Code of Practice on Dismissal and Re-Engagement

Lord Woodley Excerpts

Monday 25th March 2024 Lords Chamber

Moved by

[Lord Woodley]

At end to insert “but this House regrets that the draft Code contains no effective measures to restrain unjustified use of fire and rehire; and fails to include any measures (1) contained in the Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL], or (2) recommended by the International Labour Organization Committee on Freedom of Association’s Definitive Report 404 published in October 2023 on the matter of dismissals of 786 staff by P&O Ferries Limited”.

[Lord Woodley (Lab)]

My Lords, I do not intend to repeat the arguments made earlier this month at the Second Reading of my Private Member’s Bill. However, I must again put on record my sincere belief that, irrespective of the comments the Minister has just made, the Government’s proposed code of practice is utterly toothless. It will do nothing to end the fire and rehire abuses taking place in this country.

Quite simply, I regret that the code does not impose any new legal duties on exploitative employers. I regret that it does not ensure that fire and rehire is used only as a last resort to prevent a business going bust—that is not the case out there in the field. I also regret that it does not make it any easier for workers or their unions to seek justice at an employment tribunal. My Bill would do all this.

The code imposes a paltry 25% uplift in any compensation which abused workers can claim, and that is only if they can win an unfair dismissal claim. That was hard to do at the best of times, even before the increase in fees.

It is clear that this code of practice is a fig leaf to cover the Government’s inaction and lack of any real desire to address the shameful practice of fire and rehire. It simply is not good enough. The working people of our country deserve much better.

I thank the noble Lord, Lord Johnson, for being kind enough to write to me following our Second Reading debate. If I may, I will address some of the points he made in his letter to me.

As the Minister correctly pointed out, my Bill provides that, when an employee has been dismissed because they have refused to agree to a variation in contractual terms, the employer would not be able to rely on some other substantial reason as the reason for dismissal. Some other substantial reason, or SOSR as it is known by employment rights experts, is the gaping loophole I referred to at Second Reading, which allows bad bosses to ride roughshod over workers’ rights. Closing this loophole is a key purpose of my Bill, but I do not agree with the Minister in his logic when he writes:

“Almost all the cases of dismissal and re-engagement rely on this ground”—


that is, SOSR—

“as a potentially fair reason, therefore this would in effect ban the use of dismissal and re-engagement”.

If it is true that almost all fire and rehire cases rely on SOSR to avoid the judgment of unfair dismissal, this is proof that employment rights have been badly abused in the way that I and other noble Lords have long since warned against.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

As the noble Lord knows, one can read Hansard as well as one can, but not being in the Chamber to hear his eloquent argument of the case makes me slightly deficient in this response. I am disappointed that my noble friend was unable to write more comprehensively on the matter. Perhaps I can follow up with a second letter in that regard.

[Lord Woodley (Lab)]

My Lords, this has been a lively, interesting and, indeed, productive debate. I just want to say one thing to the Minister. In a previous life, I was the leader of Britain’s largest trade union, and I spent more time fighting for companies and for company survivals, and indeed to make sure that they had the right investment to protect jobs and increase jobs in our country, than I ever did fighting against them. That is why I take a little offence that the Minister suggested that my amendment indicates that fire and rehire is banned in all cases. That is the worst case of selective deafness that I have heard from two Ministers, to be quite honest. I point out to the Minister that it does not say that. It makes it absolutely clear that if we are in a situation where the very foundation of the company depends on these actions being taken, not only should they be carried out but we would support that.

However, with regard to where we are, I do not see anything reasonable in the code of conduct, as indeed we have all said here. The Minister also mentioned that—ironically—a TUC investigation into these things found that only 3% of employers were using fire and rehire as a tactic. I said this in the previous debate: 3% across all employers in this country means 38,800 employers. This is not chicken feed; it is big business. It is a pandemic that is right across our country and it will only get worse if we do not legislate to stop it. Again, it has been very interesting that, not only during my previous debate but today on this amendment, not a single speaker has spoken in favour of the code of conduct, never mind anything else, and that includes on the Tory side of this House.

I therefore regret that the Minister’s response is not really doing anything to remove those concerns that we have all registered here about this code of practice. It is toothless, and it does not give the protection and decent compensation that workers who are being exploited deserve. However, as I am sure your Lordships now realise, I do not intend to divide the House on this matter, so I beg leave to withdraw.

Amendment to the Motion withdrawn.