I am aware of reports of several businesses and industry sectors considering making large numbers of staff redundant. I appreciate that many businesses have been significantly affected by the Covid-19 outbreak, including those operating in the hospitality, leisure, entertainment, culture, travel, retail and transport sectors. I sympathise with anyone facing redundancy. Redundancy is never an easy process to go through, and it is important that those who have been made redundant are aware of their rights.
In the previous parliamentary session, Gavin Newlands MP introduced a Private Members' Bill which sought to prevent businesses from adopting "fire and rehire" tactics. The Bill failed to complete its passage.
I did not support the Bill, as ultimately terms and conditions of employment are a matter for employers and employees. Employers have the flexibility to arrange conditions of employment and should behave responsibly. It is completely unacceptable for employers to threaten to use fire and rehire as a negotiating tactic to force through changes to employment contracts. However, there is already recourse for those who feel they have been treated unfairly. If an employee feels they have been dismissed unfairly, they should first check their rights (https://www.gov.uk/redundancy-your-rights) before they consider taking their case to an employment tribunal.
Nonetheless, I have spoken to Ministerial colleagues to ensure that they are aware of the concerns raised about this issue. Especially at this difficult time, employers must act responsibly and only use the Coronavirus Job Retention Scheme (CJRS) to protect jobs. I understand that the Government is urging employers not to use the CJRS irresponsibly and thereby to make someone redundant on less favourable terms than they would otherwise have received.
I welcome that the Government asked the Advisory, Conciliation and Arbitration Service (Acas) to conduct an evidence gathering exercise to learn more about the use of fire and rehire practices. Acas has now published its findings and I am encouraged that the Minister for Small Businesses, Consumers and Labour Markets has asked Acas to produce better, more comprehensive guidance to help employers explore all options before considering dismissal and re-engagement.
The report showed that the practice of ‘fire and rehire’ includes instances where it has been threatened but not implemented, as well as companies dismissing and re-engaging employees. I understand that this is not a new phenomenon nor is it limited to a particular sector or type of employer. Acas acknowledged that while there was no quantitive data, there is a sense that fire and rehire had become more prevalent in the years before as well as during the pandemic.
The Government has been clear that an employer must exhaust all options available before considering dismissal and reengagement of staff. Regrettably, this is a complex issue and sometimes negotiations may fail and, in these circumstances, employers may need to dismiss staff, before potentially re-engaging with them.
More broadly, workers up and down the country have worked flat out during the pandemic, carrying out essential work to keep the UK economy going. It is vital that employers take their responsibilities seriously and act appropriately when it comes to discussions about changing employment contracts. The Government is engaging closely with businesses to ensure they are aware of what support is available.
I will continue to monitor the situation very closely.