Fire and Rehire

Paul Scully Excerpts

Tuesday 27th April 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mrs Murray.

I congratulate the hon. Member for Jarrow (Kate Osborne) on securing the debate, her first here in Westminster Hall, on fire and rehire. We have heard a lot of powerful and passionate speeches, but before I start on mine, I note that many of my colleagues have been glancing at the annunciator screens around us. Important issues have been debated in the main Chamber. I have seen colleagues on the Government Benches speaking about fire safety and veterans—a lot of issues. Many colleagues have spoken about this subject and will continue to do so.

We heard from the Opposition spokesman, the hon. Member for Bradford East (Imran Hussain), about the Government giving warm words, about consultation and about people being worse off. On the warm words, however, we agree on many things to do with the “bully-boy tactics” we have heard about today. That also demonstrates the difference when talking about businesses, because with changes to workers’ rights and anything to do with employment, whether for workers or businesses, it is important that we get it right. We have to consult and ensure that legislation is made with careful consideration and debate, and that it is made with people—companies and workers—and not done to them.

Clearly, the flexibility of our jobs market means that the hon. Member for Bradford East was right to say that people and their families are worse off if they get reduced terms. They would also be worse off, however, if their jobs were lost as a result of a different type of restructuring. Again, that is why we need to get the balance right.

We had some international comparisons. Many European countries clearly have more rigid labour markets. Often, in places such as Germany and France, more onerous requirements must be met when considering individual or collective redundancy. In some countries, permission must be sought even to go down that line. So our flexible hiring practice is important to ensuring that our economy is rounded but flexible.

Having said that, however, importantly, we are all constituency MPs and we have heard many examples today. From correspondence I have received—like many Members present—we know that, for those affected, the threat of redundancy or dismissal is always distressing. We expect employers to treat their staff with respect and compassion. That is even more important now, when people feel particularly vulnerable or anxious about the future. I speak to businesses every day and know that the vast majority of employers want to do the right thing by their employees. For most employers, the choice to let someone go is not something to be taken lightly. It usually comes at a time of great financial uncertainty for the business.

I pay tribute to all the businesses and workers that have kept the economy moving throughout an extraordinarily difficult time. In the face of those challenges, businesses have shown a remarkable ability to adapt and innovate. Through the pandemic, our priority as a Government has always been to protect jobs. Through the job retention scheme we have supported 11.4 million unique jobs to date. As we build back better from coronavirus, we will continue to support workers and work with employers to protect and create jobs. In the past year we have helped millions of people to continue to provide for their families as part of our plan for jobs, to protect, support and create employment. As we build back better we will work with employers to protect existing jobs and create new ones.

The Government are always on the side of working people, including those on the lowest wages. Earlier this month, about 2 million of the UK’s lowest-paid workers benefited from an increase in the national living wage and the national minimum wage, including a 2.2% increase in the national living wage, to £8.91—the equivalent of more than £345 a year for someone working full time.

[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.