“Fire and rehire is creating real distress for hundreds of thousands of families”

Barry Gardiner MP moved his bill to limit the practice of fire and rehire, in the House of Commons on October 22nd. Here we reproduce extracts from his speech.

This Bill is about making Britain the best place to work. It is about levelling up and treating people fairly. It is about better regulation to govern fire and rehire…

Members of all parties recognise that the practice of fire and rehire is creating hardship and real distress for hundreds of thousands of families across Britain. We can end that misery, and we must…

These people are workers who have kept us all going through the pandemic and are now being fired and rehired. They are loyal workers who have served their companies for years, such as bus drivers who risked Covid to keep the economy going; gas workers who kept the heating on in our grandparents’ homes; and teachers who kept our schools going. They are being told, “You are fired, and you can only get your job back if you sign a new contract on worse terms and conditions.” That is wrong; it should not be happening in Britain today.

Over the past months, I have visited workplaces all over our country. In Loughborough, I met a man who told me that he was watching Saturday night TV at home with his son when his phone pinged. It was email telling him he would be fired unless he accepted £15,000 off his annual salary.

In the village of Street in Somerset, I met a man at Clarks shoes who told me of his feelings. He has a two-bedroom flat because he is separated from his wife, and his children stay with him every second week. “If I have to sign that contract,” he told me, “I’ll not just lose my home; I’ll lose my family as well.” The man could not then have afforded that property and would have had to live in a bedsit. That is fire and rehire.

In Banbury, at Jacobs Douwe Egberts, one of the 291 workers who were threatened with the sack there told me that her family had given over 100 years’ service to the company. Her father had worked there, she had worked there for 34 years, her husband had worked there and now her son worked there. She felt that all of them had been treated with contempt…

In Manchester, a former bus driver told me that he was on three separate forms of blood pressure medication. The emotional strain on that man was heartbreaking. He was going to lose thousands off his pay, and the managers actually sent someone to his doorstep with the new contract, pressurising him to sign. That gives a whole new meaning to doorstep selling.

In Livingston, I met a delivery driver who was called in and threatened with the sack. He said his mind was in turmoil, but Tesco expected him to go out in a 40-tonne lorry and drive through a snowstorm to Elgin after receiving that news…

This was a complete breach of health and safety protocol. When news like that is given to an employee, the regulations say that the person should be given the rest of the day off on full pay to think through what they have been told and to seek advice. That was Tesco…

Fire and rehire is happening all over our country. We must act. Sainsbury’s, Argos, Asda, Tesco—they are all at it. Profitable companies are doing this to hard-working people. For me, the most upsetting of all was when a worker’s eyes welled up and he started to cry, as he recounted how he felt telling his family that he was to be fired. His voice faltered when he said, “It was just so humiliating.”…

I have been on a demonstration picketing with workers outside a Labour council. A Labour council has done this in Tower Hamlets, and shame on it. Wherever this happens, it is wrong. It does not matter whether it is the private sector or the public sector, it is wrong and families are suffering because of it. That is why it is incumbent on us all not to play party politics with this, but to act…

ACAS reported that recent survey that we discussed, carried out by Britain Thinks, which polled 2,231 individuals in England and Wales and recorded that 9% of employees had experienced the threat of fire and rehire in the previous nine months. Workers are vulnerable to the practice in almost every sector. The survey recorded particular patterns of discrimination against young workers between the ages of 18 and 24, workers who self-identified as being from a working-class background, and black and minority ethnic workers, who face the threat of fire and rehire at nearly twice the rate of white workers…

All too often, a new chief executive comes into a business and announces that they are going to drive up shareholder value. What they do is drive down workers’ wages through tactics such as fire and rehire and that money is then siphoned off to increase the shareholders’ dividends. Often, those employees are left as the in-work poor and they become dependent on universal credit… That means that the rest of us in society are making up the shortfall in those employees’ wages. We as taxpayers are the ones forking out to increase that shareholder value…

I have set out that there is a problem of morality and economics. How can we fix it? Back in June, when I sat down with the Under-Secretary of State for Business, Energy and Industrial Strategy… made it clear to me that the Government were “not minded to legislate.” That was even after the ACAS report “Dismissal and re-engagement (fire-and-rehire): a fact-finding exercise” was published, which may appear surprising given that ACAS reported examples of what participants in its survey “regarded as employers using the crisis opportunistically as a ‘smokescreen’ to diminish workers’ terms and conditions; and the use of fire-and-rehire as a negotiation tactic to undermine or bypass genuine workplace dialogue on change.”…

If not legislation, what? The Minister advised me that the Government are now asking ACAS to recommend how they might strengthen the guidelines to business. I am a believer in guidelines, and good businesses tend to follow them, particularly if they are clear and if other businesses are doing the same. The problem comes when unscrupulous businesses are not adhering to those guidelines and gain a competitive advantage from that non-adherence. There then often follows a race to the bottom in which the good company feels forced into bad practice…

That is why I believe guidelines are not a solution. Managers at Jacobs Douwe Egberts, the coffee people in Banbury, made record profits during the pandemic, when coffee consumption increased by 40%. While the managers awarded themselves large bonuses, they demanded wage cuts of up to £11,000 from 291 staff. The truth is that guidelines are not going to change the practice of such managers. Only by putting good practice into statute will companies be prevented from bullying their workforce by using the threat of fire and rehire, and only if those tactics are outlawed will good companies not feel the competitive pressure to behave just as badly…

There are other ways of addressing this problem, one of which has been pioneered by a group of metro Mayors: using the procurement power of local authorities by scoring companies that seek contracts from local government on social as well as economic grounds. Councils are able to press local employers to engage with their good employment charters and to eschew bad practice. My good friends—some are former colleagues— Dan Jarvis, Tracy Brabin, Andy Burnham, Dan Norris and Jamie Driscoll, have been particularly effective in using this form of community engagement and procurement power, and many other local authorities have followed suit. Mark Drakeford, in Wales, has shown just how effective this can be through his economic action plan, “Prosperity for All”, which has enabled the Welsh Government to develop a new and strengthened relationship with business and to drive inclusive growth and responsible business behaviours…

So turning to the proposed legislation, it is important to be clear about what my Bill does not do. I repeat that my Bill does not ban fire and rehire…

The Bill will enshrine good practice into law and penalise bad practice. It will put on a statutory footing the procedure that decent employers already follow. It will encourage both employers and workers to reach the best outcome, and will discourage bad employers from threatening to fire and rehire when no legitimate threat to the business demands it. If the restructuring of a company is required because it is at risk of becoming insolvent unless employees’ terms and conditions are substantially changed, my Bill will assist the speedy settling upon of an acceptable outcome…

One of the more disturbing aspects of my visits to disputes around the country are the stories I have heard about the way managers have increasingly opted to issue notices to terminate the contract very early on in the process. The issue of a section 188 notice used to be a last resort. Recently, it has become a first-strike nuclear option. ACAS has also remarked on that.

Employers will set out their package of changes to terms and conditions alongside a section 188 and effectively fold their arms and say, “That’s all the consultation you’re going to get.” They then begin to demand that workers come in for interview one by one, often without any union representative accompanying them. Workers are pressured into signing the new contract. Employers say, “How are you going to pay your mortgage if you don’t have a job? How are you going to put food on the table? How many children do you have? Two, three, is it? You really should sign because, you know, we have got 40 people lined up out here who would love to come and take your job. You are one of the lucky ones, you’ve got a job.” This is how the threat of fire and rehire is used in practice. No wonder the Minister himself has called it bully-boy tactics in the workplace…

Another insidious practice I have come across is where companies have come to realise that fire and rehire can be an effective way of avoiding redundancy payments. The law currently allows an employee to be dismissed for refusing to accept a variation in contract. Employers now consider that, by making the new terms so unacceptable, they can effectively force the worker to refuse the new contract. The job is still there; the employee has simply refused to do it on the revised terms so there is no redundancy. For this reason, the Bill ensures that, where an individual worker or a small section of the work force refuses to accept the variations that have been agreed with other representatives in the workplace, and that person is dismissed for refusing to accept the variation, they will be entitled to claim unfair dismissal…

There is one final question, which concerns the politics surrounding this Bill. Given all that Ministers have said denigrating the practice of fire and rehire, it is remarkable that the Government have imposed a three-line Whip against it today. Why? In politics, it is rare to find something that absolutely everyone agrees on, yet all the way from Len McCluskey to the Prime Minister himself, everyone agrees that fire and rehire is wrong, so why are the Government determined to block this Bill?

Normal practice would be to allow the Bill to pass Second Reading and go into Committee, where it could be amended and any perceived deficiencies ironed out. If that proved impossible, the Government could kill it in Committee or on Third Reading. Why are the Government intent on talking the Bill out this morning? The tactic of filibustering to talk the Bill out is cowardly. It seems that the Government do not wish to be seen actually to vote against the Bill. They would rather pretend, under the cloak of a closure motion, that they want to go on talking about it so that it simply runs out of time.

Today, the Government are set to vote against not the Bill, but the closure motion—the effect is the same. The Bill will die. Nobody is fooled. British workers will know that this Government would rather play politics than look after British families.

The Tories, as predicted, voted down a ‘closure motion’ – by a majority of 63 – to prevent a vote on the bill.

Barry Gardiner is MP for Brent North.

Image:  Barry Gardiner MP. Source: https://members-api.parliament.uk/api/Members/146/Portrait?cropType=ThreeFour. Author: Richard Townshend, licensed under the Creative Commons Attribution 3.0 Unported license.

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