the Bill. [Interruption.] If I or any other person does not want to see this Bill passed, we have a perfect right to stand in this Chamber and express that opinion. That is exactly what I am doing. As I say, it is better to have no legislation than poor legislation.
The capacity of employment tribunals is another big issue. The ACAS document says that employment tribunals are under enormous strain today. The Bill would likely significantly increase the workload of employment tribunals. Additionally, it would require them to make all kinds of interpretations. The ACAS document observes that tribunals are not economists. Tribunals would consider the situation between businesses and workers and would have to make decisions that, in my view, they may not be capable of making. This might introduce undesired complexity, for example. There are all kinds of questions, not just about capacity but about the competence of employment tribunals.
I am also concerned about duplication, as it seems to me that there are provisions in the Bill about situations covered by redundancy.
Can my hon. Friend perhaps provide a little more information from his expertise about the additional costs, both financial and for staffing, that he estimates will result from the high number of employment cases that might arise from this situation?
I would like to be able to, but I am not sure that is incumbent on anybody who opposes the Bill. It is right for somebody who introduces the Bill to state alongside it what extra capacity will be needed, and the cost of that to the taxpayer or the businesses concerned. To my knowledge, that work has not been done.
I am also concerned about clause 27D, on the unilateral variation of employment contracts. No doubt some of the evidence taken showed that some contracts of employment allow unilateral variation. That is not something I have never done in my business practice, but nevertheless the Bill seeks to make those provisions unworkable or not legal, meaning that employers will not be able to rely on that in future, and those elements of the contract will effectively become null and void. I do not blame the hon. Member for Brent North for seeking to do that. As an employer I would not involve myself in such a practice, but it seems to be retrospective legislation. It is bound to make businesses nervous if we legislate retrospectively about such matters, and I wonder whether he has considered that point.
Indeed. The hon. Gentleman is right, and the courts find it disagreeable that such a clause, purporting to allow retrospective variation of the contract, should be embedded within the contract. I would support the hon. Gentleman’s objection if indeed it were retrospective legislation, but the precise point is that any such clause purports to give a right to one party in the contract, and in effect to dispense with the entire contract and simply change it at will. That is what is so objectionable about it, that is what the court found objectionable, and that is what the Bill seeks to change.
It is an interesting point, and I appreciate the hon. Gentleman’s clarification. My final point is on clause 187E, which seems to say that in almost any circumstance where new terms are offered, the employee has an automatic right to go to a tribunal. That seems to me strange. If any of the things outlined in subsection (1)(a)(iii) happened and an offer has been made, the clause seems to give an automatic right for someone to go to an employment tribunal, without requiring the provisions in clause 187A or B. I might have read that wrong, but it is certainly seems to be the case. Admittedly, that kind of point could be picked up in Committee, but my overriding point is this that issue requires cross-party thought. I would much rather see the provisions become effective through guidelines, financial sanctions or other means, and I do not feel that I could support the Bill were it to be voted on today.
I am pleased to support, indeed to sponsor, the Bill of the hon. Member for Brent North (Barry Gardiner), and I am delighted that we are finally getting the chance properly to debate and vote on the merits of fire and rehire legislation. As hon. Members may be aware, I introduced two Bills on this subject in the last parliamentary Session, before the hon. Gentleman was wise enough to use his high private Member’s Bill raffle slot for this issue. I am grateful to him for seeking me out earlier to discuss my experiences. My Bills were sponsored by Members from every party in the House. Conservative Members have been talking about cross-party work, and with my Bills every party in the House that existed at the time was represented. An additional Scottish splinter party has since been formed, but that is neither here nor there.
I also engaged with the trade unions from the outset. Indeed, I invited Howard Beckett of Unite to lend his expertise on the issue at my first meeting with the Minister, and I am grateful to Hazel Nolan and Gary Smith of GMB for their support throughout that period.
My Bills were more straightforward than this Bill, in that they essentially did bin fire and rehire. I thought it important to put that at the heart of what was a presentation Bill. However, I said to the Minister, the hon. Member for Newbury (Laura Farris) and many others to whom I spoke that I would work with the Minister and others to progress a Bill to allow protections that might not end fire and rehire, such as the Bill we are debating today.
I mentioned the hon. Member for Newbury. I listened carefully to her speech, and I think most of us agree that she made some excellent points, but it struck me that the vast majority of the speech could and should have been made in Committee. She agreed with the principles of what the Bill seeks to do, and I therefore hoped and expected that she would support it.
I fundamentally disagree—[Interruption.] It would be useful if the hon. Lady would allow me to finish my response to her intervention.
In fairness, most of the speech made by the hon. Member for Newbury was not setting out that view; that is certainly not how it came across at the time. I appreciate that that is the conclusion that the hon. Member for Newbury reached, but she could have worked with the hon. Member for Brent North and others across the House to help with legislation that would appease all of us, and the workers of this country.
Ministers, however, have done what they have done every time fire and rehire has been raised with them: they have clucked sympathetically, wrung their hands at how horribly ungentlemanly these companies are being, and said how much they sympathise with the workers who are being blackmailed, and have then proceeded to do absolutely nothing to address this in legislation. Every Minister from the Prime Minister down seems to have forgotten that it is the Government who speak from the Dispatch Box, and that they have the power to act to protect workers rather than murmuring sympathy for the benefit of Hansard and no one else.
The Government should understand that this issue is not going to go away. It will certainly not go away as a result of guidelines. My Bills failed to make progress; the hon. Member for Brent North is having another crack. Until and unless the law is changed to protect workers, this issue will come back to haunt the Government time and again.
The short answer to my hon. Friend is no, I was not surprised that the Government failed to propose such a Bill. That was to be expected from the Conservatives.
Unless and until the Government act to close this loophole and ensure that workers are protected from the likes of Tesco, British Gas and British Airways and their bully-boy tactics, the need to change the law will continue to be raised, at least from these Benches. The case of British Airways is a perfect demonstration of how UK workers’ rights are light years behind those in much of Europe. Its parent company, IAG, also owns Aer Lingus and Iberia. While BA was telling its UK staff to take cuts in pay and conditions last year, workers in Ireland and Spain were protected from the same tactics because their Governments over the years have ensured that employees are entitled to a level of protection in law from their bosses. Willie Walsh—who has already been mentioned today—and the IAG management knew that they could hit workers in the UK hardest and fastest, because this Government allow them to do so.
The hon. Gentleman is making an excellent point. As he says, fire and rehire is illegal in countries such as Ireland and Spain because it is in primary legislation. Does he agree, therefore, that the option proposed by Conservative Members—the introduction of an ACAS code of conduct to deal with the issue—is entirely insufficient?
I could not agree more with my Transport Committee colleague. This has to be in primary legislation and that is what people on the Opposition Benches will continue to work for if the Government vote the Bill down today.
Many people across the country think—perhaps unfairly at times, but not so in my experience—that the Tories can be uncaring on these issues, because they do not see the poverty and the pain of not being able to provide for one’s family. [Interruption.] That is just not the case. I spoke to a number of British Airways employees who broke down in tears telling me of the fact that the airline they had served, in many cases for decades, was looking to give them what amounted to a pay cut of 50% or more, and that they had told their Conservative MP all about it, who did nothing. Nothing. Surely, we are here to represent our constituents, particularly in their time of need. If not, what exactly are we here to do?
Like me, the hon. Gentleman represents one of Scotland’s major airports. I had the same representations from very many staff who live in my constituency of Edinburgh West and work for British Airways at Edinburgh Airport. That was very much the feeling that came across. Does he agree with me that they were disappointed and felt that they had been there for so long that there was a moral obligation to offer them better than what they were getting from British Airways, and that there is a moral obligation on us, as Members of Parliament, to support that?
Absolutely. I thank the hon. Member for her intervention. I agree with her 100%. I find myself in agreement with her far too many times these days. She is absolutely right: our moral obligation, as Members of Parliament, is to support our constituents when they are under attack in such a way.
I will move on. I will come back to the hon. Gentleman. [Interruption.] Or not, if he is going to huff. It is up to him.
I do not believe that it is any coincidence that those countries with heftier employment rights around Europe have better and more robust economies. We can see the results of precarious employment around society right now: labour shortages in all sorts of sectors of the economy and lacklustre demand experienced by retailers. If our economy is 80% centred on the service sector, we need people spending money on those services. Leaving workers with the fear that tomorrow could see their employer slash their wages or show them the door is a sure-fire way to depress spending, demand, and ultimately hinder economic recovery. Workers in Europe have no such fears, and it is surely a factor in their continued long-term outstripping of the UK that employment rights are given such importance and credence by their national Governments.
Whatever ideological objections some Members on the Tory Benches have to improving workers’ rights—I have no doubt a few of them consider the factory Acts a gross impertinence—they can surely see the economic self-interest that protecting workers from fire and rehire would mean for employer, employee, and our society and economy as a whole. It is no wonder Ministers want to isolate the UK further and further from Europe; they want the UK isolated from the norms of employment rights that apply there. They want workers in the UK isolated from the economic benefits that enhanced rights would bring. They want the UK isolated from the basic standards of decency that apply across the continent. On decency, I will give way.
Is not one of the big differences between what we are doing in the UK and what they do on the continent, that on the continent they have mass immigration across the EU, which is driving down wages, whereas in this country, now that we have left the EU, we can look after workers better, not rely on poorly paid labourers and actually get high quality high-skilled jobs? That is the fundamental difference: we want better jobs and better pay for people, rather than relying on cheap labour.
Well, I find that rather astonishing. The hon. Gentleman talks about improving workers’ lot, yet they are voting down this legislation today. The lack of self-awareness in some Conservative Members is astonishing. They are very fond of talking about levelling up, but not, mysteriously, when it comes to levelling up workers’ rights against the power wielded by multibillion pound corporations and their multimillionaire managers. The idea that the UK should level up to European standards is anathema to them.
I am coming to my conclusion as I appreciate that there are many Members who want to speak today, but I would like briefly to take this opportunity to mention my own Devolution (Employment) (Scotland) Bill, which is on the Order Paper today. It is an unlikely contender for Royal Assent, given that it is at the bottom of the Order Paper today, but it is an attempt to prise employment law from the clammy grip of the Treasury Bench as far as Scotland is concerned. Do not worry, Madam Deputy Speaker, I will not speak to it; I mention it only because I fear that the Tories will vote down the Bill before us today. To my mind, that will be the straw that broke the camel’s back. No more should Scottish workers be forced to suffer the consequences of unthinking and uncaring Tory Governments. Dovetailing nicely with that is the fact that the Scottish Government supported my legislation last year and that banning fire and rehire was also in the Scottish National party manifesto for the Scottish elections in May, in which we received our record vote.
If this UK Government continue to stick their head in the sand and depress workers’ rights below the level seen in most other civilised countries, they should not be surprised if Scotland chooses civilisation instead of the race to the bottom that seems to be happening to workers here. Workers across these isles should all be accorded the respect and dignity they deserve, and have that backed up with the force of law where required. I commend the Bill to the House.
It is a pleasure to follow the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), who, through his commitment to his own Bill and through the amity he has shown to his colleague the hon. Member for Brent North (Barry Gardiner), who is bringing forward similar legislation today, demonstrates that he has a keen commitment to dealing with this problem. Although, as I will outline, I have a different approach to how we should tackle it, I believe the principle is shared across the House.
It is a shame that the hon. Member for Brent North chose the time I stood up to walk out of the Chamber—I shall not take it personally, whether or not it is personal. I wanted to commend him for the way in which he presented his argument and case today. He has undoubtedly done a tremendous amount of research and gained tremendous understanding about this issue, and in taking so many interventions from Members on both sides of the House he demonstrated that he was prepared to debate, understand and move forward. I will return towards the end of my contribution to how we might continue the progress of this amity between the hon. Members for Paisley and Renfrewshire North and for Brent North and my hon. Friend the Member for Newbury (Laura Farris), who outlined a substantial alternative approach and a better one to achieve the goals that are shared across the House.
It was a shame, and perhaps a disappointment to the hon. Member for Brent North, that what was the oratory of Cicero from him descended into the mosh pit of Westminster debate with the contribution from the shadow spokesperson, the hon. Member for Bradford East (Imran Hussain). It was a metaphorical head in the hands moment for the hon. Member for Brent North, but he did endear himself to many on the Government side of the House with his contribution. He was at one moment in danger of talking out his own Bill. Ironically, the fact that, unusually, there was a statement today gave him some latitude to come to a close.
I wish to pick up on two points the hon. Gentleman made. First, he said that his Bill would make the UK the best place to work, but the UK is already the best place to work, in large part due to measures that this Government have undertaken, particularly in their commitment to the living wage and in continuing the progress on reducing the gender pay gap by ensuring that there is enhanced reporting by boards about the treatment of employees. This Government are continuing to make the UK the best place to work, not least—I say this as much of this debate relates to actions that took place during the covid period—with the exceptional response of the Chancellor to support businesses through the furlough programme and other UK Treasury measures. So I gently make that point to the hon. Gentleman.
The hon. Gentleman and I share a passion for American football, but may I ask him why, if he believes the UK is the best place to work, the Government have not yet responded, formally, with legislation, to the Taylor report of four years ago on unscrupulous working practices in the UK?
That is an interesting point. Unfortunately, I am not a member of the Government. The hon. Gentleman probably wants to direct that question to those on the Front Bench. I am familiar with Matthew Taylor, who, apparently, is back in the news this week with a different hat on telling the Government what they should or should not do, and I am not sure whether I agree with him in that particular case.
The hon. Member for Brent North also said that the Bill was about better regulation, and that perhaps gets to the nub of the difference of approach between those on the Labour Benches and those on the Government side of the House. Our approach is not about making better regulation, but about making better business. We understand that in doing that, Government and others can take a variety of tactics and approaches to achieve a shared objective.
Let me point Members to my entry in the Register of Members’ Financial Interests, because I want to refer to a couple of pertinent examples from last year. This debate largely relates to an exceptional time and an exceptional practice, both of which remain exceptionally rare. For those who have quoted many statistics, let me just add a comment from the Chartered Institute of Personnel and Development. It said that the
“use of ‘fire and rehire’ remains low”
despite the “upheaval of Covid.” It was covid that created those exceptional issues for people. The part that was exceptional and that differentiated companies’ response from the one during a different time of distress, the 2007-08 financial crisis, was that the Government themselves had stopped commerce. This was not just a matter of overcoming financial considerations—the shortage of access to capital to support a business or a downturn in demand in the economy—but a direct intervention of the state, both in this country and in Europe and across the world, which said, “No, you cannot do business”. When we frame legislation, it is important to understand that, if the context for that legislation is primarily driven by such an exceptional event, we are wise to be very cautious indeed about what we put on the statute book for fear that it will have uses in less exceptional times that perhaps we cannot foresee today. That is one of the primary reasons why I will not be supporting the Bill in a vote later today.
Let me reflect on what was on the minds of companies at that time. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) talked a little bit about his broad experience, but I want to talk specifically about what was going on this time last year. Before coming to Parliament, my career was substantially in venture businesses. The businesses to which I still have relations would be covered by the provisions of this Bill. They are largely in the categories of businesses larger than microbusinesses, but they are all businesses for which the availability of cash and the support of capital, both shareholder capital and of loans, are always treated very seriously and quite tightly to achieve growth.
Growth is those companies’ main objective. They do not have a cushion of resources to fall back on, so when the exceptional events of covid and the closedown of the economy occurred, the amount of pressure on their boards and senior executives was beyond exceptional. There was the responsibility to understand where on earth money was going to come from to support ongoing operations. There was their duty of responsibility to make sure that they were not trading fraudulently because of insolvency concerns about the business. There was a desperate search for loans, and an approach to shareholders to gain additional liquidity through additional investment. Many senior executives voluntarily cut—and in at least one instance eliminated—their pay during that period. There was a tremendous focus on employees, and primarily on employee safety.
Let us all remember that the experience of covid was not a shared common experience for everyone in the country. There are those of us in the country, such as Members of Parliament, who were facilitated to continue to take 100% of our pay, to have 100% certainty of employment, and to have the opportunity to work from the safety of our own home, but there were many others who were facing: cuts in their pay, a 100% certainty of the loss of their business and the requirement that, if they wanted to stay in employment, they had to go to work. For any Member to say that senior executives and company boards were not intently focused on ensuring the safety and security of their employees does a gross disservice to what companies were going through.
Boards and senior executives were substantially challenged to make changes. In the process of looking at all the alternatives that could maintain the survival of the company, they would have due regard to the law at the time. As my hon. Friend the Member for Newbury stated, one of the issues with the existing legislation is that companies will defer putting all their cards on the table, including the option of fire and rehire if that is one of their considerations. Perhaps we can make some change in that regard that would be helpful for companies and employees.
Companies would also have due regard to maintaining the solvency of their business. To do that, consideration has to be given to what a company will do to manage its costs in the year ahead. If it is looking to access capital, loans or additional equity, questions will be asked by the banks, creditors and shareholders about what it is doing to manage their future costs. It would be a deterrent to gaining the investment and support needed to maintain the business if it was unable to outline what angles and opportunities it was investigating to reduce costs.
For many of the executives in business with which I have worked, consideration of employees is front and centre in their mind. It is exceptionally difficult for them to balance in their own heads the idea that, “I know I need this additional capital,” with, “I want to make sure I can protect the employees and the skills that I have within my workforce.” In my experience, most people involved in business who are entrusted with authority would undertake measures covered by the Bill only as a last resort, if ever.
The problem is that the hon. Gentleman is conflating the extraordinary situation of the pandemic, when the Government, to their credit, intervened with furlough, loans and other measures, with a normal situation when a business needs to adjust to economic pressure. That is what we are talking about today—a Bill that, to a certain extent, limits fire and rehire so that it is not the first but the last resort. I feel that he should support it.
I understand where the hon. Gentleman is coming from, but I do not think the facts of history indicate that what he suggests is the right approach. The truth is that throughout the period of the last Labour Government it was not seen fit to bring forward such legislation. As I mentioned earlier, there were no calls for it when we went through a severe financial crisis, although there was widespread fire and rehire. It is precisely because there was an exceptional event last year that I am conflating that with this legislation. In my view, the Bill has been stimulated by that experience but will sit on the statute book for the future of more regular business, though I am not sure what that will be.
Furthermore, there is a little confusion about the intent of the Bill, which perhaps the hon. Member for Brent North can help to clarify now he is back in his place. Many of us have seen Labour MPs—socialists—campaigning to outlaw fire and rehire, and one would anticipate that many of them have turned up today to vote to do that, yet we heard from the Bill’s sponsor that it does not do that. It got so confusing that the shadow Front-Bench spokesman, the hon. Member for Bradford East, urged hon. Members to “support fire and rehire”. Between those on the Opposition Benches who say that they want to ban it, the promoter of the Bill who says that his Bill does not ban it, and the shadow Front-Bench spokesman who wants us to do more of it, I wonder whether they know what indeed they are doing.
I am grateful for the hon. Gentleman’s good humour. The Bill does not ban fire and rehire, but we want—I think all hon. Members want—to end it as a tactic. That is the point. When people say, “Let’s end fire and rehire,” they mean, “Let’s end it as a tactic, as a bad practice used by disreputable employers to do the wrong thing.” I hope that that clarifies it.
I am very pleased that the hon. Gentleman is back. He is showing the steps that he is taking to create consensus. I think he will find that as we move forward, perhaps with an alternative approach. I would gently mention that only on 6 May this year 145 of his colleagues signed a letter to the Prime Minister urging that fire and rehire be outlawed, and he must accept that his proposal must be a severe disappointment to them, given what he has said today.
There is an important reason why I would urge the hon. Gentleman to continue his journey, perhaps towards a code of practice approach. For me, and I think for many, the work of business, the work of capitalism, is a good for society. Capitalism is good. Capitalism creates. Capitalism creates higher wages, better skills, stronger businesses and a more global Britain. It is through capitalism that this country has grown the strength to provide public services for so many of our people. It is through capitalism that we have been able to have the highest increases in wages for the lowest paid that we have had for decades. It is capitalism that gives hope to people who want to start their own business. It is capitalism that is going to close the gender pay gap and the discrimination against people based on colour, because capitalism seeks out talent. It is upon the captains of capitalism—the women and men who lead our businesses—who understand how to get that great concoction of people and investment to create wealth and security, that we should be entrusting the responsibilities to act ethically and responsibly.
In my view, that purpose is best accomplished through a code of practice that works with the best grain of business rather than against it.
Certainly not, which is why Labour Members are on the Opposition Benches, and the Conservative party, which supports working people, is in government.
I should like to say a few more words about the detail of the Bill and to support some of the points made by my hon. Friend the Member for Newbury.
The shadow Front-Bench spokesman said earlier that various European countries were ahead of the UK, citing Germany, Spain and Ireland. I actually agree with him—they are ahead of the UK in unemployment. In Ireland, unemployment is 50% higher than in the UK. In France it is twice as high. In Germany it is three times as high. Youth unemployment in Spain is about 30%. It is a real tragedy for young people. Does my hon. Friend agree that there is a connection between the flexible labour market and the low unemployment in the UK?
Well of course I do. Who would not agree with my hon. Friend? He will accept that, should we as a House decide that the better approach is through a code of practice, that places great responsibilities on boards of directors and chief executives to abide by that code of practice. It is a better approach. When pressures require extraordinary measures to be taken, time is critical, and everyone is busy—not just within the business, but the advisers and so on, too. That is why the legal approach proposed by the hon. Member for Brent North would in those circumstances be too bureaucratic, not flexible enough and would end up with a worse outcome for employees than is his honourable intention. A code of practice gives those entrusted to make those decisions the right set of things that might otherwise miss their attention. Directors are absolutely aware of their responsibilities under certain aspects of law, but also of their responsibilities under a code of practice.
Does the hon. Gentleman agree that it is beyond belief to think that a code of practice is enough? We are talking about firms such as Clarks, where workers who make kids’ shoes are currently on strike. It was recently bought up by a Hong Kong-based private equity firm. Are such firms going to pay any attention whatever? It is just the same as BA. Its parent company IAG had £3.5 billion in the bank and it did not pay any attention even to British laws at that particular time. It was trying to circumnavigate them. It seems to me that a code of practice will not even be worth the paper it is printed on. Does he agree?
The hon. Gentleman makes a fair point. I am not particularly aware of the particular circumstances to which he has spoken, but the intention of the suggestions of my hon. Friend the Member for Newbury is that there would be some form of power behind that code of practice to encourage businesses so that we can eliminate those limited examples where companies are misusing fire and rehire. Perhaps the hon. Gentleman would like to speak to the junior—sorry, the Minister, my hon. Friend; I should never call him junior, he is very senior. The hon. Gentleman may wish to raise that point directly with the Minister, if he has not already.
In closing, I say to the hon. Member for Brent North and the SNP spokesperson that through their diligent efforts, they have raised an issue where some measured change is required. The hon. Member for Brent North might find that the approach of my hon. Friend the Member for Newbury is a better approach, but with the dignity with which he has proposed this Bill today and the way in which he has shown his willingness to speak to others, there is no dishonour in proposing and pushing something if ultimately there is a different way for us to achieve that objective.
It is a pleasure to follow the hon. Member for North East Bedfordshire (Richard Fuller), a fellow Bedfordshire elected representative, but it will not come as any surprise that we do not agree on all the points he has raised.
People have had their lives changed since 2020, with people going months without hugging loved ones, jobs lost and food bank use rocketing. So many people in Luton North have been worried about where their next pay slip is coming from—people who never thought of their job as insecure are now experiencing that their job and their wage is only as secure and reliable as their employer allows them to be. That is not inevitable, even during a pandemic.
We have seen big businesses—British Airways and British Gas, to name just two—trading under this country’s name but not in our country’s interest. They have used the pandemic as an excuse to get rid of thousands of workers and replace their old contracts with worse pay, worse terms and conditions and fewer rights at work for very similar roles. We have heard today that few of us disagree that the practice of fire and rehire is wrong, so why not vote to stop it?
I am so proud to stand with working people and our trade union movement, including GMB and Unite—I declare an interest as members of both, as well as of the Communication Workers Union—the Union of Shop, Distributive and Allied Workers, Unison, the Transport Salaried Staffs Association and many others. They are backing the private Member’s Bill of my hon. Friend the Member for Brent North (Barry Gardiner), whose campaigning fervour has got it to this point in just a few short weeks. We know from the TUC that one in 10 workers has been told to reapply for their job since the start of the pandemic. We know that black and minority ethnic workers, women workers, young workers and working-class people have been hit even harder by the pandemic. And we know that when restrictions were lifted in July this year, millions of people in constituencies across the country were less secure in their workplace than they were in March 2020.
I am going to say something that I am probably only ever going to say once. I do not disagree with the Prime Minister—just once. I agree that we must build back better, but after 11 years of austerity and weakening of workers’ rights, better is anything but more of the same.
I thank my hon. Friend for the powerful points that she is making. Is it not fair to say that if Members believe that fire and rehire is an unfair practice, they could vote for the Bill and then, in Committee, make any amendments that are needed to make it stronger?
I absolutely agree. We have heard today a collective understanding that the practice of fire and rehire, and its misuse, is an abomination for workers and is against our country’s values, so why not vote the Bill through today instead of talking it out?
After 11 long years of austerity and weakening of trade union and workers’ rights, we need to build back people’s working lives with better rights at work, stronger foundations and more security in jobs. No one can disagree with that.
My hon. Friend is making an excellent speech. Does she agree that we have devastating levels of child poverty in this country, and that unless the Government take action on fire and rehire, they will just leave families in insecurity? The Government talk about levelling up, but they need to act on it.
Absolutely. We hear terms such as “levelling up”, but what we need is action, for exactly those people—those who are suffering from the horrific levels of child poverty and the insecurity of work. That is having a physical, mental and economic impact on constituents across the country. We need to see some action, and today would be a good time to start.
People in Luton North need jobs to be protected and created, and they need that now. We have been hit harder than most places, with our airport and proud manufacturing industry bearing the brunt of the pandemic. But these bad employers hurt the good ones, and therefore they hurt our economy and our constituents.
We had a statement earlier today—one that apparently could not wait—about improving the health of our nation. What better way could there be to improve our country’s health than giving people peace of mind, money in their pockets and security in their jobs?
I absolutely agree with my fellow Luton MP. We are talking about how we cannot go back to where we were, and about building back better. I think all of us represent constituents whose priorities are different from their priorities before the pandemic. What we hold dear and take for granted has changed. Workers’ rights must be at the heart of that, and providing security in the workplace—providing a secure job, a secure home and a future that we can all look forward to—is key to that. That is why I ask the Government and their Members to put their votes where their mouths are and vote to end the practice of fire and rehire.
Order. I am sure the whole House joins me in congratulating the hon. Gentleman on his newly-born grandson, and sends its congratulations to our former colleague, his father, on being a great-grandfather. [Hon. Members: “Hear, hear.”]
Thank you, Madam Deputy Speaker. Your remarks are most appreciated.
I want to participate in today’s debate for much the same reason as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). I ran a business before coming here and I am also a member of the BEIS Committee, which considered the dispute between British Gas and the GMB union.
I want to start off by considering the term “fire and rehire”. I think the term “fire and rehire” is emotive. It has not been helpful in a number of instances of use in this debate, which has been fairly consensual. I have to say that I think the shadow Minister, the hon. Member for Bradford East (Imran Hussain), did not help the tone of today’s debate with his remarks. But there is an understanding that, where it is used as a negotiating tactic, fire and rehire is wrong and we do need to work hard to deal with that.
I want to look at the terms “dismissal” and “re-engagement”, because as an employer and someone who ran a business, the term “re-engagement” filled me with profound happiness: it was often a member of staff who had left my business and wanted to rejoin us, and often people who had gone away, broadened their experience and came back to our business with additional skills and additional knowledge. That was really quite encouraging and happened fairly often.
As an employer and a business owner, the term “dismissal” caused me a massive amount of grief. It was an issue we would never take lightly, but occasionally there would be a need to carry out dismissal on the basis of poor performance or unacceptable behaviour. But if ever my business went down that road, we knew that there were very strict rules of procedure laid down. We had to go through the correct processes, we had to be entirely sure of our facts and we had to build a case in the sure knowledge that that could be subject to a tribunal case and my business could be found to have behaved inappropriately or unfairly. I do think that, on occasions, the burden on business, and what it has to go through in the very sad cases in which that happens, is forgotten. I have to say that, at that time, the advice and guidance of ACAS in ensuring that my business behaved appropriately was incredibly helpful and very valuable.
I would like to thank the hon. Member for highlighting the plight of those smaller businesses. Would he agree that Heathrow airport, British Airways, British Gas, Weetabix, Clarks, Argos and Sainsbury’s all are iconic British businesses? They have not engaged with their workforce, but they have engaged with that practice of fire and rehire. They are not struggling businesses. They are not just trying to get by. [Interruption.] They are not just trying to get by. They are powerful combinations—
Order! Did the hon. Lady not hear me? She cannot make a speech. She can make an intervention. That is absolutely fine—[Interruption.] No, no. It is becoming a speech. If she has an intervention to make, then make an intervention, and she should not have to read an intervention because it should be really short.
Thank you, Madam Deputy Speaker. Would the hon. Member agree that these big, iconic British businesses are not engaging with their workforce like him, but they are engaging in fire and rehire practices, and they are a disgrace to British workers and to the name of Britain—
I think I understand the point, and I think the hon. Lady, if she has been here throughout the debate, will understand that there is a desire from this side for that not to happen, and for discussions and negotiations to take place at a much earlier stage.
We have had reference to the ACAS paper that was published in June 2021, which of course makes interesting reading. It tells us that dismissal and re-engagement is not new and has been around for some time, and it sets out the scenarios where it has been applied. Those of course include the harmonising of terms and conditions. There are many businesses that make acquisitions and find that they have staff on different terms from businesses that have come together over a number of years, and it is not appropriate for one set of employees in a business to be operating on different terms and conditions from those elsewhere in the business. There is a prima facie case, an immediate case, for why there should be some standardisation. During the pandemic, businesses have been required to introduce temporary or permanent flexibility in respect of hours worked, shift patterns and the security of hours. Covid has substantially affected—
On a point of order, Madam Deputy Speaker. Given the feeling on this side of the House about fire and rehire, I wonder whether you can inform those Members who find this a profoundly disagreeable position whether the House authorities, or contractors providing services on behalf of the House, are utilising the policy of fire and rehire for the delivery of services within the Palace of Westminster.
I thank the hon. Gentleman for his very reasonable point of order. He has asked a question to which I cannot give him a direct answer, because I do not know the answer, but I would say to him that it is of course not a matter for the Chair. It is, however, a matter for the House authorities. When I say it is not a matter for the Chair, I do not mean to imply that it is a matter about which the Chair is unconcerned. I will therefore endeavour to find out the answer to his question and let him know as soon as I possibly can.
I was in the process of setting out the scenarios identified by ACAS in its paper of June 2021 on where dismissal and reinstatement had been used. The final point, which has been made by Conservative Members in particular, is the challenge of business survival in the current circumstances, with covid, and the need for businesses to get through an incredibly difficult time.
The ACAS paper also identified a number of differing attitudes to the reasonableness of using dismissal and reinstatement in dealing with one of those scenarios. It set out a series of positions, including, at the very top, the view that this should never be used. Before arriving in the Chamber this morning, I believed that that was the attitude of the Member promoting the Bill; I believed that he would never permit dismissal and reinstatement to take place. However, he told us today that in certain circumstances it can exist and that he is seeking not to ban it but to ensure that it is never needed to be used. I am sure that a number of his Opposition colleagues do not agree with that approach and would be in the “never” camp. Others see it as being a matter of concern when it is a negotiation tactic, which I think is a view common on this side of the House. There are those who see it as an option of genuine last resort, a view again sympathetically understood by those on this side. Others think it is not at all contentious—I do not think that anybody here believes that—and there are some who believe it is perfectly acceptable at any time, and the House has made its view clear on that.
I now wish to turn to the issue of Centrica, because the Select Committee on Business, Energy and Industrial Strategy looked at that. We heard in Centrica’s evidence to the Committee that the costs of its services were between 30% and 50% more expensive than the use of contractors. The senior management had real concerns about the viability of their business ongoing. They sought less to deal with the issue of pay, but more to deal with the number of hours on a standard contract. They wanted to increase that from 37 to 40 hours. Indeed, in their restructuring 20% of their staff would receive a pay rise. One thing that the chief executive reminded us of in his evidence was the need for businesses to keep sight of what the customer wants and what their needs are. Those of us who have been in business will know that the customer is king and that those of us who disregard the needs of our customers put their businesses at a significant disadvantage. Where businesses are uncompetitive, it is important to deal with these things at an early stage, because otherwise, as we know, the danger is of long-term redundancies and business failures, which are not in the interests of anybody.
I, and the majority of Conservative Members, are in agreement with the hon. Gentleman. We want those discussions to take place at an earlier stage. Centrica believed that it was a requirement to issue a section 188 notice at an early stage, because redundancies might be necessary. That was a matter of the interpretation of law.
I congratulate the hon. Gentleman on his wonderful news. We are discussing Centrica. Have he and his colleagues on the Committee committed the calamitous acquisitions by British Gas Centrica in America, which brought on it the financial pressures that it had to deal with? Its choice was to instigate section 188 notices and start the process, rather than to begin consultation, which is what Labour Members are trying to achieve with the Bill.
I thank the hon. Gentleman for his contribution. I think we are in agreement—we want that to happen. The legal advice that a substantial UK corporation received was that that was necessary, and he and I will need to look again at the contribution of my hon. Friend the Member for Newbury (Laura Farris), which sets out an alternative way of dealing with such issues. From the Centrica evidence I also got the need to modernise terms and conditions. This long-established organisation had gone through many iterations. It employed a number of businesses, there were 7,000 variations in its terms and conditions, and it needed to bring those together. I think the matter is now resolved, with 98% of engineers at Centrica having signed a new contract by May 2021. We all understand the need to add to existing protections, and my hon. Friend the Member for Newbury has set out a clear alternative for the way forward. She spoke authoritatively about the dangers of unintended consequences from the Bill, and for those reasons I shall be later joining my colleagues in the Lobby to oppose it.
I pay tribute to my hon. Friend the Member for Brent North (Barry Gardiner) for his outstanding advocacy of a necessary measure to ban from our country practices that have no place in modern Britain.
No one today has argued other than that there are circumstances in which profit-making companies put workers up against the wall and tell them that they will be fired and rehired unless they agree to major changes to their terms and conditions of employment. Whether that is British Gas on the one hand, or British Airways on the other, employers who have flown the flag of Britain have treated British workers shamefully. I have met weeping workers who have worked for a company for decades and who loved the job they were doing, but who feel they have been treated disgracefully. Across the House there has been consensus that there is no place for such treatment of workers in modern Britain. The question is whether we mean it, for this is the opportunity to end it.
One thing that has been debated a few times is whether the Bill actually removes fire and rehire. Cleary—from the intention of the hon. Member for Brent North (Barry Gardiner)—it does not. We have also heard that a lot of employees are concerned not just about the risk of fire and rehire, but about the threat of that. If we do not remove fire and rehire, the threat will still sit there, and we will still have that problem. What is the point of the Bill?
The danger to workers will be significantly lessened if my hon. Friend’s Bill passes into law.
Following on from the hon. Gentleman’s intervention, I have two points. First, some Members have asked whether a private Member’s Bill is an appropriate vehicle. I will give a good example in just one moment as to why it is. Secondly, it has been said that the proposed Bill is not perfect. In what I thought was an interesting contribution, the hon. Member for Newbury (Laura Farris) said that it is clear that the law is not working. It should be a matter of last resort, but it is not. If that is right, then, in those circumstances, we should send an unambiguous message on the principle that we are seeking to secure and see the Bill go into its next stage in Committee.
Let me turn now to the use of a private Member’s Bill. In my former role as deputy general-secretary of the Transport and General Workers’ Union, I chaired a coalition that took the Gangmasters (Licensing) Bill into law to establish the Gangmasters Licensing Authority. I saw at first hand the shameful treatment of those who worked for gangmasters in agriculture and in fisheries. What was so fascinating about that experience was that we built an extraordinary coalition from plough to plate—from the supermarkets to the National Farmers’ Union. One would hope that there would be a read-across in modern times. We had progressive gangmasters who were saying that they wanted fair treatment for all in the industry, because, without it, they would be unable to secure fair competition. I have had employers say to me, “We do not accept that the rogue should be allowed to undercut the reputable as well as treating workers shamefully.”
Another characteristic of that whole remarkable process was the cross-party approach. I pay tribute to Gillian Shephard, a former Minister of Agriculture, Fisheries and Food, for the work that she did and for working with us. She would say, “I am not sure about that, Jack.”, or, “I would like to propose that.” Sometimes, there was vigorous debate, but we were united on the principle and, as a consequence, what we saw was the most complex private Member’s Bill in 30 years pass into law. It saw the licensing of gangmasters, making it a criminal offence for anyone to use an unlicensed gangmaster. Ultimately, the consensus was buttressed by the tragedy at Morecambe bay. To this day, all of us remember that as one of the most grotesque examples of the exploitation of working people in the history of this country.
I tell that story because, as we are seeing today, there was a consensus. People said, Hang on a second, this is not right.” There was a determination to act on it—to do it. Indeed, a Conservative colleague said to me, “Dammit, do it.” Why is there resistance to this Bill going forward to the next stages? It is the vehicle that permits that very necessary debate to take place.
Let me say two things in conclusion. I have 40 years’ experience in the world of work. I have been personally involved in the striking of very difficult deals to protect workers and to secure the long-term interests of their workplace: a four-year-pay freeze at one particular car company; and major changes to terms and conditions of employment at an engineering company. There were also significant changes in an aerospace company, but they were made as a consequence of dialogue, debate and necessity. A consensus was created and, ultimately, some big changes were made.
I live in the real world where, sometimes, we face immensely challenging sets of circumstances where action is necessary. That has been the history over many years in the world of work, and in the practice of the union in particular. I distinguish between that on the one hand and this practice that we are discussing today, which no one has defended. Currently, as things stand in British law, there is an ability to put workers up against the wall and say, “Dammit, we will cut your terms and conditions of employment. If you don’t like it, we will fire you. If you then want to be rehired, we will take you back, but on very different terms and conditions of employment.” That is fundamentally wrong. There have been some interesting contributions today, but I say to Members on the Government Benches: how do we begin to justify not taking this opportunity to act? What kind of message does it send to our constituents and the country? If we believe there is that which is wrong—practices that I think are downright immoral—let us send that message, see the Bill go forward today, debate it during the next stages and do the right thing by our country and British workers.
I congratulate the hon. Member for Brent North (Barry Gardiner) on securing the Second Reading of his private Member’s Bill and on the way in which he has engaged with both sides of the House, as well as with unions, workers and employers. I met him twice over the summer, and indeed, again this week, to discuss his ambitions for the Bill. In a slightly surreal surprise moment, he leaped out of a bar in Manchester at our party conference to lobby me as I moved from event to event. I know that he wants to be associated with the party of workers, but that was an extreme way of doing it. However, I welcome his approach and I jest, because I know that he has engaged on this issue and is committed to finding a workable solution to address the issue of fire and rehire, which is clearly important for Members of the House. I have stood here many times before to address the House on this issue.
Let me answer the charge from the hon. Member for Birmingham, Erdington (Jack Dromey) about sending out an unambiguous message. We do send the message out and we have been really clear. We do not have to do it through this particular Bill. I was really attracted to the approach of my hon. Friend the Member for Newbury (Laura Farris), when she talked about not having primary legislation to address this, but looking at other ways—including the code of practice that she proposes—for the reasons that she talked about relating to not having unintended consequences.
Can we make it fully clear that Government Members, regardless of what is going on, are against the abuse of fire and rehire? I stand against it for the residents of Rother Valley and I am sure that the Minister does. Will he clarify that once and for all and make it clear for everyone listening at home?
My hon. Friend is absolutely right. The unambiguous message is that using fire and rehire as a bully-boy negotiating tactic is absolutely inappropriate. However, and I will develop this point later, I do not believe that the Bill as it stands—even if it is amended, because we do not believe that we need primary legislation to achieve these ends—will have the intended effect, because it will not ban fire and rehire, as the hon. Member for Brent North said. I think he needs a bigger badge to explain what it actually does do, in his opinion. However, we want to get rid of using fire and rehire as a negotiating tactic, as a bully-boy tactic, and that is what the other measures that we are proposing seek to achieve.
The hon. Member talks about being unambiguous and says that we are refusing to legislate. As we heard from my hon. Friend the Member for North East Bedfordshire (Richard Fuller), legislation that comes from the fact that we are coming to the end of a pandemic is not the right way to reflect the concerns about the long-term issue of workers’ rights. We need to make sure that we can address the situation. We will legislate if we need to, but as a last resort, not a first resort. A fundamental difference between Government and Opposition Members is that Opposition Members immediately look for primary legislation rather than other ways of incentivising employers to do the right thing, with the carrot of incentivisation and the stick of making sure that there are financial penalties and clear downsides for businesses that do the wrong thing.
The Minister says that the Government’s position is that they will legislate when they need to. We waited four years for the Taylor report, and there is still no legislation. When do the Government intend to introduce any kind of employment Bill to deal with unfair practices in the workplace?
We published the “Good work plan”, in which we accepted many of Matthew Taylor’s reviews, but we did not have to wait for an employment Bill to begin progress on this. We have closed the loophole which saw agency workers employed on cheaper rates than permanent workers, we have quadrupled the maximum fine for employers who treat their workers badly, and we have given all workers the right to receive a statement of their rights from day one. We do not have to always reach for primary legislation first when we can be doing other things to make sure that we can stand up for workers across the UK.
The Minister says that he does not have to reach for primary legislation, but when is he going to do anything at all? He has stood at that Dispatch Box for years, wrung his hands over the pernicious practice of fire and rehire, and done diddly squat. If we are going to have to wait for some other document from a new Member of Parliament, where is it and when are we going to get it? The only message that is going out from this place is that this Government will do nothing about fire and rehire, and bad bosses can carry on as before, continue these practices and cut people’s wages—it is either that or they will lose their jobs. That is the message that leaves this place today.
I am sorry if the hon. Member feels that I have been here for years. I think I have been here for only 18 or 19 months, but it does seem like years, so perhaps I am boring for Britain in talking about workers’ rights and standing up for those rights. None the less, we are acting on this, and I will develop my speech to show exactly how we are doing so.
My hon. Friend is absolutely right. We have heard about reaching for primary legislation. We have had a very reasonable debate which, as I have said, was opened in a very reasonable way by the hon. Member for Brent North. We heard a forensic response from my hon. Friend the Member for Newbury, who brought her expertise to the debate with such élan and showed how we can keep the flexibility of employers to be able to restructure and reconsider their future, while making sure that we can cover the most egregious cases of bully-boy tactics from rogue employers.
First, I am sure the Minister will agree that the hon. Member for Newbury (Laura Farris) is not just some “new Member”, but an experienced employment barrister who has practised in this field for some time. Secondly, let me return to a point that has been articulated by my hon. Friend for Newbury in particular. If we are going to make law, it has to work on the ground, because otherwise the only people whose pockets we are putting money in are the lawyers. It is as simple as that, is it not?
My hon. Friend has hit the nail on the head. What we have on this side of the House is the expertise that we are bringing to bear to try and solve the problem, rather than just throwing things around. Earlier, someone accused the hon. Member for Newbury of over-egging the cake; in one of the other Front-Bench speeches, we heard, basically, no cake but a lot of egg. We cannot take a Poundland Arthur Scargill approach to this; we have to get it right. I hope that Pepco, the owner of Poundland, will forgive me, as the retail Minister, for dragging down its reputation.
Reference has been made to messages going out from the House. It is important to make one thing clear to those who have been potentially misled by some of the remarks made by Opposition Members. There are already steps that people can take if they are dismissed unfairly. We should not lead people to believe that they have no legal protection if an employer dismisses them claiming a business need that was not really there.
My hon. Friend is right. We heard another accusation, in relation to whether or not those on this side of the House are uncaring when it comes to workers’ rights. What it boils down to is this: would an employee facing a rogue employer using a bully-boy tactic rather have a solution that protects their rights, or would they rather have a jabbing-finger Opposition politician who relies on an unstable future for such workers for his or her political future?
Ethnic minority workers have faced hire and rehire tactics at a disproportionate rate—nearly twice the rate of white workers. They have also disproportionately borne the brunt of the pandemic. Does the Minister not believe that the message he is giving today does not show the urgency needed to address the fact that they are literally dying in the pandemic without adequate protections?
The hon. Lady raises very important points about the situation facing ethnic minority employees, but that is why we are acting. It is why we sought quantitative evidence from ACAS. It is why we charged ACAS to come up with guidance in the first instance. There are plenty of other things we can look at, but as well as giving employers certainty in knowing how they should approach the situation, the guidance allows employment tribunal judges to make sure they are consistent with their judgments, too.
We receive lots of correspondence—I get a lot, not least from Members of this House sharing their constituents’ concerns—and I can see how deeply distressing it is for those who face changes to their pay, working hours, sick pay or other benefits. That may happen after years of service to their employer or to those new to the world of work. Losing one’s job through redundancy and dismissal is clearly something everybody wants to avoid. I speak to businesses every day and I know the vast majority of employers want to do the right thing by their employees. For most employers, decisions to change terms and conditions are not taken lightly, nor is the choice to let members of their workforce go. Good employers know that investing in their workforce and not treating them badly is the best way to increase productivity.
We have heard in the debate, from right across the House, that the Bill is aimed at bad employers and at removing this as a negotiation tactic. The problem with the Bill, however, is that it would actually damage the ability of every single company—every good company—to survive when faced with an emergency. It would lead to higher unemployment, as this has where it has been tried, both in Ireland and in Spain. Does the Minister agree that the high youth unemployment in Ireland of 31.7%—[Hon. Members: “Speech!”]
Order. The hon. Ladies who are heckling me from the Labour Benches are quite right. The hon. Gentleman should not be making a speech. He is making an intervention. He can make two or three interventions, but he cannot make one long speech.
On a point of order, Madam Deputy Speaker. It appears to me that there are considerably fewer Members in the Chamber now than voted against the closure motion you granted earlier. That would tend to give credence to the idea that the Government Whips have deliberately organised their Back Benchers to wreck the Bill by voting against the closure motion and then sent them home. Is it in your gift to grant a second closure motion, so that we can now test the will of those here in Parliament?
I thank the hon. Gentleman for his point of order, which is a perfectly reasonable one and one that had crossed my mind. However, I have come to the conclusion that, with everyone in the Chamber having been sitting here since 9.30 am, the Tea Room is probably full to overflowing at present. I am therefore not inclined to consider a second closure motion, having taken the will of the House less than an hour ago. That does not create a precedent for not doing so, but I am giving the hon. Gentleman a straight answer to his straight question.
Thank you for that clarification, Madam Deputy Speaker. Indeed, I think Members from both sides of the House are taking advantage of the Tea Room, because both sides are lighter in numbers at the moment, but I always bow to your perspicacity. I would have thought that, in the last 20 minutes or so of the debate, Members pushing the Bill would want to hear the Government’s response to the merits or otherwise of the Bill, and what we are trying to do about the issue.
The House of Commons Library has produced an excellent report on this subject, which says:
“Professor Alan Bogg, a Professor of Law at the University of Bristol, argued that under the current law the balance of power lies too much with the employer”.
Does the Minister agree?
I think it depends on which employer. We are trying to make sure that we can root out bad employers who fail to understand that investing in their workforce and respecting their workforce is good for business as well as good for the workers. As Business Minister, I speak to businesses every day and I know that the vast majority of employers want to do the right thing. When it comes to fire and rehire, I have always been very clear that we expect all employers to treat employees fairly and to consider dismissal only as a last resort when all other options have been exhausted. It is completely unacceptable to use threats of fire and rehire as a negotiating tactic.
I will not for a minute, because I want to make some progress.
It is right and proper, however, that we consider the evidence before we act, rather than just jabbing our finger, so that we avoid any course of action that runs the risk of doing more harm than good. I assure the House that the Government are taking the issue seriously, considering the evidence available from different perspectives and then taking appropriate and proportionate action.
It has been an extraordinary and difficult 19 months for all of us. The impact of the covid-19 pandemic on the whole country has been profound. Millions of people were on the precipice of losing their jobs, livelihoods and homes, but the forecast was wrong and the unemployment rate in the UK is at less than 5% and falling. That is 2 million lower than some of the forecasts and it is lower than France, the United States of America, Canada, Italy and Spain. As we heard from my hon. Friend the Member for Broadland (Jerome Mayhew), the high levels of youth unemployment in Spain and Ireland compared with the UK show that we are getting things right here.
We are making sure that bouncing back better means growing our economy, creating opportunities and creating jobs. I know how hard it has been in the past couple of years, despite the fact that we are now on our way to recovery, especially for the many businesses that have had to shut their doors and take a significant economic hit to protect the public’s health.
During the pandemic, I worked closely with the National Union of Rail, Maritime and Transport Workers, which was excellent in the negotiations with P&O Ferries in my constituency of Dover and Deal. Will the Minister consider that kind of positive and collaborative working, which is clearly possible within the current framework, as a good example when looking at the balance of rights and interests of employers and employees in his work?
My hon. Friend is right that good work should be done collaboratively by employers and employees, with Members of Parliament leaning into that as well. That is what happened in the case that was cited earlier of JDE and the Kenco factory in Banbury. Although the hon. Member for Brent North launched his campaign there, the situation was resolved through talks and negotiations within the current structure and without this legislation.
If the Minister considers the history of employment reform, the abolition of child labour, health and safety at work and equal pay for women all required primary legislation. What is his alternative to primary legislation for this issue?
The Minister referred to JDE at Banbury and the fact that, ultimately, an accommodation was reached about the least disagreeable way forward. He must know, however, if he has spoken to any of the 291 workers involved in that dispute, about the huge stress that was placed on their families and the complete disregard that they felt they were shown by that company for all the loyal service that they had given it for years. To hold it up as an example of a resolution of a dispute is beneath him.
I raised it as an interesting point. I do not underestimate the stress, and I will cover that later when I talk about the solution we have come up with. It was a resolution, but none the less we want to get rid of the bully-boy tactics—the use of fire and rehire as a tactic of negotiation—because that should never be able to happen. As we have said, it has been exacerbated by the pandemic, but we want to make sure that we get our resolution and our approach correct so that it does what it says on the tin rather than have some of the unintended consequences that we have heard about today.
I was talking about the recovery. We have one of the fastest recoveries of any major economy in the world, thanks to this Government’s will to act and plan to deliver. My right hon. Friend the Prime Minister said at our conference that we were embarking on a change of direction for the UK economy, away from the broken model of low wages, low growth, low skills and low productivity; away from a broken model underpinned by reliance on uncontrolled immigration to keep wages low. We want to build back better in a new direction towards a high-wage, high-skill, high-productivity economy, which the people of this country—workers and employers—need and deserve.
A key part of the building of that economy will be to continue to champion a flexible and dynamic labour market, creating the conditions for new jobs, protecting existing ones and maintaining the UK’s excellent record on workers’ rights—one of the best records in the world.
Is it not the case that now, with unemployment lower than before the pandemic, the bully-boy employers that mistreated their workers will find that those workers—this is the genius of capitalism—will go and look for jobs with better employers?
My hon. Friend is absolutely right. We are taking proportionate and appropriate action on the issue of fire and rehire, but that must avoid any course of action that runs the risk of doing more harm than good, increasing the risk of collapsing businesses and subsequent increasingly redundancies and unemployment. I have real concerns about the approach in this Bill, as it would significantly increase administrative burdens and costs to employers, when they are already facing challenging circumstances.
I want to assure the House that the Government take reported misuse of fire and rehire really seriously, and we are continuing to assess the evidence available from different perspectives. I will set out today what I believe to be a proportionate response to the available evidence on the practice of fire and rehire. It is an approach that encourages best practice by employers, protects workers from unscrupulous employers and, above all, protects jobs and livelihoods by not forcing employers into a situation where they need to make redundancies or close entirely. That is an approach which, in line with the Government’s actions over the past two years, has supported businesses, livelihoods and jobs through the profound impact of the covid-19 pandemic on the whole country.
I thank the Minister for being generous with his time today. He mentioned burdens. We have spoken about ACAS today and there is also the employment tribunal system, which currently has a burden to get through. Does my hon. Friend share my concern that one of the unintended consequences of the Bill is that it could add to that burden and lead to more workers not being able to resolve their problems?
My hon. Friend, typically, is absolutely right. One of the unintended consequences of the Bill is that it adds extra layers within the process. It risks adding pressure on the employment tribunal service.
Let me set out what we know about the practice of fire and rehire. During the coronavirus pandemic, the issue started gaining attention through high-profile cases, many of which we have heard about today. I was deeply concerned by reports over the last year that some employers might be turning too soon to firing and rehiring employees and were using this as a tactic in negotiations to put undue pressure on workers to rush into accepting new, and often worse, terms and conditions, or face losing their jobs. That is why we asked ACAS to conduct an evidence gathering exercise to learn more about the use of fire and rehire. We wanted ACAS to do this because of both its expertise and its impartiality. Businesses, employee representatives and other bodies were all included in that report. I want to take this opportunity to set out the key findings of the ACAS report, which was published on 8 June.
Much of the attention given to this issue was driven by high-profile cases with large employers and unionised workforces. Those cases include instances in which fire and rehire had been threatened, in some cases leading to dismissals; in other cases agreements had been reached. However, ACAS found that fire and rehire is neither a new phenomenon nor concentrated in a particular sector or type of employer. It seems to have been used by employers in the years before covid-19 as well as during the pandemic. Fire and rehire is used in a range of circumstances, including in redundancy scenarios, both to minimise redundancies by cutting payroll costs and to enable the maximum reduction in headcount, for example by changing the working hours of remaining staff, as we have heard.
ACAS suggested that there was a sense that employers’ ability to fire and rehire was being used earlier in contractual negotiations than before, but it was unable to establish whether that was linked to business challenges due to covid, or whether the timescale available to reach agreed solutions was shorter than at other times.
The parties that ACAS involved in the evidence gathering agreed that the use of fire and rehire should be limited. Views on less acceptable use focused on three areas. The first was whether negotiation was conducted fairly and in good faith, with concerns focusing on fire and rehire being used as a threat, as I have said. Secondly, while some employers may have a genuine business need to vary terms and conditions, there are concerns that some are exploiting the circumstances of the covid-19 pandemic to drive through disproportionate or longer-term changes.
I have 15 minutes; I will give way in a second.
The third area was whether fire and rehire is being used deliberately to break continuity of service, to restrict access to employment rights and protections among employees and workers. We share those concerns, and I will set out in a second—as long as I have time—the existing protections, as well as further steps that the Government have taken to prevent the misuse of fire and rehire.
A number of Conservative Members have referred to the ACAS code, and in particular section 1, and the fact that there is an alternative means of redress for workers who have been unfairly dismissed. During the debate, someone sent me a very long list of companies, including British Airways, where tens of thousands of workers were affected. I wonder how many people in the cases the Minister referred to have been able to achieve redress through the existing arrangements and how many would benefit from a Bill to end fire and rehire.
I would be interested to see that list. As I said, we want to make sure that we can tackle that early basis, which I outlined earlier.
As I said, we are considering fire and rehire from all angles, and we have continued to gather and review evidence beyond the ACAS report. It is difficult to find robust evidence on the practice, because what is seen by workers as a threat or tactic can be seen by employers as necessary behaviour to move negotiations forward and out of deadlock. What is a reduction of terms and conditions for workers can sometimes be necessary organisational change for employers.
We heard a bit about the various surveys that have been going on. The hon. Member for Brent North referenced an earlier CIPD survey. We now have further survey data based on a sample of more than 2,000 senior HR professionals and decision makers in the UK. Fieldwork for that CIPD employment outlook survey was undertaken during the summer, and it found that 3% of employers with two or more employees used fire and rehire to reduce employment terms of some or all of their staff, and a further 19% of employers said they had changed terms and conditions through consultation, negotiation and voluntary agreement. Around half of those who said they had made changes to pay, location or enhanced entitlements said that they had improved those terms.
The Office for National Statistics business impact of covid-19 survey found that around 3.1% of businesses had reduced terms and conditions since 2020. While the evidence does suggest some use of fire and rehire, it does not allow us to fully understand the circumstances of the employer and the rationale or proportionality of the use of fire and rehire. It is important to consider those business circumstances as we look to draw up solutions.
I would like to draw the House’s attention to the voice of employers, about which we heard much from my hon. Friends the Members for Thirsk and Malton (Kevin Hollinrake), for North East Bedfordshire and for Rugby (Mark Pawsey). The CIPD has shed light on how the
“impact of COVID-19 has had a huge effect on employers, causing operational disruption, increased supply costs, loss of revenue, reduced productivity. They have had to react, adapt and effect change to their processes.”
The context of heightened disruption and business challenges has also meant that some employers have been forced to consider firing and rehiring their employees where an agreement cannot be reached to vary the employment contract. We have said that that should be considered as an absolute last resort if changes to employment contracts cannot be found through negotiation.
The evidence I have just set out shows there is some use of firing and rehiring, or the threat of doing so, by at least 3% and potentially up to 9% of employers to reduce the terms and conditions of some or all staff. Although the evidence does not provide a full understanding of the employers’ circumstances, this House should be left in no doubt that the Government will always continue to stand behind workers and to stamp out unscrupulous practices where they occur.
Existing legislation already provides employers with the right baseline for setting terms and conditions for their workforce, including on the minimum wage, annual leave, statutory sick pay, parental leave, pay entitlements and pension contributions. Above that statutory baseline, employers are rightly free to offer the terms and conditions of employment that best suit their business needs. In doing so, they must always act fairly and not discriminate unlawfully on the basis of a protected characteristic such as race, sex or disability. The valid variation of contractually binding terms and conditions usually depends on mutual agreement between the employer and workers as two parties to the contract.
The employment contract itself may contain a clause expressly allowing variation. Such clauses are usually limited to specific circumstances, and they tend to be interpreted narrowly by courts and tribunals. Should an employer seek to enforce contractual variation without agreement, there are a number of legal obligations and protections with which they may need to comply, depending on the circumstances.
A dismissal may be wrongful if the employer fails to provide the relevant statutory or contractual notice period to terminate the contract. There may be a breach of contract or constructive dismissal if changes are imposed unilaterally by the employer. As we have heard, there are also collective redundancy consultation requirements that apply where there are proposals to dismiss 20 or more employees at one establishment within a 90-day period for reasons not related to the individuals concerned.
These all require an employer to provide certain statutory information and to engage in discussions with a view to reaching agreement either with trade union representatives, where there is a recognised trade union, or with other elected representatives. In workplaces where there is a recognised trade union, employers are prohibited from making offers to workers with the sole or main purpose that any terms of employment will not or will no longer be determined by collective agreement with the union.
It is not all about what the law requires. It is in businesses’ own interest to have committed, motivated staff who are properly engaged in decisions about the future. We have seen in the press and the media the considerable reputational and practical risks, many of which have been cited today, to companies that look to pursue this route. The CIPD wrote:
“Employers must recognise that this approach creates a high risk of legal claims, reputational damage and an adverse effect on employee relations. It should only be undertaken after extensive consultation and consideration of all other alternatives.”
As we have heard, in the vast majority of cases, businesses want to do the right thing by their employees. I am determined to help them do this and to make sure that we find the best approach for both employers and employees. Although I do not believe we should legislate to stop the practice of fire and rehire, and certainly not in the heavy-handed way proposed by the Bill, the Government are taking action.
Earlier this year, we asked ACAS to produce more comprehensive, clearer guidance to help all employers to explore other options before considering fire and rehire. ACAS is well placed to provide that guidance, being an independent Crown non-departmental public body that plays a vital role in promoting and maintaining good industrial relations between employees and employers. We are all well aware of the potential pressures on business as we continue to undergo the impacts of covid-19, but that ACAS guidance will help to set out best practice to employers who are considering how to solve problems that might require contractual changes.
The Government are also taking action in one of the areas where ACAS found that fire and rehire was being used, which is to interrupt the continuity of service. Certain employment rights in the UK require a period of continuous employment, so it is right that we find the right balance between worker protection and flexibility in the labour market. Continuous service is where an employee has worked for one employer without a break, and we will be introducing a measure to extend the permissible break in service from one week to one month as soon as parliamentary time allows. That measure will make it easier for those with intermittent or flexible working patterns to access employment rights, and it will deter businesses from engineering breaks in employment to deny individuals their important employment rights.
To address the Bill specifically, it seeks to amend the law relating to workplace information and consultation, employment protection and trade union rights. [Interruption.] I am glad that the right hon. Member for Islington South and Finsbury (Emily Thornberry) wants to hear my thoughts, as she has turned up for the last 20 minutes of the debate. She did not feel the need to hear the debate itself.
I have met Members of the House and trade unions to discuss the issue, and the discussions have made plain to me the anxiety and distress that has been caused. As the Bill covers a lot of ground, I make it clear, for those Opposition Members who are wearing the badges, that it will have the effect of banning fire and rehire, if enacted. It will leave us in a space where employers may be forced to make redundancies. It will also significantly increase the pressure on the employment tribunal system, as we have heard, when the right priority is to reduce the backlog.
Proposed new section 187A would introduce new consultation requirements for establishments and undertakings where there is a real threat to continued employment. The Government are perfectly clear that, should employers seek to change terms and conditions, they must seek agreement. The threat of fire and rehire should never be used as a negotiation tactic.
In addition, collective redundancy law already provides that, should an employer propose to make 20 or more people redundant in a single establishment within a 90-day period, it must consult with employee representatives. However, this legislation would introduce onerous new requirements on employers in situations where they need to make business-critical decisions. Those requirements would be additional to the collective consultation requirements already in place.
The legislation includes situations where decisions may have to be taken to terminate the contracts of 15 or more employees for reasons other than conduct or capability, or where anticipatory measures are envisaged that are likely to lead to substantial changes in work organisation or contractual relations affecting 15 or more employees.
Proposed new section 187B would place a higher duty on employers to disclose information to allow employee representatives to engage in consultation. The Government already have clear guidance that, if an employer needs to change a contract, the first step is to talk with employees or employee representatives, such as a trade union. The guidance that ACAS is producing will help to set out the best practice for employers considering how to solve problems. In addition, the ACAS code of practice on the disclosure of information to trade unions for collective bargaining purposes sets out the respective responsibilities of employers and employee representatives in matters related to collective bargaining.
Proposed new section 187C would introduce a right for employee representatives to complain to the Central Arbitration Committee about an employer’s failure to consult or disclose information. The CAC is an independent body with statutory powers, but under the Bill, should the CAC find that an employer had been remiss, it could refer it to ACAS for conciliation. If ACAS was of the opinion that further attempts at conciliation were unlikely to result in a settlement, it could then refer it back to the CAC. For complaints referred and returned through ACAS, and where settlement had not happened, the CAC could hold a hearing and determine the complaint. It could then make a declaration stating whether it found the complaint well-founded, wholly or in part, and the reasons for its findings. While the CAC could choose not to recommend a course of action, such as referring to ACAS for early conciliation, it could set out steps to rectify the error and the timeframe in which that should be done.
The House can see that the Bill would add extra layers, which would affect the flexibility of the situation for employers seeking to make business-critical decisions. It is an incredibly complex situation, and we would be adding bureaucracy and extra process when they need to make a decision quickly to protect the jobs and livelihoods of those people who have been mentioned throughout the entirety of this debate. I have real concerns about the approach in the Bill, as it would significantly increase administrative burdens and costs for employers in a situation where they are already facing challenging circumstances.
Proposed new section 104H would disallow an employee not agreeing to reduced terms and conditions as a substantial reason for dismissal and remove the qualifying period of two years to bring forward an ordinary unfair dismissal claim. That would remove the legal ground on which employers may be able to dismiss and re-engage an employee who has not agreed to changing their terms and conditions.
While these measures could result in a decline in the use of firing and rehiring, they would present a significant change to the current framework and could have unintended consequences for businesses and employment tribunals. The hon. Member for Brent North has couched this Bill as proportionate to the issue, but it would have the effect of banning fire and rehire and the unintended consequences of such actions could be severe. For instance, setting that higher threshold for dismissal and for consultations with trade unions on changes to terms and conditions may mean that the cost for employers is so high that they choose an easier route, such as redundancy; in effect, if you get rid of fire and rehire, you end up with fire, which is no good to employees up and down this country.
In the last six seconds available to me, may I just say that we are looking at this Bill, we will act and we do not need primary legislation to do so?
The debate stood adjourned (Standing Order No. 11(2)).
Ordered, That the debate be resumed on Friday 10 December.