MP warns of dire consequences of government decision on redundancy notice

As arguments continue over the government’s approach to welfare, the bedroom tax and ‘back to work’ schemes, Steve McCabe MP has expressed dismay over the government’s changes to employment legislation, which were slipped through using secondary legislation In March 2013.

Changes to the Draft Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013 will cut the minimum statutory consultation period for compulsory redundancy of 100 employees or more from 90 days to 45 days. This will make redundancy and closure easier at a time when jobs are few and far between.

The government pushed these changes through by 11 votes to 7 with the help of two Lib Dems and a Democratic Unionist MP


Here is Steve's take on events and his contribution to the debate in committee:

Steve McCabe(Birmingham, Selly Oak) (Lab):  The Minister said that trade unions opposed the reduction in the notice period. Does she plan to make public the consultation results, so that we can see how many people responded and who said what? 

Jo SwinsonI thank the hon. Gentleman for his intervention. Obviously, people who submit their comments to consultations do not necessarily expect them to be released. Before making anything public, therefore, we would want to make sure that we respected confidentiality, where individuals wanted it to apply. However, the Government response summarised the responses to the consultation, and I outlined the general views that business groups and trade unions contributed; indeed, there may be some opportunity later to draw on some of the individual responses. 

5.27 pm 

Steve McCabe:  It is a pleasure to serve under your chairmanship, Mr Brady, in this surprisingly popular Delegated Legislation Committee.  (More Labour members attended than were actually on the committee)

In fairness, I think the Minister’s heart is not in this at all; I think someone commented on that earlier. I am not that surprised, because her boss, the Secretary of State, has already said that he is against this kind of one-sided legislation. We know what the legislation is about; as my hon. Friend the Member for Edinburgh South says, it comes from a report by Adrian Beecroft, a venture capitalist and high-value Conservative party donor. The proposal is part of a set in his report, in which he also recommended allowing companies to fire workers without their being able to claim unfair dismissal; scrapping the Gangmasters Licensing Authority; abolishing employment licences for children under 16; and ending TUPE rules. What is happening today is the thin end of the wedge, and we have no reason to doubt what will come next. That possibly explains why there are so many people present concerned about it. 

In the current state of affairs, employers should be encouraged to give the maximum warning possible of a potential large-scale redundancy. By slashing the minimum notice period, the Government are sending out a clear signal that they are going to make it as easy as possible to fire people, at the very time when we need them to make it as easy as possible to hire people, so that we can cut the unemployment bill and get the country back to work. As some of my hon. Friends have said, the order will reduce the time available to consider the alternatives, so it will affect any work that local authorities may be able to do with Jobcentres to cushion the effects, and any role that local enterprise partnerships can play in offsetting redundancies. Those were the kinds of measures that we saw when the Phoenix car company collapsed in Birmingham: people got together to work on the supply chain to try to cushion the effects. 

Steve RotheramJust to illustrate my hon. Friend’s point, in a former life I worked for the Learning and Skills Council. When Cammell Laird went belly-up, there were over 100 apprentices there. I worked with a multi-agency team to try to find those apprentices alternatives. In fact, 90 days was not long enough, but we saved the vast majority of apprentices by working with employers and all the agencies across the board to do that. If it had been 45 days, I am certain that only a handful of those apprentices would have been saved. 

Steve McCabe:  My hon. Friend is absolutely right. One of the effects of this measure will be that all the experience that we have developed on doing all that can be done to cushion the effects of loss of employment on a significant scale will be lost. The Minister may think that a measure that affects 100,000 people a year is not a major issue, but that is not what folk in my constituency tell me; they think it is quite a serious issue. The sectors most likely to be hit will be manufacturing—already reeling from some of the Government’s policies—financial services and the public sector. We can see where the threats and redundancies are coming from, and this measure will simply smooth the path. It seems to me that this is a deliberate attempt to make it harder for trade unions to oppose and resist those redundancies when they are announced; I am not sure whether the hon. Member for Vale of Glamorgan thinks that is okay.  (Hon Member was laughing at this point)

The Government says that we should be grateful that they are not reducing the period to 30 days, but in the rest of Europe various other protections are set alongside the time period, so we should not be grateful in the slightest. Before we are compelled to vote on the order, I would be really interested to see who took part in the consultation and what was said. I doubt very much that anyone on the side of working people advocated cutting to 40 days, let alone 30 days. 

I am not particularly interested in the element that relates to fixed-term contracts because it is possible that the Minister has a point in relation to that, but she has not made the case for slashing the period to 45 days. I was amused to see in the paper yesterday that apparently one in six of the Conservative party’s 2010 intake are actively seeking another job. By my calculation, that means that they want an 820-day period of notice for their redundancies, as opposed to the 45 days that they are prepared to give everyone else. This is one-sided legislation. It favours employers. It will have the effect of reducing wage costs, and it will make it easier to fire people at the very time when the Government should be worrying about unemployment and trying to make it easier to take people on. 

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