LONDON, United Kingdom — As coronavirus wreaks severe
economic damage, some British employers stand accused of taking a highly controversial
measure to stay afloat: fire and rehire.
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The practice, which involves dismissing employees and
re-engaging them on inferior terms, flared up in April, when British Gas
dismissed almost 500 engineers after they refused to accept new contracts.
Last year, British Airways staff battled with the national
airline’s management over proposed fire-and-rehire schemes, while supermarket
giant Asda faced a similar stand-off in 2019.
Bus drivers in Manchester, coffee workers at
Jacobs Douwe Egberts and distribution center employees for Tesco are now locked in disputes
over new contracts which unions have denounced as fire-and-rehire tactics.
Fire and rehire is allowed in Britain but Prime Minister
Boris Johnson has called it “unacceptable”, and trade unions and the main
opposition Labor party are demanding a ban.
Unite, the UK and Ireland’s largest union, claimed fire and
rehire is “ripping through workplaces like a disease”.
A survey of 2,231 workers by the Trades Union Congress
umbrella group found almost one in 10 were told to reapply for their jobs on
worse terms or face dismissal, with young and ethnic-minority workers
disproportionately affected.
Public industrial relations body the Advisory, Conciliation
and Arbitration Service (
ACAS) submitted a report on the practice in February
but the government has yet to publish its findings.
Better alternatives
Chris Forde, co-director of the Centre for Employment
Relations, Innovation and Change at the University of Leeds, said recruitment
freezes, voluntary redundancies and furlough offer better alternatives to the
“last resort” of fire and rehire.
The practice could “chip away further at the quite lightly
regulated labor market in the UK”, where zero-hour contracts and flexibility
clauses are more prevalent than elsewhere, he told AFP.
Fire and rehire is banned in neighboring Ireland, while
other European countries require sector-level consultation with unions and
social partners when employers seek to terminate contracts.
“I cannot see any circumstances in which this is a right way
to go,” said Forde.
“It is a basic assault on workers’ rights and there are
alternative means through which they (employers) might achieve the same
outcomes.”
Fire and rehire is virtually unknown in Germany thanks to
legislation protecting workers on permanent contracts.
Employers can resort to a similar practice with workers on
fixed-term contracts only in a limited set of circumstances.
In Canada, fire and rehire is legal and particularly affects
non-unionized workers, who are powerless against employers resorting to it,
according to labor law specialist Dalia Gesualdi-Fecteau, at the University of
Quebec in Montreal.
Workers governed by the labor laws of Quebec, Nova Scotia
and the Canada Labor Code — just 10 percent of the country’s workforce — enjoy
some protection.
But employers can circumvent it by proving they are firing
for economic rather than personal reasons, she told AFP.
There is little debate about the issue in the United States,
where labor regulations are more lax.
Opportunism?
An investigation by Britain’s Observer newspaper claimed
that nine of 13 companies accused of firing and rehiring made profits or
increased executive pay.
However, British Airways’ parent company IAG recorded a
first-quarter net loss of 1.1 billion euros ($1.3 billion, £956 million) for
2021, after suffering a record annual net loss last year of 6.9 billion euros
amid a pandemic-induced crisis in the aviation sector.
And although British Gas made an £80 million ($111 million,
92 million euros), operating profit in its most recent update, parent company
Centrica posted pre-tax losses of £577 million.
Centrica told AFP the changes were unrelated to the Covid
crisis and aimed to protect 20,000 UK jobs, with 98 percent of employees
accepting new contracts.
“While change is difficult, reversing our decline which has
seen us lose over three million customers, cut over 15,000 jobs and seen
profits halved over the last 10 years is necessary,” a company statement read.
The Go-Ahead Group declined to respond to a request for
comment.
Alexander Bryson, chair of quantitative social science at
University College London, said firms may be using fire and rehire to implement
restructuring plans that predated the pandemic.
Companies are also reconsidering the viability of jobs as
government support schemes such as furlough wind down, he added.
“They may be over-zealous, over-estimate the financial
problems they face and look to rehire accordingly,” he said.
“It isn’t clear that the pandemic has created circumstances
in which this is widespread. But it could be employers acting in an
opportunistic fashion to bring forward something they were hoping to do
before.”
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