Greg Smith MP: speeches

Speeches

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  Amendment 155 would make the initial period of employment six months, to align with a standard probationary period. The Government have admitted that they do not have robust data on instances of dismissal for those under two years of employment; in other words, we do not know if there is even a problem with unfair dismissal that the Bill is seeking to solve. Without knowing the problem, how can the Government identify a solution or even know that one is necessary? This is a flimsy basis for enacting a measure that the Government estimate will cost businesses in excess of £40 million a year overall.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I understand the hon. Gentleman’s point. He likes to point to the profit lines of many of those businesses. Just because a business is making a substantial profit does not necessarily mean that it does not have to go through significant change in businesses practices in meeting market demands, manufacturing processes as technology moves on, or whatever it might be. I am really not seeking to advocate for anybody to be abused in the way he talks about. I am trying to acknowledge that things change in lots of businesses all the time. No one should be unfairly treated as part of that process, but sometimes, even for the very largest companies, significant change happens—as I say, to manufacturing processes or whatever—that requires a fundamental shift in job descriptions. I am sure that most of those businesses want to keep their workforces on, but if the contract under which the employee was originally employed talks specifically about processes or ways of manufacturing, or uses of particular bits of equipment, that just do not exist anymore because technology has moved on, there is a requirement for contracts to change. Ideally, that will always be done in a consensual, negotiated manner, but the amendments put forward by the hon. Gentleman and the SNP go too far in shutting down that restriction. I agree with his point about small and microbusinesses, which really will struggle, in an ever-changing world with technological advancement and so on, to meet the conditions he is putting down.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  Of course there will always be some who look for loopholes, but I gently suggest that the vast majority do not. They are good employers who care for their workforce, because, as we have discussed many times over, no business is anything at all without both parts—the workforce and those who risk their capital and so on to make those jobs happen, and to produce the products and sell the services in the first place. The intervention from the hon. Member for Dundee Central neatly leads on to where I was going anyway. The Committee heard from almost every witness who was an employer or who represented employers that the dismissal and re-engagement provisions in the Bill were already too restrictive and would lead to staff being laid off. The SNP amendments make those even more restrictive, so it is not hard to work out where those witnesses would have gone on this front. Given that risk of lower employment and higher unemployment, I gently ask the hon. Gentleman to consider how the SNP would actually answer that challenge were the amendment to go through.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn .

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I have a straightforward question. We are back once more with our old friend of not having full clarity and having consultation after legislation. The Minister gave a figure, but it is not clear exactly what the Secretary of State might consider specifying as the maximum compensation that can be awarded under this measure. I acknowledge that there is a consultation to come, but the reason that we need greater clarity relates to the point about business confidence in making new hires, putting new job adverts out, seeing who applies and trying to recruit. If there is a risk that the figure will be disproportionately high, it will make businesses more risk-averse about growing their businesses and thereby growing the economy and creating more jobs in our country. My only substantive question is “Where is the ceiling going to be?”

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I will speak briefly to amendments 160 and 161, standing in the name of the hon. Member for Dundee Central and the Scottish National party. These amendments seek to make the fire and rehire provisions more restrictive, saying that employers cannot vary contracts or re-engage staff on different contracts “to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business,” and remove the ability for the employer to do so if in the circumstances “the employer could not reasonably have avoided the need to make the variation.” I appreciate that it is quite a convoluted position, but it is clear to me that the SNP is siding with the trade union position that Martyn Gray set out, which is that “if directors can sign off the business as still remaining as a going concern, fire and rehire should not be an option.” –– [ Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 65, Q61.] But we heard from almost every witness—

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  As I hope I made clear in my opening remarks, amendment 155 is a probing amendment. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn .

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  It is a pleasure to serve under your chairmanship, Ms Vaz. This pair of amendments on unfair dismissal stand in my name and those of my hon. Friends from the official Opposition. Amendment 156 would make the fact that the employee was made redundant a reason in relation to the dismissal of an employee during the initial period of employment. The Bill stipulates that the modified protections against unfair dismissal in relation to the initial period of employment mean that an employee can be dismissed for the reasons listed in section 98(2) of the Employment Rights Act 1996, which include “the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do…the conduct of the employee” or “that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.” The 1996 Act also includes a fourth reason, “that the employee was redundant”, which is not replicated in the Bill. This is a probing amendment—we do not intend to press it to a Division—to try to tease out from the Government a little more detail and to establish why that fourth reason is omitted from the Bill. Amendment 157 is also a probing amendment. We want to understand what steps will be specified in regulations that an employer must follow in order for the dismissal of an employee to be treated as fair. That will come back to the test of subjective reasoning rather than specific guidelines or regulations in the Bill. It is only right that the Committee and businesses out there in the real world can fully understand the scope with which the Government are defining “fair” or “unfair”. Inherent to that is the question, why is it not in the Bill? Why is it not as clear as day in the words printed in this quite substantial tome? I know that the Government want to table more amendments, so perhaps those could be a little more specific. Critical to amendment 157 is the question how burdensome the Government intend this measure to be and how proportionate that burden will be on businesses in relation to the problem that the Minister thinks the Bill in its current form—its current vagueness—will solve.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I am grateful to the Minister for that clarification. I understand the point about autumn 2026, but would he acknowledge that the vast majority of businesses are probably already working on their 2026 business plans? They are not just planning for tomorrow, next week and January; they are making medium and long-term plans. Those decisions about creating a new role, filling a vacancy or whatever it might be will already be baked into business planning for 2026, 2027 and maybe through to 2030, so it is not good enough to say, “It’s not coming in until 2026, so don’t worry.” Businesses are already in that planning space.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I think this is one of the least contentious parts of the Bill, and we do not seek to oppose in any way the important protections for pregnant women and new mothers. I note that what the Government are really doing with these clauses is building on the regulations that, as the Minister rightly said, came into force in April off the back of legislation brought forward by the hon. Member for Barnsley North (Dan Jarvis) and my noble Friend Baroness Bertin in the other place. Again, we have the challenge of consultation after legislation. It is important that the Government move quickly to ensure that the protections for pregnant women and new mothers are not left to drag out as part of that consultation. Although consultation is important, the objective that the Government are trying to meet is quite clear. The desire to build on existing legislation should make it less controversial, and it should make getting it right quickly less of an open-ended question. That will enable pregnant women and people who are trying to conceive and start a family—or to have a second, third or fourth child, or whatever it may be—to plan with the confidence that those protections will be in place. I am not in any way speaking in opposition to this measure; I am just urging the Government not to let the consultation drag on.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I do not disagree with what the hon. Gentleman says, but where we do disagree is on the conclusions that we draw from that. I would strongly argue that to introduce primary legislation without an adequate evidence base is foolish, whereas he seems to be arguing that it is fine to do that. I fundamentally agree with the hon. Gentleman that there is often a problem with data collection, particularly on complex things such as overall employment numbers, the number of people in multiple jobs or whatever. He certainly hit the nail on the head about the post-pandemic understanding of the labour market. The pandemic brought about almost a fundamental reset in a lot of working patterns; nobody seems to work quite in the same way as they did before the pandemic. I acknowledge his point, but I suggest that this was actually the time to take a bit of a pause and a step back to think through new measures more carefully, rather than to rush ahead with a Bill in order to publish it within 100 days of the Government’s taking office. I return to my questions to the Minister. What estimate has he made of the additional cost to business, including salary costs during performance management or disputes, retention costs from tribunal risk aversion, and increased settlements offered to avoid legal claims? Are those costs worth it for a problem that, as we have just discussed, nobody can actually prove exists in the UK market right now?

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I beg to move amendment 155, in schedule 2, page 112, line 23, after “period” insert “of no less than six months”. This amendment makes the initial period of employment at least six months in length.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  Where does the Minister think the cost to businesses will be borne? Will it mean lower wages for employees, no Christmas bonuses or perhaps pay rises that are not as great as employees might be expecting? Or will it ultimately get passed on to customers, consumers and purchasers of the services that those businesses provide? Where will the cost actually be borne?

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  The Minister tempts me, but I will set out our rationale for new clause 28 and amendment 134. I acknowledge that he has published a series of impact assessments, but the Regulatory Policy Committee has not exactly given the Bill a glowing bill of health, and there are a significant number of red ratings in its assessment. I gently push back and suggest to the Minister that the impact assessments need to be looked at again across the piece, so that we can be absolutely certain that the Bill will do what the Government want it to do. As the Minister rightly said, new clause 28 would require the Government to report on the impact of the Bill’s provisions on unfair dismissal on employers and the economy. That goes beyond the impact assessments that the Government have already conducted, in the sense that the assessment we are calling for must “include labour market and broader macroeconomic analysis… examine the impact of the measures in section 19 and Schedule 2 …on employment, wages and economic output…consider the likelihood the dismissal measures leading to lower employment, and greater use of temporary contracts, and…examine the likely effect of section 19 and Schedule 2…on productivity…wage growth…equality of opportunity…job security…economic activity, and”— last but not least—“employment.” All that work should have been done before the Government proposed this legislation, so the Opposition think it is only right to try to ensure that the Government present the House with the necessary information before the changes to unfair dismissal come into effect. That is the bedrock of a democracy, and it is only right that all Members of this House and, indeed, the other place can see that information before they permit the Bill to complete its passage and gain Royal Assent. We heard from several witnesses that the provisions will tip the balance of risk for employers, who will choose to not hire people, rather than take a chance on whether a new hire will work out. We also heard that people on the edge of the labour market represent a riskier proposition for employers and are most likely to be disadvantaged by the changes. I do not believe that any Member of this House—of whatever political party or none—wants to see people on the edge of our labour market denied a second or third chance. They deserve the ability to get on in life if, for whatever reason, they have not been able to get on the job ladder and into gainful employment. All the evidence indicates that the Bill’s provisions on unfair dismissal will have a chilling effect on business growth. How will the Bill support the Government’s first mission of economic growth, when all the evidence—written and oral—and the reports in the press and from other bodies point to the contrary? Even the Government’s own impact assessment cannot provide reassurance that the measures in the Bill will lead to growth. The new clause would introduce safeguards and provide the clarity and detail that all Members no doubt want on whether clause 19 is even necessary for the intent of schedule 2.

• 12 Dec 2024 · Business of the House · Hansard source

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  I draw attention to my entry in the Register of Members’ Financial Interests. I am sure that the Leader of the House will agree that we should always acknowledge and congratulate Great British sporting success stories and that every Member was glued to their television on Sunday to watch McLaren secure its first constructors’ championship since 1998. Will she join me in congratulating McLaren, that Great British icon, on its success? Also, to make up for the apparent lack of acknowledgment from the Department for Culture, Media and Sport, can we have a debate on the value of motorsport to the British economy?

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  Not a surprise.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  I beg to move amendment 127, in clause 22, page 33, line 12, leave out from “that” to end of line 21 and insert— “the reason for the variation was to provide for improved employment practices and to update and reform outdated working practices, in order to allow for the more effective running of a business or organisation.” This amendment would provide an exemption to unfair dismissal for failure to agree to a variation of contract. It is a pleasure to see you back in the Chair for the afternoon sitting, Ms Vaz. The amendment, in my name and those of my hon. Friends, is a probing one—I want to be clear about that from the outset—that would provide an exception to unfair dismissal for failure to agree a variation of contract. The premise underpinning the Bill’s provisions on fire and rehire is that the only reason for an employer to want to re-engage employees on varied terms is to exploit them by giving them worse terms and conditions. I am in no way, shape or form suggesting that that does not occasionally happen, but I come at this debate from the other direction, presuming that most employers are good employers who care about their workforce and want to see a happy staff getting on, being productive and doing the things they do to make the business a success, be that making things, giving advice or providing a service. The Bill basically says that a business needs to be going bust for the process of varying a contract to be justified. Again, I am not certain that that is the right starting point. What if there were a legitimate reason for wanting to vary certain terms and conditions? We touched on this in our debate on SNP amendments 160 and 161 before the break, and I gave some examples thinking about the pace of change in a business. Let us say a manufacturing business moves from a very manual process for putting a product together—be it a car, a piece of furniture or some smaller product—to invest in robotics or something. I can think of a farm in my constituency that was a traditional dairy farm but, thanks to a not insubstantial grant from the previous Government, has built a robotic dairy. That means that the people who work on that farm are doing a fundamentally different job. They no longer have to get up at 4 am to manually hook the cows up to the milking machines; believe it or not, the cows now form an orderly queue for the milking robots. I am not joking, Ms Vaz. I invite anyone to come and see it with their own eyes. There is a vending machine where people can buy the milk direct. The point at which staff intervention is needed is if an alarm indicates that a machine has clogged or broken, the pasteurisation room has hit the wrong temperature, or whatever. It is a fundamentally different job. Sometimes, that happens in a workplace where the employer wants to keep the staff—they do not want to let anyone go and they do not want the robots to replace them—but it involves different terms, different conditions and a different physical thing to do on a daily basis. I offer that as a practical example of how businesses change.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  The Minister can of course look back in history at when these measures were put in, but the Bill seeks to change all sorts of things across all sorts of sectors. We are free from the European Union! He could change it if he wished.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  Most of my concerns have been outlined in the amendments to the clause, but I want to ensure that it is placed on the record that the Opposition want to see employers engage in good faith and believe that most employers do. I accept the Minister’s point about the scandal of P&O Ferries—I was on the Transport Committee at the time, so possibly looked into it in more detail than most colleagues from the previous Parliament. Where we perhaps still have a difference is that taking that unacceptable, scandalous situation at P&O and legislating for everybody on the back of it is not necessarily the best starting place. As I said in the previous debate, working on the presumption that all businesses are trying to exploit their workforces is not healthy or, I would suggest, reflective of the real world. Although there have to be measures to shut down things like what happened at P&O so that it does not happen again, there must equally be flexibility and understanding so that, when employers have engaged in good faith and really are trying to save the business—to save the jobs in the first place—we do not find ourselves in that nightmare scenario of people saying, “It’s too difficult—we’ll just have to make everyone redundant.” I fully accept that this clause will pass in a few moments, but perhaps the Minister could consider, before we come to Report, some additional safeguards on that so that we do not end up with job losses and employers slamming their heads down on the desk, unable to find another way to save the jobs and the workforce. That would keep giving people the living they need to get on and prosper as part of our country, part of the business they are engaged in and part of our vibrant UK economy.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  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.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  I am reminded of the old chestnut about rushing out a Bill in 100 days and forgetting about the devolved settlements as part of the process. Given that devolution was largely the product of the previous Labour Government, I am slightly surprised that the current one would forget about Holyrood and Cardiff Bay. However, it is good that we now have clarity. We will of course want to test how things are actually going to work. Indeed, the question of Northern Ireland—which is just as important a part of our country as England, Scotland and Wales—really should be resolved sooner rather than later, so that there can be clarity that the Government are seeking to legislate for the whole of our United Kingdom of Great Britain and Northern Ireland, and not doing it in a piecemeal fashion.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  I understand the point that the hon. Gentleman makes. He is right that the businesses in the situation he describes would have to go through a legal process, probably involving very expensive contract lawyers, to alter such a contract. I do not think it is helpful to directly compare those supply chain contracts with employment contracts, because on one level we are dealing with human beings and on the other we are dealing with the flow of parts, services or whatever. The hon. Gentleman is also right that a change in terms and conditions can sometimes be very positive for the employee. Perhaps it involves fewer hours for more money—that sometimes happens—or longer holidays. Of course, if something better is being offered, employees should have the flexibility to accept that, having exercised due diligence and looked it over properly—dotted the i’s, crossed the t’s and all that. What I am trying to get at is where the business model, and the day-to-day operation of the job, has fundamentally changed, through robotics or whatever.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  I understand where the Minister is coming from, particularly on the expansion of the requirement to notify the flag state. I spoke earlier about my time on the Transport Committee watching the P&O scandal unfold; we held some pretty tough evidence sessions as part of that. I understand that the clause is very specifically to protect seafarers from that sort of engagement. I very much hope that it works to protect those seafarers, and we will not oppose it.

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  I can be very brief on this amendment, Ms Vaz; in fact, I will channel the questioning style of my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). This is what happens when a Bill gets rushed to meet an arbitrary political deadline, is it not?

• 12 Dec 2024 · Employment Rights Bill (Twelfth sitting) · Hansard source

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  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.