Covid-19: Employment Rights

Gavin Newlands Excerpts

Tuesday 17th November 2020 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

I beg to move,

That this House has considered the covid-19 outbreak and employment rights.

It is fair to say that the pandemic has stress-tested a great many things across our civic, political and private lives. Day in, day out, jobs are being cut in many sectors across our economy. The jobs market is no exception, and neither, sadly, are employment rights. For far too many people an employment contract offers zero protection and has been rendered worthless, but despite some warm words the Government have not lifted a finger to help.

My interest in fire and rehire stems from my duty as a constituency MP for Glasgow airport, from my role as a transport spokesman and from my membership of the Transport Committee. Firing and rehiring emanates from the aviation sector, and in particular from British Airways. Among our first witnesses when the Committee looked at the impact of covid-19 on transport was Willie Walsh, the then chief executive of International Airlines Group, which owns British Airways. The company had just announced huge job losses—roughly 12,000 from a workforce of 42,000 were to be cut, while the reward, if that word can be used, for those who attempted to remain was a threat that they would be fired and rehired on reduced terms and conditions. For some, the reductions in net take-home pay were simply savage, with cuts of 40%, 50% or 60% not uncommon.

The workforce were understandably traumatised. I received hundreds upon hundreds of emails from British Airways staff. I spoke to cabin crew in tears at the treatment meted out by Mr Walsh and his willing deputy, Mr Cruz, and other BA management. It seems that Mr Walsh tried to make some of these changes a decade or so previously but failed; the pandemic has seemingly given him perfect cover to try again. I could not believe that that was legal. Perhaps naively, I thought that a contract and the law governing it would offer an employee and employer equal protection. Of course, we now see that there is no equality of arms whatsoever.

Following Mr Walsh’s appearance before the Committee, which it would be fair to say was not overflowing with modesty or contrition, further examples of firing and rehiring being deployed against thousands of workers came to light. That should not have come as a surprise to the Government. We and many other Members across the House had warned that without Government action other companies would follow in BA’s footsteps. Centrica British Gas has threatened over 20,000 employees with termination if they do not sign up to new, inferior contracts. Menzies Aviation, a ground handler at many UK airports, including Glasgow, assured me personally that it would not follow the British Airways lead but then copied and pasted its tactics for its own use. Heathrow, which other Members might touch on, is doing the same to its workforce. Unsurprisingly, many have voted for industrial action.

We should be crystal clear about what is happening and has happened. It is reprehensible to treat workers like this. It is counter-productive, self-destructive and flies in the face of what we in society should be willing to accept. In the words of a former Conservative Member, it is the “unacceptable face of capitalism.” Tory Ministers, including the Chief Secretary to the Treasury, have been queueing up to slate firing and rehiring, not least the Minister himself, who said last week:

“The very threat of fire and rehire is totally unacceptable”.—[Official Report, 10 November 2020; Vol. 683, c. 718.]

He slightly blotted his copybook just two minutes later, when he seemed to boast about the UK’s flexible labour markets and how easy it is to hire and indeed to fire workers. On that latter comment, I hope that he misspoke or that that was not what he intended, but that is how it came across to many people. The Minister and I met to discuss my fire and rehire Bill, which would outlaw the practice. He said that while the Government could not support the Bill he remained open to looking at further protections for workers in this area. Perhaps the change in management at No. 10 will allow a new and more collegiate approach on this issue. I know that it is a policy that many of the Minister’s colleagues are not pleased with. When he responds, will he say that he will work with me to strengthen workers’ protections in this area – perhaps in the Government’s Employment Bill? If he wishes to confirm it now, I would be happy to take an intervention, but if he will do so in his summing-up that would be good.

No one denies the unprecedented challenges facing business across the country. Aviation in particular has seen its business model receive its biggest shock since the war. There will be a debate on the issue tomorrow, so I will not go into detail, but as an example, Glasgow airport in my constituency has seen passenger numbers drop year on year by 83%, while some regional airports in England have seen drops of more than 90%. No serious person can argue that this is not a huge hit to an industry that has secured hundreds of thousands of jobs around these isles. The way to meet those challenges is by acting responsibly and being open with staff and trade unions about what the future might hold. In recent months, I have spoken to dozens of union reps, mostly from aviation but many from other industries too, and it is crystal clear that they recognise the position their employers are in. They know that change has to be on the table if their industry is to have a sustainable future. They are not reactionaries who want business and commerce preserved in aspic. They want their members and workers to be treated with respect, dignity and as partners as management come up with plans for the months and years ahead. A temporary problem, albeit for a more prolonged period than we would like, requires temporary solutions. Other airlines have managed to make such agreements with their work force. Threatening staff with the sack is not respectful, is undignified and is certainly not partnership.

I know that many Government Members—perhaps not the Minister—do not like to do so, but we should look at Europe. Partnership working is the norm, not the exception. The idea of management and workers coming together to plan a way forward, with the former working with rather than against the latter, is not some kind of socialist utopia. It is the stuff of advanced economies right across the continent—economies that are in most cases more advanced, wealthier and fairer than ours. That is not a coincidence. There is cross-party support for banning firing and rehiring. Members from every party in the House co-sponsored my Bill and I know that many Government Members are quietly supportive of the principles of the Bill.

Moving on from firing and rehiring, I welcomed furlough when the Chancellor announced it in March and I welcome its extension until next March, although the way in which that extension was announced and the way in which repeated calls for extension were flat-out ignored until the last minute—in fact, after the last minute—were sadly typical of the way the UK Government have handled employment and the economy over the past months. The U-turn has come far too late for thousands of workers made redundant after months of delays and uncertainty. Many good businesses have gone under and millions have been excluded completely. It is clearly still a system with many flaws, not least of which is the power it gives employers over workers, especially when those workers are worried for their jobs and livelihoods.

There is no appeal. An employee is entirely at the mercy and discretion of their employer as to whether to go on furlough or not. That is a lopsided arrangement. An employer can simply say that it is not worth the paperwork, terminate a worker’s contract and leave them to the pittance provided by the benefits system rather than furlough at 80%. The employee has zero rights under law to challenge, appeal or ask a third party to intervene.

Similarly, as we have seen in my constituency, where over 70 people have received no furlough payments due to flaws in the application process, there is no appeal to HMRC for any discretion. Over 70 households, instead of having access to furlough over the past eight months, have had to resort to food banks and the kindness of neighbours to get by, all because their employer was bought over and the change was not recorded by HMRC until one day after an entirely arbitrary furlough deadline was imposed retrospectively.

Returning to the aviation and travel sector and permanent part-year contracts that contain a provision to extend hours through the winter, I have been made aware that TUI is refusing to claim furlough payments for more than 500 permanent part-year employees on the basis that they are not extending the contracts this year due to lack of demand. However, the scheme has provision to claim for such employees, based on the amount earned in the same month last year or an average of monthly earnings for the tax year 2019-20. I hope that the Minister will join me in asking TUI and anyone else planning something similar to think again and to do the right thing. No one is asking for the furlough scheme to be a free for all, but it cannot be beyond the wit and imagination of the Treasury to come up with a system that gives some rights and power to the employee, rather than putting every single furlough egg in the employer’s basket and leaving workers with no recourse except to beg their bosses for some relief.

I welcome the Government’s introduction of bereavement leave for the parents of a deceased child. It is a decent and humane policy, and it deserves recognition. Now it is time to look at bereavement leave across the board and to give workers a right to paid time off at a time of grief and personal loss. That seems particularly pertinent when many have unfortunately lost a loved one to covid-19. It is a policy that would undoubtedly cost in the short term but could very well save money. Sue Ryder states that losing someone can have serious consequences not only for mental and physical health; it also costs the UK economy an estimated £23 billion a year due to presenteeism, absenteeism and reduced employment.

We have a situation whereby the UK’s sick pay system is, by a long way, the worst in western Europe. It is a system that has been shameful for years but is now being exposed as completely out of step with every single one of our neighbours and allies in Europe. Two years ago, the Council of Europe’s European Committee of Social Rights called the UK’s SSP system “manifestly inadequate”. In a sane world, that should have set off some kind of alarm in Whitehall, but here we are in the middle of a pandemic, asking people to self-isolate for the greater good yet providing a system of support that is manifestly inadequate.

Our nearest neighbours recognised the scale of the challenge right at the beginning of the pandemic. Ireland’s enhanced illness payment provides €350 a week to anyone who tests positive or has to self-isolate. Up to 10 weeks of payments can be made to people who have tested positive. It has ensured high compliance with self-isolation and helped provide some financial security for households who would receive a pittance if they lived in the UK.

There is no practical reason why the UK is so far behind our nearest neighbours; it is simply a matter of political choice and ideology. I know the Chancellor and his social media team are busy building the Rishi brand, and he would like to paint a picture of himself as the saviour of the economy, right down to delivering discounted katsu curries to diners’ tables. However, his signature strings are missing from a pledge to keep sick pay the lowest in Europe. His lack of photo ops to promote the UK’s position near the bottom of the league table perhaps says a lot about how well such boasts would go down with voters.

The Citizens Advice Bureau tells me that the current employment rights enforcement system is not up to task for dealing with the challenges exposed by the pandemic. Employees who have been unfairly treated have very few options for redress. For many people affected by the redundancy crisis, employment tribunals are the only place they can turn to in order to protect their rights and seek a fair outcome. There are currently six bodies that enforce employment rights in various ways: Her Majesty’s Revenue and Customs, the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, the Health and Safety Executive, local authorities and the Equality and Human Rights Commission. The situation is messy and piecemeal. Along with Citizens Advice Scotland and others, I welcome the proposal to set up a single enforcement body for employment rights. Can the Minister tell us when it will finally be introduced? Will it be included in the Employment Bill, and can he give us a timescale for that Bill?

My final point is brief and to the point. Surely the most basic of employment rights ought to be receiving a fair day’s wages for a fair day’s work. The UK Government’s national minimum wage, or the so-called living wage, is not a real living wage; it does not meet the minimum income needed for an acceptable living standard. The different rates of the living wage for young people are wholly unjust and discriminatory, and they do not take account of young people’s needs, responsibilities and living costs. The Chancellor could and should do what is right by increasing the statutory minimum wage and ending the age discrimination within it.

Rebuilding the economy after covid will become the biggest challenge that our society faces once the virus is under control. Workers must be part of that rebuilding and not treated as serfs. They and their families should not be threatened with financial disaster if they do not accept attacks on their pay and conditions. Enhanced employment rights are not just the right thing to do morally; they are the right thing to do economically. They ensure that workers have greater security, and therefore encourage spending within the economy, providing vital income and custom for our retail and service sectors.

The impact of covid has highlighted the fragility of many people’s working conditions—the fact that their family’s future hangs by a thread, which can be cut at a moment’s notice whenever management decides. That has to stop, and a much more equitable balance between employer and employee must be found as soon as possible, for the good of everyone on these islands.

--- Later in debate ---

[Paul Scully]

The reason why I am limiting interventions is that I want to leave the hon. Member for Paisley and Renfrewshire North time at the end of the debate to sum up. I will clearly cover fire and rehire in a second.

Before doing so, I want to look at just some of the ways in which we have wrapped our arms around the economy and around businesses and employees. We have done that through the furlough scheme, which has allowed 1.2 million employers across the UK to furlough 9.6 million jobs. As we have heard, that scheme has been extended to the spring. With regard to the self-employment income support scheme, there is an increase under the third instalment of the grant, covering November to January.

It is also important that we help to get people, and particularly young people, back into work; we have heard about that from other hon. Members today. That is why, as we have announced, more than 19,000 jobs have been created so far through the kickstarter scheme, helping young people from across the country into the workplace and into a variety of sectors. In addition, 1.3 million businesses have had a Government-guaranteed loan to support their cash flow through the British Business Bank. That is delivering £8 billion to more than 98,000 SMEs—something close to my heart.

The hon. Gentleman talked about fire and rehire tactics. A key aspect of building back better is to continue championing a flexible and dynamic labour market, which gives employers the confidence to retain and hire staff, while maintaining a framework that protects individuals. For those who, sadly, lose their jobs, clear laws about unfair dismissal will ensure that their rights are protected. We have tightened the protections throughout the covid-19 pandemic. For example, we have made sure that statutory redundancy pay, statutory notice pay and unfair dismissal compensation are based on a furloughed employee’s normal pay rather than furlough pay. People who, sadly, are made redundant will receive the same level of financial compensation as they would if they had not been furloughed.

To understand better the issues in relation to fire and rehire, the Government are working with ACAS, and we are bringing together a number of roundtables with businesses, employee representatives and other bodies to discuss these issues in more detail. The House should be left in no doubt that this Government will always continue to stand behind workers and to stamp out unscrupulous practices where they occur.

We have responded swiftly and effectively to the pandemic.

[Gavin Newlands]

Will the Minister give way?

[Paul Scully]

I will come back to some of the hon. Gentleman’s points, but, yes, I will give way now.

[Gavin Newlands]

I am grateful, and I will keep my intervention brief. Can the Minister confirm, if he is having roundtable discussions about the practice of firing and rehiring, whether something might be brought forward in the employment Bill, when that Bill is eventually brought forward? If that is the case, will he work with me and others across the House to ensure that those provisions are good enough for the workers of this country?

[Paul Scully]

I will gladly work with the hon. Gentleman in continuing to discuss workers’ rights in this area and other areas. It is important that the employment Bill, when it does come, not only extends workers’ rights in the way that we talked about in our manifesto, but does so in a way that fully reflects the situation we are going through and the lessons learned from the pandemic.

Some hon. Members talked about pregnancy and maternity discrimination. That is not acceptable under any circumstances. We have continued to remind employers of their existing responsibilities under current legislation. Equalities legislation requires that employers must not discriminate in the workplace based on gender, pregnancy or maternity. Following the Government’s consultation in 2019, we are extending the redundancy protection period afforded to mothers on maternity leave to six months, once the new mother has returned to work, and to those taking adoption leave and shared parental leave.

We have taken steps to support new parents by passing emergency legislation that ensures that parents who are furloughed during the period, and are determined to be entitled to maternity, adoption and other family related statutory pay, do not lose out.

--- Later in debate ---

[Gavin Newlands]

I thank the Backbench Business Committee for allowing today’s debate. As a former member of that Committee, I could feel the virtual slap on the wrist from the hon. Member for Gateshead (Ian Mearns), who is hundreds of miles away. I am grateful to Members for their attendance. The debate has been very well attended. It is a shame that the only Government Back Bencher was not able to speak this morning. I am grateful to Members’ support for the many issues discussed this morning, including the support for action on firing and rehiring.

The Minister pointed out that he had spent many years running small businesses. I also ran businesses and spent time as a business analyst, so I understand and support the need for flexibility, but that should not be at the expense of workers’ rights. There has to be an appropriate balance, and we do not have that balance in this country at this point in time. Although I remain perhaps naively hopeful for the employment Bill, if the Government continue to refuse to act, will they please devolve employment law to Edinburgh, Cardiff and Belfast? The Prime Minister seems to have dug himself a rather large hole on devolution at the moment, which is grist to the mill for the cause of Scottish independence. I bring that up for the benefit of the hon. Member for Edinburgh West (Christine Jardine), because she is a big, big fan of independence. [Laughter.]

I implore the Minister, as I said in my intervention, to listen and work with Members across the House when shaping the employment Bill. That work should include the abolition of firing and rehiring, and making sure we have appropriate protections for all workers in the United Kingdom. I thank hon. Members again, and I thank you, Sir Christopher.

Question put and agreed to.

Resolved,

That this House has considered the covid-19 outbreak and employment rights.