you're fired

Pros and cons of fire and rehire schemes

Firing and rehiring employees isn’t as straight forward as some business owners may think.

Back in April, hundreds of British Gas engineers were set to lose their jobs after refusing to agree to “tougher” employment terms.

While the fire and rehire scheme is legal, it has provoked fury among existing employees, not to mention negative publicity for one of the UK’s biggest energy supplier.

British Gas has defended the approach saying it wanted “to give our customers the service they want and protect the future of our company and 20,000 UK jobs”.

However, Andy Prendergast, GMB acting national secretary, said that while most of the 8,000 engineers have agreed to the new terms, it was “under duress”, and he described the company’s treatment of its staff as “appalling”, claiming it has greatly damaged morale.

British gas aren’t the only big name brand who’ve struggled to get fire and rehire right.

Last month over 100 workers at Clarks shoes were considering strike action as many were asked to accept new contracts that reduce pay by around 15%.

A 45-day consultation could see Clark’s dismiss all its workers and offer to rehire them on the new contracts.

What is fire and rehire?

Rayner Jones from Rayner Jones Employment Law explains that the term can be misleading

What it normally entails is an employer trying to persuade employees to agree to new (often worse) terms and conditions and terminating their employment if they refuse.

They will only be “rehired” if they agree to the new terms.  If they don’t agree they will stay fired.

According to raynerjones.uk, fire and rehire is not always a bad thing as it can often be an essential cost-cutting measure if a business is going through tough times.

The problem comes however if it is perceived to just be about driving down pay and staff benefits for the purposes of increasing profits.

Is there a right way of going about it?

Employees are always going to find it tough to take if they think they are being presented with worse terms. Rayner Jones goes on to say that you should consider the following three points:

Tactics

If we don’t want to follow into the British Gas/Clarks trap and lose control of the narrative, we have to make sure our verbal and written communications to staff are properly worded and that the people managing the exercise are good communicators and, ideally, well respected within the business

TUPE

If we want to change terms and conditions after a TUPE transfer there are additional issues for us to consider.

Collective consultations

If we have to dismiss 20 or more people at one location because they refuse to agree to proposed changes we must follow a collective consultation process.

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