Fire and rehire: can we outlaw this dirty tactic?

Nautilus communications and campaigns organiser Robert Murtagh shares the outlook on the sharp practice of fire and rehire, which is harming Nautilus members and other working people in the UK

The phrase 'fire and rehire' has become ubiquitous in recent years, inextricably linked with unscrupulous bosses who treat their employees with contempt. The practice involves the unilateral changes of an employee's terms and conditions through the termination of the original contract and replacing it with a new one, often with weaker terms. If employees refuse the new contract, they may be sacked.

This coercive tactic, deliberately used to bypass collective bargaining arrangements, has grown in use in recent years, with threats from some major UK brands.

In 2020, British Airways sought to make significant staffing changes that included job losses and pay cuts, threatening to fire and rehire staff if Unite, the union representing cabin crew and ground staff, refused to accept the changes. In 2023, Unite publicised a pay increase of 13.1% plus a £1,000 one-off bonus, claiming it had 'reversed the fire and rehire cuts'.

British Gas owner Centrica likewise vowed to fire and rehire 7,000 gas engineers if they refused to accept changes to their terms and conditions that would see them work longer hours, on evenings and weekends, without a higher rate of pay. As thousands of the affected workers participated in strike action, 500 engineers were sacked before a deal was finally struck between the GMB union and British Gas.

While the majority of the 786 maritime professionals sacked by P&O Ferries on 17 March 2022 were not re-hired, approximately 90 were 're-engaged' on weaker terms and conditions.

Members affected

Since P&O Ferries' outrageous and well-publicised actions, Nautilus has experienced two further cases of our members being threatened with fire and rehire, where the Union has stood up to the threats.

At Isle of Man Steam Packet Company, after two years of negotiations on live aboard proposals, the company gave notice to members of the termination of their contracts three days before Christmas. The company informed members that if they did not sign new contracts, not agreed through the collective bargaining process, their employment would be terminated. Nautilus members thus carried out a period of action short of strike crippling the company's sailing schedule, which forced the company to withdraw their threat and come back to the negotiating table.

In November, Carnival Corporation UK submitted a HR1 form to the UK government where it claimed if agreement could not be reached on changes to employee's terms and conditions, it would seek to implement fire and rehire. After a brief flurry of press interest and strong condemnation from Shadow Transport Secretary Louise Haigh, this form was subsequently withdrawn, and Nautilus welcomed Carnival corporation's clarification that it was not seeking to engage in fire and rehire.

Government action?

Prior to P&O Ferries, the government blocked a private members bill from Barry Gardiner Labour MP for Brent North that sought to outlaw the practice. Gardiner's bill would not have prevented companies from making changes to employees' terms and conditions, but it would outlaw firing staff to force through changes. The then TUC general secretary Frances O'Grady said the government's blocking of the bill was a 'national scandal.'

Currently the Advisory, Conciliation and Arbitration Service (ACAS) guidance states fire and rehire should only be used as a last resort, however this remains simply advice with no enforcement. In response to the actions of P&O Ferries in 2022, the UK government began a consultation on 'a code of practice on dismissal and engagement', which is expected to be published in Spring 2024.

Nautilus, the TUC and others have raised concerns regarding the government's intentions with the code of practice, which is not expected to expressly prohibit fire and rehire, nor to apply effective sanctions to deter employers from carrying out the draconian practice. In our consultation response, Nautilus explained if the draft code had been in place in March 2022 it would not have prevented the actions of P&O Ferries.

As a general election draws near, with Labour in prime position to form the next government, the party have committed to outlawing fire and rehire as part of their 'New Deal for Working People'. Retweeting a Nautilus statement on Carnival UK, Shadow Transport Secretary Louise Haigh said 'Labour will end the scourge of fire and rehire by banning the practice once and for all'.

A poll commissioned by GMB during the British Gas dispute found 71% of the public believed fire and rehire should be against the law.

It's clear that the government's actions on a code of practice are not enough. Without the full weight of legal enforcement, bad bosses will continue to use fire and rehire to undermine collective bargaining and good faith negotiations, coercing their employees to accept changes to their terms and conditions or risk losing their livelihoods. Fire and rehire must be outlawed, once and for all.