Employment and Trade Union Rights (Dismissal and Re-engagement) Bill
(Limited Text - Ministerial Extracts only)
Read Full debate13:20 - The House divided: - Ayes: 188 / Noes: 251 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I congratulate the hon. Member for Brent North (Barry Gardiner) on securing the Second Reading of his private Member’s Bill and on the way in which he has engaged with both sides of the House, as well as with unions, workers and employers. I met him twice over the summer, and indeed, again this week, to discuss his ambitions for the Bill. In a slightly surreal surprise moment, he leaped out of a bar in Manchester at our party conference to lobby me as I moved from event to event. I know that he wants to be associated with the party of workers, but that was an extreme way of doing it. However, I welcome his approach and I jest, because I know that he has engaged on this issue and is committed to finding a workable solution to address the issue of fire and rehire, which is clearly important for Members of the House. I have stood here many times before to address the House on this issue.
Let me answer the charge from the hon. Member for Birmingham, Erdington (Jack Dromey) about sending out an unambiguous message. We do send the message out and we have been really clear. We do not have to do it through this particular Bill. I was really attracted to the approach of my hon. Friend the Member for Newbury (Laura Farris), when she talked about not having primary legislation to address this, but looking at other ways—including the code of practice that she proposes—for the reasons that she talked about relating to not having unintended consequences.
Alexander Stafford
Can we make it fully clear that Government Members, regardless of what is going on, are against the abuse of fire and rehire? I stand against it for the residents of Rother Valley and I am sure that the Minister does. Will he clarify that once and for all and make it clear for everyone listening at home?
Paul Scully
My hon. Friend is absolutely right. The unambiguous message is that using fire and rehire as a bully-boy negotiating tactic is absolutely inappropriate. However, and I will develop this point later, I do not believe that the Bill as it stands—even if it is amended, because we do not believe that we need primary legislation to achieve these ends—will have the intended effect, because it will not ban fire and rehire, as the hon. Member for Brent North said. I think he needs a bigger badge to explain what it actually does do, in his opinion. However, we want to get rid of using fire and rehire as a negotiating tactic, as a bully-boy tactic, and that is what the other measures that we are proposing seek to achieve.
Gavin Newlands
The Minister says that we are sending an unambiguous message, yet he refuses to legislate. I am not sure how that is unambiguous, but let me ask him this question: does he intend to talk out the Bill today?
Paul Scully
The hon. Member talks about being unambiguous and says that we are refusing to legislate. As we heard from my hon. Friend the Member for North East Bedfordshire (Richard Fuller), legislation that comes from the fact that we are coming to the end of a pandemic is not the right way to reflect the concerns about the long-term issue of workers’ rights. We need to make sure that we can address the situation. We will legislate if we need to, but as a last resort, not a first resort. A fundamental difference between Government and Opposition Members is that Opposition Members immediately look for primary legislation rather than other ways of incentivising employers to do the right thing, with the carrot of incentivisation and the stick of making sure that there are financial penalties and clear downsides for businesses that do the wrong thing.
Chris Stephens
The Minister says that the Government’s position is that they will legislate when they need to. We waited four years for the Taylor report, and there is still no legislation. When do the Government intend to introduce any kind of employment Bill to deal with unfair practices in the workplace?
Paul Scully
We published the “Good work plan”, in which we accepted many of Matthew Taylor’s reviews, but we did not have to wait for an employment Bill to begin progress on this. We have closed the loophole which saw agency workers employed on cheaper rates than permanent workers, we have quadrupled the maximum fine for employers who treat their workers badly, and we have given all workers the right to receive a statement of their rights from day one. We do not have to always reach for primary legislation first when we can be doing other things to make sure that we can stand up for workers across the UK.
Andy McDonald
The Minister says that he does not have to reach for primary legislation, but when is he going to do anything at all? He has stood at that Dispatch Box for years, wrung his hands over the pernicious practice of fire and rehire, and done diddly squat. If we are going to have to wait for some other document from a new Member of Parliament, where is it and when are we going to get it? The only message that is going out from this place is that this Government will do nothing about fire and rehire, and bad bosses can carry on as before, continue these practices and cut people’s wages—it is either that or they will lose their jobs. That is the message that leaves this place today.
Paul Scully
I am sorry if the hon. Member feels that I have been here for years. I think I have been here for only 18 or 19 months, but it does seem like years, so perhaps I am boring for Britain in talking about workers’ rights and standing up for those rights. None the less, we are acting on this, and I will develop my speech to show exactly how we are doing so.
Bob Stewart (Beckenham) (Con)
I take another message away from this debate. I take away the message that the Government understand that there is a real problem, and are going to get it fixed as soon as possible.
Paul Scully
My hon. Friend is absolutely right. We have heard about reaching for primary legislation. We have had a very reasonable debate which, as I have said, was opened in a very reasonable way by the hon. Member for Brent North. We heard a forensic response from my hon. Friend the Member for Newbury, who brought her expertise to the debate with such élan and showed how we can keep the flexibility of employers to be able to restructure and reconsider their future, while making sure that we can cover the most egregious cases of bully-boy tactics from rogue employers.
Shaun Bailey
First, I am sure the Minister will agree that the hon. Member for Newbury (Laura Farris) is not just some “new Member”, but an experienced employment barrister who has practised in this field for some time. Secondly, let me return to a point that has been articulated by my hon. Friend for Newbury in particular. If we are going to make law, it has to work on the ground, because otherwise the only people whose pockets we are putting money in are the lawyers. It is as simple as that, is it not?
Paul Scully
My hon. Friend has hit the nail on the head. What we have on this side of the House is the expertise that we are bringing to bear to try and solve the problem, rather than just throwing things around. Earlier, someone accused the hon. Member for Newbury of over-egging the cake; in one of the other Front-Bench speeches, we heard, basically, no cake but a lot of egg. We cannot take a Poundland Arthur Scargill approach to this; we have to get it right. I hope that Pepco, the owner of Poundland, will forgive me, as the retail Minister, for dragging down its reputation.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
Reference has been made to messages going out from the House. It is important to make one thing clear to those who have been potentially misled by some of the remarks made by Opposition Members. There are already steps that people can take if they are dismissed unfairly. We should not lead people to believe that they have no legal protection if an employer dismisses them claiming a business need that was not really there.
Paul Scully
My hon. Friend is right. We heard another accusation, in relation to whether or not those on this side of the House are uncaring when it comes to workers’ rights. What it boils down to is this: would an employee facing a rogue employer using a bully-boy tactic rather have a solution that protects their rights, or would they rather have a jabbing-finger Opposition politician who relies on an unstable future for such workers for his or her political future?
Apsana Begum (Poplar and Limehouse) (Lab)
Ethnic minority workers have faced hire and rehire tactics at a disproportionate rate—nearly twice the rate of white workers. They have also disproportionately borne the brunt of the pandemic. Does the Minister not believe that the message he is giving today does not show the urgency needed to address the fact that they are literally dying in the pandemic without adequate protections?
Paul Scully
The hon. Lady raises very important points about the situation facing ethnic minority employees, but that is why we are acting. It is why we sought quantitative evidence from ACAS. It is why we charged ACAS to come up with guidance in the first instance. There are plenty of other things we can look at, but as well as giving employers certainty in knowing how they should approach the situation, the guidance allows employment tribunal judges to make sure they are consistent with their judgments, too.
We receive lots of correspondence—I get a lot, not least from Members of this House sharing their constituents’ concerns—and I can see how deeply distressing it is for those who face changes to their pay, working hours, sick pay or other benefits. That may happen after years of service to their employer or to those new to the world of work. Losing one’s job through redundancy and dismissal is clearly something everybody wants to avoid. I speak to businesses every day and I know the vast majority of employers want to do the right thing by their employees. For most employers, decisions to change terms and conditions are not taken lightly, nor is the choice to let members of their workforce go. Good employers know that investing in their workforce and not treating them badly is the best way to increase productivity.
Jerome Mayhew (Broadland) (Con)
We have heard in the debate, from right across the House, that the Bill is aimed at bad employers and at removing this as a negotiation tactic. The problem with the Bill, however, is that it would actually damage the ability of every single company—every good company—to survive when faced with an emergency. It would lead to higher unemployment, as this has where it has been tried, both in Ireland and in Spain. Does the Minister agree that the high youth unemployment in Ireland of 31.7%—[Hon. Members: “Speech!”]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Ladies who are heckling me from the Labour Benches are quite right. The hon. Gentleman should not be making a speech. He is making an intervention. He can make two or three interventions, but he cannot make one long speech.
Paul Scully
Thank you very much for that clarification, Madam Deputy Speaker. My hon. Friend makes a really interesting point about unemployment.
Steve McCabe (Birmingham, Selly Oak) (Lab)
On a point of order, Madam Deputy Speaker. It appears to me that there are considerably fewer Members in the Chamber now than voted against the closure motion you granted earlier. That would tend to give credence to the idea that the Government Whips have deliberately organised their Back Benchers to wreck the Bill by voting against the closure motion and then sent them home. Is it in your gift to grant a second closure motion, so that we can now test the will of those here in Parliament?
Madam Deputy Speaker
I thank the hon. Gentleman for his point of order, which is a perfectly reasonable one and one that had crossed my mind. However, I have come to the conclusion that, with everyone in the Chamber having been sitting here since 9.30 am, the Tea Room is probably full to overflowing at present. I am therefore not inclined to consider a second closure motion, having taken the will of the House less than an hour ago. That does not create a precedent for not doing so, but I am giving the hon. Gentleman a straight answer to his straight question.
Paul Scully
Thank you for that clarification, Madam Deputy Speaker. Indeed, I think Members from both sides of the House are taking advantage of the Tea Room, because both sides are lighter in numbers at the moment, but I always bow to your perspicacity. I would have thought that, in the last 20 minutes or so of the debate, Members pushing the Bill would want to hear the Government’s response to the merits or otherwise of the Bill, and what we are trying to do about the issue.
Peter Dowd (Bootle) (Lab)
The House of Commons Library has produced an excellent report on this subject, which says:
“Professor Alan Bogg, a Professor of Law at the University of Bristol, argued that under the current law the balance of power lies too much with the employer”.
Does the Minister agree?
Paul Scully
I think it depends on which employer. We are trying to make sure that we can root out bad employers who fail to understand that investing in their workforce and respecting their workforce is good for business as well as good for the workers. As Business Minister, I speak to businesses every day and I know that the vast majority of employers want to do the right thing. When it comes to fire and rehire, I have always been very clear that we expect all employers to treat employees fairly and to consider dismissal only as a last resort when all other options have been exhausted. It is completely unacceptable to use threats of fire and rehire as a negotiating tactic.
Paul Scully
I will not for a minute, because I want to make some progress.
It is right and proper, however, that we consider the evidence before we act, rather than just jabbing our finger, so that we avoid any course of action that runs the risk of doing more harm than good. I assure the House that the Government are taking the issue seriously, considering the evidence available from different perspectives and then taking appropriate and proportionate action.
It has been an extraordinary and difficult 19 months for all of us. The impact of the covid-19 pandemic on the whole country has been profound. Millions of people were on the precipice of losing their jobs, livelihoods and homes, but the forecast was wrong and the unemployment rate in the UK is at less than 5% and falling. That is 2 million lower than some of the forecasts and it is lower than France, the United States of America, Canada, Italy and Spain. As we heard from my hon. Friend the Member for Broadland (Jerome Mayhew), the high levels of youth unemployment in Spain and Ireland compared with the UK show that we are getting things right here.
We are making sure that bouncing back better means growing our economy, creating opportunities and creating jobs. I know how hard it has been in the past couple of years, despite the fact that we are now on our way to recovery, especially for the many businesses that have had to shut their doors and take a significant economic hit to protect the public’s health.
Mrs Natalie Elphicke (Dover) (Con)
During the pandemic, I worked closely with the National Union of Rail, Maritime and Transport Workers, which was excellent in the negotiations with P&O Ferries in my constituency of Dover and Deal. Will the Minister consider that kind of positive and collaborative working, which is clearly possible within the current framework, as a good example when looking at the balance of rights and interests of employers and employees in his work?
Paul Scully
My hon. Friend is right that good work should be done collaboratively by employers and employees, with Members of Parliament leaning into that as well. That is what happened in the case that was cited earlier of JDE and the Kenco factory in Banbury. Although the hon. Member for Brent North launched his campaign there, the situation was resolved through talks and negotiations within the current structure and without this legislation.
Sir George Howarth (Knowsley) (Lab)
If the Minister considers the history of employment reform, the abolition of child labour, health and safety at work and equal pay for women all required primary legislation. What is his alternative to primary legislation for this issue?
Paul Scully
I will cover that as I continue with my remarks. I am not sure that we should equate child labour with fire and rehire, but I will develop that argument.
Barry Gardiner
The Minister referred to JDE at Banbury and the fact that, ultimately, an accommodation was reached about the least disagreeable way forward. He must know, however, if he has spoken to any of the 291 workers involved in that dispute, about the huge stress that was placed on their families and the complete disregard that they felt they were shown by that company for all the loyal service that they had given it for years. To hold it up as an example of a resolution of a dispute is beneath him.
Paul Scully
I raised it as an interesting point. I do not underestimate the stress, and I will cover that later when I talk about the solution we have come up with. It was a resolution, but none the less we want to get rid of the bully-boy tactics—the use of fire and rehire as a tactic of negotiation—because that should never be able to happen. As we have said, it has been exacerbated by the pandemic, but we want to make sure that we get our resolution and our approach correct so that it does what it says on the tin rather than have some of the unintended consequences that we have heard about today.
I was talking about the recovery. We have one of the fastest recoveries of any major economy in the world, thanks to this Government’s will to act and plan to deliver. My right hon. Friend the Prime Minister said at our conference that we were embarking on a change of direction for the UK economy, away from the broken model of low wages, low growth, low skills and low productivity; away from a broken model underpinned by reliance on uncontrolled immigration to keep wages low. We want to build back better in a new direction towards a high-wage, high-skill, high-productivity economy, which the people of this country—workers and employers—need and deserve.
A key part of the building of that economy will be to continue to champion a flexible and dynamic labour market, creating the conditions for new jobs, protecting existing ones and maintaining the UK’s excellent record on workers’ rights—one of the best records in the world.
Aaron Bell (Newcastle-under-Lyme) (Con)
Is it not the case that now, with unemployment lower than before the pandemic, the bully-boy employers that mistreated their workers will find that those workers—this is the genius of capitalism—will go and look for jobs with better employers?
Paul Scully
My hon. Friend is absolutely right. We are taking proportionate and appropriate action on the issue of fire and rehire, but that must avoid any course of action that runs the risk of doing more harm than good, increasing the risk of collapsing businesses and subsequent increasingly redundancies and unemployment. I have real concerns about the approach in this Bill, as it would significantly increase administrative burdens and costs to employers, when they are already facing challenging circumstances.
I want to assure the House that the Government take reported misuse of fire and rehire really seriously, and we are continuing to assess the evidence available from different perspectives. I will set out today what I believe to be a proportionate response to the available evidence on the practice of fire and rehire. It is an approach that encourages best practice by employers, protects workers from unscrupulous employers and, above all, protects jobs and livelihoods by not forcing employers into a situation where they need to make redundancies or close entirely. That is an approach which, in line with the Government’s actions over the past two years, has supported businesses, livelihoods and jobs through the profound impact of the covid-19 pandemic on the whole country.
Brendan Clarke-Smith (Bassetlaw) (Con)
I thank the Minister for being generous with his time today. He mentioned burdens. We have spoken about ACAS today and there is also the employment tribunal system, which currently has a burden to get through. Does my hon. Friend share my concern that one of the unintended consequences of the Bill is that it could add to that burden and lead to more workers not being able to resolve their problems?
Paul Scully
My hon. Friend, typically, is absolutely right. One of the unintended consequences of the Bill is that it adds extra layers within the process. It risks adding pressure on the employment tribunal service.
Let me set out what we know about the practice of fire and rehire. During the coronavirus pandemic, the issue started gaining attention through high-profile cases, many of which we have heard about today. I was deeply concerned by reports over the last year that some employers might be turning too soon to firing and rehiring employees and were using this as a tactic in negotiations to put undue pressure on workers to rush into accepting new, and often worse, terms and conditions, or face losing their jobs. That is why we asked ACAS to conduct an evidence gathering exercise to learn more about the use of fire and rehire. We wanted ACAS to do this because of both its expertise and its impartiality. Businesses, employee representatives and other bodies were all included in that report. I want to take this opportunity to set out the key findings of the ACAS report, which was published on 8 June.
Much of the attention given to this issue was driven by high-profile cases with large employers and unionised workforces. Those cases include instances in which fire and rehire had been threatened, in some cases leading to dismissals; in other cases agreements had been reached. However, ACAS found that fire and rehire is neither a new phenomenon nor concentrated in a particular sector or type of employer. It seems to have been used by employers in the years before covid-19 as well as during the pandemic. Fire and rehire is used in a range of circumstances, including in redundancy scenarios, both to minimise redundancies by cutting payroll costs and to enable the maximum reduction in headcount, for example by changing the working hours of remaining staff, as we have heard.
ACAS suggested that there was a sense that employers’ ability to fire and rehire was being used earlier in contractual negotiations than before, but it was unable to establish whether that was linked to business challenges due to covid, or whether the timescale available to reach agreed solutions was shorter than at other times.
The parties that ACAS involved in the evidence gathering agreed that the use of fire and rehire should be limited. Views on less acceptable use focused on three areas. The first was whether negotiation was conducted fairly and in good faith, with concerns focusing on fire and rehire being used as a threat, as I have said. Secondly, while some employers may have a genuine business need to vary terms and conditions, there are concerns that some are exploiting the circumstances of the covid-19 pandemic to drive through disproportionate or longer-term changes.
Paul Scully
I have 15 minutes; I will give way in a second.
The third area was whether fire and rehire is being used deliberately to break continuity of service, to restrict access to employment rights and protections among employees and workers. We share those concerns, and I will set out in a second—as long as I have time—the existing protections, as well as further steps that the Government have taken to prevent the misuse of fire and rehire.
Grahame Morris
A number of Conservative Members have referred to the ACAS code, and in particular section 1, and the fact that there is an alternative means of redress for workers who have been unfairly dismissed. During the debate, someone sent me a very long list of companies, including British Airways, where tens of thousands of workers were affected. I wonder how many people in the cases the Minister referred to have been able to achieve redress through the existing arrangements and how many would benefit from a Bill to end fire and rehire.
Paul Scully
I would be interested to see that list. As I said, we want to make sure that we can tackle that early basis, which I outlined earlier.
As I said, we are considering fire and rehire from all angles, and we have continued to gather and review evidence beyond the ACAS report. It is difficult to find robust evidence on the practice, because what is seen by workers as a threat or tactic can be seen by employers as necessary behaviour to move negotiations forward and out of deadlock. What is a reduction of terms and conditions for workers can sometimes be necessary organisational change for employers.
We heard a bit about the various surveys that have been going on. The hon. Member for Brent North referenced an earlier CIPD survey. We now have further survey data based on a sample of more than 2,000 senior HR professionals and decision makers in the UK. Fieldwork for that CIPD employment outlook survey was undertaken during the summer, and it found that 3% of employers with two or more employees used fire and rehire to reduce employment terms of some or all of their staff, and a further 19% of employers said they had changed terms and conditions through consultation, negotiation and voluntary agreement. Around half of those who said they had made changes to pay, location or enhanced entitlements said that they had improved those terms.
The Office for National Statistics business impact of covid-19 survey found that around 3.1% of businesses had reduced terms and conditions since 2020. While the evidence does suggest some use of fire and rehire, it does not allow us to fully understand the circumstances of the employer and the rationale or proportionality of the use of fire and rehire. It is important to consider those business circumstances as we look to draw up solutions.
I would like to draw the House’s attention to the voice of employers, about which we heard much from my hon. Friends the Members for Thirsk and Malton (Kevin Hollinrake), for North East Bedfordshire and for Rugby (Mark Pawsey). The CIPD has shed light on how the
“impact of COVID-19 has had a huge effect on employers, causing operational disruption, increased supply costs, loss of revenue, reduced productivity. They have had to react, adapt and effect change to their processes.”
The context of heightened disruption and business challenges has also meant that some employers have been forced to consider firing and rehiring their employees where an agreement cannot be reached to vary the employment contract. We have said that that should be considered as an absolute last resort if changes to employment contracts cannot be found through negotiation.
The evidence I have just set out shows there is some use of firing and rehiring, or the threat of doing so, by at least 3% and potentially up to 9% of employers to reduce the terms and conditions of some or all staff. Although the evidence does not provide a full understanding of the employers’ circumstances, this House should be left in no doubt that the Government will always continue to stand behind workers and to stamp out unscrupulous practices where they occur.
Existing legislation already provides employers with the right baseline for setting terms and conditions for their workforce, including on the minimum wage, annual leave, statutory sick pay, parental leave, pay entitlements and pension contributions. Above that statutory baseline, employers are rightly free to offer the terms and conditions of employment that best suit their business needs. In doing so, they must always act fairly and not discriminate unlawfully on the basis of a protected characteristic such as race, sex or disability. The valid variation of contractually binding terms and conditions usually depends on mutual agreement between the employer and workers as two parties to the contract.
The employment contract itself may contain a clause expressly allowing variation. Such clauses are usually limited to specific circumstances, and they tend to be interpreted narrowly by courts and tribunals. Should an employer seek to enforce contractual variation without agreement, there are a number of legal obligations and protections with which they may need to comply, depending on the circumstances.
A dismissal may be wrongful if the employer fails to provide the relevant statutory or contractual notice period to terminate the contract. There may be a breach of contract or constructive dismissal if changes are imposed unilaterally by the employer. As we have heard, there are also collective redundancy consultation requirements that apply where there are proposals to dismiss 20 or more employees at one establishment within a 90-day period for reasons not related to the individuals concerned.
These all require an employer to provide certain statutory information and to engage in discussions with a view to reaching agreement either with trade union representatives, where there is a recognised trade union, or with other elected representatives. In workplaces where there is a recognised trade union, employers are prohibited from making offers to workers with the sole or main purpose that any terms of employment will not or will no longer be determined by collective agreement with the union.
It is not all about what the law requires. It is in businesses’ own interest to have committed, motivated staff who are properly engaged in decisions about the future. We have seen in the press and the media the considerable reputational and practical risks, many of which have been cited today, to companies that look to pursue this route. The CIPD wrote:
“Employers must recognise that this approach creates a high risk of legal claims, reputational damage and an adverse effect on employee relations. It should only be undertaken after extensive consultation and consideration of all other alternatives.”
As we have heard, in the vast majority of cases, businesses want to do the right thing by their employees. I am determined to help them do this and to make sure that we find the best approach for both employers and employees. Although I do not believe we should legislate to stop the practice of fire and rehire, and certainly not in the heavy-handed way proposed by the Bill, the Government are taking action.
Earlier this year, we asked ACAS to produce more comprehensive, clearer guidance to help all employers to explore other options before considering fire and rehire. ACAS is well placed to provide that guidance, being an independent Crown non-departmental public body that plays a vital role in promoting and maintaining good industrial relations between employees and employers. We are all well aware of the potential pressures on business as we continue to undergo the impacts of covid-19, but that ACAS guidance will help to set out best practice to employers who are considering how to solve problems that might require contractual changes.
The Government are also taking action in one of the areas where ACAS found that fire and rehire was being used, which is to interrupt the continuity of service. Certain employment rights in the UK require a period of continuous employment, so it is right that we find the right balance between worker protection and flexibility in the labour market. Continuous service is where an employee has worked for one employer without a break, and we will be introducing a measure to extend the permissible break in service from one week to one month as soon as parliamentary time allows. That measure will make it easier for those with intermittent or flexible working patterns to access employment rights, and it will deter businesses from engineering breaks in employment to deny individuals their important employment rights.
To address the Bill specifically, it seeks to amend the law relating to workplace information and consultation, employment protection and trade union rights. [Interruption.] I am glad that the right hon. Member for Islington South and Finsbury (Emily Thornberry) wants to hear my thoughts, as she has turned up for the last 20 minutes of the debate. She did not feel the need to hear the debate itself.
I have met Members of the House and trade unions to discuss the issue, and the discussions have made plain to me the anxiety and distress that has been caused. As the Bill covers a lot of ground, I make it clear, for those Opposition Members who are wearing the badges, that it will have the effect of banning fire and rehire, if enacted. It will leave us in a space where employers may be forced to make redundancies. It will also significantly increase the pressure on the employment tribunal system, as we have heard, when the right priority is to reduce the backlog.
Proposed new section 187A would introduce new consultation requirements for establishments and undertakings where there is a real threat to continued employment. The Government are perfectly clear that, should employers seek to change terms and conditions, they must seek agreement. The threat of fire and rehire should never be used as a negotiation tactic.
In addition, collective redundancy law already provides that, should an employer propose to make 20 or more people redundant in a single establishment within a 90-day period, it must consult with employee representatives. However, this legislation would introduce onerous new requirements on employers in situations where they need to make business-critical decisions. Those requirements would be additional to the collective consultation requirements already in place.
The legislation includes situations where decisions may have to be taken to terminate the contracts of 15 or more employees for reasons other than conduct or capability, or where anticipatory measures are envisaged that are likely to lead to substantial changes in work organisation or contractual relations affecting 15 or more employees.
Proposed new section 187B would place a higher duty on employers to disclose information to allow employee representatives to engage in consultation. The Government already have clear guidance that, if an employer needs to change a contract, the first step is to talk with employees or employee representatives, such as a trade union. The guidance that ACAS is producing will help to set out the best practice for employers considering how to solve problems. In addition, the ACAS code of practice on the disclosure of information to trade unions for collective bargaining purposes sets out the respective responsibilities of employers and employee representatives in matters related to collective bargaining.
Proposed new section 187C would introduce a right for employee representatives to complain to the Central Arbitration Committee about an employer’s failure to consult or disclose information. The CAC is an independent body with statutory powers, but under the Bill, should the CAC find that an employer had been remiss, it could refer it to ACAS for conciliation. If ACAS was of the opinion that further attempts at conciliation were unlikely to result in a settlement, it could then refer it back to the CAC. For complaints referred and returned through ACAS, and where settlement had not happened, the CAC could hold a hearing and determine the complaint. It could then make a declaration stating whether it found the complaint well-founded, wholly or in part, and the reasons for its findings. While the CAC could choose not to recommend a course of action, such as referring to ACAS for early conciliation, it could set out steps to rectify the error and the timeframe in which that should be done.
The House can see that the Bill would add extra layers, which would affect the flexibility of the situation for employers seeking to make business-critical decisions. It is an incredibly complex situation, and we would be adding bureaucracy and extra process when they need to make a decision quickly to protect the jobs and livelihoods of those people who have been mentioned throughout the entirety of this debate. I have real concerns about the approach in the Bill, as it would significantly increase administrative burdens and costs for employers in a situation where they are already facing challenging circumstances.
Proposed new section 104H would disallow an employee not agreeing to reduced terms and conditions as a substantial reason for dismissal and remove the qualifying period of two years to bring forward an ordinary unfair dismissal claim. That would remove the legal ground on which employers may be able to dismiss and re-engage an employee who has not agreed to changing their terms and conditions.
While these measures could result in a decline in the use of firing and rehiring, they would present a significant change to the current framework and could have unintended consequences for businesses and employment tribunals. The hon. Member for Brent North has couched this Bill as proportionate to the issue, but it would have the effect of banning fire and rehire and the unintended consequences of such actions could be severe. For instance, setting that higher threshold for dismissal and for consultations with trade unions on changes to terms and conditions may mean that the cost for employers is so high that they choose an easier route, such as redundancy; in effect, if you get rid of fire and rehire, you end up with fire, which is no good to employees up and down this country.
In the last six seconds available to me, may I just say that we are looking at this Bill, we will act and we do not need primary legislation to do so?