Ian Lavery
Main Page: Ian Lavery (Labour - Wansbeck)
Julie Hilling
The Minister gives one example, and we could collectively give many examples in which the opposite has happened—many examples over the years when it has been British factories that closed and French and German ones that stayed open.
There is already an inequitable relationship between employer and employee. Before Government Members nod their heads in agreement, let me say that power is still firmly in the hands of the employer. Employers can do as they like as long as they follow simple and fair procedures. If an employer wants to dismiss a worker for misconduct, all they have to do is carry out a proper investigation, allow the employee representation and give them the right of appeal. As long as the employer has a reasonable belief that the employee has done something wrong, they can dismiss them.
Ian Lavery (Wansbeck) (Lab)
Does my hon. Friend agree that it was Beecroft who suggested that it was fine to sack someone if the employer just disliked the employee, and that that was fair?
Julie Hilling
I agree with my hon. Friend that the Beecroft proposals are appalling as they relate to the rights and defence of individual workers. I shall say a little more about that in a moment.
In order to dismiss somebody, the employer does not have to prove that the employee has done anything wrong. The employer just has to have a reasonable belief that it was them. As long as the employer has followed a simple procedure and carried out a proper investigation, the employee has no case at a tribunal. The tribunal will not re-hear or re-judge the case and can find in favour of the employee only if the employer has not followed a fair process. If an employer wants to fire an employee for capability, all the employer has to do is tell them where they are failing and give them the opportunity to improve—again, a simple, fair process.
The employee is not protected if they are disabled or sick. The courts have already said that the employer does not have to behave like a charity. If the employee is unable to fulfil their contract of employment, they can be dismissed. Yes, they may have a case for discrimination if the worker is singled out and treated differently from non-disabled workers, but if a fair procedure is followed and a reasonable adjustment is made if necessary, the worker can be dismissed.
Let us not forget that an employer has two years to decide if an employee is suitable—two years to decide whether an employee is an asset to the company or not. Unless the employer is discriminating on the grounds of gender, race, sexuality and so on, the employee cannot go to a tribunal at all.
I do not believe that we have thousands of bosses out there who want to dismiss workers with no just cause. Why would they, when it costs so much to recruit and train a new worker? Even if we do have rogue employers, they can already dismiss workers on a whim. All they have to do is pay them what a tribunal would give them—redundancy pay, and not even at the rate of the company scheme if it is better than the statutory scheme, any holiday pay and any notice period. The only extra sum that an employment tribunal will ever give is an award for future losses. That is not normally more than six months’ pay and the average is considerably less. To get that, the employee must prove that they were unfairly dismissed and show that they have been applying for jobs with no success.
It sounds as though I am giving a lesson on how to be a bad boss. I am not; I am simply trying to point out how the employer already has massive power. I have lost count of the number of times I have had to use the trade union mantra, “Unfortunately the law is as it is, not as we would like it to be,” when I have had to give the news that an employee who had been dismissed had no case for a tribunal. Let me give the House some examples. A senior manager in the railways was charged with gross misconduct. We fought the charge and he was found not guilty. A month later the employer paid him off— 30 years of service down the drain, limited chances of another job and no chance of going to a tribunal.
A travel centre worker with 17 years’ experience had no problems until her manager changed and she ended up off work with stress. She could not prove that her manager had bullied her, and because the employer followed proper processes, she was dismissed under capability procedure. A worker who had worked for the same company for 30 years was selected for redundancy on the basis of last in, first out—after 30 years—even though this is not allowed to be the sole criterion. His redundancy payment made it impossible for him to go to a tribunal. I could go on and on with examples.
A great deal has been made of the cost to employers. They can get free legal advice from ACAS on all their policies and procedures. They do not need to employ a solicitor at a tribunal. As long as the employer has been fair and has not discriminated, they have nothing to fear. ACAS already offers mediation and I welcome the extension of that, but I believe that the proposed fees for tribunals are wrong and will act as a barrier to justice for those least able to pay. The judge can already make a deposit order of £1,000 to a claimant if the judge believes that there is no reasonable prospect of success at the tribunal.
Let us imagine ourselves in a situation that far too many people find themselves in. They are sacked. They have no idea how they are going to meet their mortgage payments or put food on the table. Then they have to find money to take their case to court. The Government are just so wrong on this. They seem to have missed the point that many claims to tribunals are for very small sums—unpaid holiday pay, no notice pay, or wrongly calculated or no redundancy pay. Such simple cases are already heard by a judge sitting alone and are often worth less than the proposed fees.
The Government are also wrong to dismantle our successful and admired tripartite industrial jury system of employment tribunals and employment appeals tribunals. As the Law Society has stated:
“Lay members add to the concept of justice and they enhance the fairness of the tribunal by bringing practical experience in employee and employer relations.”
As my hon. Friend the Member for Streatham (Mr Umunna) said, the Federation of Small Businesses is wholly against the proposals for compensated no-fault dismissal. It states that it has seen no evidence from countries where compensated no-fault dismissal is in place to demonstrate that it encourages employers to hire. In fact, it believes that it might lead to more employment tribunal cases on the grounds of discrimination, thereby producing exactly the opposite result to the main policy objective.
The FSB also believes that there is a risk of creating a two-tier labour market and, specifically, that lower protection creates a risk that workers will not be attracted to small companies, making it harder for them to recruit. Those taking employment in small firms could be the lower skilled and less productive workers willing to accept lower protection and those finding it harder to access credit, such as mortgages. The FSB also believes that that would fundamentally change the dynamic relationship between workers and their employers and could deflect attention from the need for good management and replace it with a hire and fire culture. I could not agree more.
The Government have stated that they must make changes to the tribunals system because of the rising number of tribunal cases, but the level of single claims, where individual workers make complaints about their treatment, has remained fairly steady—in fact, it fell by 15% between 2010 and 2011. Around 60,000 individual cases a year, of a work force of 26 million, does not seem all that excessive. Anyone listening to Government Members would believe that tribunals were a real cash cow for the employee, but the average award is £5,400 and the average cost to the employer is £8,500.
I welcome the possibility that tribunals could impose financial penalties on employers who break the law. I have never understood why employers can break employment laws with impunity. The law is the law, it seems to me, and those who break it deliberately, especially if they do so regularly, should be punished. I am also concerned by all the statements we have heard from Government Members about health and safety and ask the Minister to assure us that no amendments will be made that relate to health and safety legislation.
The economy is in recession not because workers have too many rights, but because the Government are cutting expenditure too far and too fast, hitting business confidence and choking off growth. Removing the rights of workers will only increase job insecurity, harm work force morale and productivity, and lower consumer confidence. This is not about making it easier to hire workers, but about making it easier to sack them. It is unwanted by responsible business people, unnecessary and yet another example of a Government who are out of touch and have no idea how to govern in the 21st century. It seems to me that they just want to take us back to the 19th century. With 2.7 million people unemployed and more than a million young people unemployed, the Government should simply get a grip.
Mr David Anderson (Blaydon) (Lab)
Like everybody else in this Chamber, I represent a diverse community that is not just based on big businesses or the public sector but has very many small businesses. The issues that people from those businesses raise with me are not about employment rights but whether the banks are going to start lending some money so that they can afford to expand and take more people into the workplace.
My problem with the Bill as regards employment rights is that it is not based on evidence or need, or on great demand from the people of this country; rather, it is based on prejudice, opinion, conjecture and bias. It builds on the attacks that the workers of this country have already been suffering under the guise of deficit reduction. We have had mass unemployment, pay freezes, reductions in pension entitlements, and people being made to work longer for fewer benefits. Now, as a result of the Downing street double-dip recession, we are seeing another front opening up in the attacks on workers at home and at work. This is a hugely important matter for the people of this country, because these proposals will be seen by some employers—not all—as a right to exploit their employees.
None of this is new. The Conservatives have never supported positive rights for working people; they have spent the last two centuries attacking and undermining them. Even in the recent past, they were against the national minimum wage and, as we heard earlier, protections for agency workers. They were against the right to paid and increased holidays. Now, most of those rights that have been won for the most vulnerable and the worst-organised sectors of our society are under threat. On the last day before the recess, we saw the disgraceful slipping out of the information that the gangmasters legislation is to be watered down. What an atrocious thing to do; people must have no memory or no respect. These are basic rights in civilised nations, and they should be celebrated, not denigrated.
The Conservatives have shown their true colours with an anti-worker, anti-trade union agenda disguised as a means of promoting growth. I would say that, wouldn’t I? I have been a trade unionist for 44 years, and I admit to being biased, but it is not just me who is saying it. Listen to Mike Emmett of the Chartered Institute of Personnel and Development:
“If the Government is serious about stimulating economic growth, it will look to support employers’ efforts to build an engaged workforce. Taking away employment rights is not the answer.”
There is disagreement even within, although not at the heart of, Government. On 21 May, the Business Secretary said in The Sun:
“Some people think that if labour rights were stripped down to the most basic minimum, employers would start hiring and the economy would soar again. This is complete nonsense. British workers are an asset, not just a cost for company bosses. That is why I am opposed to the ideological zealots who want to encourage British firms to fire at will.”
So who wants it apart from the zealots in No. 10 and No. 11 Downing street? Well, Adrian Beecroft wants it—the man who gave the Tories half a million pounds. Give him his due: at least he is honest. He said:
“Some people would be dismissed simply because their employer did not like them. While this is sad…it is a price worth paying”.
Now where have we heard that before?
Ian Lavery
Does my hon. Friend share my experience of never having met an employer who believes that this Bill will be of any benefit to employees or to the economy as a whole?
Mr Anderson
It is clear from our discussions that nobody who represents employees believes that the Bill will improve growth. As was said earlier, the OECD has said that even though we have some of the weakest employment rights in the developed world, countries with more stringent rights are performing much better than we are. It is quite clear that it does not work.
Beecroft said that the consequences are a “price worth paying”, which of course is what the Prime Minister’s former boss, Norman Lamont, said in 1992—the last time there were 3 million people on the dole in this country. We have seen the truth. The Conservatives believe that mass unemployment is a tool of public policy. They believe that bosses should be able to fire people just because they do not like them. They believe that it is in the national interest for the work force to have to accept poor pay and insecurity at work, and to be made to work without the right to complain.
The legislation will be used to get rid of union representatives. It will be used to dilute the impact of health and safety representatives. It will be used to get rid of those who question authority. It will protect and promote the blue-eyed boys and girls who put up with anything without complaint and who do exactly what the boss wants, regardless of the consequences.
This is like a rerun of “Back to the Future”. The Secretary of State is Doc Brown, the well-meaning but hapless boffin. The Chancellor is Biff the bully, who will not let anyone get in his way. The workers of this country are playing Marty McFly, the poor guy who has to run to stand still, while all around him everything he has ever done is disappearing before his very eyes. Unfortunately, this is not “Back to the Future”, because that, as people know, had a happy ending.
A happy ending is possible only if one of the following things happens. First, the Government could see the error of their ways and pull back from these callous and calculated attacks on working men and women. Secondly, the yellow human shields of the Liberal Democrats in this House could finally get some bottle and give their Secretary of State the backbone to stand up for what he believes in. Having seen the attendance of the Liberal Democrats tonight, I guess that that is not going to happen. Thirdly, if the Bill goes through and workers’ rights are attacked, those on the Labour Front Bench must commit unequivocally to repeal the legislation at the first opportunity when we return to government. Anything less will be seen as a betrayal of the workers of this country and will not be easily forgiven or forgotten.
We should be focusing in this debate on how we can support businesses to hire more workers, not on how we can legislate to help the rotten ones to fire workers. This pathetic Bill says more about the nature of today’s Government than almost anything else that they have done and it must be resisted both inside and outside this House.
Neil Carmichael (Stroud) (Con)
It is a great honour to be called to speak in this important debate, and I am pleased to follow the hon. Member for Stretford and Urmston (Kate Green).
First, I want to make two general points. If we were relying merely on passing legislation to promote economic growth, we would have had a lot of economic growth already, because the truth of the matter is that legislation is aplenty. What matters, however, is what that legislation actually does, and this Bill will empower businesses to get on and do what they need to do, which is employ people and be innovative. My first general point, therefore, is that we need legislation that trusts business to get on with the job of generating economic growth.
My second general point is that we must not see this Bill in isolation from other Bills, such as the draft energy Bill, which will pave the way for new market developments, new technologies and new ways of providing energy. We need joined-up government. Indeed, economic policy is all about joined-up government, such as linking what this Bill paves the way for with other important pieces of legislation.
Let me illustrate that by talking about the green investment bank. I serve on the Environmental Audit Committee, and we produced a thorough report on the bank. We made three points, which I shall go through now as they are important both in respect of this Bill and for our future prospects of developing an economy that is both CO2- effective and economically productive.
The Bill must ensure that the green investment bank thinks about small and medium-sized businesses. We must have legislation that salutes SMEs in the technology and energy production sectors and recognises their value. They are the businesses that will come up with the good new ideas that translate into development. That is certainly happening in my constituency, and I expect it to happen in others. This Bill needs to help bring that about. The first point, therefore, is that we must be sure that SMEs can benefit from the green investment bank.
The second point is that it has to be a bank, not a fund. If it were a fund, we would be using the regional development funds and whatever else might be at our disposal. We need a bank that knows what it can do in terms of both attracting other investment and investing itself and levering in additional money. It must have clout in the market. That is essential, because if it is to be a bank, it must look like a bank and feel like a bank, and people must think it is a bank. I acknowledge the constraints imposed by the deficit reduction programme and so on, and I have said several times in the House that we must reduce the deficit, but we must also signal that the green investment bank will be significant—a powerhouse of support for innovation, development and everything else.
Ian Lavery
At this point, does the hon. Gentleman believe that the green investment bank is a bank or a fund?
Neil Carmichael
It is called a green investment bank and that is what I shall call it, but I accept the need for us to ensure, in the shortest possible time, that it is a real bank and not just a fund. The fund is big, though— £3 billion—and we should bear that in mind.
The third important point about the green investment bank is the quality of its expertise. That will be vital in a bank that is dealing with the sort of technology for which its support will be sought. The Minister must recognise that the green investment bank has to be shaped in such a way that likely investors, borrowers and businesses that approach that bank will feel comfortable with the expertise it has and that, in turn, the bank can deliver that expertise to the firms. If we look at the banking system across the European Union, we can see that where institutions have that expertise—the European Investment Bank is a good example—it works. We have to build those critical elements into the legislation, so that the green investment bank packs a punch in terms of investment, expertise and small businesses.