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The Weekly paper of the New Communist Party of Britain

Fire-and-Rehire Special

by New Worker correspondent

FIRE-AND-REHIRE battles are continuing across the country.

In Nottingham, a one-day strike took place at BCM Fareva (manufacturers of skincare and pharmaceutical products by appointment to Boots the Chemist) last week in a dispute supported by nearly 90 per cent of the USDAW members. BCM Fareva plans to cut terms and conditions of its 700 staff. Workers’ rights to pensions, holiday pay, redundancy pay and sick pay are all at risk under the terms of the new contracts being forced under the threat to fire-and-rehire staff if they do not submit.

Shopworkers union USDAW’s National Officer Daniel Adams pointed out that: “Fire and rehire has been condemned by politicians from across the political divide. Even the current Prime Minister has said that it is ‘unacceptable as a negotiating tactic’. So we very much welcome the messages of support from local Labour MPs and urge the company to withdraw their threat to fire and rehire.”

As might be expected however, there has been no specific action from that source. It was absent from the Queen’s Speech.

Adams accused Fareva of having “already stooped to petty tactics” in the dispute, including forcing some staff members to come in to work for the one minute remaining of their shifts, between 5:29 am, when the strike action finishes, and 5:30am when their shifts technically end.

He added: “We can’t stand by and watch employers do this. We recognise that it’s been a difficult 18 months across the board. The union would be prepared to talk and reach a settlement. But we can’t do that with a gun to our heads.”

Local Labour MP Alex Norris said: “They have been key workers during this pandemic, meaning both BCM Fareva and Boots more generally have been able to function during these challenging times.

“Their reward for this has been an attack on terms and conditions, including sick pay and redundancy. USDAW has negotiated in good faith to resolve this situation but to add insult to injury BCM Fareva are planning to use fire and rehire tactics to force this on staff. This is unacceptable and I fully support the difficult decision taken to strike. Management should return to the table to negotiate.”

Labour too

Another cash-strapped organisation has just started imposing fire-and-rehire on its staff. This is the Labour Party, which is running out of money because its main activity in recent months has been expelling many of its subscription-paying members and fighting costly and unnecessary court cases. Its financial reserves are down to just one month’s payroll costs.

At present the party is recruiting staff on temporary contracts with weaker employment rights than its permanent workforce. It has also announced massive redundancies as a means of getting “fighting fit for upcoming campaigns and the next general election”.

One senior Labour MP showing more discretion than bravado was quoted as saying: “Sacking individuals and hiring others with worse wages, terms and conditions are the actions of the worst of the very worst employers.”

It remains to be seen if Sir Keir Starmer will actually support Labour MP Barry Gardiner, who plans to introduce a Private Member’s Bill to outlaw the practice.

Northern Ireland

In the Six Counties the cause had made some unlikely allies. All parties on Newry Mourne and Down District Council backed a motion to ban fire-and-rehire tactics.

A Sinn Féin motion called on the province’s Department for the Economy to close a legal loophole used by companies asking employees to re-apply for their jobs on “far worse” contracts. Councillor Barra Ó Muirí claimed that employers in the retail, hospitality and aviation sectors were by-passing collective redundancy consultation processes on their employees, adding that: “Workers can be given as little as seven days to sign a potential new contract or they face the risk of being fired.”

This won the support of the SD&LP and Ulster Unionist councillors, whilst the Democratic Unionist Party (DUP) councillor said: “I think it’s timely and there’s a lot of people being exploited during the COVID crisis and I do believe the laws here need beefed up and I support the council writing to the Economy minister in relation to it.”

British Gas

Meanwhile, discontent has surfaced in the GMB Union over its handling of the recent fire-and-rehire dispute with British Gas.

About 7,000 British Gas engineers held 44 days of strike action after the company threatened to sack them if they didn’t sign up to detrimental changes to their terms and conditions.

The union state that: “After gruelling negotiations, a new deal offers improvements to overtime rates and unsocial hours payments, places limits on the amount of unsocial working undertaken, reverses the decision to close the defined benefit pension scheme to new starters and opens the door for those who left the business to return.”

This deal was accepted by 75.5 per cent to 24.5 per cent, but almost 500 workers were dismissed from British Gas for refusing to accept the terms on offer.

GMB National Secretary, Andy Prendergast, said: “GMB Union will never forget British Gas’s unnecessary and cavalier actions over the past six months.

“But this new agreement does provide a way forward.

“We have listened to what our members wanted and have been able to deliver the improvements necessary to bring this dispute to an end.”

He boasted that: “We have also kept the pension scheme open to new starters in the old service and repair division and crucially left the door open for those who were sacked to come back should they wish to do so.”

But not all workers took such a rosy view. The concessions made by British Gas are small beer. Particularly for the 500 who lost their jobs having the “door left open for those who were sacked”. One wonders just how bad things would have to be before the GMB press office admitted defeat. One worker said: “The GMB have been very poor as well. And of course this has all been made possible by our current government.”

A departed worker said: “Nobody wants to be there and the one institution – the GMB – that engineers thought they could rely on has rolled over with management,” while another one, who stayed with British Gas, said: “Claiming this is some kind of victory is an insult to our members.”

And on the high street

Trade paper Retail Gazette has helpfully summarised the fire-and-rehire strategy of four major retailers. Even before the pandemic, supermarket chain Asda warned 12,000 employees they could lose their jobs if they rejected changes to their contracts that robbed them of paid breaks and perks for working during the holidays. In return, the new contract offered a pay rise to £9 per hour (rejoice, rejoice, such unbounded riches). Asda denied union claims that staff were sacked, and claimed the changes represented an investment of over £80 million and an increase in take-home pay for over 100,000 of its hourly paid colleagues.

More recently, in February, rival Tesco fought a court battle that saw shopworkers’ union USDAW win an interdict in the Court of Session in Edinburgh, which prevented Tesco from moving some staff at its Livingston distribution centre onto a new contract that would result in them losing between £4,000–£19,000 per year. Needless to say, Tesco are looking at ways around this ruling. It also said it would continue to engage with USDAW and the very small number of “colleagues” at its Livingston distribution centre who would have been affected. This was a long-running case that began before the pandemic, and as the larger supermarkets have been doing well from COVID-19, with expanding delivery services, they have not been the worst offenders in the past year.

In May, Argos was accused of forcing over 700 payroll, IT, training, planning and management staff to choose between accepting cuts to pay and conditions or losing their jobs. USDAW also said affected workers would be have to pay increased pension contributions, lose four days’ holiday per year, receive a lower level of ‘death in service’ cover, and suffer the loss of car allowance and other benefits, losing £1,600–£3,600 per year.

There is also an ongoing dispute at shoe shop chain Clarks, where more than 100 staff members are chewing over taking strike action due to a fire-and-rehire process.

Almost 110 of Clark’s 145 warehouse staff in Somerset are on contracts, signed before LionRock’s recent takeover of the retailer earlier this year, which are more generous than those offered to more recently recruited workers.

Affected staff are being asked to accept a new contract that would reduce pay by around 15 per cent, along with three fewer days holiday, worse terms around sick leave, and eliminate 10-minute breaks and complimentary hot drinks.

Clarks claim the new contracts will give staff a pay rise and new employment terms. This did not impress members of Community and Unite unions, which represent many of its workers, who held a demonstration outside its headquarters on Monday afternoon.

Unite regional officer Gareth Lowe was quoted as warning: “Fire and rehire is wrong and Clarks risks having its entire Street operations shut down during strikes if it does not change tack.”

In response, Clarks claim the proposals are part of a company-wide plan to “protect the future of the business”.

It is not only grasping capitalist employers who are taking advantage of the pandemic to reduce wages.

In all, about 10 per cent of the workforce have been affected by fire-and-rehire strategies. The Labour-run London borough of Tower Hamlets is one. At the moment, workers there are balloting on strike action to reverse some of the effects of cuts imposed on them last year. Both the Universities of Glasgow and Sheffield have recently attempted to impose inferior contracts on staff.

The Advisory, Conciliation and Arbitration Service (ACAS) says that when furlough and other COVID-19 support measures are withdrawn, more fire-and-rehire battles are likely. As might be expected, it is not illegal. After all, if trade unions seek to improve workers’ conditions, it is only to be expected that bosses want to do the opposite. On many occasions there was no need for bosses actually to cut pay – during periods of high inflation, such as in the 1970s, simply not giving a pay rise was an effective cut in the real wage. Times of high unemployment are those when bosses can get away with treating workers like dirt on the grounds that they have little alternative but to stay with a bad employer.

It is certainly not novel – the 1926 General Strike was about bosses attempting to reduce wages – but it is definitely becoming more common, and bosses have developed the habit of going nuclear at an early stage of negotiations. Apart from the major cases mentioned above (to which we might add British Airways and Heathrow Airport), there have been many smaller cases.

ACAS has recently produced a report on the issue. It is taking the revolutionary step of taking up “the government’s request to produce further guidance that encourages good workplace practices when negotiating changes to staff contracts”. That seems to mean not much will happen apart from ensuring that wage cuts are imposed in a more agreeable manner.

Whilst bosses sometimes plead dire necessity when threatening the sack, there have been many cases when, after one company takes over another, bosses seek to alter the terms and conditions in the name of harmonisation. Oddly enough there is no levelling up and harmonisation almost invariably means pay cuts. These are generally imposed after the takeover and at first apply to new entrants, but sooner or later the old hands come under attack. This does not take the form of actual pay cuts, but such things as introducing temporary or permanent flexibility into contracts in terms of working hours, shift patterns, payment entitlements and security of hours or employment.

The hospitality sector, which has long been known for low pay and weak trade union organisation, has been particularly affected by fire-and-rehire. In the ACAS report an anonymous trade union representative said the practice was “being led by big industry in this sector”, particularly with regard to multi-national hotel chains and restaurant chains. This is likely to filter down to smaller businesses in this and other sectors. As always, workers without some form of trade union organisation (even if it is not very helpful when the crunch comes) will come off worse.

Whilst some bosses claim that fire-and-rehire is better than selective compulsory redundancies, it is clear that it is also a simpler and cheaper way of making people redundant. If disgruntled workers leave ‘voluntarily’ after terms and conditions have altered, the boss does not need to fork out redundancy money.

Additionally, it was reported that some bosses are cunningly using fire-and-rehire specifically to interrupt the continuity of service built up by staff by dismissing them from permanent contracts and offering them new, insecure ones.

Some union officials actually favoured ‘fire and hire’ so long as it was only used as a very last resort to prevent actual bankruptcy. Some union officials need to grow a backbone. Needless to say, some bosses claim the pandemic has meant there is no time to go through the normal legal procedures about redundancies, hence they resorted to fire and rehire. One wonders what they would say if trade unions did that to avoid a strike ballot. Hopefully the use of fire-and-rehire will teach some workers the reality about how capitalism works.

It will come of no surprise to New Worker readers that fire-and-rehire has not always been used to save companies from bankruptcy. According to the ACAS report: “One large multinational employer which made over 500 workers redundant last year on the basis that certain premises would be closed until Spring 2021” but “three weeks after these employees’ contracts were terminated, the premises re-opened their doors with staff hired on lesser terms.”

Many of these companies were highly profitable and use fire-and-rehire to boost the profits rather than save the company from going down the drain. Some fire-and-rehire battles are simply an intensification of long-running battles by employers to bring workers to heel.

ACAS suggest that amending the law on dismissal, particularly that concerning constructive dismissal, could reduce the number of “inappropriate” dismissals. But bosses always have clever lawyers to get round the law.

As always, the best form of defence is trade unionism – not merely membership, but active workplace branches whose existence reminds bosses not to try anything they might regret.