Why legislation is needed to stop fire and rehire

Last month, I launched my private members’ bill to stop the practice of fire and rehire. It’s wrong that workers are threatened with the sack and told they will only be re-employed to do the same basic job if they accept less money and poorer conditions. It’s an issue that affects every constituency, every industry. It’s a social evil that is hurting hundreds of thousands of families. As if the insecurity of the pandemic were not enough, more and more companies are now hitting people with the sack so they can pay them less.

To members of the Institute this is not news. You have been dealing with this issue for years. Fire and rehire comes and goes with each boom and bust cycle of our economy. But the practice seems more pervasive than ever, and we now need to legislate.

Given the visionary work of the IER and the intellectual fire power of Professor Keith Ewing and Lord John Hendy QC, we have a great team to deliver on the back of the private members’ bill. Even some Conservative MPs are beginning to engage with us. The question is how do we achieve workable law in this area? I am so grateful to the Institute and its leading lights for their support of my Bill and the expertise they are bringing to formulate it.

The new breed of fire and rehire companies are household names – Argos, British Gas, Tesco, Sainsbury’s, and Weetabix are all at it. These are brands that we all know, and they have all done well during the lockdown. But they are prepared to bully thousands of workers with no regard for loyalty or the fact that they created the profits for these companies. Fire and rehire isn’t right and shouldn’t be happening in Britain today.

I launched my campaign at Jacob Douwe Egberts (JDE) in Banbury. Coffee consumption was up 40% during the lockdown and Jacobs Douwe Egbert made record profits, but that didn’t stop them threatening their workforce in Banbury with the sack unless they accepted a cut in wages of up to £12,000. No family should have to put up with that. I met hundreds of workers who told me what that loss of earnings meant for them: How do you pay your rent or your mortgage with a cut like that? How do you support your family? Every pound cut is a pound less to pay your rent, to pay your mortgage and the fear of eviction or repossession is very real.

The culture of Fire and Rehire is killing worker confidence and returning us to an era of industrial relations belonging to the last century or well before. We need a modern approach to employment needs, not the blunt bat of fire and rehire.

Standing on the picket line at JDE in Banbury and in Ashby de la Zouche at the Brush Traction head office, I was told how the companies used to be great places to work. One woman explained her family had given over 150 years of service to the company. At Brush, another man had started work at 15 and had 53 years of service. They could not believe that after all their loyalty, they were being treated this way. In each case new management had come in and hardworking staff had been treated like digits on a spreadsheet. Employers have lost sight of the human beings who deserve respect, dignity and decency.

There is unforgivable stress being put on these workers. They dread the next bill coming through the door, unable to sleep at night, wondering how to put food on the table. It is shameful. So it is clear we have a moral as well as practical case for new legislation.

The government has said that they believe fire and rehire should not be happening. Even Jacob Rees-Mogg has described fire and rehire as “wrong” and a “bad practice” while Business Minister, Paul Scully, has branded it as “bully-boy tactics”. But they are not prepared to legislate to stop it. They say they will issue expanded guidelines. But the companies who are doing this don’t need more guidelines, they know what they are doing is wrong and they will keep on doing it unless someone stops them. That is why legislation is needed.

Despite the government’s reluctance to pass primary legislation, my Bill already has support from over 100 MPs from every single party in the House of Commons – including a growing number of Conservative MPs. I believe that with enough public support we can persuade the government to do a U-turn just like they did with free school meals. And I am looking forward to criss-crossing the country, speaking with people to make that happen. When there is such clear injustice, it must be possible for MPs to work together towards a common goal. I am glad that the IER shares that aim and is supporting my Bill.