Terms and Conditions of Employment

David Linden Excerpts

Tuesday 14th May 2024 Commons Chamber

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

I, too, refer to my entry in the Register of Members’ Financial Interests.

When I saw the Order Paper and an item titled “Terms and Conditions of Employment”, I thought that it was good news—after the 20 times the Government have committed to an employment Bill, perhaps we would actually see it. I thought that nearly seven years on from the Taylor review, of which almost 50 recommendations have not been enacted or brought before the House, we would have an opportunity to create dignity, fairness and an inclusive labour market, leading to a fairer and more equal nation. But what we have today is a snail step, albeit one that I will welcome, with some qualifications.

The reality is that for thousands of workers across these islands, terms and conditions of employment see too many working people become victims at the mercy of bosses looking to cut costs, which is exactly what fire and rehire is about. It is also about zero-hour contracts, bogus self-employment and short notice of shift changes, leaving workers with additional transport and childcare costs, but I want to concentrate on the evil practice of fire and rehire.

My hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), who has had to go to a Committee, has tabled two private Member’s Bills that seek to outlaw fire and rehire practices. The Bills are supported by over 100 MPs and the trade unions Unite, the British Airline Pilots’ Association and GMB. I listened carefully to the Minister’s exchanges with my hon. Friend and the hon. Member for Edinburgh West (Christine Jardine), and my scepticism about the order being approved today relates to what would happen in a tribunal case for unfair dismissal where a re-engagement order is placed on an employer following a dismissal, and the tribunal orders a reinstatement. We all know that very few cases in which a tribunal tells an employer to reinstate a worker who has been dismissed leads to a reinstatement, because employers will absorb the additional costs for failing to reinstate. I welcome the fact that there will be a penalty where fire and rehire has taken place, but the same principles are at play here.

I am afraid my scepticism relates to the fact that, as those on the Labour Front Bench have said, this order will not end the practice of fire and rehire. Large employers will get their calculators out and absorb the costs, like we have seen with British Airways and P&O. I saw the Business and Trade Committee’s extraordinary exchanges with P&O’s chief executive last week. I want to see real sanctions, so I ask the Minister to write to us and tell us how many tribunal cases where there has been an order to reinstate have actually led to a reinstatement. I understand that the rate could be as low as 3%, but I would be curious to know the figures, because I suspect that they could tell us what would happen with fire-and-rehire practices.

[David Linden (Glasgow East) (SNP)]

I agree with my hon. Friend, but will not companies such as British Airways, P&O and Asda, which have indulged in this behaviour, look at this as a balance sheet exercise and conclude that the penalty is so small that they can ride it out? Does that not make the case for the Government bringing forward an employment Bill to deal with the issue?

[Chris Stephens]

I agree that there should be an employment Bill but, exactly as my hon. Friend has outlined, our concern would be that large employers will get the calculator out and decide to absorb the cost. They will then, as they see it, take a smaller financial hit from paying a penalty than they would for fire and rehire. It is an evil practice, and I hope the Government will now consider ending fire and rehire.

--- Later in debate ---

[Kevin Hollinrake]

There are cases where these opportunities are abused—I do not deny that—but the hon. Gentleman is operating on the basis that it is the exception rather than the rule. It is our view, which he may disagree with, that the vast majority of employers do not treat their employees that way. There have been cases where a court has upheld the right of an employer to fire and rehire. Where the employer tries to restructure the company to save jobs, through a salary reduction of a few per cent. for everyone in the workplace, that is better than the business going down. The hon. Gentleman must see that there are some situations in which it is the only option for an employer, which operates in the interests of the wider workforce. It was the right thing to do in those situations. His describing it as an “evil practice” is wrong and misses the point, although there are abuses of the system, as he describes.

[David Linden]

Unusually, I find myself disagreeing with my hon. Friend the Member for Glasgow South West (Chris Stephens). Are there not scenarios in which the Government think that it is perfectly fine for somebody to be sacked and re-engaged? For example, when the Government led by the right hon. Member for South West Norfolk (Elizabeth Truss) were collapsing, Ministers resigned and were then reappointed afterwards. Sometimes it is in the Government’s interest to have that option, isn’t it?

[Kevin Hollinrake]

Well, there is no recourse to an employment tribunal in that situation, and there is certainly no uplift in the compensation that might be received.

I say to the shadow Minister that he should frame the order in its context. The majority of businesses in this country do the right thing by their employees, because they are run by honourable people and treating employees well is the right thing to do for business reasons. His approach of banning dismissal and re-engagement would cost jobs, as would having day-one rights in the area of unfair dismissal. Bringing forward a single category of worker would also cost jobs, and would create huge difficulties for many sectors. It is not just about the situations that arise in individual circumstances; it is about the fear of those situations arising for businesses when they are trying a new employee. That situation will strike fear into the hearts of many businesses across this country, and will cost jobs. The hon. Member for Glasgow South West (Chris Stephens) asked me how many people had appeared before an employment tribunal and then been reinstated. I do not know those numbers but I would be happy to see what numbers we can find for him on that basis.

This order will increase the deterrent effect of the code by adding the protective award for non-compliance with collective consultation requirements to schedule A2 of the 1992 Act. That will mean that where an employer is found to have unreasonably failed to comply with their collective consultation requirements, as well as unreasonably failing to comply with the code, the employment tribunal may increase the employee’s protective award by up to 25%. Subject to the approval of both Houses, the code and the order will be enforced before the summer recess.

The Government are committed to making the UK the most dynamic place in the world to work and to launch, grow and do business. The UK’s flexible labour market is key to economic growth and helping businesses to thrive. However, labour market flexibility must be balanced with appropriate safeguards. The House should be left in no doubt that this Government will always continue to stand behind workers and stamp out unscrupulous practices where they occur.

Question put and agreed to.

Resolved,

That the draft Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024, which was laid before this House on 22 April, be approved.