The practice of firing employees only to rehire them on worse employment terms is a “truly shocking way to repay the sacrifices of so many working people”, Sir Keir Starmer has said.
The Labour leader attacked the way some workers had been treated in a speech to the GMB union conference on Monday, as he said the Trades Union Congress (TUC) now estimated that one in 10 workers had been threatened with fire and rehire during the pandemic.
He said that after coronavirus had subsided, the country could not carry on as it had before in terms of workers’ rights.
Fire and rehire occurs when an employer dismisses an employee but then offers to rehire them on new terms which are usually more favourable towards the employer.
Research from trade unions has suggested an increase in employers telling their workers to reapply for their jobs on worse terms and conditions during the Covid-19 pandemic.
A TUC report in January estimated that 9% of workers had been told to reapply for jobs on worse terms since March 2020, with higher rates among young and BAME workers.
And Commons committees have criticised high-profile cases at British Airways and Centrica.
The Advisory, Conciliation and Arbitration Service (Acas) was asked to examine the policy and reported its findings to the Government in February.
Sir Keir, in a pre-recorded speech after internet connection problems delayed him delivering his address live earlier in the day, said: “This levelling down of our economy, of workers’ rights, can’t continue.
“After everything the British people have been through in the last year, we can’t go back to business as usual, back to where we started and try to patch it up. We can’t continue to slide towards a low-rights, low-pay economy.”
The Labour leader said his party would “outlaw” fire and rehire, and he said “building a more secure economy will be central” to his plans to win the next general election.
Business minister Paul Scully previously described fire and rehire as “bully-boy tactics” when being used as a negotiation method, but told MPs they must “tread carefully” when it comes to Government intervention in contracts.
He said last month: “We’ve always been clear that using the threats to fire and rehire as a tactic to put undue pressure on workers during negotiations is completely unacceptable, but we need to tread carefully when considering Government intervention in commercial contractual matters between employers and employees.”
A spokeswoman for the Department for Business, Energy and Industrial Strategy (BEIS) said: “We are absolutely clear that using fire and rehire as a negotiating tactic is completely unacceptable, and we expect companies to treat their employees fairly.
“If an employer changes any of the terms without the employee’s agreement, the employee may be entitled to seek legal redress.
“We have asked Acas to look into how fire and rehire has been used, and how widely. Acas has completed their work and shared their insights with BEIS officials. It is right that we take the time to consider this evidence fully, and we will communicate next steps shortly.”