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Employment

What is fire and rehire? How can you fight against it?

The pandemic has seen companies use fire and rehire tactics to force employees into accepting worse terms. Here’s what you can do to fight the practice.

The Covid-19 pandemic has hit the economy hard. Companies have had to close their doors throughout lockdowns and some have had to force through cost-cutting measures to stay afloat – including using fire and rehire tactics against workers.

The response from unions and employees has made worker rights a hot topic during the pandemic.

This is why the practice is proving controversial, and why the Westminster government is facing calls to ban it.

What is fire and rehire?

Fire and rehire involves an employer threatening an employee with the loss of their job if they do not sign up to new terms and conditions of an employment.

Each case is different, but in many instances employers might seek to reduce employees’ pay, or reduce holiday or sick pay  allowances, or change shift patterns. It is typically used to impose changes on a workforce when they generally do not agree to the changes.

It can also refer to employees who are made redundant and forced to reapply for roles. The practice can see employers look to make changes to working hours, pay and benefits or other working conditions. 

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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 the May 2021 Queen’s speech to legislate against it. An Employment Bill featured in 2020 and 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 2021. 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.

But 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 in October 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.

It is extremely rare for a private member’s bill to make it into law without the support of the government, however. Tory MP Laura Farris told Gardiner that the Conservative view is that existing employment law has the “strength and flexibility” to oppose fire and rehire if it is “robustly reinforced with financial penalties”.

More recently, Scully appeared on Good Morning Britain on March 22 to discuss P&O Ferries’ firing of its entire 800 person crew to be replaced with contractors on lower wages. The minister denied voting against the Employment and Trade Union Rights Bill, claiming it was never put to a vote. MPs did not get a chance to vote on the bill as time ran out but Scully did address the Chambers for 40 minutes, opposing the proposed bill. Responding to Good Morning Britain’s hosts, Scully said “I could have spoken for five minutes but would have still run out of time on that Friday.”

He added that the bill “would have actually meant that a lot of businesses that needed to restructure in a fair way because of the financial situation, they would not have been able to do so as flexibly.”

The Labour Party introduced an emergency Opposition Day motion in the House of Commons on March 21 to debate P&O Ferries’ action and employment rights, with Labour’s shadow transport secretary, Louise Haigh, calling UK employment law “shamefully weak” and a “betrayal”. Labour is calling for P&O Ferries workers to be reinstated, for the company to be prosecuted, and for the fire and rehire practice to be outlawed by the government.

However, a large majority of the Conservatives didn’t attend the debate and none recorded a vote on the motion. The motion was passed with 211 votes, however, these types of motions are not legally binding.

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 in September 2021 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 faced 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”. 

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 staff 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.”

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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.

And more recently, P&O Ferries fired 800 people via a pre-recorded video message, with crew members told their contracts had been terminated with immediate effect. P&O Ferries claimed that this was due to it no longer being a “viable business”, citing financial losses as the reason behind the mass redundancies.

According to the union RMT, agency workers who have been hired to replace staff are being paid just £1.81 per hour.

However, P&O Ferries – owned by parent company DP World – is set to benefit significantly from the government’s freeport scheme, where it’s looking to receive £50 million in taxpayer support as P&O Ferries runs the UK’s second and third-biggest shipping terminals at London Gateway and Southampton, two locations that are among the 12 freeports named by the government last year.

P&O Ferries also received government support of around £10 million to furlough over 1000 of its workers during the pandemic.

“Ministers and officials have expressed their outrage and frustration at P&O Ferries on their decision and handling of their announcement, and are closely considering the department’s relationship with the company,” the Department of Transport said in a statement condemning the actions of P&O Ferries. 

Chancellor Rishi Sunak told the BBC’s Sunday Morning programme that these sackings were “awful” and P&O Ferries’ approach was “appalling in the way that they’ve treated their workers“.

Protests erupted across Hull, Dover, Liverpool and Larne with unions and politicians joining workers as they express their anger and frustration at their former employer. RMT General Secretary Mick Lynch said of the protests:

“It will also be a message for government that the weakness in UK employment law has not only allowed the mass dismissing of UK seafarers but has also incentivised this barbaric behaviour because employers know there may be no effective sanction to stop them doing so and on top of that they can get away with paying below the minimum wage.”

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.”

In light of the recent events around P&O Ferries, the government has once again reiterated that fire and rehire tactics are not acceptable. Many cabinet ministers, including Sunak and the Transport Secretary Grant Shapps, have publicly condemned the actions of P&O Ferries but will not go further in calling for fire and rehire to be outlawed in the UK.

Speaking to the House of Commons on March 21, Shapps described the sacking of 800 workers as “utterly shameful” and outlined steps the government would be taking to ensure P&O Ferries are held accountable for their actions, including requesting that Acas “issue additional guidance to employees” regarding fire and rehire and “if we need to go further then this is something we will consider doing.”

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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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This article was first published on May 19 2021 and is regularly updated with the latest information.

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