Business, Energy and Industrial Strategy Committee
Oral evidence: Post-pandemic economic growth: UK labour markets, HC 306
Tuesday 29 November 2022
Ordered by the House of Commons to be published on 29 November 2022.
Members present: Darren Jones (Chair); Alan Brown; Jane Hunt; Mark Jenkinson; Andy McDonald; Mark Pawsey; Alexander Stafford.
Questions 137 - 171
Witnesses
I: Jennifer Sole, Co-Chair of the ELA Working Party, Employment Lawyers Association; Alexandra Hall-Chen, Adviser for Sustainability, Skills, and Employment, Institute of Directors; Hannah Reed, Co-ordinator of Constitutional Affairs, Unite the Union.
Examination of witnesses
Witnesses: Jennifer Sole, Alexandra Hall-Chen and Hannah Reed.
Q137 Chair: Welcome to this morning’s session of the Business, Energy and Industrial Strategy Committee, for our latest hearing as part of our UK labour markets inquiry. This is the first of two sessions where we are looking at workers’ rights and workers’ protections within the labour market. We are delighted to welcome our first panel today. In the room, we have Hannah Reed, who is the co-ordinator for constitutional affairs at Unite the Union, and Jennifer Sole, who is the co-chair of the ELA working party at the Employment Lawyers Association. On the screen, we have Alex Hall-Chen, who is the adviser for sustainability, skills and employment at the Institute of Directors. Good morning to all of you.
The Government have said to us, in evidence to this inquiry, “The UK has one of the best employment rights records in the world”. Is that right or not?
Hannah Reed: Can I start by saying thank you very much for the invitation to give evidence this morning? Perhaps unsurprisingly, my response to that question is no. This answer is really backed up by all the international evidence. OECD analysis, published back in 2019, showed that, out of the world’s most prosperous countries, only with the exception of the United States of America and Canada, the UK has the weakest level of employment protection legislation. This is largely due to the fact that, in the UK, employees have to wait for at least two years to qualify for unfair dismissal rights and redundancy payments. It also reflects the weakness of our collective redundancy laws. In recent years, we have all been too aware that the weakness of those laws has led to employers being able to get away with tactics such as fire and rehire.
Everyone is very familiar with the P&O scandal, but there are many other workplaces where Unite has fought and, in some instances, won to protect jobs, and pay and conditions, for workers where fire and rehire has been used. To date, the Government have still done nothing to protect workers who are experiencing such exploitative practices.
The second area of weakness I would like to flag is our law in the UK on employment status, which means that millions of working people in this country lose out on basic employment rights. That is unfair dismissal protection, family-friendly rights and trade union rights. That includes, of course, workers on zero-hours contracts, agency workers and those in false self‑employment.
May I just flag up the third area of concern for Unite? This probably underpins all the wider concerns that we will talk about in this morning’s sessions. That is the very limited level of collective bargaining coverage that is experienced in the UK at the present time. Research from the OECD, IMF and ILO—not necessarily trade union‑friendly organisations; quite the opposite—confirms that collective bargaining is the most effective way of delivering sustained pay rises, the most effective way of tackling inequality in workplaces, and one of the most effective routes of producing increased productivity in workplaces. In workplaces where collective bargaining takes place, all the evidence shows there tends to be increased investment in skills, lower staff turnover and higher productivity.
Yet in 2019, and I use that figure for comparison purposes, the UK had only 26.9% collective bargaining coverage. That compares to over 50% in Germany, 75% in the Netherlands and over 90% in countries such as Sweden and Finland. We all are very aware that we are facing a major, historic cost of living crisis in this country. Families are struggling to feed themselves and pay their household bills. Unite believes that there would be no more important time for the Government to introduce legislation to support collective bargaining. Instead, regrettably, we see a Government introducing measures that restrict the ability of working people to stand up for their rights at work, constraining their ability to exercise their fundamental right to strike. No, we do not agree with the question.
Q138 Chair: Jennifer, that was a clear no, in response to the Government’s view that we have the best employment rights record in the world. Do you have any understanding as to why they might think that?
Jennifer Sole: I would not comment on whether we have good employment rights, because I cannot answer any questions on policy, being at an apolitical organisation. I would flag that, as employment lawyers, we have concerns about the retained EU law Bill and the effect it is going to have, turning off many employment laws in this country on 1 January 2024. The effective enforcement of employment rights and the employment tribunals backlog are two causes of concern for our membership.
Q139 Chair: Okay, so there is work to do. Alex Hall-Chen, from an employer’s perspective at the IoD, do you think we have the best employments rights record in the world?
Alexandra Hall-Chen: We would not be drawn on the international comparison element of that. On the UK, our perspective would be that the current employment rights framework achieves a reasonable balance between employee protection and employer needs. There are areas where employee rights will need to evolve, particularly to reflect changing working practices, such as flexible working, and we would welcome changes along those lines. We would hope that they would be done on a case-by-case basis. If they were to increase the cost of compliance for employers, we would want to work with the Government to reduce those costs. I would also echo concerns, which I am sure we will come to later, around the retained EU law Bill.
Q140 Alexander Stafford: Hannah, you talked about no one having a right before two years of employment, and we are obviously talking about retained EU law. One of the things that I have experienced, speaking to friends and colleagues, is that, yes, they have more rights in the EU when they start, but there is also a far bigger culture across the EU of internship after internship after internship, which basically acts as a probationary period anyway and discriminates against people who cannot afford to do a series of internships. In other words, quite a lot of companies in the EU have people on these rolling internships. It is regular to have a long-term internship, and then they get employed. It is the same thing, but you actually have fewer rights in the EU. Can you just comment on that side of things?
Hannah Reed: Unite and all trade unions are not in support of internships, particularly where, in recent years, we have seen a growing practice in the UK of individuals being expected to pay to take up internships. I am less familiar with the comparison in terms of use of internships in Europe. However, I am aware that all the international data shows that the level of job insecurity is far higher here in the UK than in other countries. In the UK, we also have fewer collective bargaining agreements, which means that workers generally are less protected in the workplace and have less security.
Q141 Andy McDonald: Can I come straight to the issue about reasonable balance—the balance between employers’ rights and freedoms, and those of workers? If we look, for example, at the P&O ferry debacle, what was the balance there, where those rights were traduced? In fact, the company figured in the cost of the breach of the existing legislation. Was balance effective there?
Alexandra Hall-Chen: It is clear in the P&O case that there was not balance there and that P&O’s approach to that was completely unconstructive. The IoD is very supportive of the proposals that the Government are going to introduce on fire and rehire tactics. It is clear that there was no balance there. It is bad business practice and poor management.
Q142 Andy McDonald: We will perhaps come on to that specific, but, just to everybody more generally, do we need to see those employment rights strengthened? Specifically, is there credence to the notion of fair pay agreements being established in sectors so that everybody knows what the floor of terms and conditions is, allowing trade unions then to collectively bargain on top of that?
Jennifer Sole: Again, my viewpoint is from an employment lawyer perspective. We have to balance claimants and the companies for which they work, and certainty is key. If you produce statutory guidance, the workers know what their protections are and employers know what they have to do to comply with that guidance. If it is statutory, it is very clear to them.
My colleagues worked with Acas to produce its fire and rehire guidance. We would be quite happy to also work with the Government, if you were going to produce some statutory guidance, and to answer calls for evidence and consultations.
Hannah Reed: Everybody is in favour of flexibility in the workplace. The problem at the present time is that all the flexibility is on the employers’ side, and all the risk is taken by the employees. Unite believes that employment law needs to be strengthened substantially. As I have mentioned already, for us, the priority would be legislation introduced to promote collective bargaining, including fair work agreements, and encourage statutory rights for equality reps, for example, who negotiate on pay and conditions.
As I mentioned at the beginning, due to the weakness of our industrial relations system here in the UK, many working people are struggling on pay. The real rate of inflation at present is 14.2%. Many workers across the UK are experiencing serious cuts in living standards. Unite is looking to negotiate, wherever possible, those pay awards, and we have achieved an increase in take-home pay for members of over £200 million in recent months. That is money that is being reinvested into local economies, not squirreled away.
We are present only in those workplaces where we have secured collective agreements. While Unite continues, in Ryanair for example, to seek to win recognition, we need the Government to step up to the plate more and make collective bargaining more commonplace so that more workers can benefit from it. It is not just simply legislation on collective bargaining that is needed. We have talked about the scandal at P&O, where we saw 800 members of staff laid off and replaced by agency workers, which led to a major issue in terms of security, operational safety and operational issues in that workplace.
Unite has been fighting attempts by employers across the country, Weetabix and others, to use fire and rehire tactics. So far, the Government have failed completely to step up to the plate. They were very critical of the tactics they witnessed in terms of fire and rehire, but, to date, we have seen no practice. I also mentioned earlier the continued growth in casualisation and insecure working practices, with many workers having no guarantee over the number of hours they work and how much pay they will take home. Yet we still have not seen the Government’s employment Bill, which might have introduced some very meagre proposals, but nevertheless proposals, to try to increase the security of those members of staff in their working lives.
At Unite, we also believe that there needs to be reform of employment status. I am happy to come back with more detail on that if it is helpful. It is welcome that the Government recently ratified ILO convention 190 against violence at work. Yet, again, we still have not seen any commitments from this Government about how that is going to be implemented in the UK. We would like them to start with ensuring that employers have a responsibility to get their staff home safely at the end of the day.
I know this is quite a considerable list, but it is a long time since we have seen any substantial improvements in employment rights in this country. We would say a good starting point for this Government is to exempt employment rights completely from the retained EU law Bill. That Bill represents a major threat to UK workers’ rights. There is need for action now to ensure that there will not be an erosion of workers’ rights. Nobody voted in the referendum against employment rights. We would also call on the Government to drop its proposals to further restrict the right to strike.
Q143 Andy McDonald: We have had commitments to the introduction of an employment Bill from successive Administrations over recent years. Do you think that is an important Bill to try to pull all this together? Is there a commonality about trying to clarify the position?
Jennifer Sole: The last mention of an employment Bill was in the Queen’s Speech in 2019, and since then there has been no change at all. There were not that many potential changes to the law within that employment Bill in the Queen’s Speech. We were waiting, and we have been waiting, for them to be elaborated on.
We are aware that Matt Warman is currently looking back to the “Good Work Plan”. We had the Taylor review and the “Good Work Plan”, and there have been some legislative changes as a result of the plan, but we are waiting for more. We would not comment on what would be good and what would be bad because we have an apolitical stance, but we would be happy to explain any effect of the changes as they are brought to fruition.
Q144 Andy McDonald: We see the lack of clarity playing out in our courts on a day-to-day basis, where trade unions have to take matters to the Court of Appeal and the Supreme Court even to establish the status of a worker.
Jennifer Sole: Everybody wants clarity. Workers want to know their rights; employers want to know what they can and cannot do; and nobody wants to be caught within the system. This is taking years currently, just at the basic level of an employment tribunal.
Alexandra Hall-Chen: I would completely agree with that. Employers want to see clarity. A lot of comments from members will be about uncertainty, and the bureaucracy and stress associated with it. We would absolutely welcome a Bill that would clarify a lot of these issues for employers.
Andy McDonald: Hannah, is it a hattrick?
Hannah Reed: On employment status, we would like to see the law changed so that there is a presumption that workers qualify for rights. That should be the working starting point, and it should be for employers to show that they are outside scope. The Government promised other measures in the Bill that we are still waiting to see and would welcome. One would be laws to tackle unfair tips, to ensure that employers allocate all tips to the staff concerned.
There was also a commitment from the Government to extend redundancy protections, to prevent maternity discrimination. Those are pressing issues. The last issue I would mention very briefly, which has already been touched upon, is the need for a very substantial investment in enforcement in this country. We have seen a 50% cutback in budgets for the HSE and EHRC in recent years. There needs to be substantial investment in those resources for those agencies to ensure that vulnerable workers can have their rights enforced at work.
Q145 Mark Pawsey: Listening to our witnesses, we would think the Government have done nothing at all in this area, but of course they published some guidance on employment status in July this year. Jennifer, how helpful was that?
Jennifer Sole: Again, from the ELA perspective, we would welcome a further explanation of the status question.
Mark Pawsey: Is it a step in the right direction?
Jennifer Sole: There are three tiers of status within UK employment law, but there are some 15 classifications that then fit under sub-headings. There is no specific tool that clients can use, whether they be workers who do not understand their rights, or employers trying to establish that they are paying people correctly or giving them the correct contract, for instance.
Mark Pawsey: Was what the Government issued in July helpful and a step in the right direction?
Jennifer Sole: We would say it would be helpful if you went further.
Mark Pawsey: But, in itself, it was helpful.
Jennifer Sole: Again, I cannot talk to whether it was helpful. For employment lawyers, I think the case law is more helpful than the guidance.
Q146 Mark Pawsey: Alex, what is your view of what the Government produced in July?
Alexandra Hall-Chen: We welcome the publication of the guidance. We would say that it is a step in the right direction. Again, we would want to see more clarity. It is probably a bit too early to tell exactly what impact it is having for employers at least, but we would want to see more work in future to align particularly tax and employment status, which the Government have recognised.
Q147 Mark Pawsey: Hannah, you were not entirely impressed by it.
Hannah Reed: Guidance can be helpful. The risk with this guidance is that it did not have any statutory status, so it can simply be ignored in the courts. Our view would be that we do not need major legislation, but some legislation would be helpful. As I have mentioned previously, we believe that there should be a legal presumption, so the starting point should be that workers qualify for rights, and it should be for the employer to demonstrate that a person has not met that threshold for employment status. If MPs want to assist employers as well as workers in terms of simplifying employment status, the easiest way to deal with that is to reduce this three-tier approach that we have to employment rights in this country. All workers should, surely, be entitled to the same basic floor of rights.
Q148 Alan Brown: Jennifer, in your opening remarks, you mentioned the retained EU law Bill. Can you maybe just clarify what effect this Bill will have on employment rights and obligations if it becomes law?
Jennifer Sole: As drafted, there is the sunset clause, which will turn off a huge swathe of employment rights, as I said, on 1 January 2024. That is because, although we have some primary legislation, there is an interwoven tapestry of rights that derive from directives and from regulations in this country, which will cease to exist on 31 December 2023, as things stand.
That will then have a huge knock-on effect to us understanding our own precedents, which is the case law. We are a common law jurisdiction. Then 50 years are wiped away and we have an unknown slate again, and uncertainty is the big risk, as far as we are concerned as advisers, for both workers and for those people employing the workers, who need to know what they have to do come 1 January 2024.
Q149 Alan Brown: Is there any indication from the Government of what primary and secondary legislation would be required, if the assumption was that we want to retain all these employment rights and laws?
Jennifer Sole: The regulations that disappear are working time regulations, so holiday pay, statutory maximum working week and parental leave, and those on TUPE and outsourcing, so workers will not have the right to transfer to a new employer if a contract is taken over. Part-time work and fixed-term working regulations will disappear, which will have a detrimental effect on a lot of women, because they tend to be most of the part-time workers, as has been shown by case law. Health and safety regulations, so health and safety at work, are under threat, as are equal pay rights.
Although we have the Equal Pay Act, a lot of the clarification of the Act has come through our case law, which looked up to the European courts in order to answer some of our questions. If that then does not exist on 1 January, we are back to not knowing what happened 50 years ago and we have potentially 50 years of litigation ahead of us, which is no good for anyone economically.
Q150 Alan Brown: Hannah, you have already said that you want to see employment rights exempt from the Bill. Is there anything that you want to add? I noted that it was reported in the media not that long ago that the Government suddenly found 14 extra laws that they did not even know about, so what does that say about competence in the programme to get this through?
Hannah Reed: That statistic is incredibly worrying, because on 1 January 2024 we could lose rights that the Government never intended to let slip away. They would just disappear because they did not happen to be aware of the list. The Bill is incredibly worrying. We have already had a discussion of the sunset clauses.
There is one point to add in particular to the fact that laws will simply disappear overnight. It will be insecure, low-paid workers who will particularly lose out from that, who are less likely to have clear contractual arrangements that provide enhancements in terms of occupational rights. Unite is also very worried that Ministers will have very wide-ranging powers to revise laws, even if they stay on the statute book, without proper parliamentary scrutiny.
The major concern, which often goes under the radar, is the suggestion that existing case law will simply disappear. Not only will that cause chaos in the tribunals, but it will mean a serious erosion in workers’ rights. I have many good friends who are lawyers and I respect them, but I would not really want to rely on them to protect what are key rights of working people to full holiday pay, so that they can rest when they need to take a break, and to equal pay, for example. All these rights are seriously under threat, so the Government should completely exclude employment law from this area, including from the requirements for the loss of case law.
Q151 Alan Brown: Jennifer, we are talking about people’s rights, but employment rights also depend on effective enforcement. Are there any issues in the UK at the moment in respect of enforcement?
Jennifer Sole: Yes. I alluded to this at the outset of today’s session. As a membership, we are extremely concerned with the backlog of cases within the employment tribunal system. As I said, we have anecdotal evidence where listings are taking place two years after dismissals. The tribunal system now has far more cases to hear than it did pre-pandemic. The pandemic has made it worse, but it was breaking anyway. We understand that the staff and the judges are there, but there are not enough of them. Arguably, it is resource, which I appreciate is not your area, but we need to get rid of the delay.
There was one proposal, which I have not seen in any of the recent literature from BEIS, but you were going to extend the time limit for some employment tribunal claims from three months to six months. That has disappeared off the agenda. I do not know whether that has changed as a matter of policy, but that was something that could assist with the delays, because people would not have just the three months to put their claim in, which is causing so many cases and such a big backlog.
Q152 Alan Brown: Is it not the case that, if the time period was extended, it could allow more cases and create a bigger backlog?
Jennifer Sole: Yes, on the other hand, it could, but, as advisers, we would say that we have greater scope to settle within a conciliation period pre-litigation, which is just causing chaos for the infrastructure of the tribunals.
Q153 Alan Brown: You mentioned resource being an issue, so what can the Government do to resolve that?
Jennifer Sole: You need to sort out the delay. There needs to be some action. You are going to talk about a single enforcement body later. Again, it would not be ELA’s stance to say that we advocate for or against a single enforcement body, but enforcement needs to be high on the agenda.
Hannah Reed: I would certainly support everything that Jennifer has just said and have just a couple of additional points. We believe that Government should take a more active role in enforcement—not only resources. I would completely endorse that, but maybe there is a role for statutory enforcement bodies to enforce unpaid holiday pay and statutory sick pay. There were commitments made to that, but, again, we would welcome action.
As a critical point, Unite is not totally convinced by the proposals for the creation of a single enforcement agency. The risk is that, when you pull together different entities into one entity, you end up with a sum that is less than its parts. However, what is really needed is increased enforcement and increased investment in inspectorates. The risk of an employer ever being inspected by a state inspectorate is so low in this country. Hopefully, one of the lessons that we have learned from the Covid pandemic in particular is the need for substantial investments in the NHS to prevent, again, future frontline workers either becoming seriously ill or losing their lives in such circumstances. Hopefully, investment in the HSE will be at the top of the Government’s agenda.
Q154 Mark Jenkinson: I just wanted to return to the retained EU law stuff. I do not know if there is a misunderstanding of the Bill or wilful political misrepresentation, but there is absolutely no risk to employment law in the retained EU law Bill. Ministers are on record as wanting to protect employment law.
There is a suggestion that Government would do nothing to retain thousands and thousands of statutory instruments and other instruments that have originated in European legislation. Where does this idea that everything will just disappear and that everything is at risk come from?
Andy McDonald: The Bill.
Mark Jenkinson: It does not come from the Bill at all, Andy.
Jennifer Sole: It is the sunset clause within the Bill. My colleagues have prepared a really useful paper that sets out exactly—
Q155 Mark Jenkinson: There is a sunset clause in the Bill, but there is also an expectation that Departments will audit all retained EU law and either revoke, reform or assimilate. There is a clause in the Bill to allow them just to assimilate into UK law, but the retained EU law Bill is just an audit exercise to ensure that we keep things that we want and that we do not keep things that we do not want. There is, of course, the possibility of an extension of that sunset clause by another three years to allow them to do that, so where does this idea that they are at risk come from? It is a political misrepresentation, is it not?
Jennifer Sole: I would not say so. I would say that we are reading the Bill.
Q156 Mark Jenkinson: You are not reading the Bill. You tell us that you will not take a political position, but that is a political position. If that is the ELA’s position, that is a political policy position.
Jennifer Sole: I disagree. We have concerns with how the sunset clause will work, and we set those out within a paper that I am very happy to share with you. I did not prepare the paper, but I have gone through several regulations today that would no longer exist on the basis of the Bill as drafted. We would welcome the audit. We hope that we would be able to help with the audit by supplying this paper, which has set out the laws that will be affected and how they will be affected. That is our position. It is within that paper.
Q157 Mark Jenkinson: Hannah, it is just a wilful political misrepresentation that suits Unite’s political purposes, is it not?
Hannah Reed: I have two quick responses to that. I would disagree with that. If the Government are committed to keeping on employment law, the clearest way of doing that is to table an amendment to say that employment law is exempted from the scope of the Bill.
Q158 Mark Jenkinson: I would disagree. We need to audit that legislation, which is exactly what the retained EU law Bill does.
Hannah Reed: Can I just draw attention to one other element of the Bill, which is not the sunset clauses? It is the deletion of years of case law. Trade unions such as Unite have worked for years through the courts to secure better rights for working people. That includes ensuring that workers get full holiday pay when they take leave. If you got bonuses as part of your pay previously under UK law, you would not have been paid that. You would not have been paid overtime.
The real concern is that, if that provision is left in the Bill, employment law will be weakened automatically. It is welcome if the Government want to say that all employment law will be retained. We would like to be consulted by the Government on those proposals. Alongside the sunset clauses, it is about the powers to review and revise employment law, but also this loss of existing case law, which will have substantial impacts on working people’s lives.
Q159 Mark Jenkinson: Is it not the case that UK case law remains and is not altered by that Bill?
Jennifer Sole: Not necessarily, because they looked to European case law in order to interpret. That is where our jurisprudence would be affected.
Mark Jenkinson: UK case law is protected in the Bill. That is the answer to that.
Chair: We need to move on, but we will make sure that that note is circulated.
Q160 Jane Hunt: Just to declare, I used to work for the tribunals service between 2002 and 2009, when there were backlogs as well. Just moving on from Alan’s question, what additional actions could be taken to ensure that employment tribunals are used as a last resort, with equal opportunity for both parties to resolve the issue long before it gets to an employment tribunal?
Alexandra Hall-Chen: I have to say that this is not an area that we have done a huge amount of work on, but, if there are specific questions that we could put to our membership, we would be very happy to do that.
Hannah Reed: I might sound like a cracked record, but there is one simple answer to this. One of the key roles that trade unions perform in the workplace every single day of the week, which does not often get in the headlines or news stories, is resolving issues using good workplace procedures that have been negotiated. That is the most effective way of avoiding the need for pressure on the employment tribunal.
As a trade unionist, I would always say that, if we end up in an employment tribunal, that is a lose-lose for everybody, so we will work, wherever possible, to resolve those disputes in the workplace, working with employers in advance to try to prevent breaches of the law, but, where they do arise, to reach a settlement. Of course, Unite will represent members in tribunals where we cannot succeed in the workplace, but that is the principal way of doing it. This is why there is some regret that, in recent years, we have seen more attacks on the role of trade unions when, in workplaces, we are doing our very best to work with employers to ensure that employment law standards are upheld and respected.
Jennifer Sole: I am afraid that that is probably a policy decision that I am not permitted to answer, but ELA will be really happy to work with you on any proposed consultations, legislation or guidance and to give you our input as advisers.
Q161 Jane Hunt: Does the Acas process work within the employment tribunal process? Is there anything else that you would do to that—not necessarily policy-wise but just in terms of the mechanics?
Jennifer Sole: I can refer to our survey results from last year, which were variable. It depends on the conciliator, which is not a perfect answer, I appreciate. In principle, it works, but it really does depend who you get on the other end of the phone.
Andy McDonald: Could I return to the fond issue of fire and rehire? Looking at P&O, when that happened—
Jane Hunt: That was not fire and rehire.
Q162 Andy McDonald: It is a version thereof. People were sacked. That case brought it into the public discourse as a significant issue, and all hell was going to descend upon that company and any others engaged in fire and rehire—Centrica, Clarks, British Gas and British Airways, among many others.
We were told that the Government would announce a new statutory code on fire and rehire. That was back in March 2022. We have not seen that. That has not happened. I would just like to ask you whether a statutory code is going to be a sufficient deterrent to employers who want to embark on such a course of action.
Jennifer Sole: As advisers, we would welcome a statutory code and the opportunity to work with you in producing it. Anecdotally, as our working party, we do not find this to be a very prevalent practice. I appreciate that I am going to have colleagues who say differently, and you have mentioned the British Airways, British Gas and P&O cases that made it to the mainstream press and brought it to the attention of the man on the street, but there are reasons why companies need to fire and rehire.
A statutory code needs to separate those, and explain what a good process is and the good reasons for that process, so that there is clarity. That is what we want as advisers. That is what our clients want, whether they be workers or whether they be the businesses that employ them. Uncertainty begets the litigation that we are all trying to avoid.
Q163 Andy McDonald: If there is no sanction, what is to stop people doing it?
Jennifer Sole: That would be a policy decision for Government.
Hannah Reed: I agree with most things that Jennifer said, but there are still examples of fire and rehire happening. The P&O case brought it to the public profile. Over the last year, Unite has had to battle fire and rehire at BA, as has been mentioned, at Weetabix, and more recently at Go North West. Unite has won all those disputes, retaining jobs and protecting pay and conditions.
We know that, too often, right across the country, in order to drive down pay and conditions, employers are using this tactic of threatening people with their jobs, even in the midst of a cost of living crisis, or are threatening outsourcing.
Unite would be very happy to work with and be consulted by the Government on a statutory code of practice. We, however, believe that there needs to be legislative reform to tackle this problem, at the forefront of which should be a recognition that, where employers are considering redundancies, they are properly consulting with trade unions and with the workforce. Too often, employees will protest against these practices, because they cannot see that the employer has any good reason. Often, these employers are making substantial profits and have no good reason to be laying staff off.
That is what the purpose of collective redundancy consultation is—to enable trade unions and workforces to understand and to work with employers if restructuring is needed, but, too often, employers simply want to go ahead to cut headcount, to reduce the wages bill and to drive down pay and conditions, which is the last thing that we need to see in the midst of a record cost of living crisis.
Q164 Andy McDonald: Alex, if we are stuck with a code of practice, what would have to be in it to make it effective and binding?
Alexandra Hall-Chen: First, we are in favour of the new code. In order for it to be effective, we want to see it solve confusion on the issue and to provide clarity for employers. That is primarily what employers want.
Q165 Andy McDonald: Have you seen the code?
Alexandra Hall-Chen: No.
Q166 Andy McDonald: But you are in favour of it.
Alexandra Hall-Chen: We are in favour of the concept of there being a code. When it is published, which we hope will be in the near future, we will, of course, engage with IoD members and provide feedback on that, but the main thing for us is that, once there is clarity on what is and is not permitted under current law, it should ideally define good behaviour when it comes to practice, promote transparency and a partnership approach to restructuring, and define ways in which its use may be legitimate.
Q167 Andy McDonald: What if the code is not observed?
Alexandra Hall-Chen: We want to understand what current law permits before necessarily legislating to change it, but, if there is strong evidence that it is not being observed, Government should, of course, look at additional measures.
Q168 Alexander Stafford: We have been increasingly homeworking during the pandemic. Some unions have called for a statutory right to disconnect. What are your thoughts on it and what do you want from a statutory right to disconnect? How will that work? Hannah, you are nodding your head, so what do you want, first? Then, Jennifer, what on earth is that going to mean?
Hannah Reed: Unite supports the TUC’s call for a right to disconnect. I, for example, have certainly experienced in my working life that our mobile phones become our remote control for life. Workers in the UK already work some of the longest hours of any across Europe. It is a right simply for individuals to be able to switch off from being online or from their mobile phone, so that the employer knows that they need to contact them during certain times of the day. That is when those staff can be expected to be available. Staff can spend the remainder of the time with their families, resting and having fun.
We would also say that a right to disconnect simply helps those people who are working online by computer. We would also like to see a move in other sectors, as is being debated at the present time in manufacturing, towards shorter working weeks to avoid burnout and people dropping out of the labour market. We know that we have labour shortages at the present time. These measures may help people to have a better quality of working life and a better work-life balance.
Q169 Alexander Stafford: That all sounds very nice and we all want that, but, in terms of trying to provide a statutory right, my impression was that, every time I have had a contract, I have my working hours, between 9 am and 6 pm or whatever, at a certain location, and there is always an extra line in that contract that says, “Usual working hours or except in special circumstances, where you will be required to”—whatever. There is always that get-out. If there is that get-out in contracts, how would the statutory right to disconnect work legally?
Jennifer Sole: You have flagged a very real problem. It would be a huge challenge to find a way to legislate that is workable and practical. We have the working time regulations, which set the maximum working hours in a week. We have health and safety legislation, which requires risk assessments to be undertaken. The pandemic has led to this being a real issue, with the blurred lines between what is work and what is your office. Home is the office. It would be a real challenge.
We have seen other jurisdictions that you could look at and learn from what they have tried to do. As well as some EU countries, the Philippines and Argentina have brought in legislation, but the legislation is not necessarily working in practice, so it would be a very difficult task. We would be glad to look at any legislation in consultation.
Q170 Alexander Stafford: If it is a difficult task, do we need to have a statuary right for this? Does this take the onus away from the employers for making good workplaces and push it on to, frankly, an unworkable law, which then will open up a whole load of legal challenges?
Hannah Reed: We need employment law only because employers do not always follow good employment practice. The concern is that employers increasingly send emails after normal working hours, and there is an expectation that people will respond. In any law, it should be a basic understanding that, if an individual does not respond outside of their working hours, they cannot suffer detriment. They cannot be subject to not being promoted or being disciplined.
Another issue that is coming to the fore is that employers are increasingly using surveillance. Regrettably, when people are working at home, employers will be monitoring how many hours the individuals are on their Teams programme and typing on the machine. They have cameras that can look into people’s homes. Those might be some of the worst practices, but it would be helpful to have tougher rules on surveillance, alongside a right for people to say, “This is the end of my working day; I will maybe do an extra half hour, but I am going to stop at that point and not respond to any emails.”
Q171 Alexander Stafford: I am still trying to get into this. We already have the working time directive in terms of hours, so I struggle to understand how a law would make any difference to working people’s hours, any more than the working time directive. People are working more than that anyway. I am trying to work out how this would work and whether we need it.
Hannah Reed: The contract of employment places a duty on individuals to show good will and to co-operate with their employer. If an individual does not respond to a direct order or request from an employer, they could find themselves in difficulties or subject to discipline or, more likely, not subject to promotion, if they are not available for endless hours.
Legislation would simply make clear—and should be accompanied by guidance—that, if an employer sends a message outside of working hours, they cannot reasonably expect a response until the person is due back in the workplace. If the individual fails to respond and suffers any detriment in the workplace—and our laws are very familiar with detriment rules—they should have compensation, or further action should be taken.
Alexandra Hall-Chen: It is absolutely right that Government should look at this. There are some very valid questions about opportunities and challenges, including burnout, with remote working. From our perspective, we feel that a legal right to disconnect would potentially be very prescriptive with regard to the nature of the working environment. Needs differ, and arrangements are probably best determined at the company level through dialogue between employers and employees.
Chair: Thank you very much, everyone. Thank you to all three of you for your contributions this morning.