The Government Could Outlaw Fire and Rehire – If It Wanted

Nearly 1 in 10 workers have faced threats to their pay, conditions and jobs since the pandemic began due to aggressive fire and rehire tactics – but the government could step in tomorrow to make them illegal.

In September last year, John Hendy and Keith Ewing wrote: ‘Workers have become commodified; and in a health pandemic they have become vulnerable and disposable commodities.’ Nowhere is this better exemplified than in the pernicious and frankly Dickensian practice of ‘fire and rehire’.

While it’s true that many businesses are facing difficult times and far too many have not been afforded the support they needed to survive the last twelve months, others have been unscrupulously exploiting the pandemic as an excuse to drive down the terms and conditions of their workforces.

According to research by the TUC, one in ten workers has been told to reapply for their job on worse terms since the first lockdown in March 2020. Given the current economic climate, it’s clear that many workers are likely to be forced to accept new downgraded contracts to avoid unemployment — whatever the terms. And sadly, there is very little legal protection currently afforded to workers to stop this from happening.

Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 requires employers to consult with recognised unions (where they exist) when proposing to dismiss and re-engage employees in order to rehire them on worse terms and conditions.

Those employers only need to show that a reorganisation gives them a discernible advantage; they don’t need to explain what other avenues were explored before starting the consultative process, and they don’t have to prove that the change to employees’ terms was necessary for the survival of the organisation.

However, in all cases, and whether a workplace has trade union representation or not, if an employee refuses to accept a new contract, they can simply be fired. It’s then up to the employee to bring a claim for unfair dismissal, and the law surrounding unfair dismissal allows bosses to seek to justify dismissals under the broad and ambiguous category of ‘some other substantial reasons’.

Insecure workers are the most at risk: an employee must have two years’ continuous employment with an employer to be able to make a claim for unfair dismissal.

Employment law is clearly in desperate need of reform. Given that, when I heard the Conservative leader of the House of Commons state earlier this year that ‘employers threatening to fire and rehire as a negotiating tactic are doing something that is quite wrong,’ I nearly fell off my chair.

Was Jacob Rees-Mogg about to become a hero for working people before my very eyes? Was he leading the charge within the government to finally legislate against this practice, the way countries such as Ireland and Spain have?

The answer, of course, was no. Only weeks later, hundreds of British Gas engineers were sacked by their company after forty-two days of strike action against fire and rehire. When asked in Parliament about the situation, Boris Johnson seemed to be unaware that it had happened.

There will be no posters of Jacob Rees-Mogg adorning the walls of student bedrooms in Che Guevara–style any time soon. The reality, in fact, is that the government asked the Advisory Conciliation and Arbitration Service to review the practice of fire and rehire, and then received its findings in February this year — and has quietly sat on them ever since.

The truth is that tackling fire and rehire would be incredibly easy. All you would need to do is amend the Employment Rights Act to provide that dismissal to achieve a reduction in an employee’s pay, benefits, or conditions of employment would be unfair; then amend it further to make it unfair to dismiss an employee for economic or organisational reasons that are not necessary to the survival of the business, and define a burden of proof.

The hesitancy of the government to implement these simple changes to strengthen workers’ rights is, sadly, a familiar theme. After the recent landmark Supreme Court ruling that designated Uber drivers as employees, rather than disposable gig workers, the business secretary refused to follow up with a commitment to introduce legislation.

In that case, a law could have ensured that all gig workers received basic employment rights. Instead he procrastinated, claiming that the government is ‘considering options to improve clarity around employment status’. Despite their new-found claim to fight for workers, when it comes to improving rights the Tory answer is always to dither and delay.

Some of us fear there is a bigger plan afoot. It’s important to note that the prime minister quietly held talks with some business leaders earlier this year about ‘cutting red tape’, as ministers allegedly drew up plans to turn Britain into the ‘Singapore of Europe’ after its exit from the European Union.

Aside from being a well-known tax haven and a symbol of the free market in practice for Hayek fans the world over, a 2018 Development Finance International and Oxfam Report ranked Singapore among the ten worst performers at reducing inequality. On workers, the report noted that Singapore ‘has no equal pay or non-discrimination laws for women; and there is no minimum wage, except for cleaners and security guards.’

If the Singapore model is indeed the direction of travel, I suspect the government’s procrastination over outlawing fire and rehire will be the first of many battles our movement will have to fight.

Standing out in support of the Go North West bus strike recently, I realised that the importance of these early picket lines is not confined to the livelihoods of the specific drivers and their families who unjustly faced the erosion of their terms and conditions. These picket lines are a test; they are being closely watched.

How many workplaces are going to stand up and face down this immoral practice? How much public support will they receive? And, ultimately, how easy will it be to forge ahead with a far more widespread erosion of workers’ rights?

It’s up to all of us to make sure we support those striking now so that this bleak vision of the future does not come to pass.