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.