Fire and Rehire Tactics

Justin Madders Excerpts

Wednesday 15th June 2022 Westminster Hall

[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?

--- Later in debate ---

[Justin Madders]

Tempted as I am to get into the niceties of devolved powers, what I will say instead is that the people of this entire country need a strong Labour Government that will bring back employment rights for everyone.

As the hon. Gentleman mentioned, the scrapping of the employment Bill, which has been promised by the Government on no fewer than 20 occasions, is symptomatic of a Government that do not see this issue as a priority. Does the Minister accept that a code of practice, even a statutory one, will not be of any use if it comes after the event? Does he accept that it would simply be another factor for employers to bake into their calculations? And does he agree that it will not stop fire and rehire happening again in the future?

I ask all those who oppose the Bill introduced by my hon. Friend the Member for Brent North, which was unfortunately blocked, to put themselves in the shoes of one of their constituents. That constituent might have worked for the same company for 10, 20 or even 30 years, giving loyal service and going the extra mile, and only asking in return for stable terms and conditions that remain constant throughout. But then, out of the blue, even though their job has not changed and they have performed their duties well for their employer, who is still turning a healthy profit, they are told that their contract is ending and that, if they want to remain employed by the company, they will have to work the same number of hours, doing exactly the same job, for 20% less pay than they receive now—and if they refuse, they are out of the door without even a redundancy payment. Is that not an injustice? Is that not an affront to the respect that someone who has served their employer for so long deserves? Is that not something that we in this place ought to be looking to end?

We often talk about the cost of living crisis and how wages have not kept pace with inflation for well over a decade now. The obscenity of fire and rehire makes that difficult situation even worse. We know that if someone is fired and rehired and gets a 20% reduction in their pay, they will not be able to get a 20% reduction in their mortgage or their rent, or in their other household bills. What does the Minister say to people who find themselves in that situation? What should they do?

The destructive combination of weak employment laws, opportunistic employers and an indifferent Government is currently allowing hard-won benefits to be stripped away, with a descent into weakening terms and conditions. It is a race to the bottom, which I am afraid has been accelerated by coronavirus. It is time that race came to an end. The Government say that they are on the side of ordinary working people and that they want to level up the country, but how can they do that if time and again we are shown that an employment contract is not worth the paper it is written on?

I wonder sometimes about the level of understanding in the Government about how modern workplaces operate. Some recent examples of their ignorance include starting a petition asking the Leader of the Opposition to call off industrial action commenced by an independent trade union; leaving notes on civil servants’ desks asking when they will come back in—Cabinet Ministers think that if someone if working from home, they are not really working—and, of course, the obscenity of security staff and cleaners in Downing Street being abused for pointing out that lawbreaking was going on. When it comes to employment rights, this Government are as clueless as they are vindictive.

We do not have to accept that this is the norm. We can return stability and respect to the workplace, we can reward loyalty, and we can end the cruel lottery of fire and rehire. We just need a Government committed to doing those things. But let us not stop at ending fire and rehire. I want to see this country becoming a leader in employment protections, not lagging behind the likes of Kosovo, Estonia and Mexico. Let us end the obscenity of British workers being easier and cheaper to get rid of than workers in just about all the rest of western Europe. Let us end the disgrace of this country always being at the head of the queue when a multinational is looking to make redundancies.

Let us end the mindset that as long as someone has a job, that is job done. It is not—security, prosperity and stability are all under threat from this lopsided legal framework. It is in all our interests that we have strong workforce protections. We grow as an economy and a country when we have secure employment. It is one of the cornerstones of a civilised society, and if this Government do not want to legislate to make that happen, then they should step aside for a Government who do want to.

[Esther McVey (in the Chair)]

Before I call the Minister, I remind him that the hon. Member for Slough (Mr Dhesi) will need a couple of minutes to wind up at the end.

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[Paul Scully]

I will come to P&O Ferries now before I address the other points that Members have raised. The Government have been clear that the dismissal by P&O Ferries of 800 loyal seafarers without any notification or consultation was absolutely unacceptable. I was sat behind the chief executive—literally, not figuratively—during the Select Committee hearing. Like everyone else, I was appalled when I heard him say that he would do the same thing again. That was absolutely horrific to hear.

[Justin Madders]

As I asked in my speech, can the Minister provide an update on the criminal prosecutions?

[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.