The Guardian view on fire-and-rehire business tactics: change the law
Earlier this year, it was reported that government discussions had taken place over the possible removal of employment protections enshrined in EU law. Kwasi Kwarteng, the secretary of state for business, energy and industrial strategy, responded with righteous indignation. Now that Brexit had taken place, he tweeted: “We want to protect and enhance workers’ rights going forward, not row back on them.”
Given the Conservative party’s decades-long commitment to deregulating the labour market and freeing employers from “red tape”, this was a bold claim to make. Coming from Mr Kwarteng, it was doubly counterintuitive. As an up-and-coming member of the party’s laissez-faire wing, he coauthored with like-minded MPs the 2012 book Britannia Unchained, which described British workers as “among the worst idlers in the world”. But as luck would have it, circumstances have presented Mr Kwarteng with a golden opportunity to demonstrate the sincerity of his new convictions. In February, the Department for Business, Energy and Industrial Strategy received a report from the Advisory, Conciliation and Arbitration Service on the iniquitous practice of “fire and rehire”, an unscrupulous tactic used by employers to unilaterally impose inferior terms and conditions on employees.
MPs from all sides of the House of Commons have condemned this abuse of power in the workplace. But Mr Kwarteng has so far resisted pressure to publish the Acas report and done nothing.
This week, the Unite trade union launched a national campaign to outlaw the practice, which has become an insidious feature of the Covid landscape. As the pandemic has placed companies under economic strain, a Trades Union Congress survey found that almost one in 10 workers had been asked to reapply for their job on worse terms and conditions. Predictably, the low-paid, the young and minority ethnic employees have been the most likely to find themselves targeted. Some companies have used Covid as cover and an excuse to force through cost-cutting strategies that predated the virus. Others, faced with genuinely difficult circumstances, have sought to channel the adverse consequences downwards to those with most to lose.
IAG, the owner of British Airways, last year awarded its outgoing CEO, Willie Walsh, an £833,000 bonus. But BA only backed down from using fireand-rehire tactics after strike action. This month, between 300 and 400 engineers at British Gas were not so lucky. They lost their jobs after refusing to sign new contracts that would have meant longer hours for the same pay.
In Manchester, hundreds of bus drivers have been on strike since February on similar grounds, backed by the cityregion mayor, Andy Burnham. Many of the companies involved have been recipients of government furlough money, including Centrica, the parent company of British Gas.
That it should be legal to rip up an employee’s contract with impunity, in order to replace it with an inferior one, is an indictment of existing employment law. In Ireland and Spain the practice is outlawed, while elsewhere in Europe tough restrictions apply. Boris Johnson has previously called the manoeuvre “unacceptable”. Even Jacob Rees-Mogg has condemned its use. But when it comes to changing the law, the Conservative party’s laissez-faire instincts prove insuperable. In January, Tory MPs were instructed to abstain on a Labour motion that would have banned fire and rehire. And as he sits on the Acas report, Mr Kwarteng has refused to commit to legislative reform in the government’s flagship employment bill, which may be delayed until next year.
As the end of furlough in September approaches, the need for workers’ rights to be robustly protected will be acute. In the wake of Brexit, this government has sought to reassure employees that it has their best interests at heart. Continued inaction over the bullying tactic of fire and rehire will reveal that rhetoric to be a hollow sham.