House of Commons
Friday 22 October 2021
The House met at half-past Nine o’clock
The Chairman of Ways and Means took the Chair as Deputy Speaker (Standing Order No. 3).
Employment and Trade Union Rights (Dismissal and Re-engagement) Bill
I beg to move, That the Bill now be read a Second time.
This Bill is about making Britain the best place to work. It is about levelling up and treating people fairly. It is about better regulation to govern fire and rehire. I am grateful to hon. Members on both sides of the House. I know that Fridays are an important time for us all to be with our constituents. That so many Members have chosen to be here is, I hope, not simply testimony to the power of the Whips, although I have my doubts. I believe it is because Members of all parties recognise that the practice of fire and rehire is creating hardship and real distress for hundreds of thousands of families across Britain. We can end that misery, and we must. I will set out my remarks in answer to four key questions: what the problem is, how we can solve it, what my Bill does not do, and what it does do.
What is the problem? I believe that every Member of the House would do all they could to stop a key worker in their constituency having their wages cut by thousands of pounds. Each of us would want to prevent a constituent who has done nothing wrong and has given loyal service from being fired. If we could, we all would.
These people are workers who have kept us all going through the pandemic and are now being fired and rehired. They are loyal workers who have served their companies for years, such as bus drivers who risked covid to keep the economy going; gas workers who kept the heating on in our grandparents’ homes; and teachers who kept our schools going. They are being told, “You are fired, and you can only get your job back if you sign a new contract on worse terms and conditions.” That is wrong; it should not be happening in Britain today.
Over the past months, I have visited workplaces all over our country. In Loughborough, I met a man who told me that he was watching Saturday night TV at home with his son when his phone pinged. It was email telling him he would be fired unless he accepted £15,000 off his annual salary.
In the village of Street in Somerset, I met a man at Clarks shoes who told me of his feelings. He has a two-bedroom flat because he is separated from his wife, and his children stay with him every second week. “If I have to sign that contract,” he told me, “I’ll not just lose my home; I’ll lose my family as well.” The man could not then have afforded that property and would have had to live in a bedsit. That is fire and rehire.
In Banbury, at Jacobs Douwe Egberts, one of the 291 workers who were threatened with the sack there told me that her family had given over 100 years’ service to the company. Her father had worked there, she had worked there for 34 years, her husband had worked there and now her son worked there. She felt that all of them had been treated with contempt.
The hon. Member is making some very important points and this is a very important debate. He set out right at the start of his speech that he wants the UK to be the “best place to work”, and I agree with that. Does he agree that the UK should also be the best place to start and grow a business, because that is what creates the opportunities for work?
I do agree with the hon. Gentleman, and that is why I was very keen to say at the beginning that this is about making Britain the best place to work. It can only be the best place to work if our businesses are thriving, and I believe our businesses can only be thriving if they have a well motivated workforce.
Does my hon. Friend agree with me that if we do not end this abhorrent practice, we the taxpayers pay instead? If people end up on lower wages, they are going to have to claim more universal credit, so instead of the companies paying their tax bill, it ends up being the taxpayer.
I am not sure whether I am glad that my hon. Friend has made that point, because I was going to make it myself later on in my speech, but it is a really important point. It shows that this is not just a human cost; it is an economic cost to the whole country as well.
In Manchester, a former bus driver told me that he was on three separate forms of blood pressure medication. The emotional strain on that man was heartbreaking. He was going to lose thousands off his pay, and the managers actually sent someone to his doorstep with the new contract, pressurising him to sign. That gives a whole new meaning to doorstep selling.
In Livingston, I met a delivery driver who was called in and threatened with the sack. He said his mind was in turmoil, but Tesco expected him to go out in a 40-tonne lorry and drive through a snowstorm to Elgin after receiving that news.
I will in just one moment, particularly because that is the hon. Lady’s constituency. This was a complete breach of health and safety protocol. When news like that is given to an employee, the regulations say that the person should be given the rest of the day off on full pay to think through what they have been told and to seek advice. That was Tesco.
I thank the hon. Gentleman for visiting my constituency and meeting these Tesco drivers. I have also met them, and they have told me stories about the brutal fire and rehire tactics that Tesco has used, including people who have predicated their mortgages and their whole life plans on contracts that were given to them and have now been pulled from under their feet at a time when, exactly as he says, they have been keeping this country running. I commend him, and I commend his Bill.
I am very grateful to the hon. Lady.
Fire and rehire is happening all over our country. We must act. Sainsbury’s, Argos, Asda, Tesco—they are all at it. Profitable companies are doing this to hard-working people. For me, the most upsetting of all was when a worker’s eyes welled up and he started to cry, as he recounted how he felt telling his family that he was to be fired. His voice faltered when he said, “It was just so humiliating.”
The hon. Gentleman is being characteristically open and generous in the way he presents his Bill, but he just said that, “They’re all doing it”, which creates the impression that this is a widespread practice and that it is focused entirely on the private sector. In his speech, could he also address what I would argue are the limited number of circumstances in which this occurs, a large of proportion of which occur in the public sector? What are his thoughts on that?
I am grateful to the hon. Gentleman for his intervention, and let me tackle it head on. The survey by Britain Thinks, of 2,321 people, showed that 9% of workers said that in the previous nine months they had either been fired or rehired, or they had been threatened with being fired and rehired. If one were to extrapolate that 9% across the workplace, which I do not seek to do, it would be 3 million workers. Let us say it is half that number—we are still talking about 1.5 million workers. Let us quarter it—it is still three quarters of a million workers in this country. This is a serious problem.
I also want to address the other element of the hon. Gentleman’s remarks. I have been on a demonstration picketing with workers outside a Labour council. A Labour council has done this in Tower Hamlets, and shame on it. Wherever this happens, it is wrong. It does not matter whether it is the private sector or the public sector, it is wrong and families are suffering because of it. That is why it is incumbent on us all not to play party politics with this, but to act.
I think we should do something in this area. It is an unacceptable practice, and a good employer would not resort to it. But on quantum, the poll in the ACAS document shows that less than 3% of HR professionals reported this. The figures quoted by the hon. Gentleman are across the entire working population. Most employers are not making redundancies or downsizing. So the quantum is far lower than the numbers he quoted.
Again, I am grateful to the hon. Gentleman. I am sure he will also have noticed that that survey was sent out by the institute to 160,000 of its members, and it asked whether those members had ever engaged in fire and rehire, how they had used it, and how they had sacked people in the previous nine months. Does he recall how many people replied to the survey? It is there—
Whether it is 1,000 workers, 20,000, 100,000 or a quarter of a million, in a sense it does matter. Does the hon. Gentleman agree that this is a point of principle? No employee should ever see their terms and conditions ripped up under threat of menaces or losing a job they may have had for decades.
I entirely agree with the right hon. Gentleman. It is a matter of principle. That is why I think Members across the House have said what they have about the evils of fire and rehire. The human cost of these tactics is acknowledged by everyone and every party in this House. I want to recognise the work and support of many colleagues who have long been battling against the inhumanity of the tactics.
My apologies, Madam Deputy Speaker. Does the hon. Gentleman agree that we have seen the Leader of the House, the Prime Minister himself and the Minister who is sitting there now—the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully)—all say how bad fire and rehire is and that it is an immoral practice? Why is it that we are sitting here this morning with the Government looking to oppose this Bill?
Madam Deputy Speaker, I have to say that that is the first time that hon. Gentleman has ever called this hon. Gentleman an honourable gentleman, so my congratulations to you.
I want to pay tribute to hon. Members across the House. The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) has fought as a constituency MP for the workers at Glasgow airport, where workers were facing new contracts that cut their take-home pay by up to 70%. He has long championed this cause, and I pay tribute to him. The right hon. Member for East Antrim (Sammy Wilson), the hon. Member for Edinburgh West (Christine Jardine) and the hon. Member for Bury South (Christian Wakeford) have all spoken out bravely against employers using this tactic and made sure that it is regarded as a moral issue rather than a party political one. I am grateful to them all.
I thank the hon. Member for mentioning me. Does he agree that when it comes to an issue such as this, on which we all agree that something needs to be done, not only is it the popular and moral thing to be done, but it is the right thing to be done?
Absolutely. I hope that the House will show its true colours and come to an accommodation to ensure that it is not just the right thing to be done but that it is done.
I must also pay tribute to my hon. Friend the Member for Middlesbrough (Andy McDonald), who is a dear friend. It might well be said that he has championed the issue of employment rights man and boy, except neither he nor anyone else can remember that far back. He will no doubt make his own excellent contribution, backed up by his technical expertise as an employment solicitor. Finally on this part of my speech, I thank Messrs Price and Torbitt in my team, who have been so helpful in supporting this campaign throughout the past month.
ACAS reported that recent survey that we discussed, carried out by Britain Thinks, which polled 2,231 individuals in England and Wales and recorded that 9% of employees had experienced the threat of fire and rehire in the previous nine months. Workers are vulnerable to the practice in almost every sector. The survey recorded particular patterns of discrimination against young workers between the ages of 18 and 24, workers who self-identified as being from a working-class background, and black and minority ethnic workers, who face the threat of fire and rehire at nearly twice the rate of white workers.
However, it would be wrong to think that fire and rehire is simply a social problem or an issue of morality; it is also an economic problem. Disputes around fire and rehire drag on, sometimes for months. During that time employees are often working to rule or refusing to do overtime. Where the dispute leads to strike action, there can be enormous loss of production. It is estimated that British Gas Centrica lost between £30 million and £40 million in productivity during the dispute. That is revenue that ultimately is lost to the country and to the Exchequer.
When I met British Gas workers and their GMB representatives, they were not against having discussions with British Gas about restructuring that might be needed, but they were against having a gun put to their heads. The Bill does not prevent companies from having discussions with unions on reasonable grounds; the Bill prevents companies from pressing the nuclear option. All we are asking for today is to be able to debate those options in Committee.
The Business, Energy and Industrial Strategy Committee took evidence from British Gas Centrica. Its concerns were that its workers were being paid 30% to 50% more than other people in that sector. There was a question about the viability of the business. What the company wanted to do was to increase working hours by two-and-a-half hours per week. Does the hon. Gentleman agree that businesses should have the opportunity to discuss changes in conditions to ensure that as many jobs are retained by businesses continuing to be competitive?
The hon. Gentleman is absolutely right to say we need to ensure that, from time to time, businesses can cope with the changes that they experience and can restructure appropriately. I think the point my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) was making is that, when they seek do that, it should be done through a proper process of consultation and negotiation, and not holding the sword of Damocles over the heads of their workers.
My hon. Friend may know that in Germany workers are much better protected from being fired and that productivity in Germany grew between 2015 to 2020 at twice the level it has in the United Kingdom. Does he therefore agree that, given the option of either firing someone or increasing their training, productivity and technology, Germany chooses to train people and raise productivity and Britain, if we allow this to go on, will choose to sack people and reduce productivity? So it is imperative to increased productivity that this is agreed.
I thank the hon. Gentleman for giving way. On the point made by the hon. Member for Swansea West (Geraint Davies), German productivity is high but that is because they cross-train and upskill their workers across different fields. That is why we are investing heavily in skills and uptraining for the future. [Interruption.]
Does my hon. Friend agree with the Productivity Institute report of March 2021 that
“The widespread, one-sided flexibility of the UK labour market has locked in a low productivity mode of work”?
People in the gig economy simply have not got the security or the money to invest in themselves. Employers need to and they will do it more in the event that they cannot simply fire and rehire people willy-nilly, which they cannot in Germany.
I have a question on productivity. Over the summer, there were reports of the Labour party engaging in fire and rehire tactics. Hon. Members may say I have a self-interest in this, but will the Labour party be less productive in the future? [Laughter.]
I thank my hon. Friend for bringing this important debate to the Chamber today. Does he agree that it is a heavy, damaging and frightening environment for the public out there when they are being threatened and intimidated by unscrupulous bosses telling them not to go to their trade unions? They are being picked out individually and forced down that route because they are afraid of not being employed if they go to their trade union for support.
Again, I am grateful to my hon. Friend. I think we in this place often have a very poor understanding of just how insecure people in the workplace really are. Most of us here have the comfort and luxury of being Members of Parliament. The point that she makes about how important it is to have support in that environment from a trade union is absolutely essential.
I will just make some progress, if I may. All too often, a new chief executive comes into a business and announces that they are going to drive up shareholder value. What they do is drive down workers’ wages through tactics such as fire and rehire and that money is then siphoned off to increase the shareholders’ dividends. Often, those employees are left as the in-work poor and they become dependent on universal credit, exactly as my hon. Friend the Member for Swansea West (Geraint Davies) said. That means that the rest of us in society are making up the shortfall in those employees’ wages. We as taxpayers are the ones forking out to increase that shareholder value. The chief executive has done what they promised. They go off to another company, but morale in the workplace has evaporated. All the good will that was once in the company is gone and productivity remains low. In the long run, the business suffers because the workforce has lost all motivation.
I am very grateful to my hon. Friend for giving way. Further to the points about the dreadful events at British Gas, my experience as a local MP speaking to highly skilled, long-standing employees who work for British Gas in Berkshire is that the mistaken policy of fire and rehire did exactly that: it damaged the morale of highly motivated, highly experienced people working for British Gas, who were highly trained in a respected business that traded on quality. The long-term effect of that was to harm the business. It damaged the reputation of the business and it may have also led to people leaving it. These are highly skilled staff who are often difficult to replace, so my hon. Friend is making an excellent point, and I hope he would agree that this is about the style of business in this country. As other colleagues have mentioned, we need a different approach that looks to the longer term for the good of the whole economy and the whole community, and not just the very short term.
I am grateful to my hon. Friend. He makes a very important point that was reinforced when I met the British Chambers of Commerce. The lady I met said that before she came to meet me to discuss these issues, she had conducted a thumbnail survey of its chambers. She said that what came back from the chambers was, “It never ends well for the business.” So the economic argument is critical, and we need to understand that this is not only immoral, as the right hon. Member for Dundee East (Stewart Hosie) outlined, but a serious economic failing of this country.
My hon. Friend is making a powerful speech, and an important one. Did not the researchers find that 70% of the companies deploying fire-and-rehire tactics were profit-making companies? They have not been driven to this as a last resort because of the pandemic; they are making profits, and healthy profits at that. Does my hon. Friend agree?
Not only do I agree with my hon. Friend, but I agree with the statistics. The statistics are very clear: 70% of the companies that have engaged in these tactics over the last month were actually making profits. That is why I say that this is not just an ethical problem of bullying and unfair tactics, but an economic problem that even the most hard-nosed Treasury official should recognise. As the Leader of the House has said,
“All companies operate best when their employees are working there with enthusiasm, and these types of tactics are very bad for morale in businesses”.—[Official Report, 25 March 2021; Vol. 691, c. 1103.]
And, as he also famously said, “Fire and rehire is no way to do capitalism.”
The hon. Gentleman has given examples of large companies and talked about shareholders. We had a discussion earlier in the week, and I understand that the legislation he proposes would apply to companies with 50 or more employees. Can he give us an example of how that might affect smaller businesses such as small and medium-sized enterprises, and has he found examples of smaller businesses practising fire and rehire? I think that we need to put this in context.
I am happy to respond to the hon. Lady’s question. We chose the figure of 50 employees, and the Bill refers to 15 or more employees being affected by these changes, because that marries up with the existing legislation on redundancy and other matters. Fifty is the figure that has been chosen by the Government in previous legislation. I have tried at all points to make the Bill technically proficient, so that it intersects with all the other legislation in this area.
The hon. Lady asked whether this was happening in smaller companies. Sadly, it is, and I would dearly like to see it outlawed there also. We have made the Bill commensurate with all the other employment legislation, which is why the figure of 50 was chosen.
May I pick the hon. Gentleman up on the point about capitalism? Throughout the past few years, before Brexit, we had an influx of European workers, and that undermined the wages of British workers. Does the hon. Gentleman not agree that companies will now have to value their workers better? If they do not pay them properly—if they try to undermine our British workers—there will not be 10 cheaper European workers in the line to take their jobs. There will not be a surplus of workers, and a rebalance of capitalism will therefore ensue.
May I just remind the hon. Lady that the comment about capitalism was not, in fact, mine but the Leader of the House’s? I understand her fundamental point, and from it I take that both she and I want to see wages in this country rise to an appropriate level so that every person and every family feels they can put a roof over their head and food on the table, and feels secure in their life—although she will have voted one way on Brexit, and I will have no doubt voted the other way, we would both welcome a move towards a society in which that is possible. The Bill is about levelling up and stopping the practice whereby, at the moment, many hundreds of thousands of workers in this country are seeing their wages levelled down, which is why it is so important that we get legislation.
I have set out that there is a problem of morality and economics. How can we fix it? Back in June, when I sat down with the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), he made it clear to me that the Government were “not minded to legislate.” That was even after the ACAS report “Dismissal and re-engagement (fire-and-rehire): a fact-finding exercise” was published, which may appear surprising given that ACAS reported examples of what participants in its survey
“regarded as employers using the crisis opportunistically as a ‘smokescreen’ to diminish workers’ terms and conditions; and the use of fire-and-rehire as a negotiation tactic to undermine or bypass genuine workplace dialogue on change.”
ACAS made it clear in the report that, although the Government were happy for it to outline the findings from such a fact-gathering exercise,
“Acas was not asked to present recommendations to government.”
If not legislation, what? The Minister advised me that the Government are now asking ACAS to recommend how they might strengthen the guidelines to business. I am a believer in guidelines, and good businesses tend to follow them, particularly if they are clear and if other businesses are doing the same. The problem comes when unscrupulous businesses are not adhering to those guidelines and gain a competitive advantage from that non-adherence. There then often follows a race to the bottom in which the good company feels forced into bad practice.
I do not believe that any manager goes into work thinking “I am going to do something noble and fine this morning: I am going to tell my 300 employees that they will be fired unless they accept a pay cut of 20%, even though our company is making record profits.” That is why I believe guidelines are not a solution. Managers at Jacobs Douwe Egberts, the coffee people in Banbury, made record profits during the pandemic, when coffee consumption increased by 40%. While the managers awarded themselves large bonuses, they demanded wage cuts of up to £11,000 from 291 staff. The truth is that guidelines are not going to change the practice of such managers. Only by putting good practice into statute will companies be prevented from bullying their workforce by using the threat of fire and rehire, and only if those tactics are outlawed will good companies not feel the competitive pressure to behave just as badly.
The hon. Gentleman highlights a shameful example, and he is right to do so. As the road to hell is paved with good intentions, particularly in terms of legislation, I am interested in his intentions with this Bill. I have watched him talk about the Bill on television a couple of times, and I think he said on Sky yesterday that it does not outlaw fire and rehire but ensures that the right information is provided. Is it his intention that the Bill does not try to ban fire and rehire, because I think it does?
Let me reassure the hon. Gentleman that we are not skipping down what Hamlet called the “primrose path of dalliance” to hell together. I have no intention in this Bill of banning, and there is nothing in this Bill that would ultimately ban, fire and rehire. There is an important reason for that and I will come on to it in my speech.
There was a prime opportunity for a lot of colleagues to learn a bit more about this at the Conservative party conference, where the hon. Gentleman actually joined me on a platform. Does he agree that this policy is not anti-business, but anti bad business leaders? The main reason for that is that it is not banning fire and rehire; it is just saying that it is an absolute last resort and should only be used with that method.
The hon. Gentleman is too kind. I wonder whether he would agree with me on something, in the spirit of the agreement with which we are reaching out across the Chamber now. He mentions competition between employers to do the right thing. Does he agree that the best way to make employers compete to keep staff and to treat them well is by growing the jobs market and the economy? Does he not also agree that the economy is now growing at the fastest rate in the G7 and employment is up to pre-pandemic levels?
Across the House, I think we can all agree that we want to grow our economy—there is no question about that. We want to grow jobs and the economy, but let us make sure that when we do grow those jobs, they are good, secure and well-paid jobs.
There are other ways of addressing this problem, one of which has been pioneered by a group of metro Mayors: using the procurement power of local authorities by scoring companies that seek contracts from local government on social as well as economic grounds. Councils are able to press local employers to engage with their good employment charters and to eschew bad practice. My good friends—some are former colleagues—my hon. Friend the Member for Barnsley Central (Dan Jarvis), Tracy Brabin, Andy Burnham, Dan Norris and Jamie Driscoll, have been particularly effective in using this form of community engagement and procurement power, and many other local authorities have followed suit. Mark Drakeford, in Wales, has shown just how effective this can be through his economic action plan, “Prosperity for All”, which has enabled the Welsh Government to develop a new and strengthened relationship with business and to drive inclusive growth and responsible business behaviours. I was delighted to talk to him recently about the success of that sort of engagement, but he was equally keen to say to me that it could never be a substitute for clear and effective legislation.
So turning to the proposed legislation, it is important to be clear about what my Bill does not do. I repeat that my Bill does not ban fire and rehire. It may surprise colleagues to know that there was a common view among the employers’ organisations I spoke with—the CBI, the Institute of Directors and the chambers of commerce—which was held equally right across the trade union movement, that banning fire and rehire outright could have perverse consequences and should not be attempted. It is essential that where a company is facing a collapse the law does not prevent what may be the only way of preserving those jobs and continuing the enterprise. Anything else would be a perverse outcome. I used to run my own business in the City. I entirely accept that businesses need to change and to adapt. In a competitive business environment, they have to restructure from time to time. My Bill will not stop that restructuring, it will not stop managers being able to manage the business and it will not burden business with new and additional bureaucracy.
I can understand the moral intent of what the hon. Gentleman is trying to do, but will he look at the practical circumstances? I refer to my entry in the Register of Members’ Financial Interests: I am the director of a number of companies. The hon. Gentleman should take himself back to the March last year, when the covid period started, and what was going through the minds of boards of directors and the timeframes they had to work with. Will he address the fact that, although it is not on the face of the Bill, as he has said, he wishes to ban fire and rehire? In circumstances like last year’s, many boards that faced the consequences of going through the process that the hon. Gentleman has mentioned would choose the option of fire and no rehire as the way to save their business.
The point about good businesses and bad business is exemplified by Ryanair and Michael O’Leary. That company is often pilloried and criticised in the House, but it took the opportunity, throughout the covid crisis, to engage with the workforce and consult, negotiate and agree a temporary diminution in the terms, and it committed to restoring them in the fullness of time. Should not that sort of practice obtain throughout the economic sectors?
My hon. Friend speaks with such a wealth of experience on these matters and he is, of course, absolutely right. Good businesses need to be able to respond quickly to the pandemic, as the hon. Member for North East Bedfordshire (Richard Fuller) suggested, but they also need to maintain the good will of their workforce, to go with workers on that journey and not only to take the immediate measures necessary but restore the benefits in the long term.
I am just about to move on to the technical part of the Bill. Madam Deputy Speaker has caught my eye to suggest that I have been over-generous in giving way, so I shall defer to her rather than to the hon. Gentleman.
The Bill will enshrine good practice into law and penalise bad practice. It will put on a statutory footing the procedure that decent employers already follow. It will encourage both employers and workers to reach the best outcome, and will discourage bad employers from threatening to fire and rehire when no legitimate threat to the business demands it. If the restructuring of a company is required because it is at risk of becoming insolvent unless employees’ terms and conditions are substantially changed, my Bill will assist the speedy settling upon of an acceptable outcome.
Clause 1 would insert into the Trade Union and Labour Relations (Consolidation) Act 1992 a duty to consult employees in good time and to disclose to workforce representatives reasonable information about the risk to continued operation. That would make it easier for the employee representatives and the management mutually to agree, in good time, a variation of contract that represents the least disagreeable way forward. Such disclosures would be covered by confidentiality. If the employer failed to provide the necessary information or refused to engage in timely and genuine negotiations, the workers’ representatives would be able to apply to the Central Arbitration Committee for a declaration that identified the steps necessary to put right any such failures. They could also apply for a court injunction to compel the taking of those steps and for any downgrading of terms and conditions, or dismissal, to be rendered void.
The independence of the CAC cuts both ways, because if an employer had followed good practice, it would be entitled to pursue the dismissal and reengagement of employees even if the terms proposed were deemed unacceptable to the workers’ representatives.
I will not.
The CAC could also refer the matter to ACAS if it thought that conciliation might assist in settling the dispute.
One of the more disturbing aspects of my visits to disputes around the country are the stories I have heard about the way managers have increasingly opted to issue notices to terminate the contract very early on in the process. The issue of a section 188 notice used to be a last resort. Recently, it has become a first-strike nuclear option. ACAS has also remarked on that.
Employers will set out their package of changes to terms and conditions alongside a section 188 and effectively fold their arms and say, “That’s all the consultation you’re going to get.” They then begin to demand that workers come in for interview one by one, often without any union representative accompanying them. Workers are pressured into signing the new contract. Employers say, “How are you going to pay your mortgage if you don’t have a job? How are you going to put food on the table? How many children do you have? Two, three, is it? You really should sign because, you know, we have got 40 people lined up out here who would love to come and take your job. You are one of the lucky ones, you’ve got a job.” This is how the threat of fire and rehire is used in practice. No wonder the Minister himself has called it bully-boy tactics in the workplace.
To fight back against this early issue of a notice of termination is actually very difficult. It takes a trade union between four and six weeks to comply with the law on notification, balloting of members, notification again and then strike action.
No, I am concluding this section, then I will happily give way to the hon. Gentleman. These points are important.
For this reason, I have amended section 19 of the Trade Union and Labour Relations (Consolidation) Act 1992 to relieve a union of those duties where there is a fire and rehire situation. Clause 2 introduces amendments to the Employment Rights Act 1996 to give enhanced protection to workers who are fired and rehired.
Another insidious practice I have come across is where companies have come to realise that fire and rehire can be an effective way of avoiding redundancy payments. The law currently allows an employee to be dismissed for refusing to accept a variation in contract. Employers now consider that, by making the new terms so unacceptable, they can effectively force the worker to refuse the new contract. The job is still there; the employee has simply refused to do it on the revised terms so there is no redundancy. For this reason, the Bill ensures that, where an individual worker or a small section of the work force refuses to accept the variations that have been agreed with other representatives in the workplace, and that person is dismissed for refusing to accept the variation, they will be entitled to claim unfair dismissal. This allows the rest of the business to move forward in harmony, and does not result in closure and loss of all the jobs.
The primary remedy for unfair dismissal is, of course, reinstatement or re-engagement, to which the Bill has precluded a defence of impracticability. But this does not present a problem, because section 117(3)(b) and (4)(a) of the 1996 Act allows the defence of impracticability to an employer who refuses to effect a reinstatement or re-engagement order, and precludes the additional penal award of compensation, which is the usual consequence of non-compliance. Thus, only normal unfair dismissal compensation would be payable to a refuser. Such compensation is, of course, all that the company would be liable to pay, even where an employee would otherwise have qualified for many years of redundancy payment. As such, I believe that it represents a reasonable and proportionate solution for those who genuinely feel that they cannot afford to accept the diminution of pay, terms and conditions that are proposed.
I have tried to set out for the House five things—that the Bill seeks to address a genuine social and economic problem; that a legislative vehicle is necessary and desirable, even though other mechanisms can partially address the problem; that the Bill is a reasonable and sensible measure that substantiates good practice and discourages bad; that the Bill is fair and proportionate in the remedies that it proposes; and that the Bill is technically proficient in connecting up with all the other relevant legislation.
There is one final question, which concerns the politics surrounding this Bill. Given all that Ministers have said denigrating the practice of fire and rehire, it is remarkable that the Government have imposed a three-line Whip against it today. Why? In politics, it is rare to find something that absolutely everyone agrees on, yet all the way from Len McCluskey to the Prime Minister himself, everyone agrees that fire and rehire is wrong, so why are the Government determined to block this Bill?
Normal practice would be to allow the Bill to pass Second Reading and go into Committee, where it could be amended and any perceived deficiencies ironed out. If that proved impossible, the Government could kill it in Committee or on Third Reading. Why are the Government intent on talking the Bill out this morning? The tactic of filibustering to talk the Bill out is cowardly. It seems that the Government do not wish to be seen actually to vote against the Bill. They would rather pretend, under the cloak of a closure motion, that they want to go on talking about it so that it simply runs out of time.
Today, the Government are set to vote against not the Bill, but the closure motion—the effect is the same. The Bill will die. Nobody is fooled. British workers will know that this Government would rather play politics than look after British families. There is another aspect to the politics of this Bill. The Government have told their Back Benchers, who are rightly concerned that they will be blamed by their constituents for voting this Bill down, that they have tasked the hon. Member for Newbury (Laura Farris) with bringing forward a Bill of their own. She has considerable experience as an employment barrister, and I hope that she does bring that forward. I doubt it will be substantially different from clause 1 of my Bill, although I doubt that the worker protections will be as comprehensive as mine in the subsequent clauses.
What does that say about our politics? The House knows that I have run a cross-party campaign to support this Bill. I have welcomed MPs from all parties, and I value their contributions to this campaign. That the Government believe they must brand any solution with their own party political colours is something I find sad. We began this week by remembering our colleague and friend and by praising the cross-party manner in which he had conducted his politics for so many years in this place. How good it would have been had we been able to conclude the week in the same co-operative cross-party spirit.
May I begin by saying what a pleasure it is to follow the hon. Member for Brent North (Barry Gardiner)? I am going to develop a number of points through my submissions, but it is important to say that in a number of regards, when I was listening to his speech, I found myself nodding along. He knows that I care about this issue as an MP because it has affected constituents of mine in Berkshire who were employed by British Airways and Centrica, and I care about it from a technical and legal perspective as an employment barrister.
There are a number of points on which I think we can all agree on both sides of the House. It is unacceptable for employers to use fire and rehire as a pretext to force through changes to long-standing workplace practice at a time when workers are vulnerable and less able to mount a challenge. We all agree that we saw some of that last year, and we all agree that there is scope to tackle the issue. Where I think we disagree is on how we do that.
I would like to pick up where the hon. Gentleman left off. One thing that we do not do enough of in this House is acknowledge that there is room for a legitimate difference of opinion on legal solutions. In fact, even outside the political domain, we know that there is a divergence of views on how to address fire and rehire, because, when the Department for Business, Energy and Industrial Strategy commissioned its call for evidence through ACAS earlier this year, one of the most striking features was how all the people who contributed to it did not agree themselves on how best to resolve the issue. I hope that what comment I have to make on this Bill will be understood and interpreted in that context.
My view is shared by other legal practitioners. I will develop these points, but I know that there will be an interruption in our debate quite shortly. I maintain the view that this Bill actually poses risk to workers’ rights. I also think that it exacerbates one of the deepest problems in industrial relations to have come about through this practice.
The wider point I want to make is that any opposition to this Bill today is not a Tory thing. It is not the Tory party against the Labour party. There is a body of professional legal opinion of mixed political persuasion that holds the same concerns that I do. I am grateful to the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), to the Secretary of State and to all their officials for the way that they have engaged with me and my proposals. I can tell from the serious scrutiny that they have applied and the questions that they have lobbed back at me throughout the summer that they are thinking carefully about this and that there is scope to address this issue.
One thing that I think has not been acknowledged by any Member of the Opposition, including the hon. Member for Brent North in his opening speech, is that there is already some protection in common law against this practice. It is important to spend a moment looking at what the common law says, because we cannot sensibly say where the law is going wrong until we have a proper look at where the tribunals might be failing. When the issue was first considered by the Employment Appeal Tribunal in 1990, it said that
“you simply cannot hold a pistol to somebody’s head and say: ‘henceforth you are to be employed on wholly different terms’
“‘at 50% of your previous contract.’ We come unhesitatingly to the conclusion”—
that, when that happens, there has been a dismissal.
In what circumstances would an employment tribunal find that dismissal to be fair? First of all, the employer must show that they have a “substantial reason” for that practice within the meaning in section 98(1)(b) of the Employment Rights Act 1996—that is usually interpreted as “sound, genuine business reasons”—and also that they have acted reasonably in accordance with
“equity and the substantial merits of the case”
within the meaning of section 98(4). For any employer to meet those thresholds, they will have to go to the tribunal and show, first, that there is a genuine necessity for the changes—that the changes are there not just to swell shareholder dividends, but to lead to a determinable advantage to the performance of the business. Secondly, there is the reasonableness test, which is really a proportionality exercise.
I refreshed my memory yesterday of the well-known case of Garside & Laycock, which was the last significant appeal court decision that I could find on fire and rehire—it was 10 years ago. In that case, the employee brought a claim for unfair dismissal because he would not accept a reduction in his wages. What questions did the appeal court ask itself? First, it asked why had the employer done it—was it in genuine economic difficulty? The answer to that question was yes. What was the size of the cut that they were asking the employee to take? It was 5% of wages. Had there been a proper consultation with the staff? The answer to that question was yes. Had they balloted the staff? The answer to that question was yes. Had those who had participated in the ballot agreed to the cut? Everybody apart from this employee had agreed, and, in those circumstances, his dismissal was fair.
That is an important yardstick to have in mind in considering whether we need primary legislation to deal with this point. So, why is there an issue? I know that hon. Members across the House continue to believe that there is an issue. The answer was captured very well in one solicitor’s evidence to ACAS. I will quote it because I enjoyed reading that report.
“From an employer perspective so long as you have followed the consultation you will be ok. If it gets to Tribunal, no judge looks very closely behind the reasons why an employer is doing it. It’s all about the procedure.”
Judges do not necessarily ask all the same questions,
“so, in that respect, an employee is not perhaps so well protected.”
It is a fair observation. I mean that with no disrespect to employment tribunal judges, but some of them have not previously run their own business and do not have that direct experience, so they are not always best placed to test the strength of the employer’s explanation.
Clearly the status quo is not sufficient, hence the need for the Bill tabbed by my hon. Friend the Member for Brent North (Barry Gardiner), which many Members on both sides of the House support. That is the way to resolve it. Today, I should have been going to the funeral of my good friend Tony Murphy, who believed in fairness and doing the right thing. In the last conversation I had with him, not very long ago at the Bulls Head pub in Frodsham, we spoke about workplace bullying and the need for fairness. I ask the hon. Lady to do the right thing and support my hon. Friend’s Bill.
I am still in the fairly early stages of what I have to say. The hon. Gentleman’s point about fairness is important and I hope the solution that I have come up with, which is not dissimilar to that of the hon. Member for Brent North, meets that threshold.
Before I came into the House, patients came to me who were under the threat of being fired. For me, that pending threat seems to be the issue, and I would be interested to know how many times it is actually gone through with. Would the legislation put forward by the Opposition or by my hon. Friend deal with that threat, rather than the outcome?
I am grateful to my hon. Friend for the question, because that will inform some of what I have to say about clause 1 and the consultation obligations that the hon. Member for Brent North seeks to set.
I can see that we are going to stop shortly, but I will say that I found it striking, when engaging with constituents, that fire and rehire had been mentioned in their first consultation meeting. From the get-go, they did not feel that they had any reasonable opportunity to renegotiate their employment terms and conditions. They always felt that they had the sword of Damocles hanging over their head and that the alternative was the possibility that they would be dismissed.
The hon. Member will know the context in which we are having this debate. It is a time of great economic uncertainty. Thousands of aviation workers in my constituency have been affected by this issue, whether at Heathrow airport, British Airways, Dnata catering or others. Thousands of them are living on incomes reduced by up to £8,000 a year, which is having a massive impact. Other employers behave differently. Has she made an assessment of her proposals to come to a view about whether that practice, which has had an impact on my and her constituents, and those of others, will be prevented by her proposals?
I considered the aviation sector specifically when coming up with my proposals. In fact, it was probably the leading sector that I had in mind, although not the only one, when considering an alternative route. I will develop that point.
The question is, why should we not simply pursue the course of action in proposed new section 27C of the Employment Rights Act 1996? I separate from the hon. Member for Brent North here because despite what he said, my concern is that it will have the practical effect of banning fire and rehire. I will say why.
It came through strongly in the call for evidence that ACAS published that an inherent tension exists between the trade unions and the employer, because trade unions wish to see evidence that the business is visibly failing before they are willing to accept any reduction in terms, but the business wishes to remedy the defect before it is on the brink of collapse. My concern stems from proposed new section 187B of the Trade Union and Labour Relations (Consolidation) Act 1992, which says that the information to be disclosed by the employer is
“all information relating to the employer’s undertaking…which is in the employer’s possession…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”.
Members can hear how wide that is.
I will just take a moment more, because I have only seconds until we break. There would be almost no circumstance in which an employee would not be in a position to say, “The employer did not consult me. They did not show me this. They did not show me that.” Employers would be at genuine risk of being dragged to an employment tribunal on every occasion.
Proceedings interrupted (Standing Order No. 11(4)).
Health Incentives Scheme
Mr Speaker, with permission, I would like to give a statement on our mission to help people live healthier lives. The covid-19 pandemic has exposed so many vulnerabilities in our nation’s health and highlighted stark inequalities that we must work hard to put right. As a Government, we want to do everything in our power to tackle these disparities and to help people live in better health for longer.
We know that regular physical activity and a healthy diet are strongly linked to a higher life expectancy and a lower incidence of many chronic conditions. However, two thirds of adults in England are currently living with excess weight or obesity, and obesity-related illnesses cost the NHS £6 billion a year. Not only this, but obesity is more prevalent among the most deprived areas, so a vital part of our mission to level up across the nation must be to level up the nation’s health, and give everyone the tools and support they need to make a positive change to their daily lives.
Earlier this year, we announced £100 million of funding to help those living with obesity move towards a healthier weight, and this month we have launched our Office for Health Improvement and Disparities, which has a relentless focus on prevention and tackling health disparities across the UK. Obesity policies cannot just be about sticks; we must also reward healthy behaviours. Today, I would like to update the House on the next step in our plans—our new health incentives scheme. The evidence shows that incentives can have an important role in improving rates of physical activity and encouraging healthier eating. For example, in Singapore, its national steps challenge has shown promising results, so we have been looking at what we can do here at home to encourage people to take the little steps that can make a difference and also to pursue a more personalised and data-driven approach to public health.
In England from next year, we will be piloting a new scheme to help people make positive changes to their diet, called Fit Miles. The six-month pilot will see users wearing wrist-worn devices to generate personalised health recommendations, such as boosting their step count, eating more fruit and vegetables, and lowering the size of portions. Users can collect points for making these healthy changes that will unlock rewards, which could include vouchers, discounts and gifts cards. We will be making £3 million of Government funding available for these rewards, and we will be releasing more information on the location of the pilot and how residents can take part in due course.
The app will be available to all adults within our pilot area, but will have a particular focus on those who are not physically active and have poor diets, as well as traditionally under-served groups—for example, those in areas of high deprivation. I would like to reassure hon. Members that the app will have the strongest standards of privacy and security, and we will make sure personal information is always kept safe. This groundbreaking new pilot offers a brilliant opportunity to explore how best to inspire people to make positive changes to their daily lives, and it is a fantastic example of how Government, business and the third sector can work together to make a difference.
I would like to thank HeadUp Systems for providing its international expertise in data science and health technology, and Sir Keith Mills, who has been advising the Government on how we can best make use of these incentives. We have been able to bring to bear his vast experience of working on reward programmes such as Airmiles and Nectar points, and I would like to thank him for his invaluable support.
There is no greater gift than the gift of good health, and we are determined to make sure that people across the country can live in better health for longer. If we get this right, it will be good for our NHS, good for our economy and good for our society. This is a mission that the whole House can get behind, and today’s important announcement is a great step forward for all of us. I commend this statement to the House.
I am grateful to the Minister for advance sight of her statement.
We on the Opposition Benches have campaigned for many years against this Government’s short-sighted cuts to public health funding. A reduction in spending of a quarter in this area has led to growing obesity in our population, loss of smoking cessation services, a ticking time bomb of poor sexual health, and over-burdened drugs and alcohol services. Of course, any savings made by those cuts has been hoovered up by the impact on the rest of the health service.
Obesity is at crisis level in this country. Two thirds of adults are above a healthy weight; half are obese. One in three children leaves primary school overweight, and one in five is obese. We know that leads to reduced healthy life expectancy, poorer mental health, and worsened outcomes at school and work.
We are not going to argue against measures that attempt to help our public improve their health, but like the obesity strategy that precedes it, this latest pilot is tinkering around the edges. Of course eating better and getting more exercise is important for all of us, but the Government once again fail to adequately address a central point.
Tackling obesity is about tackling poverty. People in the poorest communities are twice as likely to be obese as those in the best off. Poverty limits someone’s food choices, their exercise choices and their time. Why does that not feature at the heart of the Government’s plans to tackle this scourge?
Let us be very clear: whatever this pilot achieves, and whatever the obesity strategy achieves, it will all get knocked into a cocked hat by the £20-a-week cut to universal credit, which will push millions of people on to cheaper, less healthy alternatives. That will happen to adults and to our children. Add that to the broader cost of living crisis and these plans really do look small beer.
At the very least, it is vital that this programme is targeted at those communities that will benefit the most from it, because those cuts to public health have been targeted disproportionately at the poorest communities. Will the Minister make a commitment today that those invited to join this pilot will come from those communities? Will she also commit that this scheme and the obesity strategy are to be followed with a restoration of moneys cut from the public health grant?
We will only tackle obesity once we start tackling poverty. This scheme offers the tantalising prospect of vouchers, merchandise, discounts and even gift cards. I think most people would settle for a Government who do not make them poorer, an economy that allows them a decent job on decent terms and conditions, and decent housing. Frankly, until we get that, this is just tinkering around the edges.
I thank the hon. Gentleman for his comments. We have a common purpose: on both sides of the House, we are determined to tackle obesity. The measures that the Government have already taken—we have allocated £100 million to tackle obesity—show that we are serious about this. That is a huge amount of money. It is important to realise that lots of different measures have already been put in place. This is not tinkering at the edges at all.
We began tackling the issue of obesity a number of years ago with the soft drinks levy. I was delighted that the money raised from that went to school sports. We then tackled inappropriate advertising and promotions, out-of-home calorie labelling and front-of-pack nutrition labelling. We have the weight management programme and numerous other activities. It is important that we look at the population measures that are in place, but now we are also looking, with this new pilot, at individual responsibility—personal responsibility. I am really encouraged by this new approach to tackling obesity.
The hon. Gentleman mentioned other public health issues. Once again, this Government are determined not only to halve childhood obesity by 2030, but to make our nation smoke-free by 2030. We are really committed to tackling the public health issues that, as he quite rightly says, are affecting some of the most deprived parts of our country. The fact that we have launched the new Office for Health Improvement and Disparities shows exactly where our commitment lies, and I will continue to fight for this cause as we move forward.
To address the hon. Gentleman’s question about who we will choose for the pilot, we are going to make sure that we choose the right area so that it can really make a difference. That is so important when we are spending public money.
When we came back from recess, I was hoping to ask the Minister one question this week, so to be able to ask her three questions in two days is an unexpected thrill. I am grateful to her for her statement, and I welcome what she says. No Government can stand by when there is a 10-year difference in life expectancy between the richest and poorest 10% in our society. These measures are important and will make a difference. But could I ask her about something even more worrying than adult obesity? On childhood obesity, we are still the second fattest country in Europe. Has she had any discussions with the Department for Education about one of the root causes of that, which is that for several decades we have not guaranteed daily sport and exercise to every child in every state school?
My right hon. Friend will be aware that, as the previous chair of the all-party group on obesity, this issue has been close to my heart for many years. Over my years as a Member of Parliament I have been delighted to join some of my local schools and run the daily mile. It is inspiring to do that as an MP and I encourage anyone who has not done it to do so. The kids get so excited by it, and I see the difference it makes to them. More specifically, I am yet to have a meeting with the Department for Education, but it is high on my agenda. Tackling child obesity is a No.1 priority for me, and it has been for a number of years.
Like my hon. Friend the Member for Nottingham North (Alex Norris), I cannot oppose what the Minister tells us here today, but it is frankly on a very small scale. The point made by the former Health Secretary, the right hon. Member for South West Surrey (Jeremy Hunt), is fundamental. We need a recommitment to getting sports back in our schools for our children and young people. In particular, we have never been good at engaging girls and young women to stay in sporting activity, and that is now something of an emergency. Can the Minister give us more than her personal example and say what the Government will do to make that happen?
I am here today to talk about this pilot and how it will be taken forward, which is exciting news. This will be across the population to ensure that a mixture of people take part: different ages, males and females. That is so important. Some of the information from that will help us to look at policies in the future. There are good programmes to engage young women in sports. When female football teams or tennis players do very well that encourages even more people to take up sports—not just women but across the board. Such successes will help to tackle obesity in a soft way.
I thank the Minister and welcome her news about this important pilot. Eating disorders can be devastating for so many families. On behalf of those families, can my hon. Friend confirm that the focus of this scheme is not weight loss, but encouraging people to adopt a healthier lifestyle?
In welcoming today’s announcement, may I concur with my right hon. Friend the Chairman of the Health and Social Care Committee about the importance of ensuring that we start as early as possible in tackling obesity? In doing so, may I encourage the Minister to continue to support, through her Department, the funding of the primary PE and sport premium, which is worth around £320 million a year, as well to consider the core recommendation of a report by the Association for Physical Education, for which I chaired a taskforce, which looked at how we can ensure that PE is at the heart of school life and that every child leaves primary school able to swim and has PE as a habit for life, so that we tackle this as early as possible?
I very much welcome this scheme. Does my hon. Friend agree that it is about not stigmatising obesity, but helping people to adopt a healthier lifestyle, and that part of that should be a seismic shift away from ultra-processed food, which is high fat, high salt and highly addictive?
I completely agree. A lot of the measures that have been put in place on the population side have resulted in reformulation by many manufacturers. That is so important. The soft drinks levy is a prime example. Just introducing that levy meant that so many manufacturers changed their formulation. Putting calories on menus and the traffic light system on the front of packaging once again encourages and pushes manufacturers quite hard to reformulate, and that will address the issues that my hon. Friend mentions.
A few years ago the Food Foundation pointed out that healthier food is often cheaper in Europe than unhealthier food; perhaps we could look at that. The young people of Jamie Oliver’s foundation, Bite Back 2030, have identified that healthier options in schools are often more expensive and do not meet the proper standards, so will the Minister have a look at this issue?
Eight months ago, I did very little exercise and had done very little running since school, but three weekends ago I ran the London marathon—[Hon. Members: “Hear, hear.”] Thank you. I raised more than £37,000 for my local charities in North Norfolk. Does my hon. Friend agree not only that is this a wonderful initiative that puts healthy eating at front and centre of one’s physical health, but that there are also untold benefits for mental health, as I have found in doing this job and running the London marathon?
I do not know why, but I feel overwhelmed to declare an interest in this particular topic. Does the Minister agree that it is often community organisations that provide the best outputs? Organisations such as Beeches Martial Arts and the Cofton Park Runners do so much to promote healthier living and exercise choices across the Northfield constituency. There might even be a role for local Members of Parliament to take part too.
Of course, I would always encourage local Members of Parliament to take part in and enjoy every activity in their constituencies. Just yesterday, I was having discussions with people from the public health arena, who talked about the importance of community-based activities, which are often run by charities and volunteers, and what a huge impact they can have on people’s lives, including on activity levels and weight management.
Does my hon. Friend agree that this a fantastic new initiative and pilot, and that it is perhaps the forerunner to making everybody aware that the best way to protect the national health service is for us to have the healthiest lives possible and to make the healthiest choices possible, so that we have a national health service that is protected and that does not continue to be a national repair service?
My hon. Friend is exactly right. Obesity costs the NHS at least £6 billion. However, it is not just about the cost to the NHS, but the cost to individuals as well. People who are obese are more likely to have diabetes, cardiac disease and cancers, so this affects their lives. If we get it right for the NHS, we are getting it right for individuals as well.
To pick up that exact point about diabetes, obesity is inextricably linked to type 2 diabetes, which can lead to damage to people’s feet, eyes and kidneys. What is even more concerning is that it is easily reversible with a healthy lifestyle. If this pilot is a success, will the Minister consider targeting it particularly at those who suffer with type 2 diabetes?
It is always good to have a Minister at the Dispatch Box making a statement. However, precedent says that on a private Members’ Bill day, statements are put on only if they are extremely urgent. It seems to me that this is about something for next year. There are 17 Bills to be debated today. Why was it urgent to have this statement in private Members’ time rather than Government time?
Obesity is a top priority for the Government and covid-19 has shown us the necessity of levelling up disparities in health. We know how important it is to update the House first and to allow it a chance to have its say, so I wanted to update it as soon as possible on this important issue.
I offer my belated congratulations to my hon. Friend on her appointment to her role. In her statement, she mentioned Singapore’s national steps challenge, which has shown how to give small incentives to improve people’s lives. Will she confirm that her Department will draw on the best practice from around the world as it develops and pilots the scheme?
We have looked at schemes from around the world. Actually, if we get this right, we will be world-leading on this issue, although probably behind Singapore—I will give it some credit for being there first. We have looked at different schemes globally and we feel that this pulls together what has been tried in different areas, as well as having some uniqueness about it, which I am looking forward to developing as the pilot moves forward.
I welcome the news that the scheme will be developed in partnership with businesses and the third sector—the private sector and charities—with that dream team of public, private and volunteers. Will the Minister confirm that her Department will look at outcomes and measuring them and will take robust anti-fraud measures to verify that users of the scheme who gain access to the rewards will have genuinely improved their behaviour?
Can my hon. Friend reassure the House that we will look at best value for money with the scheme to ensure that we are saving money for the NHS? The last thing that any of us want to do is spend more money and not get financial rewards to protect our NHS and ensure that we have healthier lifestyles for everyone.
My hon. Friend makes a very good point. We are investing some money in the new pilot and we are confident that it will give us some outcomes that we can work on to take measures forward. If we can save a fraction of the £6 billion, it will be still be a huge saving for people’s health, but, obviously, we want to make sure that this is about saving money and saving lives.
I am tempted to ask the Minister whether bobbing in this place might count towards the app’s incentives. I know that all Members will appreciate my hon. Friend’s courtesy in making a statement to the House rather than this being announced in a press conference later in the day. As well as the national steps challenge, the Singapore Government launched its Healthy 365 app around a year ago. Will the Minister be looking both at Governments around the world and at businesses and public sector organisations in the United Kingdom that already operate app-based fitness incentives to make sure that we learn from the best and avoid replicating others’ mistakes?
My hon. Friend makes a very good point. Yes, we know that there is a lot of experience out there and we want to pull everything together to make sure that we have an effective pilot and know how we move forward from that to help people to get healthy, get fit and enjoy good lives.
Sometimes the risk of such schemes is that they become a little bit siloed. We have heard, in contributions from other Members, talk about co-operation. Can my hon. Friend reassure me that any insights will be used to inform the response across Government, and that she will ensure that we take a collaborative approach to ensure a long-term gain, not a short-term success?
I reassure my hon. Friend that we want to ensure that this is a long-term success. It is a pilot, so we cannot pre-determine the outcome. However, tackling obesity and the disparities that come with it are a No. 1 priority for the Prime Minister, and that goes across all Government Departments.
Three weeks ago, I joined my hon. Friend the Member for North Norfolk (Duncan Baker) and other hon. Members in running the London marathon. Modesty precludes me from saying which of us finished fastest. Does my hon. Friend agree that running, particularly the daily mile, is great exercise? Will she join me in congratulating everyone involved in King’s Lynn park run, which has just celebrated its 100,000th finisher?
I am delighted to congratulate King’s Lynn park run on its achievements, as well as park runs across the whole country. I am not a great runner—I am more of a sprinter—so I tend to avoid them, but I know the enjoyment that can be achieved by going along and improving one’s fitness, as well as the sense of community they bring with them.
As somebody who is carrying a Westminster stone, I could definitely do with losing a few pounds myself. More than three decades ago, I was more than six stone heavier than I am today. I lost that weight without the need for airmiles and Nectar points. Does my hon. Friend agree that the most important factors in good health are personal discipline and personal responsibility?
I, too, welcome the pilot, which I hope will help to tackle growing obesity. As the Chair of the Health Committee commented, obesity often starts in schools—I think one in five schoolchildren are obese by the time they leave year 6—so would it not be a good idea to extend the pilot to schools? I know how excited children are when they wear gadgets. That might help them to start to work towards a healthy lifestyle.
My hon. Friend makes a very good point. Kids are excited by new technology, but the pilot will be for people aged 18 and over. I take on board her suggestion and perhaps we can look at other ways to encourage kids to use technology to improve their outcomes.
I welcome this announcement. We cannot, unfortunately, all have the iron will of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), but study after study shows that gamification really does drive positive behaviour. Can my hon. Friend confirm that this is just one part of the Government’s strategy and that we are also looking at changing physical infrastructure to improve cycling and walking access?
My hon. Friend makes a very good point. We cannot do this with one action alone. To me, it is very much cross-departmental. Whether it is through planning legislation or encouraging people to be more active, there are lots of different ways we can tackle obesity and the health disparities it brings with it.
I am sorry to strike a discordant note, but with regard to the Minister’s justification for this measure may I remind her that it is not the role of life to support the NHS; it is the role of the NHS to support life? Many despair of an obsessive cult within the Department of Health and Social Care for nudging. Can the Minister advise me on how this proposal is different from a social credit system that is adopted in other countries?
We want to have a whole range of measures to tackle obesity. The important thing is that we know how much obesity costs the NHS—£6 billion is a huge amount. That money could provide for a lot of more operations. There are a lot of other ways to stop people becoming obese, or to help them to lose weight and become more active. That is better for the NHS and saves money for the NHS, but it also helps people’s lives as well.
As the Prime Minister pointed out at the Conservative party conference, life expectancy in Blackpool is 15 years lower than it is in some areas just a few miles away. This scheme will help to reduce those disparities. Does the Minister agree that Blackpool would be the ideal location for this pilot scheme?
The importance of engagement with the pilot survey has already been mentioned. Sedgefield, like most of our constituencies, has various demographics, but I am thinking of certain neighbourhoods in particular. The all-party parliamentary group for “left behind” neighbourhoods, which I chair, found that some areas do not have the capacity even to become engaged in programmes such as this. May I encourage the Minister to include people in “left behind” neighbourhoods in the survey? We have organisations such as Junction 7 in Newton Aycliffe, and if schools are likely to be involved, I have some fantastic ambassadors at Ferryhill.
Employment and Trade Union Rights (Dismissal and Re-engagement) Bill
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.