Employment and Trade Union Rights (Dismissal and Re-engagement) Bill

Gavin Newlands Excerpts

Friday 22nd October 2021 Commons Chamber

[Laura Farris]

We all know there is always a risk that we make employment relations so onerous that there is a temptation to engage consultants. What we are primarily looking at is employers that have larger, unionised workforces. I am not sure how many employers it would engage, but the short point is that Conservative Members want a solution that does not make an existing problem worse, drive redundancies or lead to more business failures. Fire and rehire must be a genuine option of last resort when a negotiated settlement cannot be reached, when the business is on the brink of insolvency and when the alternative is layoffs.

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

I am grateful to the hon. Lady for the conversations we had when I proposed legislation on this issue last year. She says that, had fire and rehire been banned, British Airways might have just made people redundant, and she cites the example of pilots. This has happened already, and Ryanair negotiated temporary changes. Why would British Airways not have done the same, had it not been allowed to fire and rehire?

[Laura Farris]

I will return to that point when I address British Airways in a bit more detail.

As I have said to the Minister, we need more than ACAS guidance. I want to see the rules on dismissal and re-engagement set out in an ACAS code of practice, with financial sanctions to back them up. Parliament specifically envisaged the possibility of doing this when it passed the Trade Union and Labour Relations (Consolidation) Act 1992. Section 207 gives the Secretary of State the power to introduce a code of practice in respect of anything in that Act. Parliament also considered and welcomed the possibility that the Secretary of State would have the power to impose legal teeth. Section 207A addresses the possibility that any compensation can be increased by up to 25% if the employer does not comply with an ACAS code of practice.

We know that ACAS codes of practice can be effective. The hon. Member for Middlesbrough (Andy McDonald) is an employment lawyer and will know that when we think about, for example, the ACAS codes of practice on disciplinaries or grievance procedures, it is vanishingly rare to get into an employment tribunal nowadays and find that the employer was oblivious to those codes of practice. Why do employers know about them? Because there is risk—financial risk. If they go down in the employment tribunal, there could be an uplift on compensation, and they want to avoid that, so we know that it is has the right effect.

What should the code of practice say? We have some of the answers already. The BEIS call for evidence, which was published through ACAS, gives us some clues. I think practitioners made such suggestions very well, including, in relation to paragraph 56 of that report, that employers should provide an analysis of whether changes are anticipated to last for more or less than five years with evidence to substantiate that answer, and, in relation to paragraph 76, that they should provide evidence of reasonable alternatives they have explored and evidence of their financial position.

Another point comes out of the excellent work of the Transport Committee, and I want to pay tribute to the very impressive session it had with Willie Walsh on 11 May 2020. Anyone who has read the transcript will recall that he was asked repeatedly by the Chair, my hon. Friend the Member for Bexhill and Battle (Huw Merriman), whether, if British Airways returned to full profitability, he would restore workers’ wages to their previous levels, and he declined to confirm that he would do so. That created huge exposure for British Airways, and I do not think it is any surprise that, when Alex Cruz appeared before the Select Committee six months later, he gave a rather different explanation.

BEIS would then have the opportunity to require employers to set the criteria that they would exercise in deciding when to restore workers’ pay. I think it would enable the Government to give guidance on this distinct category of dismissals, how they should be treated and what the employment tribunal should be looking for. My final point on this is that it would give the Government real teeth, and it would incentivise employers to do the right thing and give employees more power to enforce their existing rights.

The point has been made, but most of the employers we have cited in this House are considering fire and rehire in relation to large proportions of their workforce. With British Airways, 12,000 people were at risk. If every single one of those people could get an uplift in a compensatory award of 10% to 25%, then—let us be realistic—that might be £10,000 or £20,000 times 12,000. That creates a huge incentive for the employer to do the right thing, because there will be a very significant financial penalty if they fail. That will mean that consultations are entered into with legal advice, which is a good thing, as well as with an open mind and an open spirit.

By the way, consultation is not a meaningless word, as all hon. Members will know. When it is approached in the right spirit, it can often lead to alternatives to the thing that is most feared by the employee. That is the suggestion that I have made to Ministers.

--- Later in debate ---

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

I am pleased to support, indeed to sponsor, the Bill of the hon. Member for Brent North (Barry Gardiner), and I am delighted that we are finally getting the chance properly to debate and vote on the merits of fire and rehire legislation. As hon. Members may be aware, I introduced two Bills on this subject in the last parliamentary Session, before the hon. Gentleman was wise enough to use his high private Member’s Bill raffle slot for this issue. I am grateful to him for seeking me out earlier to discuss my experiences. My Bills were sponsored by Members from every party in the House. Conservative Members have been talking about cross-party work, and with my Bills every party in the House that existed at the time was represented. An additional Scottish splinter party has since been formed, but that is neither here nor there.

I also engaged with the trade unions from the outset. Indeed, I invited Howard Beckett of Unite to lend his expertise on the issue at my first meeting with the Minister, and I am grateful to Hazel Nolan and Gary Smith of GMB for their support throughout that period.

My Bills were more straightforward than this Bill, in that they essentially did bin fire and rehire. I thought it important to put that at the heart of what was a presentation Bill. However, I said to the Minister, the hon. Member for Newbury (Laura Farris) and many others to whom I spoke that I would work with the Minister and others to progress a Bill to allow protections that might not end fire and rehire, such as the Bill we are debating today.

I mentioned the hon. Member for Newbury. I listened carefully to her speech, and I think most of us agree that she made some excellent points, but it struck me that the vast majority of the speech could and should have been made in Committee. She agreed with the principles of what the Bill seeks to do, and I therefore hoped and expected that she would support it.

[Sara Britcliffe (Hyndburn) (Con)]

In fact, my hon. Friend the Member for Newbury was suggesting that we did not need legislation for this. That is why she said that she was opposing the Bill.

[Gavin Newlands]

I fundamentally disagree—[Interruption.] It would be useful if the hon. Lady would allow me to finish my response to her intervention.

In fairness, most of the speech made by the hon. Member for Newbury was not setting out that view; that is certainly not how it came across at the time. I appreciate that that is the conclusion that the hon. Member for Newbury reached, but she could have worked with the hon. Member for Brent North and others across the House to help with legislation that would appease all of us, and the workers of this country.

Ministers, however, have done what they have done every time fire and rehire has been raised with them: they have clucked sympathetically, wrung their hands at how horribly ungentlemanly these companies are being, and said how much they sympathise with the workers who are being blackmailed, and have then proceeded to do absolutely nothing to address this in legislation. Every Minister from the Prime Minister down seems to have forgotten that it is the Government who speak from the Dispatch Box, and that they have the power to act to protect workers rather than murmuring sympathy for the benefit of Hansard and no one else.

The Government should understand that this issue is not going to go away. It will certainly not go away as a result of guidelines. My Bills failed to make progress; the hon. Member for Brent North is having another crack. Until and unless the law is changed to protect workers, this issue will come back to haunt the Government time and again.

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

Was my hon. Friend as surprised as I was that the Government did not propose an employment Bill in the Queen’s Speech, telling the media that it was not a priority at that time?

[Gavin Newlands]

The short answer to my hon. Friend is no, I was not surprised that the Government failed to propose such a Bill. That was to be expected from the Conservatives.

Unless and until the Government act to close this loophole and ensure that workers are protected from the likes of Tesco, British Gas and British Airways and their bully-boy tactics, the need to change the law will continue to be raised, at least from these Benches. The case of British Airways is a perfect demonstration of how UK workers’ rights are light years behind those in much of Europe. Its parent company, IAG, also owns Aer Lingus and Iberia. While BA was telling its UK staff to take cuts in pay and conditions last year, workers in Ireland and Spain were protected from the same tactics because their Governments over the years have ensured that employees are entitled to a level of protection in law from their bosses. Willie Walsh—who has already been mentioned today—and the IAG management knew that they could hit workers in the UK hardest and fastest, because this Government allow them to do so.

[Ruth Cadbury]

The hon. Gentleman is making an excellent point. As he says, fire and rehire is illegal in countries such as Ireland and Spain because it is in primary legislation. Does he agree, therefore, that the option proposed by Conservative Members—the introduction of an ACAS code of conduct to deal with the issue—is entirely insufficient?

[Gavin Newlands]

I could not agree more with my Transport Committee colleague. This has to be in primary legislation and that is what people on the Opposition Benches will continue to work for if the Government vote the Bill down today.

Many people across the country think—perhaps unfairly at times, but not so in my experience—that the Tories can be uncaring on these issues, because they do not see the poverty and the pain of not being able to provide for one’s family. [Interruption.] That is just not the case. I spoke to a number of British Airways employees who broke down in tears telling me of the fact that the airline they had served, in many cases for decades, was looking to give them what amounted to a pay cut of 50% or more, and that they had told their Conservative MP all about it, who did nothing. Nothing. Surely, we are here to represent our constituents, particularly in their time of need. If not, what exactly are we here to do?

[Christine Jardine]

Like me, the hon. Gentleman represents one of Scotland’s major airports. I had the same representations from very many staff who live in my constituency of Edinburgh West and work for British Airways at Edinburgh Airport. That was very much the feeling that came across. Does he agree with me that they were disappointed and felt that they had been there for so long that there was a moral obligation to offer them better than what they were getting from British Airways, and that there is a moral obligation on us, as Members of Parliament, to support that?

[Gavin Newlands]

Absolutely. I thank the hon. Member for her intervention. I agree with her 100%. I find myself in agreement with her far too many times these days. She is absolutely right: our moral obligation, as Members of Parliament, is to support our constituents when they are under attack in such a way.

[Shaun Bailey (West Bromwich West) (Con)]

Will the hon. Gentleman give way?

[Gavin Newlands]

I will move on. I will come back to the hon. Gentleman. [Interruption.] Or not, if he is going to huff. It is up to him.

I do not believe that it is any coincidence that those countries with heftier employment rights around Europe have better and more robust economies. We can see the results of precarious employment around society right now: labour shortages in all sorts of sectors of the economy and lacklustre demand experienced by retailers. If our economy is 80% centred on the service sector, we need people spending money on those services. Leaving workers with the fear that tomorrow could see their employer slash their wages or show them the door is a sure-fire way to depress spending, demand, and ultimately hinder economic recovery. Workers in Europe have no such fears, and it is surely a factor in their continued long-term outstripping of the UK that employment rights are given such importance and credence by their national Governments.

Whatever ideological objections some Members on the Tory Benches have to improving workers’ rights—I have no doubt a few of them consider the factory Acts a gross impertinence—they can surely see the economic self-interest that protecting workers from fire and rehire would mean for employer, employee, and our society and economy as a whole. It is no wonder Ministers want to isolate the UK further and further from Europe; they want the UK isolated from the norms of employment rights that apply there. They want workers in the UK isolated from the economic benefits that enhanced rights would bring. They want the UK isolated from the basic standards of decency that apply across the continent. On decency, I will give way.

[Alexander Stafford]

Is not one of the big differences between what we are doing in the UK and what they do on the continent, that on the continent they have mass immigration across the EU, which is driving down wages, whereas in this country, now that we have left the EU, we can look after workers better, not rely on poorly paid labourers and actually get high quality high-skilled jobs? That is the fundamental difference: we want better jobs and better pay for people, rather than relying on cheap labour.

[Gavin Newlands]

Well, I find that rather astonishing. The hon. Gentleman talks about improving workers’ lot, yet they are voting down this legislation today. The lack of self-awareness in some Conservative Members is astonishing. They are very fond of talking about levelling up, but not, mysteriously, when it comes to levelling up workers’ rights against the power wielded by multibillion pound corporations and their multimillionaire managers. The idea that the UK should level up to European standards is anathema to them.

I am coming to my conclusion as I appreciate that there are many Members who want to speak today, but I would like briefly to take this opportunity to mention my own Devolution (Employment) (Scotland) Bill, which is on the Order Paper today. It is an unlikely contender for Royal Assent, given that it is at the bottom of the Order Paper today, but it is an attempt to prise employment law from the clammy grip of the Treasury Bench as far as Scotland is concerned. Do not worry, Madam Deputy Speaker, I will not speak to it; I mention it only because I fear that the Tories will vote down the Bill before us today. To my mind, that will be the straw that broke the camel’s back. No more should Scottish workers be forced to suffer the consequences of unthinking and uncaring Tory Governments. Dovetailing nicely with that is the fact that the Scottish Government supported my legislation last year and that banning fire and rehire was also in the Scottish National party manifesto for the Scottish elections in May, in which we received our record vote.

If this UK Government continue to stick their head in the sand and depress workers’ rights below the level seen in most other civilised countries, they should not be surprised if Scotland chooses civilisation instead of the race to the bottom that seems to be happening to workers here. Workers across these isles should all be accorded the respect and dignity they deserve, and have that backed up with the force of law where required. I commend the Bill to the House.

--- Later in debate ---

[Mark Pawsey]

I was in the process of setting out the scenarios identified by ACAS in its paper of June 2021 on where dismissal and reinstatement had been used. The final point, which has been made by Conservative Members in particular, is the challenge of business survival in the current circumstances, with covid, and the need for businesses to get through an incredibly difficult time.

The ACAS paper also identified a number of differing attitudes to the reasonableness of using dismissal and reinstatement in dealing with one of those scenarios. It set out a series of positions, including, at the very top, the view that this should never be used. Before arriving in the Chamber this morning, I believed that that was the attitude of the Member promoting the Bill; I believed that he would never permit dismissal and reinstatement to take place. However, he told us today that in certain circumstances it can exist and that he is seeking not to ban it but to ensure that it is never needed to be used. I am sure that a number of his Opposition colleagues do not agree with that approach and would be in the “never” camp. Others see it as being a matter of concern when it is a negotiation tactic, which I think is a view common on this side of the House. There are those who see it as an option of genuine last resort, a view again sympathetically understood by those on this side. Others think it is not at all contentious—I do not think that anybody here believes that—and there are some who believe it is perfectly acceptable at any time, and the House has made its view clear on that.

I now wish to turn to the issue of Centrica, because the Select Committee on Business, Energy and Industrial Strategy looked at that. We heard in Centrica’s evidence to the Committee that the costs of its services were between 30% and 50% more expensive than the use of contractors. The senior management had real concerns about the viability of their business ongoing. They sought less to deal with the issue of pay, but more to deal with the number of hours on a standard contract. They wanted to increase that from 37 to 40 hours. Indeed, in their restructuring 20% of their staff would receive a pay rise. One thing that the chief executive reminded us of in his evidence was the need for businesses to keep sight of what the customer wants and what their needs are. Those of us who have been in business will know that the customer is king and that those of us who disregard the needs of our customers put their businesses at a significant disadvantage. Where businesses are uncompetitive, it is important to deal with these things at an early stage, because otherwise, as we know, the danger is of long-term redundancies and business failures, which are not in the interests of anybody.

[Gavin Newlands]

I take the hon. Gentleman’s point about business requirements, but would it not be a more productive approach to seek that agreement with the union, rather than holding a metaphorical gun to its head at the start of negotiations?

[Mark Pawsey]

I, and the majority of Conservative Members, are in agreement with the hon. Gentleman. We want those discussions to take place at an earlier stage. Centrica believed that it was a requirement to issue a section 188 notice at an early stage, because redundancies might be necessary. That was a matter of the interpretation of law.

--- Later in debate ---

[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.