P&O Ferries and Employment Rights

Laura Farris Excerpts

Monday 21st March 2022 Commons Chamber

[Laura Farris (Newbury) (Con)]

What happened to the workers at P&O is one of the most disgraceful examples of industrial practice in my adult lifetime. It speaks not to the weakness of our employment laws but to their strength that the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996 have, for the last 30 years, rendered cases such as this so rare that we are debating one such case in Parliament today. What is extraordinary about this case is not that the laws did not exist, but that P&O, or DP World, thought it could break them with impunity. Let us take a moment to establish what those laws are.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) spoke about section 193 of the 1992 Act, which provides for a statutory obligation to inform the Secretary of State 45 days before any proposed redundancies could take place. That law has been broken. Section 188 provides for a duty to consult 90 days before any dismissal takes place; that law has also been broken. Section 86 of the Employment Rights Act, on the duty to give notice, and section 98, on unfair dismissal? Those laws too have been broken. The question for the House is why DP World thought it could do that, and the issue, I think, is enforcement.

It is true that failure to notify the Secretary of State is a criminal offence, but I can think of no example in my lifetime in which any criminal proceedings have been brought against any employer anywhere in the United Kingdom since the passing of the 1992 Act. The fact is that a breach of this nature is so rare that parliamentarians have probably not had to worry about it, but none the less we have not insisted on it, and I was glad to hear the Secretary of State say that he would consider enforcing section 194 in this exceptional circumstance.

[Jerome Mayhew (Broadland) (Con)]

Section 194 relates to a summary offence, punishable by a level 5 fine, but the Secretary of State referred to another section which gave rise to an unlimited fine. Does my hon. Friend agree that in such an extreme circumstance as this, the egregious nature of the sackings and the number of people involved would constitute gross aggravating factors in consideration about the size of an “unlimited” fine?

[Laura Farris]

I think that that is correct, and I think that that was what the Secretary of State was alluding to. It is also the case that DP World has obviously concluded that it would prefer to make a severance payment that takes into account the 90-day consultation period, the notice period and the redundancy period, because that is less hassle for them than going into a consultation for 90 days with the RMT and facing strike action.

I will come to my solution in a moment, but I want first to briefly address what Labour Members have said about banning fire and rehire. The hon. Members for Ogmore (Chris Elmore) and for Sefton Central (Bill Esterson) said that the commendable private Member’s Bill presented by the hon. Member for Brent North (Barry Gardiner) would have done that. Let me, with great respect, refresh the House’s memory. The hon. Gentleman said at the time:

“I have no intention in this Bill of banning, and there is nothing in this Bill that would ultimately ban, fire and rehire. There is an important reason for that and I will come on to it in my speech.”—[Official Report, 22 October 2021; Vol. 701, c. 1051.]

[Barry Gardiner (Brent North) (Lab)]

The hon. Lady is absolutely correct: nothing in my Bill would ultimately have stopped fire and rehire, and that was with the full cognisance of the 22 unions that supported it. As she knows, however, there were measures in the Bill that would have prevented the current situation.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Let me say this before the hon. Lady responds to the intervention: I recognise that important points are being made, but if there are interventions it would be helpful, to ensure that we can get everyone in, for Members to try to stick to the original time limit.

[Laura Farris]

I thank the hon. Member for Brent North for his intervention. As he will know, the reason we do not want to legislate to ban fire and rehire is that we would end up with more dismissals from the decent employer who is under extreme financial stress. As the hon. Member for Bury South (Christian Wakeford) said during that debate, fire and rehire must be “an absolute last resort”, and Conservative Members have always agreed with that proposition.

We feared that the Bill risked more job losses, not fewer, and that is the prevailing view at the employment law Bar. Yesterday I spoke to John Bowers QC, one of the great trade union lawyers of his generation, and his view was that the hon. Member for Brent North was jeopardising jobs with his Bill. If I am incorrect in that regard, I ask the Opposition Front Bencher who winds up the debate to address the question of why, as a matter of law, he is wrong, but it is true to say that the idea that any provision that sets conditions so onerous—as the proposed new section 187B did—that any failure to consult or to disclose everything, no matter how sensitive, could lead to unlimited damages would not lead an employer to dismiss rather than to renegotiate employment terms is fanciful. The Bill would risk more job losses, and we know from the bitter lesson of P&O that if employers can take short cuts, and if they can take the easy option, they will. The Bill would risk more P&Os, not fewer.

I have said previously that the answer to this lies in the ACAS code of practice. Parliament intended it to do so, through sections 203, 207 and 207A of the Trade Union and Labour Relations (Consolidation) Act, which conferred on the Secretary of State a power to pass codes of practice backed up by financial penalties. I have said repeatedly in the House—and I respectfully ask the Minister not to make me do it again—that that is the correct mechanism. It turns the screw on the unscrupulous employer in a way that nothing suggested by the Opposition does. It is also consistent with the prevailing view in the excellent ACAS consultation that took place last summer, when a number of points were made by practitioners, including the question of how it could be demonstrated that fire and rehire was a genuine last resort. Consultation is one aspect of that, but employers should also be required to demonstrate that they had considered other options.

What I think is imperative is a new form of injunctive relief, which is not available to the claimants in this case, and which would allow the High Court to mandate employers to impose a 90-day consultation period. I think that that would address some of the problems, but, again, it could go into an ACAS code of practice. We do not need new laws; we need to turn the screw on exploitative employers by hitting them with penalties that will stop them doing this in the first place. We can talk in the language of emotion and recrimination—

[Madam Deputy Speaker]

Order.