The P&O Ferries debacle has shocked the nation: 800 workers summarily dismissed in a pre-recorded message, personal belongings dumped in bin liners in the hull, without a single word from their managers – many with more than 30 years’ service. When the company’s CEO Peter Hebblethwaite appeared before the Transport Select Committee last week he admitted that the agency workers who replace them will be paid less than the national minimum wage (by dropping pay to rock bottom rates each time a P&O ferry leaves British territorial waters).
Contrary to some newspaper reports, this was not a case of “fire and rehire” – where employers make changes to the terms of employees’ contracts where they or their union will not agree to the changes voluntarily – but it did expose how vulnerable workers can be when faced with a boss who is willing to trample over their employment rights to cut costs. For that reason it has put the issue back in the spotlight. ouH
I have been working to change the law on “fire and rehire” since 2020 after constituents in Newbury working for British Airways and Centrica wrote to me about threats to slash their pay (sometimes by as much as 50%) – effectively giving them a choice of losing their jobs or accepting reduced terms. Their argument was that they did not believe their employers had explored other options that could have saved the business money and were using the pandemic as a pretext to push through long-planned business changes.
There has been a difference of opinion between Labour and the Conservatives about how this issue should be addressed. Last year, Labour MP Barry Gardiner proposed a new law that would ban the practice altogether. After 12 years as an employment lawyer I felt this would be the wrong solution and risk more job losses: If an employer in significant financial difficulties has no power to renegotiate terms in any circumstances, they will have no choice but make more people redundant. Overall it could lead to more people out of work which is something that I could never support.
But on Tuesday 29 March the Government accepted the change that I have proposed [which you can read here: https://www.gov.uk/government/news/new-statutory-code-to-prevent-unscrupulous-employers-using-fire-and-rehire-tactics which will improve the protections that employees have in law.
Using powers under the Trade Union Act 1992, an Employment Tribunal will be able to order significant damages against any employer who is found to have used this practice in an exploitative way. Tough tests will be applied to ensure that the employer is genuinely in the financial difficulties they claim and has exhausted every other alternative before renegotiating terms with any employees. This will have a strong deterrent effect against bad practice happening in the workplace and provide greater security for my constituents working in large industries. I am so pleased to have been able to shape employment laws in a way that will offer better protection for my constituents and for workers across the country.