Some commentators are concerned however that the pandemic has served to exacerbate a growing trend for employers to seek to foist downgraded terms and conditions onto employees in a process they have coined "levelling down" (in direct response to the Government's touted intention to set a "levelling-up" agenda).
Impact of fire and re-hire tactics
The Trades Union Congress (TUC) recently reported that, according to a poll they had carried out, since March 2020:
- nearly 10% of workers had been told to re-apply for their jobs on worse terms and conditions or be dismissed; and 25% of workers reported that their working terms (such as pay or hours) had been downgraded (something the union referred to as 'levelling down').
The TUC highlighted that the impact of what they termed "fire and re-hire" tactics was disproportionately impacting upon workers who were young, BME and/or working class and they called on the government to outlaw the practice of dismissal and re-engagement on new terms as a tactic used to bring about detrimental changes to employees' terms and conditions.
MPs debated the use of "fire and re-hire" tactics towards the end of April 2021 (in a debate which was oversubscribed). During the debate it was reported that the Business Minister (Paul Scully MP) confirmed that the Government is "fully considering" publishing an ACAS report of fire and re-hire practices that it commissioned in 2020 and received in February 2021 but not yet released (and which ACAS have declined to provide in response to a Freedom of Interest request on public interest grounds).
He also indicated that whilst he considered that fire and re-hire tactics should be an option of last resort, that the Government was minded to "tread carefully" before interfering in commercial contractual matters between employers and employees, and it needs to balance protection from unfair practices with enabling businesses to take decisions to preserve commercial viability.
It remains unclear if, when or how the Government will choose to tackle the fire and re-hire practices (and the negative impact of them that one might surmise is laid out in the ACAS report).
The Government is probably struggling to find the appropriate way to balance a much-needed bounce back for businesses, with their 2019 commitment to improve workers’ rights, promote fairness in the workplace, and establish a new single enforcement body to offer greater protection to workers. There was certainly some anticipation that the promised Employment Bill would feature in the Queen's Speech on 11 May 2021 - and anger from some groups when it became clear there was no mention of improving employment rights in the government's legislative programme.
As an employer, if you are considering dismissal and re-engagement to get terms and conditions:
- Bearing in mind the significant strength of feeling from unions and large numbers of MPs on the topic (especially given the strong union reaction to many of the changes that employers introduced to try to manage the potential impact of the pandemic on their business).
- Consider the negative PR that has befallen companies like British Gas for deploying such tactics to seek to secure substantial pay and longer hours for employees.
- Give careful consideration to the implications of deploying such tactics where they are not genuinely needed as the damage to morale and loyalty of those employees who remain with you is likely to outweigh the gains in the long-run.
In addition, employers should exercise caution around expecting to be able to continue with changes which were introduced temporarily in the pandemic where those changes financially benefit you as a business (with no obvious other advantage).