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Fire and Rehire

Volume 822: debated on Wednesday 15 June 2022


Asked by

To ask Her Majesty’s Government what steps they are taking to prevent the use of fire and rehire as a negotiating tactic.

My Lords, the Government asked ACAS to investigate fire and rehire, and it published guidance in November. The Government have announced their intention to publish a statutory code on fire and rehire in March, and the draft is due to be published for consultation this summer. The code will set out good practice, helping parties to reach a negotiated agreement. In cases of dispute, the code will be admissible in relevant legal proceedings and may result in increased compensation.

My Lords, I welcome the Minister’s response. Codes and consultations are helpful but, with respect, they do not go far enough. Ministers, including the Prime Minister, are paying lip service to condemning fire and rehire as an unacceptable practice. However, talk is cheap; we need legislation to stop the many abuses by numerous big-name companies and others. Today I will introduce a Bill banning fire and rehire, except in the most extreme circumstances—the same Bill that the Government so cynically squashed in another place. Therefore, my question to the Minister is simple: will he do the right thing and back my Bill —yes or no?

My Lords, we always do the right thing. I realise that it is an easy soundbite for the noble Lord to say “ban fire and rehire”, but even he would accept that you cannot ban redundancies, for instance if a company is going bust. You would end up banning the rehiring part of the equation.

My Lords, legislation is useful, and I hope the Minister pursues that course, but in the meantime will the Government look very carefully at giving any new contracts to a firm which engages in such atrocious behaviour?

We want to see all companies engaging in responsible employment practice. The UK has an employment record to be proud of. We have one of the lowest unemployment rates in the western world, one of our lowest post-war records—down again yesterday. If you contrast that to many countries in the EU or on the continent, with much less flexible labour markets, the best employment right of all is a job.

My Lords, I draw attention to my registered interests. Sometimes employment contracts need updating to reflect new legislation. Under current law, if agreement cannot be reached between employer and employee, notice can be given and new contracts offered. Then employees can opt for a tribunal claiming unfair dismissal, but tribunals are taking up to 18 months to determine. What are the Government doing to speed up tribunals?

There has been a delay from the pandemic, as in many parts of the public service, but we are doing all we can to make sure that cases are expedited as quickly as possible.

We have said that we will deliver when parliamentary time allows, but there are many other ways of delivering what were manifesto commitments than a formal government employment Bill.

My noble friend has pointed out that unemployment levels are at an all-time low, but is he not worried about the rising number of those who are not seeking work?

That will depend on the individual circumstances of many people. The pandemic resulted in a number of people reassessing their life choices and if they have decided not to go back into the labour market, I am not sure that is something we can implicitly control. But as I said, we have 600,000 more people in work than before the pandemic and one of the lowest unemployment rates in the western world.

My Lords, the Government were right in their condemnation of the disreputable behaviour of P&O Ferries recently, but I also read a lot in the papers about the Government considering introducing a Bill which will make it lawful to replace striking workers with agency workers. I am puzzled about what the difference is between what P&O has done and the kind of thoughts that are obviously alive in Government at present. What is the difference?

The difference is very clear. What P&O did is potentially illegal. Investigations into both criminal and civil wrongdoings are ongoing, so I cannot comment on those particular investigations, but if trade unions are considering holding the travelling public to ransom, as many of them are, then it is right that we should look at all available options, and we will do so.

My Lords, British Airways, Accenture, and the DP World-owned P&O Ferries—significant players in the UK economy—have all used fire and rehire to replace their workforce. They have faced down government criticism and the public’s disdain. For this to change, legislation is required to outlaw this practice. Will the Government take a lead by bringing forward a definitive code of practice that bans fire and rehire? Further, will the Government commit now to ensuring that companies found to have been using fire and rehire will neither be awarded contracts for any public body nor be allowed to take over provision of public services?

I said that we are committed to bringing forward a code and we will consult on it shortly, but as I said in response to the noble Lord, Lord Woodley, it is a complicated area of industrial relations and employment law. I assume that even the Labour Party would accept that we cannot ban redundancy if a company is going bankrupt. Therefore, by banning fire and rehire we would end up banning the rehiring part of it, which I am sure nobody wants to see.

My Lords, I take the point that banning fire and rehire would be extremely difficult, but what is the objection to regulating it by law?

I am grateful to the noble Lord for accepting the point that I am making: it is a complicated area and an outright ban would not be appropriate. Therefore, I assume that he will not support the Bill from his noble friend. However, we are prepared to regulate in this sector, which is why we are talking about introducing a code. That code will have a positive effect and will be able to be taken into account in any industrial tribunal proceedings, potentially resulting in an increase in compensation awarded.

My Lords, the Government take credit for the high employment in the UK and compare it with our neighbours in Europe, but if we compare poverty wages in the UK with the EU we find a different situation. Are the Government going to do anything about the poverty wages that exist in this country but are not allowed in other countries in Europe?

I am absolutely taking credit, on behalf of the Government, for the record low levels of unemployment. I assume the noble Lord would be arguing something different if the opposite were the case. The minimum wage in the UK was increased by 6.6% to £9.50 an hour earlier this year. We also now have one of the highest minimum wages in western Europe, something else I thought the Labour Party would recognise.

My Lords, I draw attention to my interest in the register as chairman of Transport for the North. Will the Government, in ensuring that employees get a fair deal, also look at the position of the travelling public getting a fair deal when they are being held to ransom by strikes that are deliberately protracted over a week, which will therefore bring disruption to the travelling network for more than a week, in spite of the fact that the strike days will be only three days and no more?

My noble friend makes a very important point. He has long experience of industrial relations. It is almost as if these strikes were specifically designed to make life as inconvenient as possible at some of the worst times of the year for the travelling public. That is unacceptable. They should think again, and I hope the Labour Party will join us in urging the trade unions to think again.

My Lords, clearly the strikes are designed to make sure that those workers who worked extremely hard during the pandemic, and work very hard all the time, achieve decent wages and conditions, but does the Minister agree that, by failing to outlaw fire and rehire as a negotiating tactic, the Government are giving the green light to bad bosses to exploit workers?

I am sorry the noble Baroness does not want to join us in condemning the potential strike action on the railways and elsewhere. As I said, we want to see good labour relations and employer-employee relations conducted in a meaningful and contented spirit, which is why we will try to introduce a code that will regulate these matters.

My Lords, does the Minister recall an action 20 years ago in the Friction Dynamics factory in Caernarvon—the former Ferodo factory—where the employer had locked out the employees and hired a new workforce? It was taken to an industrial tribunal. The employees and the union won, but they were unable to get any compensation whatever. Can he assure the House that any forthcoming legislation will safeguard against such circumstances?

I am not familiar with that particular case; I will certainly look at it. I would be interested to know why they were unable to enforce the order that was made. Perhaps it was because the company went bankrupt, but I do not know; I would have to look at the particular case.