Fire and Rehire Tactics

Chris Stephens Excerpts

Wednesday 15th June 2022 Westminster Hall

[Mr Dhesi]

My hon. Friend makes an excellent point and with a great deal of wit.

While the Government can do all the things that I have outlined, it seems that supporting workers’ rights has been abandoned at the bottom of the pile. It is not a priority for this Government, who seem to value their own job security above that of the average working person.

What does the Prime Minister expect from our great British workforce? Under this Government, are workers just meant to put up and shut up about their inadequate pay, conditions and benefits, without having adequate legal protections? Thankfully, due to the excellent work of unions such as Unite, Unison, GMB, the Transport Salaried Staffs Association or TSSA, the National Union of Rail, Maritime and Transport Workers or RMT, ASLEF and others, there is some support and respite from fire and rehire for employees. However, without legislation, I fear that this practice will persist.

It is clear that we need to outlaw fire and rehire. We do not need some sort of consultation but to outlaw it and urgently introduce a Bill to strengthen workers’ rights. Lip service will not stop fire and rehire; an effective ban will. However, Government plans on a statutory code fall woefully short and even then the Government are struggling to implement the bare minimum required. Current Government proposals would mean that the practice of fire and rehire remains legal, consultation procedures would not be improved and workers would continue to be dismissed for not agreeing to an inferior contract. Quite simply, all that that will achieve is to increase a company’s financial calculation before it uses fire and rehire tactics regardless.

We already know that the Government plans do not work. P&O Ferries calculated that it was financially worthwhile foregoing consultations, despite knowing that they were necessary, before cutting almost 800 jobs and replacing those employees with agency workers. P&O’s chief executive said:

“I would make this decision again, I’m afraid.”

Unscrupulous employers are acting without consequence. Companies have examined our current legislation, deemed that it is not fit for purpose and then exploited it. Failing to turn the tide now will be a green light for other employers to behave in exactly the same way.

P&O Ferries did not act in a vacuum. Its decision came after immoral fire and rehire tactics were used persistently throughout the pandemic. British Airways and other such companies were called “a national disgrace” by the Transport Committee for their actions, which put thousands of jobs at risk and led to my inbox being flooded by messages from concerned Slough constituents who work at Heathrow airport. Employees who had worked for BA for decades were threatened with being cast off at the beginning of a global pandemic, which is unforgivable. It was only due to the excellent work of unions on behalf of the workers involved that deals were reached and jobs were saved, but it should not have had to come to that.

British Gas, which is owned by Centrica, threatened the livelihoods of 5,000 employees, using the threat of coronavirus as a smokescreen to act unethically against many of my Slough constituents, and I know that many other right hon. and hon. Members’ constituents were also affected. Before an agreement was reached that brought the dispute to an end, there were 44 days of strike action and 500 workers were dismissed. Again, without the unions thousands more workers would have been left without a job and without representation.

[Chris Stephens (Glasgow South West) (SNP)]

The hon. Gentleman and I walked to this debate together from the main Chamber, where there is severe trade union bashing going on from the Government side. Is that not the reality of the current Government, namely that they are too busy bashing trade unions, not working with them?

[Mr Dhesi]

The hon. Gentleman makes an excellent point. That issue is exactly what we discussed as we made our way from the main Chamber into Westminster Hall. The Government are trying to pick a fight with unions rather than dealing with issues or coming to the negotiating table. For example, the hugely disruptive rail strikes, which will have an enormous impact on many of us, could have been resolved by now if Rail Ministers actually done the job that they were supposed to do.

As I was saying, quite frankly the Prime Minister has job security that employees can only dream of. Put simply, fire and rehire is not a negotiating tactic but a direct threat to workers, it has no place in our modern Great Britain, and the Government should be ashamed that fire and rehire has been allowed to proliferate on their watch.

I hope that the Minister has some good news for the thousands of people who have been affected by this abhorrent tactic, and for the millions more who could be at risk from it. It is disappointing that not a single Conservative colleague—apart from the Minister—has come to speak for their constituents. We should be acting in cross-party solidarity to battle against fire and rehire on our constituents’ behalf, and to press Ministers to finally introduce legislation.

We should have working standards that we are proud of and that celebrate our country’s fantastic workforce, but the Government seem intent on a race to the bottom when it comes to workers’ rights. Warm words will not do it any more; clear-cut legislation will.

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[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to see you in the Chair, Ms McVey. While I will not be as impertinent as my hon. Friend the Member for Glasgow East (David Linden), it is rather disappointing that we have not heard from one Government Back Bencher in this debate. I would have thought that this issue affected workers right across these islands—across every nation and region of the UK—so I would have expected at least one of them to contribute. It is disappointing that that has not happened.

I congratulate the hon. Member for Slough (Mr Dhesi) on giving an excellent speech to open the debate. I refer to my entry in the Register of Members’ Financial Interests, and particularly to my role as chair of the Public and Commercial Services Union parliamentary group and my membership of the Glasgow City branch of Unison—one of the largest branches in the UK. I look forward to going to the Unison conference tomorrow and seeing my fellow Glaswegian delegates.

It is clear that this practice has been growing for decades. Under Labour control, Glasgow City Council was using the practice of fire and rehire in 1990s. I say that not to make a cheap political point, but to show that the practice has, as the hon. Member for Strangford (Jim Shannon) says, been growing for too long. My real fear is that the threat of fire and rehire—dismissal and re-engagement, to use its legal term—is used as a negotiating tactic before negotiations even begin. Some employers hold that over trade union and employee representatives’ heads, saying “This is what we can do”, before negotiations even start. That leads to cuts in terms and conditions and, indeed, dismissal and re-engagement, which has been going on for far too long.

Other hon. Members have referred to the disgusting Zoom meeting where P&O Ferries workers were fired—by a particular person, who, as I understand it, is a former employee of Royal Mail, and who did exactly the same thing to Royal Mail staff, threatening them. He is not a friend of the worker by any means. Firing staff by Zoom was one of the most disgusting things that I have ever seen. Frankly, the Government should have put forward an emergency Bill to deal with fire and rehire at that time, or they should have put it in the employment Bill. I remind Members that that Bill was in the Conservative party manifestos for 2015, 2017 and 2019. We are still waiting for it seven years after it was first promised.

The Minister said in Hansard on 25 January—not a date that Scots can forget because it is, of course, Burns day—that there would be an employment Bill “in the Queen’s Speech”. There was no employment Bill in the Queen’s Speech, as other hon. Members have mentioned. That is important for a number of reasons, as we are now seeing, because the casualisation of fire and rehire interferes with people’s worker status and cuts terms and conditions. Those of us on the Work and Pensions Committee know that; for the past three weeks, we have been discussing the impact that fire and rehire—and the lack of an employment Bill—has on occupational pensions, because it affects auto-enrolment. The consequences are devastating for wages and pensions, including occupational pensions, which are deferred wages.

I once again outline the SNP’s complete opposition to the appalling practice of fire and rehire. I note that most EU countries have some form of block on fire and rehire, and it is illegal in some countries. Once again, we find the United Kingdom lagging behind Europe when it comes to worker protections. I am concerned that that signals a race to the bottom on standards, as the UK risks falling behind the European Union on basic workers’ rights.

In the cost of living crisis, job security is perhaps more important than it ever will be. Firing workers in this way is wrong in any circumstance, let alone doing so during a cost of living crisis and an economic crisis. I question the Government’s conscience and thinking in not tackling this issue by legislative means. Reform is long awaited and will be crucial. As many hon. Members have touched on, the impact of fire and rehire on black and minority ethnic workers and women is considerable. I recommend that the Minister reads the TUC report of January 2021 in relation to in-work poverty and adequate living standards for many workers. We have had debates on in-work poverty fairly recently, and I am sure that we will have more, but I am concerned that fire and rehire continues to lead to in-work poverty for many workers across these islands.

I commend the work of my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), who has just concluded his remarks in the Chamber and is not in this debate. He was, of course, the first person to put forward legislation to end the practice of fire and rehire. He has Glasgow airport in his constituency, so he has had the British Airways issues, Rolls-Royce in Hillington and at least one other employer that engaged in fire and rehire. The pressures on workers in his constituency were quite considerable, and his Bill certainly has my support and that of my colleagues and many Members across the House. He will probably be tabling that Bill again tomorrow, and I encourage all Members of the House to support it. He has the support of more than 100 MPs who signed an early-day motion urging them to back that legislation.

My SNP colleagues and I have campaigned tirelessly to update current employment laws. Tomorrow, I will be tabling a Bill on this very issue—the workers (rights and definition) Bill—and I will of course be attaching fire and rehire to that. The Minister is listening to me intently, as he always does. I know that on 29 March, he announced the introduction of a new statutory code on the practice of fire and rehire. However, he will be aware that the Trades Union Congress has said that his plans “lack bite” and

“won’t deter rogue employers like P&O from trampling over workers’ rights.”

I hope the Minister will take this opportunity to respond to me about those remarks from the TUC, because although he is introducing the statutory code, it is certainly the view of everyone who has spoken in this debate that there should be firm legislation to ensure that the practice of fire and rehire is made illegal and ends.

Although employment law is reserved to this place, the SNP Scottish Government, with their Fair Work approach, are committed to doing everything in their power to protect employees from exploitative practices in Scotland throughout the cost of living crisis and beyond. There must be meaningful dialogue between employers and employees and their trade unions. I say that here because I suspect that we will not hear very much about it in the other debate that is going on right now. It certainly was not mentioned when my hon. Friend the Member for Slough and I were in the Chamber. I look forward to the Minister telling us that there will be legislation, and giving us a date for an employment Bill to tackle not just fire and rehire but the many other exploitative practices across these islands. As other Members have outlined, an employment Bill to protect workers’ rights is needed now more than it has ever been.

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

It is a pleasure to serve under your chairmanship, Ms McVey.

First of all, I congratulate the hon. Member for Slough (Mr Dhesi) on securing this debate on the use of fire and rehire tactics. It is an important issue, and we have heard today how worrying and unsettling it is for people when their employer wants to change their contract or puts them at risk of redundancy, especially when workers are already worrying about how they will pay their bills.

I speak to businesses every day and know that most employers try to do the right thing by their staff, and that decisions to change terms and conditions are not taken lightly. Let me be clear, as I have said many times, that we expect companies to treat their employees fairly and to do right by them. There are legal obligations and procedures that employers must abide by. We expect employers to act with fairness and compassion and to comply with the rules.

The Government have always been clear that the threat of dismissal and re-engagement on reduced terms—so-called fire and rehire—should not be used as a negotiation tactic. We expect employers to engage properly and meaningfully with their workforce and representatives, and to consider alternative options. Dismissal and re-engagement should be considered only as an option of absolute last resort, if agreement cannot be reached.

The UK has a strong labour market and its success is underpinned by balancing flexibility and workers’ protections. It is vital that we continue to strike that balance, while clamping down on the poor practices of some unscrupulous employers, some of which we heard about earlier. Our response to fire and rehire has been carefully considered, reflecting the seriousness of the issue and the importance of avoiding inadvertently creating a situation where employers have no choice but to make their staff redundant.

When the pandemic led to cases of firing and rehiring, we asked ACAS to conduct an evidence-gathering exercise to help us better understand the issue, so as to get behind the headlines and work out a quantitative and qualitative understanding. The Government then went further and asked ACAS to produce new guidance, to ensure that employers were clear on their responsibilities. That guidance was published in 2021 and clearly sets out the employer’s responsibilities when considering making changes to employment contracts.

The guidance is clear that fire and rehire should be used only as the option of last resort. I urge all employers to make themselves familiar with that. ACAS stands ready to help mediate disputes, should either party seek its services. ACAS has also published guidance for employers and employees.

The Government are going further still. As has been mentioned, on 29 March, I announced that we would introduce a statutory code of practice on dismissal and re-engagement.

[Chris Stephens]

Can I say gently to the Minister that there is some confusion in his position? He says that it is the Government’s view that fire and rehire should not be a negotiating tactic. Surely, the problem is how employers can go into negotiations if they can legally dismiss and re-engage. Is he saying that if an employer, or a representative, in a negotiation says, “We can dismiss and re-engage and we may very well do that,” they are in breach of the code that he has just outlined?

[Paul Scully]

I will come to the statutory code in a second and explain how that works. Even the hon. Member for Brent North (Barry Gardiner), who talked of banning fire and rehire and ran a campaign that involved many Members here, actually explained in the debate in the Chamber that his Bill would not ban fire and rehire. It would limit it but not ban it. Even he understood that, in certain circumstances, there needs to be that flexibility.

The statutory code includes practical steps that employers should follow if they are considering changes to terms and conditions and there is the prospect of dismissal and re-engagement. A court or employment tribunal will take the code into account when considering relevant cases, including those related to unfair dismissal. The tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the code where it applies.

Most employers do their best to comply with the law, but the code will clarify best practice standards and deter those employers who try to cut corners, pushing the bar even higher for employers who seek to do the wrong thing. We will hold a public consultation soon, to seek views from across employers, individuals, unions and beyond.

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[Paul Scully]

I will come to that in a moment.

I mentioned that ACAS has been helping us on both quantitative and qualitative data. We have moved to guidance, and are moving towards a statutory code, and my colleagues can see that action is taking place. Members have asked where my colleagues are. A number of them are in the main Chamber, tackling the issue of the rail strikes; if they go ahead, there is a distinct possibility that they will affect smaller businesses and workers. My colleagues are paying attention to that immediate risk to people up and down the country.

We have discussed fire and rehire on a number of occasions, and will continue to discuss it. As I have said, we want to eliminate the most egregious instances of its use. There has been a lot of conversation about the employment Bill. I must correct the hon. Member for Glasgow East (David Linden): our manifesto commitment was not to bringing forward an employment Bill, but to bringing forward measures that might be put in it. I bore all my officials and civil servants with my talk of the difference between output and outcome. I doubt any worker with a rogue employer is thinking, “I wish there was an employment Bill.” They are probably thinking, “I need carer’s leave,” “I need neonatal leave,” or, “I need flexible working.” Those are the things that affect people up and down the country; it is not that they need a single piece of legislation, tied up with a bow. That would be neat, clearly, but it is the measures to which we are committed, and that we will deliver.

[Chris Stephens]

Frankly, I think that implementing the 51 recommendations of the Taylor review does require a Bill. On 25 January, the Minister said that such a Bill would be in the Queen’s Speech. Why was it not?

[Paul Scully]

I will look back at my words, because I am not sure that I have ever pre-empted what Her Majesty was going to say. I will certainly look back at exactly what I said.

[Chris Stephens]

The Minister is being very generous in giving way. Let me quote Hansard for his benefit. He said, in a Committee chaired by the hon. Member for Shipley (Philip Davies):

“Clearly, the employment Bill, as the hon. Member for Glasgow South West knows, is primary legislation. It will be announced, when it comes forward in parliamentary time, in the Queen’s Speech.”—[Official Report, Third Delegated Legislation Committee, 25 January 2022; c. 24.]

Why was the Bill not in the Queen’s Speech?