Employment and Trade Union Rights (Dismissal and Re-engagement) Bill

Debate between Paul Scully and Brendan Clarke-Smith

Friday 22nd October 2021 Commons Chamber

[Paul Scully]

My hon. Friend is absolutely right. We are taking proportionate and appropriate action on the issue of fire and rehire, but that must avoid any course of action that runs the risk of doing more harm than good, increasing the risk of collapsing businesses and subsequent increasingly redundancies and unemployment. I have real concerns about the approach in this Bill, as it would significantly increase administrative burdens and costs to employers, when they are already facing challenging circumstances.

I want to assure the House that the Government take reported misuse of fire and rehire really seriously, and we are continuing to assess the evidence available from different perspectives. I will set out today what I believe to be a proportionate response to the available evidence on the practice of fire and rehire. It is an approach that encourages best practice by employers, protects workers from unscrupulous employers and, above all, protects jobs and livelihoods by not forcing employers into a situation where they need to make redundancies or close entirely. That is an approach which, in line with the Government’s actions over the past two years, has supported businesses, livelihoods and jobs through the profound impact of the covid-19 pandemic on the whole country.

[Brendan Clarke-Smith (Bassetlaw) (Con)]

I thank the Minister for being generous with his time today. He mentioned burdens. We have spoken about ACAS today and there is also the employment tribunal system, which currently has a burden to get through. Does my hon. Friend share my concern that one of the unintended consequences of the Bill is that it could add to that burden and lead to more workers not being able to resolve their problems?

[Paul Scully]

My hon. Friend, typically, is absolutely right. One of the unintended consequences of the Bill is that it adds extra layers within the process. It risks adding pressure on the employment tribunal service.

Let me set out what we know about the practice of fire and rehire. During the coronavirus pandemic, the issue started gaining attention through high-profile cases, many of which we have heard about today. I was deeply concerned by reports over the last year that some employers might be turning too soon to firing and rehiring employees and were using this as a tactic in negotiations to put undue pressure on workers to rush into accepting new, and often worse, terms and conditions, or face losing their jobs. That is why we asked ACAS to conduct an evidence gathering exercise to learn more about the use of fire and rehire. We wanted ACAS to do this because of both its expertise and its impartiality. Businesses, employee representatives and other bodies were all included in that report. I want to take this opportunity to set out the key findings of the ACAS report, which was published on 8 June.

Much of the attention given to this issue was driven by high-profile cases with large employers and unionised workforces. Those cases include instances in which fire and rehire had been threatened, in some cases leading to dismissals; in other cases agreements had been reached. However, ACAS found that fire and rehire is neither a new phenomenon nor concentrated in a particular sector or type of employer. It seems to have been used by employers in the years before covid-19 as well as during the pandemic. Fire and rehire is used in a range of circumstances, including in redundancy scenarios, both to minimise redundancies by cutting payroll costs and to enable the maximum reduction in headcount, for example by changing the working hours of remaining staff, as we have heard.

ACAS suggested that there was a sense that employers’ ability to fire and rehire was being used earlier in contractual negotiations than before, but it was unable to establish whether that was linked to business challenges due to covid, or whether the timescale available to reach agreed solutions was shorter than at other times.

The parties that ACAS involved in the evidence gathering agreed that the use of fire and rehire should be limited. Views on less acceptable use focused on three areas. The first was whether negotiation was conducted fairly and in good faith, with concerns focusing on fire and rehire being used as a threat, as I have said. Secondly, while some employers may have a genuine business need to vary terms and conditions, there are concerns that some are exploiting the circumstances of the covid-19 pandemic to drive through disproportionate or longer-term changes.