Fire and Rehire Tactics

Nia Griffith Excerpts

Wednesday 15th June 2022 Westminster Hall

[Dame Nia Griffith (Llanelli) (Lab)]

I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on his excellent exposé and on all the work that he has done on this extremely serious topic, which affects the whole of society.

Security at work is absolutely fundamental to workforce productivity, but it is also fundamental to stable communities. It enables people to plan ahead and work out what they can afford, and it offers the necessary security to take on the tenancy of a home, or to take out a loan to buy a car that they might need to get to work. It is absolutely vital for people’s mental health, because wondering every single second whether they will have a job next week does nothing at all to ease stress or help someone’s mental health. There are enough difficulties in life, particularly at the moment, without having to worry constantly about work insecurity.

The growth of fire and rehire is absolutely terrifying, especially when we see what were considered to be respectable and “safe” companies, such as British Airways and British Gas, go down the route of using such tactics. People now rightly feel that no job is safe anymore. Of course, there have always been exceptional circumstances in which, sadly, jobs were lost, but that is very different from the current situation in which companies are seemingly using fire and rehire tactics with very little pretext other than as a cost-cutting exercise, with employees suddenly faced with having to accept much worse pay and conditions with very little warning. Having pay and conditions cut is bad enough, but it can also affect someone’s security of tenure. A permanent contract can be replaced with a short-term contract, with no guarantee that the fire and rehire process will not be repeated a year or two later. Sadly, this situation is not confined to the private sector; it is now affecting workers in many parts of the public sector.

I remind Members of the effect of the casualisation of the workplace. A young man in my constituency worked from the age of 18 in factory after factory, job after job. He did not have a permanent job before he was 25. He was a good worker, but he could only get agency work—last in, first out. Companies and employers are getting a higher and higher percentage of their workforce as agency workers. The workers are paid less, but it costs the companies more because the agency takes a considerable cut.

That has an impact on a young person who is setting out in life. I am sure most of us in this room were able, when we first started working, to go into a job with a stable environment in which we hoped to stay for a number of years. That young man eventually set up as a landscape gardener on his own because it had become intolerable to be pushed from pillar to post. This is in an area where there are many manufacturing opportunities, but the culture has become increasingly difficult.

[David Linden]

Is that not precisely the problem? Because an employee has such poor rights, they might become self-employed, where they will probably not have the security of a pension, sick pay and holiday pay, and they will be pushed further into insecurity. We therefore need an employment Bill, and we need to ban fire and rehire. We all know that the world of work is changing, so there needs to be a comprehensive package from the Government that includes banning fire and rehire. We need legislation that reflects what is happening in 2022, because time has moved on.

[Dame Nia Griffith]

Absolutely. As the hon. Member says, there are so many other costs—massive costs to society, the economy and the public purse—wrapped up in the culture of fire and rehire.

This causes constant worry, mental health concerns and disruption. It is okay when someone starts out as a single individual, but it becomes more complicated if they have a partner or children. It is complicated by how far they can travel to work and where the agency sends them. Deciding whether they can accept the gaps between work becomes even more of a nightmare, and of course they have responsibilities. It must be depressing for them to look at someone up the road who they thought had a very good job with British Airways, only to see that he, too, has been subject to fire and rehire and is being asked to sign a new contract. They may have thought that one day they would have a permanent job and security, and now they see older workers having to sign on the dotted line to take worse pay and conditions. That is nothing to look forward to, and it does nothing for the cohesion of society.

As the TUC has documented, 3 million workers in this country have been told to reapply for their jobs. We already have 3 million workers on zero-hours contracts or casual contracts and 5 million self-employed, some of whom are pseudo self-employed. As we know, that is a way for employers to get out of paying the full costs of employing them.

Not only is allowing employers to use fire and rehire bad for the workers, but it undermines good companies that want to play fair by their employees. The willy-nilly use of fire and rehire by unscrupulous employers to cut costs can catch decent employers unawares, undermine them and risk putting them out of work. That can spiral out of control and become a real race to the bottom—who can pay less and therefore cut costs and make more profit with less pay to the workers? This race to the bottom with lower wages leads to much greater reliance on benefits, at huge cost to the public purse.

We are also clocking up a pensions time bomb. The Minister may say that we have auto-enrolment, but there are thresholds for that and part-time workers, in particular, are likely to miss out. When we—the generation coming through now—get to pension age, what will we find? We will find that a far higher percentage have to rely on some form of state help because they have not been able to put money by. Why is that? Because it has gone into the pockets of companies that have not been playing fair.

I echo the words of my hon. Friend the Member for Bury South (Christian Wakeford) on the private Member’s Bill brought forward by my hon. Friend the Member for Brent North (Barry Gardiner) and his careful explanation of how it would work. Of course, we must not accept covid as an excuse—and it is nothing but an excuse. We all know that this is about increasing profit. There is also no truth in the statement “We cannot afford the current contracts.” We have labour shortages at the moment, so we have to afford it.

It is not just about fire and rehire, although that is the subject of today’s debate and is very important. We want much greater security from day one at work. I will not set out all of Labour’s manifesto commitments on this, but it is fundamental to our belief in a secure, cohesive and stable society that we should have security at work from day one.

The only solution to fire and rehire is an outright ban. That is not revolutionary; it is simply about respecting existing contracts and sticking to the law. A ban would be good for workers, productivity, community cohesion and the public purse. I therefore implore the Minister to take the issue seriously and introduce the necessary legislation without further delay.

--- Later in debate ---

[Paul Scully]

I am going wider than workers’ rights and productivity. That is why we are rolling out the Help to Grow management scheme for smaller businesses, and other things. This is huge. We need better transport connections. That is part of the levelling-up agenda. There are lots of things within that, and I do not underestimate what the hon. Gentleman is saying. Our employment landscape is very different from that in Germany. In Germany, they tend to ask permission—it is courts first there, whereas we tend to be tribunal led. There are big differences.

One of the key things I want to raise about productivity relates to what the hon. Member for Llanelli (Dame Nia Griffith) said. She was absolutely right to say that job security leads to a better, more productive, happier and more loyal workforce. That allows workers and employees to plan and it results in better mental wellbeing. That is why, by setting statutory minimums in legislation, guidance and codes, we want employers to go further. Frankly, it makes business sense for employers to go further, rather than follow the egregious example of P&O. What is the point of taking people on and training them, which involves costs, time and resources, only to then cast them aside and have to do the same thing again?

[Dame Nia Griffith]

Will the Minister give way?

[Paul Scully]

I will give way, but I will then need to make progress so that I allow time for the hon. Member for Slough to respond to the debate.

[Dame Nia Griffith]

The Minister says that rational and good businesses would not do this, but the fact of the matter is that hundreds of businesses are being undermined because some businesses are using fire and rehire. It is being used repeatedly and in many different sectors. It is no good saying that it does not make logical sense; we need the legislation to back that up. That is what we want the Minister to bring forward.

[Paul Scully]

The hon. Member for Strangford (Jim Shannon) talked about parliamentary staff. Before becoming a Member, I worked in this place for a little while. I was an avuncular figure because I was about 20 years older than everybody else. People would come to my office in tears because former colleagues—they are not in this place any more—did not know how to employ people. The way in which they treated some of their staff was absolutely appalling. I have seen it at first hand.

The hon. Member for Llanelli rightly mentions the behaviour of some employers, and we have heard a number of examples today. Almost a year ago, The Independent reported that one employer was making a third of its workforce redundant and then taking on other people on less secure contracts. The Labour party claimed that by doing so it was putting itself on a firmer and fairer footing ahead of a general election, when it was telling people to use their own laptops, anti-virus software and firewalls, and to work from home. That is what I mean about outcomes and outputs. We can have great words, but if an organisation is not acting on them, that is no good to the employees who trust it. People want something that is flexible and that works to protect jobs but that also gets the best out of workers. It is really important that we work for that.

Let me leave the House in no doubt that this Government will continue to stand behind workers and stamp out unscrupulous practices where they occur. We will provide further updates regarding the consultation on the statutory code in due course, and we will inform the House and keep Members up to date on what we are doing on fire and rehire.