Fire and Rehire

Gavin Newlands Excerpts

Tuesday 27th April 2021 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to see you in the Chair, Mrs Murray, and I thank the hon. Member for Jarrow (Kate Osborne) for securing this incredibly important debate. The fact that it is oversubscribed, similar to my own Westminster Hall debate in November when virtual participation was not possible, shows how important most Members—certainly Opposition Members—consider the issue.

The Tory Government should be embarrassed that the debate is even necessary. Workers in other EU countries who happen across these proceedings through some disastrous fault on their TV will think that Victoria is still on the throne and that the hard-fought-for workers’ rights that were secured in the 20th century were but a dream. Workers in those countries have employment rights based on modernity, not Dickens novels.

Over the past year, I have proposed legislation that would ban fire and rehire through a simple amendment to the Employment Rights Act 1996. I have raised the issue with Ministers in this place umpteen times. I have been told by the Prime Minister that using threats of fire and rehire is unacceptable as a negotiating tactic. The Minister said that it is not acceptable to use it as a bargaining or negotiating tactic. The Chief Secretary to the Treasury said:

“I do not think it is acceptable to have a ‘fire and rehire’ culture.”—[Official Report, 13 October 2020; Vol. 682, c. 171.]

The Leader of the House told the Commons two weeks ago:

“The name of British Gas has now been traduced in this House on a number of occasions. People who pay attention to our proceedings may feel that they dislike the way British Gas is behaving and want to get their gas supplied by another firm.”—[Official Report, 15 April 2021; Vol. 692, c. 504.]

On that, I agree with the Leader of the House. Despite giving the company every chance, I have now cancelled my own British Gas contract. That is a small act with regard to a company with revenues just shy of £15 billion last year, but it is the power that each of us has as a consumer.

To be clear, the primary blame, in all these situations, lies with the companies for making these threats, but the role of Government should be to ensure that any employer meets basic standards on worker rights and respect for its workforce, and operates on a level playing field that rests on fundamental rights for its staff. Enshrining that level playing field in law will ensure that the spivs and chancers who seem to have a grip on so many blue-chip companies can no longer undercut and undermine responsible employers, who invest in their staff and work in partnership with them rather than antagonising them.

All the sympathetic statements and expressions from the Dispatch Box do not change a thing for the workers, who are still being bullied by companies and forced into wage cuts and changes to terms and conditions. I agree with every word from Ministers that I have quoted. The difference is that they are Ministers and have the power to act.

As I have said previously, and as almost everyone who has spoken today has said, the Government have a Queen’s Speech in a fortnight’s time, and that must—must—contain a pledge on fire and rehire. They have at their disposal a Government machine that could have a Bill drafted rapidly—I would be happy to send them a copy of mine to copy and paste from if that would speed things along. They have a majority of 80 in this House to get the Bill through its stages and on to the statute book with a minimum of fuss.

The time for words is over. The pictures of the British Gas vans in the gas van graveyards across the country should be evidence of that. Millions of workers across the country are judging the Government on their deeds, and so far the outcome has been lacking, to say the least. In summing up the debate, can the Minister please give that assurance? Potentially millions of workers across the UK are depending on it.

The Government cannot say that this issue has not been pointed out to them many, many times over recent months. The last year has seen British Airways, British Gas, Menzies Aviation, Go North West, Heathrow airport and even Tesco, to name just a few, treat their staff like chattels and threaten them with the sack if they did not sign on the dotted line. I and many colleagues across the House have raised these disgraceful incidents with the Government dozens of times over the last year. Just yesterday we saw protests outside IHG—InterContinental Hotels Group—hotels, following the sacking of 250 staff, some of whom were then asked to come back to their previous jobs, but for less money and with poorer working conditions.

The Government know that this is an issue, because they are sitting on a report compiled by ACAS on it. The fact that we had to force them into commissioning that report is damning, but they have been sitting on the report for more than two months now. More than seven weeks ago, I wrote to the Secretary of State, urging him to share the report. It should be laid before the House at the earliest opportunity. The Government have to justify their lack of action and to apologise to the hundreds of thousands of workers who have faced these threats since they were highlighted to the Government and, in particular, to those who have taken redundancy when they have been faced with these threats or, even worse, have been sacked without any redundancy pay when they have refused to be bullied. Will the Minister, in his summing up, do just that and say sorry on behalf of the Government for their inaction?

I was proud to see the SNP manifesto launched two weeks ago, with a promise to ban fire and rehire in Scotland if the powers over employment law are transferred to the Scottish Parliament. We have been waiting too long for the UK Government to act and bring in legislation to ban it. If they do not want to protect the rights of workers, they should give the powers to the Scottish Parliament, which will act to end the days of bully-boy tactics and put those powers to good use.

I am proud of the SNP policy, of course, but I think my cross-party record on this issue is clear. The fact that Members from every party in this House sponsored my Bills is testament to that. Change of this nature happens only with cross-party support—not only with support from a united opposition, but with some support from the Government Benches. I know that the Minister has been lobbied hard on this issue by many of his colleagues. That is what makes me hopeful—perhaps naively so—about commitments on this issue in the employment Bill.

However, although there is support from and campaigning by a great many Labour Members, including Labour colleagues of mine on the Transport Committee—the hon. Members for Easington (Grahame Morris), for Brentford and Isleworth (Ruth Cadbury) and for Nottingham South (Lilian Greenwood), and the hon. Member for Ilford South (Sam Tarry), who was a member of that Committee—and many others, including the hon. Members for Slough (Mr Dhesi) and for Liverpool, Wavertree (Paula Barker), I have been somewhat disappointed by the lack of speed from the Labour leadership to give this issue the parliamentary attention it deserves.

In saying that, I am only reflecting the views of a great many union members whom I have spoken with or who have contacted me. Working as one, we might have been able to force through quicker change that would have helped the British Gas engineers. Moving forward, let us ensure that we have a laser-like focus on the issue, as too many have suffered these threats over the last year.

No one is saying that companies and occupations should be frozen in time, with no room for change when circumstances change. Of course this pandemic has had a huge impact on the bottom line for every business in these isles and around the world, just as the crash of 2008, the recessions of the 1980s and 1990s and the energy crisis of the 1970s had an impact on trading conditions, and I daresay there will come a point in the future when another economic shock will hit us. The way to address those challenges is not by treating “Oliver Twist” as an employee relations handbook, but by working in partnership with workers and their representatives to find a sustainable way forward that benefits all.

That philosophy is embedded in European industry and commerce, and it is embedded in law. I think it is no coincidence that every single one of those countries outperformed the UK on economic output and on the standard of living their citizens enjoy. Nine out of 10 of the poorest areas of the European Union, as was, are in the UK. The race to the bottom on employment rights has dislocated our economic system to such an extent that the poorest out of 500 million people live within a couple of hours of this place.

Many of the companies that have employed or threatened to employ fire and rehire operate across international borders. International Airlines Group, the owner of British Airways, could not copy the tactics they used in the UK with staff at Iberia and Aer Lingus because those countries enshrined in law the rights of employees not to be treated in such a way. Centrica, British Gas’s parent company, is prevented from throwing the same tricks with Bord Gáis Energy employees because the law in Ireland stops it from doing so. It only chose the UK for these actions because it can. Centrica is still selling gas in Ireland and taking payment for that gas presumably because it makes money from it. The difference is that the workers enjoy protection from fire and rehire.

That undermines any argument that legislation against fire and rehire would put companies at a disadvantage. They seem to be doing fine in countries that have already banned it and that have rejected the insidious race to the bottom on employee rights that has characterised Tory Governments for decades. Fire and rehire is part of that race to the bottom.

This Government have the power to end that race right now and legislate to give responsible businesses the level playing field they deserve and our constituents the protections they need to have a more stable and sustainable livelihood. That benefits them, their families and the communities they live in. The warm words from the Government Benches over the last year do not provide that stability. Will there be a commitment in the Queen’s Speech to introduce a Bill banning fire and rehire once and for all? That would give more security and dignity to millions of workers who could face these tactics next.

--- Later in debate ---

[Gavin Newlands]

I hear yet more warm words, and I hear about the Government’s support for workers, the furlough scheme, and what have you. Let us concede the furlough scheme. However, what does the Minister say to workers who have taken redundancy when faced with fire and rehire threats, or who have been forced out of a business, or to the British Gas engineers sacked without any redundancy payment?

[Paul Scully]

I will come to fire and rehire. In individual company disputes, in the first instance it should always be ensured that the company and employers can have conversations and dialogues with the unions, should there be a union supporting the workers.

The debate has explored a lot of issues related to fire and rehire, where employers dismiss or threaten to dismiss employees, only to hire them again on less favourable terms and conditions. However, the UK already has a robust legal framework to ensure that employees are treated fairly. Employers are clearly free to offer the terms and conditions of employment that best suit their business needs, but they must always act fairly and not discriminate unlawfully, such as on grounds of race, sex or disability. Redundancy law requires that any redundancy process be fair and reasonable, with appropriate equalities considerations. Those rules include giving a notice period and consulting staff before a final decision is reached. We have clear laws on unfair dismissal, covering such things as the application of unfair selection criteria or failure to consider the possibility of transfer to other work.

However, it is not just a matter of what the law requires; it is in businesses’ own interests to have committed, motivated staff who are properly engaged in decisions about their future. As I have said, in the vast majority of cases businesses want to do the right thing by their employees, and I am determined to help them with that, to make sure that we find the best approach for employers and employees. However, we should tread carefully when considering Government intervention in commercial contractual matters between employers and employees. We must and do protect workers from unfair practices, especially when they put unnecessary stress on people who fear for their livelihoods, but we must also allow businesses to take the sometimes difficult decisions that are necessary to preserve their commercial viability.

Some Members have called this afternoon for the Government to legislate for a ban on fire and rehire. The Government have always been clear that we do not accept the inappropriate use by some employers of fire and rehire as a negotiation tactic. I have met Members and trade unions to discuss the issue, and in those discussions it has been made plain to me what anxiety and distress such tactics cause, particularly when individuals feel that they have no real option to say no and negotiate better terms. We have heard examples of that today. However, it is right and proper to consider the evidence, to avoid any course of action that would run the risk of doing more harm than good.

For example, it would be counterproductive if measures that prevented businesses from rehiring staff on different terms and conditions meant that a business could no longer survive, so that its staff found themselves out of work entirely. That would be the worst possible outcome for both businesses and the people they employ, so we need robust evidence to make robust policy decisions. That is why my Department asked ACAS to conduct an evidence-gathering exercise to learn more about the use of fire and rehire. Some Members of the House have continued to call upon my Department to publish this evidence, including during this debate. Let me clarify: we asked ACAS for its help in developing the evidence base on this complex and sensitive issue. We are carefully considering the different issues and viewpoints raised, which is vital for good policy making, and we will set out our steps in due course.

As mentioned today, unfortunately, due to the impacts of covid, some employers may be considering making redundancies. We urge employers to consider all options and alternatives before making redundancies, but we recognise that it is not going to be possible to save every business and every job. Collective redundancy legislation requires employers proposing to make 20 or more employees redundant from one establishment in a 90-day period to consult employees or their representatives, and that must include a consultation on ways to avoid redundancies, reduce their number, or mitigate their impact. Within the same timescales, the employer must notify the Secretary of State for Business, Energy and Industrial Strategy of the proposed collective redundancies. Failure to notify is an offence. Employees and/or their representatives may make a claim to an employment tribunal if they consider the employers not compliant with the consultation for collective redundancies. If the tribunal agrees, it may make a protective award of up to 90 days’ remuneration per employee. If a protective award is made against a company in liquidation, the Insolvency Service can pay the protective award, within certain limits.

In spite of the unprecedented support made available by the Government, many people have had to make really difficult decisions about their livelihoods since last March. This includes employers who have spent years investing in and growing their businesses, and workers who have shown loyalty and dedication to a particular profession or service. This debate has highlighted the challenges that everyone is having to face, and the enormous impact that losing a job or the threat of losing a job has on individuals and their families.

[Gavin Newlands]

I have heard all of that, and I have heard the Minister’s justification for not publishing the ACAS report thus far, but can he guarantee that at some point after the Queen’s Speech—in the next Session—the Government will publish the report in full, and what the Government intend to do about it?

[Paul Scully]

What I will say at the moment is that we are fully considering that, and we will continue discussion and debate on it, because it is important that that evidence base forms part of those policy-making criteria. Employers need to make sure that they can take the decisions they need to maintain their commercial viability during all of this, and as I have said, most businesses are doing the right thing. I have been an employer myself for the best part of 25 years before being elected, and I know what it is like to be responsible for someone else’s livelihood. It is deeply unfortunate, however, that the actions of some unscrupulous employers are tarring others with the same brush. Even at a time when businesses face acute challenges, fire and rehire should only ever be used as an option of last resort. As I have made clear repeatedly, it is completely unacceptable to use threats of fire and rehire simply as a negotiation tactic.

Once again, I thank all hon. Members, and especially the hon. Member for Jarrow, for their personal contributions to this debate.