Unions fight fire and rehire

British Gas, British Airways, Heathrow Airport, Sheffield University and Go North West are some of the better-known employers that have been prepared to threaten workers with the sack during the pandemic in order to secure changes in employees’ terms and conditions.

They are just part of a wider problem. With the UK government said to be “sitting on” a report into fire and rehire by the advisory service Acas, Workplace Report has identified 23 cases where pressure of the “there is no alternative” kind has been deployed as an industrial relations tool.

The outcomes in these cases have been mixed:

• there have been clear victories for unions, most recently at the Go North West bus company but also at SPS Technologies, Securitas, Sheffield University, and at Tesco Distribution in Scotland (see below); and

• there have been negotiated outcomes, where at least some of the employers’ objectives have been tempered or mitigated – that was the case at British Airways (although the dispute over cargo workers’ terms and conditions continued into January); for white-collar staff at British Gas; and in a less high-profile case at disability charity Aspire Living; but

• there have also been actual sackings where workers were not ultimately willing to bend to the employer’s proposals, as in the case of hundreds of British Gas field engineers represented by the GMB, porters at Birmingham’s Heartlands Hospital represented by UNISON, and at Tower Hamlets.

Although this employer tactic has been widely condemned, even by leading Conservative politicians, there is little in law to prevent it (see Box 1). Changes are often forced through without dismissals being implemented, or even Section 188 notices being issued.

Just the threat itself may be enough for the employer to win the day. As post-lockdown realities take shape and the end of the furlough scheme looms, there may well be more cases, so it is worth taking stock of what it is that employers have been trying to achieve, and what tactics unions have deployed in response.

One of the most notorious cases has been Centrica/British Gas, and the experience of the company’s 7,500 field engineers is well-known. Represented mainly by the GMB union (Unite is also recognised) they were asked to work an extra three hours a week (40 hours), lose their weekend and bank holiday premiums, and accept a new performance management system (CTAP) along with a three year pay freeze, described by the GMB as a 15% pay cut.

Although Acas got involved, it ultimately came down to a straight industrial fight, and after 43 days of strike action by field engineers there were hundreds of dismissals. The case of the staff side at British Gas is less well-known. UNISON is the majority union but works alongside the GMB. Along with the rest of the workforce they were threatened with fire and rehire last year, but a negotiated settlement was reached (see Box 2).

Disability charity Aspire Living managed to push through changes to terms and conditions without any contractual notice of fire and rehire, having told over 300 care staff last November that they had 30 days to accept or be dismissed. A settlement finally accepted by members included a £200 Christmas payment, protection for staff affected by the changes, a backdated pay rise and a promise to look at a future pay rise next year.

Members reluctantly accepted this outcome, buoyed up – perhaps – by the hope that future pay rises would make up for their losses. In football terms, it felt more like a “no-score draw”, regional organiser Ray Salmon told Workplace Report. But terms and conditions have been undermined and UNISON fears the overall losers are likely to be service users.

What’s at stake?

Imposition in itself is troubling for trade unions, and facility time for reps may be one of the casualties, but employers in the 23 cases listed in Box 3 had more specific objectives:

• pay cuts;

• cuts in paid hours, an increase in unpaid hours, or other changes in working time including workforce cuts;

• changes to pension or retirement provisions;

• shift/unsocial hours or out of hours pay;

• sick pay and life assurance;

• annual leave;

• allowances and overtime premia;

• use of lower grade staff, pay progression and promotion;

• home working;

• redundancy pay; and

• breaking with a national agreement.

Pay: Pay cuts stand out as the most common threat, accounting for at least 10 of the examples in Box 3. Threatened and actual losses cited by unions ranged from percentages (20-25% for BA cargo, 25% at Heathrow) to big cash sums (from £3,200 for STVA car delivery workers to up to £15,000 at Brush Electrical).

Working time: Low-paid staff working for ESS on a Ministry of Defence contract faced cuts in paid hours and the working week; the opposite of the longer hours demanded by British Gas and Go North West (where the sick pay agreement was also at risk).

Unite had been in negotiations with the bus company over ways to save £1 million and maintain job security. But after 85 days of strike action a nationally-negotiated deal accepted last month means drivers “no longer stand to lose thousands of pounds in wages every year”, while the employer agreed never to use fire and rehire in any form.

Pensions and retirement: A fire and rehire dispute at drinks manufacturer Jacobs Douwe Egberts was triggered by plans to end the final salary pension system and introduce an inferior scheme. There was a similar scenario at Loughborough Schools Foundation, over a “forced removal” from the Teachers’ Pension Scheme (TPS). The NASUWT union was considering balloting for industrial action, following a staff vote of no confidence in the consultation, and letters of concern from parents. Luke Akhurst, Leicestershire NASUWT secretary said a number of staff were actively looking or moving jobs as a result, seeing the plan as “a choice not a financial necessity”.

Shift premia: Heineken’s cider brewery in hereford joins the fire and rehire list because of its plans last November to cancel Sunday shift premiums, cut holiday pay and change the terms and conditions for flexible working, and changes to retirement rundown benefits.

Sick pay and life assurance: In March, pharmaceutical manufacturer BCM Fareva issued a fire and rehire threat if there was a failure to agree proposals to cut pensions, life assurance, sick pay and redundancy payment provisions for Usdaw-represented workers.

Allowances: Last summer’s strikes at the London Borough of Tower Hamlets were triggered by the imposition of a new Tower Rewards contract, which – UNISON said – would see staff lose vital allowances and result in pay cuts for out of hours work.

Staff roles: Trouble erupted in Scotland’s further education sector in March this year over an employer-proposed change in the definition of the role of lecturer, opening the way to wider use of instructor/assessor grades. While roles of this type have existed for a long time, the EIS-FELA union says they have been increasingly replacing lecturer roles and positions, while Forth Valley College forced some lecturers to choose between being made redundant or becoming an instructor/assessor.

Home working: Striking workers from the referencing department at lettings platform Goodlord said fire and rehire would see many salaries reduced by £6,000 to below the real London Living Wage. With employees working from home due to the pandemic, the employer apparently decided that the job function could be done permanently from home, allowing it to “recruit nationally”.

Pay progression and promotion: Sheffield University dropped its fire and rehire threat in August last year, having previously proposed the cancellation of promotions and a reduction in hours and salary (as well as voluntary redundancies and pay freezes) in an attempt to save £100 million.

National agreement: Intermittent strike action at Saica Pack in Edinburgh followed a company decision to detrimentally vary the contracts of Unite members as they relocate to the new Livingston site in 2022, but halted in April as members considered a revised offer. Reported as a “significant step forward”, talks are expected to reset their relationship and secure a new national agreement.

Resisting fire and rehire

UNISON policy officer Dave Arnold points out that disputes like the one at Sandwell Leisure Trust arise when management take a “there is no alternative” approach: “You have to ask why employers reach for this tactic when a negotiated settlement would be better for them and UNISON’s members. We need a greater sense of shared endeavour, how to move forward in challenging circumstances”.

There are certainly plenty of angles to consider: are staff being treated equally or is fire and rehire exacerbating tensions? Is the employer bigging-up “volunteers” for change, or does it acknowledge that it is using compulsion? Are its justifications Covid-related or is that just a smokescreen? Are contracts being changed when furlough would tide things over? Is there a willingness to negotiate, for example over cost savings? And, perhaps most tellingly, are the proposed changes temporary or permanent?

Faced with a management willing to threaten workers with the sack, what other options are there? During the dispute at Centrica, the GMB launched a “Stop the British Gas fire and rehire” petition, and hailed a temporary retreat by the company last October after “sustained pressure, condemnation and public and political outcry over the proposal to sack the entire British Gas workforce”.

Getting influential politicians on board is another common tactic. In the Go North West dispute the union appealed to elected mayors in Greater Manchester and London to bar employers using fire and rehire tactics from bidding for bus contracts.

In Scotland’s FE sector, where the dispute broke out two weeks before the Scottish parliamentary election, EIS-FLA quickly produced a briefing for MSPs.

In the case of Tower Hamlets, it was a Labour council that was using fire and rehire. Now there has been a return to the negotiating table and meaningful consultation has been proposed – but only after protracted, significant industrial action.

Parliamentary scrutiny can potentially help. At a BEIS Select Committee on February 2, Centrica’s CEO Chris O’Shea told MPs he “regretted” the company’s interpretation of the law which led to him issue dismissal notices. However, his regrets did not end the dispute with the GMB.

Changing the law?

Legal channels to block fire and rehire would be widely welcomed, but are generally not available. An Usdaw-backed appeal to the Court of Session in Scotland secured a temporary prohibition (interdict) stopping fire and rehire changes at a Tesco distribution depot. A similar case concerning three of the company’s depots in England is now being heard at the High Court.

In the case of Jacobs Douwe Egberts, Unite said in April that it was starting legal proceedings over allegations that some workers were offered inducements to accept pay cuts and inferior conditions. It highlighted reports that the company would stop workers from taking summer holidays to thwart an overtime ban.

There is scope for legislative change, as indicated by a 10 minute rule bill last year. The Labour Party is taking an interest and some proposals for legal reform have been set out by Alan Bogg, of Oxford University . Governments in Scotland and Wales are open to ideas about social partnership and dialogue with trade unions.

However, the chances of success right now against fire and rehire seem to rely substantially on unions’ ability to take industrial action.