Fire and Rehire Tactics

David Linden Excerpts

Wednesday 15th June 2022 Westminster Hall

[David Linden (Glasgow East) (SNP)]

Thank you very much indeed, Ms McVey; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Slough (Mr Dhesi) on securing the debate and on opening it so well.

I have had quite a lot to do with the Minister recently. Although I have specific views on the lack of an employment Bill, I pay tribute to him for the constructive way in which he is working with me and my colleagues to ensure that we get neonatal leave and pay in statute—we have been pushing on that matter for a while. I thank my own trade union, Unite, for its helpful briefing in advance of the debate, and I will come back to a number of points on that.

I will not press this point too much given that you are in the Chair, Ms McVey—I know that you are quite an influential member of the Blue Collar Conservatives—but as the hon. Member for Slough was speaking, I was reflecting on the fact that workers’ rights are something that Blue Collar Conservatives should think about. There is no doubt that the British political landscape has changed significantly on workers’ rights. People on this side of the Chamber, and indeed people in Scotland, may not be happy about it, but there is no doubt that the Conservative-voting demographic has changed significantly, and it would be rather foolhardy of Conservative Members—particularly those who represent red wall seats—to overlook blue collar workers who have sadly been subjected to fire and rehire practices. I would not be so bold as to indicate, for the purposes of Hansard, whether the Chair is nodding.

It was interesting that during the Brexit referendum, people were regularly told that Brexit was about taking back control. I happen to believe that Brexit was a bad idea—I still believe that it was largely about deregulation and a bonfire of workers’ rights—but I reserved a degree of judgment post-2016, and the jury is still out on whether the Government take workers’ rights seriously.

As the hon. Gentleman said, the Government have promised time and again that an employment Bill would be introduced. It is quite telling that there is still no employment Bill three years into this Parliament, particularly when the world of work is changing. Ministers have to confront the reality: actions speak louder than words, so if Brexit was about taking back control and improving workers’ rights, an employment Bill should be forthcoming.

In some respects, I actually feel quite sorry for British Airways. It quite rightly got a lot of flak for its deployment of fire and rehire tactics, but it was not the first company to use them. Asda was doing it long ago, and as we have seen with the likes of P&O, people—bosses, frankly—are pursuing something that is completely immoral but not currently illegal. Without an employment Bill that properly enshrines workers’ rights post-Brexit, the likes of P&O, British Airways, Asda and so many other organisations will go down that path.

One reason why I am concerned that an employment Bill has not been introduced is because it is no secret that the current Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for Spelthorne (Kwasi Kwarteng) authored—with the right hon. Members for Witham (Priti Patel) and for Esher and Walton (Dominic Raab) and others—a book called “Britannia Unchained”. In essence, the book is about changing ways of work. Bear in mind that the authors are serving Ministers, one of whom heads up the Department that is responsible for workers’ right. I would not normally promote this book, but let me share a key quote from it:

“The British are among the worst idlers in the world. We work among the lowest hours, we retire early and our productivity is poor. Whereas Indian children aspire to be doctors or businessmen, the British are more interested in football and pop music.”

I hope the Secretary of State for Business, Energy and Industrial Strategy has changed his mind since he and his colleagues authored that book. The fact that in 2022, companies such as P&O, British Airways, Asda and many others can still get away with practices such as fire and rehire, suggests that the Government’s doctrine has not changed from “Britannia Unchained”. Many of us, particularly in a Scottish context, think that leaving Conservatives in charge of workers’ rights is akin to leaving a lion in charge of an abattoir.

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[Jim Shannon]

I thank my colleague the hon. Gentleman for his intervention. I agree with that, sincerely in my heart. As I said earlier, the Government have said that fire and rehire should not be used as a negotiation technique, but that it should also not be make illegal. Well, that is a legislative change that the hon. Member for Bury South wants to see, as well as everyone who has spoken and everyone who will speak afterwards. I want to see that legislative change in place as soon possible.

It is essential that an environment is created whereby people enjoy their work. I am very privileged to do a job that I always wished to do, but never for one second did I think that I, a wee boy from Ballywalter, would actually be here, so I am fortunate. People need to enjoy their work if they are to work hard and make a contribution to how their firm progresses. If staff are unsettled and unhappy in their work, for whatever reason, there is an onus on the employer to work harder to make them happy.

Moreover, employers rely on workers to fulfil goals and create successes, hence the need to prioritise their needs and not be dictated to. If someone wants their firm to be successful and do well, they need a happy workforce, and vice versa. I have six girls who work with me in my two offices, and I can say in all honestly that they seem fairly happy, so maybe this employer is treating them the right way. I understand how important it is to motivate staff and keep them happy.

[David Linden]

Although there are things that the hon. Gentleman and I disagree on politically, I had the great pleasure of visiting him in his constituency and meeting the staff in his constituency office. Would he reflect—as I hope will the Minister—that many of the staff who work for us would be appalled and would not stand for it if we turned around to them and said, “Do you know what? We are going to fire you from your job, but then you can come back and work for less pay, less holiday time and more uncertain hours”? Does he think that parliamentary staff, including the staff of the Minister and the Secretary of State, would sign up for that?

[Jim Shannon]

The answer, as we all know, is that they would not. This House protects the workers here by setting bands of pay, giving them the right conditions for their holidays and if they are sick. It does it here, so I think it should do the same for other workers, which is what I would like to see.

Employers must follow a set minimum dismissal procedure and a collective redundancy process is involved. The depth of this issue has to be met with scrutiny and we must hold business owners to the highest level of account to ensure that our workers are protected.

There definitely needs to be greater communication within Government. I say that with great respect, because the Minister knows that I hold him in the highest respect because of the way he does his job. When we ask him questions, he comes back with the answers—he really tries when giving us answers. I say that for no other reason than that it is the truth; I mean it and I want to put it on the record. There also needs to be greater communication in the devolved Administrations, where legislation may be the responsibility of the Northern Ireland Assembly, the Scottish Parliament or the Welsh Assembly.

We need to take action and protect our workers. Hire and refire is an unfair and unjust practice, and the Minister and the Government must take responsibility for the one in four workers who have experienced a downgrade in employment terms, whether financially or with other conditions, such as for sick pay. In this day and age, that is disgraceful. The aim is to tackle exploitative employment practices, increase clarity in the law and make employees aware of their rights.

This debate makes employees aware of their rights, but we need legislative change to protect them. I gently but firmly ask, on behalf of my constituents and all of those across this great United Kingdom of Great Britain and Northern Ireland, that the Government provide clarity on their stance on fire and rehire tactics. I want to see legislative protection, because the ultimate goal is to protect the workers.

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[Dame Nia Griffith (Llanelli) (Lab)]

I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on his excellent exposé and on all the work that he has done on this extremely serious topic, which affects the whole of society.

Security at work is absolutely fundamental to workforce productivity, but it is also fundamental to stable communities. It enables people to plan ahead and work out what they can afford, and it offers the necessary security to take on the tenancy of a home, or to take out a loan to buy a car that they might need to get to work. It is absolutely vital for people’s mental health, because wondering every single second whether they will have a job next week does nothing at all to ease stress or help someone’s mental health. There are enough difficulties in life, particularly at the moment, without having to worry constantly about work insecurity.

The growth of fire and rehire is absolutely terrifying, especially when we see what were considered to be respectable and “safe” companies, such as British Airways and British Gas, go down the route of using such tactics. People now rightly feel that no job is safe anymore. Of course, there have always been exceptional circumstances in which, sadly, jobs were lost, but that is very different from the current situation in which companies are seemingly using fire and rehire tactics with very little pretext other than as a cost-cutting exercise, with employees suddenly faced with having to accept much worse pay and conditions with very little warning. Having pay and conditions cut is bad enough, but it can also affect someone’s security of tenure. A permanent contract can be replaced with a short-term contract, with no guarantee that the fire and rehire process will not be repeated a year or two later. Sadly, this situation is not confined to the private sector; it is now affecting workers in many parts of the public sector.

I remind Members of the effect of the casualisation of the workplace. A young man in my constituency worked from the age of 18 in factory after factory, job after job. He did not have a permanent job before he was 25. He was a good worker, but he could only get agency work—last in, first out. Companies and employers are getting a higher and higher percentage of their workforce as agency workers. The workers are paid less, but it costs the companies more because the agency takes a considerable cut.

That has an impact on a young person who is setting out in life. I am sure most of us in this room were able, when we first started working, to go into a job with a stable environment in which we hoped to stay for a number of years. That young man eventually set up as a landscape gardener on his own because it had become intolerable to be pushed from pillar to post. This is in an area where there are many manufacturing opportunities, but the culture has become increasingly difficult.

[David Linden]

Is that not precisely the problem? Because an employee has such poor rights, they might become self-employed, where they will probably not have the security of a pension, sick pay and holiday pay, and they will be pushed further into insecurity. We therefore need an employment Bill, and we need to ban fire and rehire. We all know that the world of work is changing, so there needs to be a comprehensive package from the Government that includes banning fire and rehire. We need legislation that reflects what is happening in 2022, because time has moved on.

[Dame Nia Griffith]

Absolutely. As the hon. Member says, there are so many other costs—massive costs to society, the economy and the public purse—wrapped up in the culture of fire and rehire.

This causes constant worry, mental health concerns and disruption. It is okay when someone starts out as a single individual, but it becomes more complicated if they have a partner or children. It is complicated by how far they can travel to work and where the agency sends them. Deciding whether they can accept the gaps between work becomes even more of a nightmare, and of course they have responsibilities. It must be depressing for them to look at someone up the road who they thought had a very good job with British Airways, only to see that he, too, has been subject to fire and rehire and is being asked to sign a new contract. They may have thought that one day they would have a permanent job and security, and now they see older workers having to sign on the dotted line to take worse pay and conditions. That is nothing to look forward to, and it does nothing for the cohesion of society.

As the TUC has documented, 3 million workers in this country have been told to reapply for their jobs. We already have 3 million workers on zero-hours contracts or casual contracts and 5 million self-employed, some of whom are pseudo self-employed. As we know, that is a way for employers to get out of paying the full costs of employing them.

Not only is allowing employers to use fire and rehire bad for the workers, but it undermines good companies that want to play fair by their employees. The willy-nilly use of fire and rehire by unscrupulous employers to cut costs can catch decent employers unawares, undermine them and risk putting them out of work. That can spiral out of control and become a real race to the bottom—who can pay less and therefore cut costs and make more profit with less pay to the workers? This race to the bottom with lower wages leads to much greater reliance on benefits, at huge cost to the public purse.

We are also clocking up a pensions time bomb. The Minister may say that we have auto-enrolment, but there are thresholds for that and part-time workers, in particular, are likely to miss out. When we—the generation coming through now—get to pension age, what will we find? We will find that a far higher percentage have to rely on some form of state help because they have not been able to put money by. Why is that? Because it has gone into the pockets of companies that have not been playing fair.

I echo the words of my hon. Friend the Member for Bury South (Christian Wakeford) on the private Member’s Bill brought forward by my hon. Friend the Member for Brent North (Barry Gardiner) and his careful explanation of how it would work. Of course, we must not accept covid as an excuse—and it is nothing but an excuse. We all know that this is about increasing profit. There is also no truth in the statement “We cannot afford the current contracts.” We have labour shortages at the moment, so we have to afford it.

It is not just about fire and rehire, although that is the subject of today’s debate and is very important. We want much greater security from day one at work. I will not set out all of Labour’s manifesto commitments on this, but it is fundamental to our belief in a secure, cohesive and stable society that we should have security at work from day one.

The only solution to fire and rehire is an outright ban. That is not revolutionary; it is simply about respecting existing contracts and sticking to the law. A ban would be good for workers, productivity, community cohesion and the public purse. I therefore implore the Minister to take the issue seriously and introduce the necessary legislation without further delay.

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[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Ms McVey. First, I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing today’s debate and giving us an opportunity once again to highlight why the abuse of fire and rehire really needs a legislative response from this Government—not warm words and future promises but real, concrete action to tackle this national disgrace.

My hon. Friend made a number of very important points and he was right: this Government seem to have shown more interest in saving the Prime Minister’s job than in saving those of their own constituents. As has been mentioned, the fact that there is not one Tory Back Bencher here today shows people everything they need to know about where employment rights sit in this Government’s list of priorities. My hon. Friend was exactly right when he said that the Government’s pledged action will still mean that workers can be dismissed for failing to agree to worse terms and conditions. That is really the nub of it—that is what we need to put an end to.

All the Back Benchers who spoke today put the case very well, but I want to draw attention to some of the contributions—in particular, that from my hon. Friend the Member for Bury South (Christian Wakeford). He was right when he said that everyone, even the Prime Minister, knows that fire and rehire is wrong. My hon. Friend said that it was levelling down; I agree. He was also right when he said that it does not make sense economically, either. I am pleased that he spoke about our party’s green paper on employment rights, because that fantastic document will transform the lives of working people. It contrasts sharply with the lack of ambition that we have seen time and again from this Government.

My hon. Friend the Member for Warrington North (Charlotte Nichols) said that this tactic causes misery for many people and the majority of our constituents want to see an end to fire and rehire, so the Government would be doing something that was popular with the public if they listened to what we are saying. My hon. Friend rightly said that it is not enough to expect employers to do the right thing, because they do not all play by the rules. I pay tribute to her work as a trade union officer fighting against this practice. I refer to my entry in the Register of Members’ Financial Interests in that regard. We should think for a minute how much worse the situation would be if we did not have trade unions willing to defend workers’ rights. Sadly, all we hear from this Government are negative stories about trade unions and how they want to reduce their power, rather than any support for their defence of working people. I agree with my hon. Friend that tackling this practice is about what kind of country and society we want to see.

My hon. Friend the Member for Birkenhead (Mick Whitley) spoke of his decades of industrial experience as a trade unionist. I thank him on behalf of my constituents, whom he has represented on many occasions, for the work that he has done to support them. He has shown time and again how a good trade union can really make a difference and work constructively with employers, to the benefit of everyone. I commend him for the direct challenge that he made to the Minister about where we are going to end up. I suspect that my hon. Friend will be disappointed, but we all live in hope.

My hon. Friend the Member for Llanelli (Dame Nia Griffith) made some excellent points about some of the wider issues in the workplace, and said that the fundamentals were about job security and people making financial commitments. We do not talk enough about the impact on people’s mental health of the uncertainty hanging over them. She was right that fire and rehire is often used as a pretext for cost cutting. If employers get away with it, they will try it again. She rightly highlighted the expansion of insecure work. Many young people, like the constituents she referred to, do not have any experience of a secure job.

As we have heard, fire and rehire is not a new development. It has been around for as long as people have had jobs. Just because something has happened for a long time does not make it right or acceptable. Even the Prime Minister seems to agree with that, although, as we have heard today, there is little evidence of him wanting to do anything.

Why, if this power has always been there, is it coming to the public’s attention much more now? Sadly, in the last few years we have seen a proliferation of companies, including many household names, adopting fire and rehire tactics as a first port of call rather than the last. British Airways, Sainsbury’s and Weetabix are just three household names that have used the tactics, and there are many more less public-facing companies that are doing exactly the same. Wabtec and Valeo in Yorkshire are two more recent examples.

Of course, P&O is the most high profile and possibly the most egregious example of how the scales of justice are tilted too heavily against the ordinary men and women in this country who just want to do a fair day’s work for a fair day’s pay. They do not want to have the arrangement just for a while, until their employer decides it wants to move the goalposts and takes away their existing terms and conditions, presenting it as a fait accompli.

The reason we need action along the lines suggested by my hon. Friend the Member for Brent North (Barry Gardiner) in his private Member’s Bill, which the Government blocked, is that such cases have highlighted how employers price in the cost of riding roughshod over existing laws and conclude that it is a price that they are prepared to pay. They see their legal and moral obligations in the same light as they do the people who work for them—numbers to be counted, risks to be assessed and, in essence, just a barrier to making more money.

The Transport Committee said about British Airways that its use of fire and rehire was “calculated”. For too many employers, that is the case. Consultations are simply tick-box exercises, not that P&O even pretended one was necessary. Could the Minister update us on the progress in the P&O criminal investigation promised by the Prime Minister, or will that, like so many other Government promises, never come to fruition?

The genesis of fire and rehire is in the current workplace settlement, which places too much power in the hands of the employer and too little in the hands of the employees. This imbalance does not just manifest itself in this situation, but in a whole range of issues in the employment relationship. We could look at zero-hours contracts and the gig economy, or agency workers, as we have heard. Insecurity is baked into so many workplaces. It is little wonder that many people feel a sense of helplessness.

[David Linden]

I agree with the hon. Gentleman; he is outlining so many of the issues that we see in terms of workplace insecurity. It is quite clear, given the lack of an employment Bill, that this is not an area that the Government are interested in. Does he, as the Labour Front-Bench spokesman, agree with the Scottish TUC that it is important that we devolve employment law to the Scottish Parliament if Westminster will not act?

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[Paul Scully]

I will develop that in a second.

As I was saying, the chief executive of P&O Ferries admitted to breaking employment law. He demonstrated—not only in his actions on that weekend, but in the Select Committee hearing—absolute contempt for workers who had given years of service to his company. That was not just a case of fire and rehire, which is the subject of the debate; in the main, it was just fire, because the vast majority of those workers had no prospect of re- engagement. We have urged P&O to reconsider, but those calls have fallen on deaf ears.

[David Linden]

The Minister has probably made this point better than the rest of us: P&O’s acceptance that it was breaking the law very much makes the case for an employment Bill to strengthen workers’ rights. Anecdotally, the number of cases of fire and rehire is on the increase, partly because companies see others getting away with it. Do the Government hold any data on how often fire and rehire is happening, and if so, will they publish it? If they do not have that data, why not?

[Paul Scully]

I will talk a little about that in answering the question from the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), about what the Insolvency Service is doing in relation to P&O Ferries.

We engaged ACAS to better understand exactly what fire and rehire actually is. A lot of the reports in various media are not strictly about fire and rehire, because it is never quite as binary as it appears. However, there are some egregious examples, and I think we can all agree that we want to eliminate them, or at least push the bar so high that it is just not viable for employers to take that sort of action. As a result of the inability of P&O Ferries to hear not just what this House was saying but what the country was saying, my right hon. Friend the Secretary of State for Transport set out the nine steps that we are taking to force it to rethink its decision and to prevent such cases from happening again in the maritime industry.

To come to the shadow Minister’s point, the Insolvency Service is now pursuing its own inquiries. It has commenced formal criminal and civil investigations into the circumstances around the redundancies. Those investigations are ongoing, so I am not in a position to comment any further on them for the time being, but I wish the Insolvency Service every speed in its efforts, as we all want a result that holds P&O Ferries to the highest account.

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[Paul Scully]

As I say, our manifesto commitments remain. The hon. Gentleman will see employment measures come forward both in this Session and before the end of the Parliament, because we want to act. We have pledged to do many things, and we absolutely want to stick to those pledges.

The hon. Member for Glasgow East talked about productivity. I will not comment on individual workers, but there is no doubt that companies in the UK are less productive than companies elsewhere in the G7, so we need to work on our productivity as a nation, and as businesses. That involves a whole raft of things, including working practices, the relationship between employers and employees, and infrastructure. If we raised our productivity to German levels, it is estimated that we could add £100 billion to our economy. Those are pretty substantial gains, if we can get there.

[David Linden]

I caution the Minister against making too many comparisons with Germany, which has much higher statutory sick pay. If he wants to make international like-for-like comparisons, let us look at the whole package, and the wider picture.

[Paul Scully]

I am going wider than workers’ rights and productivity. That is why we are rolling out the Help to Grow management scheme for smaller businesses, and other things. This is huge. We need better transport connections. That is part of the levelling-up agenda. There are lots of things within that, and I do not underestimate what the hon. Gentleman is saying. Our employment landscape is very different from that in Germany. In Germany, they tend to ask permission—it is courts first there, whereas we tend to be tribunal led. There are big differences.

One of the key things I want to raise about productivity relates to what the hon. Member for Llanelli (Dame Nia Griffith) said. She was absolutely right to say that job security leads to a better, more productive, happier and more loyal workforce. That allows workers and employees to plan and it results in better mental wellbeing. That is why, by setting statutory minimums in legislation, guidance and codes, we want employers to go further. Frankly, it makes business sense for employers to go further, rather than follow the egregious example of P&O. What is the point of taking people on and training them, which involves costs, time and resources, only to then cast them aside and have to do the same thing again?