HC Deb 22 January 2003 vol 398 cc95-102WH

11 am

Mrs. Gillian Shephard (South-West Norfolk)

I am extremely grateful to have the chance to raise in the Chamber the matter of 316 job losses at the Del Monte factory in Methwold, a village in my constituency of some 800 people. I am also very grateful to the Minister for the trouble he has already taken to understand the issues, and their impact on a highly rural area. The facts are as follows: last June to July, following the receivership of Albert Fisher Foods at King's Lynn, the food processing plant at Methwold was acquired, along with its fellow plants in Wisbech and York, by Del Monte. These plants had formerly been part of the Albert Fisher chilled food division. The Methwold plant produces prepared salads for supermarkets.

As hon. Members can imagine, there had been enormous anxiety about the future of the plant during the uncertainty surrounding the Albert Fisher receivership. It is a huge employer in an area of very small businesses with very small employment patterns. With 555 people employed there, the plant was clearly of great importance to employees and suppliers alike. The whole community breathed a collective sigh of relief when Del Monte—on taking over the three plants, including the one at Methwold—made optimistic statements about the plant's future, the excellence of the work force, and the prospects for the plant.

I should make it clear that I and everyone else in a community whose prosperity depends on the fortunes of the agriculture sector understand that it is impossible for any company to give cast-iron guarantees about its future. Competition is intense in this sector, and retailers are ruthless in their demands, in the interests of their customers. This is the world in which we now live. Despite those harsh realities, which everyone concerned understands, it was a shattering blow to the local community when, on 16 December—one week before Christmas—the work force at Methwold were told by the management that there were likely to be some 300 redundancies. According to a letter sent to each employee, dated 16 December, the situation had arisen because the company has lost the Sainsbury's business and this has depleted demand on the plant by 60%. As a result, the company is operating at a significant loss, which is jeopardising the entire operation. Action is therefore being taken to address this matter and rebalance the number of employees to meet current demand".

I ask hon. Members to imagine for a moment the effect of that news on the 555 people concerned, just one week before Christmas. It is true that some of the employees are agency workers, but many are local, and some come from families in which two, three or even more members work at the plant. Many of the employees are women, a lot of the work involves shift work, and there are a number of part-timers. I know that the Minister will be aware of the employment patterns that are usual in the food processing sector.

The impact of the announcement on people who, by any definition, are neither powerful nor prosperous was immense, and the timing, just before Christmas, was incredible. Indeed, it was all the more incredible because, the next day, 17 December, I contacted the chief executive of Sainsbury, Sir Peter Davis, who told me that in June and July 2002, when Del Monte purchased the plant, it had been made aware that doubts already hung over the contract, and that Sainsbury had finally told Del Monte that it had lost the contract on 2 October 2002. When the Del Monte management became aware that I had contacted Sainsbury directly, they sent me a fax—I have to say that their communication with me has been, shall we say, economical—which stated: I would like you to be fully aware that the decision to reduce our workforce in Methwold is not one for which J Sainsbury can be held accountable. That is by interesting contrast with the letter to the work force just two days previously. There is also the question concerning the delay in informing the work force, which I shall come to later in my speech.

I immediately contacted the Thetford citizens advice bureau, warning it to expect a large number of queries about redundancy rights, job prospects and so on. On the same day, I also rang the East of England Development Agency to ask for immediate help with job search and other appropriate action. The Minister may wish to describe to hon. Members what the development agency was able to do at that stage, and what it might be able to continue to do.

During the Christmas period, I was contacted by a large number of constituents, including some who worked at the plant, some who were members of the local community who were very concerned about the situation, and others who expressed their amazement at the timing and general handling of the redundancies. Sadly, but very significantly, several people pointed out that they had been forbidden to speak to the media, and asked that, if I intended to pursue the matter, as I am doing today, I respect their anonymity. I intend to quote people without giving their identities, but will hand in the original letters with my notes. Hon. Members might like to reflect on the fact that we are in the 21st, not the 19th, century.

One correspondent, a former human resources manager at the plant, wrote on 20 December: On acquisition, the workforce were told by the receivers that Del Monte were not in the habit of buying out businesses followed by redundancies and they were not to worry. He added: At no time since the acquisition have Del Monte assembled the workforce to advise them of the new company strategy, structure, future plans or indeed anything at all. Another wrote on 21 December: I am one of the many employees at Del Monte … who this week has found himself getting well and truly shafted. That may be unparliamentary language, Mr. McWilliam, but never mind—it is a quote. That person went on to say that he had kept a diary of events following the hammer blow of the announcement of the redundancies on 16 December. He had been in the plant and had decided to document what was going on. He said that some employees had been aware that job losses might occur, and went on: What many of us find curious is the timing. You did not need to be too bright to figure out that something was amiss when I saw a member of personnel removing the company rules on redundancy from the main notice board several weeks in advance … We all thought that when Del Monte bought the site that at last there would be sweeping changes and improvements to the place … We waited and waited but the situation grew worse by the month … With all that has happened this week there is a growing feeling that nothing changed because they knew something we did not. Why change the system if nobody is going to be here to implement the system?

The entry in that constituent's diary for 18 December reads: A number of people here are in tears. This is not good. Why string us along like this? Everyone seems to have a story to tell about the lack of communication. I myself am being told conflicting answers to the same question. You just don't know what to believe. For example, there are now rumours that the transport drivers will be starting their redundancy packages on the day that they leave whilst we are not. We just don't know. Our manager cannot help because he is being given the runaround whenever he does try. The rest of his letter catalogues a series of broken promises, lost opportunities for dialogue, and what he considers to be unfairnesses. He concludes: Even if I could meet their terms I would not want to work for a company that has shown such disrespect for the welfare of their staff. I would have no loyalty, drive, or commitment for a company that treats dedicated staff in this manner.

I also received an e-mail from a woman who stated that no fewer than five members of her family worked at the plant. She wrote: We were informed of this news on 16/12, we were then told to expect to hear of some news about who would lose their jobs by 19/12, and when they could expect to receive their pay. It is now 30/12, and we are still none the wiser. We were told we would hear by 23/12, and then it grew to 4/01, and now it is 6/01 … We had a black cloud hanging over Christmas and now it appears it is never going to end. I repeat: we are now in the 21st century.

The Chamber would be entitled to ask what contacts I have had with the company itself. I have had two communications from it. One, dated 18 December, from the managing director, Mr. Peter Miller, was brief in the extreme, and gave no indication of the HR work planned to help so many people facing redundancies. The other, giving me the background to two specific cases that I had raised, arrived on 20 January.

It is only fair to say that the company disputes some of the evidence that I have just given to the Chamber. It maintains that when it learned that it had lost the Sainsbury contract on 2 October, staff were made aware of that fact. All I can say is that that is not the impression I have been given by people who worked at the plant. It is possible, of course, that staff were given some indication, but in such guarded terms that they had no idea of the implications for them and for their jobs.

What is not in doubt is the impact on staff, which I have already described, when they received a full account on 16 December. The company maintains that efforts were made to help redundant staff, and it is true that on 8 January jobcentre staff and representatives of local employers were present in the plant to give advice and counselling.

Mr. Henry Bellingham (North-West Norfolk)

I am sorry that I could not be here for the start of my right hon. Friend's speech. Is she aware that many of the staff affected live in King's Lynn, in my constituency? Obviously they are dismayed by what has happened, but they are also very grateful for the effort and the work that my right hon. Friend is putting in on their behalf.

Mrs. Shephard

I thank my hon. Friend for that contribution. We discussed this matter when there redundancies were announced, because, as in the case of Albert Fisher Foods, the rural nature of the constituencies that we represent means that our constituents have to travel a long way to work, and transport arrangements have to be in place especially for work such as food processing. Perforce, a blow such as this affects people over a wide area. As my hon. Friend says, redundancies on that scale are a hammer blow to the whole of west Norfolk.

The managers of Del Monte pointed out that many of those made redundant had already found new jobs. We are fortunate in Norfolk in that, as the Minister will be aware, we have very low unemployment at the moment. It is also true that jobs of that sort can be filled by people working for agencies—the agencies that, as my hon. Friend will be aware, used to be called gangs. Some of the people who work for the agencies these days come from overseas, and companies that impose many redundancies still have the flexibility that the agency network affords them to cope with the highs and lows of demand.

At my meeting with him, the managing director of Del Monte said that he wished to correct the bad press that the company had had over the issue. I believe that he intends to put some of that right today, which is a good month indeed, five weeks—since the trouble arose. He admitted that mistakes had been made, that he might not have been aware of all the problems perceived by employees during the redundancy period, as he is not on site, and that improvements had to be made.

As the Minister knows, I fully recognise that the Government's role in such matters is limited. We all live in the real world, which is one of difficult decisions and harsh competition. When such decisions have to be made, there is not always time to do everything perfectly. However, in the case of the Del Monte employees, it seems to me that the procedures were rushed, unclear to the people most affected, and uncaring. The work force did not deserve such treatment. The effect of 316 redundancies out of a total work force of 555, in an area of very small communities, where families often contain two or three members of the same work force, can be imagined by those in the Chamber—and the timing of the announcement defies description.

As I have already said, I am grateful to the Minister for the great interest that he has shown in this case. I hope that he will now give the Chamber the benefit of his views on what I have said, and that he will also tell us what the Government, through their agencies, have been and will be able to do to help my constituents.

11.16 am
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)

This debate is on one of the gravest subjects that we ever consider—the loss of jobs and livelihoods on a large scale, affecting whole families, and generations within those families, in a rural area where incomes are not high and opportunities for other employment are hard to find. The right hon. Member for South-West Norfolk (Mrs. Shephard) has set out the issues in the case with great clarity, and I know from my discussions this morning with both the chief executive of the East of England Development Agency and the manager of the local jobcentre the veracity of her words.

Redundancies are, of course, sad, but they are an inevitable part of commercial life. Some companies handle them well, treating their work force with dignity and compassion, working with employees and their trade unions to save jobs wherever possible, and where jobs cannot be saved, working with local agencies to help secure employment or training with others. Sadly, in this case Del Monte has not been one of those companies. That illustrates the need for an information and consultation directive to provide a real opportunity for better employee involvement in larger companies, and to help to steer employers round the potholes, rather than leaving them to be lifted out.

I recognise that Del Monte employs a large number of people, and I have no wish to damage its reputation further, but rather to give it some words of counsel. However, I must say that I am taken aback, if not astonished, by Del Monte's attitude to one of our most distinguished and experienced Members, who has Cabinet experience and is highly regarded on both sides of the House. Its failure to listen to the right hon. Lady and treat her with the respect that the House expects from companies dealing with Members, especially senior Members, is a grave disappointment, to say the least. I know that the company will feel that its apparent disregard for the feelings of its employees and their relatives is a matter of shame, and that it will want to go a long way to restore its reputation. In a moment I shall ask the right hon. Lady to help them to do that.

As the right hon. Lady said, although Del Monte was aware that it had lost a major contract on 2 October, it apparently made no contact with either the East of England Development Agency or the jobcentre—or, as far as I can see, with any agency that could have helped the company and its workers. It formally notified the Department of Trade and Industry redundancy payments office in Birmingham on 13 December that there would be large-scale redundancies—news that it communicated to its work force on 16 December.

It is not true to say that the company did nothing; that would have been illegal. It fulfilled its absolute minimum legal duties by informing the Secretary of State through the redundancy payments office. It also held some consultation with the representatives of its employees, as it had to do at least 90 days in advance of the first dismissals taking effect if, as was the case, there would be more than 100 redundancies. That was the company's legal obligation under section 181 of the Trade Union and Labour Relations (Consolidation) Act 1992. It appears to have done nothing else.

Fortunately, the right hon. Lady, with her finger on every pulse in her constituency, and her formidable experience and drive, had already contacted the East of England Development Agency and the rapid response service. The chief executive of the development agency, Bill Samuel, told me this morning how grateful he was for that, and also highlighted a data protection anomaly that may interest the Chamber. EEDA and all the other development agencies are not automatically informed when form HR1 is received by the RPO, until the employer gives permission under the Data Protection Act 1998. The data protection registrar might look into that as a process that hinders rather than helps possible victims of redundancy.

The jobcentre, the learning and skills council and the Government office for the east of England were all made aware of the situation. The right hon. Lady has asked me for an account of the action that they took, and I know that the Chamber will want to have those details. I have to confirm the impression, and the facts, that she gave us earlier, which show very poor co-operation by the employer in this case. Phone calls from both the jobcentre and the development agency were unreturned, and constant pestering—perhaps "pestering" is the wrong word, but certainly constant chasing up—by those agencies, offering the sort of help that I shall describe in a moment, was rejected.

I do not know whether companies in that situation get caught in the headlights and are paralysed with fear about how to deal with redundancies and about whether the bad publicity might have an impact on their share price, or some such factors, but I can tell companies that it is much better to be frank with their work forces and explain that there are no certainties and there might be further redundancies, than to leave them living in a climate of fear, without information.

This is not an American phenomenon. My hon. Friend the Member for Alyn and Deeside (Mark Tami) came to see me with trade union representatives from Corning in his constituency. Because they were coming to the Department of Trade and Industry, officers from the company flew from America to meet me and talk frankly through with the work force why the redundancies and closures were necessary. They said that similar redundancies were taking place both in their home town in America and in Germany. That information was not fresh to the unions, but it was shared with the work force, and it was very useful. Why Del Monte has taken a different approach I do not know.

The manager of the jobcentre eventually managed to set up a meeting with the company's work force on 6 January, but that meeting was a shambles. It was held in a different building so people had to leave the factory and go up the road, very few employees attended, and the human resources people from the company were 20 minutes late. There was a general impression of a lack of co-ordination, for reasons that Del Monte management must explain and justify, both to themselves and to their work force.

The jobcentre manager contacted the company yesterday to say that she would organise a jobs fair for the employees, as she had managed to extract from the company the information that some of the employees had finished before Christmas—some were due to be released on 20 December and some about 27 December—but that the bulk would go on 15 March. She was told that there were only another 30 people who were to go still left in the company. Almost all had gone already, so she has not been able to organise the jobs fair, the offer of which could have been available from day one of this sorry episode. She has not been able to do what, if the employers had co-operated, she would normally have done—

Mrs. Shephard

Is the Minister saying that, if the company had bothered to return the phone calls from the jobcentre and the East of England Development Agency before Christmas, a huge percentage of the 30 people now left would have benefited from the advice that was available then—and that sadly, those 30 people cannot now benefit from that advice?

Nigel Griffiths

I am saying precisely that. The jobcentre manager was in contact with other employees, with the Inland Revenue, with the Department for Work and Pensions and the social security offices, and with the training agencies. Indeed, she had even contacted the town hall to book it tentatively for a jobs fair. More than that—it is important that the right hon. Lady and her constituents know this—on day 1 she immediately applied for day 1 eligibility for those who wanted to apply for workplace learning. That scheme is normally for people who have been out of work for six months or more, but when there are large-scale redundancies an application can be made for day 1 eligibility. That means that training can be provided in the workplace of the new employer while the person is working, without taking them into a training room—almost on the production line.

The jobcentre manager gave me an example of how one employee, who had applied under their own steam, had been helped—and that help is still in place now. The manager has a full programme, with a host of ways of helping individual employees who come to the jobcentre, but she has to operate it without the tremendous help that the company could have given by notifying all its employees about that programme. They are helped with interview skills and with how to find agencies and update their CVs, and can use free postal and telephone services, and many other facilities that can be so helpful.

Indeed, the jobcentre could have helped the company to cut down the bureaucracy and red tape—that red tape that I am always banging on about, which is a common cause of complaint on both sides of the House. There is a facility by which the company, by liaising with the redundancy payments office, can have all the employees notified. The RPO is duty-bound to write to all 300-plus employees individually via the company. I understand that the office asked the company—if the request did not get through, that was the company's fault—to supply it with a list of all the employees, which would have absolved people of the need to open more than 300 envelopes and process the contents. That is the sort of co-operation we expect; it is common among employers, but sadly it did not happen here.

I have described the help that could have been available. Indeed, that very same jobcentre in the hon. Lady's constituency is already giving such help to others. It helped Fenmarc last year when it closed its unit in Southery. The Jobcentre Plus staff went to the factory, interviewed all the staff and gave them information about payments, working families tax credit and current vacancies. They also gave other help such as I have already described. The King's Lynn jobcentre is working with staff at Snap-on Tools, where there are now approximately 125 redundancies, and that company is co-operating. The regional development agency worked hard on the Luton Vauxhall partnership. I shall be happy to send Del Monte the examples.

I have asked the right hon. Lady, and she has kindly agreed, to chair a meeting with the regional development agency, the jobcentre, the training agency—the learning and skills council—the rapid response team, and, I hope, Mr. Miller, the plant manager and representatives of the work force. I think that we could learn some lessons that would be beneficial both to the company, in restoring its reputation, which I am keen to do, and also to the workforce and to others who find themselves in the same position.

Sitting suspended until Two o'clock.