Is fire and rehire legal?
Under current rules, there is no specific legislation to outlaw fire and rehire.
That is why there were calls from anti-poverty charities as well as MPs from across the political spectrum for an Employment Bill in May’s Queen’s speech to legislate against it. An Employment Bill featured in the previous Queen’s speech in 2019 but the omission this time around does not mean legislation will not arrive during the current parliamentary session.
The Advisory, Conciliation and Arbitration Service (ACAS) advises employers that dismissing employees to force a change in contract should be used as a “last resort”.
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Before taking the action, ACAS recommends the employer considers whether the changes are “absolutely necessary” and considers the impact on wider morale and the risk of legal action.
If the employer decides to press ahead it should follow a fair dismissal procedure, give the employee enough notice, and offer a right of appeal. If an employee has worked for the employer for more than two years and feels they’ve been unfairly dismissed, they may be able to make a claim to an employment tribunal.
Business minister Paul Scully has indicated that the UK government does not wish to bring in “heavy-handed legislation” to outlaw the practice.
However, there is widespread agreement among the British public that fire and rehire should be banned, according to a survey by GMB Union in May. Three quarters of respondents believed there should be legal protections for workers who are currently subject to the whims of employers who can fire staff only to rehire them with worse terms.
Two-thirds of those polled said that they would be less likely to buy goods or services from a company that was known to use fire and rehire tactics.
Labour MP Barry Gardiner is bringing legislation through parliament to oppose the practice through his private member’s bill titled the Employment and Trade Union Rights (Dismissal and Re-engagement) Bill.
However, the draft legislation faced significant opposition when MPs got their first chance to debate the bill in the House of Commons at the second reading on October 22 2021.
The government issued a three-line whip to Conservative MPs to vote against the bill which Gardiner said was not designed to ban fire and rehire entirely, citing the need for companies to restructure when they are on the brink of collapse.
But Gardiner did tell MPs that legislation was needed to boost protection for workers.
“This bill is about making Britain the best place to work. This bill is about levelling up. His bill is about treating people fairly.
“Fire and rehire is happening all over our country. We must act. Profitable companies are doing this to hard-working people.
“The human cost of these tactics is acknowledged by everyone and every party in this house.”
It is extremely rare for private member’s bill to make it into law without the support of the government and Tory MP Laura Farris told Gardiner that the Conservative view is existing employment law has the “strength and flexibility” to oppose fire and rehire if it is “robustly reinforced with financial penalties”.
How widely is fire and rehire used?
There have been several fire and rehire rows throughout the pandemic, with some still ongoing. In research published in January 2021, the Trade Unions Congress (TUC) said as many as one in 10 workers had faced the threat of fire and rehire during the pandemic.
The TUC poll found young workers, working-class employees and BME staff had been most affected. Nearly a fifth of 18-24 year-olds said they had been threatened with fire and rehire while BME workers were nearly twice as likely as white workers to have faced the practice.
“Almost three million people have been told to reapply for their jobs on worse terms and conditions since the first lockdown,” Andy McDonald, Labour’s shadow employment rights and protections secretary, told The Big Issue.
Who has faced fire and rehire?
Fire and rehire tactics have affected various sectors across the UK.
Workers at cereal giant Weetabix went on strike on Tuesday 21 September for 48 hours over alleged “fire and rehire” tactics which could see as much as £5,000 cut from wages for some staff, according to the Unite union, as the UK faces an autumn of rising prices and increased cost of living.
The first of a series of strikes planned by members of Unite The Union was established at Weetabix factories in Northamptonshire. Striking workers stood on the picket line with signs calling for Weetabix to “stop taking the biscuit out of Britain’s workforce.”
“Unite’s members at Weetabix will not accept being fired and rehired. Unite will fight to defend our members affected by this disgraceful practice” said Unite general secretary Sharon Graham.
“This is a totally unjustifiable assault on workers’ wages and conditions. Last year Weetabix’s profits went up by almost 20 per cent to more than £81 million”.
Unite claimed the series of two-day strikes will cause widespread delays to production of Weetabix as well as other products made by the factories including Alpen, Weetos and Oatibix, however a Weetabix spokesperson has denied the strikes would cause delays or cause “any impact on our stock availability”.
The spokesperson also told The Big Issue the company was “sorry” to see the engineering team go on strike but respected their right to do so.
Some of the most high-profile cases of companies seeking to fire and rehire have come from household names British Airways and British Gas.
With flights largely scrapped due to the pandemic, British Airways cargo workers based at Heathrow Airport faced the threat of fire and rehire until Unite the union came to a deal with BA bosses in January.
Hundreds of British Gas engineers were sacked in April after refusing to sign up to new terms which would see them work a longer working week, and more unsociable hours for no more money, amounting to a pay cut.
The GMB Union held 43 strikes before the dispute ended in mass sackings and engineers warning the row may not be the last time workers fall foul of fire and rehire. British Gas engineer Martin Glover told The Big Issue: “Hopefully our strikes have brought fire and rehire to the public’s awareness. I think it’s a bit too late for us now but hopefully what we have done will help other people who will be going through the same situation.”
There was better news for Manchester bus drivers from Go North West’s Queens Road depot. Their 82-day strike, one of the longest-running industrial actions in the UK, ended in May with the firm taking the action off the table.
Then-Unite general secretary Len McCluskey said: “This dispute should also send a clear and unequivocal message to all employers that Unite will never accept fire and rehire for our members – that we will do everything in our power to prevent it, and we will win.
“The government itself has described fire and rehire as a `bully boy practice’ but the only way to guarantee UK workers are protected from this pernicious practice that’s ripping through our workplaces is for the government to follow the lead of other European countries and ban it once and for all.
“Urgent action is needed to strengthen the UK’s weak laws because it’s simply too easy for employers to make brutal changes to contracts, sometimes taking thousands of pounds from workers’ wages.”
But Unite’s action against lettings platform Goodlord ended after three months in May 2021 with nine employees dismissed from the firm.
Referencing staff had been due to strike indefinitely until Goodlord decided to part ways with nine employees, who had claimed new contracts would result in a £6,000 pay cut.
Goodlord strongly disputed accusations that they were using fire and rehire tactics. They told The Big Issue the sacked employees were on temporary contracts due to expire and had been offered full-time roles at the company.
In a statement, a Goodlord spokesperson told The Big Issue: “Our colleagues were offered a range of options to bring this dispute to an end. Unfortunately, none of the options put forward were taken up by these nine individuals, who instead indicated an intention to continue indefinite strike action.”
However, the Living Wage Foundation confirmed Goodlord had been stripped of Living Wage Employer accreditation after employees in London saw their pay fall below the London living wage during the dispute.
What does the government say?
The Westminster government has said on several occasions that fire and rehire is not acceptable.
Prime Minister Boris Johnson told MP Anna McMorrin in the House of Commons in January: “We regard fire and rehire as unacceptable, and will continue to make that point and seek further means of redress.”
However, business minister Paul Scully indicated that the government will not be seeking to introduce legislation to crack down on the practice.
Speaking in a debate on employment rights in the House of Commons on June 8, Scully said: “The Government wants to send a clear message to employers: even if your business is facing acute challenges, all other options to save jobs and a business should be exhausted before considering the dismissal and re-engagement of staff.
“I believe that we can achieve this working in partnership with businesses and workers, without heavy-handed legislation.”
The Department of Business, Energy and Industrial Strategy does not comment on specific disputes between employers and workers, but a spokesperson told The Big Issue that they “have been very clear that using threats about firing and rehiring simply as a negotiating tactic is completely unacceptable.”
The department continues that “depending on the extent and likely impact of the proposed changes, employers should meet with affected employees, or union representatives to explain their case for making the proposed change.”
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What do experts say about fire and rehire?
While employers are facing cash difficulties due to the pandemic, using fire and rehire tactics is a “dangerous game”, according to Professor Nick Bacon of City, University of London’s Business School.
He told The Big Issue firms like British Gas and British Airways “used the opportunity to drive down terms and conditions in their sector” during the pandemic and it could take a long-term toll on their profitability.
Professor Bacon said: “I think that is pretty challenging for organisations which rely very heavily on customer service. Customer service requires committed and engaged employees and if you are going to change their contracts you lose that engagement and commitment, that leaves you with a lot of ground to build up in terms of customer service.
“It’s a dangerous game those organisations are playing, they are concentrating on shorter gains rather than long-term labour hoarding and treating their employees well.”
Advisory, Conciliation and Arbitration Service (ACAS) also published a report on fire and rehire in June 2021 in a bid to find out how widespread the practice has become in the UK.
Calling the report a “fact-finding” exercise, ACAS reported that contributors told them “the practice has become increasingly prevalent both in recent years and during the pandemic”.
ACAS also found a “shared anticipation” the fire and rehire will continue to be used more frequently once “the government’s furlough and COVID-related business support initiatives are wound down, especially if the economic recovery is slow”.
What can I do to oppose fire and rehire?
One way to take on fire and rehire is to join a union in the sector where you work. Joining a union allows workers to organise and bargain collectively, potentially improving negotiation power.
The Trades Union Congress’ website features a union finder to help you find a suitable union for the sector where you work.
Fire and rehire can also be opposed by signing a petition. There are several ongoing petitions but the parliamentary petition is the only one that can force a debate in parliament with 100,000 signatures. Sign that one here. Other petitions are also available on Organise and the GMB Union’s website.
You can also write to your MP to ask them to support efforts to ban fire and rehire. Full details on how to contact your MP can be found here.
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