Employment Rights Bill (Twelfth sitting)

Michael Wheeler Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Greg Smith]

I am grateful to the hon. Gentleman, although he was possibly milking it with the length of that intervention—[Hon. Members: “Oh!”] It is nearly Christmas.

I accept the hon. Gentleman’s points about some of those very outdated provisions. I really hope that my children do not find a job out there that involves free milk, because they might jump at it a little too quickly. This probing amendment seeks simply to understand a little further where the flexibilities lie, and to get underneath some of the detail around when a variation of contract might be a good thing on both sides, or when things have just changed and there needs to be a variation in order for the jobs to be saved. I would hope that Members on both sides of the Committee would come at this from the perspective of the real world and wanting to save jobs, create more jobs, grow the economy and grow employment.

There may be legitimate reasons for wanting to vary terms and conditions, such as to provide for improved employment practices, or to update and reform outdated working practices—as the hon. Member for Birmingham Northfield referenced—in order to allow for the more effective running of a business or organisation. The amendment seeks to understand the Government’s position should such a situation arise, and to understand why they are legislating to prevent businesses from acting in such a way.

[Michael Wheeler (Worsley and Eccles) (Lab)]

On a point of clarity, is it the purpose of the amendment or an unintended consequence of the drafting that it would completely delete the subsection, rather than adding to it? If the purpose is to completely delete the subsection it is amending, are Opposition Members trying to remove the protections for those going concerns?

[Greg Smith]

The hon. Gentleman asks a perfectly legitimate question. I repeat that this is a probing amendment: we are not going to press it to a vote or try to put it in the Bill. The purpose behind it is to get the evidence base, the justification and some clarity of thought from the Government about why the clause is necessary and proportionate. Sometimes we have to suggest getting rid of something to get a good example or a good justification for going there, doing it and putting it in primary legislation.

The Opposition certainly do not want to see exploitative fire and rehire in any workplace. From talking to businesses, and from the evidence we have heard, we know that there needs to be solid grounding and an evidence base to show that the wording in the Bill is justifiable and does not justify shutting down many businesses that are growing, adapting and changing—hopefully, for the better, so they are more successful. They should be able to keep and grow their staff, rather than go down the redundancy route or other scenarios whereby jobs are lost.

Matthew Percival from the CBI said:

“In the fire and rehire proposals, there is a risk that we might be making it easier to make people redundant than to change contracts”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 7, Q1.]

That is the absolute nub of the matter. It would be nothing short of a total disaster if the unintended consequence of the exact wording of the clause or the Bill perversely incentivises companies to make people redundant, so people lose their jobs and have to go home and have that difficult conversation with their loved ones and say that they need to find a new job, with the devastation that that brings to real people’s lives. I cannot imagine that the Government want that to happen. With this probing amendment, we are seeking to kick the tyres. We want an explanation, or at least to encourage the Minister and the wider Business and Trade team to find a better way that does not have that unintended consequence.

A recurring theme of our debates in recent days, and from the Bill Committee witnesses—other than trade union representatives—is that the measures in the Bill on dismissal and re-engagement will be too restrictive for employers. I gently ask the Minister to reflect on that and think about whether the measures will actually work and will not have unintended consequences, so that people’s jobs are protected and saved. We do not want people to be unintentionally forced down the route of job losses.

[Michael Wheeler]

I agree with the comments of my hon. Friend the Member for Gloucester. I appreciate that this is a probing amendment, but I want to talk to its specifics. It appears to me that there are plenty of consensual mechanisms for achieving most of what the shadow Minister is suggesting about the variation of contracts to reflect working practices. If anything, they are inherently better than anything that is imposed. Quite often, when working practices, organisations and business practices are modernised, communication between those doing the work and the managers and owners leads to a much better outcome.

I suggest that we need to remember that we are talking about fire and rehire, which is inherently quite extreme. The amendment seems to refer to the particulars of normal working practices, looking at updating mechanisms to account for modern technology and suchlike, that are much better handled by the existing consensual mechanisms. While I appreciate that it is a probing amendment, it seems entirely unnecessary and does not necessarily speak to the heart of what the clause is about: ending the extreme practice of fire and rehire.

--- Later in debate ---

[Greg Smith]

Indeed, we know from their declarations of interest that they all are. I hope the Minister takes the question with the good intent with which it is asked. Not everybody is in a trade union and not everybody organises in that way, so how would the mechanics of the measure work in those circumstances?

That leads to the wider question, “Why 20?” Why not 19, 18 or 15? Why not 25? It seems like an arbitrary number. I accept that a number needs to be put down. In some ways, in specifying a number, this clause is more detailed than most in the Bill, and it gives certainty, but I would like to understand why it is 20. It seems like a number picked from thin air. It could negatively impact an organisation if it led the employer to decide, “Well, we’ll just get rid of 19 of them, and we won’t have to comply.” That seems at odds with the other provisions in the Bill, where the Government seem to want to move all rights back to day one, yet they do not seem to want to apply that to organisations where, for whatever reason, 20 people are, sadly, being consulted on being made redundant. I would like clarity on that point.

[Michael Wheeler]

I will keep my contribution relatively short, but I did not want to let the clause pass without warmly welcoming its inclusion in the Bill. In a previous life, I worked to represent shop and retail workers. While P&O and the scandal of fire and rehire entered the collective consciousness, the Woolworths redundancy situation was burned into the consciousness of the workers I represented at that time. That is exactly the loophole that this measure is trying to close. Thousands of workers affected by the Woolworths redundancy missed out on the compensation they deserved as part of the lack of consultation because they worked in individual establishments that were small and fell below the threshold. The interpretation of the law at that point meant they were isolated, divided and not included as part of what was clearly, to everyone—

[Greg Smith]

Perhaps I can test the hon. Gentleman a little bit on that. I remember many happy hours as a child in Woolworths in the town where I grew up. They were fantastic stores, and they are greatly missed. Given where he is coming from, is he content with the number being set at 20? While Woolworths was a substantial business, I can think of smaller businesses with separate sites, retail outlets, pubs, restaurants or whatever that might employ 19 or 15 people.

[Michael Wheeler]

The hon. Gentleman invites to me to say whether I am content. I draw his attention to the fact that the clause removes the single establishment loophole while leaving in place the thresholds that are already part of the law around consultation and the time period. I have not examined and, despite the invitation, I will not speculate on where those thresholds should be, but I warmly welcome the removal of the single establishment loophole, so that where the numbers in a redundancy cross those thresholds—legitimately and apparently to everyone looking at it—there are not legalistic mechanisms for those workers to be left out.

Having warmly welcomed the removal of the loophole, let me reassure the shadow Minister. In a previous, previous life I was in a different job—we have all had many jobs—where trade unions were not recognised. I speak for myself alone when I say that I would love for every worker in this country to have the benefit of trade union representation. I confirm for the shadow Minister that I would love to see that, because I think it has genuine benefits.

[Greg Smith]

Not a surprise.

[Michael Wheeler]

I am sure it is not. I worked in a retail establishment that did not benefit from trade union representation and that went through consultation, not on redundancy but on a variation of contracts, so it is relevant to what we were talking about before. It was actually a relatively smooth and easy process for employee representatives to be appointed and elected from among our number, despite the lack of an existing structure, and to engage with the company in those consultation exercises. While I would love there to be a trade union fighting the corner for every worker, when it is absent it is not a burdensome process to have employee engagement in these processes.

[Justin Madders]

I recognise that the shadow Minister welcomed the clarification I provided. No doubt there will be debate to come, as is often the case with legal issues, but the Government are fairly clear and confident that the clause will not have the unintended consequences we heard raised in evidence.

The shadow Minister asked, “Why 20?” He will pleased to know that that was a product of EU regulation. It is in existing law as part of the Trade Union and Labour Relations (Consolidation) Act 1992, which has been amended many times, so I could not say exactly when it came into force, but—