Employment and Trade Union Rights (Dismissal and Re-engagement) Bill

Labour MP Barry Gardiner came second in the Private Members’ Bill ballot on 20 May 2021.

On 16 June, he introduced the Employment and Trade Union Rights (Dismissal and Re-engagement) Bill into the House of Commons. It seeks to reform employment law to discourage the use of fire and rehire practices by employers, and grant additional protection to workers affected by it.

Fire and rehire

Fire and rehire (formally dismissal and re-engagement) is when an employer fires an employee and then offers to rehire them on new terms, which are usually less favourable for the employee. It is legal in the UK for employers to use (or threaten) fire and rehire, although according to trade union Unite it is banned in Ireland, Spain and France.

UK employees who have been fired and rehired have three more general protections under employment law, being (1) wrongful dismissal (if their employer did not follow the correct procedure when firing them); (2) unfair dismissal (if their employer didn’t have a fair reason for firing them, or did not act reasonably); and (3) the right to be consulted if they are part of a group of 20 or more employees being made redundant. These provide some protection, but according to Professor Alan Bogg (University of Bristol) an employer intent on amending its employees’ contract terms can still do so with relative ease.

Fire and rehire practices have been used in the UK for many years, but public body Acas reported that it seems to be used more commonly in recent years and especially during the COVID-19 pandemic. During the pandemic, high-profile disputes emerged around the use of fire and rehire at employers including British Airways, Centrica (British Gas), Tesco and Sainsbury’s (Argos). A January 2021 poll for trade union umbrella body the Trades Union Congress estimated that 9% of workers had been the victim of fire and rehire tactics since the first lockdown in March 2020, having been told to re-apply for jobs on worse terms. The numbers were even higher among young and BME workers.

Recent action

There has been cross-party criticism in Parliament of fire and rehire tactics used by some employers during the pandemic, including from the Transport Committee in June 2020, a Labour party Opposition Day debate in January 2021, and several Early Day Motions. SNP MP Gavin Newlands has introduced two identical Private Member’s Bills which would automatically treat an employee as unfairly dismissed if the reason for their dismissal was to re-employ them on less favourable terms. Neither has made progress in Parliament.

In October 2020 the Government asked Acas to review how common fire and rehire practices are and how they are used. Published in June 2021, Acas reported that the use of fire and rehire could usefully reduce redundancies in some situations, but it could also be used to diminish employees’ contract terms. The Government subsequently tasked Acas with strengthening guidance in this area – this task is ongoing.

The Government, including the Prime Minister, has on numerous occasions condemned the use of fire and rehire practices by employers as a negotiating tactic. But it has not committed to bring forward legislation, citing the ongoing work done by Acas and the need to consult more with industry.

The Bill

Over the past few months Mr Gardiner has embarked on a national tour of Great Britain in support of his Bill, involving rallies, events and visits to affected employees. The Bill is supported by over twenty trade unions, many of whom are also funding Mr Gardiner’s campaign.

The Bill would:

1. Introduce a new duty for employers to consult employees in certain situations when they might be looking to dismiss or change the work terms of 15 or more employees. Any changes to an employment contract aren’t valid unless this consultation was done;
2. Provide additional employee protections, by:
   1. prohibiting employers from including in employment contracts a right to vary terms in ways less favourable to employees, without employee consent; and
   2. making it easier for employees to bring claims for “unfair dismissal” in cases of fire and rehire; and
3. Provide additional legal protections by making it easier and quicker for industrial action to be taken in cases of fire and rehire.

The second reading debate is scheduled to take place on Friday 22 October.